Jewish World Review Oct. 8, 1999 /28 Tishrei, 5760
DEAR J.C.: You would be better off contributing to your company plan as much as you are able, since this is a straight deductible item now. Who knows if you will need a tax shelter sometime later on. With money above that, you would be well advised to consider the Roth IRA.
DEAR BRUCE: I am a retiree who is thinking of investing in a company that deals with first-trust mortgages. I have $120,000 in an IRA at 6 percent. This company deals with builders and shopping centers. They have a 65-percent loan-to-value ratio and their mortgages pay 11.5 percent. I would like to make the minimum investment of $20,000. What do you think? -- L.W., via e-mail
DEAR L.W.: You must ask yourself why the borrower in this case is prepared to pay much higher-than-normal interest rates. The only answer is because there is a higher possibility of loss. You didn't indicate how important the $20,000 is to you, but if it is to come from the $120,000 you already have, I would pass on this one. I would, however, consider investing in a more aggressive mutual fund with a top-flight performance record. The likelihood is that you would achieve as much as the 11.5 percent in growth, with far less chance for disaster.
DEAR BRUCE: My husband and I have individual wills in Virginia. My question is, how will they apply to a house we own in Colorado which is not addressed in the wills? We have two children, but we are leaving our estate to only one of them at this time, unless circumstances change. -- F.C., Clintwood, Va.
DEAR F.C.: I would urge you to see an estate lawyer. Under ordinary circumstances, your will would have to be probated both in Virginia and in any other state where you own real property. It may be that a properly-constructed trust could solve this problem, but it does require care and skill so that your offspring who is not mentioned in the will cannot successfully contest it. That in itself requires a little extra finesse. I urge you to see an estate planner as soon as you are
10/04/99: Get a financial education!