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Hi. I became a Fool today.

After reading the Drip Port column for Tuesday, "The First Step in Drip Investing", I would like some clarification. I guess I would like the column's author to respond to this message, if possible, as well as any insights that other Fools can offer from their own experiences.

I understood that you enroll in Drips on a company-by-company basis. Is this true? If so, how does one go about finding out what companies offer Drip accounts, and how to go about enrolling in them?

My second question pertains to the fact that the article seems to indicate that Drips are a good investment for someone with LITTLE startup cash who wants to get right into investing in SOMETHING. First off, is this a correct understanding?

I am recently divorced, and as a result of the turmoil surrounding the divorce have lost EVERYTHING. I am starting over at almost 45 years of age. I am sure you can understand, when I say that I am scared! I have no retirement at all, since I had to use my retirement to live on for a while, and I have no assets to speak of. My net worth is currently negative, because I owe thousands of dollars on credit card and other debts left over from my marriage. I plan to file bankruptcy on all of that so that I can get a clean, fresh start.

At the present time, I am in the process of recovering from job difficulties caused by the effects of the divorce, and I am only working part time to try to keep my child support and insurances paid, while still seeking full time employment. My immediate goals are:


1) secure gainful full time employment
2) eliminate my debt through bankruptcy
3) establish a savings plan for basic expenses and long term plans such as home purchase, auto purchases and maintenance, retirement, etc.


Do I understand correctly that one can get into Drips with a small investment, and then invest more sums as he is able at whatever time he chooses? If so, would it be a good beginning at investing for me, and should I do it now in small sums, or wait until I get some of the above goals accomplished before trying to get into it? Or... are there better ways for someone in my situation to get into investing BEFORE investing in a Drip or Drips?

Keep in mind that I have to get started developing a retirement plan ASAP, since I have probably 20 years max left before that will be needed. And I REALLY don't want to work that many more years either!!

Before I close... is there any way you could speed up the rest of the series? I mean, like one per day until done, rather than one per week? I'd really like to get the whole thing as soon as possible.

Thanks for your advice.

Sonny
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My net worth is currently negative, because I owe thousands of dollars on credit card and other debts left over from my marriage. I plan to file bankruptcy on all of that so that I can get a clean, fresh start.

First, read the 13 steps:

http://www.fool.com/school/13steps/13steps.htm

Step number two will be especially helpful.

As for the nasty "B" word, you might want to check out this link first:

http://www.fool.com/credit/credit.htm

You may actually be able to avoid a nasty hit to your credit rating, especially if you are planning on making major purchases any time soon.

DRIPs are great for those of us with small amounts of money to invest. However, there are some conditions under which nobody should invest, and high credit card debt certainly qualifies as one of those conditions. Bankruptcy would eliminate the debt, but it would also destroy your credit rating for a long, long time.

DRIPs also demand a certain amount of patience. It can take anywhere from two weeks to two months to set up a DRIP, and that's after all of the research required to make an informed decision. You want to hold these investments for years, so rushing into them isn't prudent. The FAQ at the top of this page will give you the basic information, GLSmith's Tuesday columns will give you some of the finer details.

Good luck and Fool on!

Mike

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Before starting investing, you might want to start a emergency fund that is FDIC insured or with a mutual fund money market account.

To start investing, you might consider no load mutual funds. One fund family, TIAA-CREF, offers funds for a low minimum and a automatic investment plan that you can start with $25.


http://www.tiaa-cref.com/mfs/index.html

http://www.tiaa-cref.com/mfs/mfgoals.html

The TIAA-CREF states the following:

"Why use mutual funds instead of buying individual stocks or bonds? Mainly because few people have the resources it takes to amass broadly diversified portfolios on their own—much less the time and expertise it takes to manage them effectively. As shared portfolios, however, mutual funds offer key advantages for novice and experienced investors alike."

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An excerpt from my initial post:

My net worth is currently negative, because I owe thousands of dollars on credit card and other debts left over from my marriage. I plan to file bankruptcy on all of that so that I can get a clean, fresh start.

Colovion:

First, read the 13 steps:

http://www.fool.com/school/13steps/13steps.htm

Step number two will be especially helpful.

Sonny:

Okay... I'll go check out the 13 steps upon finishing here.

Colovion:

As for the nasty "B" word, you might want to check out this link first:

http://www.fool.com/credit/credit.htm

You may actually be able to avoid a nasty hit to your credit rating, especially if you are planning on making major purchases any time soon.

DRIPs are great for those of us with small amounts of money to invest. However, there are some conditions under which nobody should invest, and high credit card debt certainly qualifies as one of those conditions. Bankruptcy would eliminate the debt, but it would also destroy your credit rating for a long, long time.

