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What are NSCC illiquid charges? | NSCC illiquid charges are charges that apply to the trading of low-priced over-the counter (OTC) securities with low volumes. Open net buy quantity represents the total unsettled share amount per stock at any given time during a 3-day settlement cycle. Open net buy quantity must be less than 5,000,000 shares per stock for your entire firm Basically, you can't hold a long position of more than 5 million shares in an illiquid OTC stock without facing a fee. You'll still be assessed this fee if you accumulate a long position of this size by breaking your purchase up into multiple transactions. Open net sell quantity represents the total unsettled share amount per stock at any given time during a 3-day settlement cycle. Open net sell quantity must be less than 10% percent of the 20-day average volume If you attempt to sell a number of shares greater than 10% of the stock's average volume over the last 20 days, you'll also be assessed a fee. The first link I included above is just an example, but it makes the important point: you may still be assessed a fee for trading OTC stocks even if your account doesn't meet the criteria because these restrictions are applied at the level of the clearing firm, not the individual client. This means that if other investors with your broker, or even at another broker that happens to use the same clearing firm, purchase more than 5 million shares in an individual OTC stock at the same time, all of your accounts may face fees, even though individually, you don't exceed the limits. Technically, these fees are assessed to the clearing firm, not the individual investor, but usually the clearing firm will pass the fees along to the broker (and possibly add other charges as well), and the broker will charge a fee to the individual account(s) that triggered the restriction. Also, remember that when buying OTC/pink sheet stocks, your ability to buy or sell is also contingent on finding someone else to buy from/sell to. If you purchase 10,000 shares one day and attempt to sell them sometime in the future, but there aren't enough buyers to buy all 10,000 from you, you might not be able to complete your order at the desired price, or even at all. |
Passing money through a different account to avoid cash pay-in fees | buy a cashiers check with the cash (a CRT will be nec if over 10 K) and deposit the cashiers check |
What kind of value do retail investors look for in managed futures and fx? | I'm not downvoting you because I can relate, in a way, to your post and I think this is a good topic to have on this site. We had a question a couple weeks ago where someone, like you, took some friend's money to trade with but didn't know how to give the money back or calculate the net-return. It is not smart to take and invest other people's money when you have zero industry experience and when you do not understand the legal requirements of handling someone else's money. Within the first 12 months of my brokerage account I had returned something like 150%, I doubled my money plus a bit. The next year was something like -20%; if I remember correctly the next year was worse, then up again for year four. Year 1 I thought I was a genius and had figured this whole thing out, year 2 put me in my place and year 3 kicked me while I was down. You have 6 months of pretty solid returns, good for you. I don't think that means it's time to set up shop. Really, I think you need to sit down and think long and hard about the implications, legal and otherwise, of holding other people's money. Running a fund is significantly different than trading your own money. Retail investors don't, typically, have a good memory. Great, you made me 17% last year, and 25% the year before but right now I'm down 10%, so give me my money back because I would have been better off in an savings account this year. This is why index funds are in vogue right now. Lots of people have had money in active funds that have trailed or matched the "safe and passive" index funds, so they're angry. Retail folks get jittery the instant they lose money, no matter how much. You need to be ready to contend with "What have you done for me lately?" the instant something turns negative, no matter how positive your returns have been. At your stage in the game you should get a job and continue putting your own money in to your own system and be ready to lose some of it. I doubt there is anyone outside your immediate family who will hand a random 18 year-old kid any significant amount of money to trade their system based on 6 months of success; certainly not more than you have in there currently. |
How to change a large quantity of U.S. dollars into Euros? | You would probably be better off wiring the money from your US account to your French account. That IMHO is the cheapest and safest way. It doesn't matter much which bank to use, as it will go through the same route of SWIFT transfer, just choose the banks with the lowest fees on both sides, shop around a little. |
As a contractor, TurboTax Business-and-Home or Basic? | Assuming you file state tax returns, you shouldn't buy Basic. Ever. Your choice is probably between the "Premier" version and the "Business and Home" version. Price difference is insignificant (I have a comparison on my blog, including short descriptions as to who might find each version useful the most). The prices have gone down significantly, since when I wrote the article, its cheaper now. |
Does FHA goes hand in hand with PMI ? | FHA insured loans must 'go hand in hand' with PMI, because the FHA element is the insurance itself. The FHA isn't actually giving you a loan, that's coming from a lender; instead, the FHA is insuring the loan, at some cost to you - but allowing a loan to folks who may not be able to afford it normally (lower down payment requirements and a somewhat cheaper PMI). FHA-insured loans may be lower rates in some cases than non-FHA insured loans because of this backing; that's because they make it easier for people of poorer credit histories with smaller down payments to get a house in the first place. Those people would tend to have a harder time getting a loan, and be charged sometimes usurious rates to get it. Low down payment and mediocre credit history (think 580-620) mean higher risk, even beyond the risk directly coming from the poor loan to value ratio. Comparing this table of Freddie Mac rates to this table of FHA-backed loan rates, the loan rates seem comparable (though somewhat lagging in changes in some cases). FHA loans are not nearly the size or complexity of loan population as Freddie Mac, so be wary of making direct comparisons. Looking into this in more detail, pre-collapse (before 12/07), FHA rates were a bit lower - average rate was about .5 points lower - but starting with 12/07, FHA average rates were usually higher than Freddie Mac rates for 30 year fixed loans: in 1/2009 for example they were almost a point higher. As of the last data I see (5/13) the rates were within 0.1 points most months. This may be in part because Freddie Mac had looser requirements to get a loan pre-collapse, then tightened significantly, then started to loosen some (also around June 2013, rates climbed significantly due to some signals from the Fed, although they're almost back to their lows thanks to the Fed again). These are averages across all loans, so you get some noise as a result. Loan interest rates are very personal, in general: they depend on your credit, your house and down payment, and your bank (which varies by your location). The best thing to do is to shop around yourself and just see what you get, and ask your lender any questions you have: if you pick a local lender with a good service history and who is willing to talk to you in person (ie, has a direct phone number), you'll have no trouble getting answers. |
Deposit cash into US bank account | Sure; you can deposit cash. A few notes apply: Does the source of cash need to be declared ? If you deposit more than $10,000 in cash or other negotiable instruments, you'll be asked to complete a form called a Currency Transaction Report (here's the US Government's guidance for consumers about this form). There's some very important information in that guidance document about structuring, which is a fairly serious crime that you can commit if you break up your deposits to avoid reporting. Don't do this. The linked document gives examples. Also don't refuse to make your deposit and walk away when presented with a CTR form. In addition, you are also required to report to Customs and Border Protection when you bring more than $10,000 in or out of the country. If you are caught not doing so, the money may be seized and you could be prosecuted criminally. Many countries have similar requirements, often with different dollar amounts, so it's important to make sure you comply with their laws as well. The information from this reporting goes to the government and is used to enforce finance and tax laws, but there's nothing wrong or illegal about depositing cash as long as you don't evade the reporting requirements. You will not need to declare precisely where the cash comes from, but they will want the information required on the forms. Is it taxable ? Simply depositing cash into your bank account is not taxable. Receiving some forms of income, whether as cash or a bank deposit, is taxable. If you seem to have a large amount of unexplained cash income, it is possible an IRS audit will want an explanation from you as to where it comes from and why it isn't taxable. In short, if the income was taxable, you should have paid taxes on it whether or not you deposit it in a bank account. What is the limit of the deposit ? There is no government limit. An individual bank may have their own limit and/or may charge a fee for larger deposits. You could always call the bank and ask. |
Relative Strength Index: Yahoo vs Google Finance | Google's RSI is using a 10 period on 2 minute bars - i.e. it is based upon the last 20 minutes of data. Yahoo's RSI is using a 14 period lookback on an undetermined timeframe (you could maybe mouse-over and see what incremental part of the chart is giving) and given the "choppier" price chart, probably 30 second or 1 minute bars. Given the difference in both the period specified and the periodicity of the charts - you should expect different results. |
How to calculate PE ratios for indices such as DJIA? | The official source for the Dow Jones P/E is Dow Jones. Unfortunately, the P/E is behind a pay-wall and not included in the free registration. The easiest (but only approximate) solution is to track against an equivalent ETF. Here's a list of popular indexes with an equivalent ETF. Source |
Is it possible, anywhere in the US for a funding firm to not have a license number showing somewhere? | Well, these can range from loan broker to outright scams. It is pretty typical that loan broker just take some fee in the middle for their service of filling your applications for a bunch of real loan provider companies. Because making a web page costs nothing, a single loan broker could easily have many web pages with a bit different marketing so that they can get as many customers as possible. But of course some of the web pages can be actual scams. As soon as you provide enough information for taking out a loan, they can go to a real financial institution, take out the loan and run with the money. In most countries consumer protection laws do not apply to business-to-business transactions, so you have to be even more wary of scams than usual. |
Mortgage company withholding insurance proceeds | Have you found a general contractor to rebuild your home? I would imagine that someone with a bit of expertise in the area is used to dealing with insurance companies, floating the money for a rebuild, and hitting the gates to receive payment for work accomplished. Business are used to not receiving payment when work is accomplished and it is part of the risk of being in business. They have to buy materials and pay employees with the expectation of payment in the future. Much like workers go to work on a Monday for the work that day, three Friday's later, business often have to float costs but for longer periods of time. If you are looking to be your own general contractor then you will have to float the money on your own. The money should not be used for living expenses or mortgage payments, it should be used for down payments in order to get the work of rebuilding started. |
Is it a bad idea to buy a motorcycle with a lien on it? | In the case of a vehicle with a lien, there is a specific place on the title to have a lien holder listed, and the holder of the lien will also hold the title until the lien is cleared. Usually this means you have to pay off the loan when you purchase the vehicle. If that loan is held by a bank, meet the seller at the bank and pay the loan directly with them and have them send the title directly to you when the loan is paid. This usually involves writing up a bill of sale to give to the bank when paying the loan. The only thing you're trying to avoid here is paying cash to the seller--who then keeps the cash without paying the lien holder--who then keeps the title and repossesses the motorcycle. Don't pay the seller if they don't have the title ready to sign over to you. |
