A: I don't see any problem with this. Home modernization and home improvement loans are a very common vehicle. When you say downsize does this mean that you are going to take off rooms? In that case there might be a problem. The heating, cooling and modernization is within the province of the homeowner with a mortgage.
Q: I recently was awarded $100,000 from my previous employer due to an out-of-court settlement on an EEO complaint. My husband and I are both retired. How can I conserve the majority of this money since it is taxable? Your assistance will be greatly appreciated.
A: I'm assuming that your claim was one for wages, and if this is the case they will be taxable. The majority of the money can be invested in any number of ways. Your income dictates in many cases that which is wise or unwise. For example, if you have relatively modest income, tax-free bonds have no place in your portfolio. Your tolerance for risk is another variable. If you are intolerant of risk, then you'll have to settle for a modest return on your investment.
The older one becomes, the more conservative investment portfolios should, and tend, to be. There are many solid companies whose stock purchases might be in your favor. You will have to do your homework or deal with broker who's integrity and expertise you trust.
Q: My wife and I are each 61 and retired. Our pensions total $41,000 a year. We are currently invested in mutual funds and equity income funds, totaling $180,000. The money is invested in mostly moderate- to high-risk funds. We have $30,000 in cash/money market. Since we were born in 1944, I've heard we have to wait until we are 62-1/2 to collect Social Security. We are doing fine financially and once we make it to Social Security, we may even start to save money.
My problem is that my friends keep telling me I'm foolish to keep my money invested in high-risk funds. I should be much more conservative with a 50/50 mixture of bonds and stocks. I think that as long as I'm getting along just fine, I can let my money go in these high-risk funds to earn at a better rate than bonds or low-risk funds. What's your opinion?
A: I have no problem whatsoever with your plan, assuming that you are staying right on top of your investments. That is to say, if the market begins to slide, don't be a pig. Get out and take your small licking, a maximum of a 10-percent reduction in capital value. The key ingredient is that you pay attention to the market. Many people do not, and suddenly their investments have decreased well beyond what is ordinarily prudent at your age.
Q: Does the LLC offer a layer of liability protection on personal assets if the owner and worker are one and the same? I understand that it does offer protection if there are employees, but what if the owner did the work?
A: If you have employees, the LLC would give you some layer of protection. If the worker bee is the owner, an aggrieved party can bring an action against the corporation and the individual, you. The only true protection is adequate-liability insurance, which most people understand, but many do not buy due to the oft-formidable premium.
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