Sonny:

Thanks for the link. I'll check it out.

As for bankruptcy, I have been avoiding it (putting it off, actually) for a while now. And I've had many people caution me against it, for much the same reasons as you. I am well aware of what it will do to my credit rating, but my credit rating is already ruined because I have been unable to make payments for 2 years, due to job and other difficulties. I cannot and will not carry the burden of debts left over from my failed marriage, because I was literally raked over the coals in the divorce, and because I have a scant 15-20 years at most to recover my financial position and get ready for retirement.

I have to get on with MY life, and those old debts are nothing but a constant reminder of one of the worst and most painful periods in my life. Continuing to honor those obligations will do nothing to help me move on with my life, prepare for the future, or to get my head screwed on straight again.

While I thank you (and the countless others before you) for your concern for my credit rating, I cannot be bothered with it any longer. It is already a shambles, and at least taking bankruptcy will enable me to set a definite goal for getting a good credit rating back. In the meantime, I'll set myself to paying cash for what I must have. When it's something for which I cannot pay cash, I'll do without. Simple. A good credit rating is a good thing, but one CAN live without it.

While bankruptcy was never an option for me until 2 years ago, I now believe there are times when it might actually be the ONLY option. This, for me, is that time.

As you can see, I have done considerable thinking about it over the last 2 years. It is not easy for me to back out of my obligations, but I feel I have no other choice.

Colovion:

DRIPs also demand a certain amount of patience. It can take anywhere from two weeks to two months to set up a DRIP, and that's after all of the research required to make an informed decision. You want to hold these investments for years, so rushing into them isn't prudent. The FAQ at the top of this page will give you the basic information, GLSmith's Tuesday columns will give you some of the finer details.

Sonny:

I will check out the FAQ.

Fortunately, I have some time left, though not as much as a 25 yearold. I understand the benefits of a long-term approach to investing, and since I want to invest for my retirement anyway, I will only be investing funds for which I do not see a need anytime soon. I'll only be putting miniscule amounts into these investments until I get the rest of my financial house in order, so we won't be talking about money I cannot do without.

I noted on a few pages in the Fool.com site, references to needing to get my financial health back BEFORE investing. However, I see Drips (and that's why I asked the question initially... to confirm my understanding) as a way to do both at the same time, since I have so few years left before needing proceeds from the investments for retirement.

Thank you again for your reply. I hope you do not think that this post is an attempt to be argumentative. I see this as brainstorming to enable me to make the best decision possible. And who knows who else might benefit from my working through these questions and issues in this forum? I welcome all the feedback that the rest of the good Fools have to offer.

(If anyone knows, please tell me how to italicize the quotes to which I'm replying)

Sonny
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I will only be investing funds for which I do not see a need anytime soon. I'll only be putting miniscule amounts into these investments until I get the rest of my financial house in order, so we won't be talking about money I cannot do without.

I noted on a few pages in the Fool.com site, references to needing to get my financial health back BEFORE investing. However, I see Drips (and that's why I asked the question initially... to confirm my understanding) as a way to do both at the same time, since I have so few years left before needing proceeds from the investments for retirement.


It is true that some do suggest DRIPing while you are getting your finances in order. I have to admit that I'm guilty of that myself. I still have $2000 in Credit Card Debt, but I have started three DRIPs. I just couldn't wait. However, I've since stopped sending investments to those DRIPs until I have paid off my Credit Card Debt. I can't make a profit while paying off interest on Credit Cards which average about 10% APR. As you rightly point out, you only invest funds you won't need for awhile (5 years or so at least.) The moral to that story is don't invest until you are ready.

I hope you do not think that this post is an attempt to be argumentative. I see this as brainstorming to enable me to make the best decision possible. And who knows who else might benefit from my working through these questions and issues in this forum? I welcome all the feedback that the rest of the good Fools have to offer.

It's rare event indeed for a Fool to assume someone is trying to be argumentative. Well, maybe rare is the wrong word, since some posters are trying to be argumentative, but they're the exception to the rule. The whole point of these boards is to "educate, amuse and enrich." Most of us take that seriously, so don't worry about false perceptions.

(If anyone knows, please tell me how to italicize the quotes to which I'm replying)

You use a HTML code. The code for italics is < i >blah blah blah< /i >. However, you need to type the "flags" without spacing between the < and the i and the >. If I were to type them that way you would not see the "flags" themselves, naturally. The Bold command is the same, except you use b instead of i in the flags. Don't forget to add the backslash in the final flag, or everything after the initial flag will be italicized or bolded. You can always preview a post to make sure you have the codes right (and to check your spelling too eh!)

