Gannett News Service
Untitled Article
With a family income of $53,000 and annual raises of 3 percent, a couple can bring home more than $4 million working from ages 25 to 65, The Pocket Change Investor ($12.95 a year; Good Advice Press, P.O. Box 78, Elizaville, N.Y. 12523) reports.
To make the most of that money, the newsletter advises readers to ''spend less than you earn, avoid debt, and stick to these 10 steps'':
Get out of debt; decide what you really want; focus on what's most important; pay yourself first by saving a percentage of every paycheck; when investing, take appropriate risks based on your comfort level, time frame and goals; diversify investments to limit risk; learn basic financial strategies; protect yourself and your family with life insurance, a will and possibly an estate plan; and, finally, when you need professional help, get it.
Consumer Reports finds unqualified advisers
More than 500,000 licensed advisers are marketing their financial planning services in the United States, yet just 10 percent are qualified to give financial advice, Consumer Reports Magazine says.
If you need an adviser, the magazine recommends comparing the qualifications of at least three planners and interviewing them. Questions to ask:
iWhat training and experience have you had? Look for at least five years' experience and background in accounting, investment analysis and estate planning, plus a professional credential, preferably a CFP.
iHow are you compensated? Have them put their charges in writing and request a copy of the ADV-Part II, the disclosure form that advisers must file with the SEC or state securities agency, Consumer Reports suggests.
iWhat can I expect in your final report? You want a plan tailored to you, with steps to take to achieve the goals.
More taxpayers subject to paying 'shadow tax'
Thanks to inflation and tax changes approved by Congress last year, more taxpayers will find themselves subject to the alternative minimum tax or AMT -- also known as a ''shadow tax'' -- in 1998, the Institute of Certified Financial Planners says.
To calculate it, you must first figure your regular income tax, then add back adjustments and ''preferences.'' For example, you can't take the standard deduction under AMT. Taxpayers who itemize must add back the personal and dependent exemptions, state and local taxes, investment interest expense and child-care credits.
After all items are added back, you get to take a single exemption -- $45,000 for married taxpayers filing jointly. If the resulting tax is higher than your regular tax, you pay the higher AMT amount.
Survey: High schoolers lack financial smarts
High school students often lack the financial knowledge needed to make wise decisions when it comes to money matters, a 1997 survey by the Jump$tart Coalition for Personal Finance Literacy indicated.
Jeffrey Cox, director of the investment education institute, says parents and grandparents can help teach the basics. His advice, in the February issue of Better Investing, published by the National Association of Investors Corp.: Share some of your money experiences with your kids; help your child or grandchild become a common stock owner; become more knowledgeable yourself; initiate interesting learning projects with your children.
