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Cash flow implications of converting primary mortgaged residence to rental
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You are assuming 100% occupancy and 100% rent collection. This is unrealistic. You could get lucky and find that long term tenant with great credit that always pays their bills... but in reality that person usually buys a home they do not rent long term. So you will need to be prepared for periods of no renters and periods of non payment. The expenses here I would expect could wipe out more than you can make in "profit" based on your numbers. Have you checked to find out what the insurance on a rental property is? I am guessing it will go up probably 200-500 a year possibly more depending on coverage. You will need a different type of insurance for rental property. Have you checked with your mortgage provider to make sure that you can convert to a rental property? Some mortgages (mine is one) restrict the use of the home from being a rental property. You may be required to refinance your home which could cost you more, in addition if you are under water it will be hard to find a new financier willing to write that mortgage with anything like reasonable terms. You are correct you would be taking on a new expense in rental. It is non deductible, and the IRS knows this well. As Littleadv's answer stated you can deduct some expenses from your rental property. I am not sure that you will have a net wash or loss when you add those expenses. If you do then you have a problem since you have a business losing money. This does not even address the headaches that come with being a landlord. By my quick calculations if you want to break even your rental property should be about 2175/Month. This accounts for 80% occupancy and 80% rental payment. If you get better than that you should make a bit of a profit... dont worry im sure the house will find a way to reclaim it.
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What is the difference between trading and non-trading stock?
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A non-trading stock or non-marketable security or unlisted security is one that does not trade continually on an exchange. For tax purposes, this can mean a whole new ball of wax which I would prefer the experts address with an edit to this answer or a new answer. For financial accounting purposes, this is when, say, one owns shares in an unlisted corporation and should be treated very carefully less one delude oneself. For trading stock, the value can be known immediately by checking any valid data provider's price and marking to market. For non-trading stock, the value has to be "marked to model". This can get one into Enron sized trouble. In this case, it's best to either leave the value of the stock at the purchase price and recognize gains upon sale, use a price from another honest transaction by third parties which are most likely difficult to attain, or to use some shorthand measure like applying the market P/E. Be wary of strangely high figures for value from the purchase price by using a market average, and don't throw away the shares just yet if a strangely low one arises. This method can lead to strange results.
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Foreign currency conversion for international visitors to ecommerce web site?
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You probably can get away with only updating the exchange rates once a day and specify that any prices quoted in units other than your home currency are estimates only. If you're planning to accept more than one currency as payment, I'd (a) see about whatever regulations there are for doing so, and (b) build in a nice spread for yourself if you're allowed to, since it is a service you're providing to your customers. If you Google currency converter the first result is just that: a currency converter.
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60% Downpayment on house?
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I put about that down on my place. I could have purchased it for cash, but since my investments were returning more interest than the loan was costing me (much easier to achieve now!), this was one of the safest possible ways of making "leverage" work for me. I could have put less down and increased the leverage, but tjis was what I felt most comfortable with. Definitely make enough of a down payment to avoid mortgage insurance. You may want to make enough of a down payment that the bank trusts you to handle your property insurance and taxes yourself rather than insisting on an escrow account and building that into the loan payments; I trust myself to mail the checks on time much more than I trust the bank. Beyond that it's very much a matter of personal preference and what else you might do with the money.
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What is the true value, i.e. advantages or benefits, of building up equity in your home?
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Taking out your equity when refinancing means that you take out a new loan for the full value of your house (perhaps less 20% as a down payment on the new mortgage, otherwise you'll be paying insurance), pay off your old lender, and keep the rest for yourself. The result is much the same as using as a HELOC or home equity loan (or a second mortgage), except it's all rolled into a single new mortgage. The advantage is that the interest rate on a first mortgage is going to be lower than on HELOC or equivalent, and the equity requirements may be lower (e.g. a HELOC may only let you borrow against the amount of equity that exceeds 25% or 30%, while a new mortgage will require you only to have 20% equity). This is especially attractive to those whose homes have appreciated significantly since they bought them, especially if they have a lot of high-interest debt (e.g. credit cards) they want to pay off. Of course, rolling credit card debt into a 30-year mortgage isn't actually paying it off, but the monthly payments will be a lot lower, and if you're lucky and your home appreciates further, you can pay it off fully when you sell the property and still have paid a lot less interest. The downside is that you have turned unsecured debt into secured debt, which puts your home at risk if you find yourself unable to pay. In your case, you don't yet have even 20% equity in your home, so I wouldn't recommend this. :-) Equity is simply the difference between the amount you still owe on your home and the amount you'd get if you were to sell it. Until you do sell it, this amount is tentative, based on the original purchase price and, perhaps, an intervening appraisal that shows that the property has appreciated. That is really all that it is and there's nothing magic about it, except that since you own your home, you have equity in it, while as a renter, you would not. It used to be (decades ago, when you needed 20% down to get a mortgage) that selling was the only time you'd be able to do anything with the equity in your home. Now you can "take it out" as described above (or borrow against it) thanks to various financial products. It is sometimes tempting to consider equity roughly equivalent to "profit." But some of it is your own money, contributed through the down payment, your monthly principal payment, and improvements you have made -- so "cashing out" isn't all profit, it's partly just you getting your own money back. And there are many additional expenses involved in owning a home, such as interest, property taxes, maintenance, utilities, and various fees, not to mention the commissions when you buy or sell, which the equity calculation doesn't consider. Increasing equity reflects that you own a desirable property in a desirable location, that you have maintained and maybe even improved it, that you are financially responsible (i.e., paying your mortgage, taxes, etc.), and that your financial interests are aligned with your neighbors. All those things feel pretty good, and they should. Otherwise, it is just a number that the banks will sometimes let you borrow against. :-)
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How can I invest my $100?
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Yes, it is. Got to start somewhere. Typically directly through a company itself. Check out this site that lists a bunch of them and their minimum requirements. Not many only accept $100 but there are a few. ie. ACTIVEnergy Income Fund, CIBC, COMPASS Income Fund, Suncor Energy Inc. and a few others.
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How much can I withdraw from Betterment and be considered long-term investment?
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No matter what, you owe taxes on the gains, known as capital gains. How much, depends on how long you invested it for. In your example, each month is treated separately - each month you contribute starts a new clock on that set of investments. If you hold it for longer than a year, the taxes are treated as long-term, and less than a year is short-term. Short term taxes are at your marginal rate, and long term taxes are different, usually 15%. https://www.irs.gov/taxtopics/tc400/tc409
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Source of income: from dividends vs sale of principal or security
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All that it is saying is that if you withdraw money from your account it doesn't matter whether it has come from dividends or capital gains, it is still a withdrawal. Of course you can only withdraw a capital gain if you sell part of the assets. You would only do this if it was the right time for you to sell the asset.
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Ray Dalio - All Weather Portfolio
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Here are the specific Vanguard index funds and ETF's I use to mimic Ray Dalio's all weather portfolio for my taxable investment savings. I invest into this with Vanguard personal investor and brokerage accounts. Here's a summary of the performance results from 2007 to today: 2007 is when the DBC commodity fund was created, so that's why my results are only tested back that far. I've tested the broader asset class as well and the results are similar, but I suggest doing that as well for yourself. I use portfoliovisualizer.com to backtest the results of my portfolio along with various asset classes, that's been tremendously useful. My opinionated advice would be to ignore the local investment advisor recommendations. Nobody will ever care more about your money than you, and their incentives are misaligned as Tony mentions in his book. Mutual funds were chosen over ETF's for the simplicity of auto-investment. Unfortunately I have to manually buy the ETF shares each month (DBC and GLD). I'm 29 and don't use this for retirement savings. My retirement is 100% VSMAX. I'll adjust this in 20 years or so to be more conservative. However, when I get close to age 45-50 I'm planning to shift into this allocation at a market high point. When I approach retirement, this is EXACTLY where I want to be. Let's say you had $2.7M in your retirement account on Oct 31, 2007 that was invested in 100% US Stocks. In Feb of 2009 your balance would be roughly $1.35M. If you wanted to retire in 2009 you most likely couldn't. If you had invested with this approach you're account would have dropped to $2.4M in Feb of 2009. Disclaimer: I'm not a financial planner or advisor, nor do I claim to be. I'm a software engineer and I've heavily researched this approach solely for my own benefit. I have absolutely no affiliation with any of the tools, organizations, or funds mentioned here and there's no possible way for me to profit or gain from this. I'm not recommending anyone use this, I'm merely providing an overview of how I choose to invest my own money. Take or leave it, that's up to you. The loss/gain incured from this is your responsibility, and I can't be held accountable.
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where to get stock price forecast
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I believe you are looking for price forecasts from analysts. Yahoo provides info in the analyst opinions section: here is an example for Apple the price targets are located in the "Price Target Summary" section.
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If throwing good money after bad is generally a bad idea, is throwing more money after good Ok?
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Is investing more money into a stock that you already have a stake, in which has gone up in price a good idea? What you describe here is a good idea when the stock keeps up-trending. The way to do it is say you have originally bought $1000 worth of shares, then the next purchase you buy $500 worth, then $250 worth. It is called pyramiding into your trades. However, this system would not be the best with simply a buy and hold when you keep holding even if the price starts freefalling. You would need to have a trailing stop loss on your initial trade, and then as you buy each additional trade your trailing stop loss would incorporate the additional trade and move to a level where if you get stopped out you will make an overall profit. With each additional trade your trailing stop will move higher and higher for higher protected profits. The whole point behind pyramid trading is to keep buying more of a stock that keeps performing well to increase your profits. However, each additional purchase is half the previous one so that you don't eat too much into existing profits (in the case of the uptrend reversing) and so as to not overcapitalise on the one stock. So you are using part of your existing profits in an attempt to make more profits.