Fool on!

Mike





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My second question pertains to the fact that the article seems to indicate that Drips are a good investment for someone with LITTLE startup cash who wants to get right into investing in SOMETHING. First off, is this a correct understanding?

Greetings Sonny,

I am an E5 in the Navy w/ 3 children. I have a LIMITED paycheck, earning about $1000 every two weeks after taxes. This is NOT minus my bills. So you see, I have a very limited amount of money to spend.

you can either contact companies directly or you can go through different companies to invest like Buy/Hold or Netstock or NetDirect, etc, etc. Most companies have web pages w/ links to their investment section.

Myself, I used FirstShare.com and set up ten stocks. I then use their minimum purchase times that amount by six months and twice a year I send in money to five of my ten stocks (rotating evey six months).

Most companies Minimum Purchase price is about $10.00, $20.00 or $50.00. For example, Marriott (MAR) is $10.00 minimum purhcase. I take $10.00 x 2 (per paycheck) x 6 months equals $120.00. In six months, I send off that money to Marritott.

How does this help? It allows me to spread my purchases over five stocks (I drip into 10 total) which for me adds up to $153.00 x 2 (per paycheck) or $306 (per month) x 6 months equals $1836.00 every six months. I then cut checks to each of my five stocks and then I start saving $153.00 per month again.

For me, I take my money and break it up between how many times I get paid. I cannot afford $306.00 per paycheck, but I can EASILY afford $153.00 per paycheck. I then send it to Netbank, and it sits there for six months. I have NO ATM card or CHECKBOOk, so, I'm not able to "steal" from this account, the money MUST BE WIRED or "electronically paid" through my online billpayment. This is good for me b/c it keeps me from "spending" the money when I see a large amount sitting there. Also, Netbank's checking (free checking) is earning above 3.00% on interest, MUCH better than my bank!

This is just my example, if you have two or three stocks to look at, look at their MINIMUM, use that, if you can afford more, go for it pay more, but if you can only afford the BARE MINIMUM then do that, you can also have the money taken directly from you bank if you want or you can open an account elsewhere, send the money there and when you have built up enough (in your eyes) then send it in.

The power is there and you can easily grasp it. I understand your stretched thin, but remember, $10.00 is not THAT much and you don't have to send it in right away, if anything set it aside for one year (thats $120.00) and then make a payment.

It might seem SLOW and PAINFULL but in the LONG TERM it WILL PAY OFF. Something is ALWAYS BETTER than nothing.

I hope this helps. Anyone else have ideas???

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It is true that some do suggest DRIPing while you are getting your finances in order.

Some actually suggest it? I haven't seen any such suggestions yet. I would be interested in reading other viewpoints that you might be able to refer me to. Are we talking about here on Fool.com?

You use a HTML code. The code for italics is < i >blah blah blah< /i >.

Thanks. It worked.

Well, I reviewed the material you suggested in your previous post. I printed the 13 Steps and the FAQs for reading in "down time". I didn't see, however, where the site you referred me to in your discussion of my bankruptcy was directly applicable to that topic. However, I printed the first page of that site and will spend more time reviewing it.

Thanks for your replies, and Fool on!

Sonny
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The power is there and you can easily grasp it. I understand your stretched thin, but remember, $10.00 is not THAT much and you don't have to send it in right away, if anything set it aside for one year (thats $120.00) and then make a payment.

Thank you very much for such helpful replies, based on your own practice.

I don't know yet how much I'll be able to afford, or how often, since my FIRST goal is to get a full time job in addition to my present part time one. Having to pay child support (not begrudging it; it's my daughter we're talking about, and she DESERVES it) usually leaves me with little more than barely enough to live on. But I have to get something going, lest I face total poverty at retirement -- OR end up working til I die.

Once I get the job thing worked out, then I hope to establish some good LIQUID savings for basic expenses, emergencies, and long term plans (house, etc.) At the same time, I will figure an amount that I can set aside each paycheck to build my investments. It might end up being only $10-$20 per paycheck, but it will add up. And you are right that something will be better than nothing, when retirement gets here.

Thanks again for responding.

Fool on!

Sonny
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Sonny -

Actually, I believe that my next article will touch on the issue of debt. As you'll read, there's good debt and bad debt, and credit card debt is definitely in the latter category. I would recommend making sure that this has been removed before starting to DRiP.

However, that doesn't mean that you need to sit on your hands.

About 25 years ago I worked for the WVU Hospital, and accumulated about $700 in retirement, which was passed to me when I left. Needless to say, it would have been better to put this money into stocks, but back then one had to go through a full-service broker at the time, so that was out.

