CARIBBEAN TODAY


U.S. legislators table bill to close


 tax loopholes in the Caribbean


WASHINGTON United
States presidential hopeful
Barack Obama has joined
three Democratic colleagues
in tabling a bill in the U.S.
Senate that would close a
loophole which now allows
rich Americans to avoid pay-
ing taxes through offshore
havens in the Caribbean.
 Obama, an Illinois sena-
tor, and senators John Kerry
of Massachusetts, Brad
Ellsworth of Indiana and
Rahm Emanuel of Illinois
introduced the Fair Share Act
of 2008 in the wake of the
"fleecing of the American tax-
payer by almost US$100 mil-
lion a year" by U.S. defense
contractor KBR, Inc.
 "It was discovered that
KBR has avoided paying its
fair share of Social Security
and Medicare taxes by creat-
ing shell companies in the
Cayman Islands," the senators
said in a joint statement.
 "The Fair Share Act of
2008 will end the practice of
U.S. government contractors
setting up sham companies in
foreign jurisdictions to avoid


payroll taxes," it added.

RESPONSIBILITY
 Obama said American
companies have a responsibili-
ty to pay taxes, and "guaran-
tee that their employees will


ubama


receive the Medicare and
Social Security benefits they
are entitled to through their
employment.
 "It's unacceptable for fed-
eral contractors to use foreign
affiliates or tax shelters in
order to avoid paying their
share of payroll taxes and to
shirk on their basic obligations
to American N rk1 rk the


statement said.
 The Fair Share Act of
2008 legislation will, among
other things, amend the
Internal Revenue Code and
the Social Security Act to
treat foreign subsidiaries of
U.S. companies, performing
services under contract with
the government, as American
employers for the purpose of
Social Security and Medicare
payroll taxes.

PROBE
 In the wake of the U.S.
Department of State's release
of a scathing report on alleged
money laundering in the
Caribbean, the U.S. Congress
recently dispatched a team of
investigators to the Cayman
Islands.
 The Cayman Islands gov-
ernment said the U.S. inves-
tigative team met with offi-
cials to address "any misper-
ceptions about the role of
Cayman's financial services
sector relative to U.S. business
interests."
0


What's the secret to successful

investing? Start with discipline


 HUMBERTO CRUZ

QUESTION: I would like to
know all about the stock mar-
ket, what you look for in stocks
and how you go about picking
winners and why you feel you
have been successful.

QUESTION: I was always
taught that your money should
work for you. I'm looking for
an investment to grow dramati-
cally over the coming years.
Any advice would be great.

ANSWER: I don't know of any
investments that will grow "dra-
matically" over the coming
years. Nobody does, least of all
the self-anointed gurus and
investment newsletter publish-
ers who promise huge, huge
profits in bold-faced letters if
you subscribe. If they really
knew, why would they tell?
Could it be their real profits
come from the money their
clients and subscribers pay them
rather than from the invest-
ments they so loudly tout?
 My success as an investor -
yes, I have been successful has
come not from picking "hot"
stocks but from having the dis-
cipline to adhere to basic and
time-tested principles.
 I've always had a clear
goal, including the amount of
money I wanted to have accu-
mulated at different stages in


life. To achieve that goal,
depending on how much
money I would save every
month, I calculated the rate of
return my investments needed
to achieve. I then picked an
asset allocation likely to give
me such a return with the least
amount of risk.
 Asset allocation in its
broadest sense means how you
divide your money among dif-
ferent "asset I,, such as
stocks, bonds and cash. I
believe that low-cost, broadly
diversified mutual funds and
exchange-traded funds are the
most efficient and effective
building blocks that investors
can use for their asset alloca-
tion, particularly their alloca-
tion to stocks.

OPTIONS
 Many people I respect dis-
agree and argue that investors
willing to put in the time and
effort can build a diversified
portfolio of stocks on their own
without the management fees,
other costs and potential tax
drawbacks of mutual funds.
 Those who want to learn
more about picking stocks -
and investing in general -
should consider joining the
American Association of
Individual Investors
(www.aaii.com), a not-for-prof-
it investor education group
founded in 1978 with about


150,000 members.
 At $29 a year, its basic
membership is one of the best
bargains I've found, providing a
wealth of investment education
and guidance, including an ad-
free magazine 10 times a year,
annual mutual fund and tax
guides, model stock and mutual
fund portfolios and free stock
reports. The magazine never
touts "Must Buy" lists or "hot"
tips but rather stresses invest-
ment education and understand-
ing. The web site, while offering
special content to members, also
has extensive free educational
materials for everyone.
 Another not-for-profit
investor education organization
worth considering is
BetterInvesting (www.betterin-
vesting.org), formerly the
National Association of
Investors Corporation.
BetterInvesting, an umbrella
group for nearly 12,000 local
investment clubs, offers a free
one-month trial membership.
After that, it costs $6.95 a
month or $79 a year.
 For my money, I prefer
AAII. But BetterInvesting may
appeal to those interesting in
forming investment clubs, and
several people I know belong
to both organizations.