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ESPP: Share vs Payroll withholding
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Note that you're asking about withholding, not about taxing. Withholding doesn't mean this is exactly the tax you'll pay: it means they're withholding a certain amount to make sure you pay taxes on it, but the tax bill at the end of the year is the same regardless of how you choose to do the withholding. Your tax bill may be higher or lower than the withholding amount. As far as tax rate, that will be the same regardless - you're just moving the money from one place to the other. The only difference would be that your tax is based on total shares under the plan - meaning that if you buy 1k shares, for example, at $10, so $1,500 discounted income, if you go the payroll route you get (say) $375 withheld. If you go the share route, you either get $375 worth of stock (so 38 shares) withheld (and then you would lose out on selling that stock, meaning you don't get quite as much out of it at the end) or you would ask them to actually buy rather more shares to make up for it, meaning you'd have a slightly higher total gain. That would involve a slightly higher tax at the end of it, of course. Option 1: Buy and then sell $10000 worth, share-based withholding. Assuming 15% profit, and $10/share at both points, then buy/sell 1000 shares, $1500 in profit to take into account, 38 shares' worth (=$380) withheld. You put in $8500, you get back $9620, net $1120. Option 2: Buy and then sell $13500 worth, share based withholding. Same assumptions. You make about $2000 in pre-tax profit, meaning you owe about $500 in tax withholding. Put in $11475, get back $13000, net $1525. Owe 35% more tax at the end of the year, but you have the full $1500 to spend on whatever you are doing with it. Option 3: Buy and then sell $1000 worth, paycheck withholding. You get the full $10000-$8500 = $1500 up front, but your next paycheck is $375 lighter. Same taxes as Option 1 at the end of the year.
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Bid-Ask at market open, which comes first? [duplicate]
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When you place a limit sell order of $10.00 (for a stock on an option) you are adding your order to the book. Anyone who places a buy at-the-market or with a limit price over $10.00 will have that order immediately fulfilled through the offer you have placed on the book. On the other hand, if that other person places a buy for $8.00, then the spread will now be "$8.00 bid, $10.00 ask". Priority is based on first the price (all $9.99 asks will clear before $10.00) and within each bucket this is based on the time your order was submitted. This is why in bidding markets (including eBay) buying at $x.01 is way better than $x.00 and selling at $x.99 is better than $(x+1).00. Source: https://en.wikipedia.org/wiki/Order_(exchange) under "first-come-first-served"
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Sole proprietorship or LLC?
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The primary advantage is protection of your personal assets. If your LLC gets sued, they can't take your house/car/dog/wife. There aren't really any financial incentives to be an LLC; because of the pass-thru taxing structure, you wind up paying the same in taxes either way. "The cost" will depend on where you're located, and usually involves a few factors -- Expect to pay $300-500 to start it, depending on your state and who you register with (technically, you can usually register for free at the secretary of state, but wouldn't you rather pay an expert?), and "State Franchise Tax", which will can be a minimum of up to $1000/year depending on the state, plus even more if your LLC earns more than $xxx,000. EDIT -- As an aside, I'll mention that I'm based in California, and our state franchise tax starts at $800/yr. I'm all-web-based, so I've been investigating incorporating in Nevada or Delaware instead (no franchise tax, lower filing fees), but from what I've found, it's hardly worth the trouble. In addition to having to pay a Registered Agent (someone to act as my permanent mailing address in that state for ~$100/yr), apparently California likes to search for people just like me, and charge them $800 anyway. You can fight that, of course, and claim that your business really is done in Nevada, but do you really want to?
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When would one actually want to use a market order instead of a limit order?
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After learning about things that happened in the "flash crash" I always use limit orders. In an extremely rare instance if you place a market order when there is a some glitch, for example some large trader adds a zero at the end of their volume, you could get an awful price. If I want to buy at the market price, I just set the limit about 1% above the market price. If I want to sell, I set the limit 1% below the market price. I should point out that your trade is not executed at the limit price. If your limit price on a buy order is higher than the lowest offer, you still get filled at the lowest offer. If before your order is submitted someone fills all offers up to your limit price, you will get your limit price. If someone, perhaps by accident, fills all orders up to twice your limit price, you won't end up making the purchase. I have executed many purchases this way and never been filled at my limit price.
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How to reconcile these contradictory statements about the effect of volume on stock price?
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These statements aren't necessarily contradictory. In the first case, investors are bearish because they anticipate selling in the future (because all the interested buyers have bought, so all that remains in the short run are people willing to sell and therefore drive down the price). In the second case, the trend is strengthened because the increase in volume indicates that the price movement interested a lot of traders. The trend could be bullish or bearish. The statements aren't contradictory because the second case could very well lead to the first case. For example, if an increase in price is coupled with an increase in volume, this could indicate that the positive trend is strengthening (second case). Traders are becoming more interested in the price move, so they buy. However, once all of the traders who are willing to enter the market long do so, we're in the first case. Investors realize that all of the traders who were interested in buying have bought, so they become bearish because they expect selling to start soon.
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Strategy for investing large amount of cash
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What you put that money into is quite relevant. It depends on how soon you will need some, or all, of that money. It has been very useful to me to divide my savings into three areas... 1) very short term 'oops' funds. This is for when you forget to put something in your budget or when a monthly bill is very high this month. Put this money into passbook savings. 2) Emergency funds that are needed quite infrequently. Used for such things as when you go to the hospital or an appliance breaks down. Put this money in higher yeald savings, but where it can be accessed. 3) Retirement savings. Put this money into a 401-K. Never draw on it till you retire. Make no loans against it. When you change jobs roll over into a self-directed IRA and invest in an ETF that pays dividends. Reinvest the dividend each month. So, like I said, where you put that money depends on how soon you will need it.
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Strategies for saving and investing in multiple foreign currencies
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If you want to use that money and maybe don't have the time to wait a few years if things should go bad, than you will definitely want to hold a good bunch of your money in the currency you buy most stuff with (so in most cases the currency of the country you live in) even if it is more volatile.
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A good investment vehicle for saving for a mortgage down payment?
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Assuming this'll be a taxable account and you're an above-average wage earner, the following seem to be biggest factors in your decision: tax-advantaged income w/o retirement account protection - so I'd pick a stock/stocks or fund that's designed to minimize earnings taxable at income and/or short-term gains rates (e.g. dividends) declining risk profile - make sure you periodically tweak your investment mix over the 2-3 year period to reduce your risk exposure. You want to be near savings account risk levels by the end of your timeline. But make sure you keep #1 in mind - so probably don't adjust (by selling) anything until you've hit the 1-year holding mark to get the long-term capital gains rates. In addition to tax-sensitive stock & bond funds at the major brokerages like Fidelity, I'd specifically look at tax-free municipal bond funds (targeted for your state of residence) since those generally pay better than savings on after tax basis for little increase in risk (assuming you stick w/ higher-rated municipalities).
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Does U.S. tax code call for small business owners to count business purchases as personal income?
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Expenses are where the catch is found. Not all expenditures are considered expenses for tax purposes. Good CPAs make a comfortable living untangling this sort of thing. Advice for both of your family members' businesses...consult with a CPA before making big purchases. They may need to adjust the way they buy, or the timing of it, or simply to set aside capital to pay the taxes for the profit used to purchase those items. CPA can help find the best path. That 10k in unallocated income can be used to redecorate your office, but there's still 3k in taxes due on it. Bottom Line: Can't label business income as profit until the taxes have been paid.
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If throwing good money after bad is generally a bad idea, is throwing more money after good Ok?
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I have heard that investing more money into an investment which has gone down is generally a bad idea*. "Throwing good money after bad" so to speak. Is investing more money into a stock, you already have a stake in, which has gone up in price; a good idea? Other things being equal, deciding whether to buy more stocks or shares in a company you're already invested in should be made in the same way you would evaluate any investment decision and -- broadly speaking -- should not be influenced by whether an existing holding has gone up or down in value. For instance, given the current price of the stock, prevailing market conditions, and knowledge about the company, if you think there is a reasonable chance that the price will rise in the time-period you are interested in, then you may want to buy (more) stock. If you think there is a reasonable chance the price will fall, then you probably won't want to buy (more) stock. Note: it may be that the past performance of a company is factored into your decision to buy (e.g was a recent downturn merely a "blip", and long-term prospects remain good; or have recent steady rises exhausted the potential for growth for the time being). And while this past performance will have played a part in whether any existing holding went up or down in value, it should only be the past performance -- not whether or not you've gained or lost money -- that affects the new decision. For instance: let us suppose (for reasons that seemed valid at the time) you bought your original holding at £10/share, the price has dropped to £2/share, but you (now) believe both prices were/are "wrong" and that the "true price" should be around £5/share. If you feel there is a good chance of this being achieved then buying shares at £2, anticipating they'll rally to £5, may be sound. But you should be doing this because you think the price will rise to £5, and not because it will offset the loses in your original holding. (You may also want to take stock and evaluate why you thought it a good idea to buy at £10... if you were overly optimistic then, you should probably be asking yourself whether your current decisions (in this or any share) are "sound"). There is one area where an existing holding does come into play: as both jamesqf and Victor rightly point out, keeping a "balanced" portfolio -- without putting "all your eggs in one basket" -- is generally sound advice. So when considering the purchase of additional stock in a company you are already invested in, remember to look at the combined total (old and new) when evaluating how the (potential) purchase will affect your overall portfolio.
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Do I need to register as self employed in Ontario, Canada?
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If your business name is your name, you are automatically considered a sole-proprietorship and any income you generate and expenses you incur can be calculated on your personal tax return. You can use QuickTax Home & Business tax software to lead you through the steps; you don't even need an accountant. One drawback of a sole-proprietorship in your name is liability. You are personally responsible for the business because you are the business. If you get sued, you can lose everything. To limit that liability you can look into opening a corporation. If the corporation gets sued you are insulated from that; the corporation goes bankrupt, not you. A lawyer and an accountant will be required to give you solid advice on this direction.
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I got my bank account closed abruptly how do I get money out?