Anyway, I decided to buy a stereo with the money. I knew that it would be 5-6 months before I would get the check, so I spent that time to look at the various units to determine which would work best for me (FWIW, I got an Onkyo, the first receiver with quartz-lock capabilities).

The point is that although you may be well away from starting DRiPping, that doesn't mean that you can't find this time to be very useful in determining a number of things, like how many companies you should own, what companies you should own, how much you should be giving to each company, creating a budget, etc.

I think that you should consider yourself lucky. You do have 20 years of investing to go. Just think of the people who will be wanting to retire 20 years from now and will be complaining that Social Security is not enough - and they'll probably still be paying on their debts. Certainly, better late than never.

So do your home work, read the messages here (some I agree with, others I don't, but most important is for you to read them all and decide what is best for you - possibly none of what you read), and prepare for the time when you get going. It sounds like you are already headed in the right direction.

Before I close... is there any way you could speed up the rest of the series? I mean, like one per day until done, rather than one per week? I'd really like to get the whole thing as soon as possible.

Well, then the Fool would have to hire me on full time, and they certainly couldn't afford that. <g>

Cheers -

george
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Sonny,

I have no idea what Louisana's bankruptcy exemptions are, but if you are going to file for bankruptcy you will need to check that out before you begin investing. If bankruptcy is imminent, you should probably get that process over with before you start investing. Depending on the exemptions in your state, you may have to turn over any investments to the trustee to pay down your debts, which would defeat the purpose of starting a Drip before filing for bankruptcy. Take this time to educate yourself about investing and fiscal responsibility so that you are prepared when the bankruptcy process is over.

CAT
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Actually, I believe that my next article will touch on the issue of debt. As you'll read, there's good debt and bad debt, and credit card debt is definitely in the latter category. I would recommend making sure that this has been removed before starting to DRiP.

Good debt/bad debt... right now I can't say that ANY debt looks "good" to me. I'm really burned on the idea of financing ANYTHING. Someday I might finance a home or a car, but I plan to do my dead level best to avoid financing anything for the rest of my life!!!! It's been a hard lesson, and I don't want to have to learn it again.

As for the CC debt... You've already seen my comments about doing AWAY with it through bankruptcy. I understand everyone's objections to bankruptcy, but I honestly believe it is the best way for me at this point. So, hopefully by the end of this year, I plan to have the CC and all other debts out of the way.

Between now and then I definitely will spend time researching companies, etc.

I think that you should consider yourself lucky. You do have 20 years of investing to go.

But let's be realistic... how much can one honestly hope to do in 20 years? What if, when everything is said and done, I can only afford a meager $25 per month for the next 20 years? Can you give me some kind of projections of what that will yield, using some very conservative interest rate?



Well, then the Fool would have to hire me on full time, and they certainly couldn't afford that. <g>

LOL... okay, George... I'll try to be patient. <g>

Thanks, and Fool on!

Sonny
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If bankruptcy is imminent, you should probably get that process over with before you start investing. Depending on the exemptions in your state, you may have to turn over any investments to the trustee to pay down
your debts, which would defeat the purpose of starting a Drip before filing for bankruptcy.


Thanks.

I was sort of expecting that I would have to wait at LEAST until I can accomplish the bankruptcy... just too many questions surrounding an investment portfolio that is already in existence when the bankruptcy occurs.

As for the bankruptcy itself, can anybody offer personal experience about how to go about the bankruptcy? Am I better off with a paid attorney or using legal aid, or is there truth to the idea that you can "do it yourself", as a few people have recommended to me? How long can the bankruptcy be expected to take? I honestly don't know what steps to take first, But I've been needing to get started for some time now, and I'm ready for it to be behind me, already.

Any input from someone who's been there already would be most appreciated.

Thanks gang, and Fool on!

Sonny
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Sonny,

It wouldn't be appropriate for me to give you specific advise about how to go about filing bankruptcy. Every state is different in terms of what it will allow you to exempt. In particular, Louisana is a very unusual state because of its civil law background. Although they are required to provide you with at least the minimum federal exemptions, I would bet that if any state has a strange exemption process it is Louisana. Whether you can do it yourself or should have an attorney involves too many variables for anyone to be able to give you good advice. Perhaps there is an attorney who will give you a free, or low cost, initial consultation and you can take some time to discuss things with him/her. Also, if you had an attorney for your divorce, it would be a good idea to check with him/her to see how bankruptcy will affect your divorce (you cannot get out of alimony or child support with bankruptcy; often a separation agreement will have provisions which limit your ability to discharge certain debts in bankruptcy; Louisana law may also have something that impacts your ability to discharge certain debts).

