borrowing. it will also mean a greater emphasis on exports that we can build, produce and sell all over the world. for america, this is a jobs strategy. >> reporter: the next stop for the president, singapore for the asia-pacific cooperation summit. >> i think he's going to want to use the apec stage to bring a vision of his trade initiatives toward aia as a whole and more broadly,is sense of u.s. political engagement in asia, involvement in asia, commitment to asia. >> reporter: after the summit in singapore, the president heads to china, shanghai and beijing and then onto seoul, south korea. back to you. >> that was our very own peter barnes traveling throughout asia with president obama. let's bring it back here to home to answer your questions about your money. everybody, we have joe clark still with us, partner with the financial enhancement group. herb kay is joing us from los angeles. he is president of herb kay sos, which helps people with their finances. personal development coach. it's great for you to be here, first timer on the show. can't wait to dig into all these questions in the next hour. rich is still here. managing director of wealth health. joe, founder of max funds.com. so much to talk about, tracy. >> yeah. it's great having a turn around coach with us 'cause i think a lot of people are in this spot where they don't know what to do. herb, let's throw this out to you. what's the first thing that you suggest people do in this economy, in this situation, just like -- it's true we're coming out of this recession, let's come out of it clean, what should i be doing right now? >> well, i beg to differ. i'll start -- i tell people to kind of hope for the best, but cope with the rest. i think if you take the attitude that things are going to get worse and not better and then things do get better, you're that much more better off. if i'm right, you protect yourself. if i'm wrong, you're richer still. i think you have to cut back, get control of your finances. make sure your house is in order, get control of your debts. i was listening to the last question, there is a lot more that people can do being hounded by creditors. but you have to get everything under control and most of all, get some quiet. people under a lot of stress have very busy minds. they start to worry and have anxiety and you can't perform well when you're being beaten down. step one is take a deep breath. >> then what, though? should we be reevaluating? >> depends what the problem is. it's how you look at it. i have a very, very different view towards debt. i think a person deep in debt has four options. one is bankruptcy. two is renegotiate. three is pay the debts in full. and four, and this is one you don't hear a lot, but if you believe inflation is coming down the road, as i do, then maybe just make the minimum payments, try not to pay it down, wait sister inflation to help you out, and reduce the balances based on a cheaper dollar. the dollar is devaluing very quickly. that actually helps a debtor with fixed debt. you have to look at all four. the enemy of good is perfect. no solution is perfect. >> if you got a 5% loan. -- but if you got -- you're never -- >> well, first of all, we'll see. putting josh -- >> i'll bet you a steak dinner a year from now, but we'll see. having said that. they have other options. one is they don't have to allow the creditors to hound you. they don't necessarily have the right to contact you by phone. if you notify them by mail, by certified mail of return receipt and tell them you understand your rights under the law and they're to cease calling you and contact you only by mail, you'll still get a lot of letters, but it's less distracting. >> hold that thought, herb, 'cause we have to take a break right here. it's that time every hour. we just have to say welcome to people listening on the radio. it's six minutes past the hour and a big hello to people listening on sirius channel 145 and xm channel 168. this is the "fox business" network. i'm dagen mcdowell along with tracy byrnes. >> we're taking your questions about your money this saturday. get on the phone and call us 877-249-9626. you can always e-mail us yourmoney@foxbusiness.com. you can tweet us at fbn your money. >> brian rights in: >>> great question. brian has incredible sense about his money. joe, people complain about money market rates, cd rates, big joe, and so what? if it's short-term, it's safe. that's where you put it, right? >> well, yeah. absolutely. the first principle is it's got to be liquid. you want the return of your money money the return on your money sometimes. right now we do have this opportunity, corporations have kind of shunned banks because of last year. we've had more financing this year in the bond market which is why the yields are staying as low as they are with the amount of money pouring into the bond funds. we've had more money financed by corporations through bonds than we have banks. first time since 1985. it's over a trillion three right now. so you can go in and buy the short end of the curve and instead of having the money in the bank, you can buy a short term etf or mutual fund that will give you a yield of 3 to 