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If you can get to a physical branch, get a cashier's check (or call them and have them send you one by mail). When they draft the cashier's check they remove the money from your account immediately and the check is drawn against the bank itself. You could hold onto that check for a little while even after your account closes and you make other arrangements for banking. If you cannot get a cashier's check, then you should try to expeditiously open a new account and do an ACH from old to new. This might take more days to set up than you have left though.
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Return of value to shareholders in an ISA
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You will receive a combination of Verizon shares and cash whether you chose option B or C. Option B means that your "Return of Value" will be treated as capital - ie: as a capital gain. Option C means that your "Return of Value" will be treated as income - ie: as a dividend. As your ISA has favourable tax status, you don't end up paying any capital gain tax or income tax on dividend income. So it won't matter which option you chose.
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What happens if my order exceeds the bid or ask sizes?
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You should check with your broker. I asked my broker a similar question just 2 weeks ago. With their market orders they will be filled within 3 points from the current market bid/ask. If there is any remaining it will be placed as a limit order at 3 points away from the bid/ask price. For example, if the current ask is 100 @ $1.00 followed by 500 @ $1.01, 300 @ $1.02 and 100 @ $1.03; if you were to place a buy market order for 1000 shares you would get 100 filled at $1.00, 500 filled at $1.01, 300 filled at $1.02 and 100 filled at $1.03. If, on the other hand, you were to place a buy market order for 2000 shares you would get 100 filled at $1.00, 500 filled at $1.01, 300 filled at $1.02 and 100 filled at $1.03, with the remaining 1000 of your order being placed as a limit order at $1.03. Again, check with your broker, as they may be different in how they treat their market orders.
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Theoretically, if I bought more than 50% of a company's stocks, will I own the company?
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You'll own whatever fraction you bought. To own the company (as in, boolean - yes or no) you need to buy 100% of the outstanding stock. RE controlling the company, in general the answer is yes - although the mechanism for this might not be so straight forward (ie. you may have to appoint board members and may only be able to do so at pre-set intervals) and there may be conditions in the company charter designed to stop this happening. Depending on your jurisdiction certain ownership percentages can also trigger the need to do certain things so you may not be able to just buy 50% - in Australia when you reach 20% ownership you have to launch a formal takeover bid.
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15 year mortgage vs 30 year paid off in 15
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Consider the "opportunity cost" of the extra repayment on a 15 year loan. If you owe money at 30% p.a. and money at 4% p.a. then it is a no brainer that the 30% loan gets paid down first. Consider too that if the mortgage is not tax deductable and you pay income tax, that you do not pay tax on money you "save". (i.e. in the extreme $1 saved is $2 earned). Forward thinking is key, if you are paying for someone's college now, then you would want to pay out of an education plan for which contributions are tax deductable, money in, money out. In my country most mortgages, be they 15,25,30 years tend to last 6-8 years for the lender. People move or flip or re-finance. I would take the 15 for the interest rate but only if I could sustain the payments without hardship. Maybe a more modest home ? If you cannot afford the higher repayments you are probably sailing a bit close to the wind anyway. Another thing to consider is that tax benefits can be altered with the stroke of a pen, but you may still have to meet repayments.
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How do you save money on clothes and shoes for your family?
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I speak as a person without kids, but I'll give this a shot anyway, using my memory of the perspective I had when I was a kid. My advice is, if the kids are young enough to not care much, don't be afraid of the thrift store. My parents got a bunch of clothes from the thrift store as I was growing up (around elementary school age) and I didn't care at all. When I got to be older, (middle school age) shopping at Target and K-mart didn't seem bad either. By the time the kids are old enough to really care beyond, they are probably old enough to get their own part-time jobs and get their own clothing. I however, am probably naive, as I still care little for such things, and judging from popular culture, most care about them a great deal.
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Does gold's value decrease over time due to the fact that it is being continuously mined?
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Like anything else, the price/value of gold is driven by supply and demand. Mining adds about 2% a year to the supply. Then the question is, will the demand in a given year rise by more or less than 2%. ON AVERAGE, the answer is "more." That may not be true in any given year, and was untrue for whole DECADES of the 1980s and 1990s, when the price of gold fell steadily. On the other hand, demand for gold has risen MUCH more than 2% a year in the 2000s, for reasons discussed by others. That is seen in the six-fold rise in price, from about $300 an ounce to $1800 an ounce over the past ten years.
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What do people mean when they talk about the central bank providing “cheap money”? What are the implications for the stock market?
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There are a couple of different things that could be referenced by "cheap money": The money supply itself - This is the Federal Reserve printing more money which could devalue the existing US dollars and thus make the dollars even cheaper since there would be more of them. Interest rates - Currently in the US interest rates are rather low which means that borrowers could possibly get good rates on that money thus making it relatively cheap. Compare current interest rates to the early 1980s and there is a major difference. In terms of implications on the stock market, there are a couple that come to my mind: Investment options - With low interest rates, cash and bonds aren't necessarily yielding that much and thus some people may be more likely to invest elsewhere with stocks being an option. Thus, there may be some people that would rather invest in stocks than hold their investments in lower-yielding options. Corporate spending - If rates stay low, then for companies with good financial track records, they could borrow money to expand operations rather than sell more stock and thus there may be companies that borrow to grow so that they take advantage of these interest rates.
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Is it inadvisable to leave a Roth IRA to charity upon death?
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You need to keep in mind that there's an exemption amount of more than $5M (five million) dollars for estate tax. Unless you used all of it for gifts during your life time, it will more than cover all of your $70K estate, so there's no need in any additional planning. As to Roth vs Traditional IRA - if you want to leave something to your siblings, leave them the Roth. Why would you give the taxable income to your siblings when you can give them the nontaxable one? Charities are tax exempt anyway.
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Is an interest-only mortgage a bad idea?
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Generally, interest-only mortgages are a bad idea, because a lot of people get them so that they can buy more house than they could otherwise afford (lower payment = affordable, in their minds). If the house continues to go up in value, they probably get away with it, because when the balance becomes due, they can refinance. However, the last few years has shown how risky that strategy can be, and this kind of things is what cost a lot of people their houses. In your case, if the house is something you could afford on a regular 15 or 30-year mortgage, and you really are as disciplined as you say you are, you might get away with it. But you have to take into account the risk, and consider what happens if there is a job loss or similar difficulty in the future. Another thing to consider is the term of the mortgage. How many years will you get this lower interest rate? Interest rates are at historic lows right now, and pretty much everyone thinks they're going up soon. You might be better off locking in a higher rate for 15 years.
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Does FHA goes hand in hand with PMI ?
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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.
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Do Americans really use checks that often?
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I know this an old thread, but one that caught my interest as I just moved to the USA from Australia. As per the OP I had never written a check in my whole life, and upon arriving in the US I was surprised as to their proliference. In Australia pretty much all bills you receive can be paid in a number of ways: For small amounts between friends cash is probably used most, but for larger amounts direct transfer is popular. Your friend/landlord will give you their bank account number and BSB number, which identifies their bank, and then you transfer the money in. We don't have a SSN like some other countries. Cheques are still used by some however, esp by the older generations. Now that I'm in the US initially I had tried to set up direct transfer to pay my rent however the bank has a $1000 daily transfer limit. I contacted the bank to get this increased however I was informed that this limit applies to ALL accounts at the bank. I asked how do people pay their rents with this low limit and was told that most people used cheques. (This explains the strange look I got from my landlord when I asked for their bank account details so I could pay the rent!) I now have some bills to pay here and I use online banking. You enter the biller's name and address and then the bank actually prints off a cheque and posts it to the biller on your behalf! My first couple of pays here were also cheques, which were the first actual "paychecks" I had ever received.
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What is the options industry changing about option symbols in February, 2010?
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Here is what I could find on the net: http://education.wallstreetsurvivor.com/options-symbol-changes-coming-february-12th-2010 So it sounds like it does not affect how you invest in options but only how you look them up. I remember using a Bloomberg terminal and it wasn't clear what the expiry date of the option you were looking at was. It looks like the new quote system addresses this. HTH.
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Buy securities at another stock exchange
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In a simple statement, no doesn't matter. Checked on my trade portal, everything lines up. Same ISIN, same price(after factoring in FX conversions, if you were thinking about arbitrage those days are long gone). But a unusual phenomenon I have observed is, if you aren't allowed to buy/sell a stock in one market and try to do that in a different market for the same stock you will still not be allowed to do it. Tried it on French stocks as my current provider doesn't allow me to deal in French stocks.
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How much life insurance do I need?
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If I remember the information in "The Wealthy Barber" correctly, he said: And as someone once said to me, "make sure you're worth more alive than dead!" :-)
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Where can I find accurate historical distribution data for mutual funds?
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In the case of a specific fund, I'd be tempted to get get an annual report that would disclose distribution data going back up to 5 years. The "View prospectus and reports" would be the link on the site to note and use that to get to the PDF of the report to get the data that was filed with the SEC as that is likely what matters more here. Don't forget that mutual fund distributions can be a mix of dividends, bond interest, short-term and long-term capital gains and thus aren't quite as simple as stock dividends to consider here.
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Do my 401k/Roth accounts benefit from compounding?
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You might be confusing two different things. An advantage of investing over a long term is the compounding of returns. Those returns can be interest, dividends, or capital gains. The mix between them depends on what you invest it and how you invest in it. This advantage applies whether your investment is in a taxable brokerage account or in a tax-advantaged 401K or IRA. So, start investing early so that you have longer for this compounding of returns to happen. The second thing is the tax deferral you get from 401(k) or IRAs. If you invest in a ordinary taxable account, then you have to pay taxes on your interest and dividends for the year in which they occur. You also have to pay taxes on any capital gains which you realize during the year. These yearly tax payments are then money that you don't get the benefit of compounding on. With 401(k) and IRAs, you don't have to pay taxes during these intermediate years.
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Wash sales and year end tax implications
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Yes, the net effect is zero. If you own zero shares by Nov 30, for example, and don't buy any more shares by 12/31, the year is done, and nothing left to account for.
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Are low commission trading sites safe?