You need to decide, first of all, whether you qualify for bankruptcy and, if so, then which form of bankruptcy is best for you. Chapter 7 is a liquidation process, while Chapter 13 usually permits you to keep most assets but you pay down a percentage of your debts over time. Some jurisdictions are cracking down on Chapter 7 filings, especially when there is a lot of credit card debt that a trustee deems to have been run up fraudulently. In other jurisdictions, Chapter 7 filings are the norm. At some point Congress will probably make it more difficult to file for Chapter 7 due to widespread credit card abuse.

There is a point when bankruptcy is necessary. The bias of this board -- an investment board -- is against bankruptcy, and that is a good thing, but sometimes the realities of life (divorce, health problems, etc.) overcome the best laid plans.

CAT
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But let's be realistic... how much can one honestly hope to do in 20 years? What if, when everything is said and done, I can only afford a meager $25 per month for the next 20 years? Can you give me some kind of projections of what that will yield, using some very conservative interest rate?

George's excellent site (http://members.home.net/hmpi/) includes a lot of DRIP info, including a calculator which can help you estimate your future returns on an investment. According to this calculator, if you invest $25 every month for 20 years at a percentage increase of 8% you'd end up with $14,725.51.

There are a few of things to keep in mind, though.

1. This is only an estimate.
2. The S&P 500 Index averages 11% growth per year, so 8% is definitely conservative.
3. This does not include reinvested dividends.

Fool on!

Mike
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...if you had an attorney for your divorce, it would be a good idea to check with him/her to see how bankruptcy will affect your divorce

I checked with him several months back. He was of virtually no help in the matter. <shrug> I have already talked to one bankruptcy attorney here locally. He wants $675 total (including his fees) to handle the bankruptcy.

I am planning (currently) to file chapter 7. I just don't have the desire to continue paying for stuff that my ex-wife ran up, especially since I have virtually NOTHING now that we're divorced. Also, I have to start almost entirely over, having nothing saved up for retirement, with only 20 years (if I'm lucky) to prepare for that, and I just don't think it's prudent for me to spend that 20 years paying off old debts.

I was interested in your comment about "whether you qualify for bankruptcy"... I'm not sure I understand this. What qualification is there, other than the obvious, of not being able to pay the bills you owe?

Thanks for replying.

Fool on!

Sonny
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According to this calculator, if you invest $25 every month for 20 years at a percentage increase of 8% you'd end up with $14,725.51.

Hmmmm... not very encouraging. But then, in addition to the comments you made about dividend reinvestment not being considered, etc., there is also the fact that I HOPE $25 monthly will be a rather short term investment amount. Hopefully within the next year or so, it can double, triple, etc.

Thanks, Mike.

Fool on!

Sonny
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Sonny,

Not being able to pay your bills as they come due is one aspect of it. For Chapter 13 there are limits to the amount of debt that qualify. If the trustee deems that credit cards were being use with no intention of paying off the debts, that could lead to a fraud problem.

CAT
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Hi Sonny,

I don't know too many specifics about LA's bancruptcy codes but I do believe that most retirement plans are exempted at least up to a minimum, so it may be wise of you to try to shift any liquid assets you have into an IRA or 401(k). But since the laws here are pretty screwy sometimes I would definitly get legal help, shop around and find one you can afford and like, the yellow pages are full of them.


Good luck,
Charles
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I don't know too many specifics about LA's bancruptcy codes but I do believe that most retirement plans are exempted at least up to a minimum, so it may be wise of you to try to shift any liquid assets you have into an IRA or 401(k).

From his prior posts, I don't think Sonny has this option. But, if you do Sonny, transferring assets into a retirement fund before filing for bankruptcy can, and probably will, be considered fraud.

But since the laws here are pretty screwy sometimes I would definitly get legal help, shop around and find one you can afford and like, the yellow pages are full of them.

Good advice.

CAT
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I don't know too many specifics about LA's bancruptcy codes but I do believe that most retirement plans are exempted at least up to a minimum, so it may be wise of you to try to shift any liquid assets you have into an IRA or 401(k).

FYI Bankruptcy is the same from state to state, it is a federal issue. When you file for bankruptcy it is in federal court. I used to do this for the law firm I clerked for during law school.

