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Foreign Earned Income Exclusion - Service vs. Product? | Even though you will meet the physical presence test, you cannot claim the FEIE because your tax home will remain the US. From the IRS: Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a "tax home" in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes. ... You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. However, your abode is not necessarily in the United States while you are temporarily in the United States. Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling. ... The location of your tax home often depends on whether your assignment is temporary or indefinite. If you are temporarily absent from your tax home in the United States on business, you may be able to deduct your away from home expenses (for travel, meals, and lodging) but you would not qualify for the foreign earned income exclusion. If your new work assignment is for an indefinite period, your new place of employment becomes your tax home, and you would not be able to deduct any of the related expenses that you have in the general area of this new work assignment. If your new tax home is in a foreign country and you meet the other requirements, your earnings may qualify for the foreign earned income exclusion. If you expect your employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. If you expect it to last for more than 1 year, it is indefinite. If you expect your employment to last for 1 year or less, but at some later date you expect it to last longer than 1 year, it is temporary (in the absence of facts and circumstances indicating otherwise) until your expectation changes. For guidance on how to determine your tax home refer to Revenue Ruling 93-86. Your main place of business is in the US and this will not change, because your business isn't relocating. If you are intending to work remotely while you are abroad, you should get educated on the relevant laws on where you are going. Most countries don't take kindly to unauthorized work being performed by foreign visitors. And yes, even though you aren't generating income or involving anyone in their country, the authorities still well may disapprove of your working. My answer to a very similar question on Expatriates. |
Can ETF's change the weighting of the assets they track | They can rebalance and often times at a random manager's discretion. ETF's are just funds, and funds all have their own conditions, read the prospectus, thats the only source of truth. |
What is the opposite of a sunk cost? A “sunk gain”? | liquid asset A sunk cost may turn out to be a loss or it may make you a profit, but what makes it "sunk" is: you can't get it back. The opposite is a cost that you can later redeem, which makes it "liquid". |
Is CFD a viable option for long-term trading? | Something really does seem seedy that if I invest $2500, that I'll make above 50k if the stock doubles. Is it really that easy? You only buy or sell on margin. Think of when the stock moves in the opposite direction. You will loose 50k. You probably didn't look into that. Investment will vanish and then you will have debt to repay. Holding for long term in CFD accounts are charged per day. Charges depends on different service providers. CFD isn't and should not be used for long term. It is primarily for trading in the short term, maybe a week at the maximum. Have a look at the wikipedia entry and educate yourself. |
Should I buy a house because Mortgage rates are low | Reasons for no: In your first sentence you say something interesting: rates low - prices high. Actually those 2 are reversely correlated, imagine if rates would be 5% higher-very few people could buy at current prices so prices would drop. Also you need to keep in mind the rate of inflation that was much higher during some periods in the US history(for example over 10% in the 1980) so you can not make comparisons just based on the nominal interest rate. Putting all your eggs in one basket. If you think real estate is a good investment buy some REITs for 10k, do not spend 20% of your future income for 20 years. Maintenance - people who rent usually underestimate this or do not even count it when making rent vs mortgage comparisons. Reasons for yes: Lifestyle decision - you don't want to be kicked out of your house, you want to remodel... Speculation - I would recommend against this strongly, but housing prices go up and down, if they will go up you can make a lot of money. To answer one of questions directly: 1. My guess is that FED will try to keep rates well bellow 10% (even much lower, since government can not service debts if interest rates go much higher), but nobody can say if they will succeed. |
Definitions of leverage and of leverage factor | This would clear out a lot more. 1) Leverage is the act of taking on debt in lieu of the equity you hold. Not always related to firms, it applies to personal situations too. When you take a loan, you get a certain %age of the loan, the bank establishes your equity by looking at your past financial records and then decides the amount it is going to lend, deciding on the safest leverage. In the current action leverage is the whole act of borrowing yen and profiting from it. The leverage factor mentions the amount of leverage happening. 10000 yen being borrowed with an equity of 1000 yen. 2) Commercial banks: 10 to 1 -> They don't deal in complicated investments, derivatives except for hedging, and are under stricter controls of the government. They have to have certain amount of liquidity and can loan out the rest for business. Investment banks: 30 to 1 -> Their main idea is making money and trade heavily. Their deposits are limited by the amount clients have deposited. And as their main motive is to get maximum returns from the available amount, they trade heavily. Derivatives, one of the instruments, are structured on underlyings and sometimes in multiple layers which build up quite a bit of leverage. And all of the trades happen on margins. You don't invest $10k to buy $10k of a traded stock. You put in, maybe $500 to take up the position and borrow the rest of the amount per se. It improves liquidity in the markets and increases efficiency. Else you could do only with what you have. So these margins add up to the leverage the bank is taking on. |
Stock Trade Transaction Fee - at what point is it worth it | The main question is, how much money you want to make? With every transaction, you should calculate the real price as the price plus costs. For example, if you but 10 GreatCorp stock of £100 each, and the transaction cost is £20 , then the real cost of buying a single share is in fact buying price of stock + broker costs / amount bought, or £104 in this case. Now you want to make a profit so calculate your desired profit margin. You want to receive a sales price of buying price + profit margin + broker costs / amount bought. Suppose that you'd like 5%, then you'll need the price per stock of my example to increase to 100 + 5% + £40 / 10 = £109. So you it only becomes worth while if you feel confident that GreatCorp's stock will rise to that level. Read the yearly balance of that company to see if they don't have any debt, and are profitable. Look at their dividend earning history. Study the stock's candle graphs of the last ten years or so, to find out if there's no seasonal effects, and if the stock performs well overall. Get to know the company well. You should only buy GreatCorp shares after doing your homework. But what about switching to another stock of LovelyInc? Actually it doesn't matter, since it's best to separate transactions. Sell your GreatCorp's stock when it has reached the desired profit margin or if it seems it is underperforming. Cut your losses! Make the calculations for LovelyCorp's shares without reference to GreatCorp's, and decide like that if it's worth while to buy. |
Do I pay a zero % loan before another to clear both loans faster? | Keep in mind that by fully paying off one of your loans, you will reduce your minimum repayments. This will make you feel richer than you actually are. This will make you buy stuff that it seems like you can afford, probably putting some of it on credit. As you can't actually afford this, this will leave you, in a years time, with the same amount of debt you have now or more, but with a slightly bigger tv. Assuming your home loan has no penalties for paying off extra, then put all 11k into there to keep your monthly repayments as high as possible. |
How smart is it to really be 100% debt free? | As others mentioned, the only clear reason to remain in debt is if you can find an investment that yields more than what you're paying to maintain the debt. This can happen if a debt was established during low-rate period and you're in a high-rate period (not what is happening now.) A speculative reason to keep debt is as an inflation bet. If you believe money will shortly lose value, you are better off postponing repayment until the drop occurs. However you're not likely to be able to make these bets successfully. Hope this helps |
What kind of traditional IRA should I use to hold funds from old employer 401K plans? | Magazines like SmartMoney often have an annual issue that reviews brokers. One broker may have a wider variety of no-fee mutual funds, and if that's your priority, then the stock commissions may be a moot issue for you. In general, you can't go wrong with a Fidelity or Schwab, and to choose investments within the accounts with an eye toward low expenses. |
How much time does a doctor's office have to collect balance from me? | Seems like the doctor's office is not very organized. Ask for a line itemized bill. You want the date and the specific service(s) performed on those dates. If the bill seems fair and correct, try to negotiate cash discount payment. Ask how much they would settle for if you paid cash. If it is higher than you were thinking, say you were not expecting this sudden bill and if they would accept $xxx. If they say yes, great. If not, try to compromise, pay the suggested offer, or not pay and hope they don't send it to collections. |
Understanding the T + 3 settlement days rule | For margin, it is correct that these rules do not apply. The real problem becomes day trading funding when one is just starting out, broker specific minimums. Options settle in T+1. One thing to note: if Canada is anything like the US, US options may not be available within Canadian borders. Foreign derivatives are usually not traded in the US because of registration costs. However, there may be an exception for US-Canadian trade because one can trade Canadian equities directly within US borders. |
Credit card issued against my express refusal; What action can I take? | I believe it is so. It doesn't sound like they did anything outright illegal, just a pushy upsell. You can complain to the bank manager. If you want you can mention the employee by name (if you know who they are). Ultimately, you can change banks. From what you say it sounds like you are dissatisfied with this bank, so I think you should at least begin evaluating other banks and consider switching. You can also let your current bank know you are planning to take all your money away from them specifically because of their poor customer service. You could consider filing a complaint with the Consumer Financial Protection Bureau alleging that the bank engaged in some kind of deceptive marketing of their financial products. Of course you can also file a complaint with something like the Better Business Bureau, or even just write a negative Yelp review. But these actions won't really result in any penalty for the bank as a result of what they did in your specific case; they just express your dissatisfaction in a way that will be recorded and possibly made public (e.g., in a list of complaints) to protect future consumers. If you're really gung-ho and have time and money to burn, you could hire a lawyer and get legal advice about whether it is possible to sue the bank for fraud or misuse of your personal information. Needless to say, I think this would be overkill for this situation. I would just cancel the credit card, tell the bank you're dissatisfied, switch banks, and move on. |