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I have used TradeKing for a couple of years now and love it. It really is a great site. They hold an IRA trading account for me and have been helpful in rolling money into that account, and with answering the occasional question. Previously I have used Scottrade and found that TradeKing is a much better value.
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How can I determine if leaving a lower paying, tax advantaged, job for a higher paying one makes sense financially?
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It looks like a coin toss. What you have isn't bad at all. If you have enough free time with your $50k job to do extra stuff on the side, you can use that time to build a business. You're obviously a go-getter type, so this might suit you. Which job is closer to your calling? All other things being equal, the more fulfilling job should win, no?
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Why should the P/E ratio of a growth stock match its percentage earnings growth rate?
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To perhaps better explain the "why" behind this rule of thumb, first think of what it means when the P/E ratio changes. If the P/E ratio increases, then this means the stock has become more expensive (in relative terms)--for example, an increase in the price but no change in the earnings means you are now paying more for each cent of earnings than you previously were; or, a decrease in the earnings but no change in the price means you are now paying the same for less earnings. Keeping this in mind, consider what happens to the PE ratio when earnings increase (grow)-- if the price of the stock remains the same, then the stock has actually become relatively "cheaper", since you are now getting more earnings for the same price. All else equal, we would not expect this to happen--instead, we would expect the price of the stock to increase as well proportionate to the earnings growth. Therefore, a stock whose PE ratio is growing at a rate that is faster than its earnings are growing is becoming more expensive (the price paid per cent of earnings is increasing). Similarly, a stock whose PE ratio is growing at a slower rate than its earnings is becoming cheaper (the price paid per cent of earnings is decreasing). Finally, a stock whose P/E ratio is growing at the same rate as its earnings are growing is retaining the same relative valuation--even though the actual price of the stock may be increasing, you are paying the same amount for each cent of the underlying company's earnings.
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How does owning a home and paying on a mortgage fit into family savings and investment?
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Like @littleadv, I don't consider a mortgage on a primary residence to be a low-risk investment. It is an asset, but one that can be rather illiquid, depending on the nature of the real estate market in your area. There are enough additional costs associated with home-ownership (down-payment, insurance, repairs) relative to more traditional investments to argue against a primary residence being an investment. Your question didn't indicate when and where you bought your home, the type of home (single-family, townhouse, or condo) the nature of your mortgage (fixed-rate or adjustable rate), or your interest rate, but since you're in your mid-20s, I'm guessing you bought after the crash. If that's the case, your odds of making a profit if/when you sell your home are higher than they would be if you bought in the 2006/2007 time-frame. This is no guarantee of course. Given the amount of housing stock still available, housing prices could still fall further. While it is possible to lose money in all sorts of investments, the illiquid nature of real estate makes it a lot more difficult to limit your losses by selling. If preserving principal is your objective, money market funds and treasury inflation protected securities are better choices than your home. The diversification your financial advisor is suggesting is a way to manage risk. Not all investments perform the same way in a given economic climate. When stocks increase in value, bonds tend to decrease (and vice versa). Too much money in a single investment means you could be wiped out in a downturn.
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Tax considerations for outsourcing freelance work to foreign country
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I took littleadv's advice and talked to an accountant today. Regardless of method of payment, my US LLC does not have to withhold taxes or report the payment as payments to contractors (1099/1042(S)) to the IRS; it is simply a business expense. He said this gets more complicated if the recipient is working in the US (regardless of nationality), but that is not my case
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What are some time tested passive income streams?
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Renting a house out using a management company is mostly passive income. Earning affiliate income from companies that pay on a recurring basis is closer to passive income.
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Is there a “standard deduction” for Line 5 on Schedule A of Federal taxes?
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The $10,400 is in the question, in two pieces. His employer withheld $8000, and her employer withheld $2400. Thus they paid together $10,400 in income taxes, which are deductible if you itemize deductions and choose income taxes over sales taxes (you can deduct one or the other). There's nothing "standard" about the amount, though it is standard to take the income tax deduction (almost always higher than sales tax).
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How to share income after marriage and kids?
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Some basic thoughts, mostly on fairness. I guess the answer doesn't really fit this site, it's more about ethics, but this fits the question which isn't really just about money either. So when both work the same amount, it seems appropriate that both get the same mount of money, doesn't it? That is, the scheme of (as already contained in your question and in some other answers) is fair by this logic. Pay attention to hidden money: for example the one who works more for money might automatically get a pension funded this way. This is hidden money which already goes to only one partner, so when dividing equally, you'll need to take that into account (or just include "equal pensions for both" in the family's needs directly).
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What tax can I expect on US stocks in a UK ISA?
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See my answer here What is the dividend tax rate for UK stock The only tax from US stocks you'd need to worry about would be dividend withholding tax of 30%. If you contact your ISA provider they should be able to provide you with a W8-BEN form so that you can have this rate reduced to 15%. Just because there's a tax treaty does not mean you will automatically be charged 15% - you must provide a W8-BEN form and renew it when it expires. That last 15% is unfortunately unavoidable. If you were paying any UK taxes you could claim that 15% as a discount against your UK dividend tax liability, but as your US stock would be wrapped in an ISA there's no UK tax to pay which means no tax to reclaim from the tax treaty. Other than DWT though, you will pay absolutely no tax on US stocks held in an ISA to either the US or UK government.
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How to measure how the Australian dollar is faring independent of the US dollar
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What you want is the average change in rate of the Australian Dollar against multiple other currencies, to even out the effect of moves in a single other currency. People often look at the trade-weighted exchange rate to get an idea of this, as it allows you to look at the currencies that are most relevant, rather than every tiny other currency having an equal weight.
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Making $100,000 USD per month, no idea what to do with it
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Your #1 problem is the Government both in it's form as a taxation outfit and as a 'law and order' outfit. You'd be very surprised at how fast a bank seizes your bank account in response to a court order. Purchase 100 Mexican 50 Peso Gold (1.2 oz/ea). These coins are cheap (lowest cost to get into) and will not be reportable on sale to taxing authorities. That money is out of the banking system and legal system(s). Do not store them in a bank! You need to find a tax strategist, probably a former IRS agent / CPA type. With the rest remaining money... There's an old saying, Don't fight the Fed. As well as "The trend is your friend". So, the Fed wants all savers fully invested right now (near 0 interest rates). When investing, I find that if you do exactly opposite what you think is the smart thing, that's the best thing. Therefore, it follows: 1) Don't fight the Fed 2) Do opposite of smart 3) Do: Fight the Fed (and stay 100% out of the market and in cash) We're looking like Japan so could remain deflationary for decades to come. Cash is king...
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Are Index Funds really as good as “experts” claim?
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The point of buying an index fund is that you don't have to pick winners. As long as the winners are included in the index fund (which can include far more than 500 stocks), you benefit on average because of overall upward historical market performance. Picking only the top 50 capitalized stocks in the S&P 500 does not guarantee you will successfully track the S&P 500 index because the stocks in the tail can account for an outsized amount of overall growth; the top 50 stocks by market capitalization change over time, and these stocks are not necessarily the stocks that perform better. As direct example, the 10 year average annual return for the S&P top 50 is 4.52%, while the 10 year average annual return for the S&P 500 is 5.10%. Issues of trading and balancing to maintain these aside, these indices are not the same.
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How risky is it to keep my emergency fund in stocks?
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Keeping your “big emergency” fund in stocks if you have 12 months income saved is OK. However you should keep your “small emergency” fund in cash. (However I find that even my stock broker accounts have some cash in them, as I like to let the dividends build up enough to make the dealing charges worthwhile. You don’t wish to be forced to sell at a bad time due to your boiler needing replacing or your car breaking down. However if you lost your job in the same week that your boiler broke down and your car needed replacing then being forced to sell stocks at a bad time is not much of an issue. Also if you are saving say 1/3 of your income each month and you have a credit card with large unused credit limit that is paid of each month, then most “small emergency” that are under 2/3 of your monthly income can be covered on the credit card with little or no interest charges. One option is to check you bank balance on the day after you are paid, and if it is more than 2x your monthly income, then move some of it to long term savings, but only if you tend to spend a lot less then you earn most months.
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Why do put option prices go higher when the underlying stock tanks (drops)?
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There are two components of option valuation, the value that's "in the money" and the "time value." In the case of the $395 put, that option was already in the money and it will move less than the stock price by a bit as there will still be some time value there. $22.52 is intrinsic value (the right word for 'in the money') and the rest is time. The $365 strike is still out of the money, but as jldugger implied, the chance of it going through that strike is better as it's $6.66 closer. Looking at the options chain gives you a better perspective on this. If Apple went up $20 Monday, and down $20 Tuesday, these prices would be higher as implied volatility would also go higher. Now, I'd hardly call a drop of under 2% "tanking" but on the otherhand, I'd not call the 25% jump in the option price skyrocketing. Options do this all the time. Curious what prompted the question, are you interested in trading options? This stock in particular?
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Do I have to repay the First-Time Homebuyers tax credit if I refinance?
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No. As long as you live in the house for 3 years, it's yours to keep. Financing has nothing to do with that.
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How much more than my mortgage should I charge for rent?
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Your reasoning is backwards. As others have pointed out, you cannot just decide how much you charge irrespective of the market. Let me paraphrase a little economics 101 to underline why you also should not think like this: You can see a rental property like your house (the same reasoning is usually explained with the example of hotel rooms) as a series of perishable goods. Your house represents the potential sale of the January rent (which perishes once January is over), plus the February rent etc. Your approach was to compute the total costs (all fixed and variable costs of owning that house as well as costs associated to renting specifically) and average them over the time period so that you know how much to ask at least. Assuming that you are only looking to rent it out, not sell it or let a family member live there, you can't think like this. Most of those costs that you averaged are what economists call sunk costs. You have already incurred the mortgage costs and they are not affected by your decision to rent or not to rent. These costs are irrelevant to your decision making process. You only need to think about marginal costs: those additional costs that you have when you rent but not when you don't. Look at the market prices for renting similar properties in that region and compare them with your marginal costs. As long as they are higher than your marginal costs, rent it out. This does not mean that you are sure to make profits, but it means that you are sure to make less losses than in your only alternative of not renting.
