Author: A.T.

Most of my days are pretty good, knock wood. I am a lucky man. But imagine what a good day it was recently when I got not one but two “Pre-Approved” offers from Mutual of Omaha.

The first was described as “good news!” and concerned an accidental death policy for which I had been preapproved. (Anyone who does not subscribe to Modern Motorcycle or Skydiving!, I suspect, is pre-approved.) I’ll tell you about it tomorrow.

The second, for which I had also been approved, was described as “great news!” To wit:

“Here’s great news! If you’re a woman age 50 to 75 [I am not] or a man age 50 to 72 [nope] you can choose from four valuable life insurance plans.”

What makes this such good news is that no matter how ill you are, you qualify for this insurance — up to $5,000.

Granted, like most life insurance policies, it doesn’t cover suicide for the first two years (lest, realizing how little $5,000 is really going to mean to your heirs, you become depressed and shoot yourself). And granted, there are no benefits if you should die of natural causes during the first two years (lest this offer be a magnet to the terminally ill). Your heirs would simply get a refund of the premiums you paid (plus 25% the first year, 100% the second).

But beyond that, if you keel, they pay.

And all it costs you is $336 a year if you’re a 62-year-old male (to take one example) or $186 if you’re a 52-year-old woman (to take another).

Not to be patronizing about this. There clearly are people for whom $5,000 (or even the $2,000 minimum policy, which costs a 75-year-old woman $232.80 a year) really matters. It could be the difference between a “proper” burial and something less.

But according to the Life Expectancy module in Managing Your Money (DOS V12), a 62-year-old male who smokes and never exercises and is in “fair” health with “worrisome” finances (or else why would he even be considering this offer?), with “mixed” family longevity, who never wears seat belts when driving, is still likely to live another 15 years.

So if he pays $336 a year that could otherwise earn him, say, 6% in some long-term CD, he would after 15 years have forfeited what could otherwise have grown to be $7,820.

In truth, it’s not a bad deal for such a pint-size policy. But it’s not bad for Mutual of Omaha, either. While YOU might be able to earn only 6%, Mutual of Omaha might expect to earn 9% or more — meaning that to them, after 15 years (but before marketing costs and overhead), your premiums would have swelled not just to $7,820 but to $9,865.

And yes, some of the people who sign up for this stuff will NOT be smokers, and WILL wear their seat belts and take daily walks. Managing Your Money puts the life expectancy of a 62-year-old male like that at 24 years, which means $25,800 for Mutual of Omaha (less marketing costs and overhead), of which they’d pay your heirs $5,000.

Bottom line: if you feel you need life insurance and can’t afford to buy in larger, more economical amounts, this life policy is actually not too bad for someone in poor health or with a family history of dying young.

Otherwise, you should be able to get more coverage for the same money. Or you might simply want to take your chances and just set aside the same money every month in a savings account. Odds are, your heirs will wind up with a lot more when you’re gone . . . and you retain the flexibility of being able to spend that money on yourself, if they should predecease you or wear out their welcome.

Tomorrow: More Good News

CONSUMERWORLD! Just click here and you’re at a wonderfully simple, well-organized jumping-off point to just about everything. Eleven hundred websites, linking to thousands more.

I have made this my new “Home Page,” for when AT&T Worldnet first logs me on to the Internet, because from here I can get so many places so easily.

Want to buy some ballpoint pens? Click SHOP TIL YOU DROP, as I just did, then select Office Max (the Staples site is there, too, but currently “under construction”) . . . I found exactly the brand I wanted. UPS delivered them a few days later.

Want to list your house for sale, or take a look at others’ listings? You’ll find a link to the For Sale By Owner site in the SHOP TIL YOU DROP section, also. So far, there aren’t many listings. But heck, Century 21 is still four years off!

While I was writing this I remembered a novel someone urged me to buy. Corelli something-or-other. Don’t know the author or publisher or title. A few clicks, Corelli’s Mandolin! A few more clicks and a credit card and I’ll have it next week (or overnight if I want to pay extra).

Want to select a CD? Buy a car? Browse the L.L. Bean or Sharper Image or Computer Express or International Male catalogs? Brookstone? FAO Schwartz? North Carolina Furniture? Tupperware? It’s all here. And that’s just SHOP TIL YOU DROP!

