Jewish World Review Oct. 17, 2000 / 18 Tishrei, 5761
Young investors should start a Roth IRA
DEAR BRUCE: My wife and I are in our mid-20s, and we have paid off a $13,000 debt in the past three months. We have no payments outside of our rent and utilities. We earn about $70,000 a year together. We want to purchase a home and start investing. What do you suggest? -- T.C., via e-mail
DEAR T.C.: For guys that are your age, the first thing that I would do would be to take $4,000 of after-tax money and put it into a Roth IRA. Within the Roth, have this money invested in a very aggressive mutual fund or something similar. I can't overemphasize the value of this. If you do this for six or seven years, for all intents and purposes, your retirement is assured.
One thing that you didn't mention was if you were participating in any retirement plan at work. If it's available, use it to the utmost. Should it not be available, you can invest your money like any other investor outside a tax shelter. That means picking some reasonably aggressive areas and buying and holding. The last thing that I think you should be doing is trading.
As for the home, you haven't mentioned children or how long you have been married. Recognizing that a home is an investment and lifestyle, I would not rush into buying one. Buying a home is not an investment to make money. In today's world, while your property values may increase, it is nothing like it was a couple of decades ago, so walk softly. Remember real estate can and does go down.
DEAR BRUCE: We live in a deed-restricted community -- that is, there are a lot of things that you are not allowed to do and you agree to these things when you purchase your home. At the closing, you sign a paper with the restrictions. Among other things, you can't put up a fence all the way around your house, only around the back yard. You get the idea.
One of our neighbors just spits in the eye of the restrictions and the deed restriction committee. He has not one, but two unlicensed cars parked on the side of his house, a beat-up looking boat that he claims he is going to restore, and now he is putting up a fence around the front yard because he says that some of the neighbors' kids cut across the grass.
When he receives violation notices from the committee, he simply throws them away. He owns the property, and he will do what he wants. Unfortunately, we have a number of people in the community who are reluctant to take any stronger action. I simply cannot put up with this. It certainly takes away from the value of my property, not to mention the pleasant living environment that we've spent a great deal of money to enjoy. What can we do? -- L.T., via e-mail
DEAR L.T.: In your circumstance you have a couple of options, and perhaps you would want to exercise both. The first would be to get together with your neighbors and take over the board of directors of your association. You cannot have mamby-pamby people running the board. The reason for the deed restrictions is to give some uniformity to your community. Unless they are enforced, they have no value.
Secondly, in most circumstances a property owner in your situation, without the support or approbation of anybody else, can take the miscreant to court, and I suggest that maybe a couple of you might want to take that route as well. He is in violation, and I have to believe that the courts would find in your favor. You would think that people like this would buy somewhere where there are not restrictions and not force themselves upon those people who prefer to keep a community looking more
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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