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Are investor's preference for dividends justified?
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Some investors (pension funds or insurance companies) need to pay out a certain amount of money to their clients. They need cash on a periodical basis, and thus prefer dividend paying stock more.
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“Business day” and “due date” for bills
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You definitely have an argument for getting them to reverse the late fee, especially if it hasn't happened very often. (If you are late every month they may be less likely to forgive.) As for why this happens, it's not actually about business days, but instead it's based on when they know that you paid. In general, there are 2 ways for a company to mark a bill as paid: Late Fees: Some systems automatically assign late fees at the start of the day after the due date if money has not been received. In your case, if your bill was due on the 24th, the late fee was probably assessed at midnight of the 25th, and the payment arrived after that during the day of the 25th. You may have been able to initiate the payment on the company's website at 11:59pm on the 24th and not have received a late fee (or whatever their cutoff time is). Suggestion: as a rule of thumb, for utility bills whose due date and amount can vary slightly from month to month, you're usually better off setting up your payments on the company website to pull from your bank account, instead of setting up your bank account to push the payment to the company. This will ensure that you always get the bill paid on time and for the correct amount. If you still would rather push the payment from your bank account, then consider setting up the payment to arrive about 5 days early, to account for holidays and weekends.
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How much time would I have to spend trading to turn a profit?
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It depends on how you define trading. If you're looking at day-trading, where you're probably going to be in a highly-leveraged position for minutes or hours, the automated traders are probably going to kill you. But, if you have a handful (less than a dozen) equities, and spend about an hour or so every week conducting research, you have a good chance of doing pretty well. You need to understand the market, listen to the earnings calls, and understand the factors that contribute to the bottom line of your investments. You should not be trading for the sake of trading, you're trading to try to achieve the best returns. Beware of dogmatists and people selling products that align with their dogma. Warren Buffet invests in companies for an extremely long investment window. Mr. Buffet also expends significant resources to gain a deep understanding of the fundamentals of the businesses that he invests in and the factors affecting those fundamentals. Buffet does not buy an S&P 500 index fund and whistle dixie.
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Everyone got a raise to them same amount, lost my higher pay than the newer employees
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The same thing happened to me when I worked retail during my college years. I agree that it is unfair however, it is what it is. With that being said, there may be several factors that you should consider: the new employees might have more experience or qualifications then you, your work performance based on your manager's perspective, and like in my situation when I worked retail, I started out as a cashier which get paid less than sales associates but when I moved to a sales associate position I still got paid less and when I got my raise I got the same pay a new sales associate would get. I suggest you suck it up and ride it through until you get a real job because in retail, in my opinion, you are expendable, if you don't like their pay they will find someone else.
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I'm in Australia. What should I look for in an online stock broker, for trading mostly on the ASX?
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It depends what you want to do with them. If you are just simply going to drip-feed into pre-identified shares or ETFs every few months at the market price, you don't need fancy features: just go with whoever is cheaper. You can always open another account later if you need something more exotic. Some brokerages are associated with banks and that may give you a benefit if you already deal with that bank: faster transfers (anz-etrade), or zero brokerage (westpac brokerage on westpac structured products.) There's normally no account fee so you can shop around.
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Is it legal if I'm managing my family's entire wealth?
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My answer is with respect to the United States. I have no idea about India's regulatory environment. You are opening yourself up to massive liabilities and problems if you deposit their money in your account. I managed investment accounts as a private investment advisor for years (those with less than 15 clients were not required to register) until Dodd-Frank changed the rules. Thus you would have to register as an advisor, probably needing to take the series 65 exam (or qualifying some other way, e.g. getting your CFP/CFA/etc...). I used a discount broker/dealer (Scottrade) as the custodian. Here's how it works: Each client's account was their own account, and I had a master account that allowed me to bill their accounts and manage them. They signed paperwork making me the advisor on their account. I had very little accounting to handle (aside from tracking basis for taxed accounts). If you take custody of the money, you'll have regulatory obligations. There are always lots of stories in the financial advisor trade publications about advisors who go to jail for screwing their clients. The most common factor: they took custody of the assets. I understand why you want a single account - you want to ensure that each client gets the same results, right? Does each client want the same results? Certainly the tax situation for each is different, yes? Perhaps one has gains and wants to take losses in one year, and the other doesn't. If their accounts are managed separately, one can take losses while the other realizes gains to offset other losses. Financial advisors offer these kinds of accounts as Separately Managed Accounts (SMAs). The advisors on these kinds of accounts are mutual funds managers, and they try to match a target portfolio, but they can do things like realize gains or losses for clients if their tax situation would prefer it. You certainly can't let them put retirement accounts into your single account unless the IRS has you on their list of acceptable custodians. I suggest that you familiarize yourself thoroughly with the regulatory environment that you want to operate under. Then, after examining the pros and cons, you should decide which route you want to take. I think the most direct and feasible route is to pass the Series 65, register as an investment advisor, and find a custodian who will let you manage the assets as the advisor on the account. Real estate is another matter, you should talk to an attorney, not some random guy on the internet (even if he has an MBA and a BS in Real Estate, which I do). This is very much a state law thing.
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Should I consolidate loans and cards, or just cards, leaving multiple loans?
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My answer is similar to Ben Miller's, but let me make some slightly different points: There is one excellent reason to get a consolidation loan: You can often get a lower interest rate. If you are presently paying 19% on a credit card and you can roll that into a personal loan at 13.89%, you'll be saving over 5%, which can add up. I would definitely not consolidate a loan at 12.99% into a loan at 13.89%. Then you're just adding 1% to your interest rate. What's the benefit in this? Another good reasons for a consolidation loan is psychological. A consolidation loan with fixed payments forces you to pay that amount every month. You say you have trouble with credit cards. It's very easy to say to yourself, "Oh, just this month I'm going to pay just the minimum so I can use my cash for this other Very Important Thing that I need to buy." And then next month you find something else that you just absolutely have to buy. And again the next month, and the next, and your determination to seriously pay down your debt keeps getting pushed off. If you have a fixed monthly payment, you can't. You're committed. Also, if you have many credit cards, juggling payments on all of them can get complex and confusing. It's easy to lose track of how much you owe and to budget for payments. At worst, when there are many bills to pay you may forget one. (Personally I now have 3 bank cards, an airline card, and 2 store cards, and managing them is getting out of hand. I have good reasons for having so many cards: the airline card and the store cards give me special discounts. But it's confusing to keep track of.) As to adding $3,000 to the consolidation loan: Very, very bad idea. You are basically saying, "I have to start seriously paying down my debt ... tomorrow. Today I need a some extra cash so I'm going to borrow just a little bit more, but I'm going to get started paying it off next month." This is a trap, and the sort of trap that leads people into spiraling debt. Start paying off debt NOW, not at some vague time in the future that never seems to come.
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Which credit card is friendliest to merchants?
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From experience, Mastercard and Visa charge vendors about the same (around 2%-5%) while American Express and Diners Club are astonishingly expensive (6%-10%) and you'll find that few small retailers are very comfortable accepting these. The variation comes from the volume of trade that vendors provide. A big retailer will negotiate a very low rate while smaller businesses will be hit with higher charges.
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What publicly available software do professional stock traders use for stock analysis?
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Factset also provides a host of tools for analysis. Not many people know as they aren't as prevalent as Bloomberg. CapitalQ and Thomson Reuters also provide analysis tools. Most of the market data providers also provide analysis tools to analyze the data they and others provide.
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Bonus issue - Increasing share capital
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This is what is called "stock dividend". In essence the company is doing a split, the difference is in financial accounting and shouldn't concern you much as an individual investor. "Fully paid up", in this context, probably means "unconditioned", aka fully vested.
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ESPP (Employee Stock Purchase Plan) Funds on Mortgage Loan Application
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The problem is that you don't have the money now; so they can't know with 100% certainty that you will have it on settlement day. What happens if you don't file the paperwork in time? or you change your mind because you think the company stock is going to go through the roof next quarter? They would have to pull the funding for the loan. The seller would be upset, and could even file for damages if the deal falls through. It could even snowball because if they delay the sale then they can't buy the new place, which impacts another closing... Frequently lenders want to see the money for the down payment long before settlement. They want to know the money is there, and it isn't a hidden loan. While you can point to the money in the ESPP, they would still like to see the money in a regular bank account. Even if you do convince them to delay their evaluation you can count on being asked to prove the existence of the funds in the days before closing, or they will delay giving the loan.
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Does an option trading below parity always indicate an arbitrage opportunity?
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Defining parity as "parity is the amount by which an option is in the money", I'd say there may be an arbitrage opportunity. If there's a $50 strike on a stock valued at $60 that I can buy for less than $10, there's an opportunity. Keep in mind, options often show high spreads, my example above might show a bid/ask of $9.75/$10.25, in which case the last trade of $9.50 should be ignored in favor of the actual ask price you'd pay. Mispricing can exist, but in this day and age, is far less likely.
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Why is it possible to just take out a ton of credit cards, max them out and default in 7 years?
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I should apply for everything I can on the same day, get approved for as many as I can First it may not sound as easy. You may hardly get 2-3 cards and not dozens. Even if you submit the applications the same day; If you still plan this and somehow get too many cards, and draw huge debt, then the Banks can take this seriously and file court case. If Banks are able to establish the intent; this can get constituted as fraud and liable for criminal proceedings. So in short if someone has the money and don't want to pay; the court can attach the wage or other assets and make the person pay. If the intent was fraud one can even be sent to jail.
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Should I sell a 2nd home, or rent it out?