4% and still have a reasonable amount of liquidity and pretty good assurance you're getting your money back. it's going to take work, but worth the time if the money will sit there. >> it's a common question, money markets are paying so little for the reasons you talked about. there is good short-term funds out there. there is a floating rate which will do better than a money market. it's in commercial paper. fairly liquid. recognize that it's not going to be the guarantee that a money market fund gives you. another alternative that we've been looking at, again the liquidity issue isn't as great, depends on your time frame. there are structured notes out there that are fdic insured cd's. they're tied to various types of equity baskets or even currency baskets. they're fdic insured, so you have the cd that gives you that protection and if you can find one that's 12 months or less, they come out each month. you have liquidity after that 12 month, but you can have the

upside, greater than a money market. >> all right. let's go to another e-mail. >> i have another comment to add. >> sure. >> i was going to say that i was stening to the other guys. this guy's question was, he's in fear of the loss of his job, which could happen without warning at any time. i think persony your first advice was right. the money market account because job loss can come without warning and then he'll need the money immediately. not 12 months, not six months, not three months. and for the extra -- what's 1% of $12,000? is it worth taking the extra risk of maybe having volatility in the account, even nominal if you might need the money in the short-term? i don't think so. >> also, before we move on, to step back and assess your job, where you work, is there anything you can do at work to insure that you might not lose your job? also if you're really concerned about it, go out there and start looking for a more stable employment. but brian is clearly thinking ahead and being super smart. >> way to go. another e-mail from joan: >>> the home was purchased for 394. now valued at 192. >> wow. >> i know. we shouldn't be surprised. it's in florida. they are barely -- they have very little equity in that mortgage right now. >> that's the issue. i have a number of clients in florida that are in theame position and if you're making your payments, kudos to you. i really do think you'll have a hard time refinancing because of the loan to value ratio without doing a calculation in my head. i don't think you have 20% equity in the home, or just about that. if you're making your payments, i would say that's good. don't be so in fear of the fact that the home has fallen in value. if it's a home you're living in and intend to live there a long time, there will be peaks and valleys. i have this discussion, people who walk away, not pay the mortgage and get refinancing. it would hurt your credit score. if you're making payments, keeps your credit score good. >> did she say what the rate was? >> she didn't say what the rate was. >> you can refinance, by the way. they have equity. >> 5% refinance. you only need 5% for fha mortgage for an fha insured refinance you need 5%. it's not impossible. right? >> we have to look at what other qualifications. >> 'cause again, you will pay more for the mortgage if it has fha refinancing. i don't want to say it's impossible. >> worth investigating. >> i do think it's good that you're making payments and if it's a home you're looking to live in, it wasn't a speculative investment, don't be so freaked out by the fact that the value has come down. because i think that's what -- a lot of people are playing into their fears. >> my guess is they're talking about going too to a fixed rate. they already have a low rate loan. a few years ago when he bought the peak, if you put down half, that loan was already at 5%. if it was a fixed rate, it's probably not 'cause some mortgage broker was like, it's 3%. if you get an adjustable rate mortgage. they shod try to get that and get into a fixed rate loan. this is a sad situation where somebody who didn't put money down -- what are you going to do? you're going to move to another house, it will be the same situation. >> we'll take a quick break and get to more of your questions about your money. we promise. that's what we're here for. call us, 877-249-9626. or send us an e-mail yourmoney@foxbusiness.com. >> stay with us here on the "fox business" network. 're up on a saturday. got a little more than three hours. give us a call. we'll be right back. president obama: i took a trip to elkhart, indiana, today. elkhart's a place that has lost jobs faster than anywhere else in america. the unemployment rate went from 4.7% to 15.3%. in fact, local tv stations have started running public service announcements that tell people where to find food banks... even as the food banks don't have enough to meet the demand. as we speak, similar scenes are playing out in cities and towns across america. >>> we're going to go right to the phones. on the phone is dave from illinois. hey, dave. >> hi. >> what's your question? >> my question is, i'm in the process of buying a new home. a house i currently have, i plan on holding on to and i guess my question is, should i hold on to it until the housing market recovers or sell it now and come out pretty much even? i guess i'm concerned about the liability. >> i guess it depends on first you need the money in the home you own right now to buy the next one. >> no. >> you don't. so can you rent it and make your mortgage payment? >> should come out just about even each month. i guess -- if i lose my job kind of thing and i end up with two mortgages i can't afford instead of just the one. >> one more question. can you get the next mortgage while you have the original? >> yes. >> you qualify? >> yes. >> okay. >> to be clear, you can rent this place and cover your costs on it now, you think? >> hopefully, if i can get a renter, i guess is the big

