While much of the United States is digging out of snow-drifts, and the Island of Britain sinks under severe flooding, we here in Bermuda have much to be thankful for.

Year in and year out, 340 days of sunshine.

*** And yet another idea on how to leverage the paid-off value in your home.

Everyone wants to `make the ultimate payoff'; to reach where we want to go with plenty of money; to have access to everything that our neighbours have (that we don't, we think) with some left over for a rainy day. To that end, there will always be investment schemes to help you along this way; some are legitimate, you benefit, the investment advisor benefits, everyone earns a living.

Some are not so legitimate, but may seem so. It is left up to you to ask enough questions when a new scheme is promoted; to understand what is going on; to think more than twice about giving up any of your hard-earned money. In fact, if a new idea is really legitimate, you really don't have to ask as many questions because the investment scheme and the professional investment advisor will provide full disclosure of all investment facts.

Let's talk about an investment scheme to help you get ahead in life by borrowing against the paid-off value in your home. That's right, the home that you cherish; the home that you scrimped and saved for years to come up with the down payment; the home that you hope to retire in, fully paid off.

It works like this. Say, your current monthly mortgage payments are around $3200 per month; you have ten years to go and then your home is yours, free and clear. The new refinancing scheme has you taking out an additional $30,000 by refinancing your home mortgage for a much longer period of time, say 25 years and a lower monthly payment.

What are your real costs? Assuming borrowing rate is the same 9.5%.

EXISTING MORTGAGE Balance remaining -- $250,000 Monthly payment -- $3,235 Cost of borrowing: none Total interest remaining for 10 year term -- $138,193 NEW LEVERAGED MORTGAGE Balance remaining -- $280,000 Monthly payment -- $2,446 Cost of borrowing: Total interest remaining for 25 year term -- $453,905 One percent -- $2800 for closing costs One percent -- to advisor $2800 The difference of $789 a month, plus the $30,000 extra financing will be paid to advisors who state they are putting your money into a special bank account with the promise that your mortgage will be paid off more quickly in a lump sum or a series of payments, in the future, at some time.

Let's look at the real money facts of this scheme.

If you refinance for another 25 years, your interest total is more than two and a half times as much to borrow the same money. Adding the cost to refinance and your payment to your advisor your real cost is at or above 11.75%.

Question: how is this promoter going to make money on your money, enough to continue to pay a one percent commission, make you a profit and earn enough to paydown your mortgage early? The highest guaranteed fixed deposits pay around 7.50% annually (and that is just about globally). In order to make at least 12-14% rate of return, your hard-earned money will have to be invested in a stock market sometime, somewhere.

Do you know where? Do you know what your money will be invested in? Do you realise that nothing is guaranteed in stock markets? Are you comfortable with the risk of losing this money? Has your advisor explained all of the facts to you, both in writing and in a meeting? Is your advisor qualified to be selling you investment products? Do you know what company will be holding this money? Does this company have a license to provide investment services? What country are they registered in, if not Bermuda? Will you be subject to taxation on your earnings? Will you get reports on your investment every month? Will you get a statement that guarantees your mortgage will be paid off early with the proceeds of this investment? If you are not happy with this scheme, can you get your money out? What happens if your money is sent overseas, along with your advisor some years from now? Well, readers, I don't know the answer to many of the above issues, but three things I do know.

One. If your refinancing scheme does not pay off as promised, you and you alone will be paying your mortgage for another 24 years along with three times as much interest.

Two. If your goal is to payoff your mortgage faster, then talk to your mortgage lender and arrange to make additional payments on the principal alone.

Three. You can put number two into place (above) at no additional cost at all! *** Some favourite stocks, where are they now? Quite a few months ago, one of our fellow Somerset ferry riders, Margaret Young, gave me an article excerpted from the Internet site "MotleyFool.com''.

The context went something like this, "if you could only buy one stock what would it be''.... and then of course, the author proceeds to pick out his favourite fifteen stocks, using examples of qualitative and quantitative fundamental analysis for each one. Naturally, one had to use more than one stock because there certainly is no such thing as one perfect investment. If there was, we would all be totally assured of a secure financial future.

Many financial advisors' criteria would reach way beyond owning fifteen stocks, current thinking that 15 stocks is nowhere close to being fully diversified in today's investment markets.

Researching the world of the financial analyst, it is not uncommon to use more than 850 statistical models for each publicly traded company that investments firms track. Imagine the numerical familiarity that these folks work so easily with; thank goodness, as many of the rest of us have trouble deciphering our check book balances, let alone things like adjustable-rate mortgage terms and beta-coefficient and standard deviations of a portfolio.

This complex process says worlds about the real decision making in analysing, evaluating and choosing company stocks for purchase (or sale).

And certainly makes mincemeat (it is Thanksgiving weekend) of many brokerage and investment firms claims of the benefits of having a one hour seminar with them or using their analytical tools to pick your own stocks.

Some of the criteria used to evaluate companies are the following; Sufficient market potential to increase sales for several years Management committed to future development of new products An effective research and development department in relation to its size Company with an outstanding sales and marketing team Company with worthwhile profit margins (how many tech stocks have these)? Company fighting to increase profit margins Outstanding employee and labour relations Depth to its management (ACE and AIG get real high marks here) Historical tradition of cost analysis and accounting controls Clues to company excellence within its industry Long-term view with regards to profits (GE wins high marks here) Company must make sufficient profit so that future growth will not require equity financing, diluting the value of existing shares (Automatic Data Processing has had 154 consecutive quarters of revenue growth(38 years) Company must be open with investors during times of trouble (SEC now requires far more disclosure today than six months ago) Management of unquestionable integrity (and a favourite Berkshire Hathaway whose CEO Warren Buffet takes home peanuts in wages compared to most of his peers) Looking at these few criteria, they sound pretty generic. Of course, we want a company with worthwhile profit margins, don't we? Depends again on whether you are willing to settle for some modest growth or go for the "brass ring'' with the huge rewards (or losses) of tech stocks.

The following list of these stocks are being tracked as if you have purchased 100 shares of each on January 1, 2000 versus their value priced as of November 22, 2000. Are they are truly reflective of this volatile year. How many actually fit the criteria listed above? The numbers speak for themselves.

*** Martha Harris Myron CPA is a Bermudian, a NASD Series 7 license holder, a United States Tax Practitioner and a Comprehensive Financial Planner. She is Programming Director for the Financial Planning Association of Bermuda.

Under no circumstances are the comments in this column to be taken as recommendations on the purchase or sale of securities or any other investment.