“Bruce Williams: Learn the market or get out” |
| Bruce Williams: Learn the market or get out Posted: 11 Dec 2010 09:12 PM PST December 12, 2010 DEAR BRUCE: I have bought Ford Stock at Computershare. I don't know anything about the stock market or investing. I have a contribution of $50 a month to my account. Is this wise? I just know I wanted Ford stock and I don't know what to do after this. A.M., via e-mail DEAR A.M.: The telling line in your message is that "you don't know anything about the stock market or investing." If so, then you shouldn't be messing around with the stock market. The very small amount of money that you're investing in all likelihood is not going to be a lifestyle changer. I am fascinated by your line, "I just know I wanted Ford stock" — why? I'd continue to invest your $50 bucks a month, but I would also start reading the financial section in your local newspaper. Pick up a copy of The Wall Street Journal from time to time — I assure you that it will not bite. Magazines such as Forbes, etc., are also good introductions. If time permits and there is a community college in your area, see if they offer courses on investing. All knowledge is costly. Going to high school and colleges are expensive endeavors. There are no shortcuts that I know of to acquire knowledge of investing. You will be surprised in six months to a year of how much will rub off. DEAR BRUCE: In addition to my full-time job, I edit, layout and produce for a small club that produces magazines and newsletters from my home. I may be adding a fourth soon that would bring my total income on these side jobs above $10,000 per year. Is it time to create an LLC or similar? I am unsure what tax/business advantages there is to this? I would like to further grow the side jobs into a potential full-time gig. Do you have any additional advice on creating a business plan or can you recommend some resources to research it? Reader, via e-mail DEAR READER: From little acorns large oak trees grow. I have no quarrel with starting a business. I am always more comfortable with some type of corporate arrangement, and an LLC (limited liability company) would be a good way to go. I know there are many companies that advertise that you can start your own corporation, but I am still more comfortable with having an attorney in the state where the company is located helping to form a corporation and becoming its registered agent. Also, business plans are generally primarily to impress a lender to provide money, and that doesn't seem to be the problem here. It would seem that you got a good handle on what you are doing. I would continue in that direction, just one word of caution: too much speed can be a disaster. Move reasonably. Don't try to grow so fast that the operation becomes unmanageable. DEAR BRUCE: I am 61, retired and divorced. I am considering letting my girlfriend move in with me. I suffered a relatively minor financial loss in the divorce because I had a prenup. What, if any, financial considerations should I be concerned with if she moves out. I live in Louisiana, my house is paid for, and I have seven figures in my IRA. A.S., via e-mail DEAR A.S.: A few years ago, most people would have said that she has no rights because she is just moving in. However, I am sure you had read about successful "Powell alimony suits" where the act of sharing quarters was used to support a claim of further responsibility on one party's part to the other. Because you have a very substantial worth, talk to an attorney in your state and find out what type of agreement you each should enter into to protect each of you. If she refuses to accommodate in this fashion, it would seem to me, unless your attorney contravenes what I am saying, that she should maintain her own apartment. If she stays in your place from time to time, that's another matter. DEAR BRUCE: I moved and put all of my expenses onto my credit cards. I have about $40,000 in credit card debt. I have a $1,600 monthly mortgage and a $600 monthly car payment. I am able to make all of my monthly payments, but I am tired of paying 21 percent interest on my credit cards. Is there a safe way to consolidate my credit card payments (using one low-interest credit card) without ruining my credit? Joanne, via e-mail DEAR JOANNE: The days of transferring large sums of money on credit cards at lower teaser rates are very much in our past. In your brief note, you didn't give me any financial information with regard to your income. You indicate that you make your monthly payments, but I suspect that you are making minimum payments, and they will go on — for all intents and purposes — forever. That consolidation will not hurt your credit in most circumstances. Since you are paying the 21 percent in interest, it would indicate that there are some weaknesses in your credit history and you have a very substantial credit debt. If your home has decent equity, a home-equity loan would be the way to go. Unfortunately, most people in your circumstance do not have the equities required to get a decent rate of interest. DEAR BRUCE: My wife has owned a business for 30 years. She has never paid quarterly estimated taxes because she sporadically makes a profit. When she makes a profit, I pay her taxes because she claims to have no money. We file jointly. I do not know how to end this. Do you have any suggestions? D.D., via e-mail DEAR D.D.: Sounds to me like your wife has a hobby that you subsidize. When you say "sporadically," I suspect that this means "seldomly." Tell your wife, in a nutshell, that she has a business and she's going have to operate it like a business. An accountant will compute the taxes and she is going to have to find a way to extract that amount of money out of the business to pay her taxes — otherwise get another hobby. I know this sounds like strong medicine, and it might put a strain in your marriage, but business relationships within a marriage often create a strain. The only other answer for you is to continue to grin and bear it, as you have been doing for so long. DEAR BRUCE: I signed up to join a business, which I later found out was a scam. When the people there didn't send me the information or a merchant license within the three days as promised, I immediately contacted my credit card company to cancel the $10,000 purchase. While the credit card company is trying to help me get my money back, it claims I have no true legal action to get my money back because what I signed said "purchase is final" and "no refund or cancellation." Do I have any way to get my money back? Especially since the company did not provide information or the merchant license it promised? Fern, via e-mail DEAR FERN: You start out saying you found out it's a fraud. Is this a feeling on your part or because they didn't meet the terms that you thought you were entitled to? There is a major difference. Ordinarily in credit card transactions, if the service or product is not delivered, the credit card company will intercede on your behalf. On the other side of that they probably paid the money and have no redress themselves and would far rather have you get stuck than themselves. I would insist that the credit card company give me a full credit while this matter is being contested. I would also make a complaint to the appropriate authorities because they did take your money and did not provide the service that was promised. This points out how important it is to investigate a business before parting with upfront money. Send your questions to Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided. Reader Reaction We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Rules. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment. New comments are only accepted for two weeks from the date of publication. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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