Chicago Sun-Times Latest news from the Chicago Sun-Times Online en-us (Editor) Newspapers Chicago Sun-Times 84 34 30 Copyright 2014 <![CDATA[ Couple has to-do list after financial planning meeting ]]>

Originally published: January 19, 2003 How does the financial planning process work in real life? Joe and Terri Long were delighted to volunteer. I met Terri when she won a lunch with me at RL Restaurant at a charity auction. During that lunch, we talked about their rather complicated financial situation. Joe, 49 and a former banker, was fulfilling his dream of starting a new business in the residential construction industry. Terri, 42 and a managing director of a consulting firm, once worked at the same bank. Both owned significant amounts of bank stock and stock options, as well as … ]]> Fri, 03 May 2013 12:14:32 -0600 <![CDATA[ Plan helps everyone, so let’s not make it a class battle ]]>

Originally published: January 9, 2003 Let’s not turn the tax debate into class warfare. Or political warfare. The economy is too important. History makes it clear that tax cuts--across the board-- do work to get the economy going. President John F. Kennedy proposed huge tax cuts to the American people in the early 1960s, and after his death, Congress cut the top tax rate from 91 percent to 70 percent, and the corporate tax rate from 52 percent to 48 percent. The Kennedy tax cuts started at the top and went across all income levels. President Kennedy wasn’t deterred by … ]]> Fri, 03 May 2013 12:14:32 -0600 <![CDATA[ More than just rich could benefit from dividend plan ]]>

Originally published: January 16, 2003 Looking for some tax-free income? You don’t have to be rich to find that idea appealing. Just ask any plumber or electrician to do a job for cash. Bet you’ll get a quick answer. The same idea applies to municipal bonds. Billions of dollars of tax-free bonds and bond funds are purchased by investors who don’t define themselves as rich. They’re just looking for the tax-free income. Ditto the appeal of Roth IRAs to young workers. And Section 529 College Savings accounts to young parents. In both of these savings products, the gains come out … ]]> Fri, 03 May 2013 12:14:32 -0600 <![CDATA[ Try making your financial resolution a project ]]>

Originally published: January 2, 2003 I’m not making any New Year’s resolutions. And I’m not writing a column about making New Year’s resolutions. Looking back over the nearly 15 years of writing this column, I realized that I start every year by giving people advice about how they should rearrange their financial lives in the New Year. Have you ever noticed that the people who tell you to make resolutions only give advice about stuff that is easy for them to do? For the nearly 15 years I’ve been writing this column, I’ve started every year with a suggested list … ]]> Fri, 03 May 2013 12:14:32 -0600 <![CDATA[ Make short work of getting long-term care insurance ]]>

Originally published: January 23, 2003 Hurry. Wake up. If you’re over 50--or your parents are--please take this advice. For years, I’ve been urging you to buy long- term care insurance. These new policies pay benefits for home health care, as well as care in a nursing home. They’ve become so popular that now some of the best deals are disappearing fast. The good news is that the concept of buying long-term care insurance is catching on. Last year the industry paid out more than $1 billion in benefits to policyholders. But the bad news is that the insurance companies are … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ Bankruptcies can hurt your pension ]]>

Originally published: November 21, 2002 If you’re counting on a pension check, you’d better do a quick checkup. Pension funds make a simple promise: a check a month for life. There are variations, of course. You can take smaller monthly checks and cover your spouse’s lifetime as well. But you have no discretion over how the money inside the plan is invested, or the amount you will receive each month. Those kinds of pension plans are called “defined benefit” plans. That’s just the opposite of 401(k) plans, where the ultimate payout depends on the amount you contribute and how your … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ Savings accounts could be tax-free ]]>

Originally published: February 2, 2003 When President Bush presents his budget to Congress this week, it will include two bold new savings proposals that will allow all Americans, regardless of age or income, to save money in tax-free accounts. The Lifetime Savings Account (LSA) would allow anyone to open a savings or investment account and put away an after-tax amount up to $7,500 a year. The money would grow tax-free and could be withdrawn without penalty at any time and used for any purpose. The proposed Retirement Savings Account (RSA) would operate like the current Roth IRA. Up to $7,500 … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ Get help for debt trouble before learning costly lesson ]]>