What is a good way to save money on car expenses? | The obvious answer for savings costs with a car is not to have a car. Of course that must be balanced against other expenses (bicycle, taxi, public transport) to do things. Generally speaking, if you need a car, ways to contain expense are to buy the least expensive vehicle with the most economical engine that meets your needs, keep it undercover (reduces damage or wear due to exposure), proactively maintain it (maintenance is cheaper in the long run than the costs of dealing with a breakdown and cost of repairs, and lack of maintenance accelerates depreciation), and shop around for a good mechanic who will maintain it at a fair price. If you do a lot of milage, or do a lot of towing, or drive under load, consider a diesel. A diesel engine often costs more each service, sometimes has a shorter service interval, but it also gets greater milage. There may be a differential cost of fuel (diesel is often a bit more expensive per volume). For towing, a diesel is often more economical, due to low end power (greater torque at lower revs) which does result in better fuel economy. It is no accident that most large transport vehicles consume diesel. Do the sums based on your usage before you buy. Accelerate as gently as possible to get to speed within traffic conditions (less fuel to get to a speed). Change up to higher gears as soon as possible as - at a given speed - economy will be better, as long as the engine has enough oomph to handle it (so don't try to start from stationary in a high gear). Don't drive faster than necessary, as drag increases with speed, and hurts economy. Similarly, reduce speed gradually, to reduce undue wear on breaks and reduce fuel consumption (sharp breaking with power assisted breaks does affect fuel economy). Drive close to legal limits if conditions permit. This reduces chances of annoying other drivers (who if they get impatient may throw rocks at your car, or collide, or subject you to road rage - which contribute to damage and insurance costs). It also reduces chances of being pulled over by police and fined for obstructing other traffic. Don't tailgate. This both consumes fuel in keeping up, and means needing to slow sharply. And increases chance of accident. Don't idle more than necessary. Allow stop/start systems on your car to operate - particularly if you're in stop/start traffic. However, there is a break-even point where stopping and restarting consumes more fuel than idling, so get to know your vehicle. That depends on how much the engine needs cranking to restart - which is affected both by engine design and maintenance. Maintain it yourself if you have the skills, but account for the cost of parts and equipment, to be sure it is cost effective (modern cars are software driven, so equipment to diagnose and maintain can be expensive). Combine trips (don't get into the car for every little thing - wait until you can do a few things during a single drive) and car pool. If fuel prices vary (e.g some places have regular cycles) try to refuel near the bottom of a pricing cycle. Take unnecessary weight out of the vehicle. Don't load it up with tools unless you need them frequently. |
Alternatives to Intuit's PayTrust service for online bill viewing and bill payment? | Ally bank has a free billpay service where you have the option of paying bills via eBills. Though I use Ally's billPay service (and I write about my experience with Ally in my blog), I haven't used eBills, but from reading your question, looks like this is what you are looking for. From Ally's site: What are eBills? An eBill is an online version of a bill or statement that can replace a traditional paper copy. Many large companies, like your electric, phone, cable and major credit card companies have the ability to send you eBills. To receive eBills at Ally, you must already receive your bill online at the biller's website. Ally will ask for the biller's website credentials to set up an eBill. Hope this helps. |
Does it make sense to talk about an ETF or index in terms of technical indicators? | With the disclaimer that I am not a technician, I'd answer yes, it does. SPY (for clarification, an ETF that reflects the S&P 500 index) has dividends, and earnings, therefore a P/E and dividend yield. It would follow that the tools technicians use, such as moving averages, support and resistance levels also apply. Keep in mind, each and every year, one can take the S&P stocks and break them up, into quintiles or deciles based on return and show that not all stock move in unison. You can break up by industry as well which is what the SPDRs aim to do, and observe the movement of those sub-groups. But, no, not all the stocks will perform the way the index is predicted to. (Note - If a technician wishes to correct any key points here, you are welcome to add a note, hopefully, my answer was not biased) |
Choosing the limit when making a limit order? | There are a couple of things you could do, but it may depend partly on the type of orders your broker has available to you. Firstly, if you are putting your limit order the night before after close of market at the top of the bids, you may be risking missing out if bid & offer prices increase by the time the market opens the next day. On the other hand, if bid & offer prices fall at the open of the next day you should get your order filled at or below your limit price. Secondly, you could be available at the market open to see if prices are going up or down and then work out the price you want to buy at then and work out the quantity you can buy at that price. I personally don't like this method because you usually get too emotional, start chasing the market if prices start rising, or start regretting buying at a price and prices fall straight afterwards. My preferred method is this third option. If your broker provides stop orders you can use these to both get into and out of the market. How they work when trying to get into the market is that once you have done your analysis and picked a price that you would want to purchase at, you put a stop buy order in. For example, the price closed at $9.90 the previous day and there has been resistance at $10.00, so you would put a stop buy trigger if the price goes over $10, say $10.01. If your stop buy order gets triggered you can have either a buy market order or a limit order above $10.01 (say $10.02). The market order would go through immediately whilst the limit order would only go through if the price continues going to $10.02 or above. The advantage of this is that you don't get emotional trying to buy your securities whilst sitting in front of the screen, you do your analysis and set your prices whilst the market is closed, you only buy when the security is rising (not falling). As your aim is to be in long term you shouldn't be concerned about buying a little bit higher than the previous days close. On the other hand if you try and buy when the price is falling you don't know when it will stop falling. It is better to buy when the price shows signs of rising rather than falling (always follow the trend). |
Tax me more: Can I pay extra to the government so I don't have to deal with all this paperwork? | Perhaps the real question you are asking is "How can the tax code be fixed to make it simple for everyone (including me), and what would it take to effect those changes"? There are really two causes for the complexity of the tax code. Many of those who enter Government hold a desire for power, and Government uses the tax code as one lever of power to distribute largess to their supporters, and to nudge everyone to behaviors which they favor. The current system enables incumbents to spend taxpayer money to reward those they favor, and thus they accumulate power and security. Those who enter Government also love to spend money (especially other people's money), and their rapacious behavior recognizes no boundaries. They will spend money without control until the taxpayers yank them to a brutal stop. They enact complex rules which are used to ease the (tax) burden for some, which buys their support (with taxpayer money), and they spend money to benefit those which they favor. The system of lobbyists and contributors exists to entice Government to treat them and the causes they support favorably. This system enables incumbents to spend taxed money to reward those they favor, and to tax those they disfavor. Thus their greed is satisfied, and their power is increased. The freedom you seek is not available, although you can minimize the effort required for compliance. You can take the standard deduction, and use nothing but the W-2 provided by your employer, and unless you are subject to the Alternative Minimum Tax, you will find that the tax software will do most of the work for you. Do you want to approach the Nirvana of minimal effort to appease your tax collectors? Avoid starting your own business, charitable donations, investment income, 1099 income, and you will need minimal paperwork. Avoid earning enough to risk the AMT (Alternative Minimum Tax). Refuse to take the mortgage interest deduction, tax credits for electric vehicles, tax credits for high-efficiency appliances and air conditioners, tax credits for residential solar panel installations. Do not own investments which pay interest, or own stocks where you need to track the "basis" (purchase price) of the stocks, nor buy and then sell valuable items that might gain value (where you would need to track the purchase price, the "basis"). Avoid owning and leasing a rental home for income, deducting businesses expenses and mileage for business purposes, contributions to a retirement plan (outside an employer plan) -- all complicate your tax filing. The solution you truly desire is either a "Flat Tax" or the "Fair Tax". These solutions would effect either a single tax rate (with no deductions or adjustments to income, yeah right), or a national retail sales tax, which would tax the money spent in the economy regardless of the source of the money (legal, gifts, crime) and there would be no need to report income, or classify it. The largest objection to either is that the tax code might become less "progressive" (increasing tax rate with increasing income). Good Luck! |
Can a US bank prevent you from making early payments to the principal on a home mortgage? | littleadv's first comment - check the note - is really the answer. But your issue is twofold - Every mortgage I've had (over 10 in my lifetime) allows early principal payments. The extra principal can only be applied at the same time as the regular payment. Think of it this way - only at that moment is there no interest owed. If a week later you try to pay toward only principal, the system will not handle it. Pretty simple - extra principal with the payment due. In fact, any mortgage I've had that offered a monthly bill or coupon book will have that very line "extra principal." By coincidence, I just did this for a mortgage on my rental. I make these payments through my bank's billpay service. I noted the extra principal in the 'notes' section of the virtual check. But again, the note will explicitly state if there's an issue with prepayments of principal. The larger issue is that your friend wishes to treat the mortgage like a bi-weekly. The bank expects the full amount as a payment and likely, has no obligation to accept anything less than the full amount. Given my first comment above here is the plan for your friend to do 99% of what she wishes: Tell her, there's nothing magic about bi-weekly, it's a budget-clever way to send the money, but over a year, it's simply paying 108% of the normal payment. If she wants to burn the mortgage faster, tell her to add what she wishes every month, even $10, it all adds up. Final note - There are two schools of thought to either extreme, (a) pay the mortgage off as fast as you can, no debt is the goal and (b) the mortgage is the lowest rate you'll ever have on borrowed money, pay it as slow as you can, and invest any extra money. I accept and respect both views. For your friend, and first group, I'm compelled to add - Be sure to deposit to your retirement account's matched funds to gain the entire match. $1 can pay toward your 6% mortgage or be doubled on deposit to $2 in your 401(k), if available. And pay off all high interest debt first. This should stand to reason, but I've seen people keep their 18% card debt while prepaying their mortgage. |
Malaysian real estate: How to know if the market is overheated or in a bubble? | I think the only sure way to know if there is a bubble is to wait till it bursts and buy then. If it would be easy to tell there wouldn't be any bubbles. |
Can one get a house mortgage without buying a house? | As a legal contract, a mortgage is a form of secured debt. In the case of a mortgage, the debt is secured using the property asset as collateral. So "no", there is no such thing as a mortgage contract without a property to act as collateral. Is it a good idea? In the current low interest rate environment, people with good income and credit can obtain a creditline from their bank at a rate comparable to current mortgage rates. However, if you wish to setup a credit line for an amount comparable to a mortgage, then you will need to secure it with some form of collateral. |
How would bonds fare if interest rates rose? | When interest rates rise, the price of bonds fall because bonds have a fixed coupon rate, and since the interest rate has risen, the bond's rate is now lower than what you can get on the market, so it's price falls because it's now less valuable. Bonds diversify your portfolio as they are considered safer than stocks and less volatile. However, they also provide less potential for gains. Although diversification is a good idea, for the individual investor it is far too complicated and incurs too much transaction costs, not to mention that rebalancing would have to be done on a regular basis. In your case where you have mutual funds already, it is probably a good idea to keep investing in mutual funds with a theme which you understand the industry's role in the economy today rather than investing in some special bonds which you cannot relate to. The benefit of having a mutual fund is to have a professional manage your money, and that includes diversification as well so that you don't have to do that. |