How do I bring money overseas? | This page from TripAdvisor may be of interest. Look at what fees are charged on your ATM cards and credit cards, and consider overpaying your credit card so you have a credit balance that you can draw on for cash "advances" from ATMs that will dispense in local currency. Depending on what fees your bank charges, you may get a better rate than the forex cash traders at the airport. Edit: Cards may not always have the best rate. I recently heard from a traveler who was able to use a locally but not globally dominant currency to buy cash of a major currency at a shopping mall (with competitive forex traders) at rates even better than the mid-market rates posted at xe.com and similar places; I don't think you'll have that experience going from Australia to Malaysia (but another traveler reading this might have a different pair). In my experience the card rates are slightly worse than those and the airport forex traders significantly worse. |
Credit card transactions for personal finances | Other responses have focused on getting you software to use, but I'd like to attempt your literal question: how are such transactions managed in systems that handle them? I will answer for "double entry" bookkeeping software such as Quicken or GnuCash (my choice). (Disclaimer: I Am Not An Accountant and accountants will probably find error in my terminology.) Your credit card is a liability to you, and is tracked using a liability account (as opposed to an asset account, such as your bank accounts or cash in your pocket). A liability account is just like an asset except that it is subtracted from rather than added to your total assets (or, from another perspective, its balance is normally negative; the mathematics works out identically). When you make a purchase using your credit card, the transaction you record transfers money from the liability account (increasing the liability) to the expense account for your classification of the expense. When you make a payment on your credit card, the transaction you record transfers money from your checking account (for example) to the credit card account, reducing the liability. Whatever software you choose for tracking your money, I strongly recommend choosing something that is sufficiently powerful to handle representing this as I have described (transfers between accounts as the normal mode of operation, not simply lone increases/decreases of asset accounts). |
Will I get taxed on withdrawals from Real Cash Economy games? | Situation #1: I keep playing, and eventually earn 1000 PED. I withdraw this. Will I get taxed? If so, by how much? This is probably considered an "award", so whatever your country taxes for lottery/gambling winnings would be applicable. If there's no specific taxation on this kinds of income - then it is ordinary income. Situation #2: I deposit $5000, play the game, lose some money and withdraw PED equal to $4000. Will I get taxed? If so, by how much? Since it is a game, it is unlikely that deducting losses from your income would be allowed. However, the $4000 would probably not be taxed as income (since you are getting your own money back). Situation #3: I deposit $5000 and use this to buy in-game items. I later sell these items for massive profits (200%+, this can happen over the course of 2 years for sure). I withdraw $10000. Will I get taxed? If so, by how much? Either the same as #1 (i.e.: ordinary income) or as capital gains (although tax authority may argue that this was not a for-profit investment, and capital gains treatment shouldn't be applicable). Will I get taxed on withdrawals from Real Cash Economy games? And do the taxes apply to the full withdrawal, or only on the profits? Or only on the profits above a certain amount? Generally income taxes only apply on income. So if you paid $10000 and got back $12000 - only the $2000 is considered income. However some countries may tax full amounts under certain conditions. Such taxes are called "franchise taxes". For a proper tax advice consult with the locally licensed tax adviser. |
List of web sites or online forums for stock picking and security analysis | This is a great forum, mostly focused around mutual funds though: http://www.bogleheads.org/ |
Transfer $70k from Wells Fargo (US) to my other account at a Credit Union bank | The LLC is paying you. It would only be fraudulent if you were trying to move the money out of the LLC to avoid a liability. I'm pretty sure the transaction will be taxable income for you personally. Consider consulting with a CPA to ensure that you're doing the proper record keeping and to get advice on the best way to minimize tax burden while achieving your goals. |
Whether to prepay mortgage or invest in stocks | what other pieces of info should I consider If you don't have liquid case available for unexpected repairs, then you probably don't want to use this money for either option. The 7% return on the stocks is absolutely not guaranteed. There is a good amount of risk involved with any stock investment. Paying down the mortgage, by contrast, has a much lower risk. In the case of the mortgage, you know you'll get a 2.1% annual return until it adjusts, and then you can put some constraints on the return you'll get after it adjusts. In the case of stocks, it's reasonable to guess that it will return more than 2.1% annually if you hold it long enough. But there will be huge swings from month to month and from year to year. The sooner you need it, the more guaranteed you will want the return to be. If you have few or no stock (or bond)-like assets, then (nearly) all of your wealth is in your house, and that is independent of the remaining balance on your mortgage. If you are going to sell the house soon, then you will want to diversify your assets to protect you against a drop in home value. If you are going to stay in the house forever, then you will eventually need non-house assets to consume. Ultimately, neither option is inherently better; it really depends on what you need. |
Can I add PMI to my principal balance when I take out a mortgage? | There are few different types of MI you can choose from, they are: Borrower-Paid Monthly (this is what most people think of when they think MI) Borrower-Paid Single Premium (you may have QM issues on this) Lender Paid Single Premium Split Up-front and Monthly The only way to determine which option will ultimately cost you less is to come up with a time estimate or range for how long you anticipate you will hold this mortgage, then look at each option over that time, and see where they fall. To answer your question about the single-premium being added to your loan, this typically does not happen (outside of FHA/VA). The reason for that is you would now have 90%+ financing and fall into a new pricing bracket, if not being disqualified altogether. What is far more typical is the use of premium pricing to pay this up-front premium. Premium pricing is where you take a lender credit in exchange for an elevated rate; it is the exact opposite of paying points to buy down your rate. For example: say a zero point rate is 4.25%, and you have monthly MI of say .8%. Your effective rate would be 5.05%. It may be possible to use premium pricing at an elevated rate of say 4.75% to pay your MI up front--now your effective rate is the note rate of 4.75%. This is how a single premium can save you money. Keep in mind though, the 4.75% will be your rate for the life of the loan, and in the other scenario, once the MI drops off, the effective rate will go back down from 5.05% to 4.25%. This is why it is critical to know your estimated length of financing. |
Are junk bonds advisable to be inside a bond portfolio that has the objective of generating stable income for a retiree? | I let someone else pick and chose which junk bonds to buy and which to sell. So instead of holding individual bonds in my portfolio I hold an ETF that is managed by a man with a PHD and which buys junk bonds. I get a yearly 15.5% ROI, paid monthly. Buy and hold and you can get a good return for the rest of your life. It is only speculation when you sell. |
Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building? | Grade 'Eh' Bacon answers it well, the issue is risk. To explain further, when a bank issues a loan, that loan comes with certain legal rights. If the bank decided to partner with a construction company, many of those rights to collect would be gone. Debt is treated differently than equity in the legal system. Banks are good at debt, investors are good at equity. We also oversimplify it by asking why banks don't prefer equity to debt. Some investment banks also like to deal in equity, so it's probably an inaccurate assumption that you start with. |
When's the best time to sell the stock of a company that is being acquired/sold? | This is but one opinion. Seek others before your act. "When someone puts a million dollars in your hand, close your hand." A 50% gain in two weeks is huge. |
In what state should I register my web-based LLC? | I would prefer to see you register in your home state, and then focus on making money, rather than spending time looking to game the system to save a few bucks. People worry way too much about these trivial fees when they should be focused on making their business successful. Get registered, get insurance, and then pour it on and start making money. Make $650 your target for a week's income - you can do it! Next year's goal should be spending $50 a month on a payroll service because you're SO BUSY you can't take the extra time to pay your own social security taxes. |
Whether to prepay mortgage or invest in stocks | The short answer is to invest it since the rate of return is higher than your mortgage. (Assuming that you can withstand interest rate hikes, meet short term liquidity needs and don't need your $10K in the short or near term). The long answer is if you're comfortable leveraging your house and can put that $10K away for the long term you can reduce your taxes via the Smith Manoeuvre: Alternatively, if you have kids or grandkids and will help them through school, take the government's money by putting it away in an RESP. |
Can you explain “time value of money” and “compound interest” and provide examples of each? | Here are some really excellent video tutorials on these topics: Introduction to Compound Interest Introduction to Present Value |
Is there a way I can get bid/ask price data on the NSE in real time? | Quite a few Banks/brokers offer direct terminals to NSE where you can see live prices. |
Can a CEO short his own company? | That would be the ultimate in insider trading. They made a stock transaction knowing in advance what was going to happen to the share price. They could easily expect to face jail time, plus the CEO would still face lawsuits from the board of directors, the stockholders and the employees. |
How does the Pension system work in Poland? | littleadv's answer gives a concise summary of the system as it stands now, but much more changed than just the portion of the mandatory contribution that was diverted to the private plan. In broad terms, the balances of your accounts and your future benefit won't change. It's only the source of these benefits that's changing. The Bloomberg article describes the changes this way: The state will take over the amount of bonds that pension funds held as of end of Sept. 3 and turn them into pension liabilities in the state-run social security system... The state will assume control of 51.5 percent of pension-fund assets, including bonds guaranteed by the government and “other non-stock assets” After the change, Polish workers that held bonds in the private portion of their retirement portfolios will instead have more payments from the state-run pension system. The balances of your retirement portfolio and your future benefits shouldn't change, but the reality may depend on how the state pension system is managed and any future changes the government implements. The effect this change will have on future benefits isn't clear, because the change may simply delay the problem of high levels of outstanding sovereign debt, not solve it. The government stated that because increasing numbers of workers invested their money in private pension funds, less money went into the government's fund, which forced them to issue sovereign debt in order to cover the shortfall in their current pension liabilities. The government's recent cancellation of government bonds in the hands of private pensions will decrease their overall outstanding debt, but in exchange, the government is increasing its future pension liabilities. Years down the road, the government may find that they need to issue more sovereign debt to cover the increased pension liabilities they're taking on today. In other words, they may find themselves back in the same situation years down the road, and it's difficult to predict what changes they might make at that time. |
