Making mutual fund deposits
Q: I am considering investing in some mutual funds for a new retirement account contribution but worry about the time involved to set this up compared with just going to my local bank. I also worry about checks being lost in the mail. What can you tell me about my options for getting money into a mutual fund account quickly and safely?
A: If you need to securely make a deposit in a flash, you basically have the three following options:
Write and deposit a check. Ask if your investment company has an app that would enable you to snap a photo of your check with your smartphone and deposit the check in flash. Alternatively, you can stop by and deposit the check at the company’s local branch office if you’re dealing with a company with a branch location near you.
Wire the money from your bank account. If the fund company isn’t in your neighborhood, don’t despair. However, note that wiring usually costs money on both ends. After you’ve set up the wiring feature on your fund account, call your fund company to see what information you need to provide to your bank in order for the wire to be correctly sent. If you don’t have the wiring feature set up on your account, establishing this feature takes some time because you must request, fill out and mail a special form.
Electronically transfer the funds. Electronic funds transfer, which is like a paperless check, usually takes a day longer than a wire, but it’s free. Simply call your fund company and say how much money you want to move. As with wiring, if you don’t have this feature set up, you can establish it by requesting and filling out a form from the fund company.
Should you turn your home into a rental?
Q: Is this a good time to turn a primary residence into a rental property? If we can recover our costs from year to year from the rent received and the tax benefits (depreciation, deductible expenses and mortgage interest), is real estate a good investment now? During, say, a 10- to 20-year period, what sort of appreciation might we expect? Or should we take our money out of real estate and run?
A: Real estate should continue to be a good long-term investment. Converting your home into a rental property appeals to folks needing or wanting to move, since you already own and know the property. One downside to consider is if the fine appointments in the home are not suited to the expected wear and tear of renters. Also, be sure to run the numbers to see what kind of monthly cash flow or drain you can realistically expect as a landlord. Finally, consider tax issues — especially the fact that you will lose being able to sell and exempt a hefty amount of your home’s capital gain if you convert it to a rental for a number of years.
Write to Eric Tyson, author of “Investing for Dummies” and “Personal Finance for Dummies” (Wiley) via email: firstname.lastname@example.org.
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