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How do share dilution scams make money?
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For this to work, those who control the dilution must also control their salaries because the only way for them to be paid off when it's the corporation itself selling is to gain access to the proceeds. When a corporation sells newly issued equity, the corporation itself owns the money. To at least have the appearance of propriety, the scammers must be paid those proceeds. Both actions imply that the board is captured by the scammers. There are many corporations that seem to do this even with persistently large market capitalizations. The key difference between this and pump-and-dump is that its a fraudulent group of investors selling in this case instead of the corporation itself. A detailed simple example Corporations are mandated by law to be little oligarchies; although, "republic" is now becoming more appropriate with all of the new shareholder rights. A corporation is controlled at root by the board of directors who are elected by the shareholders. The board has no direct operational control, as that is left to the "king", the CEO; however, the board does control what everyone wants access to: the money. Board members have all sorts of legal qualitative mandates on how to behave, and they've functioned fairly decently efficiently over the long run, but there are definitely some bad apples. Boards are somewhat intransigent since it's difficult to hold board elections, and usually only specific board members are put up for election by a shareholder vote, so a bad one has the potential to really get stuck in there. Once a bad one is in there, they don't care because they know it will be tough to get them out, so they run roughshod over the company's purse. Only the board can take action on major funding such as the CEO's operating budget, board compensation, financing, investment, etc, some with shareholder approval, some without. The corporation itself owns all of those assets, but the board controls them. In this example, they scheme with most likely the top executive, but a rubber stamp top executive could allow a lower rung to scheme with the board, but the board is always constant until the law is changed. Because there's no honor amongst thieves, the board votes which can require some combination of executive and shareholder approval are taken very close together: sell shares, increase salaries to key executive schemers, increase board compensation. The trusting shareholders believe this is in the best interests of the company at large so go along. So the money flows from existing & new shareholders to the corporation now controlled by a malicious board and then finally to the necessary malicious executive and the vital malicious board.
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What does a contract's worth mean?
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$400M is the gross "check" the company will receive as payment for the project. The contract will specify payment schedule. And it can range from a payment per milestone achieved to a pay in full on completion. The profit will hopefully be positive, but it's not impossible for a bid to underestimate the full cost, resulting in no profit at all. In theory, if you knew the expected profit from the deal, you should be able to estimate the value it adds to the company's value.
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Making your first million… is easy! (??)
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It is difficult to become a millionaire in the short term (a few years) working at a 9-to-5 job, unless you get lucky (win the lottery, inheritance, gambling at a casino, etc). However, if you max out your employer's Retirement Plan (401k, 403b) for the next 30 years, and you average a 5% rate of return on your investment, you will reach millionaire status. Many people would consider this "easy" and "automatic". Of course, this assumes you are able to max our your retirement savings at the start of your career, and keep it going. The idea is that if you get in the habit of saving early in your career and live modestly, it becomes an automatic thing. Unfortunately, the value of $1 million after 30 years of inflation will be eroded somewhat. (Sorry.) If you don't want to wait 30 years, then you need to look at a different strategy. Work harder or take risks. Some options:
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Pensions, annuities, and “retirement”
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With an annuity, you invest directly into an annuity with money you have earned as wages/salary/etc. You pay for it, and trade your payments into the annuity for guaranteed payments from the annuity issuer in the future. The more you pay in before the annuity payments begin, the more you will receive for your annuity payment. With a pension, most often you invest implicitly, rather than directly, into the pension. Rather than making a cash contribution on a regular basis, it is likely that your employer has periodically invested into the pension fund for you, using monies that would otherwise have been paid to you if there were no pension system. This is why your pension benefits are often determined based on years of service, your rate of pay, and similar factors.
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Where can I find a company's earnings history for free?
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I was going to comment above, but I must have 50 reputation to comment. This is a question that vexes me, and I've given it some thought in the past. Morningstar is a good choice for simple, well-organized financial histories. It has more info available for free than some may realize. Enter the ticker symbol, and then click either the Financials or the Key Ratios tab, and you will get 5-10 years of some key financial stats. (A premium subscription is $185 per year, which is not too outrageous.) The American Association of Individual Investors (AAII) provides some good histories, and a screener, for a $29 annual fee. Zacks allows you to chart a metric like EPS going back a long ways, and so you can then click the chart in order to get the specific number. That is certainly easier than sorting through financial reports from the SEC. (A message just popped up to say that I'm not allowed to provide more than 2 links, so my contribution to this topic will end here. You can do a search to find the Zacks website. I love StackExchange and usually consult it for coding advice. It just happens to be an odd coincidence that this is my first answer. I might even have added that aside in a comment, but again, I can't comment as of yet.) It's problem, however, that the universe of free financial information is a graveyard of good resources that no longer exist. It seems that eventually everyone who provides this information wants to cash in on it. littleadv, above, says that someone should be paid to organize all this information. However, think that some basic financial information, organized like normal data (and, hey, this is not rocket science, but Excel 101) should be readily available for free. Maybe this is a project that needs to happen. With a mission statement of not selling people out later on. The closest thing out there may be Quandl (can't link; do a search), which provides a lot of charts for free, and provides a beautiful and flexible API. But its core US fundamental data, provided by Sharadar, costs $150 per quarter. So, not even a basic EPS chart is available there for free. With all of the power that corporations have over our society, I think they could be tabulating this information for us, rather than providing it to us in a data-dumb format that is the equivalent of printing a SQL database as a PDF! A company that is worth hundreds of billions on the stock market, and it can't be bothered to provide us with a basic Excel chart that summarizes its own historical earnings? Or, with all that the government does to try to help us understand all of these investments, they cannot simply tabulate some basic financial information for us? This stuff matters a great deal to our lives, and I think that much of it could and should be available, for free, to all of us, rather than mainly to financial professionals and those creating glossy annual reports. So, I disagree that yet another entity needs to be making money off providing the BASIC transparency about something as simple as historical earnings. Thank you for indulging that tangent. I know that SE prides itself on focused answers. A wonderful resource that I greatly appreciate.
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Multi-user, non-US personal finance and budget software
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I know exactly what you are talking about. You may like
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Why do dishonour fees exist?
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In the United States, many banks aim to receive $ 100 per year per account in fees and interest markup. There are several ways that they can do this on a checking account. These examples assume that there is a 3 % difference between low-interest-rate deposit accounts and low-interest rate loans. Or some combination of these markups that adds up to $ 100 / year. For example: A two dollar monthly fee = $ 24 / year, plus a $ 2,000 average balance at 0.05% = $ 29 / year, plus $ 250 / month in rewards debit card usage = $ 24 / year, plus $ 2 / month in ATM fees = $ 24 / year. Before it was taken over by Chase Manhattan in 2008, Washington Mutual had a business strategy of offering "free" checking with no monthly fees, no annual fees, and no charges (by Washington Mutual) for using ATMs. The catch was that the overdraft fees were not free. If the customers averaged 3 overdraft fees per year at $ 34 each, Washington Mutual reached its markup target for the accounts.
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Is real (physical) money traded during online trading?
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I think you need to define what you mean by "buy currency online using some online forex trading platform" ... In large Fx trades, real money [you mean actual electronic money, as there is not paper that travels these days]... The Fx market is quite wide with all kinds of trades. There are quite a few Fx transactions that are meant for delivery. You have to pay in the currency for full amount and you get the funds electronicall credited to you in other currency [ofcouse you have an account in the other currency or you have an obligation to pay]. This type of transaction is valid in Ismalic Banking. The practise of derivaties based on this or forward contracts on this is not allowed.
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How to make an investment in a single company's stock while remaining market-neutral?
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You can employ a hedging strategy using short selling, put options, or other methods that will partially neutralize your exposure to the overall market. e.g. You could short sell a market-wide index such as the S&P500, while going long (buying) the company you are interested in. Investopedia has a nice primer on this: Also, see this related question here:
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How to rescue my money from negative interest?
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First off, the answer to your question is something EVERYONE would like to know. There are fund managers at Fidelity who will a pay $100 million fee to someone who can tell them a "safe" way to earn interest. The first thing to decide, is do you want to save money, or invest money. If you just want to save your money, you can keep it in cash, certificates of deposit or gold. Each has its advantages and disadvantages. For example, gold tends to hold its value over time and will always have value. Even if Russia invades Switzerland and the Swiss Franc becomes worthless, your gold will still be useful and spendable. As Alan Greenspan famously wrote long ago, "Gold is always accepted." If you want to invest money and make it grow, yet still have the money "fluent" which I assume means liquid, your main option is a major equity, since those can be readily bought and sold. I know in your question you are reluctant to put your money at the "mercy" of one stock, but the criteria you have listed match up with an equity investment, so if you want to meet your goals, you are going to have to come to terms with your fears and buy a stock. Find a good blue chip stock that is in an industry with positive prospects. Stay away from stuff that is sexy or hyped. Focus on just one stock--that way you can research it to death. The better you understand what you are buying, the greater the chance of success. Zurich Financial Services is a very solid company right now in a nice, boring, highly profitable business. Might fit your needs perfectly. They were founded in 1872, one of the safest equities you will find. Nestle is another option. Roche is another. If you want something a little more risky consider Georg Fischer. Anyway, what I can tell you, is that your goals match up with a blue chip equity as the logical type of investment. Note on Diversification Many financial advisors will advise you to "diversify", for example, by investing in many stocks instead of just one, or even by buying funds that are invested in hundreds of stocks, or indexes that are invested in the whole market. I disagree with this philosophy. Would you go into a casino and divide your money, putting a small portion on each game? No, it is a bad idea because most of the games have poor returns. Yet, that is exactly what you do when you diversify. It is a false sense of safety. The proper thing to do is exactly what you would do if forced to bet in casino: find the game with the best return, get as good as you can at that game, and play just that one game. That is the proper and smart thing to do.