Personal taxes for Shopify / Paypal shop? | (do I need to get a W9 from our suppliers)? Will PayPal or Shopify send me a 1099k or something? Do not assume that you'll get paperwork from anyone. Do assume that you have to generate your own paperwork. Ideally you should print out some kind of record of each transaction. Note that it can be hard to view older transactions in PayPal, so start now. If you can't document something, write up a piece of paper showing the state of the world to the best of your knowledge. Do assume that you need separate receipts for each expenditure. The PayPal receipt might be enough (but print it in case the IRS wants to see it). A receipt from the vendor would be better (again, print it if it is online now). A CPA is not strictly necessary. A CPA is certified (the C in CPA) to formally audit the books of a corporation. In your case, any accountant would be legally sufficient. You still may want to use a CPA, as the certification, while technically unnecessary, still demonstrates knowledge. You may otherwise not be in a position to evaluate an accountant. A compromise option is to go to a firm that includes a CPA and then let them assign you to someone else to process the actual taxes. You are going to have to fill out some business tax forms. In particular, I would expect a schedule C. That's where you would show revenues and expenses. You may well have to file other forms as well. |
Superannuation: When low risk options have higher return, what to do? | The long term view you are referring to would be over 30 to 40 years (i.e. your working life). Yes in general you should be going for higher growth options when you are young. As you approach retirement you may change to a more balanced or capital guaranteed option. As the higher growth options will have a larger proportion of funds invested into higher growth assets like shares and property, they will be affected by market movements in these asset classes. So when there is a market crash like with the GFC in 2007/2008 and share prices drop by 40% to 50%, then this will have an effect on your superannuation returns for that year. I would say that if your fund was invested mainly in the Australian stock market over the last 7 years your returns would still be lower than what they were in mid-2007, due to the stock market falls in late 2007 and early 2008. This would mean that for the 7 year time frame your returns would be lower than a balanced or capital guaranteed fund where a majority of funds are invested in bonds and other fixed interest products. However, I would say that for the 5 and possibly the 10 year time frames the returns of the high growth options should have outperformed the balanced and capital guaranteed options. See examples below: First State Super AMP Super Both of these examples show that over a 5 year period or less the more aggressive or high growth options performed better than the more conservative options, and over the 7 year period for First State Super the high growth option performed similar to the more conservative option. Maybe you have been looking at funds with higher fees so in good times when the fund performs well the returns are reduced by excessive fees and when the fund performs badly in not so good time the performance is even worse as the fees are still excessive. Maybe look at industry type funds or retail funds that charge much smaller fees. Also, if a fund has relatively low returns during a period when the market is booming, maybe this is not a good fund to choose. Conversely, it the fund doesn't perform too badly when the market has just crashed, may be it is worth further investigating. You should always try to compare the performance to the market in general and other similar funds. Remember, super should be looked at over a 30 to 40 year time frame, and it is a good idea to get interested in how your fund is performing from an early age, instead of worrying about it only a few years before retirement. |
Is Real Estate ever a BAD investment? If so, when? | Real estate is a lousy investment because: Renting a home and buying a home, all else being equal, are pretty similar in costs in the long term (if you can force yourself to invest the would-be down payment). So, buy a home if you want to enjoy the benefits of home ownership. Buy a home if you need to hedge against rising housing prices (e.g. you're on a fixed income and couldn't cope if rent increased a bunch when the economy heated up). Maybe buy a home if you're in a high tax bracket to save yourself from being taxed on your imputed rent, if it works out that way (consult your financial advisor). But don't consider it a really great investment vehicle. Returns are average and the risk profile isn't that attractive. |
How to invest in gold at market value, i.e. without paying a markup? | This is an excellent question; kudos for asking it. How much a person pays over spot with gold can be negotiated in person at a coin shop or in an individual transaction, though many shops will refuse to negotiate. You have to be a clever and tough negotiator to make this work and you won't have any success online. However, in researching your question, I dug for some information on one gold ETF OUNZ - which is physically backed by gold that you can redeem. It appears that you only pay the spot price if you redeem your shares for physical gold: But aren't those fees exorbitant? After all, redeeming for 50 ounces of Gold Eagles would result in a $3,000 fee on a $65,000 transaction. That's 4.6 percent! Actually, the fee simply reflects the convenience premium that gold coins command in the market. Here are the exchange fees compared with the premiums over spot charged by two major online gold retailers: Investors do pay an annual expense ratio, but the trade-off is that as an investor, you don't have to worry about a thief breaking in and stealing your gold. |
What happened when the dot com bubble burst? | From the perspective of an investor and someone in high-tech during that period, here is my take: A few high tech companies had made it big (Apple, Microsoft, Dell) and a lot of people were sitting around bemoaning the fact that we all should have realized that computers were going to be huge and invested early in those companies. We all convinced ourselves that we knew it was going to happen (whether we did or not), but for some reason we didn't put our money where our mouth was and now we were grumpy because we could be millionaires already. In the meantime the whole Internet thing transitioned from being something that only nerds and academics used to a new paradigm for computing. Many of us reasoned that we weren't going to be suckers twice and this time we were getting on that boat before it left for money-land. So it became fashionable to invest in Internet stocks. Everyone was doing it. It was guaranteed to come up in any conversation at parties or with friends at work. So with all this investment money out there for the Internet's "next big thing" naturally lots of companies popped up to take advantage of the easy money. It got to the point where brokers and Venture capital firms were beating the bushes LOOKING for companies to throw money at and often they didn't scrutinize these company's business plans very well and/or bought into insane growth projections. Frankly, most of the business plans amounted to "We may not make any money off our users, but if we get enough people to sign up that HAS to be valuable, right?" Problem #2 was that most of these companies weren't run by proven business types, but that didn't matter. It worked for those rag-tag kids at Google, Apple and Microsoft right? Well-heeled business types who know how to build a sustainable business model are so gauche in the new "Internet Economy". Also, the implicit agenda of most of these new entrepreneurs is (1) Get enough funding to make the company big enough go public while keeping enough equity to get rich when it does; (2) Buy a Ferrari; (3) Repeat with another company. Now these investors weren't stupid. They knew what was going on and that most of these Internet companies weren't going to be around in a decade. Everyone was just playing the momentum and planned to get out when they saw "the signal" that the whole house of cards was going to fall. At the time we always talked about the fact that these investments were totally playing with monopoly money, but it was addictive. During the peak, at least on paper, my brokerage account was earning more money for me than my day job. The problem was, that it was all kind of a pyramid scheme. These dot com companies needed a continual supply of new investment because most of them were operating at a loss and some didn't even have a mechanism to make a profit at all, at least not a realistic one. A buddy of mine, for example worked for an IPO bound company that made a freaking web based contact management system. They didn't charge yet, but they would one day turn on the meter and all of those thousands of customers who signed up for a free account would naturally start paying for something the company was actively devaluing by giving it away for free. This company raised more than $100M in venture capital. So eventually it started to get harder for these companies to continue to raise new money to pay operational costs without showing some kind of ROI. That is, the tried-and-true model for valuing a company started to seep back in and these companies had to admit that the CEO had no clothes. So without money to continue paying for expensive developers and marketing, these companies started to go under. When a few of the big names tumbled, everyone saw that as "the signal" and it was a race to the bank. The rest is history. |
How to choose a good 401(k) investment option? | The vanguard funds are all low fee your employer has done a good job selecting their provider for 401(k). I would do a roth if you can afford it as taxes are at a historical low. Just pick the year you want to get your money if you will need your money in 2040 pick Vanguard Target Retirement 2040 Fund. Its that simple. This is not a "thing" ( low-risk, and a decent return ). Risk and reward are correlated. Get the vanguard and every year it rebalances so that you take less risk every year. Lastly listen to the Clark Howard podcast if you are having trouble making decisions or contact their 45 hour a week free advice email/phone help. |
My Brokerage statement shows “Adjusted due to previous wash sale disallowed loss” what does this mean? | Well it would appear that you had a wash sale that canceled out a loss position. Without seeing the entire report, I couldn't tell you exactly what was happening or how you triggered § 1091. But just from the excerpted images, it appears as though your purchase of stock was layered into multiple tranches - perhaps you acquired more of the stock in the 61-day period than you sold (possibly because of a prior holding). If in the 61-day period around the sale of stock (30 days before and 30 days after), you also acquire the same stock (including by contract or option), then it washes out your loss. If you held your stock for a while, then in a 61-day period bought more, and sold some, then any loss would be washed out by the acquisition. Of course it is also a wash sale if your purchase of the stock follows your sale, rather than precedes it. Your disallowed loss goes into the basis of your stock holding, so will be meaningful when you do have a true economic sale of that stock. From IRS Pub 550: A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale. Looking at your excerpted account images, we can see a number of positions sold at a loss (sale proceeds less than basis) but each one is adjusted to a zero loss. I suspect the fuller picture of your account history and portfolio will show a more complicated and longer history with this particular stock. That is likely the source of the wash sale disallowed loss notations. You might be able to confirm that all the added numbers are appearing in your current basis in this stock (or were reflected upon your final exit from the stock). |
Online transaction - Money taken out late | Debit Cards have a certain processing delay, "lag time", before the transaction from the vendor completes with your bank. In the US it's typically 3 business days but I have seen even a 15 day lag from Panera Bread. I guess in the UK, payment processors have similar processing delays. A business is not obliged to run its payment processing in realtime, as that's very expensive. Whatever be the lag time, your bank is supposed to cover the payment you promised through your card. Now if you don't have agreements in place (for example, overdraft) with your bank, they will likely have to turn down payments that exceed your available balance. Here is the raw deal: In the end, the responsibility to ensure that your available balance is enough is upon you (and whether you have agreements in place to handle such situations) So what happened is very much legal, a business is not obliged to run its payment processing in realtime and no ethics are at stake. To ensure such things do not happen to me, I used to use a sub-account from which my debit card used to get paid. I have since moved to credit cards as the hassle of not overdrawing was too much (and overdraft fees from banks in the US are disastrous, especially for people who actually need such a facility) |
