DAVE SAYS

Should we ever buy a house?
Dave Ramsey

Dear Dave,

My husband and I are on Baby Step 2 of your plan. We move every two or three years due to our jobs, so would it ever make sense in our situation to buy a house?

Janelle Dear Janelle,

In most cases like this it doesn’t make sense to buy a house, especially if the real estate market in your area is lethargic. Some markets have bounced back and are doing very well, while some are worse than slow. It all depends on where you’re moving.

Here’s the big question: Can you get the place sold quickly the next time you have to move? Another thing to consider is whether or not you can sell it for more than it cost when the time comes. If not, you’ll be writing a check for home ownership, and that’s not a good plan.

As a general rule, a twoto three-year window is not enough time to own a home. There are rare exceptions to this rule, places where you have a hot, escalating price market. But if you’re not careful you’ll end up leaving behind a rental property and playing landlord, whether you want to or not!

—Dave

Picking right trustee

Dear Dave,

I’m going through a divorce, and I’m about to buy a $600,000 life insurance policy. My 9-year-old daughter would be the beneficiary. I need a trustee, but how do I pick a good one?

Marie Dear Marie,

First, your daughter wouldn’t be the beneficiary. You would leave it in a trust for her benefit. And I’m not sure I’d depend on an ex-husband to handle something that requires this much integrity. You’d be better off hiring a good attorney to execute the trust upon your death, or you can look for a bank that has a trust department.

Once you decide on a trustee, you must remember to clearly and specifically state what you want done with the money. Don’t say to invest the money appropriately, because what a banker views as an appropriate investment and what I view as an appropriate invest are usually very different. A banker might put the money in CDs, or certificates of deposit, while I’d probably look at something like mutual funds, which have a much better rate of return.

In many cases, a trust for a child is put in place to pay for their first car, a medical situation or their college education, but this is completely up to you. The balance of the money might go to them when they reach age 21, while they receive a monthly stipend for food and other essentials while they’re younger.

I’m proud of you for thinking ahead, Marie. I know divorce is hard, but your little girl is lucky to have such a good and caring mom on her side!

—Dave


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2013-01-24 digital edition



The burn ban for Milam County has been lifted. Burning is always prohibited in the county's municipalities.


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