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Dad paid cash for house and we want to put it in my name
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If your parents are not on the deed then I am not sure how it could be their house. It seems like the sale was done unofficially. If your parents or aunt pass away this could be a real mess. Make this official ASAP. It might be possible for your aunt to gift you the house. This may have tax implication but the article below suggests that it may not be an issue. http://www.bankrate.com/finance/real-estate/aunt-be-taxed-for-bargain-price-on-house.aspx As you're probably aware, owning a house is expensive. Make sure you can afford taxes, bills, and maintenance. Things add up fast. I should have address the "rent to own" plan. If you plan on transferring the house from your aunt to you by renting with $0 monthly payment and then claiming it is all paid off, then I think this would be considered a gifting of the house from your aunt to you. It sounds like fraud to claim you paid something that you didn't. In the end, it is either a gift from your parents or from your aunt. The sooner you get the house in your name the better
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Non-EU student, living in Germany, working for a Swiss company - taxes?
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Finally, I got response from finance center: "It doesn't matter where do you study, what does matter is where you live. So, once you live in Germany, you pay taxes in Germany. And it doesn't matter who you work for." So, there are two options to pay taxes: it's paid by an employer or an employee: If I would work for Swiss company, I need to show how much money I make every month (or year) to Finance Center.
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What happens to options if a company is acquired / bought out?
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A lot may depend on the nature of a buyout, sometimes it's is for stock and cash, sometimes just stock, or in the case of this google deal, all cash. Since that deal was used, we'll discuss what happens in a cash buyout. If the stock price goes high enough before the buyout date to put you in the money, pull the trigger before the settlement date (in some cases, it might be pulled for you, see below). Otherwise, once the buyout occurs you will either be done or may receive adjusted options in the stock of the company that did the buyout (not applicable in a cash buyout). Typically the price will approach but not exceed the buyout price as the time gets close to the buyout date. If the buyout price is above your option strike price, then you have some hope of being in the money at some point before the buyout; just be sure to exercise in time. You need to check the fine print on the option contract itself to see if it had some provision that determines what happens in the event of a buyout. That will tell you what happens with your particular options. For example Joe Taxpayer just amended his answer to include the standard language from CBOE on it's options, which if I read it right means if you have options via them you need to check with your broker to see what if any special exercise settlement procedures are being imposed by CBOE in this case.
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Should I always pay my credit at the last day possible to maximize my savings interest?
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If you have the ability to pay online with a guaranteed date for the transaction, go for it. My bank will let me pay a bill on the exact date i choose. When using the mail, of course, this introduces a level of risk. I asked about rates as the US currently has a near zero short term rate. At 3.6%, $10,000, this is $30/month or $1/day you save by delaying. Not huge, but better in your pocket than the bank's.
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How to protect yourself from fraud when selling on eBay UK
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Paypal UK has a page here: https://www.paypal.com/uk/webapps/mpp/seller-protection Basically they don't just take the seller's word for it, there is a resolution process. The biggest thing you can do is make sure that you deliver it in a way that requires signature.
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Why will the bank only loan us 80% of the value of our fully paid for home?
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I am going to add just one more item to what are some very well thought out answers. The element of "Cash Out" If you are taking out 80% of the value of the home that you already own free and clear the bank considers this a "Cash Out" transaction - meaning you would effectively walk away from closing with a check for 80% of your home's value. So in a hypothetical situation you have a $200,000 home value - you would be handed a check for $160,000 with which you could do anything that you wanted. Granted, you are likely going to do something responsible with it and purchase another home - BUT (big BUT) the bank can't control what you do with it and that is the part they don't like - and therefore they treat these types of transactions with a higher degree of scrutiny. It is all about control - if the property you are downsizing to fits their rules for lending they may actually loan you a higher loan to value on that purchase than they would on your "cash out" refinance transaction on your current home. With the purchase loan the money you get goes immediately to the purchase of a new home. In the "cash out" transaction it goes to a check with which you could do anything you want . . . and then not pay the loan back . . . I know no one here would do that - but there are some folks that would . . . and this is one of the reasons "Cash Out" loans are not nearly as easy as they once were to get. http://www.justice.gov/usao/az/mortgagefraud.html
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What is the difference between state pension plans and defined contribution plans?
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The specific "State Pension" plan you have linked to is provided by the government of the U.K. to workers resident there. More generally speaking, many countries provide some kind of basic worker's pension (or "social security") to residents. In the United States, it is called (surprise!) "Social Security", and in Canada most of us call ours "Canada Pension Plan". Such pensions are typically funded by payroll deductions distinct & separate from income tax deducted at source. You can learn about the variety of social security programs around the world courtesy of the U.S. Social Security Administration's own survey. What those and many other government or state pensions have in common, and the term or concept that I think you are looking for, is that they are typically defined benefit type of plans. A defined benefit or DB plan is where there is a promised (or "defined") benefit, i.e. a set lump sum amount (such as with a "cash balance" type of DB plan) or income per year in retirement (more typical). (Note: Defined benefit plans are not restricted to be offered by governments only. Many companies also offer DB plans to their employees, but DB plans in the private sector are becoming more rare due to the funding risk inherent in making such a long-term promise to employees.) Whereas a defined contribution or DC plan is one where employee and/or employer put money into a retirement account, the balance of which is invested in a selection of funds. Then, at retirement the resulting lump sum amount or annual income amounts (if the resulting balance is annuitized) are based on the performance of the investments selected. That is, with a DC plan, there is no promise of you getting either a set lump sum amount or a set amount of annual income at retirement! The promise was up front, on how much money they would contribute. So, the contributions are defined (often according to a matching contribution scheme), yet the resulting benefit itself is not defined (i.e. promised.) Summary: DB plans promise you the money (the benefit) you'll get at retirement. DC plans only promise you the money (the contributions) you get now.
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Some stock's prices don't fluctuate widely - Is it an advantages?
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I don't think you are reading the stock chart right. ORCL has a beta of 1.12 which means it has more volatility than the market as a whole. See image below for a fairly wild stock chart for a year. I would not truly consider ESPP participation investing, unless you intend to buy and hold the stock. If you intend to sell the stock soon after you are able, it is more speculation. ESPP's are okay based upon the terms. If the stock was a constant price, and you could sell right away, then an ESPP plan would be easy money. Often, employees are often given a 15% discount to purchase the stock. If you can sell it before any price drop, then you are guaranteed to make 15% on the money invested minus any commissions. Some employers make ESPP participants hold the stock for a year. This makes such a plan less of a value. The reasons are the stock can drop in price during that time, you could need the money, or (in the best case) your money is tied up longer making the ROI less. The reasons people invest in stock are varied and is far to much to discuss in a single post. Some of your colleagues are using the ESPP solely to earn the discount in their money.
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Best Time to buy a stock in a day
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You can't predict when to buy a stock during the day to guarantee not having a loss for the day. In the short run stock prices are really pretty random. There are many day traders who try to accomplish exactly this and most of them lose money. If you don't believe me, create an account on Investopedia and use their free stock market simulator and try day trading for a few months.
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How does a “minimum number of items to be bought” factor into break even analysis?
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A minimum purchase quantity just means that you need to round your result up to the nearest 100. In your example it comes out evenly. If we look at an example where it doesn't come out even, you'd round up: And round that up to 700 due to purchase quantities. For a slightly more complex and accurate approach, you'd then evaluate how many of the extras you had to buy due to the minimum purchase quantity would need to be sold: So you'd have to sell 694 of the 700 purchased to break even.
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End-of-season car sales?
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It completely varies by manufacturer, dealer, and time of year, but in general yes, you can get a (sometimes significant) discount on brand new last year models. In general though, it comes down to supply and demand. As an example, in April 2016 I was looking at a brand new 2016 in which the 2017 model had come out that week (I thought April was a little early for next year's model but sometimes that's a marketing tool). The sticker price of the 2017 was only $100 more than the 2016, but the 2016 was selling for $3K under MSRP, and the 2017 was selling at exactly MSRP since they only had 2 in stock.
