SMART MONEY: Do-it-yourself investing starts with education
DEAR BRUCE: We want to invest money that we set aside for investments. What do you think about online trading websites? — J.C., via email
DEAR J.C.: I have no problem with online trading websites. However, where are you going to get the information and knowledge that will allow you to take advantage of the low-cost trades? That is the difficulty.
If you are knowledgeable and have a good handle on investments, I have no quarrel, but I suspect that if you have to ask me about online trading websites, you are somewhat of a novice. The first thing to do is start studying the marketplace, reading your local newspapers (financial sections), and in short, become knowledgeable.
Then pick an area such as automobiles and concentrate on that one, narrow market. Get yourself educated. Then you will have a better chance for success.
DEAR BRUCE: My husband and I are retired, living on a small pension with no savings. We have three kids and four grandchildren.
Our closest nephew is having problems. We’ve helped him before, and we’ll help him again. He just got custody of his 5-year-old. His wife was a spender, and he had to go through Chapter 7. We agreed to buy him a small house, which he can occupy. He has agreed to pay the bills, insurance, etc.
We would like to know how we can protect ourselves, the children and grandchildren in case something happens to us. His name is not on the mortgage. How do we handle this at tax time? — F.P., via email
DEAR F.P.: You say that you are retired, living on a small pension with no savings. Given that, how are you going to buy your nephew a house that he can occupy? Of course, if he doesn’t pay the bills, you will be stuck for that as well.
I don’t know what you are trying to protect “in case something happens to us.” Because your nephew’s name isn’t on the mortgage, when you pass away, unless there is money in your estate, the house will have to be sold.
I am pleased that you have the notion of taking care of your family, but I don’t see how that is possible. Even if it is possible, I don’t see it being in your interest. If you want to help him, pay some of the rent on a small house. Even if you could swing it, I wouldn’t buy a house that he can occupy.
Send questions to firstname.lastname@example.org. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided. The Bruce Williams Radio Show can now be heard 24/7 via iTunes and at www.taeradio.com. It is also available at www.brucewilliams.com.