Has anyone heard of Peerstreet? | (Disclosure - PeerStreet was at FinCon, a financial blogger conference I attended last month. I had the chance to briefly meet a couple people from this company. Also, I recognize a number of the names of their financial backers. This doesn't guarantee anything, of course, except the people behind the scenes are no slackers.) The same way Prosper and Lending Club have created a market for personal loans, this is a company that offers real estate loans. The "too good to be true" aspect is what I'll try to address. I've disclosed in other answers that I have my Real Estate license. Earlier this year, I sold a house that was financed with a "Hard Money" loan. Not a bank, but a group of investors. They charged the buyer 10%. Let me state - I represented the seller, and when I found out the terms of the loan, it would have been a breach of my own moral and legal responsibility to her to do anything to kill the deal. I felt sick for days after that sale. There are many people with little credit history who are hard workers and have saved their 20% down. For PeerStreet, 25%. The same way there's a business, local to my area, that offered a 10% loan, PeerStreet is doing something similar but in a 'crowd sourced' way. It seems to me that since they show the duration as only 6-24 months, the buyer typically manages to refinance during that time. I'm guessing that these may be people who are selling their house, but have bad timing, i.e. they need to first close on the sale to qualify to buy the new home. Or simply need the time to get their regular loan approved. (As a final side note - I recalled the 10% story in a social setting, and more than one person responded they'd have been happy to invest their money at 6%. I could have saved the buyer 4% and gotten someone else nearly 6% more than they get on their cash.) |
Estate taxes and the top 1 percent by net worth | There are two main reasons for the difference between these two numbers: While there are a few people that are wildly wealthy, most of the people with more than 10 million have between 10-50 million dollars. These people shield most of their estate and in the end the tax only effects a small portion of even the wealthy. |
Is business the only way to become a millionaire? | That's actually a pretty good way to get bankrupt quick. You can get rich quick through lottery, gambling, mere saving or investing wisely, or marrying someone from the Kennedy or Bush clans. Starting a business is one of the ways to become a millionaire, but definitely not the only one. |
Owing state tax Interest and a result of living in Maryland and working in Virginia | Ultimately, you are the one that is responsible for your tax filings and your payments (It's all linked to your SSN, after all). If this fee/interest is the result of a filing error, and you went through a preparing company which assumes liability for their own errors, then you should speak to them. They will likely correct this and pay the fees. On the other hand, if this is the result of not making quarterly payments, then you are responsible for it. (Source: Comptroller of Maryland Site) If you [...] do not have Maryland income taxes withheld by an employer, you can make quarterly estimated tax payments as part of a pay-as-you-go plan. If your employer does withhold Maryland taxes from your pay, you may still be required to make quarterly estimated income tax payments if you develop a tax liability that exceeds the amount withheld by your employer by more than $500. From this watered-down public-facing resource, it seems like you'll get hit with fees for not making quarterly payments if your tax liability exceeds $500 beyond what is withheld (currently: $0). |
Pay down on second mortage when underwater? | I think everyone else answered before you added the info about your car loan in your comment. While it makes sense to pay off loans with the highest interest rate first, keep in mind that in most cases you can deduct mortgage interest from your taxable income. So the after-tax rate of interest that you're paying on your 8.6% second mortgage will be less than your 7% car loan, assuming that your tax bracket is more than 18% (federal and state combined). If you plan to use your funds to pay down debt, definitely attack the car loan first. |
Changes in Capital Gains Tax in the US - Going to 20% in 2011? | Consider doing things that will allow for tax deductions, such as short selling. The IRS has regulations on this as well. And consider that Futures are taxed more favorably than other kinds of investments. (60% taxed as long term, 40% taxed as short term) |
Additional credit card with different limit on same account? | You can look into getting a business credit card. When I had my Chase business credit card, I could add authorized users to the main account and set a spending limit on each card. |
What would be a wise way to invest savings for a newly married couple? | I agree with @Pete that you may be well-advised to pay off your loans first and go from there. Even though you may not be "required" to make payments on your own loan based on your income, that debt will play a large factor in your borrowing ability until it is gone, which hinders your ability to move toward home ownership. If you are in a fortunate enough position to totally pay off both your loan and hers from cash on hand then you should. It would still leave you with more than $112,000 and no debt, which is a big priority and advantage for a young couple. Mind you, this doesn't keep you from starting an investment plan with some portion of the remaining funds (the advice to keep six months' income in the bank is very wise) through perhaps a mutual fund if you don't want to directly manage the investments yourself. The advantage of mutual funds is the ability to choose the level of risk you're willing to take and let professionals manage how to achieve your goals for you. You can always make adjustments to your funds as your circumstances change. Again, I'd emphasize ridding yourself of the student loan debt as the first move, then looking at how to invest the remainder. |
How do I notify the IRS of a new member to an LLC? | You don't need to notify the IRS of new members, the IRS doesn't care (at this stage). What you do need, if you have a EIN for a single-member LLC, is to request a new EIN since your LLC is now a partnership (a different entity, from IRS perspective). From now on, you'll need to file form 1065 with the IRS in case of business related income, on which you will declare the membership distribution interests on Schedules K-1 for each member. |
Where are open-end funds traded? | I assume that mutual funds are being discussed here. As Bryce says, open-ended funds are bought from the mutual fund company and redeemed from the fund company. Except in very rare circumstances, they exist only as bits in the fund company's computers and not as share certificates (whether paper or electronic) that can be delivered from the selling broker to the buying broker on a stock exchange. Effectively, the fund company is the sole market maker: if you want to buy, ask the fund company at what price it will sell them to you (and it will tell you the answer only after 4 pm that day when a sale at that price is no longer possible unless you committed to buy, say, 100 shares and authorized the fund company to withdraw the correct amount from your bank account or other liquid asset after the price was known). Ditto if you want to sell: the mutual fund company will tell you what price it will give you only after 4 pm that day and you cannot sell at that price unless you had committed to accept whatever the company was going to give you for your shares (or had said "Send me $1000 and sell as many shares of mine as are needed to give me proceeds of $1000 cash.") |
Why would this kind of penny stock increase so much in value? | Well I'm not going to advise whether it's a good idea to invest in this company (though often OTC is pretty scary), but it DOES have a product (vivio, an ad blocker), it did post financials and it's trading on the OTC-QB (which is better than the pink sheets), so you need to look these over and study up on the product to decide if it is overpriced or not. What might have occurred (viz the Patriot Berry Farm becoming Cyberfort) is that the latter bought up the stock of the former (this is, I believe, called using a shell, which is not necessarily a bad thing) and is using this as a way to be registered, i.e. sell to non-accredited investors via the OTC market. So I'm really just answering your third question: yes, you have to do a lot of due diligence to see if buying this stock is a good deal or not. It might be the next big thing. Or it might not. It certainly is the case that low trading volume allows a relatively small trade to really change the stock price, so the penny stocks do tend to be easier to 'inflate'. Side comment: the bid/ask spreads are pretty big, with a best bid of 0.35 and best ask of 0.44. |
Does it make sense to take out student loans to start an IRA? | IRA contributions are limited; you cannot "dump the excess into a retirement account like an IRA" if the excess is more than $5500. Furthermore, as @firefly points out, you need to have earned income (technical term is compensation and it includes self-employment income, not just wages) to contribute to an IRA, and the limit mentioned above is actually the lesser of your earned income and $5500. (There are other limitations for people with high gross income, but these likely will not affect you) On the positive side, if your earned income is small, you can contribute your entire taxable earned income including the money withheld by your employer for Social Security and Medicare tax and Federal, State and local income taxes to an IRA, not just your take-home pay. For example, if your earned income is $5500 and take-home pay after tax withholding is $5000, you are still entitled to contribute $5500. So, where do you get that withheld money from so that it can be put into your IRA? Well, it can come from the student loan or interest earned from a bank or from the dividends and capital gains on your investments, etc. Money is fungible; it is not the case that only the cash received (or deposited into your bank account) as your take-home pay can be contributed. Subject to other limitations mentioned, your earned income can be contributed, not just your take-home pay. |
Should I sell a 2nd home, or rent it out? | I kind of hate piling on with another opinion, but this is too long for a comment. I did what you are thinking of doing, I would at least try renting it for a couple years so long as: The primary risks of renting are mostly related to unexpected costs and bad tenants, you've got a very healthy income, so as long as you maintain a nice emergency fund it doesn't sound like keeping this property as a rental will be too much risk. If the rental market is strong where your house is, then you have a better chance of avoiding bad tenants. I like to keep my rent a little lower than the max I think it could go for, to attract more applications and hopefully find someone who will be a good longer term tenant. Tax-free gains So long as you lived in your house 2 of the last 5 years, you can sell without paying capital gains tax on your profit, so you could try renting it for 2 years and then sell. That was a key for me when I converted my first house to a rental. I liked that flexibility, there's still the typical renting risks associated, but it's not a lifelong commitment. You can get 2 years of increased equity/appreciation tax-free, or you could find you enjoy it and keep it for the long haul. |
Potential pitfalls of this volume trading strategy | People are trying ideas like this, actually. Though they generally aren't very public about it. While keshlam ventures into hyperbole when mentioning Watson, he is certainly correct human language parsing is a extremely hard problem. While it is not always true that the big players will know before the news (sometimes that would qualify as insider trading). The volume spike that you mention generally comes as the news arrives to the major (and minor) players. So, if you have an algorithm run after the volume spike the price will likely have adjusted significantly already. You can try to avoid this by constantly scanning for news on a set of stocks however this becomes an even harder problem. Or maybe by becoming more specific and parsing known important and specific news sources (farm report for instance) and trying to do so faster than anyone else. These are some methods people use to not be too late. |
Index fund that tracks gold and other commodities | I don't know answers that would be specific to Canada but one of the main ETF funds that tracks gold prices is GLD (SPDR Gold Trust) another is IAU (iShares Gold Trust). Also, there are several ETF's that combine different precious metals together and can be traded. You can find a fairly decent list here on the Stock Encylopedia site. |
How to share income after marriage and kids? | I think the problem is that you've made a math error. This child would not be costing you 300 per month, it will be costing you 1400 per month. 1100 of this is in a donation of salable hours rather than cash, but helpfully you have a number right there as to how much someone is willing to pay for these hours so the math is still doable. So, if you are indeed splitting your expenses fifty-fifty, you should chip 1100 into the pot to match your wife's contribution. It would make the most sense, I think, to have your part of this contribution cover some of your mutual expenses, and if any is left over, save it up for the day that your child would cost more than that 300 in a month - when you need extra clothes, or have to replace something they destroyed, or want to pay for extra opportunities (camps, educational games, lessons), or a a savings that can be used for major future expenses (higher education, first car, milestone celebrations, safety net when starting out). Of course, if your family is indeed a priority, you might consider making an equal investment in your family - say, half your income (1800) to match half her time going into the building of the family. After all, the decision to start a family should be an investment of time and value, not just a minimum bid for expenses. And again, any extra can be spent on mutual expenses, saved up for future costs, or left as your child's "savings" for major expenses or safety net. I suppose I should mention that you perhaps could get away with covering half her contribution (550 per month, on the face of it), as that should also "balance" out the monthly expenses. Even this much would be enough to put her back into the green on her covering her own costs. Of course, in this case you might want to take into account that while she's working 38,5 hours per week now, running a household is, I've heard, more closely equivalent to a 60-hour week, plus or minus being "on call" for a further 100 hours a week. Trying to calculate the absolute minimum payment on your part to match the investment of hours on hers is likely to be a bit more tricky than just matching the salable hours not worked, if you're set on income ratios and splitting costs "as they are". Also, you might want to rethink your criteria for sharing income completely or what makes certain divisions of costs "unfair". You mention one reason it would be unfair is that you have a "more stressful job" - well, your job may well be more stressful than her job now, but it is likely to be less so than raising a child (her new job). As for investment of time and energy for your education entitling you to a larger amount of pay, again, raising a child is likely to be a larger investment of time, money, and anxiety than your education, but her pay (or even share of the costs) doesn't seem to be balanced in response. I'm not gonna tell you what is fair, that's for you to work out, just suggesting you really think it through before deciding what would be fair or not. |