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Definition of equity
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The word equity always refers to the ownership of something, whether it be a company or a home. The wikipedia article is differentiating companies by how they raised money for operations. Equity companies, by their definition are those that sold an interest in the company in exchange for capital. Debt based companies, again by their definition, are those that borrow money from investors, but instead of an ownership stake they promise to pay back the money presumably with interest.
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What is the P/E ratio for a company with negative earnings?
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When presenting negative P/E values, most brokers and equity analysts show them as "n.m.", which stands for not meaningful. I have never seen a P/E ratio of 0.
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That “write your own mortgage” thing; how to learn about it
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The other answers are talking about seller financing. There is another type of arrangement that might be described as "writing your own mortgage," where the buyer arranges his (or her) own financing. Instead of using a bank, a buyer might find his own investor to hold the mortgage for him. An example would be if I were to buy a house that needs fixing up. I might be able to buy a house for $40,000, but after I fix it up, I believe it will sell for $100,000. Instead of going through a traditional mortgage bank, I find an investor with cash that agrees the house is a good deal, and we arrange for the investor to provide funds for the purchase of the house on a short-term basis (perhaps interest-only), during which I fix up the house and sell it. Just like a regular mortgage, the loan is backed by the house itself. I am not recommending this type of arrangement by any means, but this article does a good job of describing how this would work. It is written by a real-estate guru with lots of training courses and coaching materials that she would like to sell you. :)
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Foreign Earned Income Exclusion - Service vs. Product?
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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.
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Basic questions about investing in stocks
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What is a stock? A share of stock represents ownership of a portion of a corporation. In olden times, you would get a physical stock certificate (looking something like this) with your name and the number of shares on it. That certificate was the document demonstrating your ownership. Today, physical stock certificates are quite uncommon (to the point that a number of companies don't issue them anymore). While a one-share certificate can be a neat memento, certificates are a pain for investors, as they have to be stored safely and you'd have to go through a whole annoying process to redeem them when you wanted to sell your investment. Now, you'll usually hold stock through a brokerage account, and your holdings will just be records in a database somewhere. You'll pick a broker (more on that in the next question), instruct them to buy something, and they'll keep track of it in your account. Where do I get a stock? You'll generally choose a broker and open an account. You can read reviews to compare different brokerages in your country, as they'll have different fees and pricing. You can also make sure the brokerage firm you choose is in good standing with the financial regulators in your country, though one from a major national bank won't be unsafe. You will be required to provide personal information, as you are opening a financial account. The information should be similar to that required to open a bank account. You'll also need to get your money in and out of the account, so you'll likely set up a bank transfer. It may be possible to request a paper stock certificate, but don't be surprised if you're told this is unavailable. If you do get a paper certificate, you'll have to deal with considerably more hassle and delay if you want to sell later. Brokers charge a commission, which is a fee per trade. Let's say the commission is $10/trade. If you buy 5 shares of Google at $739/share, you'd pay $739 * 5 + $10 = $3705 and wind up with $3695 worth of stock in your account. You'd pay the same commission when you sell the stock. Can anyone buy/own/use a stock? Pretty much. A brokerage is going to require that you be a legal adult to maintain an account with them. There are generally ways in which a parent can open an account on behalf of an underage child though. There can be different types of restrictions when it comes to investing in companies that are not publicly held, but that's not something you need to worry about. Stocks available on the public stock market are available to, well, the public. How are stocks taxed? Taxes differ from country to country, but as a general rule, you do have to provide the tax authorities with sufficient information to determine what you owe. This means figuring out how much you purchased the stock for and comparing that with how much you sold it for to determine your gain or loss. In the US (and I suspect in many other countries), your brokerage will produce an annual report with at least some of this information and send it to the tax authorities and you. You or someone you hire to do your taxes will use that report to compute the amount of tax owed. Your brokerage will generally keep track of your "cost basis" (how much you bought it for) for you, though it's a good idea to keep records. If you refuse to tell the government your cost basis, they can always assume it's $0, and then you'll pay more tax than you owe. Finding the cost basis for old investments can be difficult many years later if the records are lost. If you can determine when the stock was purchased, even approximately, it's possible to look back at historical price data to determine the cost. If your stock pays a dividend (a certain amount of money per-share that a company may pay out of its profits to its investors), you'll generally need to pay tax on that income. In the US, the tax rate on dividends may be the same or less than the tax rate on normal wage income depending on how long you've held the investment and other rules.
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How do I find an ideal single fund to invest all my money in?
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Not sure what your needs are or what NIS is: However here in the US a good choice for a single fund are "Life Cycle Funds". Here is a description from MS Money: http://www.msmoney.com/mm/investing/articles/life_cyclefunds.htm
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Long vs. short term capital gains on real estate
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No, it's not all long-term capital gain. Depending on the facts of your situation, it will be either ordinary income or partially short-term capital gain. You should consider consulting a tax lawyer if you have this issue. This is sort of a weird little corner of the tax law. IRC §§1221-1223 don't go into it, nor do the attendant Regs. It also somewhat stumped the people on TaxAlmanac years ago (they mostly punted and just declared it self-employment income, avoiding the holding period issue). But I did manage to find it in BNA Portfolio 562, buried in there. That cited to a court case Comm'r v. Williams, 256 F.2d 152 (5th Cir. 1958) and to Revenue Ruling 75-524 (and to another Rev. Rul.). Rev Rul 75-524 cites Fred Draper, 32 T.C. 545 (1959) for the proposition that assets are acquired progressively as they are built. Note also that land and improvements on it are treated as separate assets for purposes of depreciation (Pub 946). So between Williams (which says something similar but about the shipbuilding industry) and 75-524, as well as some related rulings and cases, you may be looking at an analysis of how long your property has been built and how built it was. You may be able to apportion some of the building as long-term and some as short-term. Whether the apportionment should be as to cost expended before 1 year or value created before 1 year is explicitly left open in Williams. It may be simpler to account for costs, since you'll have expenditure records with dates. However, if this is properly ordinary income because this is really business inventory and not merely investment property, then you have fully ordinary income and holding period is irrelevant. Your quick turnaround sale tends to suggest this may have been done as a business, not as an investment. A proper advisor with access to these materials could help you formulate a tax strategy and return position. This may be complex and law-driven enough that you'd need a tax lawyer rather than a CPA or preparer. They can sort through the precedent and if you have the money may even provide a formal tax opinion. Experienced real estate lawyers may be able to help, if you screen them appropriately (i.e. those who help prepare real estate tax returns or otherwise have strong tax crossover knowledge).
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Who should pay taxes in my typical case?
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The bottom line is you broke the law. While this is pretty much victimless, it is none the less a violation of the law and should be avoided in the future. I would have not agreed to this as a parent and it sets a bad precedent. As such I would avoid trading and move the money into cash until you turn 18. Once you turn 18 you should transfer the money into an account of your own. From there you may proceed as you wish. As far as paying taxes, of course you need to pay them. Your mother did this as a favor to you and by doing such you caused her tax bill to rise. As a gesture of goodwill you should at least provide her with half of the profits, not the 15% you propose. Fifteen percent would be the "I am an ungrateful son" minimum, and I would seriously consider giving all of the profits to her.
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How does high frequency trading work if money isn't available for 2-3 days after selling?
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Purchases and sales from the same trade date will both settle on the same settlement date. They don't have to pay for their purchases until later either. Because HFT typically make many offsetting trades -- buying, selling, buying, selling, buying, selling, etc -- when the purchases and sales settle, the amount they pay for their purchases will roughly cancel with the amount they receive for their sales (the difference being their profit or loss). Margin accounts and just having extra cash around can increase their ability to have trades that do not perfectly offset. In practice, the HFT's broker will take a smaller amount of cash (e.g. $1 million) as a deposit of capital, and will then allow the HFT to trade a larger amount of stock value long or short (e.g. $10 million, for 10:1 leverage). That $1 million needs to be enough to cover the net profit/loss when the trades settle, and the broker will monitor this to ensure that deposit will be enough.
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Accidentally opened a year term CD account, then realized I need the money sooner. What to do?
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In my experience, the only penalty to breaking a CD is to lose a certain amount of accumulated interest. Your principal investment will be fine. Close the CD. A few days of interest is nothing.
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Official Bank Check
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How? Basically all banks nowadays allow online deposits from a smartphone - you take a picture from the front and back of the check, and submit it, and that's it. You still have the paper check, and it looks pristine, but it is deposited (and the paper is worthless).
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How are long term capital gains taxes calculated?
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You pay taxes on capital gains when you realize your gains by selling the investment property. Also, in the US, taxes on capital gains are computed at special rates depending on your current income level, and so when you realize your gains two years from now, you will pay taxes on the gains at the special rate then applicable to your income level for the year of sale. Remember also that the US Congress can change the tax laws at any time between now and the time you sell your stocks, and so the rates you are looking at now may have changed too.
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How can I find hotel properties to buy other than using Google?