thing. >> wait, wait. >> i'm traffic coming. it goes to big joe clark. go ahead. >> sell that puppy. there is plenty of other places to put money. we get into this world where we want to worry about what we paid for something and what it's worth now or what somebody once said it was worth. listen, there are too many chances for this to go badly. you're not a renter. you're a high paid individual, obously. you're a good saver. you are not a landlord. i was bad at it. good chance you are probably bad at it. it's one property. it's hard to find a renter. you don't want phone calls in the middle of the night. i will sell it. move to your happy. drink wine, go to church and be happy. >> and dance occasionally. >> to make an analogy, this is like having a single concentrated stock in your portfolio. you lost money, do you hold on to the stock and wait for some period in the future where it goes back in value or do you sell it and diversify and walk away from it? this is a perfect opportunity for you without any cost to walk away from it and diversify. >> don't say walk away. sell it. >> herb, go ahead. >> actually i agree with everything that the other guy said. the real estate market, even though prices are down significantly, there is no way to tell if we're at a bottom anyway. it could go significantly down further as more and more foreclosures come on the market. he's not diversified with one property. this thing may or may not break even. if you're not making positive cash flow on a rental, you shouldn't own them anyway. you shouldn't be thinking about buying real estate without cash flow in this environment. >> people still think of homes in this magic world where they always go up. if you were a stock owner, would you not sell a stock, you're down from cisco in 2000, would you keep owning it with a margin loan waiting for it to come by while you buy a new stock? that's just crazy. the stocks aren'tagical money machines anymore. i will say the caveat. if you want to be a home investor and be a landlord and this home actually would sell for less than the rental income, and you are cool with the whole phone call in the middle of the night thing, then you can make the case for that as an investment. now you're not a homeowner. you're a real estate speculator. >> he's not a speculator, but you're an investor. >> investor of property, which is a business in itself. >> i think we miss the other part of the equation. okay. you'll sell this house, maybe you'll take a little loss, but let's rember, you're buying the next one at a supposed deal. so net, you probably come out relatively even at the end of the day. >> you're doubling down on real estate, which people were doing a lot when they were buying homes. it's really stupid unless you have a specific plan to manage properties for rental income. >> all right then. let's take a break. >> i don't think i could be a landlord ever. you call me in the middle of the night, i'll be like, go to bed. >> i'm the landlord who gets arrested for breaking into your house to check out the condition of it. >> and i wouldn't knowhe first -- i can't change a light bulb. i have better things to do. coming up, we got a viewer who has a question about equity index annuities. are they a good thing? we'll talk about that next. >> stay with us here on "fox business" network. we care enough about you and your money to get ourselves here bright and early every saturday. we're always fired up. we'll be right back. >>> happy saturday. welcome back to "your questions your money." earlier we heard the president's weekly address. now we turn to the republican response, congressman mark kirk from illinois. speaking on health care. let's listen. >> good morning. this is congressman mark kirk of illinois. when i returned home from active duty in afghanistan, i dedicated my congressional service to helping families with health care. we can lower health care costs and provide coverage for americans who lack insurance by enacting key reform that already help thousands of families in many states. first, we can start lowering cost by reining in lawsuits in america. we are the mostly to my knowledgeious country on earth. lawsuit reforms can save billions in health care costs alone. in new jersey, without lawsuit reform, it costs $5,500 per patient to provide insurance. in california, with some of the strongest lawsuit reforms, insurance costs half as much as it does in new jersey. congress should enhance the effective reforms of many states by enacting lawsuit reforms for our entire country. second, congress should grant the right of each american to buy coverage from any state in the union, especially if you find a plan that has a lower cost or is more flexible for your family or your small business. third, we should give states the tools they need to create new innovative reform that lower health care costs. i also offered an amendment, the medical rights act. standing for the principle that congress should make no law interfering with the decision that you have made with your doctor. unfortunately, all of these common sense, republican reforms

