{"contentId":"2472210","authorDomain":"carmenwongulrich"}

Newsvine Q&A with CNBC's Carmen Wong Ulrich

News Type: Event — Tue Feb 24, 2009 2:44 PM EST

business, economy, personal-finance, cnbc, brian-williams, nbc-nightly-news, meltdown-making-sense-of-it-all

Hi. I'm Carmen Wong Ulrich, host of CNBC's "On the Money" (airs weekdays at 10PM ET) -- in conjunction with this week's NBC Nightly News special series, "Meltdown: Making Sense of it All," I'll be available tonight and Thursday to answer your personal finance questions. Feel free to post your questions here in advance.

For those of you visiting us here for the first time, please know that Newsvine is an interactive web site designed for members to participate in thoughtful discussions about news-related topics. Feel free to take a look at the Newsvine Code of Honor, it's a short list of standards that existing members hold themselves to here.

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{"commentId":5556266,"authorDomain":"dcstone01"}

dcstone01

Thank you for the opportunity to ask...

If a person has the wherewithal to invest, (already paying down personal debt, increasing savings, etc....) what type of investment would you recommend? As a person interested in re-investing, I want my money in an 'ethical' company and I am not finding many to be worthy of my investments...

PS...is that also a reason why people are not investing as well??? They don't see 'ethical' behavior from the CEO's and high ranking managers of companies making gazillions in salary and bonuses and then those same companies going bankrupt that they end up needing government bailouts....I know my personal money will not go to them by way of investing...I want to put my money in a company that is run by better people than that.

{"commentId":5556266,"threadId":"510357","contentId":"2472210","authorDomain":"dcstone01"}

5 votes

#1 - Tue Feb 24, 2009 3:24 PM EST

{"commentId":5577306,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

I actually do not recommend putting any money you truly need into individual stocks--too risky. However, I definitely recommend diversifying your investments by putting your money into index funds, for example, though you may find that the funds you like contain companies that you don't like. There are 'green' funds out there that pool together stocks from companies that do as little harm to the environment as possible, but 'green' doesn't necessarily refer to the ethics that you mention. If you are looking to invest in individual companies, know that we're not in the boardroom or executive suites so outside of doing your due diligence in terms of their books, you can look into companies whose products and services fit your value system. What products and services meet your criteria for ethics?

{"commentId":5577306,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

1 vote

#1.1 - Wed Feb 25, 2009 12:10 PM EST

{"commentId":5618585,"authorDomain":"dcstone01"}

dcstone01

Well, I am looking forward, I want to invest in alternate energy and viable technologies, (along the lines of an Apple/Mircosoft, SNDK, etc...) maybe medical devices for the growing elderly populations etc...

But, I want a company(s) that is/are using sound and ethical and honest accounting, not hiding their liabilities, and fully funding their employees retirement plans with honest CEO's and BOD's that aren't getting salary's and bonuses that are 400+ (or even 100+) times higher than that of the average and mid level employees...

A company that believes in giving back to their communities. Profit is good, greed for the sake of greed is not a company that I want to promote or invest in...So in a sense, I am trying to invest in companies that would be comparable to my principles...

{"commentId":5618585,"threadId":"510357","contentId":"2472210","authorDomain":"dcstone01"}

1 vote

#1.2 - Thu Feb 26, 2009 9:53 PM EST

{"commentId":5629249,"authorDomain":"nofluer"}

Nofluer

Ummm yeah. Bad advice Carmen. Index funds pretty much guarantee you'll lose money because they buy the index. On any given day, some stocks in the index (like DOW industrials, or NASDAQ) go up, some go down. Over time you'll match the index. Which isn't doing very well and it won't for some time in the future. (I'm not looking for a low until it's well south of 6000. In 2001 I called a market downside of 50 - 75% - we're getting there.) (Keep in mind that the stock market low in 1932 - or was it 34? - didn't rebound to it's former highs of the late 20s until 1954)

Individual stocks, OTOH, can do VERY well if you use your noodle.

Buffett had it right - BUY WHAT YOU KNOW!!! If you like Coke, don't just buy Coke - research the company. See what their plans for the future are and evaluate their business strategies and ethics. Get to KNOW them as a company.

Which brings us to the other point I'll make here. Both of DC's posts mentioned the company ethics and social factors. Things like "Are they green" and "Are they involved in helping poor kids in the slums" and such.