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Probably the easiest way to invest in hotel rooms in the U.S. is to invest in a Real Estate Investment Trust, or REIT. REITs are securities that invest in real estate and trade like a stock. There are different REITs that invest in different things: some own office buildings, some residential rentals, some hold mortgages, and some are diversified in lots of different types of real estate. There are also REITs that are exclusively invested in hotels. REITs are required to pay out at least 90% of their profits as dividends, and there are tax advantages to investing in REITs. You can search for a REIT on REIT.com's Searchable Directory. You can select a type (Lodging/Resorts), a stock exchange (NYSE), investment sector (equity), and a listing status (public), and you'll see lots of investments for you to consider.
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Cons of withdrawing money from an Roth IRA account?
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One "con" I have not yet seen mentioned: retirement accounts are generally protected from creditors in a bankruptcy. There are limits and exceptions, Roth has a 1.2 million dollar limit and can be split by a divorce QDRO for instance. Link Since it seems you have no income this year, you may may be raiding your IRA for living expenses. If there is a chance you may declare bankruptcy in the next year or so, consider doing that first and raid the IRA for seed money after.
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Not paying cash for a house
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Pay cash for the house but negotiate at least a 4% discount. You already made your money without having to deal with long term unknowns. I don't get why people would want invest with risk when the alternative are immediate realized gains.
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Since many brokers disallow investors from shorting sub-$5 stocks, why don't all companies split their stock until it is sub-$5
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I do believe it comes down to listing requirements. That is getting very close to penny stock territory and typical delisting criteria. I found this answer on Ivestopedia that speaks directly the question of stock price. Another thought is that if everyone were to do it, the rules would change. The exchanges want to promote price appreciation. Otherwise, everything trades in a tight band and there is little point to the whole endeavor. Volatility is another issue that they are concerned about. At such low stock prices, small changes in stock prices are huge percentage changes. (As stated in that Ivestopedia answer, $0.10 swing in the price of a $1 stock is a 10% change.) Also, many fraudsters work in the area of penny stocks. No company wants to be associated with that.
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Condo Purchase - Tax Strategies [US]
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You will need to see a tax expert. Your edited question includes the line For the short term, we will be "renting" it to my wife's grandmother at a deep discount. According to the instructions for schedule E If you rented out a dwelling unit that you also used for personal purposes during the year, you may not be able to deduct all the expenses for the rental part. “Dwelling unit” (unit) means a house, apartment, condominium, or similar property. For each property listed on line 1a, report the number of days in the year each property was rented at fair rental value and the number of days of personal use. A day of personal use is any day, or part of a day, that the unit was used by: I have no idea how this will work for Schedule C.
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Purchase same stock twice
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how does the trading company know which one I want to sell? It doesn't need to know. You just sell one. From taxation point of view depending on the country / tax jurisdiction, it can be only be FIFO or specific stock.
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Relationship between liquidity and an efficient market
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Liquidity is highly correlated to efficiency primarily because if an asset's price is not sampled during the time of a trade, it's price is unknown therefore inefficient. Past prices can be referenced, but they are not the price of the present. Prices of substitutes are even worse. SPY is extremely efficient for an equity. If permitted, it could easily trade with much lower ticks and still have potential for a locked market. Ideal exchange An ideal exchange has no public restrictions on trade. This is not to say that private restrictions would need to be put in place for various reasons, but one would only do that if it were responsible for its own survival instead of being too big to fail. In this market, trades would be approximately continuous for the largest securities and almost always locked because of continuous exchange fee competition with ever dropping minimum ticks. A market that can provide continuous locked orders with infinite precision is perfectly efficient from the point of view of the investor because the value of one's holdings are always known. EMH In terms of the theory the Efficient Market Hypothesis this is irrelevant to the rational investor. The rational investor will invest in the market at large of a given asset class, only increasing risk as wealth increases thus moving to more volatile asset classes when the volatility can be absorbed by excess wealth. Here, liquidity is also helpful, the "two heads are better than one" way of thinking. The more invested in an asset class, the lower the class's variance and vice versa. Bonds, the least variant, dwarf equities which dwarf options, all in order of the least variance. Believe it or not, there was a day when bonds were almost as risky as equities. For those concerned with EMH, liquidity is also believed to increase efficiency in some forms because liquidity is proportional to the number of individuals invested thus reducing the likelihood of an insufficient number of participants. External inefficiency In the case of ETFs that do not perfectly track their underlying index less costs at all times between index changes, this is because they are forbidden from directly trading in the market on their own behalf. If they were allowed and honest, the price would always be perfect and much more liquid than it otherwise should be since the combined frequency of all index members is much higher than any one alone. If one was dishonest, it would try to defraud with higher or lower numbers; however, if insider trading were permitted, both would fail due to the prisoner's dilemma that there is no honor among thieves. Here, the market would detect the problem much sooner because the insiders would arbitrage the false price away. Indirect internal efficiency Taking emerging market ETFs as an example, the markets that those are invested into are heavily restricted, so their ETF to underlying price inefficiencies are more pronounced even though the ETFs are actually working to make those underlying markets more efficient because a price for them altogether is known.
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Saving for a down payment on a new house, a few years out. Where do we put our money next?
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If you're absolutely certain that you won't buy a house within a year or so, I'd still be tempted to put some of the money into short-term CDs (ie, a max of 12 months). I think that at the moment CDs are a bit of a mug's game though because you'd hardly find one that offers better interest rates than some of the few savings accounts that still offer 1%+ interest. A savings account is probably where I'd put the money unless I could find a really good deal on a CD, but I think you might have to check if they've got withdrawal limits. There are a couple of savings accounts out there that pay at least 1% (yes, I know it's pitiful) so I'd seek out one or two of those. From memory, both Sallie Mae and Amex offer those and I'm sure there are a couple more. It's not great that your money is growing at less than inflation but if you're saving for something like a downpayment on a house I would think that (nominal) capital preservation is probably more important than the potential for a higher return with the associated higher risk.
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Joint account that requires all signatures of all owners to withdraw money?
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Savings accounts have lower fees. If you don't anticipate doing many transactions per month, e.g. three or fewer withdrawals, then I would suggest a savings account rather than a checking account. A joint account that requires both account holder signatures to make withdrawals will probably require both account holders' signature endorsements, in order to make deposits. For example, if you are issued a tax refund by the U.S. Treasury, or any check that is payable to both parties, you will only be able to deposit that check in a joint account that has both persons as signatories. There can be complications due to multi-party account ownership if cashing versus depositing a joint check and account tax ID number. When you open the account, you will need to specify what your wishes are, regarding whether both parties or either party can make deposits and withdrawals. Also, at least one party will need to be present, with appropriate identification (probably tax ID or Social Security number), when opening the account. If the account has three or more owners, you might be required to open a business or commercial account, rather than a consumer account. This would be due to the extra expense of administering an account with more than two signatories. After the questioner specified interest North Carolina in the comments, I found that the North Carolina general banking statutes have specific rules for joint accounts: Any two or more persons may establish a deposit account... The deposit account and any balance shall be as joint tenants... Unless the persons establishing the account have agreed with the bank that withdrawals require more than one signature, payment by the bank to, or on the order of (either person on) the account satisfys the bank's obligation I looked for different banks in North Carolina. I found joint account terms similar to this in PDF file format, everywhere, Joint Account: If an item is drawn so that it is unclear whether one payee’s endorsement or two is required, only one endorsement will be required and the Bank shall not be liable for any loss incurred by the maker as a result of there being only one endorsement. also Joint accounts are owned by you individually or jointly with others. All of the funds in a joint account may be used to repay the debts of any co-owner, whether they are owed individually, by a co-owner, jointly with other co-owners, or jointly with other persons or entities having no interest in your account. You will need to tell the bank specifically what permissions you want for your joint account, as it is between you and your bank, in North Carolina.
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How to pay bills for one month while waiting for new job?
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The first thing I would try is to take out a loan from a local credit union. If you don't know of any that you're eligible for, start looking at the National Credit Union Administration's Credit Union Locator. You should be able to get a good rate since your credit is so good. If for whatever reason you can't get the credit union loan, I would open another credit card. Try hard to get the loan though, because using a credit card will most likely be significantly more expensive. If you can't cover your cash-only expenses with cash you already have, make sure that you can get cash from the card. For example, one of my cards regularly sends me checks that I could write to myself to get cash, but be careful with this strategy. Usually the interest is much higher than normal purchases. Either way, until you've paid off this emergency debt and built up an emergency fund of 3-6 months of expenses, cut your expenses as much as possible. This Experian article has some good tips:
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Is there any evidence that “growth”-style indexes and growth ETFs outperform their respective base indexes?
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The value premium would state the opposite in fact if one looks at the work of Fama and French. The Investment Entertainment Pricing Theory (INEPT) shows a graph with the rates on small-cap/large-cap and growth/value combinations that may be of interest as well for another article noting the same research. Index fund advisors in Figure 9-1 shows various historical returns up to 2012 that may also be useful here for those wanting more detailed data. How to Beat the Benchmark is from 1998 that could be interesting to read about index funds and beating the index in a simpler way.
