Filed under: Debt, Extracurriculars, Home, Wealth

You know how it is. You’re sitting around the house with your wife, looking at a blank space on the mantle, and wishing you knew what to put there. Finally, she turns to you and says “Honey, we’ve waited long enough. It’s time to purchase a 5,000 year old Sumerian phallus statue.” You look back at her, stare deeply into her eyes and state “my God, it’s like you’re in my head.”

Or you’re hanging out in the bedroom and something just doesn’t feel right. You try moving the furniture, taking down the framed posters, rearranging the curtains. Still, something is off. Finally, you realize that the room’s fung shui is out of balance and can only be rectified by the addition of an ancient Egyptian Eye of Horus amulet.

Okay, it’s not like anybody needs to purchase antiquities. But they’re still really, really cool. There’s something about holding an item that has survived for thousands of years. It helps you weed out the nonsense. After all, when you’re contemplating the eternal, it’s easier to forget that your ideal buddy “accidentally” beaned you in the head when he got a little too excited by his game of “Guitar Hero.”

If you want to pick some pieces of ancient detritus, there are a few options. You can try robbing a museum (be sure to wear black tights and invest in the Batman-style utility belt…and don’t get caught. Even the Getty has had problems with going this route.) Alternately, you can go begging to an obscenely high-priced retailer (it helps if you have a couple of kids and are willing to sell them into slavery). Perhaps you can take the Indiana Jones route and try robbing ancient graves; this technique is always helped along by a cool fedora and a crooked customs inspector.

If robbery, retail or otherwise, isn’t your bag, try the Sadigh Gallery. In addition to its extensive on the web offerings, it also has a paper catalog and a store at 303 Fifth Avenue in New York City. Because it deals directly with archeologists, Sadigh’s prices are well below the going rate. Ideal of all, it is willing to dicker, in the ancient tradition. I’ve been visiting the gallery since the early 1990’s, and have never paid more than a hundred bucks or so. Of course, I focused on the mummy beads and low-level ancient coins, leaving the more elaborate items for wealthier patrons.

Still, although I’m a lower-level customer, the Sadigh guys have always been incredibly nice. Most important, they guarantee their merchandise, and their client list (including a few museums) bears testament to the quality of their goods.

Best of all, antiquities tend to keep their value. They might not be the ideal hedge against inflation, but let’s face it, there will always be a market for a mummified cat.

Bruce Watson is a former English instructor, sometime writer, and all-around cheapskate. A co-author of Military Lessons of the Gulf War and A Chronology of the Cold War at Sea, his work has appeared in The Journal of Speculative Philosophy, The Roanoker, The Brush Mountain Review, The Eccentric Monthly, The Best of Times, and College Daze. He currently blogs on Crankster.

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Filed under: Debt, Tax

Experts will tell you not to run up the balance on your credit cards because you’ll pay dearly when it comes time to calculate the interest. But the fact is that many consumers do have credit card debt that’s carried over from month to month.

Here’s a way to reduce your taxes and probably save some interest in the process. Use a home equity loan to pay off your credit cards. (But be sure to cut up the cards and not begin accumulating a balance again!)

There are two advantages to carrying your debt as a home equity loan: First, the interest on a mortgage or home equity loan is generally deductible on your taxes if you itemize, while the interest on a credit card is not deductible. So you’ll get a small reduction in your taxes for the interest on that loan. Second, home equity loans generally have lower interest rates than credit cards, so you can save yourself some money.

There are limits to the amount of mortgage interest that is deductible, so check the rules before you do this. The deduction is also only available for your first or second home, so you won’t be able to do this on other properties you might own. This tip also won’t help you if you’re affected by the Substitute Minimum Tax.

As with any tax tip, check the rules before you act.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Record-keeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Debt, Extracurriculars, Home, Wealth

You know how it is. You’re sitting around the home with your wife, looking at a blank space on the mantle, and wishing you knew what to put there. Finally, she turns to you and states “Honey, we’ve waited long enough. It’s time to purchase a 5,000 year old Sumerian phallus statue.” You look back at her, stare deeply into her eyes and state “my God, it’s like you’re in my head.”