Originally published: February 20, 2003 I worry about terrorism. And I worry about the economy. But mostly I try to worry about things I can do something about--or at least help others do something about. So today’s headline scares me: “2002 bankruptcy filings set historic record.” Last year, 1,577,651 individuals filed for personal bankruptcy. That topped the previous year’s record of 1,492,129. Yes, I could round off those numbers. But each one counts. Each is the story of a financial life out of control. Those big numbers mean that one of every 100 families in this country was affected by … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ Average investors can use foreign-currency vehicles ]]>

Originally published: February 6, 2003 Looking to get rid of some of your dollars? I’m not suggesting a shopping spree, but you might want to follow the lead of the smart money around the world. The smart-money investors these days are switching their rapidly weakening U.S. dollars for gold and euros and even the New Zealand dollar to protect the value of their holdings. Good news: You don’t have to watch from the sidelines. Everbank, the nationwide division of First Alliance Bank, makes it possible for average Americans to do the same type of hedging--by opening FDIC-insured money market accounts … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ Proposed changes address mutual funds’ disclosures ]]>

Originally published: February 27, 2003 Wall Street is eager to ink a $1.5 billion settlement with several state attorneys general over conflict-of-interest issues regarding research and public stock offerings. But mutual fund investors have not seen similar scandals erupt. Certainly some mutual funds owned shares in now scandal-tinged companies like Enron and WorldCom. Fund analysts may have relied too heavily on research from Wall Street’s “sell side.” But there have been no headline cases of fund managers profiting at their shareholders’ expense. Even so, federal regulators have proposed some changes in the way mutual funds do business. Some investors argue … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ Don’t overlook these potential tax breaks ]]>

Originally published: March 6, 2003 I hate tax season. The tax law is so huge and convoluted that it doesn’t lend itself to a simple column of tax tips. In fact, you don’t have to be a cynic to believe that the tax law is written so we can all spend countless hours worrying and countless dollars seeking advice to make sure we don’t overpay our taxes. As always, there’s good news and bad. The good news is lower tax rates apply across the board. The bad news is that the tax system just got more complex, even though Congress … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ These annuties a solid ‘chicken money’ option ]]>

Originally published: April 1, 2003 It’s time to revisit “chicken money” now that the Federal Reserve has cut interest rates again. While home buyers rejoice, many seniors who planned to live on their interest income are facing agonizing prospects. The definition of “chicken money” is simply money you can’t afford to lose. Options for “chicken money” investments are limited to safe, liquid, and--these days--low-yielding places such as insured bank CDs, money market accounts, Treasury bills, and money market mutual funds that invest only in U.S. government securities. Low yields abound A quick survey of rates in the Chicago area at … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ Investing calls for plan, not guesswork ]]>

Originally published: March 27, 2003 The future is, by definition, unknowable. Hindsight is 20/20. Don’t confuse the two. When it comes to your retirement investments you need something more than intuition, guesswork, or market timing. You need to make an intelligent, fact-based plan and stick with it--especially when it goes against your instincts. That’s very important these days when your instincts tell you not to “waste” your hard-earned money by making a contribution to your retirement plan or IRA. A well-diversified investment in large-company stocks (with dividends reinvested) has an average annual compounded return of 10.2 percent over the past … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ Proposed accounts encourage saving ]]>

Originally published: February 26, 2003 The rules of the money game are changing, and those who respond quickly to the new incentives for saving instead of borrowing will benefit the most. For decades, Americans have been rewarded for spending and penalized for saving. The spending habit was encouraged years ago when interest paid on consumer debt was tax-deductible. In more recent years, creative financing and widespread availability of credit led Americans to finance their lifestyles on credit cards and home equity loans. The result is that the ratio of debt to personal income today exceeds 100 percent. Now the wheel … ]]> Fri, 03 May 2013 12:14:31 -0600 <![CDATA[ 2 investing suggestions for ‘chicken money’ ]]>

Originally published: April 3, 2003 Although the Fed hasn’t cut interest rates in the last few months, rates paid to savers continue to decline. People with “chicken money” are now searching desperately for higher yields--and sometimes shouldering more risk than they understand. So here’s an update on a few ways to earn a bit more interest on your nest egg, without adding to risk. First, though, remember that the definition of “chicken money” is very simple: money you can’t afford to lose. As such, it belongs in short-term, liquid, safe investments such as CDs, money market accounts, and Treasury bills. … ]]> Fri, 03 May 2013 12:14:30 -0600