DEAR BRUCE: You have said that as a landlord you should get at least 1 percent a month of the value of the property in rental income. How do you come up with this figure, meaning, what do you base getting 1 percent on? I am in my 30s, and I was interested in looking into buying rental property. Houses right now are a bargain, and then I could just rent it out until the market recovers. -- Reader, via e-mail

DEAR READER: Yes, the housing market is in the tank, but, as history has shown us, it will rise again. So now is a good time, if you have the money, to invest in a house. There is any number of ways to compute minimum acceptable rentals, but the 1 percent number is pretty much an industry standard. There are rental properties that will generate 1.4 percent and higher, so why be satisfied with 1 percent? Understand that you just can't go out this weekend, find a house on Monday and become a landlord. You might, but the likelihood is that you are going to have to spend some time looking. As to the type of properties to invest in, that's entirely up to you and the area that you live in. The one thing I would avoid is single-family homes, which seldom produce income commensurate with their value.

DEAR BRUCE: I have $4,000 left in a 401(k) account from my former employer. I have to do something between now and August of this year or it will automatically be taxed and sent to me. Do you have any suggestions? -- P.R. Georgia

DEAR P.R.: First, you need to get this taken care of so you don't have to pay any taxes. That's just throwing money down the drain. You could have the money transferred either to a traditional IRA or a Roth IRA. If you chose the Roth IRA, you will have to pay the taxes at your regular income rate. If you chose this route, by all means pay the taxes from some outside source so that the entire $4,000 can remain sheltered. The alternative would be the traditional IRA where the tax will be deferred until the time you retire. Before you know it, August will be here, so whatever you decide, get it done!

DEAR BRUCE: My wife and I are 60. I currently earn $55,000 a year and I have $150,000 in my 401(k). I have a first mortgage balance of $15,000 and a second at $25,000. We both plan on working until we're 65. I would like to retire the second mortgage against my home because of job insecurity in these bad times. Would you advise that I leave things as they are? What's the best way to pay off the second mortgage? -- Reader, via e-mail

DEAR READER: You didn't share with me what the interest rate is on your second mortgage, but I would leave things as they are unless the interest rates are very high. The reason that I say this is, if your job is insecure, you will always have the option of paying off the mortgage with the money you have saved. In other words, you could make payments out of that money until you get back on your feet. If your job conditions stabilize, and you would still like to pay off the second mortgage lien, then I would have no problem with that. I would stay as liquid as I can given your current instability.