What assets would be valuable in a post-apocalyptic scenario? | This is going to be a list of some things that will likely be of value immediately after some apocalyptic event. However, note that I am not answering your question of what you should invest in now to take advantage of such an event. That is a pretty ridiculous notion. Preparing oneself for such a possibility is certainly a good idea. That said, there are some realistic limitations to how you could take advantage of such a situation. Namely, the very real requirement of physical security. Unless you have a huge posse -- armed to the teeth -- to defend your cache, someone will come along with a bigger and better armed group to take it. (Not to mention that I am the type of person that would -- at least -- consider organizing such a group to take you down; if only as a matter of principle.) Guns & ammo (Also, knives; ideally ones that can be used as weapons and for food preparation/hunting.) Alcohol. Especially liquor. It's concentrated and easier to store than beer or wine. Beside for getting inebriated, it is useful as a sedative and antiseptic. Non-perishable foods. Canned goods are obvious. Though, grains and cereals can be stored with relative ease under some circumstances. (Obviously, not so easily done in an urban area.) Methods of starting a fire. Preferably rugged ones, such as flint and steel. (Lighters would only be of limited use. Matches are bulky and require water-tight storage.) Salt and/or salt-licks. (Possibly, other forms of non-perishable bait.) As bstpierre puts it, hunting will be about survival not sport. Hand-tools. Textiles, fabrics, thread and needles. Medicines of all sorts, though especially antibiotics, antiseptics and painkillers. Books of a practical nature. Topics such as: wilderness survival, cooking, carpentry, etc. The list is mostly ordered in terms of value & practicality. Ultimately, I doubt there is much that will provide a practical investment idea for such a scenario. The physical security issue is a big limiting factor. In a post-apocalyptic scenario it goes back to who is bigger, stronger and better armed. One thing does come to mind: knowledge. Prepare yourself with the skills and knowledge you need to survive in such a scenario and you will be invaluable. Also, as bstpierre notes in the comments, connections will likely also be important. (Probably local or nearby connections.) No one person can do it all alone. It will come down to cooperation. |
Can mortgage insurance replace PMI? | PMI IS Mortgage insurance. It stands for "Private Mortgage Insurance". This guy is just trying to get you to buy it from him instead of whoever you have it with now. Your lender would always be on the policy since it is an insurance policy they hold (and you pay for) that protects them from you defaulting on the loan. Don't think of it as insurance for you in case you can't pay. If that should happen, your credit would still be trashed, the bank just wouldn't be out the money. You don't really get any benefit at all from it. It is just the way a bank can mitigate the risk of giving out large loans. This is why people are keen to drop it as soon as possible. The whole thing about keeping the house in your estate after you die makes me think he is trying to sell you a different type of insurance called Mortgage Life Insurance. PMI isn't typically about that type of situation. Your estate will go into probate to work out your debts if you die and my understanding is that PMI doesn't usually pay out in that situation. If this is what he is selling, buying such a policy would be on top of your PMI insurance payment, not instead of it. Be forewarned, personal finance experts usually consider mortgage life insurance to be a ripoff. If you want to protect against the risk of your heirs losing the house because they can't make the payments, you are better off with Term Life Insurance. However, don't worry that they will inherit your debt on the house unless they are on the loan. If they don't want the house, they won't be obliged to make payments on it (unless they want to keep it). It won't affect their credit if they just walk away and let the bank have the house after you die unless they are on the note. Here is an article (in two parts) with a pretty good treatment of the issue of choosing your own PMI policy: "Give Buyers Freedom to Choose Mortgage Insurance" Part 1 Part 2 |
PayPal wants me to “add a bank account”, another funding source. Credit card isn't working. Why? | It's possible the recipient of the payment is not setup to receive funds form PayPal from a credit card, too. |
question about short selling stocks | If you had an agreement with your friend such that you could bring back a substantially similar car, you could sell the car and return a different one to him. The nature of shares of stock is that, within the specified class, they are the same. It's a fungible commodity like one pound of sand or a dollar bill. The owner doesn't care which share is returned as long as a share is returned. I'm sure there's a paragraph in your brokerage account terms of service eluding to the possibility of your shares being included in short sale transactions. |
Why invest for the long-term rather than buy and sell for quick, big gains? | The technical term for it is "timing the market" and if you can pull it off correctly, you will do quite well. The problem is that it is almost impossible to consistently do well. If it were that easy there would be a lot of billionaires walking around. Even Wall street experts haven't been able to predict the market that well. This idea is almost universally considered a bad idea. Consider this: When has the stock dropped low enough that you are "buying low" and let's say you do buy low and it doubles in a month. When do you get out? What if you are wrong and it doubles again? Or if it drops 10% do you keep waiting? This strategy is rife with problems. |
How long does it take for money to transfer into a mastercard? | In a nutshell, as long as they (Sparkasse) choose to. I work with banks where it happens the moment I submit the transaction (so the next screen already shows the new totals), and I work with banks that make it take 3 days. In the past, Sparkasse and Raifeissenkassen were especially famous to take a looong time ('Wir nehmen mehr als Geld und Zinsen...' - they supposedly work with the money inbetween, as it is gone from the source account but not arrived in the target account yet); that might have changed (or not). Probably Sparkasse has a statement in their fineprint on how long they make it take. I would expect one business day in today's environment, but I didn't look it up. |
Claiming income/deductions on an illegal apartment | The IRS demands and expects to be paid tax on all taxable activity, including illegal activity. If they expect drug dealers, hit men, and smugglers to pay tax, they expect you to pay tax on your basement apartment. The flip side of this is that the IRS keeps reported tax activities confidential. They only share what is required (for example, your taxable income with your state). You can read the details in their disclosure laws. Deductions will work just as they would if your apartment was perfectly legal. In the eyes of the IRS, whether your income is legal or not is none of their business. They care only about whether it is being taxed appropriately. They will not share any information with your zoning authority without a court order. |
Will a credit card issuer cancel an account if it never incurs interest? | While technically true, a card issuer can cancel your card for almost any reason they want, it's highly unlikely they'll cancel it because you pay your bills! There are many, many people out there that pay their bills in full every month without ever paying a cent in credit card interest. I wouldn't ever purposefully incur any interest on a credit card. Related anecdote: I used to have a credit card that I only used for gas purchases because they gave 5% off for fuel. The issuer eventually discontinued the program (I assume because people like me took advantage of it.) So while they didn't cancel my card, the bonus eventually went away. I miss that card. My conclusion: if you can take advantage of promotional rates, by all means, go for it. You don't owe them any favors. Enjoy it as long as it lasts. |
How do wire transfers get settled? | Wire transfers normally run through either the Fedwire system or the Clearing House Interbank Payments System (CHIPS). The process generally works like this: You approach a bank or other financial institution and ask to transfer money. You give the bank a certain code, either an international bank account number or one of several other standards, which informs the bank where to send the money. The bank sends a message through a system like Fedwire to the receiving bank, along with settlement instructions. This is where the process can get a bit tricky. For the wire transfer to work, the banks must have reciprocal accounts with each other, or the sending bank must send the money to a bank that does have such an account with the receiver. If the sending bank sends the money to a third-party bank, the transaction is settled between them, and the money is then sent to the receiving bank from the third-party bank. This last transaction may be a wire transfer, ACH transfer, etc. The Federal Reserve fits into this because many banks hold accounts for this purpose with the Federal Reserve. This allows them to use the Fed as the third-party bank referred to above. Interestingly enough, this is one of the significant ways in which the Fed makes a profit, because it, along with every other bank and routing agent in the process, collects a miniscule fee on this process. You'll often find sources that state that Fedwire is only for transferring large transactions; while this is technically correct, it's important to understand that financial institutions don't settle every wire transfer or payment immediately. Although the orders are put in immediately, the financial institutions settle their transactions in bulk at the end of the business day, and even then they normally only settle the difference. So, if Chase owes Bank of America $1M, and Bank of America owes Chase $750K, they don't send these as two transactions; Chase simply credits BAC $250K. You didn't specifically ask about ACH transfers, which as littleadv pointed out, are different from wire transfers, but since ACH transfers can often form a part of the whole process, I'll explain that process too. ACH is a payment processing system that works through the Federal Reserve system, among others. The Federal Reserve (through the Fedline and FedACH systems) is by far the largest payment processor. The physical cash itself isn't transferred; in simple terms, the money is transferred through the ACH system between the accounts each bank maintains at the Federal Reserve. Here is a simple example of how the process works (I'm summarizing the example from Wikipedia). Let's say that Bob has an account with Chase and wants to get his paycheck from his employer, Stack Exchange, directly deposited into this account. Assume that Stack Exchange uses Bank of America as their bank. Bob, the receiver, fills out a direct deposit authorization form and gives it to his employer, called the originator. Once the originator has the authorization, they create an entry with an Originating Depository Financial Institution, which acts as a middleman between a payment processor (like the Federal Reserve) and the originator. The ODFI ensures that the transaction complies with the relevant regulations. In this example, Bank of America is the ODFI. Bank of America (the ODFI) converts the transaction request into an ACH entry and submits it, through an ACH operator, to the Receiving Depository Financial Institution (RDFI), which in this case is Chase bank. Chase credits (deposits) the paycheck in Bob's account. The Federal Reserve fits into all of this in several ways. Through systems like Fedline and FedACH, the Fed acts as an ACH operator, and the banks themselves also maintain accounts at the Federal Reserve, so it's the institution that actually performs the settling of accounts between banks. |