were rejected by speaker pelosi. the pelosi health care bill has no significant lawsuit reforms and does not guarantee your medical rigs from government waiting lines or restrictions. in the teeth of the great recession, the pelosi bill would impose ten new taxes on the american economy. the top combined tax rate for my state of illinois would be 4 percentage points higher than france. democrat bill levies new taxes on health insurance, income, and even pace makers. the bill also cuts health care for seniors. my parents and many of yours. with $500 billion in cuts for medicare doctors, hospitals, and advantage patients. the bill even cuts medicare for skilled nursing, wheelchairs, and hospices. in some, the pelosi bill opens a new trillion dollar entitlement just as our national debt tops $12 trillion. ignoring the future needs of social security and medicare, the bill creates a new massive spending program supported by heavy taxes and cuts to senior health care. we need to back the common sense health care reforms that i outline and reject a government takeover of our family health care. this is congressman mark kirk of illinois. thank you for listening. god bless you and god bless america. >>> that was the republican response to the president's weekly address to the nation. coming up, it's about you and your money. a viewer has $250,000 cd that just matured and he wants to know what to do with that money. we're going to answer that straight ahead. >> if you missed a segment, you can always visit us on our web site, and watch the best stories from our show. we'll be right back. >>> welcome back to "your questions your money." zeke and zell do have written in: >>> quit beating up on that young guy. he doesn't know how to fight back. >> who is the young guy? >> i want to say it's me. >>'m hoping it's me. >> i get to beat up on him 'cause i'm married to him. this is nothing compared to what we -- never mind. >> first of all, i think the caller/e-mailer should be aware that that index annuity is paying that grand a year, some crazy thing. going on commissions. you're paying paying 2 to 3% a year to own any sort of annuity index. they have all these magical properties and gimmicks created through some bizarre structure thing where you won't lose this or that. bottom line, buy an index fund from vanguard, pay 18 basis points, a fraction of what you're paying for this. yeah, you could lose 50% if the market crashes. don't put half your money in. put a third or a quarter if that's the risk you want at that age. don't invent safety through a high bizarre annuity thing. >> looking at their financial situation, how much of that portfolio should be in stocks versus bonds because at that age? >> it's hard to say because we don't know exactly what their cash flow needs are. i think the caller said -- the viewer was 2.4 in ira and another 1 point something in stocks and bonds. >> 1.2. >> my understanding is half of that money in the ira are in these equity index annuities. that means you have this wrapper around the wrapper. you have an annuity sold. so i would say get out of it. you have to look at any surrender charges, depending how long you've been in it. the good news is since it's in the ira, you're not worried about an income tax hit. then beyond that, what should we do beyond stocks or bonds, look what your cash flow needs are. how much do you spend a year? understand what your needs are and then say, okay, how much will be in stocks, bonds, cash and other alternative investment styles. >> the inflation question, if you own property, that's a great inflation hedge. stocks are a good inflation hedge long haul. cash i a decent inflation hedge. we don't think about it because money market rates will go up if we get rapid inflation. money market funds beat inflation over long periods of time. it's not like you have to be so clever to fight this inflation thing. >> i have to say, i don't want to fight about the inflation bug, even though i buy into