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Pay down the student loan, or buy the car with cash?
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To directly answer your question, the best choice is to pay cash and place the rest on your student loan. This is saving you from paying more interest. To offer some advise, consider purchasing a cheaper car to place more money towards your student loan debt. This will be the best financial decision in the long-term. I suspect the reason you are considering financing this vehicle is that the cash payment feels like a lot. Trust your instinct here. This vehicle sounds like large splurge considering your current debt, and your gut is telling you as much. Be patient. Use your liquid funds to get a more affordable vehicle and attack the debt. That is setting yourself up for financial success.
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If I believe a stock is going to fall, what options do I have to invest on this?
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Shorting Stocks: Borrowing the shares to sell now. Then buying them back when the price drops. Risk: If you are wrong the stock can go up. And if there are a lot of people shorting the stock you can get stuck in a short squeeze. That means that so many people need to buy the stock to return the ones they borrowed that the price goes up even further and faster. Also whoever you borrowed the stock from will often make the decision to sell for you. Put options. Risk: Put values don't always drop when the underlying price of the stock drops. This is because when the stock drops volatility goes up. And volatility can raise the value of an option. And you need to check each stock for whether or not these options are available. finviz lists whether a stock is optional & shortable or not. And for shorting you also need to find a broker that owns shares that they are willing to lend out.
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Why are residential investment properties owned by non-professional investors and not large corporations?
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As other answers have pointed out, professional real estate investors do own residential investment properties. However, small residential units typically are not owned by professional real estate investors as your experience confirms. This has a fairly natural cause. The size of the investment opportunity is insufficient to warrant the proper research/due diligence to which a large investment firm would have to commit if it wanted to properly assess the potential of a property. For a small real estate fund managing, say, $50 MM, it would take 100 properties at a $500K valuation in order to fully invest the funds. This number grows quickly as we decrease the average valuation to reflect even smaller individual units. Analogously, it is unlikely that you will find large institutional investors buying stocks with market caps of $20 MM. They simply cannot invest a large enough portion of total AUM to make the diligence make economic sense. As such, institutional real estate money tends to find its way into large multi-family units that provide a more convenient purchase size for a fund.
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How do you translate a per year salary into a part-time per hour job?
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If you're really a part-time worker, then there are some simple considerations.... The remote working environment, choice of own hours, and non-guarantee of work availability point to your "part-time" situation being more like a consultancy, and that would normally double or triple the gross hourly rate. But if they're already offering or paying you a low hourly figure, they are unlikely to give you consultant rates.
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Why do credit cards require a minimum annual household income?
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I don't know, but I can guess. You'll notice the Elite card has higher rewards. A card might want to convince merchants that they represent high end buyers, and use that to negotiate higher merchant discounts. Issuing bank: "Our 10 million card holders are sophisticated and have lots of discretionary income. If you don't agree to this rate, we'll terminate the contract and they will take their business elsewhere." Merchant: "But it's twice the rate of everyone else! I'm sure these customers have other means of payment, and besides, how many of those card holders are actually using it?" Issuing bank: "Our cardholders signal their interest in the benefits of cardholding by paying us an annual fee. If they didn't want one, they'd stop paying right? They clearly know they have one and our records indicate they use them regularly. We're pretty sure if you don't wise up they'll shop at your biggest competitor, another client of ours. pause Frankly, they already do."
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Should I pay more than 20% down on a home?
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Leverage increase returns, but also risks, ie, the least you can pay, the greater the opportunity to profit, but also the greater the chance you will be underwater. Leverage is given by the value of your asset (the house) over the equity you put down. So, for example, if the house is worth 100k and you put down 20k, then the leverage is 5 (another way to look at it is to see that the leverage is the inverse of the margin - or percentage down payment - so 1/0.20 = 5). The return on your investment will be magnified by the amount of your leverage. Suppose the value of your house goes up by 10%. Had you paid your house in full, your return would be 10%, or 10k/100k. However, if you had borrowed 80 dollars and your leverage was 5, as above, a 10% increase in the value of your house means you made a profit of 10k on a 20k investment, a return of 50%, or 10k/20k*100. As I said, your return was magnified by the amount of your leverage, that is, 10% return on the asset times your leverage of 5 = 50%. This is because all the profit of the house price appreciation goes to you, as the value of your debt does not depend on the value of the house. What you borrowed from the bank remains the same, regardless of whether the price of the house changed. The problem is that the amplification mechanism also works in reverse. If the price of the house falls by 10%, it means now you only have 10k equity. If the price falls enough your equity is wiped out and you are underwater, giving you an incentive to default on your loan. In summary, borrowing tends to be a really good deal: heads you win, tails the bank loses (or as happened in the US, the taxpayer loses).
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How hard for US customers make payments to non-resident freelancer by wire transfer?
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For most major banks, wire transfers are simple, if expensive, to arrange. For example, I can initiate an international wire transfer from my online banking portal.
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Entering the stock market in a poor economy
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Buy low and sell high. Right now stocks are cheap (or at least cheapish). If you wait for better forecasts, the price will be higher. They might go down still farther, but no one knows for sure when that will happen, or where the bottom is -- despite what the talking heads on TV say. Remember that what you really care about is sell price minus purchase price (plus dividends, but I'll ignore that). What happens between the time you buy and the time you sell is irrelevant financially, but can be important psychologically. If it was me, and you are sure you won't need the money for at least 10 years, or better still 15-20, I would buy some index funds. Pick something that you are comfortable with (some are more aggressive/risky than others), and then only look at it a few times a year, if that much. Only do this as long as you are sure that you won't sell if the market drops further. That is a guaranteed way to lose money. This is what I've been doing for my retirement funds for 15 years, and its worked well so far.
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How do I build wealth?
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Share options. If you get options on £200,000-worth of a company and then its share price increases five-fold then you make £800,000, which is often taxed more favourably than salary.
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Is the MBA an overrated degree/qualification?
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It depends on what you want it for If it is just salary then maybe not, for instance, some MBA programs may suggest their graduates make $100,000 per year, but you work in an oil field barely finishing high school and make $300,000 a year. If you go for the MBA right now, you may miss your chance to work in the oil industry for another few years (or weeks), but at the same time, the MBA lasts forever (although, real world experience is also relevant) and it may give you a leg up when you are 50 years old in the unemployment line (or maybe not, because you are overqualified) everything in life is a cost/benefit analysis Passing the GRE lasts for five years, so keep that in mind
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What home improvements are tax deductible?
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In general, for a home you live in, there's maintenance, which is just that, you pay to keep your house in good repair. There's also real improvements. I spend $xxx to turn my poured cement basement into living space. Here, I keep my receipts and the cost (although not my labor) is added to the basis of my home when I sell. The couple things that may offer a deduction have to do with energy. When I insulated my basement, there was a state tax credit which I got back when I filed taxes. There are also credits for installing solar panels. What you've described in your question just sounds like one of the small joys of home ownership.
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What's a normal personal debt / equity ratio for a highly educated person?
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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 $$$.
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What is a good way to save money on car expenses?
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Do your own oil change! If you are a hands-on person, you could also avoid the cost of the semi-annual oil change, by doing it yourself. Edmunds.com has a great how-to to help you accomplish this. Be prepared for dirty fingernails! But savings, you will realize, as an oil change will run you anywhere from $20 - $200 (if you drive a European car and require a specialized filtre).
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IRR vs. Interest Rates
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Yes, assuming that your cash flow is constantly of size 5 and initial investment is 100, the following applies: IRR of 5% over 3 years: Value of CashFlows: 4.7619 + 4.5351 + 4.3192 = 13.6162 NPV: 100 - 13.6162 = 86.3838 Continuous compounding: 86.3838 * (1.05^3) = 100
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How does one value Facebook stock as a potential investment?
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The amount of hype and uneducated investors/speculators driving its prices up. Just by that I would say its prices are inflated. Bear in mind that Facebook don't sell anything tangible. They can go down as fast as they went up. Most of their income is ad based and single-product oriented, and as such highly dependent on usage and trends (remember MySpace?). Having said that, all the other "classic" valuation techniques are still valid and you should utilize them.
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Can I default on my private student loans if I was an international student?
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What are the consequences if I ignore the emails? If you ignore the emails they will try harder to collect the money from you until they give up. Unlike what some other people here say, defaulting on a loan is NOT a crime and is NOT the same as stealing. There is a large number of reasons that can make someone unable to pay off a loan. Lenders are aware of the risk associated with default; they will try to collect the debt but at the end of the day if you don't have money/assets there is not much they can do. As far as immigration goes, there is nothing on a DS-160 form that asks you about bankruptcies or unpaid obligations. I doubt the consular officer will know of this situation, but it is possible. It is not grounds for visa ineligibility however, so you will be fine if everything else is fine. The only scenario in which unpaid student loans can come up relevant in immigration to the US is if and when you apply for US Citizenship. One of the requirements for Citizenship is having good moral character. Having a large amount of unpaid debt constitutes evidence of a poor moral character. But it is very unlikely you'd be denied Citizenship on grounds of that alone. I got a social security number when I took up on campus jobs at the school and I do have a credit score. Can they get a hold of this and report to the credit bureaus even though I don't live in America? Yes, they probably already have. How would this affect me if I visit America often? Does this mean I would not ever be able to live in America? No. See above. You will have a hard time borrowing again. Will they know when I come to America and arrest me at the border or can they take away my passport? No. Unpaid debt is no grounds for inadmissibility, so even if the CBP agent knows of it he will not do anything. And again, unpaid debt is not a crime so you will not be arrested.
