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Jewish World Review Feb. 2, 2000 /29 Shevat, 5760

Bruce Williams

Bruce Williams
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Money or securities? -- DEAR BRUCE: My insurance company is being converted from a mutual company to a stock company, and I have the option of taking money or securities. Which would you do? -- R.S., Toronto, Ohio

DEAR R.S.: Many mutual companies (in which the shareholders own the company) are converting to stock companies. In most cases, the stock does well, and if I were faced with the decision, I would opt for the shares of stock.

If, however, you are fearful of any risk, take the cash and run.

DEAR BRUCE: You have expressed your feelings about elderly nursing patients trying to get the state to pay for their care while protecting their assets for their heirs. What do you think about an indigent elderly patient from a close-knit family whose children are financially secure? Should the state pick up the tab? What would you say to those children? -- Reader, Chelmsford, Mass.

DEAR READER: One must differentiate between obligations that are moral and those that are legal. On the moral issue, people who try to protect assets and then allow the state to pay their bills are certainly morally wrong, and in many cases, legally wrong. In the legal aspect, children are not required to care for their parents no matter how able they are.

Given that, the elderly person who is indigent can, in fact, collect all the state benefits. You can imagine the uproar there would be if they tried to pass a law that children had to be responsible for their parents. Isn't it amazing that one set of parents can raise 10 kids, but 10 kids can't support one parent?

DEAR BRUCE: My husband and I have preached to our son about the importance of starting his own Roth IRA since he began working at a fast-food restaurant. Shortly after turning 16, he took it upon himself to go to the bank and start his own Roth IRA. He was so proud of himself.

Unfortunately, it will only grow with interest because it is not invested in a mutual fund or securities. He didn't tell us about this until his option to cancel had passed.

Would it be advisable for him to pay the penalty and convert it into an IRA with other investment goals? -- C.G. Casa Novia, N.Y.

DEAR C.G.: Congratulations on teaching your son so well.

The thing I would question the bank about is whether a 16-year-old is capable of entering into a contract for a CD. If memory serves me correctly, minors are only able to enter into contracts for necessities, and no matter how desirable a Roth IRA is, a necessity it is not.

As his parents, I would go down to the bank and tell them that you did encourage him to do this, but certainly not to put his money into CDs without some type of aggressive mutual fund. I would take the position that the contract (i.e., the purchase of the CD) is null and void because the maker was a minor.

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).


02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
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...

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