that, but having said that, these people are 62. first of all, annuities always stink. stink, stink. there is no good reason to buy an annuity in anything ever. i couldn't agree with the other guys more. your broker loves you folks because he made 10%, not 2 or 3% a year, up front and the insurance company will recover it out of higher fees over the next few years while they penalize you withdraw. i would fire this broker. i'd go to someplace like vanguard, the other fellow said, that's really good advice. where i stop is on indexing against inflation, which i think is an enormous net, i would consider 20% at least portfolio in precious metals and related mutual funds. tips as an alternative to just the money market account so we can index these people's money to inflation. inflation and taxes are the two worst enemies of retired people. as far as their income needs, since you'll have to withdraw under required minimum decision as they get older out of the ira anyway, money spends the same whether it's a dividend or capital gain. worrying about whether it's a stock or bond or whatever inside of an ira is immaterial. >> joe, go ahead. inflation, okay, we can argue about how big of an enemy that is. but for retired people, taxes, if you're not working, you know, joe, go ahead. >> big enemy. >> you got -- taxes and inflation side are obviously a critical part. i still have an issue with people looking at somebody's age and trying to determine what they need to own. retirement is a function of money. it's not of age. as we said earlier, figure out what your cash flow needs are, set your portfolio up to do that, have some in inflation hedge. i'm notn any way shape or form an equity indexed annuity guy. i don't like them in the terms of the way that they work and you've got to be very, very careful when you tell somebody to surrender them, to lock them away because the problem is many times the surrender penalties are huge. they can be ten to 12 years and longer. you may have to deal with what you have there, but please don't buy anymore of them and understand what's there. but determine your cash flow needs. i buy into the tips. i own them. i buy into having a little bit of an inflation hedge. remember, you can move all of the time into change the allocation. don't get caught up in what may happen three years from now, but build that portfolio so you have your cash flow today. >> the redemption fees on these things, the surrender charges can be bigger than anybody anticipates and no one -- >> however, do the math. if you're paying .18 to vanguard and not paying 3 1/2 in the annuity, 3 1/2 years you middle eastern offset the surrender penalty. >> the problem is people who buy them would never buy the equity part. they're not going to go fm there to vanguard to the equity fund. they're going to cash it out and going to go to a cd and they just got mutilated in the deal. >> that's great advice. we're going to jump to the phones now. bob is on the phone from florida. hey, bob. >> good morning, ladies and gentlemen. i really love your show. watch it every day. >> thank you. >> what's your question? >> basically i'm unemployed. be 60 years and a half in january. i recently had a quarter of a million-dollar cd that had come due. 4.2% interest. i parked it into a a money market account. and should i get back into the stock market with my fidelity mutual funds that i had before that i did so well with? >> bob, are you going to work again? are you retired? >> that's a good question. probably will work again. >> but right now you're retired? >> right now i'm semiretired. i collect unemployment. correct. >> you're asking an all or nothing question. >> okay. >> is that right? you want to know should it be in or out of the market this quarter of a million dollars? >> pretty much, that's it. >> jonas, why can't he -- >> he said he did well in these fidelity funds. if you bought a 4% cd, did you get out of the stocks three or four years ago? >> i got out in november of last year, about a year ago. >> okay. >> i took a hit, but not as bad as it would have been. >> you got a 4% cd, wow. in general, i would move some -- stock fund, got a lot of down side. 50% down side i would argue compared to 0% in a 1% yielding cd right now. figure out your risk. half of the money you can lose, you can generally put twice of that much in the stock market. you're comfortable losing 20%, have 40%. >> he's 60 not working right now and, is this all your money? >> no, no. my wife is working, has a very good job. we own our house and car. >> van goes -- >> let him finish. >> bob, go ahead. >> i was saying that we don't need the money. wife has a very good job. the house and cars and motorcycle are paid. it's where to park it now to get my best return. >> okay. >> he's in a great position right now. he just needs to figure out how to invest this wisely. >> exactly. >> i have to tell you -- >> hold on. >> i think dagen is spot on. it's an all or nothing question without an all or nothing answer. i always go back to really understanding what your needs are. i think i'd be cautious about putting all this into the market right now just because of your current situation where you're unemployed. not knowing what other assets you have, i would look at this as an opportunity to parcel it up between keeping it some in cash. and put some other money into some of the mutual funds we talked about or even some bond funds. i think it goes back to looking at what your needs are because you're in a position where you don't have employment. it's uncertain when you'll be employed. you're wife works, but i'm not sure if your cash flow -- is that income covering all your cash flow