Ken, I think that you are totally misunderstanding my point of view. First of all, I never got the impression that Cube's dad owned his house fee and clear. She said that he said, Âbut the house and car insurance snuck up on meÂ. I took that to mean house payment, although, it could have meant homeowner's insurance, or real estate taxes. I don't know. But I assumed that he did not own the house free and clear. Also, I could care less about the inheritance. I don't care if I inheret a dime from my relatives, and I guess that I make the presumption that others don't care either. My concern is what is best for Cube and her dad. Sure, she could continue to supplement his income, and write IOUs, but that really is not what's best, because Cube is planning for a layoff, and the money simply will not be there for her to give to her dad. You can't give what you don't have. The RM is a possible alternative, but I don't think it's best for Cube's dad, mainly because, as you said, he may have another 20 years of living to do. That RM is gonna come due eventually. Or, he will tap it out, and then, how will he pay for his living expenses? As stated above, my opinion was not based on the fact that the RM would prevent Cube from obtaining an inheritance. My point was, the best way for Cube to help her dad out of this situation, which she feels a moral obligation to do, is to help him to not spend more than he earns. I'm sorry that you feel that that would be "treating him like a child." But, I disagree. My grandfather does not feel like he is treated like a child. My mother does not insist that he hand his money over for safe keeping. He willingly gives it to her and asks her to hold it (because he is well aware that he is not good with money,) so that if his cars breaks down and cannot be fixed, he can purchase a new one. And, I'm not talking about huge sums. Currently, my Mom is holding $3000 for my grandpa, and that is his entire net worth. In the case of my family, this is not an inheritance issue, it's a looking out for one another issue. No one has $3000 to give to grandpa, but my mom can help him be prepared in case an emergency pops up and he needs money. Perhaps the term "allowance" makes you think of a child. But many adults put themselves on an allowance. It's just the amount of money that they have to spend each week (or month) after they have met all other financial obligations. Call it something else if you like. And, I never called anyone "money stupid." I don't like the term "stupid." But, I would not equate someone who is not good with money with someone who has different money priorites either. Someone who has different money priorities is not necessarily someone who cannot meet all of their financial obligations. Do you see the distinction? I think Anita's last paragraph is a very good suggestion, IF it's even possible for Cube's dad to downsize.

Hi stinkbone, When I first read your message, I thought, "Oh, no ... running a mortgage for 10 years without agreeing formally to pay off a penny of the principal?"! Dave doesn't mind people running a fairly substantial mortgage without their getting their shirt-tails tied into knots to pay them off ... if one uses the freed-up money to invest into worth-while assets. But ... when one considers that a mortgage is an agreement to pay off a (usually large) loan making level rates of payment from the first month to the last, one knows that in the early years, when the loan is large, the amount of interest payable annually is large ... meaning that one pays peanuts on the basic principal during the whole of that first year. In the later years, a very large component of the regular payment goes to pay off principal, as the amount of interest payable on that residual amount owing is quite small - but the borrower has been paying the same amount each time. We've often been told that if one can make one extra payment annually (specifying that it's to be used totally to pay down principal) it'll probably make a larger payment of the principal that the total amount paid off on principal through all the rest of the year (or close to it). That will result in the loan being paid off much earlier than according to the original plan. If you make that official plan, I hope that you'll make a deal with yourself to make that extra payment annually, or more if possible, even if it's not required. If you get someone to run down the effect that'll make in the date that your mortgage'll be paid off, you'll be surprised, I'm sure ... and substantially motivated to carry it out, if at all possible. The people who pay bi-weekly are actually making that 13th month payment in each year, contractually. What plans do you have in place to deal with an emergency? Unexpected illness, if not covered by medical insurance (and few offer coverage of the entire amount, and certainly not up-front ... but medical people like to get paid now, not in half a year ... with you recovering the amount from your insurance company, later). Blowing the engine or tranny of your car? Replacing a furnace ... it may make you sweat (sorry ... "perspire") to do without an air conditioner for a while until you can afford a repair or a replacement ... but you'd get more uncomfortable than that, doing without a furnace (without regard to tearing holes in walls to replace split parts of water pipes after freezing). Will you be able to get a HELOC from your financial institution? For sure? I'll bet not ... if you've been put on lay-off (especially if permanent). And at what rate? I suggest that, even if it means cutting expenses to just the bare essentials for a couple of years (or more), that you make a strong effort to set aside the value of a fourteenth month of mortgage payment each year, to invest as a safety net for use in emergency. I've recommended to many that they try to have 3 - 6 mos. worth of income in case theirs stops, for whatever reason, so that they'd still be able to manage financially. I've told a number of people, as they became more familiar with the ins and outs of capable financial management, that often I don't have such myself. But I have a fairly guaranteed income, being as I'm on three pensions plus required annual withdrawal from a tax-deferred retirement plan, and live on less than that income ... automatic, until I depart this earth. Even if I didn't, I have some equity and mutual fund assets and have had certificates issued ($35 - 50. per asset in stocks, usually fee-free for mutual funds) that I have lodged as collateral backing a Letter of Credit at my bank (which sits unused, most of the time, with no inactivity fee levied) which I can draw on in case of an emergency. So I use credit card to pay for the emergency needs, then draw on the LOC in time to pay off the total owing on the credit card ... as I dislike paying their high interest rates ... I'd rather pay at a lower rate on the amount borrowed on the Line of Credit. Then, as I have surplus income (and I cut expenses to the bone, in such cases) to pay that loan off in full, as quickly as possible, partly due to interest not being deductible. After that, to put the amount that I was paying interest into my pocket. Where I'd keep it for a short while, then use it to buy more assets. I agree with Dave somewhat, however ... in that I will, however use a different Letter of Credit (due to the interest being deductible) to use to buy assets, sometimes agreeing to pay interest only, and some principal if and when it suits me. As I believed, back when I would have to pay 6.25% interest, that I could borrow to invest at nearly nil net cost ... ... so it should be true in spades, now that I can borrow for 4.75%. What's better than putting your money into the bank? Long term ... it's buying a piece of the bank! For reasons that I've outlined elsewhere in these fora. Good wishes for making a deal that you'll be happy with in 10 and 20 years. Learn how money works ... an interesting hobby ... **that pays well**!! ole joyful