The CONSUMER AGENCIES button opens a gateway to everything from the +Better Business Bureau to the Environmental Protection Agency to your own state’s consumer protection agency to the U.S. Postal Service . . . but organized in a very friendly, not-overwhelming way.

The CONSUMER RESOURCES button takes you to a zillion interesting things . . . which take you to a zillion more. For example, one of the many CONSUMER RESOURCES “directories” is the Advertising directory from the University of Texas. Click that and you get an index of dozens of topics, from +Actors and Models to Outdoor Signs (click to find a company that will make or display one for you) to Consumer Psychology to Tobacco Advertising to dozens of others. And this is just one tiny piece of the CONSUMER RESOURCES button of CONSUMERWORLD.

The COMPANY CONNECTION takes you to an alphabetical list from American Airlines and Burpee (“answers all your gardening questions”) on through Walgreens, Weight Watchers and Whirlpool. Some sites, needless to say, are more exciting or useful than others. But what a handy way to shoot to whichever one you want.

And that still leaves three or four other buttons to explore — TRAVEL AND LEISURE, MONEY AND CREDIT, BARGAINS, INTERNET WONDERS (including, from New Zealand, the world’s first automatic wedding speech writer).

Really, the thing is misnamed. It’s not CONSUMERWORLD. It’s: THE WHOLE WORLD. And my new home page.

I was re-reading 30 Simple Things You Can Do to Save Energy, by the Earth-Works Group, authors, also, of 50 Simple Things You Can Do to Save the Earth.

Did you know:

• A microwave is a lot more energy efficient than a regular oven at cooking small things, but less efficient for big things like a turkey? So just forget about that old-fashioned microwave Thanksgiving you had planned.

• “Long-life” incandescent bulbs are actually less efficient than regular ones. It’s the newer, much more expensive compact fluourescents that are so great for the environment. And they really do work. I use them in places that don’t need bright light but are left on a lot. (No point putting one in a closet. The $15 cost of the bulb, which will last three centuries if you only use it a few minutes a day, is wasted.) I have one outside my door, left on all night every night. A low wattage is plenty bright at night. The bulbs use only about 25% as much energy as regular ones of the same brightness, and last 10 times as long.

• You don’t need to leave your air conditioner on all day to have a cool house when you get home.” Just have it switch on half an hour ahead of time. “Put a timer on your room air conditioner,” advises 30 Simple Things, “or use a programmable thermostat on your central unit.

• A full refrigerator is more efficient, because food retains cold better than air does. (If you plan to defrost something for tomorrow, stick it in the refrigerator now, rather than on the counter tomorrow . . . the frozen item will help cool the refrigerator as it thaws.)

• There are 20 million waterbeds in the U.S. (No! could that be true? and 20 million pairs of bell bottom pants?). Heating them takes a lot of energy (as does bouncing around on them, if I recall correctly). If you have one of these things, make your bed! Leaving them uncovered, says the book, lets the heat dissipate.

• Pool blankets cut pool-heater energy consumption by 40% to 70%.

• Spark-ignition gas stoves can save 40% over the ones where the pilot light runs all the time. I got the handyman to turn off the pilot-light valve in my old stove, and, lacking “spark ignition,” resort to what’s known in pyrotechnical circles as “a match.” Of course, I suppose it takes some energy to manufacture a match . . .

• Reversible ceiling fans provide a “wind chill” in the summer and recycle hot air back down toward your toes in the winter. Just don’t install them in low-ceilinged rooms. Thwock. Thwock. Thwock.

Why didn’t I think of that!

I was probably one of the very first to buy a book via the Internet and an outfit called “Amazon.com.” And the minute I did, I just knew this one would be a keeper.

It’s annoying, because when I have an insight like that (which is rare), I’d like to profit from it. Buy the stock or something. (Sorry. It’s a private company.)

But at least it became a convenient way for me to buy books . . . and also, in my job, a convenient reference tool even if I had nothing to buy. (Such and such author going to be at dinner tonight? Hmm — check out the books she’s written by looking them up on Amazon.com.)

Then a couple of months ago the Wall Street Journal wrote all this up and their Internet server has been scuttling around the dance floor like a whirling dervish (this is the sum total of my understanding of how these things work).