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If it was me, I would sell the house and use the proceeds to work on/pay off the second. You don't speak to your income, but it must be pretty darn healthy to convince someone to lend you ~$809K on two homes. Given this situation, I am not sure what income I would have to have to feel comfortable. I am thinking around 500K/year would start to make me feel okay, but I would probably want it higher than that. think I can rent out the 1st house for $1500, and after property management fees, take home about $435 per month. That is not including any additional taxes on that income, or deductions based on repair work, etc. So this is why. Given that your income is probably pretty high, would something less than $435 really move your net worth needle? No. It is worth the reduction in risk to give up that amount of "passive" income. Keeping the home opens you up to all kinds of risk. Your $435 per month could easily evaporate into something negative given taxes, likely rise in insurance rates and repairs. You have a great shovel to build wealth there is no reason to assume this kind of exposure. You will become wealthy if you invest and work to reduce your debt.
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Gap in domestic Health Insurance coverage, expect higher premiums?
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I bought Health Insurance for myself after a period without it, and my premiums were not terrible. I was a 27 year old man, living in California, no preexisting conditions, and I paid approximately 90$ a month. This was for a standard Health Insurance plan. However, when I moved back to NY a little while later, insurance companies wanted almost $500/month for catastrophic coverage. So, from personal experience, my answer is that price varies widely by state. Different states have different regulations as to what Health Insurance Companies need to cover and at what price. In NY, Health Insurance companies can't charge different rates according to age. Also, in NY, there is a price spiral, where the price is so high, few people buy it, so they have to raise the price because not enough well people are in the pool, so fewer people buy it.... To test it out, go to an online insurance broker, like ehealthinsurace, and put in your proposed information, including that you haven't been covered for a period. This way you will know.
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When I ask a broker to buy stock, what does the broker do?
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My answer isn't a full one, but that's because I think the answer depends on, at minimum, the country your broker is in, the type of order you place (limit, market, algo, etc.,) and the size of your order. For example, I can tell from watching live rates on regular lot limit orders I place with my UK-based broker that they hold limit orders internally until they see a crossing rate on the exchange my requested stock is trading on, then they submit a limit order to that exchange. I only get filled from that one exchange and this happens noticeably after I see my limit price print, and my fills are always better than my limit price. Whereas with my US-based broker, I can see my regular lotsize limit order in the order book (depth of book data) prior to any fills. I will routinely be notified of a fill before I see the limit price print. And my fills come from any number of US exchanges (NYSE, ARCA, BATS, etc.) even for the same stock. I should point out that the "NBBO" rule in the US, under SEC regulation NMS, probably causes more complications in handling of market and limit orders than you're likely to find in most countries.
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I am looking for software to scan and read receipts
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Scanning receipts is easy and any decent scanner will do a good job for you. The difficult part is the software that 'extracts' the data. Today there is no software that can do this really well because there is just too great a range of receipts (e.g. handwritten receipts, receipts in foreign languages, etc.). For this reason services like Shoeboxed (in the US) and Receipt Bank (in Europe) are very popular. (Added disclosure: Michael Wood's profile web site link indicates he is associated with Receipt Bank.)
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The formula equivalent of EBITDA for personal finance?
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This should not be taken to be financial advice or guidance. My opinions are my own and do not represent professional advice or consultation on my part or that my employer. Now that we have that clear... Your idea is a very good one. I'm not sure about the benefits of a EBITDA for personal financial planning (or for financial analysis, for that matter, but we will that matter to the side). If you have a moderate (>$40,000) income, then taxes should be one the largest, if not the largest chunk of your paycheck out the door. I personally track my cash flow on a day-by-day basis. That is to say, I break out the actual cash payments (paychecks) that I receive and break them apart into the 14 day increments (paycheck/14). I then take my expenses and do the same. If you organize your expenses into categories, you will receive some meaningful numbers about your daily liquidity (i.e: cash flow before taxes, after taxes, cash flow after house expenses, ect) This serves two purposes. One, you will understand how much you can actually spend on a day-to-day basis. Second, once you realize your flexibility on a day-to-day basis, it is easy to plan and forecast your expenses.
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Can I deduct interest and fees on a loan for qualified medical expenses?
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IRS Publication 502: Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. Loan interest and fees do not meet this definition. Your loan interest and fees are a cost of the payment method you chose (a loan), not a cost of medical treatment. The IRS makes clear where loan interest is deductible. Publication 936 discusses home mortgage interest deductions, and Publication 970 specifically discusses student loan interest deductions. Considering Publication 502's definition of a medical expense, combined with the absence of a publication discussing medical expense loan interest deductions, one must conclude that medical loan interest and fees are not deductible.
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Solo-401k interaction with employer sponsored 401k. Limits of contribution from Schedule C income
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Alright, team! I found answers to part 1) and part 2) that I've quote below, but still need help with 3). The facts in the article below seem to point to the ability for the LLC to contribute profit sharing of up to 25% of the wages it paid SE tax on. What part of the SE tax is that? I assume the spirit of the law is to only allow the 25% on the taxable portion of the income, but given that I would have crossed the SS portion of SE tax, I am not 100%. (From http://www.sensefinancial.com/services/solo401k/solo-401k-contribution/) Sole Proprietorship Employee Deferral The owner of a sole proprietorship who is under the age of 50 may make employee deferral contributions of as much as $17,500 to a Solo 401(k) plan for 2013 (Those 50 and older can tack on a $5,500 annual catch-up contribution, bringing their annual deferral contribution to as much as $23,000). Solo 401k contribution deadline rules dictate that plan participant must formally elect to make an employee deferral contribution by Dec. 31. However, the actual contribution can be made up until the tax-filing deadline. Pretax and/or after-tax (Roth) funds can be used to make employee deferral contributions. Profit Sharing Contribution A sole proprietorship may make annual profit-sharing contributions to a Solo 401(k) plan on behalf of the business owner and spouse. Internal Revenue Code Section 401(a)(3) states that employer contributions are limited to 25 percent of the business entity’s income subject to self-employment tax. Schedule C sole-proprietors must base their maximum contribution on earned income, an additional calculation that lowers their maximum contribution to 20 percent of earned income. IRS Publication 560 contains a step-by-step worksheet for this calculation. In general, compensation can be defined as your net earnings from self-employment activity. This definition takes into account the following eligible tax deductions: (1) the deduction for half of self-employment tax and (2) the deduction for contributions on your behalf to the Solo 401(k) plan. A business entity’s Solo 401(k) contributions for profit sharing component must be made by its tax-filing deadline. Single Member LLC Employee Deferral The owner of a single member LLC who is under the age of 50 may make employee deferral contributions of as much as $17,500 to a Solo 401(k) plan for 2013 (Those 50 and older can tack on a $5,500 annual catch-up contribution, bringing their annual deferral contribution to as much as $23,000). Solo 401k contribution deadline rules dictate that plan participant must formally elect to make an employee deferral contribution by Dec. 31. However, the actual contribution can be made up until the tax-filing deadline. Pretax and/or after-tax (Roth) funds can be used to make employee deferral contributions. Profit Sharing Contribution A single member LLC business may make annual profit-sharing contributions to a Solo 401(k) plan on behalf of the business owner and spouse. Internal Revenue Code Section 401(a)(3) states that employer contributions are limited to 25 percent of the business entity’s income subject to self-employment tax. Schedule C sole-proprietors must base their maximum contribution on earned income, an additional calculation that lowers their maximum contribution to 20 percent of earned income. IRS Publication 560 contains a step-by-step worksheet for this calculation. In general, compensation can be defined as your net earnings from self-employment activity. This definition takes into account the following eligible tax deductions: (i) the deduction for half of self-employment tax and (ii) the deduction for contributions on your behalf to the Solo 401(k). A single member LLC’s Solo 401(k) contributions for profit sharing component must be made by its tax-filing deadline.
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Reconciling transactions reimbursing myself for expenses as self-employed (UK)
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Any money that ScottMcGready gives to the company is a personal loan that must be repaid by the company at some point without tax consequences. Any money that the company gives to ScottMcGready is either salary (Scott pays income tax, company counts this as cost), or a dividend (Scott pays dividend tax), or a loan (Scott must repay the loan).
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Why can Robin Hood offer trading without commissions?
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Robinhood does offer premium products that they charge for-I suspect we will see more of that in the future. They do not change the bid/ask spread as some have said because they have to give you the NBBO.
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How many days does Bank of America need to clear a bill pay check
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My bank's bill payment system saves nothing more than writer's cramp and stamps. When a paper check is required they mail it, but it's drawn on my account just as if I'd written it out by hand and mailed it myself. There is no "temporary account", and at the time of month when I take care of the bills, my balance oscillates up and down depending on what's cleared and what hasn't. I'm going back to mailing checks because it saves a day or two of time between payment initiation and check clearing, which sucks. And electronic payments aren't much better. It recently took about five days for a payment to my car insurance company to be processed--and the amount is finalized and subtracted in the bank's website only after clearance. I can't know what I have without balancing the account every. frigging. time. IIRC bill payment systems were a lot more seamless and user friendly when they first became widespread.
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Good book-keeping software?
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You can try manager.io. It has a desktop, cloud and server edition that should fit your needs.
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Should I buy a home or rent in my situation?