These are valid concerns in life - but they should NOT be primary considerations when picking a stock. Why are you investing? To help the world or to save for your old age or some other goal? Don't confuse your goals. If you want to consider social stances, do that AFTER you have picked a short list of companies that you like and think you can make money on. Or invest, make a ton of money, and then DONATE some of it to the org of choice. ;-D

But ihn the current market - if you owe money, after you have set aside an emergency cash fund, paying off debt is absolutely the BEST investment you can make.

{"commentId":5629249,"threadId":"510357","contentId":"2472210","authorDomain":"nofluer"}

2 votes

#1.3 - Fri Feb 27, 2009 1:48 PM EST

{"commentId":5556523,"authorDomain":"mightyblogger"}

Pacific Northwest Blogger

Will this become a monthly column?
Hope so...

There's so much talk about Bonds and Treasury notes.
Are there non governmental investments that you feel have similar safety associated with them? My personal ethos is that I want to invest in American smallcap/midcap alternative energy sector...

{"commentId":5556523,"threadId":"510357","contentId":"2472210","authorDomain":"mightyblogger"}

3 votes

#2 - Tue Feb 24, 2009 3:37 PM EST

{"commentId":5577474,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

The only financial instruments that come close to offering the one-to-one guarantee of say Treasury bills are money markets, either as an account with an FDIC insured bank or as a fund with a broker or other financial services company. If you're looking to invest even in bonds and/or smallcap/midcap/alt-energy, etc., know that any investment in any stock or even bond can lose value. Many folks before this recession touted that municipal bonds were as good as T-bills or as safe as cash. We've learned that lesson the hard way. I've had folks call into my show who saw their AAA rated municipal bonds lose 30%+. If you're looking to protect what you put in, without a doubt or losing a dime, money markets and Treasuries are the only sure way to go. Remember though, because they are so safe, they don't earn much...

{"commentId":5577474,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

1 vote

#2.1 - Wed Feb 25, 2009 12:14 PM EST

{"commentId":5629904,"authorDomain":"nofluer"}

Nofluer

And currently I believe Treasuries are paying ZERO %? Although this SEEMs like preservation of principle, it's not. Between 2000 and 2008 the US dollar lost around 50% of it's value when measured against other currencies. The obscene spending that is currently going on in Washington and is planned to accelerate over the next 4 years GUARANTEES that inflation will go nowhere but UP! So an investment at zero percent starts out losing value from day one due to inflation.

{"commentId":5629904,"threadId":"510357","contentId":"2472210","authorDomain":"nofluer"}

2 votes

#2.2 - Fri Feb 27, 2009 2:13 PM EST

{"commentId":5559329,"authorDomain":"steven-11"}

Steven-909113

My wife and I have a mortgage on a condo that we have not been late on. When she orginally bought the condo she put down 20% of the $112k purchase price. She used a mortgage program called MassHousing since she was a first time home buyer it had reduced interest rates at that time. Now that we are married, we are interested in getting a lower interest rate and a smaller term to get this loan paid off fast. We are not sure if the MassHousing loan was FHA backed or not. We live in Clinton, MA and this loan is only available for MA residents. We were looking at refinancing, but since there has been manny foreclosures where the properties are selling for 60 to 70% of the value that wife paid for the condo back in 2006.

What can we do you suggest us doing? We did want to move within 5 years.

{"commentId":5559329,"threadId":"510357","contentId":"2472210","authorDomain":"steven-11"}

1 vote

#3 - Tue Feb 24, 2009 5:49 PM EST

{"commentId":5577925,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

Steven - The most important criteria for refinancing is equity. How much equity do you have in the home? Have you lost that 20% as the value went down? Lenders are barely even glancing at homeowners who don't have that full 20% of equity in their homes--sometimes they even require more. Some good news though--if your mortgage is backed by Fannie Mae and/or Freddie Mac (ask your lender) and you have a solid income, good payment history and do not owe more than 5% of your home's current value (meaning, you're not underwater on your home--owing more than your home is worth--by more than 5%), you may qualify for the new Housing Affordability Plan that goes into affect on March 4th. Head to HUD.gov for more information. Good luck!

{"commentId":5577925,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

1 vote

#3.1 - Wed Feb 25, 2009 12:25 PM EST

{"commentId":5560392,"authorDomain":"umpire82"}

marcus paroli

Hi what are the chances that mortgage rates will drop to 4%?