Does the bid/ask concept exist in dealer markets? | Why would there not be a bid and ask? Dealers make their money in the spread between what they buy it from one entity for and what they sell it to another entity for. This doesn't mean they have to do it auction-style, but they'll still have a different buy price from a sell price, hence "bid" and "ask". |
Online tutorials for calculating DCF (Discounted Cash Flow)? | Check out Professor Damodaran's website: http://pages.stern.nyu.edu/~adamodar/ . Tons of good stuff there to get you started. If you want more depth, he's written what is widely considered the bible on the subject of valuation: "Investment Valuation". DCF is very well suited to stock analysis. One doesn't need to know, or forecast the future stock price to use it. In fact, it's the opposite. Business fundamentals are forecasted to estimate the sum total of future cash flows from the company, discounted back to the present. Divide that by shares outstanding, and you have the value of the stock. The key is to remember that DCF calculations are very sensitive to inputs. Be conservative in your estimates of future revenue growth, earnings margins, and capital investment. I usually develop three forecasts: pessimistic, neutral, optimistic. This delivers a range of value instead of a false-precision single number. This may seem odd: I find the DCF invaluable, but for the process, not so much the result. The input sensitivity requires careful work, and while a range of value is useful, the real benefit comes from being required to answer the questions to build the forecast. It provides a framework to analyze a business. You're just trying to properly fill in the boxes, estimate the unguessable. To do so, you pore through the financials. Skimming, reading with a purpose. In the end you come away with a fairly deep understanding of the business, how they make money, why they'll continue to make money, etc. |
Scam or Real: A woman from Facebook apparently needs my bank account to send money | The answers here are all correct. This is 100% scam, beyond any reasonable doubt. Don't fall for it. However, I felt it valuable to explain what would happen were you to fall for this. It's not all that hard to understand, but it involves understanding some of the time delays that exist in modern banking today. The most important thing to understand is that depositing a check does not actually put dollars in your account, even though it appears to. A check is not legal tender for debts public and private. It's a piece of paper known as a "bill of exchange." It's an authorization for a payee (you), to request that their bank pay you the amount on the check. A transaction made with a check does not actually draw to a close until your bank and their bank communicate and cause the actual transfer of funds to take place. This process is called "clearing" the check. Despite living in the modern times, this process is slow. It can take 7-10 days to clear a check (especially if it is an international bank). This is not good for the banking business. You can imagine how difficult it would be to tell a poor client, who is living paycheck to paycheck, that he can't have his pay until the check clears a week later. Banks have an interest in hiding this annoying feature of the modern banking system, so they do. When you deposit a check, the bank will typically advance you the money (an interest free loan, in effect) while the check "floats" (i.e. until it clears). This creates the illusion that the money is actually in your account for most intents and purposes. (presumably a bank would distinguish between the floating check and a cleared check if you tried to close out your account, but otherwise it looks and feels like the money is in your hands). Of course, if the check is dishonored (because the payer had insufficient funds, or the account simply did not exist), your bank will not get the money. At this moment, they will cancel any advances you received and notify you that the check bounced. Again, this happens 7-10 days later. The general pattern of this scam is that they will pay you by a method which clears slowly, like a check. They will then ask you to withdraw the money using a faster clearing method (like a wire transfer or withdrawing the cash). Typically they will be encouraging you to move quickly (they are on a timetable... when their check bounces, the game is up!) At this time, it will appear as though the account has a positive balance, but in fact it has a negative balance plus an advance on the check. This looks great until 7-10 days later, when the check bounces. At that time, the bank will cancel the advance, and reality will set in. You will now have an open bank account, legally opened by you in your own name, which is deeply in debt. Meanwhile, the scammer walks away with all the money that you sent them (which cleared quickly). There are many variants which can hide the details. Some can play games with check kiting to try to make your first check clear (then try to rope you in for a more painful hit). Some will change the instruments they use (checks are the easy ones, so they're simply most common). Don't try to think "maybe this one is legit." These scammers literally make a living off of making shady transactions look legit. Things I would recommend looking out for: |
What happens if a company I have stock in is bought out? | A buy out is agreed by shareholders. Plus most countries have regulation protecting minority interest. Depending on the terms of buy out, you may get equivalent shares of buyer company or cash or both. |
Is it possible to borrow money to accrue interest, and then use that interest to pay back the borrower + fees? | Your plan as proposed will not work, because it goes against how banks make money. Banks make money in two ways: (1) Fees [including account fees, investment advice fees, mortgage application fees, etc.]; and (2) Interest Rate Spread. They borrow money for x%, and they lend it out for x+y%. In a simple form, someone gives the bank a deposit, and earns 1%. The bank turns around to the next person in line and loans the money to them for 4%. You are asking them to turn the interest rate spread into a cost instead of their main source of profit: You are asking the bank to borrow money from another person paying them 1.2% interest, and then loan the money to you, paying you 0.6% interest and keeping 0.6% for themselves. The bank would lose money doing this. Technically yes, you can borrow from a bank and invest it in something earning above the 4% interest they will charge you. You can then pay the bank's interest off of your earnings, and make some profit for yourself. BUT this carries an inherent risk: If your investment loses money, you still owe the bank, effectively increasing the negative impact of your investment. This tactic is called "Leveraging"; you can look it up on this site or on google. It is not something you should do if you do not fully understand the risks you are taking on. Given that you are asking this question, I would suggest tactfully that you are not yet well informed enough to make this sort of investment. You run serious risk of losing everything if you over-leverage (assuming the banks will even lend you money in the first place). |
Buying my first car out of college | Buying this car would be a good idea because you will quickly learn why you feel you need a BMW (that you cannot afford). This is not an investment, but a financing decision, beyond your means of living. As a future MBA you will regret not investing this money now. |
Can I move my 401k to another country without paying tax penalty? | hello – I am a natural born US citizen; I have worked 35+ years in the United States; I have a 401(k), IRA, Social Security benefits. I have researched the ex-patriot possibilities for several years. I've consulted both accountants and tax attorneys. The long answer is: hire tax consultants/attorneys to try to shelter what assets you can. 401(k), IRA, and Social Security benefits are all taxable worldwide to US citizens. unless you become the citizen of your new country of residence, these taxes are unavoidable. since all of the above assets are considered "pretax" to the US government, they are all taxable on distribution whether slowly or in lump sum. the short answer is: "Hotel California"… "Relax, said the watchman – we are programmed to receive. You can check out any time, but you can never leave…" |
Why should I trust investment banks' ratings? | Investment banks will put out various reports and collect revenues from that along with their banking activity. I don't read them or care to read them myself. If banks can make money from something, they will likely do it, especially if it is legal. To take the Tesla stock question for a moment: Aren't you ruling out that yesterday was the day that Tesla was included in the Nasdaq 100 and thus there may be some people today exiting because they tried to cash in on the index funds having to buy the stock and bid it up in a sense? Or as @littleadv points out there could be those tracking the stocks not in the index that would have been forced to sell for another idea here. The Goldman note is a possible explanation but there could well be more factors in play here such as automated trading systems that seek to take advantage of what could be perceived as arbitrage opportunities. There can be quick judgments made on things which may or may not be true in the end. After all, who knows exactly what is causing the sell-off. Is it a bunch of stop orders being triggered? Is it people actually putting in sell order manually? Is it something else? There are lots of questions here where I'm not sure how well one can assign responsibility here. |
How do I fold side-income into our budget so my husband doesn't know? | These earnings will likely have tax implications, depending on where in the world you are. So, your budget concerns not nearly as important as having an honest conversation about money with your husband. Better for him to be mad about the truth than to continue the lie, and potentially have this become a much larger legal, not just marital, problem. |
Using credit card points to pay for tax deductible business expenses | For simplicity, let's start by just considering cash back. In general, cash back from credit cards for personal use is not taxable, but for business use it is taxable (sort of, I'll explain later). The reason is most personal purchases are made with after tax dollars; you typically aren't deducting the cost of what you purchased from your personal income, so if you purchase something that costs $100 and you receive $2 back from the CC company, effectively you have paid $98 for that item but that wouldn't affect your tax bill. However, since businesses typically deduct most expenses, that same $100 deduction would have only been a $98 deduction for business tax purposes, so in this case the $2 should be accounted for. Note, you should not consider that $2 as income though; that would artificially inflate your revenue. It should be treated as a negative expense, similar to how you would handle returning an item you purchased and receiving a CC refund. Now for your specific questions: Part 1: As a small business owner, I wish to attend an annual seminar to improve my business. I have enough credit card reward points to cover the airfare, hotel, and rental car. Will those expenses still be deductible at the value displayed on the receipt? Effectively no, these expenses are not deductible. If you deduct them they will be completely counter-acted by the "refund" you receive for the payments. Part 2: Does it matter if those points are accrued on my personal credit card, rather than a business credit card? This is where it gets hairy. Suppose your company policy is that employees make purchases with their own personal credit cards and submit receipts for reimbursement. In this case the employer can simply reimburse and would not know or care if the employee is racking up rewards/points/cashback. The trick is, as the employee, you must always purchase business related items normally so you have receipts to show, and if you receive cashback on the side there seems to be a "don't ask, don't tell" rule that the IRS is OK with. It works the same way with heavy business travelers and airline miles- the free vacations those users get as perks are not treated as taxable income. However, I would not go out of my way to abuse this "loophole". Typically, things like travel (airfare, hotel, car rental, meals) are expected. But I wouldn't go purchase 100 company laptops on your personal card and ask the company to reimburse you. The company should purchase those 100 laptops on a company card and effectively reduce the sale price by the cashback received. (Or more realistically, negotiate a better discount with your account rep and just cut them a check.) Part 3: Would there be any difference between credit card points and brand-loyalty points? If the rental car were paid for with points earned directly on the rental car company's loyalty system (not a CC), would that yield a different result? There is no difference. Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. This is why when you volunteer and work 10 hours for a charity, you can't call that a "donation" of any amount of money because there is no actual payment made that would show up on a bank statement. Instead you could have billed the charity for your 10 hours of work, and then turned around and donated that same amount back to them, but it ends up being a wash. |