Or you’re hanging out in the bedroom and something just doesn’t feel right. You try moving the furniture, taking down the framed posters, rearranging the curtains. Still, something is off. Finally, you realize that the room’s fung shui is out of balance and can only be rectified by the addition of an ancient Egyptian Eye of Horus amulet.

Okay, it’s not like anybody needs to purchase antiquities. But they’re still really, really cool. There’s something about holding an item that has survived for thousands of years. It helps you weed out the nonsense. After all, when you’re contemplating the eternal, it’s easier to forget that your ideal buddy “accidentally” beaned you in the head when he got a tiny too excited by his game of “Guitar Hero.”

If you want to pick some pieces of ancient detritus, there are a few options. You can try robbing a museum (be sure to wear black tights and invest in the Batman-style utility belt…and don’t get caught. Even the Getty has had problems with going this route.) Alternately, you can go begging to an obscenely costly retailer (it helps if you have a couple of kids and are willing to sell them into slavery). Perhaps you can take the Indiana Jones route and try robbing ancient graves; this technique is always helped along by a cool fedora and a crooked customs inspector.

If robbery, retail or otherwise, isn’t your bag, try the Sadigh Gallery. In addition to its extensive online offerings, it also has a paper catalog and a store at 303 Fifth Avenue in New York City. Because it deals directly with archeologists, Sadigh’s prices are well below the going rate. Ideal of all, it is willing to dicker, in the ancient tradition. I’ve been visiting the gallery since the early 1990’s, and have never paid more than a hundred bucks or so. Of course, I focused on the mummy beads and low-level ancient coins, leaving the more elaborate items for wealthier patrons.

Still, even though I’m a lower-level customer, the Sadigh guys have always been incredibly nice. Most important, they guarantee their merchandise, and their client list (including a few museums) bears testament to the quality of their goods.

Ideal of all, antiquities tend to keep their value. They might not be the ideal hedge against inflation, but let’s face it, there will always be a market for a mummified cat.

Bruce Watson is a former English teacher, sometime writer, and all-around cheapskate. A co-author of Military Lessons of the Gulf War and A Chronology of the Cold War at Sea, his work has appeared in The Journal of Speculative Philosophy, The Roanoker, The Brush Mountain Review, The Eccentric Monthly, The Best of Times, and College Daze. He currently blogs on Crankster.

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Filed under: Debt, Tax

Experts will tell you not to run up the balance on your credit cards because you will pay dearly when it comes time to compute the interest. But the fact is that many consumers do have credit card debt that is carried over from month to month.

Here’s a way to reduce your taxes and probably save some interest in the process. Use a home equity loan to pay off your credit cards. (But be sure to cut up the cards and not begin accumulating a balance again!)

There are two advantages to carrying your debt as a home equity loan: First, the interest on a mortgage or home equity loan is generally deductible on your taxes if you itemize, while the interest on a credit card isn’t deductible. So you’ll get a small reduction in your taxes for the interest on that loan. Second, home equity loans generally have lower interest rates than credit cards, so you can save yourself some money.

There are limits to the amount of mortgage interest that is deductible, so check the rules before you do this. The deduction is also only available for your first or second home, so you won’t be able to do this on other properties you might own. This tip also won’t help you if you’re affected by the Alternative Minimum Tax.

As with any tax tip, check the rules before you act.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Filed under: Cards, Debt

I was watching the Suze Orman Show last night, listening to the story of a debt-burdened woman who filed for bankruptcy shortly before she received a massive inheritance. Her rationale for the early filing was that she didn’t want the creditors to take a big chunk of the money her dad would leave her when he passed.

I couldn’t believe that Suze Orman didn’t rip into the woman’s conduct. Stiffing your creditors to keep an inheritance is unethical at best, and borders on bankruptcy fraud — Filing for bankruptcy when you know you will have the means to pay off your creditors in the near future.