{"commentId":5560392,"threadId":"510357","contentId":"2472210","authorDomain":"umpire82"}

1 vote

#4 - Tue Feb 24, 2009 6:43 PM EST

{"commentId":5577579,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

Wouldn't that be something! Even the best of us don't know how low rates will go or if they will even be able to go any lower. They are already at amazingly low rates... What we can say with some certainty is that at some point rates will go up again. With so much money being printed, to keep our dollar strong, the Fed will have to raise rates again - it's just a matter of when. If you're waiting to buy a home or refinance until rates drop that low, don't... On the life of a 30 year or 15 year fixed mortgage, placing your odds on waiting for a one point change may set you up to lose the current deal we have now.

{"commentId":5577579,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

1 vote

#4.1 - Wed Feb 25, 2009 12:17 PM EST

{"commentId":5630145,"authorDomain":"nofluer"}

Nofluer

I agree. The time to refinance or buy is when you're comfy with current price levels. Interest rates will not get much better.

The difference between the cost to the bank of the money they will lend you (how much interest they have to pay out) and what they will charge you for the money is called their "spread." Banks need a spread of at least around 4 or 5% just to pay their bills. As Carmen indicated - rates will have to go up soon to fight the inflation that they're causing, and to strengthen the Dollar lest it become worthless (a real danger at present money creation levels.)

Volker had to increase the Federal Funds rate to around 19% to tame the Stagflation he faced. The inflation that's hanging over our heads now will be MUCH worse - so expect HIGHER interest rates. ie if you can get one, go for a fixed rate loan, not an ARM. And stay away from "teaser" rates. They're deadly.

{"commentId":5630145,"threadId":"510357","contentId":"2472210","authorDomain":"nofluer"}

2 votes

#4.2 - Fri Feb 27, 2009 2:23 PM EST

{"commentId":5635122,"authorDomain":"umpire82"}

marcus paroli

So if they are going to have to raise the mortgage rates, will it tend to increase rates on cd's and money market accounts?

{"commentId":5635122,"threadId":"510357","contentId":"2472210","authorDomain":"umpire82"}

1 vote

#4.3 - Fri Feb 27, 2009 6:18 PM EST

{"commentId":5635857,"authorDomain":"nofluer"}

Nofluer

Marcus #4.3

Yes - but they won't pay as much as they charge. And that's why I'm currently suggesting investing in CDs - nothing longer term than 12 months and with rolling maturities.

:-)

{"commentId":5635857,"threadId":"510357","contentId":"2472210","authorDomain":"nofluer"}

2 votes

#4.4 - Fri Feb 27, 2009 6:59 PM EST

{"commentId":5637678,"authorDomain":"dcstone01"}

dcstone01

In the bank I worked at we encouraged what is called 'laddering'...that means buy CD's at either one month or quarter intervals...they then mature at different times...this way if rates go up the owner could take advantage of a higher rate, or if they go down, at least only some of the cd's are affected at once and gives the owner time to look for better rates...(bottom line-don't purchase all cd's at once, don't allow all the maturities dates to be the same)

{"commentId":5637678,"threadId":"510357","contentId":"2472210","authorDomain":"dcstone01"}

1 vote

#4.5 - Fri Feb 27, 2009 8:58 PM EST

{"commentId":5637905,"authorDomain":"nofluer"}

Nofluer

"laddering" = rolling maturities. I never heard it called that though. What backwards part of the country do you live in? {snort!} ;-D

{"commentId":5637905,"threadId":"510357","contentId":"2472210","authorDomain":"nofluer"}

1 vote

#4.6 - Fri Feb 27, 2009 9:12 PM EST

{"commentId":5638103,"authorDomain":"dcstone01"}

dcstone01

Its what we called it in house, seemed like a good description of the 'process'... bank is one of top 5 nationals, but will leave name for later...

{"commentId":5638103,"threadId":"510357","contentId":"2472210","authorDomain":"dcstone01"}

1 vote

#4.7 - Fri Feb 27, 2009 9:25 PM EST

{"commentId":5638329,"authorDomain":"nofluer"}

Nofluer

Well... I'm an accountant (among other things) so that might explain it. Most bankers I've met are not - so I've heard lots of terms for the same thing. They seem to just kind of make up what they don't know sometimes. ;-D

Stock Brokers are worse, tho.

