Jewish World Review June 29, 2000 /26 Sivan, 5760
How social security seniors should invest
DEAR BRUCE: I am a first-time investor. Do I invest in mutual funds, the stock market or variable funds, and where do I get help? I will be receiving a rather large worker's compensation settlement in a few months and would like some guidance. -- R.P., via e-mail
DEAR R.P.: You didn't indicate what you do for a living, but most of us in our vocational lives have either studied or worked on the job to learn the craft, which took an investment of time and effort.
The same thing is true of investing. It requires both time and effort. Start to read, go to a library and take a look at the financial publications such as Money, Forbes and Fortune. Talk to the reference librarian. You have to put some effort into learning what investing is all about.
If you do not do this, you are at a huge disadvantage when you talk to financial planners or sales people. They are talking about things that you don't understand, and most of us are too embarrassed to ask.
Go out and get yourself an education. If a course in investing is offered at your local community college, take it on an audit basis. You are not looking for the class credit; you just want the information. You must put forth the effort. There is no shortcut that I know of.
DEAR BRUCE: My mother-in-law is 74 years old, and I do mean old. She has been living with us for the past four months.
She's on Medicare and Medicaid, and her only income is her Social Security. She had an insurance policy, but it was canceled for nonpayment. In the previous times she lived with us, she has been able to save about $500. What can she do to invest it? -- D.M., via e-mail
DEAR D.M.: There is very little one can do with $500 other than put it into a savings account. There are one or two mutual funds that will open an account for less than $1,000, and you might investigate these.
A more important question is, are you going to keep your mother-in-law with you? With a relatively modest income, where can she go? This is an ongoing problem with the aging population, and some have been less prudent than they might have been. Apparently that was the case with your in-laws, who did not save for this time of their lives. I wish I had a snap answer, but I do not.
DEAR BRUCE: I am 62. I purchased a condo in February for $94,000, putting $43,000 down. It is now appraised for $110,000. I pay extra principal each month. My goal is to pay it off in 10 years or less if possible.
My sons have advised me to invest the money that I am putting into the extra principal. They say it would give me a better return on my investment, and then I could still pay the loan off. I am a very low-risk investor. I would feel more comfortable getting the loan paid off before I retire. Can you advise me? -- M.L., Norcross, Ga.
DEAR M.L.: Your sons are correct. You would be far better advised to invest the money elsewhere and have this as an offsetting balance against your mortgage obligation.
Having said that, there are many people that are just uncomfortable with a mortgage and would rather pay it down. I am not going to fight you at your age, if that's the way you want to go. But technically, your sons are
Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).
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