Clicking on banner ads enables JWR to constantly improve
Jewish World Review Jan. 21, 2000 /14 Shevat, 5760

Bruce Williams

Bruce Williams
JWR's Pundits
World Editorial
Cartoon Showcase

Mallard Fillmore

Michael Barone
Mona Charen
Linda Chavez
David Corn
Ann Coulter
Greg Crosby
Larry Elder
Don Feder
Suzanne Fields
Paul Greenberg
Bob Greene
Betsy Hart
Nat Hentoff
David Horowitz
Arianna Huffington
Marianne Jennings
Michael Kelly
Mort Kondracke
Ch. Krauthammer
Lawrence Kudlow
Dr. Laura
David Limbaugh
Michelle Malkin
Chris Matthews
Michael Medved
Kathleen Parker
Debbie Schlussel
Sam Schulman
Roger Simon
Tony Snow
Thomas Sowell
Cal Thomas
Jonathan S. Tobin
Ben Wattenberg
George Will
Bruce Williams
Walter Williams
Mort Zuckerman

Consumer Reports
Weekly Standard



Strategies for paying off debt -- DEAR BRUCE: Contrary to what some of your marketing departments say, I am a devoted listener and reader at age 24. I have even patronized a few of your sponsors.

My question revolves around your thoughts on a compensating balance on a mortgage. I understand that if you have a good rate, say, 7 percent, then you should pay the minimum on your mortgage and invest any extra that you are able to in the stock market. Is this true for other types of debt? -- M.H., Syracuse, N.Y. DEAR M.H.: You bet your life it is.

In the event that you are borrowing inexpensive money on the one hand, you can invest the dollars that would either reduce the debt or grow more quickly in the parallel debt. I would opt for the later.

You must realize that there is no guarantee here. You could lose, but over a period of time that strategy will serve you well.

DEAR BRUCE: My wife and I decided that we would consider a congregate-care facility for ourselves so that our responsibility would be diminished.

Our stockbroker suggested that we put part of our money in preferred stock and the other half of our money into a variable annuity with a death rider. The investment took place just six months ago.

We received our first statement showing the value down $8,000. She told us not to worry, that this was OK. What do you think? -- H.N., Las Vegas

DEAR H.N.: Well, she may not be worried, but I would be a bit concerned. The problem is -- and this is not the case in every situation -- annuities are a very high-commission product and many sales people put their own needs for earnings ahead of the clients' welfare.

While there are certain circumstances in which an annuity is a viable investment for someone as old as you are, I have some serious doubts. Further, having a death benefit does not appear to be needed, assuming that the bulk of your expense money is coming from your investments, as you indicated.

DEAR BRUCE: I just turned 60 and retired, drawing a modest pension. I inherited $70,000, and $15,000 of this came right off the top to pay my outstanding debts. The balance is in a money market account while I consider investment options.

Given my situation, how should I invest this money in the market place? -- H.W., American Canyon, Calif.

DEAR H.W.: My answer cannot be specific, because I have no idea how risk-tolerant you might be and what other assets you might have.

In general, I would certainly get out of the money market account and pick a well-performing mutual fund.

I know that past performance doesn't ensure the future performance, but with a good five-year track record it will likely continue to succeed.

While individual stocks will likely give you a greater return, they also require a great deal of stewardship, and I suspect that is something that you might not be comfortable with.

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).


01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

©1999, NEA