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Tax moves may ease mortgage crunch

If you read the newspapers, it looks like all hell is about to break loose when so many mortgages reset at higher interest rates this month.

A recent news account cited the couple in Sacramento whose mortgage on a $250,000 house was about to rise from $1,400 a month to about $1,900 when it resets. Both spouses worked and generated a high five-figure family income. They were whining about their increased interest and were getting nowhere in their efforts to renegotiate.

Can intelligence prove profitable?

In a casual chat after a round of golf, my friend, Ashok Vaish, offered a clue to choosing money mangers successfully.

After arriving from India, earning his doctorate at Berkeley and then building two engineering companies from scratch to a combined total of more than 1,000 employees, he said the one constant predictor of future success in a job-applicant engineer was their grade point average in college.

Dreaming up perfect 401(k)

Johnny Carson once described himself as having "a low threshold of boredom." Me too. But fortunately, whenever I feel a touch of boredom, my mind wanders toward what I envision as the perfect 401(k) plan. I start building that castle in the sky. Assuming you're curious, here's how it would look:

First, it would have some pure no-load investments chosen for all the right reasons -- low cost, high performance, a broad selection of investment types and a routine review to make sure the investments are meeting the quality criteria.

Instilling work ethic benefits everyone

I was trying to get some inspiration for a birthday present for my wife, so I wandered into Boswell's Party Supply Store -- one of my favorite places to shop for special occasions.

I thought I might surprise her with one of those grass skirt and coconut halter kits.

The next thing I knew, I was in casual conversation with Luke Boswell, who owns all four of these great local stores and who somehow manages to keep track of that amazingly entertaining and eclectic inventory.

The beauty of 401(k) loans

Way back in the early 2000’s, the irony of loans from 401(k) plans was that they were the best performing investment choice for most participants. Anyone who had effectively become their own banker by borrowing from their 401(k) account was earning 7% on their loan as a plan investment, and this was a winner compared to money market rates of about two percent and stock mutual funds that, on average, lost about 35% over a few years.

Project shows success in microcosm

I recently spent a contemplative weekend at the bottom of Concord's Nautilus Aquatics' 12-foot pool struggling to qualify for my scuba diver's certificate.

The exercise in which the instructor deliberately turns off the air reminded me of running a small business. Business on a small scale offers decisionmaking with an immediate cause-and-effect relationship.

Not the same game as the '60s

'Don't confuse brains with a bull market."

I was reminded of that aphorism the other day when an acquaintance mentioned that they had a friend who was offering to manage their 401(k) money with monthly moves between cash and equity funds.

This self-styled "advisor" was suggesting that they move everything out of international funds for the moment until "international funds became more reasonably priced ... possibly in a month or so."

Be optimistic, yes, but have insurance

"It's dangerous to make predictions -- especially about the future."

Everyone from Mark Twain to Yogi Berra is given credit for that line. Meanwhile, what a difference a week makes.

Last week, I was just a nattering nabob of negativism with regard to the economic impact of rising interest rates. Searching for good news to lift me out of my funk, I found plenty of offsetting optimism in columns like that of Paul Lim in the New York Times, as well as the informative bulletin from the ubiquitous Ken Fisher. Then, there's always Bob Brinker and Norm Fosbach.

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