Investment advisory services offered through Sharma Associates, Inc.
Securities offered through Resource Horizon Group, L.L.C., Member FINRA,  SIPC
1350 Church Street Extension 3rd. Floor, Marietta, GA Phone: 770-319-1970
Sharma Associates, Inc. and Resource Horizons Group, L.L.C. are not affiliated.

Q: I just changed my job, left a big corporate job after 10 years with the company having 401(k) worth $100,000. I am heading to a new job at a new company that also offers 410(k) plan. What should I do with the money in my old plan?

Q: Should I borrow from my 401(k) Account?

Q: I have elderly relative who needs help, what kind of options available ?

Q: Can I sell my own house myself?
Q:I am thinking of buying a long term care policy, What should I look for in a Long Term Care Policy?

Q:I am in the market for a new car. Should I buy a car or lease one?

Q: I just changed my job, left a big corporate job after 10 years with the company having 401(k) worth $100,000. I am heading to a new job at a new company that also offers 410(k) plan. What should I do with the money in my old plan?

A: You have got four choices:

1. Leave your 401(k) at the old company.
2. Transfer your 401(k) to the new program.
3. Have your old company cut you a check for $100,000.
4. Roll over your 401(k) into a self directed Individual Retirement Account IRA Account.

In this situation, best thing to do is to take professional advice and talk to your financial advisor. If you want to have full control over your retirement funds, best thing to do is to roll over your 401K into a self directed IRA account. 

Most important thing in this situation, do not let anybody rush you. Leave the money in your old plan while you do your homework and talk to your financial advisor. Also make sure you know what your rights are under your old 401(k) plan and make sure you understand the rules of the new one.

Q: Should I borrow from my 401(k) Account?

A: Being able to borrow from your own account can be convenient, especially in an emergency. But it may not be financially best thing to do. Here is why:

• Lost opportunity. A 401(k) plan puts your money to work, earning more money. Money you borrow stops growing. You lose that money's future compound growth-forever.
• It upsets your financial plan. Presumably you decided how much to invest in each fund or stock in your account by considering how close you are to retirement and your risk tolerance. Whichever stock or fund the borrowed money comes from will shrink in size relative to your other investments. That means your account may become riskier than you want, or too conservative.
• Hidden Costs. If you borrow by selling shares when the market is down, replacing those shares after the market rallies will cost you more money.
• In the red. You must repay a loan with interest. But do not think of that interest as profit. In fact, you are probably losing money. Your interest rate is likely to be lower than the rate at which your money would grow if you left it in your account.
• Double taxation. Regular contributions to your account are with 'before-tax' dollars. You do not pay taxes on your contributions or earnings until they are withdrawn from your account at retirement. But the money and interest you use to repay a loan are made with 'after-tax' dollars. That is, you pay taxes on it as part of your current taxable income before putting it into your account. Then it is taxed again when you eventually withdraw it.
• You can do better. If you need a loan, consider other sources. For example, a home-equity loan may be available at a low interest rate, and the interest is deductible.

Q: I have elderly relative who needs help, what kind of options available?

A: Assisted Living: Latest option for elderly Facilities Offer Some Health care, Meals and Housekeeping
You need to know everything about facilities up front before selecting one, so that you do not have any surprises later on.

Assisted living facilities are residences for those typically 75 and older who are healthy enough to live on their own, but who need help with daily chores. Such residences provide meals and social activities in common areas.

Prices can be high for assisted-living services, which are usually paid privately. In some of the costlier areas of the country running as high as $5,000 a month or higher, You should estimate how long you can afford as assisted-living residence before moving in.

It is a good idea to ask for references from other residents or their families, as well as local hospitals, when selecting an assisted-living facility. Recommendation from local chambers of commerce and civic organizations also are good.

Q: Can I sell my own house myself?

A: Selling a house yourself is definitely not for everyone, and only a handful of sellers try it. But many more could do it alone. In deciding whether to handle a sale yourself, the most important issue is your time horizon. If you are in a hurry to take a new job out of town, go with a Pro.

If you are not in a hurry, it makes sense to try selling on your own, at least for a while. You need time to show the house, and a thick skin. People will criticize the property to your face, and some buyers do not show up for appointments.

Negotiating with a buyer is the trickiest part for a do-it-yourselfer. Buyers often make very low offers, and you have to keep your emotions under control and have a clear idea of your minimum price. To weed out tire-kickers, it is always a good idea to mention during showings that you had to get a certain price to justify selling, since property is profitable rental. Never reveal that you are desperate.

With price settled, the rest is pretty easy. You can get a standard sales agreement from an office supply store. Just add a clause saying the terms are binding even if the Title Company or lender requires a different form. Require that the buyer furnish a pre-qualification from a mortgage lender stating that he or she can obtain the necessary loan. Get $1,000 up front in "earnest money" toward the down payment, and specify that the rest of the down payment is due in 10 days.

When do you close?
The options are limited by the lender's lock-in period, the time it will guarantee loan terms. The contract also specifies contingencies, such as the maximum interest rate and points on the buyer's mortgage. Make sure those are high enough to leave a binding contract even if rates go up a touch before buyer applies for a loan. The contract should require that application be made within 10 days.

Most other details, such as inspection, are pretty standard. If you have not done this before, it is probably worth spending a few hundred dollars on a lawyer. Many people do that even if they have a broker.

On closing day, buyer and seller meet for the last time around the title company's table. When it is over, the buyer has the keys, and seller has a check. And if you do it alone, there is no broker there siphoning off an enormous chunk of your proceeds.

Q:I am thinking of buying a long-term care policy. What should I look for in a Long Term Care Policy?

A: A good long term care policies should cover you in all situations outside a hospital, such as your own home, assisted living facilities, adult care or nursing homes. Increasingly more and more want to be cared in own homes. I would suggest seeking the help of your financial or insurance advisor. For more information, please feel free to contact me.

Q:I am in the market for a new car. Should I buy a car or lease one?

A: With a lease, You can have a new vehicle every two or three years, and you are always on warranty. The monthly payments can be much lower than those of a loan, since you are not paying off the full value of the car, just the depreciation-- the decline in value--over the term of the lease. With a lease could have paid monthly half the cost of the three-years loan.

Leased vehicles should be free of major repair bills, but you will always pay top dollars for insurance.

How do you figure, whether buying or leasing is best?

Leased vehicles should be free of major repair bills, but you will always pay top dollars for insurance.
How do you figure, whether buying or leasing is best?

The monthly payments will be higher than with a lease, but they will end and you will enjoy many payment free years. A repetitive leaser is never free of monthly payments.

If you buy a new vehicle these days, you should not face big repairs for at least 100,000 miles and vehicle you own gets cheaper to insure.

If you must have a new vehicle every two or three years, and you do not drive more than the maximum annual mileage allowed on a lease.
Want to have a car that is more expensive than you can afford to buy. Pay little down payment money and would prefer to invest that money elsewhere for better returns. Then you are a best candidate for the lease.

If you must have a new vehicle every two or three years, and you do not drive more than the maximum annual mileage allowed on a lease.
Want to have a car that is more expensive than you can afford to buy. Pay little down payment money and would prefer to invest that money elsewhere for better returns. Then you are a best candidate for the lease.

Leasing only makes sense for people who must drive an almost-new vehicle all the time. That is not really a financial decision. It is a matter of lifestyle or keeping up with the friends.

Should you have any question or need more information, please feel free to email @ hansr@sharmah.com or call Hans Sharma at 610-828-8253