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Jewish World Review Oct. 22, 1999 /12 Mar-Cheshvan, 5760

Bruce Williams

Bruce Williams
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Online fine, but CDs? -- DEAR BRUCE: We are considering investing in a CD through online banking. How do we know the bank is as it says? It is one that we are not familiar with. -- L.F., via e-mail

DEAR L.F.: Contact the online bank and ask for their banking number and the authentication that the FDIC insures them with. Online banking is becoming a bigger presence, and I am sure that it will get much bigger still. I am wondering, though, why you would want to buy a CD -- it gives you such a poor return and is also taxable. If you are considering investing for a long period of time, I would go into a 30-year long-bond, which will kick off about as much or maybe a little more with no tax consequence on the federal level.

DEAR BRUCE: I nearly always agree with you and enjoy the information I find in your column, but I can't agree with your suggestion to buy municipal bonds for an IRA. There is no reason to accept the tax-free rate when the IRA distribution will be taxed at regular income tax rates. Did I misunderstand? -- R.V., via e-mail

DEAR R.V.: For the very reason you mentioned, I don't believe I ever suggested that under ordinary circumstances municipal bonds belong inside an IRA. The only reason I can think of to do this is if the individual transferred risk of any kind. Given this, and if the individual is in a high income bracket, this course might be advisable, but it would be very, very unusual.

DEAR BRUCE: You have helped me through many rough times. I am 15 years old and will soon will be turning 16. I have a big, big question: I have always wanted a Jaguar. My Dad found me a 1987 Jaguar with 72,000 miles on it, and the asking price is $8500. The body has no rust and the paint is in fantastic condition. Do you think this is a wise choice? -- M.H., via e-mail

DEAR M.H.: I hate to rain on your parade, but the last thing I think a 16-year-old needs is a Jaguar of any kind. You are a beginning driver, and a Jaguar is a high-performance automobile. I would be very, very uncomfortable if one of my kids was driving one at 16.

Also, if you talk to almost anybody who has owned one of these high-performance cars, you will find that the maintenance costs can be very expensive. If I were your Dad, I would suggest that you get an older car in good condition -- probably a bigger car, which would give you some protection until you have some experience on the road. You have a whole lifetime to drive a high-performance automobile. You sound like you have a good head on your shoulders, and I wish you well -- but I also hope you listen to what I have to say.

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).


10/20/99: 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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