needs? >> i'm getting unemployment. >> he sounds like he's in a good position. joe clark, you want to jump in? >> yeah. i understand your needs, but it sounds like the things that you and your wife have done, one of my favorite conversations right now is the rock recharacterization issues coming up in the conversion things that you can do and if you can use some of that cd money to help leverage part of that conversion to take care of some of your tax issues further down the road, you may want to keep it somewhat liquid so you can do that and certainly engage in that kind of planning based on your age with some of the opportunities. other than that, i'm along with everybody else. wade in to what you're doing. i wouldn't leap and say this is a great day to be in stocks. wade into the pool. >> exactly. take your time with this. herb, i know you've been want to go jump in. go ahead. >> i would tell him to buy another cd for the time being

and tread water. buy tips. this is a vile time. he doesn't have a huge need for cash flow because he has very low debt and his wife has a job. he has unemployment. i'd punt. sometimes the best thing to do. it's not so important y're not earning a lot of interest on a cd. it's just important you won't lose the principle. i think we're in the second inning of a nine inning ball game. this party could go on for quite a while. >> let's move to an e-mail: >>> this is from brent, this is an incredible question. jonas? because there are prices -- people in the commercial real estate business, people with cash do see incredible opportunities forming in terms of buy probably in the middle of next year based on everyone that we talk to every day of the week really. so for an investor to put some money in a reit, what do you say? >> there is two main questions here. first of all, i got a feeling he's being sold into some ipo wi a commission. he says it's an advisor, but i think it's a broker. >> that always frightens me. >> as far as the actual -- >> wait. finish what you just said, though. it may be an ipo of a closing fund that owns real estate or a few years ago you were waiting until it was sold. they are sold with built in commissions and then trade on the new york stock exchange, often at a discount of 5 or 10%. so you not only avoid the sales commission, but get the underlying property act. there is no need ever to buy a new i.p.o. close in fund if that is what this is. if it's a regular reit, not technically a closed in fund, again, you'll do better buying after the fact. you have a broker, you have to keep the relationship going, you can't always do that. the underlying question is, they're doing an ipo, raising a lot of cash and going to buy distressed commercial property that, could work out. mosteits are highly leveraged. that's a business model that can go to zero if commercial real estate takes another dive. that is very speculative. if it's a new one, the problem might not be over one. if it's equity and they can stick through these properties and rents coming down, could work out. >> would you do this, rich? >> if you were going to do it, i would do it for a small percentage of your small portfolio and look a little more under the hood. the commercial market is probably a couple years behind the residential market and therefore, the valuations and defaults on loans can bring these values down. i would look under the hood. and if i did, do it for a small percentage of the commission. >> probably, it's a new product. advisors very often are not going to sell you -- if he charges you an annual fee -- >> let's go to the phones. marlene is on the phone from pennsylvania. >> hi. >> what's your question? >> okay. i'm a woman of 67 years old, i work part-time. would it be wise or unwise to sell my stock and pay part of my home off? >> how much of your stock would you have to sell? >> all of it. >> would you be taking losses on these stocks? >> no. i would probably break even right now at the price that it's at right now. i would probably break even. i would wait until it went to 90. >> does it bother you that you owe money on your home? >> yes. it does. >> but do you have any other money other than this stock portfolio? do you have a lot of cash in the bank? what is your cash situation? >> well, i'm a firm believer in keeping a pretty good amount of cash in savings for -- they say how much you should have in case you lose your job, 4,000 or something in there. but that is all other than i do draw social security and i have an annuity. >> okay. >> big joe clark, what do you think? >> i think the issue is on the stock side, i don't think it's a matter of your house. if you have to sell all your stocks to pay off your house, then you may want to be selling some of that stock regardless to get a larger cash buffer. one of the common misnomers is people think they can put a bunch of money down on their house and it will actually free up your house payment. rember, your payment is going to stay the same. all you did was pay down on the balance. if you're trying to free up cash flow, you've got to renegotiate that entire mortgage from the beginning. i would be inclined, as long as you're not losing sleep over