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First, let me mention that the reasons mentioned this far for renting are excellent ones. But, I disagree. Second, I would like to mention that I'm just a regular Joe, not an accountant, or a realtor. That said, I was in a similar situation not that long ago. I ended up renting, but I wish I hadn't. You should check out the "offers" in your area. You seem like you're willing to compromise on a more standard, or older home. If that is the case and you are willing to "settle" for an older town-home, or something similar, it might be in your best interest to do so. In my area for instance, the urban areas are becoming a bit crowded. This is good news for the people who already own homes in those urban areas, but bad news for people who are looking to rent an apartment (which tend to be located in urban areas) or buy a house in these urban areas. The reason I say that is simple; there is only one thing there will never be more of: land. If people are moving into these areas, and there is limited room to build structures, the demand is going up while the supply is unable to keep up. This means an increase in prices. BUT, this can also be used to your advantage. As the demand for those urban areas goes up, the rural areas around the urban areas are likely to be subsidized. For instance, near me, if you're willing to be 20 minutes from the nearest Walmart and you have a 550+ credit score and a stable income, you're able to acquire a government subsidized loan with 0% down. (I would recommend dropping at least SOMETHING, however, if possible.) Apartments of the size your family is going to require are going to be expensive. People who own apartment buildings are looking to make the most money per square foot. This means most apartment complexes are going to be filled with 1-2 bedroom apartments, but have very few if any 3+ bedroom apartments. (Again, this is my general experience, but it may be different where you're living.) I suspect the apartment your family is going to need is going to end up being very expensive, especially if people are moving into your town. You might consider trying to get a lower-quality house as apposed to a rare and large apartment for a few pretty obvious reasons: Don't misunderstand me, though. A lot of people get infatuated with the idea of being a home owner, and end up getting into something they will never be able to maintain, and if that happens it's something that's going to follow you for the rest of your life. As for your student loans, if you NEED to and you qualify you can apply for hardship. This would mean that you don't have to pay anything, or pay a reduced rate for some arbitrary approved amount of time, or until some arbitrary circumstance is met. However, do not take this lightly. While doing this might not necessarily accrue interest (depending on whether or not your loans were subsidized or unsubsidized and a host of other factors it might actually halt interest) these loans will follow you even into bankruptcy. Meaning if you get your student loans postponed and end up losing the house anyway, you have to make a fresh start with a bankruptcy AND student loans on your back. Furthermore, you can't count your chickens before they hatch, and neither will the banks. A big part of qualifying for a loan is your proof of income. If you haven't had that steady job for 6 months to a year or more, you're going to have a tough time getting a loan. Suppose your wife-to-be DOES start making that income...it's still not going to make a difference to the banks until they can say that it's not just a month long fling. Last, after reading all this I want to tell you that I am BIAS. I happened to miss the opportunity I'm explaining to you now, and that affects what I think you should do in this situation. Weigh the options carefully and objectively. Talk to your fiance. Talk to your friends, parents, anyone who is close with you. Come to an educated decision, rather than the decision that might be more exciting, or the one you WISH you could take. Good luck.
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Personal loan to a friend procedure
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If this isn't a case where you would be willing to forgive the debt if they can't pay, it's a business transaction, not a friend transaction. Establish exactly what the interest rate will be, what the term of the loan is, whether periodic payments are required, how much is covered by those payments vs. being due at the end of the term as a balloon payment, whether they can make additional payments to reduce the principal early... Get it all in writing and signed by all concerned before any money changes hands. Consider having a lawyer review the language before signing. If the loan is large enough that it might incur gift taxes, then you may want to go the extra distance to make it a real, properly documented, intra-family loan. To do this you must charge (of at least pay taxes on) at least a certain minimal interest rate, and they have to make regular payments (or you can gift them the payments but you still won't up paying tax on the interest income). In this case you definitely want a lawyer to draw up the papers, I think. There are services on the web Antioch specialize in helping to set this up properly, and which offer services such as bookkeeping and monthly billing (aT extra cost) to make it less hassle for the lender. If the loan will be structured as a mortgage on the borrower's house -- making the interest deductible for the borrower in the US -- there are additional forms that need to be filled. The services can help with that too, for appropriate fees. Again, this probably wants experts writing the agreement, to make sure it's properly written for where you and the borrower live. Caveat: all the above is assuming USA. Rules may be very different elsewhere. I've done a formal intractability mortgage -- mostly to avoid gift tax -- and it wasn't too awful a hassle. Your mileage will vary.
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Do Americans really use checks that often?
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When you start at a new job here in the U.S., the default means of payment is usually a paper check. Most folks will quickly set up direct deposit so that their employer deposits their paycheck directly into their personal bank account - the incentive to do so is that you receive your funds faster than if you deposit a paper check. Even if you set up direct deposit on your first day on the job, you may still receive your first paycheck as a paper check simply because the wheels of payroll processing turn slowly at some (large) companies. A counter example is a self-employed contractor - perhaps a carpenter or house painter. These folks are paid by their customers, homeowners and such. Many larger, well established contracters now accept credit card payments from customers, but smaller independents may be reluctant to set up a credit card merchant account to accept payment by card because of all the fees that are associated with accepting credit card payments. 3% transaction fees and monthly service fees can be scary to any businessman who already has very thin profit margins. In such cases, these contractors prefer to be paid by check or in cash for the simple reason that there are no fees deducted from cash payments. There are a few folks here who don't trust direct deposit, or more specifically, don't trust their employer to perform the deposit correctly and on time. Some feel uncomfortable giving their bank info to their employer, fearing someone at the company could steal money from their account. In my experience, the folks who prefer a paper paycheck are often the same folks who rush to the bank on payday to redeem their paychecks for cash. They may have a bank account (helps with check cashing) but they prefer to carry cash. I operate in a manner similar to you - I use a debit card or credit card (I only have one of each) for nearly all transactions in daily life, I use electronic payments through my bank to pay my regular bills and mortgage, and I receive my paycheck by direct deposit. There have been periods where I haven't written or received paper checks for so long that I have to hunt for where I put my checkbook! Even though I use a debit card for most store purchases, the bank account behind that debit card is actually a checking account according to the bank. Again, the system defaults to paper checks and you have the option of going electronic as well. Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day laborer who expect to work for a different person each day or week. I don't think this is all that unique to the US. There are people in every city and country who don't have long-term employment with a single employer and therefore prefer cash or paper check over electronic payments. I'd be willing to bet that this applies to the majority of people on the planet, actually.
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Historical stock prices: Where to find free / low cost data for offline analysis?
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You may refer to project http://jstock.sourceforge.net. It is open source and released under GPL. It is fetching data from Yahoo! Finance, include delayed current price and historical price.
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An online casino owes me money and wants to pay with a wire transfer. Is this safe?
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I have won a large amount of money on an online casino. How reputed is the company? Have you done any research around it? It has taken 2 months for me to see any payouts. Last week I received $2300 check from them. Did you win everything in the same period? If so there is no reason why they sent you a smaller check of $2300 instead of the full amount. This should raise a red flag. Why would someone write multiple checks. The only valid reason is you won in different months. The payout for first month was $2300 and they sent a check. The payout for next month is large amount ... the request for Bank Details. that they would rather wire me the money and they are asking for my banking account number and routing number. Although giving bank account number and routing has some risks. This is the fundamental information that is need to make a credit to your account directly. You would be giving this to quite a few entities / people. In most countries, this information is printed on every check that you write from your account. Is this safe? Or am I stupid for even considering this? Online world is full of traps and this could be a scam. So proceed with extreme caution. Insist of check. In worst case open a different savings account, that does not allow direct debits, does not have over draft, etc. Use this to receive money and move it into your regular account.
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Are Index Funds really as good as “experts” claim?
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Simply put, you cannot deterministically beat the market. If by being informed and following all relevant news, you can arrive at the conclusion that company A will likely outperform company B in the future, then having A stocks should be better than having B stocks or any (e.g., index based) mix of them. But as the whole market has access to the very same information and will arrive at the same conclusion (provided it is logically sound), "everybody" will want A stocks, which thus become expensive to the point where the expected return is average again. Your only options of winning this race are to be the very first to have the important information (insider trade), or to arrive at different logical conclusions than the rest of the world (which boils down do making decisions that are not logically sound - good luck with that - or assuming that almost everybody else is not logically sound - go figure).
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How an ETF pays dividend to shareholders if a holding company issues dividend
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Join me for a look at the Quote for SPY. A yield of 1.82%. So over a year's time, your $100K investment will give you $1820 in dividends. The Top 10 holdings show that Apple is now 3% of the S&P. With a current dividend of 2.3%. Every stock in the S&P has its own different dividend. (Although the zeros are all the same. Not every stock has a dividend.) The aggregate gets you to the 1.82% current dividend. Dividends are accumulated and paid out quarterly, regardless of which months the individual stocks pay.
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Buying an option in the money, at the money, or out of the money
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I look for buying a call option only at the money, but first understand the background above: Let's suppose X stock is being traded by $10.00 and it's January The call option is being traded by $0.20 with strike $11.00 for February. (I always look for 2% prize or more) I buy 100 stocks by $10.00 each and sell the option, earning $0.20 for each X stock. I will have to deliver my stocks by $11.00 (strike value agreed). No problem for me here, I took the prize plus the gain of $1.00. (continuing from item 3) I still can sell the option for the next month with strike equal or higher than that I bought. For instance, I can sell a call option of strike $10.00 and it might be worth to deliver stocks by $10.00 and take the prize. (continuing from item 3) Probably, it won't be possible to sell a call option with strike at the price that I paid for the stock, but that's not a problem. At the end of the option life (in February), the strike was $11.00 but the stock's price is $8.00. I got the $0.20 as prize and my stocks are free for trade again. I'll sell the call option for March with strike $9.00 (taking around 2% of prize). Well, I don't want to sell my stocks by $9.00 and make loss, right? But I'm selling the call option anyway. Then I wait till the price of the stock gets near the strike value (almost ATM) and I "re-buy" the option sold (Example: [StockX]C9 where C means month = March) and sell again the call option with higher strike to April (Example [StockX]D10, where D means month = April) PS.: At item 9 there should be no loss between the action of "re-buy" and sell to roll-out to the next month. When re-buying it with the stock's price near the strike, option value for March (C9) will be lower than when selling it to April (D10). This isn't any rule to be followed, this is just a conservative (I think they call it hedge) way to handle options and stocks. Few free to make money according to your goals and your style. The perfect rule is the one that meet your expectation, don't take the generalized rules too serious.
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Opportunity to buy Illinois bonds that can never default?
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If you give money to a person or entity, and they don't have the ability to pay you back, it doesn't matter if they are legally required to pay you.
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I'm currently unemployed and have been offered a contract position. Do I need to incorporate myself? How do I do it?