How do share buybacks work? | Something to note is that when a company announces a share buyback program there is usually a time frame and amount of shares that are important details as it isn't like the company will make one big buy back of stock generally. Rather it may take months or even years as noted in the Wikipedia article about share repurchases. Wikipedia covers some of the technical details here but to give a specific set of answers: When a company announces a share buyback program, who do they actually buy back the shares from? From the Wikipedia link: "Under US corporate law there are five primary methods of stock repurchase: open market, private negotiations, repurchase 'put' rights, and two variants of self-tender repurchase: a fixed price tender offer and a Dutch auction." Thus, there are open market and a couple of other possibilities. Openly traded shares on a stock exchange? Possibly, though there are other options. Is there a fixed price that they buy back at? Sometimes. I'd think a "fixed price tender offer" would imply a fixed price though the open market way may take various prices. If I own shares in that company, can I get them to buy back my shares? Selective Buy-Backs is noted in Wikipedia as: "In broad terms, a selective buy-back is one in which identical offers are not made to every shareholder, for example, if offers are made to only some of the shareholders in the company. In the US, no special shareholder approval of a selective buy-back is required. In the UK, the scheme must first be approved by all shareholders, or by a special resolution (requiring a 75% majority) of the members in which no vote is cast by selling shareholders or their associates. Selling shareholders may not vote in favor of a special resolution to approve a selective buy-back. The notice to shareholders convening the meeting to vote on a selective buy-back must include a statement setting out all material information that is relevant to the proposal, although it is not necessary for the company to provide information already disclosed to the shareholders, if that would be unreasonable." Thus it is possible, though how probable is another question. While not in the question, something to consider is how the buybacks can be done as a result of offsetting the dilution of employees who have stock options that may exercise them and spread the earnings over more shares, but this is more on understanding the employee stock option scenario that various big companies use when it comes to giving employees an incentive to help the stock price. |
Restricted Stock Grants - How to prepare tax return when you sell to cover taxes | You don't. When you sell them - your cost basis would be the price of the stock at which you sold the stocks to cover the taxes, and the difference is your regular capital gain. |
What are the gains from more liquidity in ETF for small investors? | ETFs are both liquid (benefits active traders) and a simple way for people to invest in funds even if they don't have the minimum balance needed to invest in a mutual fund (EDIT: in which purchases are resolved at the end of the trading day). One big difference between ETFs and mutual funds is that you must buy ETFs in whole units, whereas you can add $100 to a mutual fund and the fund will determine -- usually to 4 decimal places -- how many shares you've purchased. |
Are there cons to paying monthly bills with a rewards card and then paying it off monthly? | There are a few potential downsides but they are minor: If you forget to make the payment the interest hit the following month could be significant. With many cards the new charges will be charged interest from the start if the previous payment was late/missed. Just make sure you don't forget to pay the entire bill. If the $5K in monthly bills is a large portion of the credit limit for that credit card you could run into a problem with the grace period. During the three weeks between when the monthly bill closes and the payment is due, new charges will keep rolling in. Plan on needing a credit limit for the card of 2x the monthly bills. Of course you don't have to wait for the due date. Just go online and pay the bill early. If the monthly bills are a significant portion of the total credit limit for all credit cards, it can decrease your credit score because of the high utilization rate. The good news is that over time the credit card company will increase your credit limit thus reducing the downsides of the last two items. Also keep in mind you generally can't pay a credit card bill or loan with a credit card, but many of the other bills each month can be handled this way. |
How can people have such high credit card debts? | You must understand that not everyone has or can get credit cards. Consider that those who are in the the lowest 20-30% of income tend to have fewer credit cards (or none), and lower credit debt, although some have quite high credit card debt relative to their income. So you really aren't comparing the same demographics (the population of all income earners, used to calculate average income, and the population of all credit card debt holders, are not the same groups of people). Once you remove those folks from consideration, then credit card usage may still average higher, but accept that it is unusual for people making less than $20K-30K/year to have much credit card debt. You must understand that wealth and income are two very different (although related) concepts. One must note that there are millions of people in the U.S. who have wealth; they have net assets of over $1M (excluding their homes). Many of those folks have assets greatly exceeding $1M. And although it might seem foolish to carry a large balance on their credit cards, they may have quite low interest rates, and simply find it simpler and more convenient to use credit cards in lieu of personal loans. Suppose you have $2M in net assets, and want to buy a classic car or a diamond necklace. Charging $30K and carrying the balance until a dividend check arrives may make sense. Understand also that not everyone makes the same choices, or good choices. Carrying a credit card balance may appear like a poor choice, especially when you are not wealthy, or have lower income. But suppose you have a high credit limit across several cards, and you need to handle a short-term financial challenge (car repair, layoff, medical bills, etc). You might use the credit card to pay for that purchase, essentially financing an extraordinary event over a longer period of time. And although having a balance of more than 5-10% of your monthly income may seem foolish to some, it may make sense to others. And some people choose to carry balances of 50% to 100% of their credit limit. Others realize that keeping their credit utilization below 30%, 20%, or 10% of the credit limit is a better plan (both interest rate and risk wise). |
The board of directors in companies | Boards of Directors are required for corporations by nearly all jurisdictions. Some jurisdictions have almost self-defeating requirements however, such as in tax havens. Boards of Directors are compensated by the company for which they sit. Historically, they have set their own compensation almost always with tight qualitative legal bounds, but in the US, that has now changed, so investors now set Director compensation. Directors are typically not given wages or salary for work but compensation for expenses. For larger companies, this is semantics since compensation averages around one quarter of a million of USD. Regulations almost always proscribe agencies such as other corporations from sitting on boards and individuals convicted of serious crimes as well. Some jurisdictions will even restrict directories to other qualities such as solvency. While directors are elected by shareholders, their obligations are normally to the company, and each jurisdiction has its own set of rules for this. Almost always, directors are forbidden from selling access to their votes. Directors are almost always elected by holders of voting stock after a well-publicized announcement and extended time period. Investors are almost never restricted from sitting on a board so long as they meet the requirements described above. |
What is a checking account and how does it work? | As others have noted, in the U.S. a checking account gives you the ability to write a check, while a savings account does not. I think you know what a check is even if you don't use them, right? Let me know if you need an explanation. Personally, I rarely write paper checks any more. I have an account for a small side business, and I haven't bothered to get new checks printed since I moved 6 years ago even though the checks still have my old address, because I've only written I think 3 paper checks on that account in that time. From the bank's point of view, there are all sorts of government regulations that are different for the two types of accounts. But that is probably of little concern to you unless you own a bank. If the software you have bought allows you to do the things you need to do regardless of whether you call the account "savings" or "checking", then ... who cares? I doubt that the banking software police will come to your house and beat you into unconsciousness and arrest you because you labeled an account "checking" that you were supposed to label "savings". If one account type does what you need to do and the other doesn't, then use the one that works. |
Is dividend taxation priced in derivatives? | No. Black Scholes includes a number of variables to calculate the value of the derivative but taxation isn't one of them. Whether you are trading options or futures, the dividend itelf may be part of the equation, but not the tax on said dividend. |
Investments other than CDs? | First off, you have done very well to be in your financial position at your age. Congratulations. I first started investing seriously about 10 years ago, and when I started, I had a similar attitude to you. Learning how to invest is a journey, and it will take you a while to learn both the intellectual and emotional sides of investing. First off, there is nothing wrong with having a chunk of cash that you aren't investing effectively. It is far better to be losing earning power WRT inflation that it is to make a bad investment, where you can lose all your money quite quickly. I have perhaps 15% of my capital just sitting around right now because I don't have any place where I'm excited to put it. For your IRA, I would look at the options you have, and choose one that is reasonably well diversified and has low costs. In most cases, an index fund is a reasonable choice. My 401K goes into an S&P 500 index fund, and I don't have to worry about it. Beyond that, I suggest spending some time learning about investing, and then making some small and conservative investments. I've learned a lot from the Motley Fool web site. |
One of my stocks dropped 40% in 2 days, how should I mentally approach this? | Did you read Soichiro Honda's biography? He is the founder of Honda Motor. His plant was destroyed by an earthquake, and then he proceeded to build another factory which, as World War II broke out, was lost again with his money, and many of his friends', but he started again. |
What options are available for a home loan with poor credit but a good rental history? | Here are some (not all) things that can help overcome a low credit score: Getting a new job may actually hurt unless it's a substantial increase in income. Banks usually look at salary going back 2 years, and look for consistent, maintainable income. If you just got a new job that pays more, the bank may conservatively assume that it may not last. |
Paid part of my state refund back last year; now must declare the initial amount as income? | If you get 1099-G for state tax refund, you need to declare it as income only if you took deduction on state taxes in the prior year. I.e.: if you took standard deductions - you don't need to declare the refund as income. If you did itemize, you have to declare the refund as income, and deduct the taxes paid last year on your schedule A. If this year you're not itemizing - you lost the tax benefit. If it was not clear from my answer - the taxes paid and the refund received are unrelated. The fact that you paid tax and received refund in the same year doesn't make them in any way related, even if both refer to the same taxable year. |
