DEAR BRUCE: I have a husband who has no life insurance, and who says, "Why should I pay for something I won't use?" Even though he is a lawyer, he refuses to make a will. We have a good income, a large house with a small mortgage that will be paid off in 21„2 years and a 401(k) in the mid-five figures. Our problems: $12,000 in credit-card debt, mostly from helping six kids through college (four are still there), and no emergency savings.
My husband has since learned he has diabetes, giving him a reason to do what he always wanted to do: travel like mad to Europe, Brazil, Central America, New England and spur-of-the-moment trips to see his relatives. Again, he says it's his money. I know he is sensing his mortality, but refuses to discuss it, so I have made plans of my own. I have a small accidental policy I have hidden from him that covers our college-age children and us. I have put copies of important papers in one place. And I have told my oldest children what I want to happen if both of us should die at the same time.
My biggest dilemma is career. I am 50 years old, with a B.S. in mathematics, but I have worked part-time as a legal secretary for 30 years and would like a change. Should I go to full-time employment now and forgo more debt, or should I go back to school and get a teaching credential or graduate training in a mathematical field? Where can I learn more about such options? — R.J., Riverside, Calif.
DEAR R.J.: I think you covered it all when you say, "He is sensing his mortality." Diabetes at his age is probably type 2 and hardly a death sentence. You didn't indicate if he was going on these trips by himself or with you. It seems to me if he is doing this all on his own, it's symptomatic of deeper problems. Why he refuses to make out a will and not carry insurance is beyond me.
That said, you are doing the right things in terms of planning for yourself. There is nothing wrong with a midlife change in career paths. Whether or not graduate training or teaching credentials is the best route is a matter of personal preference and the job markets where you live in California. It's a shame you couldn't have your husband sit down with someone he trusts and advise him of the mistakes he is making. This is even more difficult to understand for someone who has been legally trained.
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DEAR W.S.: There are any number of companies that will be happy, usually for a modest fee, to search your stock certificates and see if they have any value. If you have access to a computer, you can search out companies that will research old stocks for you. Some of them charge a fee, and others are free. Two we found at the Securities and Exchange Commission's Web site: Financial Stock Guide Services, 800-367-3441, and Scripophily, at 888-786-2576.
DEAR BRUCE: I am 77 years old, and I was one of eight children. Back in the day, my grandfather was a retired carpenter who died at age 86. He had told my parents he purchased each of us a bond. He lived and died in the same house he built for my grandmother. I never saw the bond, nor did my oldest brother who supposedly looked after his passing. It's always been a puzzle. Is there any way to trace them? — S.O., via e-mail
DEAR S.O.: Many, many people have told their relatives there is money for them "someplace" in the form of cash, bonds or whatever. More often than not, these things didn't exist. It was a way for them to ingratiate themselves and maybe curry a certain kind of favor. At this point, I would put this behind you as just another myth.
DEAR BRUCE: I attended a medical school in Belize, and the loaning institution ceased supplying loans. I have $30,000 in loans due. Fortunately, I have money set aside to pay it off since I'm considered a nontraditional student and worked prior to applying to medical school. The loan interest is not fixed at 6.78 percent. Would it be better to pay off the whole sum at once, or is there a more fortuitous route to take? I have never had a loan, only the luxury of tuition or stipend scholarships. I thank you for your time and sage advice. — M.E., via e-mail
DEAR M.E.: Congratulations on getting into a nontraditional situation. So many people have tried to get into medical school in this country and have given up and gone on to something else. I do know individuals who have gone to the Caribbean and other parts of the world, and they have done very well.
You mentioned your interest rate is not fixed. I assume you mean it is adjustable now at 6.78 percent. The question then becomes: How is the money you've set aside doing? If it is earning considerably more than that, leave it alone; if it is not, you might wish to consider paying off the loan now. Good luck with your new career.
DEAR BRUCE: I had a judgment against me a few years ago, and I ran up a credit card. Today, most of my bills are paid, except for a judgment I can't really pay for. I have to pay lots of child support. How long can it be held against me? What can I do? — M.M., via e-mail
DEAR M.M.: If the judgment has been renewed according to the laws of the state where it was granted, it could stay with you until the day you die, and the interest meter continues to run. Further, it could be sold from one holder to another, all of whom will make their best effort to try to collect from you. Your best shot is to negotiate with the current holder of the judgment to see if you could make some kind of settlement for less than the amount outstanding. Ignoring it will almost surely not make it go away. Sooner or later, someone will pick up on it, renew it and come after you.
DEAR BRUCE: Can you please explain the benefits of interest-only mortgage loan. Who are more likely to get this type of loan? — V.S., via e-mail
DEAR V.S.: I would use the word "benefit" in quotation marks. The reason most people go into an interest-only mortgage: It's the least amount of money going out every month. Put another way, it allows them to go into a home they otherwise couldn't afford. The troublesome part is: It depends on the house rising in value to build any equity, which in many markets is not happening these days, and tempts people to gamble on the hope that the property will go up in value, their income will increase, etc. In some unusual situations, I might be persuaded to recommend an interest-only mortgage, but I do believe it lures people to spend more than they can afford, which is never a good idea.
Send your questions to: Smart Money, P.O. Box 503, Elfers, FL 34680. E-mail to: bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.