As a young adult, what can I be doing with my excess income? | If I were you I would just save the money until I had at least 5000 pounds to keep as an emergency fund. There are various kinds of unexpected events and it is smart to have some cash in case a problem comes up. Next time I would recommend buying a car you can afford. Borrowing money to buy nice things is the enemy of wealth accumulation. Also, when you buy a car for cash you will get a much better deal than when you let a dealer put his foot on your neck. |
Are there tax liabilities (in the US) for having a US bank account while I am abroad? | I don't think so in your case. Unless the account generates so much interest income that it became reportable (I don't know the exact limit, but I think it's in the hundreds if not thousands of dollars, you might get a 1099 form if it generates over $10 of interest income, but you don't have to file taxes if your overall income is too low anyways). The US does not typically tax assets, only income. There are some states (Florida is the only one I can think of) that has odd tax treatment of intangible assets, but I doubt that would apply in your case. If this were a large enough amount, usually over $10,000, it might trigger some reporting requirements (possibly by your home country). |
Main source of the shares/stocks data on the web | To expand on keshlam's answer: A direct feed does not involve a website of any kind. Each exchange publishes its order/trade feed(s) onto a packet network where subscribers have machines listening and reacting. Let's call the moment when a trade occurs inside an exchange's matching engine "T0". An exchange then publishes the specifics of that trade as above, and the moment when that information is first available to subscribers is T1. In some cases, T1 - T0 is a few microseconds; in other (notorious) cases, it can be as much as 100 milliseconds (100,000x longer). Because it's expensive for a subscriber to run a machine on each exchange's network -- and also because it requires a team of engineers devoted to understanding each exchange's individual publication protocols -- it seems unlikely that Google pays for direct access. Instead Google most likely pays another company who is a subscriber on each exchange around the world (let's say Reuters) to forward their incoming information to Google. Reuters then charges Google and other customers according to how fast the customer wants the forwarded information. Reuters has to parse the info it gets at T1, check it for errors, and translate it into a format that Google (and other customers) can understand. Let's say they finish all that work and put their new packets on the internet at time T2. Then the slow crawl across the internet begins. Some 5-100 milliseconds later your website of choice gets its pre-processed data at time T3. Even though it's preprocessed, your favorite website has to unpack the data, store it in some sort of database, and push it onto their website at time T4. A sophisticated website might then force a refresh of your browser at time T4 to show you the new information. But this forced refresh involves yet another slow crawl across the internet from where your website is based to your home computer, competing with your neighbor's 24/7 Netflix stream, etc. Then your browser (with its 83 plugins and banner ads everywhere) has to refresh, and you finally see the update at T5. So, a thousand factors come into play, but even assuming that Google is doing the most expensive and labor-intensive thing it can and that all the networks between you and Google and the exchange are as short as they can be, you're not going to hear about a trade -- even a massive, market-moving trade -- for anywhere from 500 milliseconds to 5 seconds after T0. And in a more realistic world that time will be 10-30 seconds. This is what Google calls "Realtime" on that disclaimer page, because they feel they're getting that info to you as fast as they possibly can (for free). Meanwhile, the computers that actually subscribe to an exchange heard about the trade way back at time T1 and acted on that information in a few microseconds. That's almost certainly before T2 and definitely way way before T3. The market for a particular instrument could change direction 5 times before Google even shows the first trade. So if you want true realtime access, you must subscribe to the exchange feed or, as keshlam suggests, sign up with a broker that provides its own optimized market feeds to you. (Note: This is not an endorsement of trading through brokers.) |
where to get stock price forecast | First, stock prices forecasts are usually pretty subjective so in the following resources you will find differing opinions. The important thing is to read both positive and negative views and do some of your additional research and form your own opinion. To answer your question, some analysts don't provide price targets, some just say "Buy", "Sell", "Hold", and others actually give you a price target. Yahoo provides a good resource for collecting reports and giving you a price target. http://screener.finance.yahoo.com/reports.html |
Are these really bond yields? | It's worth pointing out that a bulk of the bond market is institutional investors (read: large corporations and countries). For individuals, it's very easy to just put your cash in a checking account. Checking accounts are insured and non-volatile. But what happens when you're GE or Apple or Panama? You can't just flop a couple billion dollars in to a Chase checking account and call it a day. Although, you still need a safe place to store money that won't be terribly volatile. GE can buy a billion dollars of treasury bonds. Many companies need tremendous amounts of collateral on hand, amounts far in excess of the capacity of a checking account; those funds are stored in treasuries of some sort. Separately, a treasury bond is not a substitute investment for an S&P index fund. For individuals they are two totally different investments with totally different characteristics. The only reason an individual investor should compare the return of the S&P against the readily available yield of treasuries is to ensure the expected return of an equity investment can sufficiently pay for the additional risk. |
How long should I keep my tax documents, and why? | How long you need to keep tax records will depend on jurisdiction. In general, if you discard records in a period of time less than your tax authority recommends, it may create audit problems down the road. ie: if you make a deduction supported by business expense receipts, and you discard those receipts next year, then you won't be able to defend the deduction if your tax authority audits you in 3 years. Generally, how long you keep records would depend on: (a) how much time your tax authority has to audit you; and (b) how long after you file your return you are allowed to make your own amendments. In your case (US-based), the IRS has straight-forward documentation about how long it expects you to keep records: https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records Period of Limitations that apply to income tax returns Keep records for 3 years if situations (4), (5), and (6) below do not apply to you. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return. Keep records indefinitely if you do not file a return. Keep records indefinitely if you file a fraudulent return. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later. Note that the above are the minimum periods to keep records; for your own purposes you may want to keep them for longer periods than that. For example, you may be in a position to discover that you would like to refile a prior tax return, because you forgot to claim a tax credit that was available to you. If you would have been eligible to refile in that period but no longer have documentation, you are out of luck. |
How do you get your Canadian stock information? | I only follow the news of stocks I already own. I use the GlobeInvest Watchlist http://www.theglobeandmail.com/globe-investor/my-watchlist/ each Friday night. In the drop-down views choose ALL NEWS I believe that there is a strong "grass is greaner .." effect from always looking at what other stock are doing - leading to switching just before your first stock takes off. It is only when I sell some position that I go looking at other possibilities. |
When an investor makes money on a short, who loses the money? | Michael gave a good answer describing the transaction but I wanted to follow up on your questions about the lender. First, the lender does charge interest on the borrowed securities. The amount of interest can vary based on a number of factors, such as who is borrowing, how much are they borrowing, and what stock are they trying to borrow. Occasionally when you are trying to short a stock you will get an error that it is hard to borrow. This could be for a few reasons, such as there are already a large amount of people who have shorted your broker's shares, or your broker never acquired the shares to begin with (which usually only happens on very small stocks). In both cases the broker/lender doesnt have enough shares and may be unwilling to get more. In that way they are discriminating on what they lend. If a company is about to go bankrupt and a lender doesnt have any more shares to lend out, it is unlikely they will purchase more as they stand to lose a lot and gain very little. It might seem like lending is a risky business but think of it as occurring over decades and not months. General Motors had been around for 100 years before it went bankrupt, so any lender who had owned and been lending out GM shares for a fraction of that time likely still profited. Also this is all very simplified. JoeTaxpayer alluded to this in the comments but in actuality who is lending stock or even who owns stock is much more complicated and probably doesnt need to be explained here. I just wanted to show in this over-simplified explanation that lending is not as risky as it may first seem. |
What does “Settling your Debt” entail, and how does it compare to other options? | If you are struggling with debt and cannot realistically pay your debts off with your current level of income, these businesses offer, for a fee, to negotiate with your debt providers a sum that you can realistically afford to pay. The debt providers will consider the offer because they would rather get some money back rather than nothing (as these are usually unsecured loans). For you it can be a better deal than going bankrupt or trying to struggle endlessly to pay off something you can't afford to pay off. Note, that even though you won't be bankrupt, you will be treated (by lenders) very similar to being bankrupt. In other words, it will be very hard for you to get new loans in the near future. |
Does a restaurant have to pay tax on a discount? | I owned a restaurant for over 5 years. Sales tax was only collected on POST discount price, though every state that collects sales tax may have different laws regarding collection. For example, when a customer used a gift certificate, that did NOT reduce the amount that tax was collected on. Why? Because the restaurant at some point or another collected the full amount of the bill. |
Learning investing and the stock market | I would recommend getting a used set of Chartered Financial Analyst books. The series is a great broad introduction to the most important aspects of investing and the markets. Combining both day-to-day knowledge and fundamental theory. CFA materials include in depth discussions of: After you have a strong base then stop by quant.stackexchange and ask about more specialized books or anything else that interests you. Have fun with your journey. |
Why don't people generally save more of their income? | This question is likely to be voted closed as opinion-based. That said - In general people have become accustomed to instant gratification. They also have the media showing them luxury and are enticed every day to buy things they don't need. In the US, the savings rate is awfully low, but it's not just the lower 50%, it's 75% of people who aren't saving what they should. see http://web.stanford.edu/group/scspi/_media/working_papers/pfeffer-danziger-schoeni_wealth-levels.pdf for an interesting article on the topic of accumulated wealth. |
What's a normal personal debt / equity ratio for a highly educated person? | Average person's life I'm going to say there is no normal debt level. Here's the standard life pattern: So it really depends on your situation, it's way too spread out to quote a "normal" figure. Cost of debt vs Gain from assets and Risk of income You need to strike a sweet spot based on: Someone who is more educated in finance will probably be able to run a tighter and more aggressive financial strategy, whereas someone who is educated in, say, creative media may not be able to do as good of a job. Running your life as a business Someone here mentioned this, I think it's very true. Unless you intend on living day to day, with no financial strategies, much of our lives parallel businesses. Both need to pay tax, both look for low risk high growth strategies, and both will (hopefully) have a purpose that goes beyond bringing in $$$. |
Higher returns from international markets? | Here's the 2009-2014 return of the S&P 500 (SPY) vs. Vanguard FTSE ex-US (VEU) (higher returns bolded) Another argument for them is their low correlation to U.S stocks. Looking at history however, I don't see it. Most times U.S stocks have done badly, foreign stocks have also done badly. Looking at the last 6 years (and current YTD), 1 in 3 years have international stocks doing better. I invest a portion of my investments in international because they aren't well correlated. |