In general, is it financially better to buy or to rent a house? | There's probably no simple answer, but it's fair to say there are bad times to buy, and better times. If you look at a house and see the rent is more than the mortgage payment, it may be time to consider buying. Right now, the market is depressed, if you buy and plan to stay put, not caring if it drops from here because you plan to be there for the long term, you may find a great deal to be had. Over the long term, housing matches inflation. Sounds crazy, but. Even into the bubble, if you looked at housing in terms of mortgage payment at the prevailing 30yr fixed rate and converted the payment to hours needed to work to make the payment, the 2005 bubble never was. Not at the median, anyway. At today's <5% rate, the mortgage will cost you 3.75% after taxes. And assuming a 3% long term inflation rate, less than 1%. You have expenses, to be sure, property tax, maintenance, etc, but if you fix the mortgage, inflation will eat away at it, and ultimately it's over. At retirement, I'll take a paid for house over rising rents any day. |
Why do cash back credit cards give a higher rate for dining and gasoline purchases? | I am not sure but probably it depends upon the cut the credit card company receives from the merchant. For Hotels such as dining etc. the cut could be more. Again, periodically, many merchants join with the card company to launch promotions. It could be part of such promotions. Apart from class of merchants, these points also differ on class of cards e.g a premium card will earn more rewards than a simple classic card. |
Are there common stock price trends related to employee option plans? | There's an odd anomaly that often occurs with shares acquired through company plans via ESPP or option purchase. The general situation is that the share value above strike price or grant price may become ordinary income, but a sale below the price at day the shares are valued is a capital loss. e.g. in an ESPP offering, I have a $10 purchase price, but at the end of the offering, the shares are valued at $100. Unless I hold the shares for an additional year, the sale price contains ordinary W2 income. So, if I see the shares falling and sell for $50, I have a tax bill for $90 of W2 income, but a $50 capital loss. Tax is due on $90 (and for 1K shares, $90,000 which can be a $30K hit) but that $50K loss can only be applied to cap gains, or $3K/yr of income. In the dotcom bubble, there were many people who had million dollar tax bills and the value of the money netted from the sale couldn't even cover the taxes. And $1M in losses would take 300 years at $3K/yr. The above is one reason the lockup date expiration is why shares get sold. And one can probably profit on the bigger companies stock. Edit - see Yelp down 3% following expiration of 180 day IPO lock-up period, for similar situation. |
Pay via Debit Card or Bank's portal | There are reward points that you have already mentioned. Some banks also give reward points for netbanking transfer, although very few and less than debit card. On a fraudulent site, debit card adds a layer, if compromised, easy to change. i.e just hot list the card, get a new card issued. Netbanking quite a few banks have incorrect implementation and difficult to change the login ID / User ID. The dispute resolution mechanism is well established as there is master or visa network involved. The ease of doing transaction is with netbanking as for card one has to remember 16 digits, expiry, cvv. The entire process of card usage is multiparty, on slow connection if something goes wrong, it takes 3 days to figure out. In netbanking it is instantaneous. You just login to bank and see if the debit has gone through. |
I have about 20 000 usd. How can invest them to do good in the world? | In the UK, one quirky option in this area (OK, admittedly it's not a passive) is the "Battle Against Cancer Investment Trust" (BACIT). Launched in 2012, it's basically a fund-of-funds where the funds held charge zero management charges or performance fees to the trust, but the trust then donates 1% of NAV to charity each year (half to cancer research, investors decide the other half). |
Landlord living in rental unit - tax implications? | Does allowing family to stay at the rental jeopardize my depreciation? No, accumulated depreciation that hasn't been deducted reduces your basis in the event of sale. That doesn't go anywhere. Accumulating more may not be allowed though. If the property is no longer rental (i.e.: personal use, your family member lives there for free), you cannot claim expenses or depreciation on it. If you still rent it out to your family member, but not at the fair market value, then you can only claim expenses up to the rental income. I.e.: you can only depreciate up to the extent the depreciation (after all the expenses) not being over the income generated. You cannot generate losses in such case, even if disallowed. If you rent to your family member at the market rate (make sure it is properly documented), then the family relationship really doesn't matter. You continue accumulating expenses as usual. |
How is a Condominium / Apartment Building fiscally identified? | In such cases, it has a EIN, like any business would. Even absent the rent you suggest, the condo should have reserve funds, similar to an individual's emergency account, only more codified as to level and flows. These funds should be earning interest. |
Should I participate in a 401k if there is no company match? | Another consideration that is not in the hard numbers. Many people, myself included, find it hard to have the discipline to save for something that is so far off. The 401K plan at work has the benefit of pulling the money out before you see it, so you learn to live on what is left more easily. Also, depending on the type of 401K it attaches penalties to using the money early disincentive you to pull it out for minor emergencies. |
Please explain: What exactly is a CDS or “Credit Default Swap”? | A Credit Default Swap (CDS) is a contract between two parties. A useful analogy is insurance (but by no means exact). I pay a quarterly premium in order to insure myself against another event. In this case, it might be that I own some IBM Bonds. I am happy to own those bonds, and like the "coupon" that they pay me. But I am a little worried about IBM going bankrupt. So I can find someone willing to sell me a CDS. So long as I keep up my "premium" payments, if IBM goes into default on their bonds, I get a payout. This analogy does break down at a couple of levels. Firstly there is no requirement that I have to own the IBM bond in the first place. I can in effect then "take a view" on IBM going into default by purchasing a CDS without owning the underlying asset. Also in the real insurance world, there are various capital requirements that the companies have to adhere to, while CDS market, being essentially unregulated has none. So to summarize, and while The Pedia has a pretty good article, they are good both to hedge your bet (i.e. protect your actual owned asset) or as a speculative tool to take a "view" on the likelihood of a company to go bankrupt. |
What is the relationship between the earnings of a company and its stock price? | I have heard that people say the greater earning means greater intrinsic value of the company. Then, the stock price is largely based on the intrinsic value. So increasing intrinsic value due to increasing earning will lead to increasing stock price. Does this make sense ? Yes though it may be worth dissecting portions here. As a company generates earnings, it has various choices for what it can do with that money. It can distribute some to shareholders in the form of dividends or re-invest to generate more earnings. What you're discussing in the first part is those earnings that could be used to increase the perceived value of the company. However, there can be more than a few interpretations of how to compute a company's intrinsic value and this is how one can have opinions ranging from companies being overvalued to undervalued overall. Of Mines, Forests, and Impatience would be an article giving examples that make things a bit more complex. Consider how would you evaluate a mine, a forest or a farm where each gives a different structure to the cash flow? This could be useful in running the numbers here. |
Pay down on second mortage when underwater? | Well, I suppose it depends on your idea of a "lost cause". Are you planning to lose the house to foreclosure? If so, then yes, it's a lost cause. Don't waste your money paying down the principal. In any other scenario* you should absolutely pay down the principal to the extent that you'd pay down any loan with nearly 9% interest (in other words, moderately aggressively). The fact is, you owe someone $265,000 unless you plan on losing the home to foreclosure. You can manage the amount of interest you pay while you hold that debt by paying it down. * Short sale and bankruptcy would be special conditions as well, but not exactly the same effect as foreclosure. |
Are there Investable Real Estate Indices which track Geographical Locations? | Not to my knowledge. Often the specific location is diversified out of the fund because each major building company or real estate company attempts to diversify risk by spreading it over multiple geographical locations. Also, buyers of these smaller portfolios will again diversify by creating a larger fund to sell to the general public. That being said, you can sometimes drill down to the specific assets held by a real estate fund. That takes a lot of work: You can also look for the issuer of the bond that the construction or real estate company issued to find out if it is region specific. Hope that helps. |
taxes, ordinary income, and adjusted cost basis for RSUs | The sale of shares on vesting convolutes matters. In a way similar to how reinvested dividends are taxed but the newly purchased fund shares' basis has to be increased, you need to be sure to have the correct per share cost basis. It's easy to confuse the total RSU purchase with the correct numbers, only what remained. The vesting stock is a taxable event, ordinary income. You then own the stock at that cost basis. A sale after that is long or short term and the profit is the to extent it exceeds that basis. The fact that you got these shares in 2013 means you should have paid the tax then. And this is part two of the process. Of course the partial sale means a bit of math to calculate the basis of what remained. |
Freelancer in India working for Swiss Company | I have some more inputs to investigate: India has dual tax avoidance treaty signed with european countries so that NRIs dont pay tax in both countries. Please check if India has some agreement with Swiss Also for freelance job that is delivered from India, u need to make sure where you have to pay taxes as you are still in India so the term NRI will not hold good here. Also, if Swiss company is paying tax there, and you are a freelancer from India(resident in india) how to tax filing /rate etc has to be investigated. Also, can you apply for tax back from swiss( a portion of tax paid can be refunded eg: in Germany) but I dont know if this is true for Freelancers and also for people out side SWISS. Bip |
Meaning of reinvestment | 1) When it says "an investment or mutual fund", is a mutual fund not an investment? If no, what is the definition of an investment? A mutual fund is indeed an investment. The article probably mentions mutual funds separately from other investments because it is not uncommon for mutual funds to give you the option to automatically reinvest dividends and capital gains. 2) When it says "In terms of stocks", why does it only mention distribution of dividends but not distribution of capital gains? Since distributions are received as cash deposits they can be used to buy more of the stock. Capital gains, on the other hand, occur when an asset increases in value. These gains are realized when the asset is sold. In the case of stocks, reinvestment of capital gains doesn't make much sense since buying more stock after selling it to realize capital gains results in you owning as much stock as you had before you realized the gains. 3) When it says "In terms of mutual funds", it says about "the reinvestment of distributions and dividends". Does "distributions" not include distributions of "dividends"? why does it mention "distributions" parallel to "dividends"? Used in this setting, dividend and distribution are synonymous, which is highlighted by the way they are used in parallel. 4) Does reinvestment only apply to interest or dividends, but not to capital gain? Reinvestment only applies to dividends in the case of stocks. Mutual funds must distribute capital gains to shareholders, making these distributions essentially cash dividends, usually as a special end of year distribution. If you've requested automatic reinvestment, the fund will buy more shares with these capital gain distributions as well. |
