the plastic bag does not inflate.
This is the view from my seat when we lost pressure. Disclosure – in my attempt to avoid “gone fishing” posts, I try to set up my next few blog postings in advance when I take any vacation time. A couple weeks back was such a time. So, while I was on this plane with my family, with no warning at all, the bags came down. The pilot quickly came on to advise that we were losing pressure and that he had to drop to 10,000 feet while we wore the masks. In the end, this was a simple pump failure and at no time were we really at any risk, but of course the thoughts that run through your mind are not so rational. I took the shot above once we were told we were OK to take the mask off. The red X you see on the canister is because the canister gets quite hot, and there’s a bit of a burning smell. They don’t tell you that in the warning pre-flight.
JOE
{ }
My March feature article discusses Money Merge Accounts. This system came to my attention a few months back in the form of a question on a usenet newsgroup. Since then, I’ve gotten as much information as I’ve been able to uncover and am staying with my gut reaction, that if one has the money and desire to pay their mortgage off early, they would be best off doing it on their own. I’ve also spent some time and created an MMA spreadsheet which will let you enter your own number and decide for yourself. Add a comment to request a copy. If it helps you save $3500, please donate $35 to your favorite charity in my name.
In other feature articles, I’ve discussed Bi-Weekly Mortgages, and the general topic of pre-paying one’s mortgage. The larger message here is that there are many approaches to take, but whatever you choose to do needs to be in the larger context of the rest of your financial situation.
Note: I’ve added a page on the sidebar with links to sites that discuss MMA in greater detail.
JOE
{ }
by Joe
on February 29, 2008
Last week, in “More Roth Magic”, I discussed how for people on the edge of a tax bracket, there are some moves that one can make to optimize their wealth (read that – minimize their taxes over time.) Now, as promised, let’s look at schedule A.
From Fairmark, we can see that in 2008, the standard deduction for a married couple filing jointly is $10,900. Let’s think about this. A couple earning $60,000 might live in a house worth $200K, and be paying on a mortgage balance of $150K or at 6%, about $9,000 per year interest. Maybe another $2000 or so goes to property tax. At tax time, their total itemized deductions may just exceed the standard deduction, if that. Now, with a bit of planning, they may be able to use the system to work toward their advantage. In year one, right at the end of the year, make one extra mortgage payment. Not a principle payment, but the next month’s payment. This way the bank will credit the account with having paid that interest in advance. Similarly, go to the tax assessor’s office and pay at least half next year’s property tax bill in advance. They should be happy to take your money and credit your account. Are you generous to your house of worship or other charities? Make your annual donations in January of this year and then again in December of the same year. Now you’ve stacked up your Schedule A deductions to their maximum. Next year, just 11 mortgage payments, no donations, maybe half a year’s property taxes, and you take the standard deduction. Just one way to beat the system, a bit. Let me know what you think.
JOE
{ }
by Joe
on February 27, 2008
In the March issue of Smart Money, there was an article “10 Things Your Tax Preparer Won’t Tell You,” which, like many articles in this series takes a shot at the least reputable people in a given profession. What caught my eye reading this story was this one sentence “On average tax preparers make more mistakes, and costlier ones, than Josie Taxpayer does.” I quickly Googled “Josie Taxpayer” and found two results, both referencing Joe and Josie Taxpayer, as the Smart Money story had not hit the web yet. I found the avoidance of the phrase Joe Taxpayer interesting, as I’m sure it was intentional. Just my random observation today.
JOE
{ }
by Joe
on February 25, 2008
The New York Times recently reported in a story titled “Top Court Allows Suit Over 401(k)” that the supreme court ruled on Wednesday allowing an individual to proceed with his lawsuit against his employer who administered the company’s 401(k). His claim was that they ignored his instructions to shift his investment mix and that he lost $150K due to his instructions being ignored. I received many emails asking about this ruling, asking if anyone can sue over the current losses. The suit was not about the losses of the market, but were specific to the fiduciary responsibility of a 401(k) sponsor to follow instructions of the participants. Most of us invested in stocks are down this year, but that’s not to suggest that any class actions suits will follow, we are just subject to the volatility of the current market.
JOE
{ }