And I met an H&R Block tax instructor who BRAGGED about having done taxes for 14 years and had never taken an accounting course! I stuck my foot in it when I quipped "it shows." (Always the smart azz! :-D) She was handing out bad advice - and the class ended up reconvening after class so I could correct the stuff she got wrong. Once she challenged me on a point and made the mistake of saying, "I'd like to see code and Regs on that one!" (thinking that I wouldn't be able to, I'm sure.) Next class period I handed her photo copies of the code and regs as requested, relevant sections highlighted, and also gave her a copy of my CCH comentary on the subject. Boy was SHE poed! ;-D

{"commentId":5638329,"threadId":"510357","contentId":"2472210","authorDomain":"nofluer"}

2 votes

#4.8 - Fri Feb 27, 2009 9:41 PM EST

{"commentId":5638675,"authorDomain":"dcstone01"}

dcstone01

Love it...

My Accounting 'Tax' class in college this past fall, was taught by a former IRS agent (after retiring she started her own bookkeeping office and started teaching college classes). Her first test for the semester covered 3 chapters and no one got more than 50% on it...we felt it was a reflection of her instructing than lack of knowledge of the material....

{"commentId":5638675,"threadId":"510357","contentId":"2472210","authorDomain":"dcstone01"}

2 votes

#4.9 - Fri Feb 27, 2009 10:04 PM EST

{"commentId":5560545,"authorDomain":"sfowler42"}

Sfowler42

I have 529 plans for my grandchildren. They are age-based, so as they get closer to going to college the mix becomes more bonds and less stocks. One grandson's plan was 28% stocks last year. He goes to college in about 18 months, and his plan has lost everything I put into it last year plus about $1000. Should I change the mix to mostly bonds or what? Suspend contributions for awhile? Three other grandchildren will go to college in 3 years--- is that long enough for the market to recover?

{"commentId":5560545,"threadId":"510357","contentId":"2472210","authorDomain":"sfowler42"}

1 vote

#5 - Tue Feb 24, 2009 6:50 PM EST

{"commentId":5577708,"authorDomain":"docall"}

Dave O'Callaghan

Listened to you about fighting credit ratings. Short as I can. Retired after 38 years of employment, never a credit problem. Home paid off which is worth $350,000.00 to $400,000.00 even in this market. Pension and other income good. Have plenty of other assets (some dwindling like the rest of the world) Applied for AX Blue Card that was turned down stating that I had two outstanding issues. Pulled credit reports and only Experian had listed these issues. 1) A $433.00 gas bill from my son at another address who is not living with me and is 33 years old. 2) I cosigned a $70,000.00 home equity line of credit (4 yrs. agao) to help out my other son and the balance is still up around $68,000.00 as he lost his business in a crunch, but payments are always being made. I am not the primary on loan. He is back to work and will work on paying loan down. Filed appeal with Experian and they erased the $433.00, but refused to clear from my credit report the other loan, even though the other two credit agencies have not used this. Filed appeal with AX and explained in detail. Got short rebuke letters from Experian and AX stating that they would not consider these to be "exceptions." AX turned down the Blue Card even though I hold two separate card with them for the last thirty years. AX claims they relied heavily on Experian and don't count the others. Within a week of me arguing on the phone and writing letters to them they still refused to issue card, but solicitied me for a Platinum Plus Card for being such a good customer. Of course. this card carries an annual $475.00 fee. Problem is that I would like to make some major purchases such as a car and avail myself to 0% fifnancing, but I am afraid that these offers will be withhheld beacuse of trying to help my son. Any advice beyond what I have already completed in appeals process?

{"commentId":5577708,"threadId":"510357","contentId":"2472210","authorDomain":"docall"}

2 votes

#5.1 - Wed Feb 25, 2009 12:20 PM EST

{"commentId":5578123,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

A lot of folks were caught in your position - too much money in stocks in their 529's when the student is getting ready to go to college. Many 529's have actually changed the way they do business (too late for you, I realize) due to these huge losses. As you've experienced, even the age-based plans were much, much too aggressive. Essentially, as a 529 acts as a kind of college-IRA, when your child gets into high school, little of the money should be exposed to stocks since anything less than 5 years in the market doesn't give you enough time to recover losses.... SO - yes, you should first off all allot new contributions to a cash-equivalent such as a money-market within the 529 and as you're only able to change allocations twice a year, shift your 'mix' to more conservative (to preserve what you've got) - BUT - if you can stick it out and not take out the money until your student is say a junior or senior in college, you can give yourself, and those stocks, time to recover. Remember, like an IRA, even when you lose money, you still own the same 'stuff'.