Where can I find a company's earnings history for free? | I was going to comment above, but I must have 50 reputation to comment. This is a question that vexes me, and I've given it some thought in the past. Morningstar is a good choice for simple, well-organized financial histories. It has more info available for free than some may realize. Enter the ticker symbol, and then click either the Financials or the Key Ratios tab, and you will get 5-10 years of some key financial stats. (A premium subscription is $185 per year, which is not too outrageous.) The American Association of Individual Investors (AAII) provides some good histories, and a screener, for a $29 annual fee. Zacks allows you to chart a metric like EPS going back a long ways, and so you can then click the chart in order to get the specific number. That is certainly easier than sorting through financial reports from the SEC. (A message just popped up to say that I'm not allowed to provide more than 2 links, so my contribution to this topic will end here. You can do a search to find the Zacks website. I love StackExchange and usually consult it for coding advice. It just happens to be an odd coincidence that this is my first answer. I might even have added that aside in a comment, but again, I can't comment as of yet.) It's problem, however, that the universe of free financial information is a graveyard of good resources that no longer exist. It seems that eventually everyone who provides this information wants to cash in on it. littleadv, above, says that someone should be paid to organize all this information. However, think that some basic financial information, organized like normal data (and, hey, this is not rocket science, but Excel 101) should be readily available for free. Maybe this is a project that needs to happen. With a mission statement of not selling people out later on. The closest thing out there may be Quandl (can't link; do a search), which provides a lot of charts for free, and provides a beautiful and flexible API. But its core US fundamental data, provided by Sharadar, costs $150 per quarter. So, not even a basic EPS chart is available there for free. With all of the power that corporations have over our society, I think they could be tabulating this information for us, rather than providing it to us in a data-dumb format that is the equivalent of printing a SQL database as a PDF! A company that is worth hundreds of billions on the stock market, and it can't be bothered to provide us with a basic Excel chart that summarizes its own historical earnings? Or, with all that the government does to try to help us understand all of these investments, they cannot simply tabulate some basic financial information for us? This stuff matters a great deal to our lives, and I think that much of it could and should be available, for free, to all of us, rather than mainly to financial professionals and those creating glossy annual reports. So, I disagree that yet another entity needs to be making money off providing the BASIC transparency about something as simple as historical earnings. Thank you for indulging that tangent. I know that SE prides itself on focused answers. A wonderful resource that I greatly appreciate. |
Is this investment opportunity problematic? | Every time I have loaned money to family members I have never gotten the money back. If they can't make the down payment, they should not be taking out the loan. It's a bad idea to loan money to friends, because when they can't pay you back (which might be forever) they avoid you. So, you lose both your money and your friends. |
I cosigned for a friend who is not paying the payment | I would like to add one minor point for clarity: Cosigning means that you, alongside your friend, enter into a contract with the bank. It does not necessarily mean that you now have a contract with your friend, although that could implicitly be concluded. If the bank makes use of their contracted right to make you pay your friend's debts with them, this has no effect on your legal relationship with your friend. Of course, you can hold him or her liable for your damages he or she has caused. It is another question whether this would help you in practice, but that has been discussed before. |
I have an extra 1000€ per month, what should I do with it? | Lots of good advice on investing already. You may also want to think about two things: A Bausparvertrag. You can set this up for different monthly saving rates. You'll get a modest interest payment, and once you have saved up enough (the contract is zuteilungsreif), you will be eligible for a loan at a low rate. However, you can only use the loan for building, buying or renovating real estate. With interest rates as low as they are right now, this is not overly attractive. However, depending on your salary, you may qualify for subsidies, and these could indeed be rather attractive. This may be helpful (in German). A Riester-Rente. This is a subsidized saving scheme - you save something every year and again get subsidies at the end of the year. I think the salary thresholds where you qualify for a subsidy are a bit higher for the Riester-Rente than for a Bausparvertrag, and even if you don't qualify for a subsidy, your contributions will be deducted from your taxable income. I wouldn't invest all my leftover money in these, considering that you commit yourself for the medium to long term, but they might well be attractive options for at least part of your money, say 20-25% of what you aim at saving every month. Finally, as others have written: banks and insurance companies exist to make money, and they live off their provisions. Get an independent financial advisor you pay by the hour, who doesn't get provisions, and have him help you. |
Live in Oregon and work in Washington: Do I need to file Oregon state taxes? | Unfortunately, you are required, but most states do have agreements with neighboring states that let the states share the collected taxes without the person having to pay double taxes. So being as this is your first tax return in your current situation, you might be wise to have a professional fill it out for you this year and then next year you can use it as a template. Additionally, I really would like to see someone challenge this across state lines taxation in court. It sure seems to me that it is a inter-state tariff/duty, which the state's are expressly forbidden from doing in the constitution. |
How do I get a Tax Exemption Certificate for export from the US if I am in another country? | Depends on the state, in Texas you should charge sales tax because the shipment is going to a freight forwarder in Texas. That being said, once you have the bill of lading you can have your tax credited by the vendor. It is one of the documents the state will except in lieu of sales tax for exports. There are five. You can find this info at the Comptrollers website. I would validate that you are being charged sales/use tax and not withholding tax, withholding would be related to your country. Doc requirements for export vary from state to state. |
Condo Purchase - Tax Strategies [US] | You will need to see a tax expert. Your edited question includes the line For the short term, we will be "renting" it to my wife's grandmother at a deep discount. According to the instructions for schedule E If you rented out a dwelling unit that you also used for personal purposes during the year, you may not be able to deduct all the expenses for the rental part. “Dwelling unit” (unit) means a house, apartment, condominium, or similar property. For each property listed on line 1a, report the number of days in the year each property was rented at fair rental value and the number of days of personal use. A day of personal use is any day, or part of a day, that the unit was used by: I have no idea how this will work for Schedule C. |
Understanding the Nasdaq insider trading information | Their argument is mostly nonsense. Take someone like Tim Cook, CEO of Apple. He has a not very large salary, and makes a lot more money through stock bonuses. You would never, ever expect him to buy Apple shares. And assuming that he doesn't want to end up one day as the richest man in the cemetery, you would expect him to sell significant numbers of shares, independent on whether he expects Apple to go up or down. |
Are BIC and SWIFT code the same things? | BIC and IBANN are used in EU (and some other OECD countries) for inter bank transfers. SWIFT is used everywhere for interbank transfers. In the US - IBAN system is not (yet, hopefully) available, so you have to use SWIFT. The codes may look the same, but these are different systems. More details here. |
How to pay bills for one month while waiting for new job? | What is my best course of action, trying to minimize future debt? Minimizing expenses is the best thing you can do. The first step to financial independence is making do with less. Assuming I receive this $3500, am I better off using the bulk to pay off my credit cards, or should I keep as much cash available as I can? This would depend on the interest rate that is associated with the credit cards and the $3500. If the $3500 has a higher interest rate than your credit cards, then do not use any of it to pay your credit cards. Paying back the money you borrow hurts but it's the interest rate that does you in. If the interest rate for the $3500 is lower than the credit card interest, then placing some of it on the credit cards may be a wise course of action. But this depends on how long you are out of work. If you could be out of work for an extended period of time, I would recommend holding on to all of the funds. Note on saving I know this goes against the grain, but I would actually not recommend saving several months worth of funds (maybe one month though). Most employers offer some type of retirement savings account (401(k), Thrift Savings Plan, etc.). I contribute 5% to this fund instead of putting the money in savings. This is an especially effective strategy if your employer offers matching contributions such as mine. Because the divedends for a savings account are so low, it is not a wise place to store your money in the long run. If I had placed my Thrift Savings Plan contributions in a standard savings account, I would now be $12,000 poorer. In addition to this, most long term investment accounts allow you to withdraw the money early in case of emergency, such as being without work. (I also find it too temping to have huge amounts of funds on hand). |
Is a stock's trade size history publicly available? | My Broker and probably many Brokers provide this information in a table format under "Course of Sale". It provides the time, price and volume of each trade on that day. You could also view this data on a chart in some charting programs. Just set the interval to "Tick by Tick" and look at the volume. "Tick by Tick" will basically place a mark for every trade that is taken and then the volume will tell you the size of that trade. |
How to spend more? (AKA, how to avoid being a miser) | I agree with JoeTaxpayer's answer. The question you should be asking is not "how do I spend more" but "how do I become happier". From what you say, it may be that you could increase your happiness simply by cutting back on these aggressive attempts to save a few bucks here and there. At the same time, if you do this, on some level your personality is probably not the type that would allow to simply "forget it". I think many frugal people are somewhat as you describe: they don't like wasting money. In such cases, often what matters is not so much the actual saving money as the feeling of saving money. Therefore, I'd suggest that you take a look at which of the "money-losing" activities you mention are really worth it. The easiest ones to drop would be things like the home-improvement project, which even you acknowledge does not save you money. If you like saving money, give yourself a pat on the back when you hire the contractor. If you want, run the numbers so you can "prove" to yourself how much money you are saving by not doing the work. For some of the other things, it may be that spending time to save a small amount can "gamify" an everyday experience and make it more interesting. For instance, comparing products to save a few bucks is not necessarily bad unless you actually don't like doing it. If spending a few hours comparing two toaster ovens on Amazon or whatever makes you feel good, go for it; it's no worse than spending a few hours watching TV. By acknowledging that you get something out of it --- the feeling of getting a bargain --- and savoring that, you can feel better about, and also potentially "get it out of your system" so that you won't feel the need to do it for every little thing. We all have our little pet obsessions, and it's possible to acknowledge that they're irrational, while still accepting them as part of your personality, and finding a way to satisfy them in a controlled manner that doesn't stress you out too much. |
22-year-old inherited 30k from 529 payout - what is the best way to invest? | Also, my wealth manager doesn't like to discuss my money with me. To some extent, I understand this because finances are not my forte This is akin to porn surfing all day at your job instead of writing code, fire him ASAP. For now I would stick it in a bank account until you are comfortable and understand the investments you are purchasing. Here are some options to consider: The last one is tricky. You might have to interview several in order to find that one gem. With you being so young it is unlikely any of your friends have a need for such a service. I would concentrate on asking older work colleagues or friends of your parents for recommendations. Ask if they are educated by their adviser. In the end it would really pay for you to educate yourself about finances. No one can quite do as good as a job as you can in this area. You recognize that there was a problem with your current guy, that shows wisdom. If you have an interest in this area, I would recommend attending a Financial Peace University class. All my kids (about your age and older) are required to take it. It will help you navigate debt, mortgages, insurance, and investing and will cost you about $100. If you don't learn enough the first time, and you won't, you can repeat the course as many times as you wish for no additional cost. |