Why are daily rebalanced inverse/leveraged ETFs bad for long term investing? | If you want to make a profit from long term trading (whatever "long term" means for you), the best strategy is to let the good performers in your portfolio run, and cull the bad ones. Of course that strategy is hard to follow, unless you have the perfect foresight to know exactly how long your best performing investments will continue to outperform the market, but markets don't always follow the assumption that perfect information is available to all participants, and hence "momentum" has a real-world effect on prices, whether or not some theorists have chosen to ignore it. But a fixed strategy of "daily rebalancing" does exactly the opposite of the above - it continuously reduces the holdings of good performers and increases the holdings of bad. If this type of rebalancing is done more frequently than the constituents of benchmark index are adjusted, it is very likely to underperform the index in the long term. Other issues in a "real world" market are the impact of increased dealing costs on smaller parcels of securities, and the buy/sell spreads incurred in the daily rebalancing trades. If the market is up and down 1% on alternate days with no long tern trend, quite likely the fund will be repeatedly buying and selling small parcels of the same stocks to do its daily balancing. |
What are the best software tools for personal finance? | For any android device you can try: Daily Expense Manager - to track your expenses and a host of other apps to suit your specific needs. |
Are there any disadvantages to DHA Investment Properties? | I think the strongest reason against DHA purchases (I don't consider them investments) is points 3 and 5 mentioned above. The resale market is only to other investors that are convinced its a good investment.If you can't sell to owner occupiers, you've just removed the MAJORITY of your potential pool of people to resell to - this has a devastating effect on your ability to make any capital gain from your investment - if you're not chasing capital gain...be sure to understand why! (see article below)The marketing people will have you believe that DHA is a great investment from a yield perspective...maybe so, I haven't crunched the numbers. But in my opinion, I would wonder - who cares?Yield is important to ensure you can hold the property, but if there is no capital growth and you can't sell it for a profit or release some equity to buy the next investment, then you've just put a massive road block in your wealth building path.I am at the asset accumulation phase of my investing journey, so my opinion is skewed towards capital growth investments. Unless you have a sizable equity base already, in my opinion $4-5 Million in debt free assets, then you should be looking for capital growth assets...not high yield.This article from Your Investment Property magazine, although now dated, gives a good example to illustrate my point on why capital growth is the sensible strategy during the asset building phase of your wealth creation journey: Why capital growth is still king I think the strongest reason against DHA purchases (I don't consider them investments) is points 3 and 5 mentioned above. The resale market is only to other investors that are convinced its a good investment. If you can't sell to owner occupiers, you've just removed the MAJORITY of your potential pool of people to resell to - this has a devastating effect on your ability to make any capital gain from your investment - if you're not chasing capital gain...be sure to understand why! (see article below) The marketing people will have you believe that DHA is a great investment from a yield perspective...maybe so, I haven't crunched the numbers. But in my opinion, I would wonder - who cares? Yield is important to ensure you can hold the property, but if there is no capital growth and you can't sell it for a profit or release some equity to buy the next investment, then you've just put a massive road block in your wealth building path. I am at the asset accumulation phase of my investing journey, so my opinion is skewed towards capital growth investments. Unless you have a sizable equity base already, in my opinion $4-5 Million in debt free assets, then you should be looking for capital growth assets...not high yield. This article from Your Investment Property magazine, although now dated, gives a good example to illustrate my point on why capital growth is the sensible strategy during the asset building phase of your wealth creation journey: Why capital growth is still king |
Is debt almost always the cause of crashes and recessions? | While debt increases the likelihood and magnitude of a crash, speculation, excess supply and other market factors can result in crashes without requiring excessive debt. A popular counter example of crashes due to speculation is 16th century Dutch Tulip Mania. The dot com bubble is a more recent example of a speculative crash. There were debt related issues for some companies and the run ups in stock prices were increased by leveraged traders, but the actual crash was the result of failures of start up companies to produce profits. While all tech stocks fell together, sound companies with products and profits survive today. As for recessions, they are simply periods of time with decreased economic activity. Recessions can be caused by financial crashes, decreased demand following a war, or supply shocks like the oil crisis in the 1970's. In summary, debt is simply a magnifier. It can increase profits just as easily as can increase losses. The real problems with crashes and recessions are often related to unfounded faith in increasing value and unexpected changes in demand. |
I received $1000 and was asked to send it back. How was this scam meant to work? | The initial story sounds normal. Happens every day. Checksums cannot prevent this, since it is a typo by the sender. The sender typed in a wrong account number. That account number happened to exist (so the sender wouldn't get any immediate error message), your account. But, that innocent story can also be used as part of a money laundering plan. Namely, to give the money a legitimate source. Also can be used in a scheme to frame you for something. The question of how the person got your phone number raises suspicion. The bluffs to avoid the normal paperwork, and then disappearing, make it incriminating. No doubt. Take this to the police. The question arises: even if the plan (whatever it was) failed, why didn't he do the paperwork and get the money back? The answer is that that would leave a trail to possibly be picked up in a future investigation. |
Explain the details and benefits of rebalancing a retirement portfolio? | Rebalancing your portfolio doesn't have to include selling. You could simply adjust your buying to keep your portfolio in balance. If you portfolio has shifted from 50% stocks and 50% bonds to 75% stocks and 25% bonds, you can just only use new savings to buy bonds, until you are back at 50-50. Remember to take into account taxes if you are thinking of selling to rebalance in taxable accounts. The goal of rebalancing is to keep your exposures the way that you want them. Assuming that you had a good reason to have a portfolio of 50% stocks and 50% bonds, you probably want to keep your portfolio similar in the future. If you end up with a portfolio of 75% stocks and 25% bonds due to stock market fluctuations, the exposure and the risk / return profile of your portfolio will have changed, and it's probably not something that you want. You don't want to rebalance just for the sake of rebalancing either. There can be costs to rebalancing (taxes, transaction fees, etc...) and these aren't always worth the effort. That's why you don't need to rebalance every month or if your portfolio has shifted from 50/50 to 51/49. I take a look at my portfolio once a year, and adjust my automated investments so that by the end of the next year I'm back to the ratio I want. |
Receiving partial payment of overseas loan/company purchase? | Is it equity, or debt? Understanding the exact nature of one's investment (equity vs. debt) is critical. When one invests money in a company (presumably incorporated or limited) by buying some or all of it — as opposed to lending money to the company — then one ends up owning equity (shares or stock) in the company. In such a situation, one is a shareholder — not a creditor. As a shareholder, one is not generally owed a money debt just by having acquired an ownership stake in the company. Shareholders with company equity generally don't get to treat money received from the company as repayment of a loan — unless they also made a loan to the company and the payment is designated by the company as a loan repayment. Rather, shareholders can receive cash from a company through one of the following sources: "Loan repayment" isn't one of those options; it's only an option if one made a loan in the first place. Anyway, each of those ways of receiving money based on one's shares in a company has distinct tax implications, not just for the shareholder but for the company as well. You should consult with a tax professional about the most effective way for you to repatriate money from your investment. Considering the company is established overseas, you may want to find somebody with the appropriate expertise. |
What are the advantages of paying off a mortgage quickly? | I used to think that paying off ahead of time made sense, but I no longer do, at least in most cases. The upside is that you can get a return on your money equal to the mortgage interest rate (it's less than that in the US, where mortgage interest is deductible, so it's roughly the mortgage interest rate * 1 - your marginal income tax rate). There are a few downsides. The biggest is that cash is the most liquid asset you can have; you can get at it with no restrictions. If you put that cash into your house, you are converting that into an asset with a lot of restrictions; you can't get at it without fees, nor can you get at it if you don't have a job, which is when you would need it most. So, you are putting your money in a hard-to-get-at place for a small interest rate. I don't think it is worthwhile. (edit) One complication is PMI. If you are currently paying PMI, it may make sense to put money towards the mortgage until you get to 20% and can get rid of the PMI. |
Do I have to explain the source of *all* income on my taxes? | Do I have to explain the source of all income on my taxes? "Yes, you do", say the ghosts of Ermenegildo and Mary Cesarini. https://turbotax.intuit.com/tax-tips/general/what-to-know-about-taxes-on-found-property/L9BfdKz7N The Cesarinis argued to the IRS that the money wasn’t income, and so it should not be taxed as such. The IRS wasn’t swayed by the couple’s argument. The case went to federal court, and the IRS won. “Found” property and money has been considered taxable income ever since. The IRS plainly states that taxpayers must report “all income from any source," even income earned in another country, unless it is explicitly exempt under the U.S. Tax Code. This covers a wide range of miscellaneous income, including gambling winnings. According to the Cesarini decision, money you find isn’t explicitly exempt. The tax impact won’t be significant if you find an item of property with a fair market value of only $500 and are in the 25% tax bracket. You’ll owe the IRS $125 ($500 x .25 = $125). However, if you are a finder and keeper of $10,000, your tax burden will be $2,500 ($10,000 x .25 = $2,500). |
Avoiding timing traps with long term index investing | What are the risks pertaining to timing on long term index investments? The risks are countless for any investment strategy. If you invest in US stocks, and prices revert to the long term cyclically adjusted average, you will lose a lot of money. If you invest in cash, inflation may outpace interest rates and you will lose money. If you invest in gold, the price might go down and you will lose money. It's best to study history and make a reasonable decision (i.e. invest in stocks). Here are long term returns by asset class, computed by Jeremy Siegel: $1 invested in equities in 1801 equals $15.22 today if was not invested and $8.8 million if it was invested in stocks. This is the 'magic of compound interest' and cash / bonds have not been nearly as magical as stocks historically. 2) How large are these risks? The following chart shows the largest drawdowns (decreases in the value of an asset) since 1970 (source): Asset prices decrease in value frequently. Financial assets are volatile, but historically, they have increased over time, enabling investors to earn compounded returns (exponential growth of money is how to get rich). I personally view drawdowns as an excellent time to buy - it's like going on a shopping spree when everything in the store is discounted. 3) In case I feel not prepared to take these risks, how can I avoid them? The optimal asset allocation depends on the ability to take risk and your tolerance for risk. You are young and have a long investment horizon, so if stocks go down, you will have plenty of time to wait for them to go back up (if you're smart, you'll buy more stocks when they go down because they're cheap), so your ability to bear risk is high. From your description, it seems like you have a low risk tolerance (despite a high ability to be exposed to risk). Here's the return of various asset classes and how the average investor has fared over the last 20 years (source): Get educated (read Common Sense on Mutual Funds, A Random Walk Down Wall Street, etc.) and don't be average! Closing words: Investing in a globally diversified portfolio with a dollar cost averaging strategy is the best strategy for most investors. For investors that are unable to stay rational when markets are volatile (i.e. the investor uncontrollably sells their stocks when stocks decrease 20%), a more conservative asset allocation is recommended. Due to the nature of compounded interest, a conservative portfolio is likely to have a much lower future value. |