But my guess is, even if you read the Journal story, you may not have tried it.

Well, click here and, if you are a book-buyer, go through the process of setting up an account. Thereafter, if you choose to buy anything, it’s really easy — and often discounted by more than enough to cover the shipping cost.

The “search” options are flexible and easy to get the hang of. You’ll get your choice of hardcover or paperback when both are available, your choice of shipping methods, free gift wrap — I mean, they are really doing this thing right.

You won’t be able to sit and read, and maybe meet a fellow book lover, as you can at Barnes & Noble superstores. But for many purposes, Amazon.com is really handy.

So how DO we profit from this? I’m not sure we can. (Well, we can always enjoy the books, of course.)

I guess Amazon.com is good for the book publishing industry, who will sell more books and bad for the traditional bookstores. But I don’t think the effect on any of them is reason enough to go long or short.

I do own some FedEx stock, because I think the Internet means millions and millions of extra shipments of books and everything else that you current carry home from a store but one day will arrive at your door via FedEx. I’d own UPS too, if it were public.

I wouldn’t short the bookstore chains because I’m not sure it’s a zero-sum game. Yes, people have only so much time to read books. But buying a book doesn’t mean you have to read it. I don’t get to read even a fraction of all the books I buy. So to a certain extent, Amazon.com will surely steal business from the chains. But lounging around a Barnes & Noble superstore is becoming quite a popular form of entertainment of a Friday evening, too, so I wouldn’t bet against them any time soon.

I predict a new word. I should probably try to trademark it or something and not just predict it, or get the 800 rights (1-800-CLICKLE), but here it is anyway:

Clickle.

Because isn’t that what everyone’s working to come up with on the Internet — some way to charge a dime or a nickel or perhaps even just a penny or two for access to a particular page? You’d come to a page, which would show a dialog “access costs a penny” and you could either click to proceed, to go back — or to proceed and “don’t slow me down with this message again unless you raise your price.”

What does it cost to see one of these pages? Just a clickle. Sort of a high-tech cross between trifle and nickel. The universal monetary unit of the Internet.

And although to any given user a clickle’d be just a few cents or a nickel, the accumulated clickle trickle could become a flood. For it would come not just from U.S. nickels, but from Russian rubles, Arabian rials, Israeli shekels and Polynesian pickles (or whatever the Balinese call their loose change).

I know an access charge will make people stickle. But you watch. When a simple click’ll get them where they want to go, they’ll soon be dropping clickles without a second thought. You mark my word.

(The implications are not all bad, incidentally. Say its five years from now, when TV and the Internet are all integrated somehow. There’s a show like Fox’s Profit you really enjoy, but that has to be dropped for insufficient ratings. Aha! What if they could keep it going by supplementing ad dollars with clickles? I, for one, would gladly have dropped a few clickles to see another episode.)

Here’s a really neat use of the web. Click here and three minutes from now you will have a choice of four or five competitive life insurance quotes.

If you’ve been putting off buying coverage, fiddling with this site could help get you moving.

If you have coverage, but never really shopped for it competitively, this site could save you a bundle.

If you already have whole life or variable life or one of those other savings-plan types of life insurance, don’t drop it — you’ve already paid the steep up-front sales charges and so forth.

But if you need more, or you haven’t yet got the coverage you need, “term” insurance is the way to go. Term insurance is just plain vanilla insurance: if you die, they pay.

If you have no dependents, you probably don’t need life insurance at all!

Here’s a smart tip from my friend Jane Bryant Quinn’s Newsweek column:

If you put less than 20% down on your house, you probably had to buy mortgage insurance. But did you know that, once your equity in the home reaches 20% (through appreciation and/or your payments), you may be able to stop paying that premium?

Different lenders have different policies, and an appraisal fee will probably be required. But if you’re currently paying mortgage-insurance premiums and think you may qualify to stop, check with your lender. It could put you hundreds of dollars a year ahead.

(Thanks, Jane.)

Some of you buy mutual funds via your stockbroker or discount broker. This can be very convenient. It also means — if you have a “margin account” — that you can borrow against them, just as you can borrow against the value of a stock.

The advantages of margin loans: (1) low interest, often below prime; (2) it’s deductible against investment income (dividends and interest and, in some circumstances, capital gains).