What this woman did is not really substantially different from being $100 thousand in debt and then buying a lottery ticket and winning $100 thousand — then filing for bankruptcy before cashing in the lottery ticket. Stiffing people when you can afford to pay them is immoral.

In any case, the Wall Street Journal recently reported (subscription required) that consumer bankruptcy filings rose 40% to over 800 thousand in 2007. With the housing market in turmoil, this is sad news. But I’ve to wonder: How many of those people filed for bankruptcy after buying plasma TVs, Lincoln Navigators, and homes they couldn’t afford?

If we’re going to speak about new policies to help out struggling debtors, it’s an important question — we don’t need to be helping out selfish morons and people looking to screw the lenders. The housing bubble was in part caused by an unprecedented level of mortgage fraud. Are we now entering an era of unprecedented bankruptcy fraud? We won’t know for a while, but it seems likely.

Perhaps part of the problem is that too many people no longer feel ashamed to file for bankruptcy. In our instant gratification society, which led people into HELOCs as a way to buy TVs (remember when borrowing money was something to be ashamed of?), filing for bankruptcy is no longer seen as that bad of a thing. People under 25 are the fastest-growing group of bankruptcy filers.

The point is, avoiding bankruptcy is usually fairly easy: Don’t spend money you don’t have! We should remember that before we feel too bad for all the debt “victims”.

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Filed under: Borrowing, Cards, Debt, Ripoffs and Scams

Unless you pay off your credit card in full each month, you likely have no idea exactly how much your credit card debt is costing you. While some consumers may know that they’ve a special introductory rate of 0% or 3.99%, most don’t know the terms on the regular cards that they use each day.

And it’s not enough to just know the interest rate on your card. You also need to know how that’s calculated, what happens to the rate if you pay late, what other actions may cause you to default on your card, what types of fees or surcharges you could incur, whether you have some sort of annual fee, and tons of other details.

Credit card agreements have become so complex that they’re not even understandable by the average consumer anymore. I challenge anyone who’s been carrying a balance on their card for the last year to calculate for me exactly what their interest charges will be next month. Chances, are, they have no idea. If you have no idea how much you’re going to pay for your credit, how can you make an informed decision about whether or not to incur the debt?

The solution to this problem: Don’t use credit cards unless you totally have to. Pay off your balance in full each month, prior to the due date. Don’t get sucked into a credit card trap you can’t possibly understand.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Filed under: Cards, Debt

I was watching the Suze Orman Show last night, listening to the story of a debt-burdened woman who filed for bankruptcy shortly before she received a huge inheritance. Her rationale for the early filing was that she didn’t want the creditors to take a big chunk of the money her father would leave her when he passed.

I couldn’t believe that Suze Orman didn’t rip into the woman’s conduct. Stiffing your creditors to keep an inheritance is unethical at ideal, and borders on bankruptcy fraud — Filing for bankruptcy when you know you will have the means to pay off your creditors in the near future.

What this woman did is not really substantially different from being $100 thousand in debt and then buying a lottery ticket and winning $100 thousand — then filing for bankruptcy before cashing in the lottery ticket. Stiffing people when you can afford to pay them is immoral.

In any case, the Wall Street Journal recently reported (subscription required) that consumer bankruptcy filings rose 40% to over 800 thousand in 2007. With the housing market in turmoil, this is sad news. But I have to wonder: How many of those people filed for bankruptcy after buying plasma Televisions, Lincoln Navigators, and homes they couldn’t afford?

If we’re going to speak about new policies to help out struggling debtors, it’s an important question — we don’t need to be helping out selfish morons and people looking to screw the lenders. The housing bubble was in part caused by an unprecedented level of mortgage fraud. Are we now entering an era of unprecedented bankruptcy fraud? We won’t know for a while, but it seems likely.