{"commentId":5578123,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

1 vote

#5.2 - Wed Feb 25, 2009 12:30 PM EST

{"commentId":5560621,"authorDomain":"ntrogers"}

nancy-909235

Is there any relief for a family like ours? I was a stay at home mom - I am looking for a job. My husband lost his job on April 1, 2008. We have survivied on unemployment, savings and some help from family and friends. We are current on our Mortgage and do not have a car payment or credit cards. With out a job offer in site, things are starting to get tight in our house - we do not know how much longer we can hold on. Our house has not dramatically depreciated (values have held well in our area) and our ARM is currently at 5.875. We do not fit any of the criteria necessary for "help", but we do need some help!!!!

{"commentId":5560621,"threadId":"510357","contentId":"2472210","authorDomain":"ntrogers"}

2 votes

#6 - Tue Feb 24, 2009 6:54 PM EST

{"commentId":5624030,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

Nancy, have you looked into the criteria for 'responsible homeowners' and refinancing? If you're current on your mortgage (and have been), have a Freddie Mac or Fannie Mae backed mortgage (call your lender to find out) and are no more than 5% underwater on your home (or not underwater at all), you can apply for a loan modification through the new Housing Plan - head to HUD.gov for more info. Applications will be available and ready to accept on March 4th, next Wednesday. If you don't fit under any of these guidelines and you're struggling with your mortgage, contact a non-profit housing counselor in your area - you can find one at NFCC.org. Good luck!

{"commentId":5624030,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

1 vote

#6.1 - Fri Feb 27, 2009 9:48 AM EST

{"commentId":5560662,"authorDomain":"oopfray"}

ARTHUR MORRISON

hello!! what if anything is going to be done for renters? we don`t have a house to sell so we can move somewhere else. if we can`t pay our rent we are homeless in about 60 days. thank you!!

{"commentId":5560662,"threadId":"510357","contentId":"2472210","authorDomain":"oopfray"}

1 vote

#7 - Tue Feb 24, 2009 6:56 PM EST

{"commentId":5560885,"authorDomain":"bilibtms"}

Armella

We had to declare personal bankruptcy (chpt. 13) last year due to a failed business - most difficult decision we ever made. Will it be possible for us to refinance our existing mortgage at 6.5% to a lower rate, we have never been late for the 18 years of our mortgage. Or will banks look at the bankruptcy and not consider us?

Thanks.

{"commentId":5560885,"threadId":"510357","contentId":"2472210","authorDomain":"bilibtms"}

1 vote

#8 - Tue Feb 24, 2009 7:08 PM EST

{"commentId":5624061,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

Armella - Banks are looking for folks who will be the lowest risk and that means having great credit. The bankruptcy--even though you haven't been late once with your mortgage payments--may prevent you from being able to refinance. 6.5% is not a bad rate for a 30 year mortgage though if you could refinance now you could save a lot of money every month. Start with your current lender first to see if they'd consider you.

{"commentId":5624061,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

1 vote

#8.1 - Fri Feb 27, 2009 9:50 AM EST

{"commentId":5561617,"authorDomain":"edie64"}

Edie-909338

Hello Carmen, love your show OTM. My husband & I are retired, in our mid and late 60's. We each have rollover IRA's from 401(k) funds. Our portfolios are with a good investment company. With the stocks as they are now should we leave the funds in place or move them maybe to FDIC insured accounts with our community bank? Our bank isn't in a bailout.

Thank you!

{"commentId":5561617,"threadId":"510357","contentId":"2472210","authorDomain":"edie64"}

2 votes

#9 - Tue Feb 24, 2009 7:49 PM EST

{"commentId":5562660,"authorDomain":"Sunny2"}

Sunny2

Hi Carmen!

I have a $50,000 whole life insurance policy which my parents purchased for me 13 years ago and it has a cash value of $950. I pay $22 a month for the policy. My father took out a loan on the policy a few years ago, which has a yearly interest of $99. My employer provides me with a $15,000 policy. I am an unmarried 27 year old without any dependents. Should I keep the whole life insurance policy OR cancel it and put the cash value to a $3,000 unsecured loan? (I did have melanoma which was removed in 2005 if that factors into the decision)

Thanks so much for your guidance!

{"commentId":5562660,"threadId":"510357","contentId":"2472210","authorDomain":"Sunny2"}

2 votes

#10 - Tue Feb 24, 2009 8:45 PM EST

{"commentId":5564916,"authorDomain":"roed47"}

DOUG ROEDER

ive been starting a towing and transport company since november 2008.will i be able to write off all my expenses once i start earning in 2009?