Why pay 18% on a credit card or 10% on a car loan, non-deductibly, when you can pay perhaps 8% for a margin loan, which in your bracket may really be only 4% or 5%?

But what if you don’t have a brokerage account? What if you just own mutual funds directly? Now comes Fidelity AccessLine (SM), which basically offers to put your Fidelity funds into a Fidelity brokerage account so you can borrow against them.

As borrowing goes, it’s cheap and easy. No appraisal fees, no points to pay, no lawyers to hire or “closings” to attend. Just write a check against your account.

Three caveats:

1. If you have no investment income — perhaps because all your dough is in mutual funds that invest in nondividend-paying growth stocks — the margin interest won’t be deductible. You’ll have to carry it forward to a year when you do have investment income against which to deduct it.

2. If you are audited, you may be challenged on your margin-interest deduction if you were not careful in how you drew down these funds. The IRS looks to see the use of borrowed funds to determine tax-deductibility. Margin interest is normally deductible; but if you moved your funds into a Fidelity brokerage account and then wrote a $199,999.95 check against them directly payable to Captain Tom’s Yacht Dealership — or even just a $19,995 check to the local Ford dealership — the IRS might argue that the interest incurred on this loan was not deductible investment interest, but rather nondeductible personal interest. You might be better off switching $250,000 — or $25,000 — from your margin account to your cash account, and then, perhaps a few days later, writing a check for the specific cost of the yacht or Mustang.

I’m not advocating you do anything illegal or cheat Uncle Sam in any way. The rules on this are so grey, it’s anybody’s guess. As a practical matter, you’re likely to be OK.

3. Even at a low rate, and tax-deductible, borrowing is risky. It only makes sense to borrow at, say, 5% after tax, if you have a way to earn 6% after tax. And remember that the interest rate on your margin loan may shoot up — it’s completely variable — and that if it does, chances are good the value of your mutual fund shares will fall (because rising interest rates often mean falling share prices).

Borrowing against your mutual funds to pay off high-interest debt or even to buy a car or make some other investment can certainly make sense. It’s a way to get cash without, for example, selling mutual fund shares and, possibly, incurring heavy capital gains taxes.

But do it with care. You worked hard to build up those mutual fund balances. It would be a shame to hop on the debt treadmill and find yourself going backwards.

One thing I certainly wouldn’t recommend, let alone with the market as high as it is, is borrowing against your mutual fund shares to buy more shares. In hindsight, that could have paid off big the last couple of years — borrowing at 5% after tax to earn perhaps 30% a year in capital gains. Wow. But leverage works both ways. What if you did the same thing now and fund shares fell 30%? In that case, you wouldn’t just lose 30%. You would lose 60% (if you had doubled up on your initial investment) plus the interest, to boot. Oops.

Maybe you read my May 10 comment, about shorting crazily overvalued stocks. I didn’t suggest you do it, because crazily overvalued stocks can become even vastly more crazily overvalued. But we talked about it (and about how to create a “synthetic” short).

One of the examples I gave was stock in a company called Presstek, which Barron’s has been knocking for years. “Someday,” I wrote, “all printers may use the Presstek process. But in the meantime, Presstek earns just a few cents a share, yet sells at 114, up from a 1996 low of 21. Or wait: 114 was last month. Monday it was 149.”

Well, by May 21 it had hit 200. With nearly 15 million shares outstanding, that meant the entire company was valued at about $3 billion — chicken feed these days. It also meant that if you had shorted 1,000 shares, say, at 149, you would have lost $51,000.

When, 11 trading days later (which is to say, Thursday), it had fallen from 200 to 60 (which meant the company was now valued at less than a billion and you would have made $89,000 on your short), I called my broker and asked, smiling to myself, ”Any news on Presstek?”

I should pause here to say that in addition to using a couple of discount brokers, I use a full-service broker — mainly so I can enjoy conversations like these.

“News?” he said, pretending not to understand. “Why?”

“Well,” I said, pretending to take him seriously, “I noticed the stock is down a hundred and forty points.”

“No,” he said, “no, news.” And he broke into a huge laugh, as I knew he would. (For years, I’ve been paying him outsized commissions to hear him laugh.)

“Just normal market fluctuations,” we both guffawed more or less simultaneously.