Andy
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Hi CAT

>transferring assets into a retirement fund before filing for bankruptcy can, and probably will, be considered fraud.<

That definitly could be the case(not a lawyer) but I believe it has to do with the time period involved and the amounts. Since Sonny said he had limited assets the amount could be small enough to be OK. I figured being able to save a small amount would be enough to give a glimmer of hope so that he would be encouraged to stay the course over the long term. That being said fraud charges would definitely make a bad situation worse. I looked at the yellow pages: 61 pages of ads for attorneys, bound to be one that can help shield as much assets as possible and would probably save more than the fees involved when compared with filing on one's own( talk about swimming with sharks).

Fool on!
Charles


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FYI Bankruptcy is the same from state to state, it is a federal issue.

That's not entirely correct. Federal Court handles all bankruptcies, but states may opt out of the federal exemptions, which has a big impact on how bankruptcies are handled from state to state. Also, states may have longer look back periods for fraudulent transfers, as does Maryland, which impacts how a fraud case is prosecuted from state to state. It is definitely not the same from state to state.

CAT
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>transferring assets into a retirement fund before filing for bankruptcy can, and probably will, be considered fraud.<

That definitly could be the case(not a lawyer) but I believe it has to do with the time period involved and the amounts.

I think you are thinking of payments made to creditors within 90 days of the bankruptcy filing. In MD, if you make $600 of payments to creditors within 90 days of filing, the creditor could be forced to pay the money back to the trustee. This is a different issue than putting money in a retirement fund, which is exempt under federal law, that could have been used to pay off creditors. I tell people to stop their 401K/IRA, etc contributions for 90 days before filing to avoid the trustee going after them for concealing assets. While I know that a lot of people do not use an attorney for their bankruptcy case, and I haven't discouraged Sonny from doing that if it is his choice, there are nevertheless some minefields to watch out for. As with investments (hey, I forgot this was an investment board !), I would encourage anyone considering bankruptcy who is reading this thread to do their own research and seek professional guidance, if needed.

CAT
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but states may opt out of the federal exemptions, which has a big impact on how bankruptcies are handled from state to state. Also, states may have longer look back periods for fraudulent transfers, as does Maryland, which impacts how a fraud case is prosecuted from state to state. It is definitely not the same from state to state.



CAT

Sorry to disagree with you but Bankruptcy law IS federal and state laws can not override or further restrict federal law or more specifically what can or can not be discharged in bankruptcy. I am not sure what you mean when you say states can opt out of federal exemptions, but state laws can not disallow what the federal code allows you to exempt. In fact, once you file bankruptcy, state are not even allowed to enforce judgements which state courts have awarded creditors unless the bankruptcy judge permits it.

As to fraudulent transfers in a criminal context, that is not a bankruptcy issue so state laws control. The issue of fraudulent transfer in bankruptcy only pertains to what can or can not be discharged. States are free to set their own laws on what is a criminal or fraudulent transaction.


Andy
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Andy,

I see that you are a prosecutor and you mentioned that you filled out some bankruptcy petitions when you were in law school, but I am a general practitioner who, among other things, does bankruptcy cases for a living. Obviously I never said that the bankruptcy code isn't federal law, so your emphasis on that point is not warranted. Nor did I ever say anything about states trying to enforce judgments (of course, I assume you mean judgments issued by a state Court that a creditor is trying to enforce and not that the state would for some reason try to enforce a creditor's judgment on its own).

The fact that you do not know that states may opt out of the federal bankruptcy exemptions indicates that you are not familiar with the practice of bankruptcy law (not surprising, since you are a prosecutor and only practice criminal law -- a whole other world which I respect immensely but couldn't speak very fluently about). I can't get into the bankruptcy code online for some reason today, but here's a FAQ: http://www.agin.com/bkfaq/. Look under the assets and exemptions heading and read about the exemptions and the opt-out provision. And looking at this I see that Louisana has opted out, which answers one of my previous questions.

As for fraudulent transfers, the point I was trying to make before was that if a state has a more restrictive fraudulent transfer law (Maryland looks back 3 years, federal is 1 year), the bankruptcy trustee can and will look back 3 years, in Maryland, for fraudulent transfers. You may dispute this, but I've had it happen before and have had to deal with it, so I know its true.

CAT
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What if, when everything is said and done, I can only afford a meager $25 per month for the next 20 years? Can you give me some kind of projections of what that will yield, using some very conservative interest rate?

Sure. Assuming that you get the market average, 11%, over the next 20 years, that would come to $21,640.95. If you can find you way to a 15% return (certainly doable) then that raises things to $37,430.99. 20% is, of course, more difficult, but that gets you to $77,741.3.

Of course, you should assume that years from now you will be able to move to more than $25 per month. Additionally, that doesn't take into account the fact that many companies will match a reasonable portion of your salary in a tax-deterred 401k. When you are looking for a job, you may wish to make that benefit one of your considerations.

george
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CAT

I stand corrected.