USAA has a good rep so I don't think it should be a problem for you to leave it there for a while. SmartMoney's website I believe is free for access, but I could be wrong - I'm a WSJournal subscriber and the two are owned by the same company so there's a lot of cross-links on the websites. It isn't easy finding an good independent fiduciary advisor, but for people who need help developing a comprehensive financial plan (which is not the same as earning a high ROI on investments), I think it's essential. Most middle-class folks would find it helpful to talk to a neutral third party who can ask the hard questions and analyze your total financial picture. One thing for everyone to be aware of is that when I refer to financial planning, this is not only a legal term, it actually refers to creating a 'road map' that takes you from your current financial situation to achieving your short, medium, and long-term goals. It is aiming for a moving target, so any life-changing events - life, death, marriage, divorce, change of job - means some fine-tuning may be needed to your plan. To produce a good plan requires time spent in not only gathering all your financial info and analyzing it, but defining your goals. Some will be achievable and some will not be. Only you can define and prioritize them, and a good advisor will help if needed. You can get a financial plan, separate from investing advice, from any certified fiduciary advisor. Cheaper ones are computer 'plug in the numbers' produced, so always make sure you understand the base assumptions, and have multiple scenarios run to be sure you're covered for any contingencies/emergencies you haven't foreseen. Establish the total cost of meeting, gathering info, analyzing, and producing the plan(s) up front before signing anything. It takes time to do a financial plan, and anyone promising you it will be easy and fast isn't going to do a comprehensive job. It's an advantage for the fiduciary to be an insurance agent OR to be very familiar with insurance analysis, because many people could use advice on how to use different types of insurance to mitigate risk in various areas of their life. At a minimum you should contact at least three fiduciary advisors, obtain references, and investigate them thoroughly, before working with one. Even if all you need is a financial plan, do the research, but confine the requested references to clients who received a financial plan at least three years ago and are willing to discuss its usefulness. It is not uncommon for people to pay for a financial plan and then follow the suggested actions on their own; e.g., do their own investing, etc., without engaging the advisor to handle their portfolio. OTOH, a financial plan that goes unimplemented is just a useless piece of paper. We used to have to gently 'nag' our clients that they still hadn't completed certain checklist items on their plan, so it depends on how good you are at doing tasks that many people put off....until it's too late.

I'd say that buying stock is like buying ownership of a company's booster club. Stocks go up and down based upon the changing human emotions of the investing public concerning the given company, not actual results. The shares of troubled companies can rise, and those of successful companies fall. The old cliche is that market prices are driven only by greed and fear. Dividend reinvestment plans are just like dollar cost averaging, they are non-strategy "strategies" created in the interest of financial advisers and brokers, not the investors themselves. Outside of a retirement plan, you need to come up with cash from other sources to pay tax on the dividend. How much sense does that make as a strategy? You do know that brokerage firms and advisers usually receive payments from fund advisers (or customers) based upon account balances. Why distribute a dividend to the customer, when you can retain the funds and have a bigger base for payments? Or, in the case of direct stock holdings, the dividend paying company can avoid paying out the dividend and just keep the cash. Issuing more shares is free. Oh, I have an idea, let's call doing that a Dividend Reinvestment Plan. Like it or not, that's where this "strategy" came from. Tech stocks are volatile, there's no take-away lesson to be learned from that fact. Do as you like, keep your eyes open. Good luck.