{"commentId":5564916,"threadId":"510357","contentId":"2472210","authorDomain":"roed47"}

1 vote

#11 - Tue Feb 24, 2009 10:54 PM EST

{"commentId":5578452,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

Not all of them Doug, but quite a few. Keep fantastic records (receipts), confer with a tax pro or accountant (and if you don't have one, now as a business owner, it's time to) and find out more info at: http://www.irs.gov/businesses/small/article/0,,id=109807,00.html

{"commentId":5578452,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

1 vote

#11.1 - Wed Feb 25, 2009 12:37 PM EST

{"commentId":5570642,"authorDomain":"rockybixby"}

John Holmes Porn Star

My wife and I are saving up money to buy a house next year. We currently have about $35,000 saved, but we would like to save about $50,000 before buying a house. Does not getting a house this year and losing the $8,000 tax break outweigh us saving more and getting a house next year without the $8,000 tax break?

Thank you Carmen and I love your show.

{"commentId":5570642,"threadId":"510357","contentId":"2472210","authorDomain":"rockybixby"}

1 vote

#12 - Wed Feb 25, 2009 8:07 AM EST

{"commentId":5578564,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

Hello John - What's most important, as a mortgage is a very, very long-lived loan, is if you're putting down a full 20%. Putting down a substantial down payment when you buy, as well as having very good credit and the income to fully support the mortgage means you get the lowest interest rate which can save you 10 times that $8,000 over the life of the loan and then some. So buy when you're ready to buy--when you have that 20% down.

{"commentId":5578564,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

#12.1 - Wed Feb 25, 2009 12:40 PM EST

{"commentId":5575592,"authorDomain":"caroline-raymond"}

Caroline-911963

How long can we save important documents as taxes, mortgages records, credit card bills, medical bills?

{"commentId":5575592,"threadId":"510357","contentId":"2472210","authorDomain":"caroline-raymond"}

#13 - Wed Feb 25, 2009 11:21 AM EST

{"commentId":5630472,"authorDomain":"nofluer"}

Nofluer

The accountant's most frequently used answer to questions like this is "It depends." ;-)

For all of the categories you listed, the determining factor is relevance. GENERALLY - tax records should be held at least as long as the years in question are in play - ie as long as any item that is included in those returns can affect your taxes. (Things like depreciation) Mortgage records should be maintained as long as you own the property (they establish basis) plus any additional time that they may bear on your on-going finances or taxes. The credit card bills would depend on what they relate to, and medical bills would depend on what kind of medical bills. (You can toss the receipt for aspirin.)

Best advice is check locally with someone who's qualified who could tell you which things to keep and why, and which things you can toss.

Or just put the stuff in a box and shove it up the stairs to the attic. Then it won't be a worry or a bother. :-)

{"commentId":5630472,"threadId":"510357","contentId":"2472210","authorDomain":"nofluer"}

2 votes

#13.1 - Fri Feb 27, 2009 2:37 PM EST

{"commentId":5578383,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

Caroline - great question(s)!

Save tax documents for a minimum of 3 years, though I personally save them for at least 5.

Save mortgage records as well for several years though always save your original closing and/or refinancing records.

Credit card bills are now mostly electronic though if you have had a card for a while and either you or the company closes your account, they may wipe your records clean so it's up to you to keep some records. Check into the statute of limitations on debt in your state (it's by a state by state basis, some states it's only 3 while others it can be as much as 10). Check out this link for your state, for medical debts as well: http://www.consumerfraudreporting.org/debtcollectionsol.php

{"commentId":5578383,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

2 votes

#14 - Wed Feb 25, 2009 12:35 PM EST

{"commentId":5582520,"authorDomain":"grannisk"}

Kathy-913427

Hi Carmen,

I'm receiving $1200 back in tax refunds and am $6,500 in credit card debt. One card has a $1800 balance with a 8% APR, another a $1300 balance with 0% until June and then goes to 8% and my last card has $3,300 balance with 24% APR. Which credit card should I send my refund check to? I am not sure which one to focus on paying off first.

Thanks,

Kathy

{"commentId":5582520,"threadId":"510357","contentId":"2472210","authorDomain":"grannisk"}

#15 - Wed Feb 25, 2009 2:39 PM EST

{"commentId":5598117,"authorDomain":"carmenwongulrich"}

Carmen Wong Ulrich

Hi Kathy - I LOVE this question! The secret to credit-card-payoff efficiency is to focus on paying off your most expensive debt first. 'Expensive' means the one with the highest interest rate. Even if your balance on the 24% card were not the biggest balance, it would be the debt that grows the fastest, like a fast growing weed, soon outpacing the others. So pay the minimums on your other cards, focus on the 24% card to pay it off as soon as possible, when it's paid off, then focus on the 8% card, then the 0% (which turns to 8%). If you have two cards at 8%, then head for the one with the highest balance. Good luck!