Is compounding interest on investments a myth? | This post may be old anyhow here's my 2 cents. Real world...no. Compounding is overstated. I have 3 mutual funds, basically index funds, you can go look them up. vwinx, spmix, spfix in 11 years i've made a little over 12,000 on 50,000 invested. That averages 5%. That's $1,200 a year about. Not exactly getting rich on the compounding "myth?". You do the math. I would guess because overly optimistic compounding gains are based on a straight line gains. Real world...that aint gonna happen. |
Why is the volume highest at the beginning and end of a trading day? | While volume per trade is higher at the open and to a lesser extent at the close, the overall volume is actually lower, on average. Bid ask spreads are widest at the open and to a lesser extent at the close. Generally, bid ask spreads are inversely proportional to overall volumes. Why this is the case hasn't been sufficiently clearly answered by academia yet, but some theories are that |
Are 'no interest if paid in in x months' credit cards worth it? | You can't buy it outright. You can't take the time to save up. if the remaining choice is between a card that charges from day one, and a card with this kind of grace period, the grace card is the better choice. Plan wisely, pay it in full before that rate starts to be charged. One additional note - There are two groups of people, the pay-in-fullers and the balance carriers. I believe that one should pay in full, and never pay interest. A zero rate offer can be used by the balance carrier to feel great for 12 months, but have even more debt after the rate kicks in. As a pay-in-full user, I've used the zero rate to throw $20K at the 5.25% mortgage, and planned a refinance to 3.5% just as it ended. a $750 savings (after the tax effect) well worth the bit of effort. The fees should be in the fine print. My zero rate had a transfer fee, $50 max, which was nothing in comparison to the savings. |
How long do credit cards keep working after you disappear? | how can I keep my website running for posterity after I die? If this is the real problem, incorporate a non-profit corporation or have a lawyer set up a foundation. Those will survive after your death and their bank accounts with them. You might even find someone willing to do this for you. It sounds like a neat business. Collect the ad revenue, charge a fee, pay the web hosting. Heck, this is a decent deal for a web host. Provide the web hosting; collect the ad revenue. |
Basic questions about investing in stocks | Now a days, your stocks can be seen virtually through a brokerage account. Back in the days, a stock certificate was the only way to authenticate stock ownership. You can still request them though from the corporation you have shares in or your brokerage. It will have your name, corporation name and number of shares you have. You have to buy shares of a stock either through a brokerage or the corporation itself. Most stock brokerages are legit and are FDIC or SIPC insured. But your risks are your own loses. The $10 you are referring to is the trade commission fee the brokerage charges. When you place an order to buy or sell a stock the brokerage will charge you $10. So for example if you bought 1 share of a $20 stock. The total transaction cost will be $30. Depending on the state you live in, you can basically starting trading stocks at either 18 or 21. You can donate/gift your shares to virtually anyone. When you sell a stock and experience a profit, you will be charged a capital gains tax. If you buy a stock and sell it for a gain within 1 year, you will taxed up to 35% or your tax bracket but if you hold it for more than a year, you will taxed only 15% or your tax bracket. |
The Benefits/Disadvantages of using a credit card | In the UK, using a credit card adds a layer of protection for consumers. If something goes wrong or you bought something that was actually a scam, if you inform the credit card company with the necessary documents they will typically clear the balance for that purchase (essentially the burden of 'debt' is passed to them and they themselves will have to chase up the necessary people). Section 75 of the Consumer Credit Act I personally use my credit card when buying anything one would consider as "consumer spending" (tvs, furniture ect). I then pay off the credit card immediately. This gives me the normal benefits of the credit card (if you get cashback or points) PLUS the additional consumer credit protection on all my purchases. This, in my opinion is the most effective way of using your credit card. |
How do you measure the value of gold? | Intrinsic value is a myth. There is no such thing. Subjective human demand is the only thing that gives anything value. This subjectivity is different person to person and can change very quickly. Historically there are two main uses for gold: jewelry and money. How can you tell when a particular type of money is undervalued? It disappears from circulation since people prefer to use money that is overvalued. This phenomenon is paraphrased in Gresham's Law: Bad money drives out good money. The Coinage Act of 1792 established the US dollar as 371.25 grains of silver or 24.75 grains of gold. This established a government ratio of 15 ounces of silver to 1 ounce of gold. In the late 18th century there was a large production of silver from Mexico and the market ratio of silver to gold increased to 15.75 to 1 by 1805. The government ratio, however, was still 15 to 1. This was enough incentive for people to exchange their silver coins for gold coins at the government ratio, melt the gold, and sell the gold bullion overseas at the market value. Thus, gold coins disappeared from circulation as people either hoarded the gold or sent it abroad. People used the overvalued silver coins (i.e. the "bad" money) domestically and gold coins disappeared from the market. In an attempt to correct the problem of disappearing gold coins the Coinage Act of 1834 was enacted. It kept the US dollar at 371.25 grains of silver but changed the definition to 23.2 grains of gold which established a government ratio of 16 to 1. This was close to the market ratio of gold to silver at the time so both gold and silver coins appeared in circulation again. The gold rush of 1849 produced a lot of gold and the market ratio of silver to gold became 15.46 to 1. Now gold was overvalued so people began exchanging their gold coins for silver coins at the government ratio, melt the silver, and sell the silver bullion overseas at the market value. People used the overvalued gold coins (i.e. the "bad" money) domestically and silver coins disappeared from the market. When you see gold circulating everywhere you will know it is overvalued compared to other types of money. Paper money always drives gold out of circulation since the market ratio of paper to gold severely under values gold. Source here. |
Co-signer deceased | People act like lawsuits are the end of the world, her suing shouldn't be considered a threat, it should be considered the accurate course of action to resolve contractual obligations. Of course, it would be convenient if she did nothing at all! If you believe her real goal is to "get it off her credit", then have her come refinance with you. This will give you the opportunity to not have her on it and you to get different terms. Of course, if your credit still is poor then this option also exacerbates the inconvenience. None of the options sounds like they will ruin your credit (unless you are scrounging for cash through credit facilities to pay her off). You have several completely benign options available. |
Is there such a thing as “stock insurance”? | Not that I am aware. If you are trying to mitigate losses from stock purchases, you may want to consider stock mutual funds. This is why single stocks can be extremely risky. |
Stock options: what happens if I leave a company and then an acquisition is finalized? | Having stock options means that you have worked for and rightfully earned a part of the company's capital appreciation. Takeover of the company would indicate someone is interested in the company (something should be valuable). It would be unwise to not strike before the period lapses since the strike price is always lower than market price and takeovers generally increases stock values ... it is capital gains all the way my friend. Good luck. *observations not in professional capacity. pls consult a professional for investment related advice. |
Will depositing $10k+ checks each month raise red flags with the IRS? | Contractors regularly deposit checks like this; if the income is legitimate don't worry. Report it to the IRS as income whether or not the customer issues you a 1099. With deposits like this you should be making quarterly payments to the IRS for your projected income. |
Pay off credit cards in one lump sum, or spread over a few months? | I know you say you are aware of secured and unsecured debt and you've made your decision. Did you do the numbers? You will pay 44k over the life of the mortgage for that 24k (Based on 4.5% APR mortgage). Once you refinance your mortgage, do you plan on using credit for a while? Lots of Americans are hyperfocused on credit scores. The only times it affects your life are when you finance something, when you apply to rent a house or apartment, and sometimes when you apply for a job. Credit score should not be a factor in this decision. You're borrowing the money at a lower rate to pay off the high rate cards because you want to pay less in interest. Considering #1 is there any reason NOT to pay off the cards immediately, if not sooner? |
Investment / Savings advice in uncertain economy | $23,000 Student Loans at 4% This represents guaranteed loss. Paying this off quickly is a conservative move, while your other investments may easily surpass 4% return, they are not guaranteed. Should I just keep my money in my savings account since I want to keep my money available? Or are there other options I have that are not necessarily long term may provide better returns? This all depends on your plans, if you're just trying to keep cash in anticipation of the next big dip, you might strike gold, but you could just as easily miss out on significant market gains while waiting. People have a poor track record of predicting market down-turns. If you are concerned about how exposed to market risk you are in your current positions, then you may be more comfortable with a larger cash position. Savings/CDs are low-interest, but much lower risk. If you currently have no savings (you titled the section savings, but they all look like retirement/investment accounts), then I would recommend focusing on that first, getting a healthy emergency fund saved up, and budgeting for your car/house purchases. There's no way to know if you'd be better off investing everything or piling up cash in the short-term. You have to decide how much risk you are comfortable with and act accordingly. |
Ballpark salary equivalent today of “healthcare benefits” in the US? | As others have said, it depends entirely on what benefits are provided, and how much of the cost of those benefits is paid by the employer and how much is paid by the employee, and compare that to what it would cost to obtain the necessary/equivalent coverage without employer assistance. In my case, my employer pays more than $10,000 per year toward the cost of medical, dental, vision, disability, and life insurance for myself and my family. That's almost 20% of the average total household income in my state, so it is not an insignificant amount at all. |
Do I make money in the stock market from other people losing money? | Do I make money in the stock market from other people losing money? Not normally.* The stock market as a whole, on average, increases in value over time. So if we make the claim that the market is a zero-sum game, and you only make money if other people lose money, that idea is not sustainable. There aren't that many people that would keep investing in something only to continue to lose money to the "winners." The stock market, and the companies inside it, grow in value as the economy grows. And the economy grows as workers add value with their work. Here's an analogy: I can buy a tree seed for very little and plant it in the ground. If I do nothing more, it probably won't grow, and it will be worth nothing. However, by taking the time to water it, fertilize it, weed it, prune it, and harvest it, I can sell the produce for much more than I purchased that seed for. No one lost money when I sell it; I increased the value by adding my effort. If I sell that tree to a sawmill, they can cut the tree into usable lumber, and sell that lumber at a profit. They added their efforts and increased the value. A carpenter can increase the value even further by making something useful (a door, for example). A retail store can make that door more useful by transporting it to a location with a buyer, and a builder can make it even more useful by installing it on a house. No one lost any money in any of these transactions. They bought something valuable, and made it more valuable by adding their effort. Companies in the stock market grow in value the same way. A company will grow in value as its employees produce things. An investor provides capital that the company uses to be able to produce things**, and as the company grows, it increases in value. As the population increases and more workers and customers are born, and as more useful things are invented, the economy will continue to grow as a whole. * Certainly, it is possible, even common, to profit from someone else's loss. People lose money in the stock market all the time. But it doesn't have to be this way. The stock market goes up, on average, over the long term, and so long term investors can continue to make money in the market even without profiting from others' failures. ** An investor that purchases a share from another investor does not directly provide capital to the company. However, this second investor is rewarding the first investor who did provide capital to the company. This is the reason that the first investor purchased in the first place; without the second investor, the first would have had no reason to invest and provide the capital. Relating it to our tree analogy: Did the builder who installed the door help out the tree farmer? After all, the tree farmer already sold the tree to the sawmill and doesn't care what happens to it after that. However, if the builder had not needed a door, the sawmill would have had no reason to buy the tree. |