Is there a rule that a merchant must identify themself when making a charge | Obviously, the credit card's administators know who this charge was submitted by. Contact them, tell them that you don't recognize the charge, and ask them to tell you who it was from. If they can't or won't, tell them you suspect fraud and want it charged back, then wait to see who contacts you to complain that the payment was cancelled. Note that you should charge back any charge you firmly believe is an error, if attempts to resolve it with the company aren't working. Also note that if you really ghink this is fraud, you should contact your bank and ask them to issue a new card number. Standard procedures exist. Use them when appropriate. |
Putting borrowed money into an SIPP | You may have misunderstood some parts of the system. If you make a pension contribution in any given year, the tax relief is based on your income for that year - the gross pension contribution is subtracted from your gross income and you only end up paying tax based on the reduced gross income. So if the higher rate threshold is £40K, you have income for the year of £65K, and you make a gross contribution of £25K, then you'll get tax relief at 40% on the whole contribution, i.e. £10K. If your income for the year is less, e.g. £50K, then you'll get tax relief at 40% on £10K and at 20% on the other £15K, i.e. £7K. So if you're significantly into the higher-rate band, it's usually not worth making a contribution large enough to reduce you to basic-rate tax - better to wait till the next tax year for the rest. Overall, while you probably could do what you suggest subject to the caveats below, why not just spread the pension contribution over the three years, rather than making it all up front? If you are confident you can invest the money at better than the 3.4% interest on the loan, then it might make sense to borrow, but you should be pretty clear that you're deliberately borrowing to invest (otherwise known as investing with leverage). Or you might know that your income is going to drop next year. Another clarification, as your comment on another answer mentions: basic-rate tax relief is claimed directly by your pension provider ("relief at source"), whereas the higher-rate part of the relief comes straight to you via your tax return. So for the above £25K gross contribution example, you'd hand over £20K initially and then get £5K back at the end of the tax year, leaving you with £15K less in your pocket. If you did want to make a £20K net contribution and had enough higher-rate salary to cover it, the gross contribution you'd end up with would be £33,333, and you'd need to find £6,666 more temporarily. Note that there are also limits on the annual contribution you can make of £40K (the "annual allowance"), but you can carry forward allowances from three previous years so it's very unlikely to be relevant. |
Advice on strategy for when to sell | Consider trailing stop losses maybe 5% below your profit target, if you want a simplistic answer. |
What emergencies could justify a highly liquid emergency fund? | While there have been plenty of good answers I would like to suggest turning it on it's head--the problem is one of perception. Other than in terms of cash-type emergency funds (my general policy is to have enough cash to get home, however far from there I might be) I consider available credit + assets that can be liquidated reasonably quickly to count as emergency fund money. |
collateralized mortgage obligations | Say there are 5 people took loan of $100000 each. Those 5 people work in different jobs and have different capacity to payoff loan. Someone earning $40000 a year has higher risk to default on their payment then someone making $250000 a year. As Bank wants to sell this CDO to investor but how would investor know what the risk factor for this CDO is. This is where rating agency comes in picture. They apparently look at the underlying asset and assign rating to this CDO say AAA, B, AA etc which give investor idea of underlying risk. Problem here is rating agency gets paid by Bank to rate their CDO. So if a rating agency starts rating their CDO to higher risk Bank will go to next agency round the corner to get better rating and agency will lose commission. You can see the problem here. Now if people start struggling to pay loan, bank will not get money and it cannot pay CDO holders. If house that was worth $100000 when CDO was created is devalued to say $50000 today the underlying asset is not worth as much when CDO was sold. That is what happened when market crashed in 2008 and GFC hit. |
Is it bad etiquette to use a credit or debit card to pay for single figure amounts at the POS | A lot of stores, especially smaller ones, won't accept card payments under $10.00. They pay a fee for taking cards and for small transactions it is not worth it. |
Is this legal: going long on call options and artificially increasing the price of the underlying asset seconds before expiration? | Despite the fact that I think there is a litany of inaccuracies and misunderstandings related to quoted price and transaction price and the way prices move and assets transact; if you were able to, under these extremely narrow and very unlikely conditions, affect the prices of these assets that would be market manipulation in the eyes of the SEC. Link to the SEC page about market manipulation. |
60% Downpayment on house? | Voluntarily assuming a loan is a bad idea, especially for a non-investment purpose. It would be one thing to take on a loan to operate a business or buy a piece of capital equipment, like a machine that would make you money. Borrowing money to have a more luxurious house is foolish. The smart move is to buy a good quality home that will meet your needs for as little as possible. Having $800,000 leaves a quit a bit of leeway in that department. You don't say where you live, but if this occurred in my area (eastern Massachusetts) I would buy a house for $500,000 and then invest the remaining $300,000. If I lived in the California bay area, it might be necessary to spend the whole $800,000. Either way there should be no need to borrow money. Also, if you buy a house for cash, often you can get a substantially better deal than if you have to involve a bank. Not owing anyone money is a huge psychological advantage in business and in life in general. View being debt-free as a springboard to success and happiness. |
What's best investment option? Mutual fund or Property [duplicate] | nan |
What actions should I be taking to establish good credit scores for my children? | My son who is now 21 has never needed me to cosign on a loan for him and I did not need to establish any sort of credit rating for him to establish his own credit. One thing I would suggest is ditch the bank and use a credit union. I have used one for many years and opened an account there for my son as soon as he got his first job. He was able to get a debit card to start which doesn't build credit score but establishes his account work the credit union. He was able to get his first credit card through the same credit union without falling work the bureaucratic BS that comes with dealing with a large bank. His interest rate may be a bit higher due to his lack of credit score initially but because we taught him about finance it isn't really relevant because he doesn't carry a balance. He has also been able to get a student loan without needing a cosigner so he can attend college. The idea that one needs to have a credit score established before being an adult is a fallacy. Like my son, I started my credit on my own and have never needed a cosigner whether it was my first credit card at 17 (the credit union probably shouldn't have done that since i wasn't old enough to be legally bound), my first car at 18 or my first home at 22. For both my son and I, knowing how to use credit responsibly was far more valuable than having a credit score early. Before your children are 18 opening credit accounts with them as the primary account holder can be problematic because they aren't old enough to be legally liable for the debt. Using them as a cosigner is even more problematic for the same reason. Each financial institution will have their own rules and I certainly don't know them all. For what you are proposing I would suggest a small line of credit with a credit union. Being small and locally controlled you will probably find that you have the best luck there. |
What are the differences between an investment mortgage and a personal mortgage? | According to my wife who used to work in the industry, since an investment mortgage is more likely to fail (they are just riskier) there are higher loan to value requirements and higher interest rates. They are just different products for different situations. |
What is the best way to invest in gold as a hedge against inflation without having to hold physical gold? | Investing in gold without having physical gold is not really a hedge against inflation. GLD is really more for speculation, not protection against serious inflation. If there is any kind of inflation worth really protecting yourself against then one thing you will notice at its onset is a divergence in the price of physical and GLD; with GLD offering very little protection if any against inflation. Ultimately holders of GLD will demand physical metal and the physical price will rise and the paper price will fall. I would advise you to study physical gold before you purchase GLD for that reason. EDIT: Just adding this to my answer - I don't know why I didn't put it in before, and I hasten to add that I'm not an expert though a little investigation will show you that this is at least one option for owning gold. If you think of having the physical gold yourself at one end of the spectrum and buying GLD at the other; so that you don't need to take physical delivery, there is another scenario which I understand is in between (and sorry I don't actually know what it's referred to as) but it's where you buy the physical gold but instead of taking delivery the bars are stored for you in a vault - these bars are numbered and you actually own what you have paid for and theoretically you could go and visit your gold and actually remove it because it's your gold - as opposed to having paper GLD which in my understanding is a "right to take physical delivery" of gold - and this is slightly different - of course unlike GLD you actually have to pay a storage fee and of course unlike having the physical gold buried in your garden or something you are not entirely secure against say a robbery of the vault, and you are also depending on the company not to sell the same bar to more than one person - but that's the only think that their reputation is built on, and a company like that would live or die by the reputation - ( and of course you might lose the proverbial gold buried in the garden either, so nothing's 100% secure anyway really ) |
Can capital expenses for volunteer purposes be deducted from income? | I would suggest to buy your own printer, and calculate the cost for a page including the wear to the printer. Then either deduce these printing expenses, or ask the charity to reimburse you. This is not much different than when you would go to a copyshop, those easily charge 10-30c per page, with your own printer you can probably get it around 5-10c per page, including paper, toner, drum, and amortization. The advantage is that when you do use the printer for other purposes, you wont get into any problems with who owns the printer or deductions. |
Incorporating, issuing stock and evaluating it | No. Mark-to-market valuation relies on using a competitive market of public traders to determine the share price --- from free-market trading among independent traders who are not also insiders. Any professional valuation would see through the promotional nature of the share offer. It is pretty obvious that the purchaser of a share could not turn around and sell their share for $10, unless the 'free hosting' that is worth most of the $10 follows it... and that's more of hybrid of stock and bond than pure stock. It is also pretty obvious that selling a few shares for $10 does not mean one could sell 10,000,000 shares for $10, because of the well known decreasing marginal value effect from economics. While this question seems hypothetical, as a practical matter offering to sell share of unregistered securities in a startup for $10 to the general public, is likely to run afoul of state or federal securities laws -- irregardless of the honesty of the business or any included promotional offers. See http://www.sec.gov/info/smallbus/qasbsec.htm for more information about the SEC regulations for raising capital for small businesses. |
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