{"commentId":5598117,"threadId":"510357","contentId":"2472210","authorDomain":"carmenwongulrich"}

1 vote

#15.1 - Thu Feb 26, 2009 10:25 AM EST

{"commentId":5587221,"authorDomain":"sprudo"}

SPRUDO

Hello Carmen,

Thank you for the opportunity to ask financial questions. Mine is a bit different. Previsously I purchased tax credits from Boston Capital. They came in $10k blocks and provided a direct credit against taxes, investing each 'series' in section 8 housing. This was great at tax time, but they only ran for ~10 years. When I inquired about purchasing another block, I was told they no longer sell tax credits to individuals.

The question is - do you know of a firm which sells tax credits to individuals similar to what Boston Capital once did?

Thank you... sprudo

{"commentId":5587221,"threadId":"510357","contentId":"2472210","authorDomain":"sprudo"}

1 vote

#16 - Wed Feb 25, 2009 5:39 PM EST

{"commentId":5588398,"authorDomain":"prb5600"}

K. Mulacek

How does spending 634 billion for healthcare and paying for this by "taxing the wealthy" stimulate growth in the economy? I'm a smart person, how about a straightforward answer?

{"commentId":5588398,"threadId":"510357","contentId":"2472210","authorDomain":"prb5600"}

#17 - Wed Feb 25, 2009 6:40 PM EST

{"commentId":5604219,"authorDomain":"hvymtl83"}

hvymtl83

Carmen,

In the first post you said you do not recommend individual stocks because they are too risky and prefer index funds. I would counter that I have done quite well in individual stocks and generally dislike index funds, especially the broad indexes, as you're buying dogs along with good stocks. I generally only do this in my 401k where I don't have a choice. Could you expand on why you feel individual stocks are too risky? Especially in light of the info now available to investors via the net and your own station (CNBC). Do you feel that the average person can't understand or doesn't have the time or ???

{"commentId":5604219,"threadId":"510357","contentId":"2472210","authorDomain":"hvymtl83"}

1 vote

#18 - Thu Feb 26, 2009 1:38 PM EST

{"commentId":5612760,"authorDomain":"tramost"}

Tramost

Carmen,

I have a rental house in Nevada. My tenant notified me yesterday that they are being asked to move out because the house is in foreclosure due to unpaid HOA dues. I immediately contacted the HOA and they told us that to stop the foreclosure we have to pay over $6,000 in fees which we don't have. I bought the house in 2005 and current on my mortgage payments; however the property is about $125K underwater. Should I negotiate the fees and ask if I can arrange a payment plan or should I just do nothing and have this property foreclosed? What is the effect of foreclosure on my credit?

{"commentId":5612760,"threadId":"510357","contentId":"2472210","authorDomain":"tramost"}

1 vote

#19 - Thu Feb 26, 2009 5:05 PM EST

{"commentId":5619302,"authorDomain":"spaceneedle68"}

Story-919180

I work for one of the banks that was recently purchased and absorbed. I have a transition position until June 30. At the end of this run, I'll receive about $62,000 in severance (before taxes). I am part owner in a condo in downtown Seattle and if it sells at the current listing price - I'll receive around $70,000. What should I do with this money when it comes in July?

-pay off credit card debt (yes)

-pay school loan down?

-buy another house (would rather rent for awhile)

-keep the cash at hand until I find a new job?

-invest the $$ somewhere?

I have $50,000 in school loans and $18,000 in credit card debt at various interest rates. I'm 40 and only have $3,700 in a 401k. I currently bring in $5,600 a month after taxes. I have no idea how long it will take for me to find another PR/marketing job close to my current salary.

{"commentId":5619302,"threadId":"510357","contentId":"2472210","authorDomain":"spaceneedle68"}

1 vote

#20 - Thu Feb 26, 2009 10:41 PM EST

{"commentId":5630674,"authorDomain":"nofluer"}

Nofluer

1, 2, 3, 5

Don't quit your job. They're scarcer than hen's teeth.

{"commentId":5630674,"threadId":"510357","contentId":"2472210","authorDomain":"nofluer"}

3 votes

#20.1 - Fri Feb 27, 2009 2:47 PM EST

{"commentId":5635905,"authorDomain":"nofluer"}

Nofluer

Sorry - I had it right then forgot that you're not QUITTING!