Edited for space.  2008
Tribune Media Services Inc.
0


 Weakening U.S. dollar

will affect region ~ minister


ST. GEORGE'S, Grenada,
CMC A former finance min-
ister in Grenada has said the
weakening United States dol-
lar would have an adverse
effect on visitor arrivals to the
Caribbean, as well as the
region's ability to repay
national debt.
 Anthony Boatswain, the
current minister of economic
development, made his projec-
tion as the U.S. economy grap-
ples with an escalating credit
crunch sparked by a mortgage
crisis.
 As the U.S. dollar
declined against currencies
such as the Japanese yen and
the Euro, Boatswain said
Caribbean countries would
have to dig deeper to pay for
imports from outside the U.S.
 "It means that we would
have to pay more for the
goods that we import from
countries outside of the U.S.
with which we trade, for
example Japan, Canada
Europe... because the U.S.


dollar is floating vis-a-vis
these currencies and the U.S.
dollar is moving downwards it
means that we have to pay
more," Boatswain explained.

FALLOUT
 Boatswain's comments
echoed similar sentiments by
Prime Minister of St. Vincent
and the Grenadines Dr. Ralph
Gonsalves and former Central
Bank Governor of Trinidad
Dr. Terrence Farrell.
 While Gonsalves was con-
cerned about countries' ability
to service their national debts,
Dr. Farrell said the region's
tourism sector would begin to
feel the effects of the crisis as
U.S. consumers cut spending.
 Boatswain is ',u-- linn
two key counter measures to
combat the effects of the U.S.
credit crunch and the falling
currency an increase in local
production and a reduction of
the country's dependence on
foreign goods.
0


 JOSE H. CARABALLO

It's most homebuyers' worst
 nightmare. They've finally
 found the perfect house.
They sign the purchase agree-
ment and begin planning for
life in their new dream home -
only to find out that they can't
qualify for the loan.
 Fortunately, that scenario
frequently can be avoided
thanks to the growing popularity
of pre-approved loan programs.
 Today, most lenders encour-
age prospective homebuyers to
secure financing before they
start shopping for a home. Pre-
approval saves time for every-
one and makes the closing
process more efficient. It also
lower costs, since buyers do not
pay upfront fees for credit
checks and appraisals only to
find that they didn't qualify.
 Before discussing how pre-
approval can take the uncer-
tainty out of shopping for the
home of your dreams, it is
important to understand the
difference between pre-qualify-
ing and pre-approval.
Prequalification is simply a ver-
bal exchange in which lenders
tell prospective buyers the max-
imum mortgage amount they
are able to borrow based on
their financial status. Pre-
approval goes a step further by
verifying credit information at
the time of loan application. It
is a commitment to lend subject
to receipt of satisfactory prop-
erty appraisal, and no changes


or omissions in the information
on which the pre-approval was
granted.

ADVANTAGES
 There are several important
advantages of pre-approval:
 Because sellers and real
estate agents view consumers
who are pre-approved as seri-
ous buyers, you can increase
your purchasing power and,
hlil rL f rL may be able to nego-
tiate a better deal.
 Once you know how
much you can afford, real
estate agents can guide you
toward properties in the right
price range.
 Since verification of
financial information can take
place up front while you are
shopping, the total underwrit-
ing time, and the eventual clos-
ing of the loan, is faster and
more efficient, meaning you
enjoy the tax benefits of home-
ownership sooner.
 Credit problems caught
early, such as late payments on
a credit card, can frequently be
resolved so that the loan
process can move forward.
 Getting pre-approved for a
home loan is a smart step. When
you find that perfect home, you
can plan your future with a
smile.

Jose H. Caraballo is a home loan
consultant with the Pembroke
Pines, Florida office of
Countrywide Home Loans, Inc
0


Getting financing first can clear

path to dream homeownership


April 2008