Jewish World Review Oct. 11, 2000 / 12 Tishrei, 5761
Go with simple interest!
DEAR BRUCE: I will be purchasing a new automobile shortly, financing about $25,000. I'm going to try to pay it off as quickly as I can. Is it best to accept a deal for simple interest or one calculated on the "rule of 78s?" -- D.F., via e-mail
DEAR D.F.: You've got to be kidding. Simple interest is the only way to fly. The "rule of 78s" effectively has you borrowing all of the interest up front and then paying interest on the interest -- the very least desirable way to go.
DEAR BRUCE: I will be going to Germany in the not-too-distant future. I have about $2,500 in U.S. dollars for spending money during the time I will be there, which should last approximately one year. What is the best way to exchange these funds so that I get the best rate? -- J.S., via e-mail
DEAR J.S.: There are a number of things that you can do. You can exchange it in this country or have it sent and transferred to German currency through a bank. The banks will give you the best rates of exchange, recognizing that the exchange rates bounce around from day to day. It used to be advantageous to charge things abroad, but now many of the credit card companies are charging a couple of service points, and that advantage melted away.
DEAR READERS: A reader has written me, enclosing an article indicating that many older people are buying living trusts and paying substantial sums of money for them, when in their circumstance it made no sense. The article goes on to say that there are scores of people out there peddling living trusts who are not financial planners but simply sales people with a product to sell. My writer then asked about a specific estate planning service.
I am not in the position to comment on the estate planning service as an entity. However, I am in agreement with the writer of the article that people of relatively modest means have no reason to spend money to have a trust put together. The trust does accomplish one thing, and that is to help you avoid probate on everything put inside the trust. On a modest estate, in most cases, probate is a breeze, and that money could have been spent
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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