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How can I find out who the major short sellers are in a stock?
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There is no way to know anything about who has shorted stuff or how concentrated the positions are in a few investors. Short positions are not even reported in 13(F) institutional filings. I'll take the bonus points, though, and point you to the US Equity Short Interest data source at quandl.
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Are there “buy and hold” passively managed funds?
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They pretty much already have what you are looking for. They are called Unit Investment Trusts. The key behind these is (a) the trust starts out with a fixed pool of securities. It is completely unmanaged and there is no buying or selling of the securities, (b) they terminate after a fixed period of time, at which time all assets are distributed among the owners. According to Investment Company Institute, "securities in a UIT are professionally selected to meet a stated investment objective, such as growth, income, or capital appreciation." UITs sell a fixed number of units at one-time public offering. Securities in a UIT do not trade actively, rather, UITs use a strategy known as buy-and-hold. The UIT purchases a certain amount of securities and holds them until its termination date. Holdings rarely change throughout the life of the trust so unit holders know exactly what they're investing in, and the trust lists all securities in its prospectus. Unit trusts normally sell redeemable units - this obligates the trust to re-purchase investor's units at their net asset value at the investors request.
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How are the $1 salaries that CEOs sometimes take considered legal?
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Taxable fringe benefits are included in taxable wages for the purpose of FLSA. So when those executives get to use company cars or company jets that value is "wage" even if it isn't salary.
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Should I fund retirement with a static asset allocation or an age based glide path?
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The thing about the glide path is that the closer you're to the retirement age, the less risk you should be taking with your investments. All investments carry risk, but if you invest in a volatile stock market at the age of 20 and lose all your retirement money - it will not have the same effect on your retirement as if you'd invest in a volatile stock market at the age of 65 and then lose all your retirement money. Static allocation throughout your life without changing the risk factor, will lead you to a very conservative investment path, which would mean you're not likely to lose your investments, but you're not likely to gain much either. The point of the glide path is to allow you taking more risks early with more chances of higher gains, but to limit your risks down the road, also limiting your potential gains. That is why it is always suggested to start your retirement funds early in your life, to make sure you have enough time to invest in potentially high return stocks (with high risk), but when you get close to your retirement age, it is advised to do exactly the opposite. The date-targeted funds do that for you, but you can do it on your own as well. As to the academic research - you don't need to go that far. Just look at the graphs to see that over long period investments in stocks give much better return than "conservative" bonds and treasuries (especially when averaging the investments, as it usually is with the retirement funds), but over a given short period, investments in stocks are much more likely to significantly lose in value.
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Dealing with event driven market volatility
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If you are worried about elections think about writing some calls against your long positions to help hedge. If you have MSFT (@ $51.38 right now) you could write a MSFT Call for lets say $55. You can bank $170 per 100 shares (let's say you write it at 1.70) (MSFT 01/20/2017 55.00 C 1.73 +0.01 Bid: 1.69 Ask: 1.77) If MSFT goes down a lot you will have lost $170 less per 100 shares than you would have because you wrote an option for $170. You will in fact be break even if the stock falls to 49.68 on the Jan Strike Date. If MSFT goes up $3.50 you will have made $170 and still have your MSFT stock for a net gain of $520. $170 in cash for the premium and your stock is now worth $350 more. If MSFT goes up $3.62 or more you will have made the max $530ish and have no MSFT left potentially losing additional profit if the stock goes up like gang busters. So is it worth it for you to get $170 in cash now and risk the stock going up more than $5 between now and Jan. That is the decision to make here.
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Automatic investments for cheap
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Previously (prior to Capital One acquisition -- it's kind of like K-Mart buying Sears) Sharebuilder offered 12 automatic (i.e. pre-scheduled) stock purchases per month if you subscribed to their $12/mo "Advantage" plan. So, 12 trades for $1 a trade. Great deal. Except then they flattened their pricing to everyone's acclaim (that is, everyone except for the non-millionaire casual investors) and jacked it up to $4 per automatic investment. As far as I know, Sharebuilder's 12 no-fee investments for $12/mo was rather unique in the online trading world -- and now it's very sadly extinct. They do have no-fee mutual fund investing, however, for what it's worth.
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Is Pension Benefit Information (aboutmyletter.com) legitimate?
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To boil down what mgkrebbs said: Yes, you should send back the form, provided that it doesn't ask for any more information than address, current telephone number, and email address. Don't ever, ever provide any bank account information. Nor social security number unless you're absolutely positive of the validity of the requestor. Phishing via regular mail is very rare. It's way expensive compared to email, which is basically free, plus the U.S. Postal Service takes mail fraud fairly seriously (and has the legal statutes to prosecute). So: don't obsess; send the form back.
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Are there any market data providers that provide a query language?
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You can give YQL a try. I'm not sure it can do the query you want, but for example you can do: (try it here) And this best thing about it - it's free.
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Should you co-sign a personal loan for a friend/family member? Why/why not?
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Never co-sign a loan for someone, especially family Taking out a loan for yourself is bad enough, but co-signing a loan is just plain stupid. Think about it, if the bank is asking for a co-signer its because they are not very confident that the applicant is going to be paying back the loan. So why would you then step up and say I'll pay back the loan if they don't, make me a co-signer please. Here is a list of things that people never think about when they cosign a loan for somebody. Now if you absolutely must co-sign a loan here is how I would do it. I, the co-signer would be the one who makes the payments to ensure that the loan was paid on time and I would be the one collecting the payment from the person who is getting the loan. Its a very simple way of preventing some of the worst situations that can arise and you should be willing to make the payments anyway after all thats what it means to cosign a loan. Your just turning things around and paying the loan upfront instead of paying after the applicant defaults and ruins every ones credit. (Source: user's own blog post Never co-sign a loan for someone, especially family)
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Should I use regular or adjusted close for backtesting?
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If you want to monitor how well you did in choosing your investments you will want to use stock prices that account for the dividends and splits and other changes (not just the closing price). The adjusted close will include these changes where the straight close will not include them. Using the adjusted close you will get your true percentage change. For example I have a stock called PETS that paid an $0.18 dividend in July 2015. The adjusted closes before that day in July are all $0.18 lower per share. Say the closing price had been unchanged at $20.00. The close prices would say I made no profit, but the adjusted closing price would say I made $0.18 per share on this investment because the adjusted close would read $19.82 in June 2015 but would read $20.00 in August 2015 (just like the closing price). The adjusted close allows me to know my true profit per share.
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How to find cheaper alternatives to a traditional home telephone line?
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How low you can reduce your costs does depend on your calling pattern. How many minutes per month you call locally; call long distance; call internationally; and how many minutes you receive calls for. If all these figures are low, you can be better off with a pay-per-minute service, if any of the outbound figures are high then you could consider a flat-rate "unlimited" service. So that's the first step, determine your needs: don't pay for what you don't need. For example, I barely use a "landline" voip phone any more. But it is still useful for incoming calls, and for 911 service. So I use a prepaid pay-per-minute VOIP company, that has a flat rate (< $2/mo) for the incoming number, an add-on fee for the 911 service (80c/mo), and per-minute costs for outgoing calls (1c/min or less to US, Canada, western Europe). I use my own Obitalk box (under $50 to buy). There is a bit of setup and learning needed, but the end result means my "landline" bill is usually under $4/mo (no other taxes or fees). Companies in this BYOD (bring your own device) space in the US/Canada include (in alphabetic order), Anveo, Callcentric, Callwithus, Futurenine, Localphone, Voip.ms and many others. A good discussion forum to learn more about them is the VOIP forum at DSLreports (although it can be a bit technical). There is also a reviews section at that site. If your usage is higher (you make lots of calls to a variety of numbers), most of these companies, and others, have flat-rate bundles, probably similar to what you have now. Comparing them depends on your usage pattern, so again that's the first thing to consider, then you know what to shop for. If you need features like voicemail or voicemail transcription, be sure to look at whether you need an expensive bundle with it in, or whether you're better off paying for that seperately. If your outbound calls are to a limited number of numbers, such as relatives far away or internationally, consider getting a similar VOIP system for those relatives. Most VOIP companies have free "on network" calls between their customers, regardless of the country they are in. So your most common, and most lengthy calls, could be free. The Obitalk boxes (ATA's: analog telephone adapters) have an advantage here, if you install them in yours and relatives houses. As well as allowing you to use any of the "bring your own device" VOIP companies like those listed above, they have their own Obitalk network allowing free calls between their boxes, and also to/from their iOS and Android apps. There are other ATA's from other companies (Cisco have well-known models), and other ways to make free calls between them, so Obitalk isn't the only option. I mentioned above I pay for the incoming number. Not every supplier has incoming numbers available in every area, you need to check this. Some can port-in (transfer in) your existing number, if you are attached to it, but not all can, so again check. You can also get incoming numbers in other areas or countries, that ring on your home line (without forwarding costs). This means you can have a number near a cluster of relatives, who can call you with a local call. Doesn't directly save you money (each number has a monthly fee) but could save you having to call them back!