I will admit it was not a double-over-laughing, punchline sort of joke (which is probably why I have to pay him so much). It was just wry merriment.

But c’mon! Is this market not amusing? From its Thursday low of 60 Presstek managed to inch back up to 95 the next day. “Any news on Presstek?” I called to ask my broker. “No news,” he deadpanned. “I wonder what made it go up so much?”

“Bargain hunting,” I suggested. And he gave me that million-dollar (my cost) laugh.

One last thing I should point out, lest all this frivolity take your eye off the ball. Shorting Presstek would have worked out big — last week. But shorting stocks at the dawn of the millennium, this amazing technological age we live in, is a very easy way to get wiped out and wreck your life.

So there I was, Sunday, around 6:30 in the evening, walking with a friend across 59th Street, enjoying all the New York things you enjoy — the Plaza, for example — and dodging all the things you dodge.

(I normally dodge the horse-drawn carriages, parked around the Plaza, because I’m not all that horsy. But my friend not only is horsy, he actually knew one of the coachmen. Before you could say “Whoa!” we were feeding this very large horse carrots. He’d just come from Pennsylvania — the horse — where he was doing whatever horses do in Pennsylvania, and was now being trained for duty in and around Central Park. Much of the training, apparently, revolves around carrots. You feed the horse 14 or 15 bags of carrots at first — the horse can’t get enough of these things — so that he associates carrots with work and “work is where he wants to be.” Then, once you’ve gotten your point across, the coachman explained, you can economize.)

Anyway, we got a couple blocks further East, and began encountering what in another city might have appeared to be very large crossing guards. As it happened, they were not in the least concerned with pedestrian safety but, rather, were proffering some kind of hand-out.

You see that a lot in the seedier parts of the City — live! nude! — and for a moment it occurred to me that, what with the renaissance of 42nd Street firmly under way, perhaps East 59th Street was becoming the new porn district.

I doubted that, though, and I also felt bad for the hand-out people. After all, they weren’t looking for a hand-out, they were attempting to eke out a living handing things out.

I am not one to waste paper, and yet I am also not one to make a fellow citizen feel worthless. So as my friend passed by, eyes straight forward (not an unwise way to walk the streets of Manhattan, I will admit), I reached out and grabbed one of the fliers and said thanks, fully intending to drop it in the next trash can I saw.

It was a pink half-sheet for Men’s Suits — “Designer Suits at the Lowest Prices” — and I could see my friend begin to roll his eyes. When it comes to clothes, I am known to be a “lowest-prices” kind of guy. Mail-order, mostly. My friend has been trying to wean me away from that, and yet UPS keeps arriving with more bargains.

Anyway, before he could say anything, we had arrived at the address on the flier — 118 East 59th Street — and I was already walking up the stairs. (You don’t get “lowest prices” from a ground-floor establishment. I might not walk a mile for a camel hair coat, but I will surely walk up a flight of stairs to save $400.)

I should say, just before I wind this up, that a young Wall Street friend of mine, who’s also careful with money, spends $1,200 on his suits. And in case you didn’t know, I’m told it’s possible to spend even more — and that successful folks in this neck of the woods frequently do.

Not me.

The whole thing took 15 minutes — two Fioravanti suits, $224 each. Free same-day alterations. Frequent-flier miles from the credit card.

Of course, you can get suits a lot cheaper than $224. But Bill Blass? Chaps? Fioravanti? Perry Ellis? Ungaro? Christian Dior?

Open seven days a week. “All sizes. Large selection.”

You may want to bargain a little. (I didn’t. I just asked the price. He said: $249, but if you buy two I’ll take 10% off, so I did.) And you may have to ask sweetly to get free alterations. (I didn’t. My suits didn’t need much work, so he volunteered to throw that in.)

I’m not sure the name of the place. It seems to be called just Men’s Suits. Like a food store called, say, “Food.”

I realize you may not be from New York. But who among us will not find himself (or his son or grandson) near the Plaza Hotel in the not too distant future? Let other tourists take their hansom cab rides at $34 for the first 30 minutes and $20 for each 15 minutes thereafter, plus tip. You march right on over and buy yourself a suit!

As I was leaving I produced the pink hand-out that had started all this. “Your guy out there did a good job,” I said.

Monday: Should You Borrow Against Your Mutual Funds?