Cedar Rapids Gazette (Newspaper) - January 4, 1974, Cedar Rapids, Iowa
I he Investor s Guide
By Sam Shulsky
Q—We are members ut a small club with $6,000 available for investment now and will have $180 additional every month. One faction in the club wants to put the money into 4-year savings certificates. The other wants to put it into some utility stock yielding 8.1 percent,
A—I’m a bit puzzled as to
whether this is an investment to pool money iii search of capi-club or one formed to carry out tai gains, in search of growth, some special social project and Certainly one does’t need a club just happening to have $6,000 in to open a savings account, its treasury, lf the latter — if utility stock you're con-
the money is intended to betsidering is a relatively sober, available for some project —'income-type investment. I would then, obviously, it must be kept think that an investment IOO percent safe in insured de- club would step out more bodlv posits, government bonds, etc. in search of capitai gain
lf it is an investment club * * *
i which I would assume from the want t0 donate $to.ooo to
fact von will have $180 addi- a school in the form of H bonds tional for investment everyj vvith the interest to be given month! then I don t understand nach year to a deserving stunt all the vote for a savings ac- dent £an \ do this without a count. Why assume all the book- wjj| >
keeping and tax red tape which A-Before you buy anything goes with a mutual fund merely with this money, better consult to put money into insured sav-'with the school’s treasurer so togs? Each individual member as t0 make certain that the can bank his own money and money will be invested in a avoid all this record-keeping. form that creates the least legal
An investment club, as I un- problems for the school as well derstand it, is organized to give as for yourself, each member the benefit of the * * *
others’ financial knowledge and Can I Retire? A frequent
request is for some ideas of what it costs to retire It would he foolhardy to offer any specific budget since many retired folks have shown unusual ability in adapting to a wide range of budgets.
However, for what they are worth, here are some figures presented recently by the National Consumer Finance Association.
Reporting on a study by the U.S. Bureau of Labor Statistics, the association points out that the cost of housing (including furnishings and operations) and food made up 66 percent of expenditures in an average, intermediate-level, annual budget for an urban retired couple. Tho intermediate retirement budget for a couple of 65 was figured at $4,965. The lower level budget was figured as $3,442 and the higher level, $7,689.
In dollars, the intermediate level ($4,965) budget broke down to $1,328 for food; $1,745 for housing; $448, transportation; $435, clothing and personal care; $434 medical care and the balance for other items including token income taxes.
♦ * *
Q—I’ve been approached to buy $5,000 local loan company bonds yielding about 8Mi percent. What can you tell me
about the company? I know nothing of it except that it is in some trouble with the SEC.
A What sort of foolishness is this? You know nothing of the company except that it is involved in some SEC troubles. (I have never heard of the company.)
You live in a state where at least four companies — just taking popular names which cornel readily to hand — are household words and have triple-A bonds outstanding: Cincinnati Gas and Electric, Cleveland Electric lllu-mlnating, Cincinnati and Suburban Bell Telephone, Ohio Bell Telephone. (You must buy, something from at least one of them.) AU are yielding around the 8 percent level. And yet you go looking for 4 of I percent more ($25 more a year on $5,000' from a company you know nothing about except that it is in trouble with the SEC. Shame on you.
* * *
Mr Shulskv welcomes written qoesions, but he wtll be able lo provide answer* only through the column. For information on retirement, and pre-retirement planning, please include a self - addressed stamped envelope Address your requests to Sam Shulsky, care of The Gazette.
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