Dear Bruce: Do you recommend any work-at-home companies or any practical home-based business start-ups?
- R.T., email
Dear R.T.: There are many companies that will offer to "put you in business" by schooling you in the process of starting a business such as home billing for professionals, as an example.
While it may seem a practical idea at first look, you will find in almost every instance that the money to be made clearly doesn't justify the investment, time and effort, and that's unfortunate.
I would say the overwhelming majority of these companies are to be avoided like the plague. Businesses that attempt to sell you products or material that you will assemble, such as beads for jewelry, also are to be avoided at all costs.
Dear Bruce: I've got $80,000 worth of EE Bonds that will mature in 2014. They will no longer pay any interest. Is there anything I can do with these bonds other than give them to charity when I redeem them?
They were paying about 5 percent interest. Buying new EE Bonds pays less than 1 percent. Is there any way I can reduce the income tax hit when I cash them? California doesn't require payment on the interest earned, just the federal government.
-- Richard, email
Dear Richard: I don't understand why you believe you have to give the bonds away. It's true that the EE Bonds are paying well under 1 percent, and the tax the federal government requires is payable on money that has been earned. There's no way to avoid that, but that doesn't mean you have to give them away. Let's assume that there is a substantial tax due, perhaps $4,000 plus. That's hardly a viable reason to give anything away to charity.
At the risk of repeating myself, I think it's worthwhile to put the money into solid American companies. Perhaps a portfolio of three or four such companies that are paying decent dividends and are doing well in the marketplace.
While you are not going to get rich, you are certainly going to equal at least the 5 percent that the bonds were paying in terms of newly appreciated value, plus the dividends. When these two are combined, 6 percent to 8 percent return is not an unreasonable expectation. Times change and you have to change with them.
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