Perhaps part of the problem is that too many people no longer feel ashamed to file for bankruptcy. In our instant gratification society, which led people into HELOCs as a way to buy TVs (remember when borrowing money was something to be ashamed of?), filing for bankruptcy is no longer seen as that bad of a thing. People under 25 are the fastest-growing group of bankruptcy filers.

The point is, avoiding bankruptcy is usually fairly easy: Don’t spend money you don’t have! We should remember that before we feel too bad for all the debt “victims”.

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Filed under: Banks, Borrowing, Debt, Real Estate, Ripoffs and Scams

While I can’t guarantee that there won’t be any exotic mortgages lurking out there in 2008, they’ll be rare and hard to find. You also will need to have stellar credit ratings to qualify for exotic mortgages, because investors have pretty much dried up. The risks of loss are just too high for most mortgage investors.

When exotic mortgages were at the top of their game in 2005, lenders made about $625 billion in subprime loans, and most of these fit into the category of exotic mortgages. Essentially any mortgage that can’t be sold to Fannie Mae and Freddie Mac because it doesn’t meet their prime lending terms gets categorized as subprime, even if the borrower is also a candidate for a prime loan. In 2005, about $625 billion of subprime loans were funded. In 2007, that number will drop to about $50 billion, or just about 2% of the mortgage market.

Don’t expect to find option ARMs, 0% down mortgage loans (especially if it’s an investment property and not your primary home), and ridiculously low teaser rates that jump dramatically in two to three years. Also, many of the balloon loans will be shut out except for those with strong credit histories.

The folks who likely will be hardest hit with this change in market conditions are people who are self-employed and have a difficult time proving income. No doc loans will be hard to find, and probably the rules for getting approval will be very stiff.

Many exotic loans helped to introduce the term upside-down mortgage, which used to be solely for automobiles when the car was worth less than the loan amount due. With people putting 0% down, and in some cases not even paying all the interest due, mortgages quickly became upside-down as the real estate market weakened.

Good riddance to exotic mortgages, and I hope for the sake of American consumers they never come back.

This post was written as part of a series on on 2007 departures. Read about more products, companies and people you won’t see in 2008.

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Filed under: Borrowing, Cards, Debt, Ripoffs and Scams

Unless you pay off your credit card in full each month, you likely have no idea exactly how much your credit card debt is costing you. While some consumers might know that they have a special introductory rate of 0% or 3.99%, most don’t know the terms on the regular cards that they use each day.

And it’s not enough to just know the interest rate on your card. You also need to know how that’s calculated, what happens to the rate if you pay late, what other actions might cause you to default on your card, what types of fees or surcharges you could incur, whether you’ve some sort of annual fee, and tons of other details.

Credit card agreements have become so complex that they’re not even understandable by the average consumer anymore. I challenge anyone who’s been carrying a balance on their card for the last year to calculate for me exactly what their interest charges will be next month. Chances, are, they have no idea. If you have no idea how much you’re going to pay for your credit, how can you make an informed decision about whether or not to incur the debt?

The solution to this problem: Don’t use credit cards unless you totally have to. Pay off your balance in full each month, prior to the due date. Don’t get sucked into a credit card trap you can’t possibly comprehend.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Record-keeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Borrowing, Debt, Real Estate

Reverse mortgages have long been thought of a creative way for retirees to generate income: By slowly giving up equity in their homes over time, they could generate cash for their living expenses. When they no longer needed the house, it could be sold and the bank could be paid back with the proceeds. The AARP has quite a bit of information about reverse mortgages.

But according (subscription required) to the Wall Street Journal, reverse mortgages are gaining favor among those seeking to avoid foreclosure. Some home owners are trying to obtain reverse mortgages on their homes, then offering their lenders the proceeds in an attempt to stave off foreclosure.

This strategy will only work for homeowners who have substantial equity in their homes — often retirees who took out home equity loans and are having trouble making the payments.

With a complex product like a reverse mortgage, be sure to consult with a fee-only financial adviser before you do anything. Don’t listen to a salesmen — their job is to sell you a mortgage, whether you like it or not.

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