I did bankraptcy case pro bone in PA for 5 years for the AIDS law project in the training I received and the cases I filed there were never any state rules or laws which countered the federal code.

I appreciate you being nice in the way you correct me. Glad to learn something new.

Andy
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Andy,

Looking back at my posts, I think I was a little testy, so I apologize for that. My post 14565 was ambiguous in its reference to the "prosecution" of fraud cases, which caused some confusion.

Fool on!

CAT
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Of course, you should assume that years from now you will be able to move to more than $25 per month.

That's certainly my hope.

Additionally, that doesn't take into account the fact that many companies will match a reasonable portion of your salary in a tax-deterred 401k. When you are looking for a job, you may wish to make that benefit one of your considerations.

Well, there's at least a 50% chance that I'll end up either employed my local or my state government. Both of them have their own private retirement systems, which are very good, with the hiring entity matching employee retirement contributions dollar for dollar. So, if I in fact end up so employed, it will be very good. But, the fact that I have no more than about 20 years (I would prefer to retire in 10, if possible) to work toward retirement, will of course mean that any retirement payments will be smaller. That is, of course, where investing comes in. If I am to retire in 10 years (looks to me very much like wishful thinking at this point, since I would need a HUGE income to meet expenses and still have enough to invest to achieve that goal), then I am gonna have to have one heck of a success at investing between now and then. LOL

Sonny
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If I am to retire in 10 years (looks to me very much like wishful thinking at this point, since I would need a HUGE income to meet expenses and still have enough to invest to achieve that goal), then I am gonna have to have one heck of a success at investing between now and then.

Don't forget that you can also get inventive with the way you handle your money. For instance, you are talking about setting aside only $25 per month. As previously mentioned, at 11% for 20 years that comes to $21,640.95 - not much, but something. $60 per month brings you up to $51,938.28, which is a little better (not enough, but better). Stretch it out to 25 years and you've got $78,806.67, or keep the years to 20 and find a way to make 16% (certain doable) and you've got $86,322.08.

Where does the extra money come from? Well, I'm going to assume that you are paying $15 per month for Internet access. Chances are that you can get this absolutely free. If you are willing to put up with losing an inch of your screen, you can go to www.freei.com and see if there is a local number for your area. My mother uses this service, which is the only way I could get her on the Internet (now she won't get off!). <g> Also, www.juno.com is another free service.

You can also get paid to allow an inch of your screen to go away. I do this and get a check every month - it's not much, but it all goes into my DRiP account (you can find details on my Web site - http://members.home.net/hmpi - link on the bottom left of the screen).

Where else are you willing to compromise? Clipping coupons is a road to getting a little extra cash, as is buying in bulk when the sales come along. I do a bit of each of these and send half of my savings to my DRiPs. Again, it isn't much, but when you think of the long term, every little bit counts.

Also, for years I worked part time at The Nature Company during the Christmas season. It definitely wasn't my first choice, but not only could I use the cash, but the company gave me a 40% discount on my purchases. The thing was that I made many purchases there for Christmas presents.

You see, I was in a similar situation. I wasn't heavily burdened with debt, but my salary was less that I would have liked. With about 20 paid work years remaining (hopefully), I had very little set aside for retirement - and still had two kids to put through college. Budgeting for everything to understand what I had coming in and going out, and getting a little inventive with ways to obtain money have made a real difference.

The bottom line is that sometimes things can get painful, but you just need to grit your teeth and tell the world that you're going to take charge. If you're serious about things, it will actually work.

Cheers -

george
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Sonny,

According to this calculator, if you invest $25 every month for 20 years at a percentage increase of 8% you'd end up with $14,725.51.
Hmmmm... not very encouraging.


Using a model spreadsheet...if you invest $25/month for 20 years and get 10% appreciation and a 1% yield, you'd accumulate $20,448.35. If you did it for 30 years, you'd have $63,890.65; after 40 years, it would be $188,408.11; after 50 years, $545,302.92, after having invested just $15,000.

Kewep in mind that the gains grow more robust as time passes, a good reason to start as early as possible. Also, as you noted, you'd hope to invest more than just $25/month after a while, and, of course, if you got a 15% return, for example, you'd do much better:
With 14% appreciation and a 1% yield (for your $25/month), you'd get:
$33,357.24 after 20 years
$143,197.73 after 30 years
$593,165.18 after 40 years
$2,436,521.51 after 50 years

dave fish/moneypaper
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Don't forget that you can also get inventive with the way you handle your money. For instance, you are talking about setting aside only $25 per month. As previously mentioned, at 11% for 20 years that comes to $21,640.95 - not much, but something. $60 per month brings you up to $51,938.28, which is a little better (not enough, but better). Stretch it out to 25 years and you've got $78,806.67, or keep the years to 20 and find a way to make 16% (certain doable) and you've got $86,322.08.