What is the next step to collect money after a judgment has been ignored? | Do you have the following information? If the above conditions are met, you can use the county sheriff department to put a lien on his bank account. You can also garnish wages if he has a job but you don't know all of the above. |
Stock not available at home country nor at their local market - where should I buy it | Theoretically, it shouldn't matter which one you use. Your return should only depend on the stock returns in SGD and the ATS/SGD exchange rate (Austrian Schillings? is this an question from a textbook?). Whether you do the purchase "through" EUR or USD shouldn't matter as the fluctuations in either currency "cancel" when you do the two part exchange SGD/XXX then XXX/ATS. Now, in practice, the cost of exchanging currencies might be higher in one currency or the other. Likely a tiny, tiny amount higher in EUR. There is some risk as well as you will likely have to exchange the money and then wait a day or two to buy the stock, but the risk should be broadly similar between USD and EUR. |
How do I determine how much rent I could charge for a property or location? | A good way to find the rates of rental prices is to look what other landlords are charging for similar properties in your area. The proper investigation of property rental market should be make by using property listing platforms. The other method is online rent calculator. There are a bunch of them on the Web. Briefly speaking, the rent calculator uses industry data to look at the typical rent you might expect from a property in a post code. Remember that the rent you charge has to be at least equal to the cost of your monthly mortgage bill. When you’re deciding what to charge, don’t forget to factor in an estimate of repair costs, taxes, homeowners association fees and insurance. |
Does FIFO cost basis applies across multiple accounts? | To sum up: My question came from misunderstanding what cost basis applies to. Now I get it that it applies to stocks as physical entities. Consider a chain of buys of 40 stock A with prices $1-$4-$10-$15 (qty 10 each time) then IRS wants to know exactly which stock I am selling. And when I transfer stocks to different account, that cost basis transfers with them. Cost basis is included in transfers, so that removes ambiguity which stock is being sold on the original account. In the example above, cost basis of 20 stocks moved to a new account would probably be $1 x 10 and $4 x 10, i.e. FIFO also applies to transfers. |
What are the risks of Dividend-yielding stocks? | Having a good dividend yield doesn't guarantee that a stock is safe. In the future, the company may run into financial trouble, stop paying dividends, or even go bankrupt. For this reason, you should never buy a stock just because it has a high dividend yield. You also need some criteria to determine whether that stock is safe to buy. Personally, I consider a stock is reasonably safe if it meets the following criteria: |
At Vanguard, can I transfer shares from regular investment account to a Roth IRA? | No, IRA contributions can only be made in the form of cash (rollovers and conversions are different). You'd have to sell the investments in your taxable account, incurring capital gains or losses, then transfer the proceeds to your IRA in cash. Note that the amount you can transfer is subject to the limits on how much one can contribute to the IRA each year. You could look into Vanguard Target Retirement funds, which have a lower $1,000 minimum investment, or Vanguard ETFs. |
Can I place a stock limit order to buy above the current price? Can I place a stock limit order to sell below the current price? | buy above the current price in the stock market You can do that, but what is the purpose to do so ? Brokers take the limit price of your order as the highest price you are going to pay. So if an order can be fulfilled below the limit they will do so. can I sell below the current price You can put in a order to do so. But what I have seen with my current broker is that the order never reached the market and wasn't executed at all. The broker might have some safeguards or process in place to stop me from doing so. Not sure how other brokers deal with it. |
Process for dissolving a recently-opened Colorado LLC? | Forms for the Colorado LLCs are online. You can find the link to the dissolution form here, and instructions here. IRS instructions are here. That's what they want: To close your business account, send us a letter that includes the complete legal name of the entity, the EIN, the business address and the reason you wish to close your account. If you have a copy of the EIN Assignment Notice that was issued when your EIN was assigned, include that when you write to us at: Internal Revenue Service Cincinnati, Ohio 45999 Everything is pretty straight forward. Note that you might be required to file a initial/final tax return if you had any transactions. |
What special considerations need to be made for a US citizen who wishes to purchase a house in Canada? | About deducting mortgage interest: No, you can not deduct it unless it is qualified mortgage interest. "Qualified mortgage interest is interest and points you pay on a loan secured by your main home or a second home." (Tax Topic 505). According to the IRS, "if you rent out the residence, you must use it for more than 14 days or more than 10% of the number of days you rent it out, whichever is longer." Regarding being taxed on income received from the property, if you claim the foreign tax credit you will not be double taxed. According to the IRS, "The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived." (from IRS Topic 856 - Foreign Tax Credit) About property taxes: From my understanding, these cannot be claimed for the foreign tax credit but can be deducted as business expenses. There are various exceptions and stipulations based on your circumstance, so you need to read the official publications and get professional tax advice. Here's an excerpt from Publication 856 - Foreign Tax Credit for Individuals: "In most cases, only foreign income taxes qualify for the foreign tax credit. Other taxes, such as foreign real and personal property taxes, do not qualify. But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040)." Note and disclaimer: Sources: IRS Tax Topic 505 Interest Expense, IRS Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses) , IRS Topic 514 Foreign Tax Credit , and Publication 856 Foreign Tax Credit for Individuals |
Do I need a business credit card? | It can certainly help build a credit score, but remember that businesses gain credit differently from individuals. Depending on the country, there isn't usually a national register of business credit ratings the way there is for individuals. The credit record you'd be gaining is with your own bank only. Banks will usually base your business credit record on revenue and transactional loads rather than merely on having and holding a credit card. That said, it isn't always that easy to get a business credit card and so it is a useful thing to have for credibility with clients (depending on the type of work you do). A credit card can also sometimes work out cheaper (and faster) for financing small overdrafts than a regular business overdraft facility. That said, I've found that larger loans over a five-year term can work out much cheaper for an established business than they would for an individual, even where the business itself has no history of using credit. |
First time consultant, doubts on Taxation | 1.If the compensation that I receive is over 10 lakhs, how much would be deducted as tax No tax will be deducted by the company. You have to calculate the tax and pay in Advance by yourself. There are quite a few Banks that give you online facility to pay your tax. There is no service tax. Otherwise the tax slabs are right. The current budget has slightly revised the tax brackets. 2.So are these the right taxes and % that Need to be paid? If not do let me know the correct deductions. Yes. Revised brackets for financial year 2014-2015 are NIL for first 2.5 lakhs. Other brackets are unchanged. 4.What others legal options I have to decrease the tax liability? As an employee of my ex company I had once taken an FD (that reduced my tax) The options are same as salaried, i.e. you can claim exemption under 80C or on interest of housing loan, etc. As a consultant certain expenses can also be deducted. You should also talk to a CA who can help you with this as there will be some paperwork involved. |
Which credit card is friendliest to merchants? | Please don't waste any more time feeling bad for merchants for the charges they incur. I don't know who supported the lobby for this rule, but issuers no longer can demand that merchants accept all transactions (even the unprofitable ones). I discussed this at length on my blog. Merchants accept credit cards for one reason, and one reason only: it brings them more business. More people will buy, and on average they'll buy more. They used to take the occasional hit for someone buying a pack of gum with a credit card, but they don't have to anymore. The new law restricts issuers from imposing minimum transactions that are less than $10. I use a rewards card wherever possible. I get a cheaper price. In most cases I don't care what the merchant has to pay. They've already factored it into their prices. But if you are concerned, then as fennec points out in his comment, cash is the way to go. |
Is paying off your mortage a #1 personal finance priority? | Paying off your house quickly should be a #2-level priority, behind making sure you have some basic savings but definitely ahead of any investing concerns, because your house is not an investment; it's your home. (If you're brave/foolish enough to try buying houses-as-investments in the current climate, this obviously doesn't apply to you!) This isn't a financial matter so much as an issue of basic prudence. If something disastrous happens, (you lose your job, get in a serious car accident, your kid comes down with cancer, etc,) it will put tremendous strain on your financial resources. If you own your home outright when this happens, it means that no matter what else might go wrong, you can't get foreclosed on and end up out on the streets, and that's worth more than any rate of return you can reasonably expect to find even in the best of times. It's a well-known investing maxim to "never bet anything that you can't afford to lose." In light of that, consider this: if you have a mortgage that is not paid off, that's exactly what you're doing. You are placing a bet against a bank that you'll remain solvent long enough to pay off the mortgage, and your home is the wager. Mortgages may be a necessary evil with housing prices being what they are, but make no mistake, they are evil. Get rid of yours as quickly as you can. |
Which practice to keep finances after getting married: joint, or separate? | My wife and I maintain seperate accounts. We have the bills split between us so that certain bills are paid by one of us, and other bills by the other. This is not a perfect 50/50 split as we don't make the same amount of money, but comparable enough that neither feels like they're doing all the bills alone. Our investments are similar. That means we each have a pool of money that we can spend on toys or entertainment as we see fit without overspending. Once my bills are paid and my savings are paid for the month, if I want to go buy some DVDs and my wife wants to buy a new lens for the camera, we don't have to agree. We just use our own money and do it. For us that's led to minimal friction or arguments over what to spend money on, simply because we aren't using the same pool. Getting it work requires getting the split right AND having the mindset that the other person is just as entitled to spend their share of the money as you are to spend yours. It really helps to eliminate issues where she spent money that I expected to be able to spend before I could, which can happen in a joint account. (We have no joint accounts, only things like the mortgage are in both our names.) I've been told by more then one person that how we're doing it is "wrong", but it works a lot better for us then trying to combine finances ever did. I think it also helps that we're younger, and this seems far less common amongst older couples. |
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