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Do you need to incorporate? This depends on whether the company prefers you to be incorporated. If you are going through a recruiting company, some of them are willing to deal with non-incorporated people (Sole Proprietor) and withhold taxes from your cheques for you. If you do want to incorporate, you can do it yourself, go through a paralegal, or you can even do it online. I did mine in Ontario for about $300 (no name search - i just have a numbered corporation like 123456 Ontario Inc.) through www.oncorp.com - there are other sites that do it as well. Things to consider - if you're contracting through a corporation you most likely need to: Talk to an accountant about these for clarification - most of them will give you an initial consultation for free. Generally speaking, accountant fees for corporate filing taxes averages about $1000-2000 a year.
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If I go to a seminar held overseas, may I claim my flights on my tax return?
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You can deduct this if the main purpose of the trip is to attend the seminar. Travel expenses relating to the attendance at conferences, seminars and other work-related events are deductible to the extent that they relate to your income-producing activities. You will need to apportion your travel expenses where you undertake both work-related and private activities. Travel costs to and from the location of the work-related event will only be deductible where the primary purpose of the travel was to attend the event. Accommodation, food and other incidental costs must be apportioned between work-related and private activities taking into account the types of activities that you did on the day you incurred the cost. You might like to consider in advance what you would tell them if they questioned this - for instance you might say (if they are true):
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If I sell a stock that I don't have, am I required to buy it before a certain amount of time?
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I'm just began playing in the stock market. I assume you mean that you're not using real money, but rather you have an account with a stock simulator like the one Investopedia offers. I am hopeful that's the case due to the high level of risk involved in short selling like you're describing. Here is another post about short selling that expands a bit on that point. To learn much more about the ins and outs of short selling I will point again to Investopedia. I swear I don't work for them, but they do have a great short selling tutorial. When you short sell a stock you are borrowing the stock from your broker. (The broker typically uses stock held by one or more of his clients to cover the loan.) Since it's basically a loan you pay interest. Of course the longer you hold it the more interest you pay. Also, as Joe mentioned there are scenarios in which you may be forced to buy the stock (at a higher price than you sold it). This tends to happen when the stock price is going against the short sell (i.e. you lose money). Finally, did anyone mention that the potential losses in a short sell are infinite?
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Can Professional Certifications be written off in taxes?
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There are a number of federal tax deductions and credits available for education expenses. They are too numerous to describe here, but the place to get full details is IRS Pub 970. Note that many, but not all, of them require that you be enrolled in a degree program; since this does not seem to be the case for you, you would not be eligible for those programs. None of them is as simple / generous as "deduct the full amount of your tuition with no limits". Also note that there are restrictions on using more than one of these deductions or credits in any given tax year. You might pay special attention to Chapter 12, "Business Deduction for Work-Related Education". In particular, this program allows you to deduct transportation expenses under some conditions, which does not seem to be the case for the other programs. But also note carefully the restrictions. In particular, "Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work-related education." So if you are not already working in the field of IT, you may not be eligible for this deduction.
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Unusual real estate market with seemingly huge rental returns
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The way to resolve your dilemma is to consult the price-to-rent ratio of the property. According to smartasset.com: The price-to-rent ratio is a measure of the relative affordability of renting and buying in a given housing market. It is calculated as the ratio of home prices to annual rental rates. So, for example, in a real estate market where, on average, a home worth $200,000 could rent for $1000 a month, the price-rent ratio is 16.67. That’s determined using the formula: $200,000 ÷ (12 x $1,000). Smartasset.com also goes on to give a table comparing different cities' price-to-rent ratio and then claim that the average price-to-rent ratio is currently 19.21. If your price-to-rent ratio is lower than 19.21, then, yes, your rents are more expensive than the average house. Smartasset.com claims that a high price-to-rent ratio is an argument in favor of tenants "renting" properties while a low price-to-rent ratio favors people "buying" (either to live in the property or to just rent it out to other people). So let's apply the price-to-rent ratio formula towards the properties you just quoted. There's a specific house I could buy for 190 (perhaps even less) that rents for exactly 2000 / month. 190K/(2000 * 12) = 7.92 There's a house for sale asking 400 (been on the market 2 yrs! could probably get for 350) which rents for 2800 /month. (400K)/(2800*12) = 11.90 (350K)/(2800*12) = 10.42 One can quite easily today buy a house for 180k-270k that would rent out for 1700-2100 / month. Lower Bound: (180K)/(1700*12) = 8.82 Upper Bound: (270K)/(2100*12) = 10.71 Even so, the rental returns here seem "ridiculously high" to me based on other markets I've noticed. Considering how the average price-to-rent ratio is 19.21, and your price-to-rent ratio ranges from 7.92 to 11.90, you are indeed correct. They are indeed "ridiculously high". Qualification: I was involved in real estate, and used the price-to-rent ratio to determine how long it would take to "recover" a person's investment in the property. Keep in mind that it's not the only thing I care about, and obviously the price-to-rent ratio tends to downplay expenses involved in actually owning properties and trying to deal with periods of vacancy. There's also the problem of taking into account demand as well. According to smartasset.com, Detroit, MI has the lowest price-to-rent ratio (with 6.27), which should suggest that people should buy properties immediately in this city. But that's probably more of a sign of people not wanting to move to Detroit and bid up the prices of properties. EDIT: I should also say that just because the properties are "ridiculously expensive" right now doesn't mean you should expect your rents to decrease. Rather, if rents keep staying at their current level, I'd predict that the property values will slowly increase in the future, thereby raising the price-to-rent ratio to 'non-ridiculous' mode.
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What is the opposite of a sunk cost? A “sunk gain”?
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In the second example you are giving up future free cash flows in exchange for a capital gain on the original investment. With that respect the money you will not gain will be the difference of the future cash flows ( net of related costs) minus the net gain on the panel you have sold. The financial result can be considered as the opposite of a sunk cost, that is a cost you have already incurred ( and cannot be recovered) vs net future gains you are giving up. In more sophisticated financial terms we are talking about the benefit-cost ratio: ( from Investopedia)
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Indian resident owning dividend-paying shares in company based in France: Can I save on withholding tax?
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France taxes capital / dividend gains accrued in France. Hence you will not be able to reduce this liability. India does have a Double Tax Avoidance Treaty with France and you can claim relief for the tax paid in France.
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Where can one find intraday prices for mutual funds?
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Mutual funds don't have intraday prices. They have net asset values which are calculated periodically (daily or weekly or any other period depending on the fund).
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What determines the price of fixed income ETFs?
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The literal answer to your question 'what determines the price of an ETF' is 'the market'; it is whatever price a buyer is willing to pay and a seller is willing to accept. But if the market price of an ETF share deviates significantly from its NAV, the per-share market value of the securities in its portfolio, then an Authorized Participant can make an arbitrage profit by a transaction (creation or redemption) that pushes the market price toward NAV. Thus as long as the markets are operating and the APs don't vanish in a puff of smoke we can expect price will track NAV. That reduces your question to: why does NAV = market value of the holdings underlying a bond ETF share decrease when the market interest rate rises? Let's consider an example. I'll use US Treasuries because they have very active markets, are treated as risk-free (although that can be debated), and excluding special cases like TIPS and strips are almost perfectly fungible. And I use round numbers for convenience. Let's assume the current market interest rate is 2% and 'Spindoctor 10-year Treasury Fund' opens for business with $100m invested (via APs) in 10-year T-notes with 2% coupon at par and 1m shares issued that are worth $100 each. Now assume the interest rate goes up to 3% (this is an example NOT A PREDICTION); no one wants to pay par for a 2% bond when they can get 3% elsewhere, so its value goes down to about 0.9 of par (not exactly due to the way the arithmetic works but close enough) and Spindoctor shares similarly slide to $90. At this price an investor gets slightly over 2% (coupon*face/basis) plus approximately 1% amortized capital gain (slightly less due to time value) per year so it's competitive with a 3% coupon at par. As you say new bonds are available that pay 3%. But our fund doesn't hold them; we hold old bonds with a face value of $100m but a market value of only $90m. If we sell those bonds now and buy 3% bonds to (try to) replace them, we only get $90m par value of 3% bonds, so now our fund is paying a competitive 3% but NAV is still only $90. At the other extreme, say we hold the 2% bonds to maturity, paying out only 2% interest but letting our NAV increase as the remaining term (duration) and thus discount of the bonds decreases -- assuming the market interest rate doesn't change again, which for 10 years is probably unrealistic (ignoring 2009-2016!). At the end of 10 years the 2% bonds are redeemed at par and our NAV is back to $100 -- but from the investor's point of view they've forgone $10 in interest they could have received from an alternative investment over those 10 years, which is effectively an additional investment, so the original share price of $90 was correct.
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How should I prepare for the next financial crisis?
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Your asset mix should reflect your own risk tolerance. Whatever the ideal answer to your question, it requires you to have good timing, not once, but twice. Let me offer a personal example. In 2007, the S&P hit its short term peak at 1550 or so. As it tanked in the crisis, a coworker shared with me that he went to cash, on the way down, selling out at about 1100. At the bottom, 670 or so, I congratulated his brilliance (sarcasm here) and as it passed 1300 just 2 years later, again mentions how he must be thrilled he doubled his money. He admitted he was still in cash. Done with stocks. So he was worse off than had he held on to his pre-crash assets. For sake of disclosure, my own mix at the time was 100% stock. That's not a recommendation, just a reflection of how my wife and I were invested. We retired early, and after the 2013 excellent year, moved to a mix closer to 75/25. At any time, a crisis hits, and we have 5-6 years spending money to let the market recover. If a Japanesque long term decline occurs, Social Security kicks in for us in 8 years. If my intent wasn't 100% clear, I'm suggesting your long term investing should always reflect your own risk tolerance, not some short term gut feel that disaster is around the corner.
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A calculator that takes into account portfolio rebalancing?
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Quicken has tools for this, but they have some quirks so i hesitate to actually recommend it on that basis.
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