From: owner-persfin-digest@lists.xmission.com (persfin-digest) To: persfin-digest@lists.xmission.com Subject: persfin-digest V5 #86 Reply-To: persfin Sender: owner-persfin-digest@lists.xmission.com Errors-To: owner-persfin-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes persfin-digest Wednesday, February 3 1999 Volume 05 : Number 086 In this issue of the Personal Finance Digest: Stock Question Re: Stock Question Roth IRA Question Re: (Fwd) Asset Allocation for new automobile Income Tax Consequences of Exercised Options how to calculate return on 401k The messages posted to the Persfin-Digest are opinions and are not intended to substitute for qualified professional advice. Subscribers should seek the services of qualified professionals for such advice. The publisher, Internet provider, and Digest contributors cannot be held responsible for any loss incurred as a result of the application of any of the information provided here. 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Subscribe: e-mail majordomo@xmission.com, text: subscribe persfin-digest Unsubscribe: e-mail majordomo@xmission.net, text: unsubscribe persfin-digest ---------------------------------------------------------------------- Date: 01 Feb 99 13:57:40 EST From: Jacqueline.D.Richardson@Hitchcock.ORG (Jacqueline D. Richardson) Subject: Stock Question I have started watching a few stocks and am trying to learn about the stock market with regard to individual stocks as opposed to mutual funds. I was just reading a press release on a stock I am watching and was wondering if someone could tell me what it means and what impact it may have or has on the stock. "Asia Properties, Inc announced today that the Company has retired 1.4 million shares of its founders' stock into API's treasury. The Company has 5,850,600 shares outstanding, following the retirement of the founders' shares. This represents an accretion of 19.30 percent for existing shareholders." What does it mean when they retire shares of founders' stock into its treasury? What does an "accretion of 19.30%" mean and how does it affect the stock people buy? Again, I'm new to following individual stocks and am trying to educate myself. Thanks a lot for your help and patience. j - - ------------------------------ Date: Mon, 1 Feb 1999 14:01:37 -0500 From: snarasim@genre.com Subject: Re: Stock Question "Asia Properties, Inc announced today that the Company has retired 1.4 million shares of its founders' stock into API's treasury. The Company has 5,850,600 shares outstanding, following the retirement of the founders' shares. This represents an accretion of 19.30 percent for existing shareholders." What does it mean when they retire shares of founders' stock into its treasury? What does an "accretion of 19.30%" mean and how does it affect the stock people buy? Again, I'm new to following individual stocks and am trying to educate myself. Thanks a lot for your help and patience. Retiring stock means these were in the treasury of the company. Which means they were NOT outstanding. All this means is that there will be NO effect on the stocks outstanding. i.e., they are NOT included in the 5,850,000 shares outstanding. Consequently there will (read: should) be NO effect on the stock price. Further, it means the company will NOT have these stocks available for stock option or other company related purposes. It also means these stocks will NOT be available for any stock splits that may happen in the future. - - ------------------------------ Date: 01 Feb 99 15:23:09 EST From: Jacqueline.D.Richardson@Hitchcock.ORG (Jacqueline D. Richardson) Subject: Roth IRA Question I've never paid very much attention to the posts about Roth IRAs because I didn't think I would ever want to do an IRA. Therefore, could someone direct me to a web site that gives a good overview of the Roth IRA and how it can be set up. What I would like to do (and probably someone here could tell me if it is possible to do this or a variation of it) is dabble in some individual stocks and I was wondering if I could open an IRA and either put in some existing stocks I own (or start the IRA with cash and buy stocks within the IRA) and buy and sell them within the IRA. My plan would be to leave my initial investment and (hopefully) any profits in the IRA until I retired. If I did well my understanding is that it would save all those capital gains I would otherwise have to pay upon the sale of the stocks if they weren't in a Roth IRA. Is my thinking correct? Is something like this possible and if so who would I see to start a Roth IRA like this? Do brokerage firms that sell stocks do Roth IRAs? (I sure wish I had of read all those IRA posts.....) Also, do I have until April 15, 1999 to put in $4,000 (married) for 1998 and then could I put in an additional amount for 1999? Thanks a lot. j - - ------------------------------ Date: 1 Feb 1999 13:38:57 -0700 From: Elaine Steward Subject: Re: (Fwd) Asset Allocation for new automobile On 02/01/99 08:48:25 you wrote: > > >--- Forwarded mail from "Ray McKinnon" > >From: "Ray McKinnon" >Date: Mon, 1 Feb 1999 08:37:11 -0500 >should we pay for the automobile out right, or >finance it? I believe in the rule of thumb that inasmuch as it is possible, one should never finance a depreciating item. Elaine Steward email address: esslady@ix.netcom.com - - ------------------------------ Date: Tue, 02 Feb 1999 15:23:01 CST From: "Roberta Kleinman" Subject: Income Tax Consequences of Exercised Options My sister just informed me that this past December she and her husband decided to exercise some company stock options her husband had been given a few years ago by his employer. They had not been able to exercise the options earlier because of minimum time restrictions imposed by the company on how long the options had to be held before they could be exercised. The exercise price of the options ($38) was only about one fourth the market price of the stock on the date of exercise, which market price was then at or near its all time high. They did not immediately turn around and sell the shares they acquired by exercising the options because they thought if they held the shares for at least a year and then sold them they would qualify for long term capital gain treatment on any profits. The market value of the shares has decreased somewhat since the date of exercise. Now my sister is concerned because she has reviewed the relevant 1998 income tax publications and believes that she and her husband will be required to pay about $9000 in 1998 income taxes on the difference between the exercise price of the options and the (sky high) market value of the stock on the date of exercise, despite the fact that the stock has not actually been sold, they have not realized any positive cash flow from the sale, and the stock now has a lower market price than on the date of exercise. Is she correct? If so, are they at least entitled to the lower long term gains rate because they held the options for longer than one year? Is there any way they could have handled this matter differently which would have allowed them to defer realization of "profits" from the option exercise until the acquired stock was sold, thus avoiding a big tax bill this April? At this point, would it be possible to sell an equivalent amount of stock borrowed from their broker in order to raise immediate funds to pay the tax due? And would this course of action have the desired effect of entitling them to the long term capital gains rate for profits resulting from the eventual liquidation of the current shares of stock? Any informed advice would be greatly appreciated. ______________________________________________________ Get Your Private, Free Email at http://www.hotmail.com - - ------------------------------ Date: Wed, 3 Feb 1999 11:09:28 -0800 From: "Bipin" Subject: how to calculate return on 401k hello: i just changed jobs and when rolling over my 401k to an IRA, i thought that the total amount was suspiciously low, just a little more than the total contribution. that seems strange because i had been 100% invested in index funds over the last five years. i have created an excel table with the following columns: date(first of every month) my contribution company match total for all five years. i was fully vested in my company match. in addition to the above, i have the final amount. how can i use this to calculate a return? bip - - ------------------------------ End of persfin-digest V5 #86 **************************** - To unsubscribe to persfin-digest, send an email to "majordomo@xmission.com" with "unsubscribe persfin-digest" in the body of the message. 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