the debt, to start to wade out of the stocks. that doesn't mean you have to sell them in one day, to start to get a better cash position and a buffer and go that direction. >> herb, do you want to jump in? >> this is a two part question. on one hand, it's an emotional decision. it doesn't make any financial sense to pay off her mortgage. for the inflation issues we talked about, paying off real estate is really almost never a good idea. having said that, i've done a lot of people over the years who sleep better having done it. depends on how much cash. we don'tnow how much cash she has around. if she has plenty of liquid assets and makes her sleep better, i can't argue about that. on the other hand, she should consider not doing that. >> if you've got so much money in one stock to pay off an entire mortgage, you don't have a lot of other investments, you've got too much money in one stock to sell with. you got to sell one stock and buy at least a diversified stock. you don't want all your retirement money in it. i would pay off some of the mortgage. i think that's what she wants to do in her gut and the rest would go into diversified stock. >> good luck with that. think it through and get yourself some help. in the next hour, a lucky entrepreneur gets a chance to speak with one of the nation's leading advertising executives for advice on how to take her product to the next level. >> procter & gamble they do advertising for, mcdonald's,

and one lucky entrepreneur. that's pretty great. >> we want to hear from you. grow your business, make it a smashing success. we have incredible guests coming up in the next hour. a woman who built a brand and en survived bankruptcy. 877-249-9626. or e-mail us yourmoney@foxbusiness.com. you're watching the "fox business" network in true hd each and every saturday. in 1961, the american lung association reminded us that in homes across america, christmas is in the air. for over 100 years, your gifts to american lung association's christmas seals have helped us fight for healthy lungs and healthy air. celebrate another year -- make christmas seals a part of your holiday tradition. go to christmasseals.org. >>> hey, happy saturday. welcome back to "your questions your money." we're going to go right to the phones. david is on the phone from wisconsin. hi, david. >> hi. >> what's your question? >> i bought general motors stock and it went bankrupt. i also bought ford and general motors was worth $10,000 went bankrupt and i'm making more on ford to pay that off to supplement what i lost. should i sell all my ford or keep half of it and just pick half of the writeoff? >> do you own any other stock? >> no. nothing: g.e. i do. >> you own three stocks. >> ge and ford. but ford -- gm went bankrupt. i'm wondering if i should sell my ford to clear that up or just hold on to the ford. >> did you work for either company? is that why you're so strongly invested? >> no, i did it on my own. i don't have any bills, i'm 75 years old. >> david, big joe clark, unless this is just his throwing around gambling money, it should not be in two stocks. >> no. it should not. but to go to your question, you're understanding the tax code and using it right. the notion is, you've got a loss, you're going to be able to lose 3,000 of that on your tax return for your gm stock. even if you don't sell the for you get that free three grand you can take off. if you sell part of your ford position, recognize the gains, you can offset the loss that you have in the general motors. that part is very true. but we would strongly encourage you to diversify to some degree in an equity side, at least in different sectors, even if you want to stay in the individual stock side. >> jonas? >> you're actually -- sell the gm. floating around some bulletin board doesn't mean -- i would sell -- this is a speculation that went right so far and it could go wrong and i would sell the ford enough to pay off all the money that went into both of these stocks. i think it's are you -- like you said, i'm for gambling small parts, but this is all you got, get out of individual stocks. buy something a little more diversified. this was fun, it worked, they could have both failed. you got very lucky, in my opinion. that's great. ford is a better company at this point. but it could also go broke. and ge is far from the most blue chip of blue chip anymore these days. >> even though the government didn't get behind them. >> for now. >> fdic. >> the upshot, he can take advantage of the tax laws. >> i think it's worked to your advantage. you took a loss, put it into a position, you gotten some gain back. you have the loss to offset the gain. it's favorable in your situation right now, but diversification in my view is the way to go. i think you're playing dangerously with two stocks. >> well said. in our next hour, we're talking about your business, starting one, growing one, bringing this economy back to life, realizing your dreams. that's what it's about. being an entrepreneur. we've got incredible advice to get you there. >> we'll have more of your questions in a moment. get on the phone, give us a call, e-mail us and you can always tweet us. we'll be right back.