Well... at this point, the name of the game will be as much as possible at as great a gain as possible for as little time as possible. 25 years is out of the question, since I can't imagine myself working til age 65, let alone age 70!!!! I'm sure that I will be doing more than $25 per month, hopefully even at first. It's just the uncertainty of the whole thing at this point. Frankly, I am scared... facing the autumn of my life in a very short time, and not knowing how I'm going to pay for it. That's why I'm really desperate to get my ducks in a row and start salting away as much as I can as soon as possible.

Well, I'm going to assume that you are paying $15 per month for Internet
access.


Nope. Already switched to 1stUp.com about a month ago. I just can't see paying for access, when it's so readily available for free.

You can also get paid to allow an inch of your screen to go away.

Already enrolled with AllAdvantage. I haven't started making $$ from it yet, because I only just started and haven't used it that much. But I'm sure it'll net me about $25 or so a month... that could certainly go towards investments, once I know that I have a basic primary income and don't have to have every penny for living expenses.

details on my Web site - http://members.home.net/hmpi

Thanks for the url... I'll check it out soon.

when you think of the long term, every little bit counts.

I definitely subscribe to this philosophy... I pick up probably anywhere from 50 cents to $1 a week, on a good week, in pennies and stuff I find while walking. Hey... it's all spendable.

Also, for years I worked part time at The Nature Company during the Christmas season.

Well, I'm currently working at a UA cinema. It doesn't afford me anything in the way of perks, except free movie passes (great for visitations with my daughter and also for dates). But this job will most likely be my SECOND job once I find a primary job. I just don't see me making it with just one job for a while, especially since I have another 5 years to pay child support.

The bottom line is that sometimes things can get painful, but you just need to grit your teeth and tell the world that you're going to take charge. If you're serious about things, it will actually work.

Well, bottom line for me is that, while I say I'm scared, and while I don't know HOW it's all going to work out, I know it will. Reason I know this, is because I am a SURVIVOR... always have been, and always will be. And I have faith in Someone bigger and more knowing and powerful than I alone could ever be. Scared? Yes. But do I know I'll make it? Yes, because I always have.

Thank you very much, George, for all the info and encouragement your post provided. It's great to know the wealth of knowledge and experience available here among our fellow Fools.

Sonny
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Using a model spreadsheet... <snip> ...Kewep in mind that the gains grow more robust as time passes, a good reason to start as early as possible.

I understand that time value of money. I have studied a little bit of accounting, and have worked in bookkeeping for many years. I have played with Lotus spreadsheets for years, plotting and scheming about these very things.

Thing is, in case you haven't caught all my previous posts, that I'm STARTING OVER rather late in life. I am soon to be 45, and I don't HAVE another 30+ years to put towards it. I really have to get my ducks in a row and get on with investing for my future fast, in order to have even 20 years towards it when I retire. And I'd really rather retire in 10, since I just can't see myself working til I'm 65. <shrug>

That's why this whole thing is quite complicated and also quite unsettling for me. But I know it will be okay... I just have to get started, and time will take care of the rest. :)

Fool on!

Sonny
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I have some techniques you may want to consider:

Your local bank's Holiday Club (Some call it a christmas club)

I have $10 per week taken out and in November will have approx $500 for Christmas presents! This is a completely painless way to save and comes in handy at a financially taxing time of year for all of us.

You might also want to consider (although this is sure to create some discussion) increasing the amount withheld from your paycheck. You readjust your budget very quickly, and then when you file your taxes in Feb, get a nice check. No it doesnt include any interest you would have generated, but its a simple way to save.

It sounds like you have MANY MANY things on your mind, so I offer these as simple ways to save while you are getting yourself together after a tough time. I cant offer you any other advice, but my best wishes go out to you and I hope everything turns out for the best.



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I have $10 per week taken out and in November will have approx $500 for Christmas presents!

But then aren't you getting something like 2% interest?

You might also want to consider (although this is sure to create some discussion) increasing the amount withheld from your paycheck.

Why not get the money that is coming to you and invest it before spending it? Even if it's a paltry 2%, at least your money would be working for you

Cheers -

george
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The interest question is moot for me -- I'm looking at a way to "hide" money from myself because once it gets into my "greasy little hands" aka my checking account - spend spend!

Yes the interest is paltry, but before you can invest you have to save. Once you get the discipline part down then you can move forward.

One step at a time, ya know?
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