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How should I handle student loans when leaving University and trying to buy a house?
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Concise answers to your questions: Depends on the loan and the bank; when you "accelerate" repayment of a loan by applying a pre-payment balance to the principal, your monthly payment may be reduced. However, standard practice for most loan types is that the repayment schedule will be accelerated; you'll pay no less each month, but you'll pay it off sooner. I can neither confirm nor deny that an internship counts as job experience in the field for the purpose of mortgage lending. It sounds logical, especially if it were a paid internship (in which case you'd just call it a "job"), but I can't be sure as I don't know of anyone who got a mortgage without accruing the necessary job experience post-graduation. A loan officer will be happy to talk to you and answer specific questions, but if you go in today, with no credit history (the student loan probably hasn't even entered repayment) and a lot of unknowns (an offer can be rescinded, for instance), you are virtually certain to be denied a mortgage. The bank is going to want evidence that you will make good on the debt you have over time. One $10,000 payment on the loan, though significant, is just one payment as far as your credit history (and credit score) is concerned. Now, a few more reality checks: $70k/yr is not what you'll be bringing home. As a single person without dependents, you'll be taxed at the highest possible withholdings rate. Your effective tax rate on $70k, depending on the state in which you live, can be as high as 30% (including all payroll/SS taxes, for a 1099 earner and/or an employee in a state with an income tax), so you're actually only bringing home 42k/yr, or about $1,600/paycheck if you're paid biweekly. To that, add a decent chunk for your group healthcare plan (which, as of 2014, you will be required to buy, or else pay another $2500 - effectively another 3% of gross earnings - in taxes). And even now with your first job, you should be at least trying to save up a decent chunk o' change in a 401k or IRA as a retirement nest egg. That student loan, beginning about 6 months after you leave school, will cost you about $555/mo in monthly payments for the next 10 years (if it's all Stafford loans with a 50/50 split between sub/unsub; that could be as much as $600/mo for all-unsub Stafford, or $700 or more for private loans). If you were going to pay all that back in two years, you're looking at paying a ballpark of $2500/mo leaving just $700 to pay all your bills and expenses each month. With a 3-year payoff plan, you're turning around one of your two paychecks every month to the student loan servicer, which for a bachelor is doable but still rather tight. Your mortgage payment isn't the only payment you will make on your house. If you get an FHA loan with 3.5% down, the lender will demand PMI. The city/county will likely levy a property tax on the assessed value of land and building. The lender may require that you purchase home insurance with minimum acceptable coverage limits and deductibles. All of these will be paid into escrow accounts, managed by your lending bank, from a single check you send them monthly. I pay all of these, in a state (Texas) that gets its primary income from sales and property tax instead of income, and my monthly payment isn't quite double the simple P&I. Once you have the house, you'll want to fill the house. Nice bed: probably $1500 between mattress and frame for a nice big queen you can stretch out on (and have lady friends over). Nice couch: $1000. TV: call it $500. That's probably the bare minimum you'll want to buy to replace what you lived through college with (you'll have somewhere to eat and sleep other than the floor of your new home), and we're already talking almost a month's salary, or payments of up to 10% of your monthly take-home pay over a year on a couple of store credit cards. Plates, cookware, etc just keeps bumping this up. Yes, they're (theoretically) all one-time costs, but they're things you need, and things you may not have if you've been living in dorms and eating in dining halls all through college. The house you buy now is likely to be a "starter", maybe 3bed/2bath and 1600 sqft at the upper end (they sell em as small as 2bd/1bt 1100sqft). It will support a spouse and 2 kids, but by that point you'll be bursting at the seams. What happens if your future spouse had the same idea of buying a house early while rates were low? The cost of buying a house may be as little as 3.5% down and a few hundred more in advance escrow and a couple other fees the seller can't pay for you. The cost of selling the same house is likely to include all the costs you made the seller pay when you bought it, because you'll be selling to someone in the same position you're in now. I didn't know it at the time I bought my house, but I paid about $5,000 to get into it (3.5% down and 6 months' escrow up front), while the sellers paid over $10,000 to get out (the owner got married to another homeowner, and they ended up selling both houses to move out of town; I don't even know what kind of bath they took on the house we weren't involved with). I graduated in 2005. I didn't buy my first house until I was married and pretty much well-settled, in 2011 (and yes, we were looking because mortgage rates were at rock bottom). We really lucked out in terms of a home that, if we want to or have to, we can live in for the rest of our lives (only 1700sqft, but it's officially a 4/2 with a spare room, and a downstairs master suite and nursery/office, so when we're old and decrepit we can pretty much live downstairs). I would seriously recommend that you do the same, even if by doing so you miss out on the absolute best interest rates. Last example: let's say, hypothetically, that you bite at current interest rates, and lock in a rate just above prime at 4%, 3.5% down, seller pays closing, but then in two years you get married, change jobs and have to move. Let's further suppose an alternate reality in which, after two years of living in an apartment, all the same life changes happen and you are now shopping for your first house having been pre-approved at 5%. That one percentage point savings by buying now, on a house in the $200k range, is worth about $120/mo or about $1440/yr off of your P&I payment ($921.42 on a $200,000 home with a 30-year term). Not chump change (over 30 years if you had been that lucky, it's $43000), but it's less than 5% of your take-home pay (month-to-month or annually). However, when you move in two years, the buyer's probably going to want the same deal you got - seller pays closing - because that's the market level you bought in to (low-priced starters for first-time homebuyers). That's a 3% commission for both agents, 1% origination, 0.5%-1% guarantor, and various fixed fees (title etc). Assuming the value of the house hasn't changed, let's call total selling costs 8% of the house value of $200k (which is probably low); that's $16,000 in seller's costs. Again, assuming home value didn't change and that you got an FHA loan requiring only 3.5% down, your down payment ($7k) plus principal paid (about another $7k; 6936.27 to be exact) only covers $14k of those costs. You're now in the hole $2,000, and you still have to come up with your next home's down payment. With all other things being equal, in order to get back to where you were in net worth terms before you bought the house (meaning $7,000 cash in the bank after selling it), you would need to stay in the house for 4 and a half years to accumulate the $16,000 in equity through principal payments. That leaves you with your original $7,000 down payment returned to you in cash, and you're even in accounting terms (which means in finance terms you're behind; that $7,000 invested at 3% historical average rate of inflation would have earned you about $800 in those four years, meaning you need to stick around about 5.5 years before you "break even" in TVM terms). For this reason, I would say that you should be very cautious when buying your first home; it may very well be the last one you'll ever buy. Whether that's because you made good choices or bad is up to you.
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Where to find out conversion ratio between General Motors bonds and new GM stock?
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I would imagine that as a holder you will receive information in the post when it's made public, but I don't think it's been decided yet. This thread on the Motley Fool boards is keeping an eye on them - you might want to keep an eye on the thread.
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Is stock in a company considered a good or a service, or something else?
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Facebook the company is probably better understood as a capital good - it is a collection of software and servers and a well-known brand name with a snazzy network effect under reasonably competent corporate governance that can produce final goods and services (mostly services) that actually have value. A share of Facebook stock is a share of ownership in that capital. See also: http://en.wikipedia.org/wiki/Capital_good which makes some concessions for the difference between capital goods and capital services, so it's kind of a fuzzy thing.
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What is a maximum amount that I can wire transfer out of US?
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Chase has a limit of $500,000 per day. A banker should be able to help you determine any immediate tax liabilities that will arise as a direct result of the transaction. You may wish to consult with a tax professional about any indirect implications the transfer may have. This transaction will be reported to the government but assuming that you are not involved in any illegitimate activities the likelihood of the US government taking any action on the notice is incredibly low. I have heard of 7 and 14 day holds being placed on out of character transfers but if you are buying property you should work with your bank to help facilitate. Bankers understand the business and can help you avoid any appearances of impropriety that the government flags. Should your account be flagged, I would retain a lawyer immediately. If you feel you have a reason to be concerned, then I would contact a lawyer in the US and Thailand before initiating the transfer. As they say an ounce of prevention is worth a pound of cure.
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What actions should I be taking to establish good credit scores for my children?
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You really can't. Credit rating is determined by financial history, and until your kids are old enough to legally sign a contract they have essentially no financial history. Interesting out-of-the-box thought, but not workable.