>>> happy saturday. welcome back to "your questions your money." we're going to go right to the phones. bob is on the phone from nevada. hey, bob. >> hello. >> what's your question? >> i've been with a company for over 30 years. i was just let go. i'll be getting money in 401(k) and i have opportunity to take a lump sum or annuity. between that, if i take the lump sum, will have $1 million. where would be a safe place right about now, 'cause we'll have to live off the principle because i don't know if i'll be able to find another job? >> how old are you? >> 61, my wife is 61. >> you need income. jonas? >> you got $1 million. i wouldn't annuityize it today. you won't get a very good long-term income stream given how low rates are. if you're real nervous, you might want to take a portion of the proceeds and get a fixed lifetime annuity. the rest, if you got to live 30, 40 years and live off it, $1 million, you can definitely do that. but you'll have to have a good portion of that in the stock market today with bond rates so low. that's risky. but that's what it is. your relatively young. i would go with something along the lines of maybe half and half, some sort of balanced half fund index, half stock index and maybe 10% in your fixed lifetime annuity for some sort of security and longevity. >> i have a question, how much debt does joe have? how much debt do they have? >> joe, you still on the phone? >> yeah. >> how much debt do you have, sir? >> well, we have two pieces of property, one paid off. >> bob, by the way. >> that's all right. we have two homes. one is paid off and the other we have a mortgage and that's about it. >> that's great. in you're 61 years old and your wife is? >> yes. >> only four more years to collect full social security benefits. you can start collecting reduced ones in a few years. that will offset your cash needs. i wouldn't consider an annuity. do it through a rollover ira, diversify. take income as you need it for the nokes few years and something will kick in and substantially offset that. >> i was thinking of taking social security at 62 or 63. >> probably should. bob, you're close. again, diversify it. right? >> right. >> i'm a numbers guy. soor me, it's so hard to answer a question like this and give you an answer without knowing what your income needs are. once i look at what your income needs are, we have no idea whether it's a pension out there, whether or not you're spending $5,000 a month. without that information, it's difficult to say how to allocate $1 million and whether or not $1 million is enough to retire on. you're a young guy and so is your wife. we look at this for 30 more years. >> let's get to an e-mail: eva told us we missed something very important from one of our callers. >>> eva is talking about the home affordable refinance program that allows them to refi up to 105 or even 125% of the value if the orinal loan was without pmi, that's mortgage insurance, a new loan would also be without pmi. it's streamling process. contact your lender to see if your loan qualifies. eva thank you for telling us that because that is a government program. it only applies to mortgages that are through -- that are touched by fannie mae or freddie mac. but a loan of that size, likely would be a fannie mae or freddie mac loan and it's a government program that is refinancing loans that are even somewhat underwater. not deep under water. but somewhat. >> people today can do refis with no points and the home is basically at value, as long as not a bunch of exotic loans, it's doable today. the viewer is right. you should at least try, especially if you have some -- there is a little equity in that home. >> why didn't you tell the woman that? >> i just did a loan like that. it's doable now. the government is letting them do that in many cases and you should try. always try to get the lowest rate you can through your bank. you'd be surprised what you can pull off today with the gov. >> uncle sam with his foot on the backside. >> last word of advice to our viewers? >> today i've been thinking about this, i think the theme, in my view, is a lot about the psychology, emotion versus the financial advice, whether it's paying down a mortgage, whether it's changing your phone number to avoid constant credit card companies. i think the message for me is that balance your psychology with the financial and sometimes it's just educating yourself on a financial side to help you overcome what was psychologically hard for you to deal with. education. we're out there, there is other advisors. there is lots on the web. educate yourself to get over the fear. >> watch our show every saturday. >> big joe clark, final thoughts? >> life is good. prepare for the future. you've got one shot in 2010 to do a roth conversion regardless of adjusted gross income. this is a tax opportunity in appearance, but really an investment opportunity and you've got to be able to put that together and understand the investment option behind this.