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Jewish World Review Oct. 8, 1999 /28 Tishrei, 5760

Bruce Williams

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Should I stick with the company IRA? -- DEAR BRUCE: I am in a company that matches 401(k) contributions dollar for dollar up to 4 percent. I earn $70,000 a year. I recently received a $6,000 raise, and I would like to put it into my retirement. Which would be the better deal: going into my company plan or going out and doing it myself, by putting it in a Roth IRA or some other area? -- J.C., Ind.

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 able.

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).


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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