DOH! My bad.

Revised answer = 4, 1, 2, 3, 5

OR you could consider getting completely debt free which would enable you to take a job at a lower pay level.

Which would make it 1, 2, 4, 3, 5.

{"commentId":5635905,"threadId":"510357","contentId":"2472210","authorDomain":"nofluer"}

3 votes

#20.2 - Fri Feb 27, 2009 7:03 PM EST

{"commentId":5621058,"authorDomain":"nuthouse4d"}

Scott-919440

How can the American people be so stupid. What caused ALL of this economic crisis is NAFTA that Bill clinton signed into law. It will NEVER get better until this stops. And now Barrack Osama is going to make it worse. Everyday companies are leaving to go to mexico, because they can pay junk wages, and bring the product in for free.. WAKE UP AMERICANS, If you even can stop being sheep that long.

{"commentId":5621058,"threadId":"510357","contentId":"2472210","authorDomain":"nuthouse4d"}

1 vote

#21 - Fri Feb 27, 2009 1:35 AM EST

{"commentId":5627335,"authorDomain":"lindenzoo"}

Linda-920054

Hi Carmen, You're great. I would like you to tell me when using automatic (electronic) payments for services i.e. phone, cable, etc. is it preferrable to give access to a credit card or to a bank account. Thank you for your response.

{"commentId":5627335,"threadId":"510357","contentId":"2472210","authorDomain":"lindenzoo"}

1 vote

#22 - Fri Feb 27, 2009 12:29 PM EST

{"commentId":5628054,"authorDomain":"dcstone01"}

dcstone01

Sorry, I just had to put my two cents in here with this question, if you don't mind an observation....

I used to work for a large bank and really learned the benefits of the 'online' bill pay process...what is great about it is that when you designate a 'payee' the only information on it from you the payor is the payee's account number...the payment, either electronic or paper may come from your checking account at your financial insitution, BUT it does not include information about you...

If you look at a check you write, it has YOUR name, address, phone, your BANK ACCOUNT number, etc...PLUS your signature...(or if using a credit card, that's the account number, expiration date, zip code and the security code).

That really is a lot of useful information from you that a crook can use...now a bill pay, payment is a transfer of funds, like a check, does transfer $ from your account to the payee, but it does NOT include anything about you other than your name and the payees account number...a much better system for data control on your end. It lessens your personal information out there for crooks to use...

Another thing, I personally do not use the 'automatic payment' set up...

I do go into my checking account monthly and send off my bill payments myself...I do make sure that I put in the request a few days or a week ahead of time since some payments process slower than others from the bank side and your payee may not get the payment in time...

So, bill pay good, using checks or credit cards not so good...and think hard before using 'automatic payments'...

Hope that helps....

{"commentId":5628054,"threadId":"510357","contentId":"2472210","authorDomain":"dcstone01"}

1 vote

#22.1 - Fri Feb 27, 2009 12:59 PM EST

{"commentId":5628004,"authorDomain":"anisha-holliman"}

Michelle-920135

I am $200,000 in private student loan debt and I am behind big time. They are threatening to garnish my wages and take my mothers home. I can't pay what they want me to pay because I don't make enough. My mother and I want to pay these loans off but they won't work with us. Is there any place I can get help or advice on what to do?

{"commentId":5628004,"threadId":"510357","contentId":"2472210","authorDomain":"anisha-holliman"}

#23 - Fri Feb 27, 2009 12:57 PM EST

{"commentId":5628631,"authorDomain":"Melissam725"}

Melissam725

Hi Carmen,

What website can you combine airline miles/points that you discussed on your show?

Thanks, Melissa

{"commentId":5628631,"threadId":"510357","contentId":"2472210","authorDomain":"Melissam725"}

#24 - Fri Feb 27, 2009 1:23 PM EST

{"commentId":5630427,"authorDomain":"jackierawlings"}

jackierawlings

Hi Carman thank goodness it's not Santelli answering the question. We listen to him report how great the Stock Market was doing and 24 hours later it Crashed.

Now I veiwed the breakdown of the Stimulus Package on the White House website. My question is will the billions used for Iraq/Aghanistan/Israel wars help cut in to the debt as we can now use that money for the US taxpayers and our own country?

I try following Tim Geithners posting on his website but it helps to have it explained to those of us who are that smart in Economics. Thanks

{"commentId":5630427,"threadId":"510357","contentId":"2472210","authorDomain":"jackierawlings"}