Ask Rande 10,000+
- Karin_
- Rande
- Rande
- Erik75
- Rande
- Kirk
- AL_W
- Rande
- Rande
- bob90245
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» Karin_ - Thank you Rande
Thank you Rande for the information on the I-Bonds.It sounded too good to be true.
It would have been better than the Treasury Notes
which are only paying 3.6% (2-year Notes)
To get the Interest rate of 5.92% you have to be
in a bracket - single:$54,100 to $69,100
married:$81,100 to $111,100.
I wonder why there is this spread?
-- posted by Karin_
» Rande - Re: Thank you Rande
In response to message posted by Karin_:Karin,
Where did you read that you had to be below a certain AGI income level to receive I-Bond interest? I'm not aware of any such limitation. As will all savings bonds, you can elect to report interest income currently under the accrual method or defer reporting until maturity under the cash method. The only AGI limitation I'm aware of is for beneficial tax treatment when the savings bonds are used for higher education expenses, as is the case with any savings bond.
-- posted by Rande
» Rande - I Bonds
In response to message posted by Rande:
BTW, here's the I-Bond link:
http://www.savingsbonds.gov/sav/sbiinvst...
7. What are the tax advantages of the I Bond?
Earnings are exempt from state and local income taxes. Federal income taxes can be deferred for up to thirty years, or until redemption or other taxable disposition, whichever comes first.
8. Is there a tax advantage for I Bonds used for college tuition?
Yes. If you qualify, you can exclude all or part of the interest on I Bonds (and on eligible EE bonds) from income as long as the proceeds are used to pay for tuition and fees at eligible post-secondary educational institutions. Details are available in IRS Publication 550, "Investment Income and Expenses."
More on tax aspects:
-- posted by Rande
» Erik75 - House buying advice.
Rande, I'm in the process of ordering a house built, to be closed on in mid May 2002.The builder, a large natioally known company with a good reputation, has offered their customers a discount equivilant to 8% simple interest on any deposit they make over $100k.
Since my house money is sitting in a money market at about 3.75%, that sounds rather attractive.
What do I need to look out for? They are bonded in California and I have asked for more information. Where should I go for advice? A real estate lawyer?
I'm thinking about putting a $200k deposit down which would get me a discount of about $10k. That is about $5,400 better than a MM. Actually it's better than that, because then I wouldn't have to make any other deposits for custom features etc which would be about $20k drawing no or very little interest
-- posted by Erik75
» Rande - Re: House buying advice.
In response to message posted by Erik75:Erik,
If you're comfortable with the builder in the first place and have a solid contract, why not take advantage of the discount? One thing to keep in mind is withholding a substantial part of the payment until satisfactory completion puts you in a better position. But, you would likely need to put something down to get work started with some sort of payment schedule along the way in any event. If the amount required to obtain the discount isn't that much more than you would have paid over that timeframe anyway, and there's still a substantial reserve, then why not take advantage of the price break? Assuming you've done your due dilligence on the outfit and you're comfortable enough to contract with them to build your home with or without a discount, why not get the discount.
-- posted by Rande
» Kirk - Re: House buying advice.
In response to message posted by Erik75:Erik, congratulations on your new home!
I like these sorts of discounts. Remember, if you can get it knocked off the top it COULD save you on property taxes since the closing price will be lower. Perhaps structure the deal after talking to a tax expert?
Plus, you won't pay taxes on the savings... and you'd pay taxes on the interest earned in savings.
I'd make an Excel spreadsheet to really see what you are getting...
-- posted by Kirk
» bob90245 - Re: Caller of The Day 9/8/01
Rande writes on another board:Author: Rande
Date: September 8, 2001 3:48 PM
Subject: Caller of The Day 9/8/01
Great call today: Caller was worried about secular bear market where stocks would be flat for a decade and was thinking about aborting his DCA program and going for GNMAs instead. Flanigan warned against such behavior, calling it "risky." After all, DCA works best when you can pick up stocks at lower prices. Discipline and patience are key, and now could be the worst time to stop DCAing. The point is, nobody knows and that's why planning, patience, and discipline are so important. Great advice! Furthermore, in his opinion, he felt calls for a secular bear market at this juncture don't make any sense, given the fundamental economic backdrop.
You have to wonder where the caller got such ideas? Flanigan should have gone one step further and warned the caller and others against listening to the fear mongers, especially the ones who operate on an agenda that profits from scaring people (e.g., "you have to keep listening and subscribing to me or you will be in a lot of trouble in the short term, wondering what to do next without my instructions," etc.).
Anyway, great call. Do you think it will make the "Free Summaries?"
I didn’t listen to the call. I wonder what the timeframe the caller had for his stock portfolio. I’m reading Jeremy Siegel’s book “Stocks for the Long Run”. Lots of interesting stuff. There’s a chart that shows the thirty-year real returns after market peaks. Starting with $100 initial investment here are the results:
August 1929
Stocks: $565
Bonds: $141
T-Bills: $79
January 1966
Stocks: $447
Bonds: $205
T-Bills $145
Average after peaks of 1901, 1906, 1915, 1929, 1937, 1966
Stocks: $510
Bonds: $177
T-Bills: $125
Here’s an excerpt from Siegel:
“Of course, if investors can identify peaks and troughs in the market, they can outperform the “buy-and-hold” investor. But, needless to say, few investors can do this. And even if an investor sells stocks at the peak, this does not guarantee superior returns. As difficult as it is to sell when stock prices are high and everyone is optimistic, it is more difficult to buy at market bottoms when pessimism is widespread and few have the confidence to venture back into stocks.”
-- posted by bob90245
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