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What are some good ways to control costs for groceries?
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If you are willing to use one main credit card for shopping, use a grocery points rewards card like PC Financial Mastercard. Pay for the groceries using the card to earn points and use those points to reduce costs. The only limitation is that you must shop at Loblaws, Superstore, No Frills, Zehrs, Fortinos. It works out to $1 = 10 points and 20,000 points = $20. So that works out to spend $1 to earn back $0.01.
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Interest on self assessment tax
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Assuming you are Resident Indian. As per Indian Income Tax As per section 208 every person whose estimated tax liability for the year exceeds Rs. 10,000, shall pay his tax in advance in the form of “advance tax”. Thus, any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in advance by the due dates prescribed in this regard. However, as per section 207, a resident senior citizen (i.e., an individual of the age of 60 years or above) not having any income from business or profession is not liable to pay advance tax. In other words, if a person satisfies the following conditions, he will not be liable to pay advance tax: Hence only self assessment tax need to be paid without any interest. Refer the full guideline on Income tax website
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Do my 401k/Roth accounts benefit from compounding?
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You might be confusing two different things. An advantage of investing over a long term is the compounding of returns. Those returns can be interest, dividends, or capital gains. The mix between them depends on what you invest it and how you invest in it. This advantage applies whether your investment is in a taxable brokerage account or in a tax-advantaged 401K or IRA. So, start investing early so that you have longer for this compounding of returns to happen. The second thing is the tax deferral you get from 401(k) or IRAs. If you invest in a ordinary taxable account, then you have to pay taxes on your interest and dividends for the year in which they occur. You also have to pay taxes on any capital gains which you realize during the year. These yearly tax payments are then money that you don't get the benefit of compounding on. With 401(k) and IRAs, you don't have to pay taxes during these intermediate years.
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Are you allowed to have both a 401(k) and a SIMPLE IRA? If so, what about limits?
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I am not 100% sure, but I think the answer is this: You can't max out both. You could theoretically max out the SIMPLE IRA ($11,500) and then contribute $4,000 to your 401k, but your total can't exceed the 401k limit of $16,500. This also means you could max out your 401k at $16,500, but you couldn't contribute anything to the SIMPLE IRA. Note that no matter what, you can't contribute more than $11,500 to your SIMPLE IRA. (Note that this is all independent from your Traditional or Roth IRA, which are subject to their own limits, and not affected by your participation in employer-sponsored plans.) As I understand it, a 401k and a SIMPLE IRA both fall under the umbrella of "employer-sponsored plans". Just like you can't max out two 401k's at two different employers, you can't do it with the 401k and the SIMPLE IRA. The only weird thing is the contribution limit differences between SIMPLE IRA and 401k, but I don't think the IRS could/would penalize you for working two jobs (enforcing the lower SIMPLE IRA limit for all employer-sponsored retirement accounts). You should probably run the numbers, factoring in the employer match, and figure out which account-contribution scenario makes the most financial sense for you. However, I'm not sure how the employer match helps you when you're talking about a small business that you own/run. You may also want to look at how the employer match of the SIMPLE IRA affects the taxes your business pays. Disclaimer #1: I couldn't find a definitive answer on your specific scenario at irs.gov. I pieced the above info from a few different "SIMPLE IRA info" sites. That's why I'm not 100% sure. It seems intuitively correct to me, though. Does your small business have an accountant? Maybe you should talk to him/her. Disclaimer #2: The $ amounts listed above are based on the IRS 2010 limits.
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Are there any Social Responsibility Index funds or ETFs?
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At the other end of the spectrum is the VICEX fund. it invests in industries such as tobacco, gaming, defense/weapons, liquor and other companies whose products or services are widely considered not to be socially responsible
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Repaying Debt and Saving - Difficult Situation
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Like everybody else I'm picking up on the school loans - you're mother isn't exactly earning a massive amount of money given her cost of living, why is she taking out student loans that benefit you and your sister? I'm not trying to be offensive but it's fairly obvious that she can't afford it. As a first step I think you should at least take over paying your own student loans (you sound like you're out of college already and if you have $8k to "lend" to your mother you probably have enough money to pay the student loans that benefited you, after all) or as someone else also recommended, assume your loans. As to your sister, maybe it's time for her to get (another) job to pay for the tuition so her mother doesn't have to go further into debt. Again, I'm not trying to be mean here but your mother is digging herself deeper and deeper into a hole because of the tuition. Something's gotta give, and delivering pizza or getting a paper round is a small sacrifice here. Next, the car - unless she has a managed to work herself out of some of this mess, I would consider getting a much cheaper car instead. This is provided that she isn't upside down on the loan. Personally I wouldn't trade in a vehicle with an upside down loan, if anything that's another bad financial decision. Assuming that she isn't upside down on the loan and has some equity in the car, I would seriously consider selling the car and using the equity to buy something small and cheap. That should also hopefully reduce the cost of gas and maybe insurance somewhat. I think these points are probably the quickest steps that can be taken towards recovering this situation. You already mentioned the longer term plans like downsizing the apartment, but TBH I'm not sure that this is really necessary. The big elephant in the room are the college costs and removing those from the equation would give her a serious amount of breathing room.
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How to make a decision for used vs new car if I want to keep the car long term?
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This is my opinion as a car nut. It depends on what you want out of a car. For your situation (paying cash, want to keep the car long-term but also save money) I recommend seriously considering a slightly used vehicle, maybe 2 or 3 years old, or a "certified pre-owned vehicle". Reasons: Much less expensive than a brand new car because the first two years have the biggest depreciation hit. Cars come with a 4-year warranty, so a 3 year old car will still be in warranty. Yes, a certified pre-owned car will have a bit of a premium compared to a private-party used car, but the peace of mind of knowing it's in good shape is worth the extra cost considering you want to keep it long term. Consumer Reports will have good advice on the best values in used cars.
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Does an issue of bonus shares improve shareholder value?
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The bonus share also improves the liquidity however there is some difference in treatment. Lets say a company has 100 shares, of $10 ea. The total capital of the compnay is 100*10 = 1000. Assuming the company is doing well, its share is now available in the market for $100 ea. Now lets say the company has made a profit of $1000 and this also gets factored into the price of $100. Lets say the company decides to keep this $1000 kept as Cash Reserve and is not distributed as dividends. In a share split say (1:1), the book value of each share is now reduced to $5, the number of shares increase to 200. The share capital stays at 200*5 = 1000. The market value of shares come down to $50 ea. In a Bonus share issue say (1:1), the funds $1000 are moved from Cash Reserve and transferred to share capital. The book value of each share will remain same as $10, the number of shares increase to 200. The share capital increases to 200*10 = 2000. The market value of shares come down to $50 ea. So essentially from a liquidity point of view both give the same benefit. As to why some companies issue bonus and not a split, this is because of multiple reasons. A split beyond a point cannot be done, ie $10 can be split to $1 ea but it doesn't look good to make it $0.50. The other reason is there is adequate cash reserve and you want to convert this into share holders capital. Having a larger share holders capital improves some of the health ratios for the compnay. At times bouns is used to play upon that one is getting something free.
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What did John Templeton mean when he said that the four most dangerous words in investing are: ‘this time it’s different'?
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To play devil’s advocate to much of what has been written before, it's also worth noting that this is quite an important quote for a sort of reverse reason to what has been discussed before us, that of that fact that virtually every economic situation is different. As it's such a reflexive problem, each and every set of exact circumstances is always different from before. Technology radically changes, monetary policy and economic thinking shift, social needs and market expectations change and thus change the very fabric of markets as they do. It's only in its most basic miss projections of growth that economics repeats, and much like warfare, has constant shifts that radically change the core assumptions about it and do create completely new circumstances that we have to struggle to deal with predicting. People betting on the endless large scale mechanised warfare between western powers continuing post nuclear weapons would have been very, very wrong for example. That time it actually was different, and this actually happens with surprisingly often in finance in ways people quickly bury in the memories and adopt to the new norm. Remember when public ownership of stock wasn't a thing? When bonds didn't exist? No mortgages? Pre insurance? These are all inventions and changes that did change the world forever and were genuinely different and have been ever since, creating huge structural changes in economies, growth rates and societies interactions. As the endless aim of the game is predicting growth well, we often see people/groups over extend on one new thing, and/or under extend on another as they struggle to model these shifts and step changes. Talking as if the fact that people do this consistently as if it is some kind of obvious thing we can easily learn from (or easily take advantage of) in the context of such a vague and complex problem could be argued to be highly naïve and largely useless. This time it is different. Last time it was too.
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Is it a good idea to rebalance without withdrawing money?
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There will quickly come a time when buying to rebalance is impractical. Consider, you save 10%, and at some point, you have 5x your income saved. (you earn $50K and have accumulated $250K). A simple allocation, 50/50, so $125K stock, $125K bonds. Now, in a year the market is up much over 4%, your $5K deposit will not be enough to balance. Earlier on, the method may work just fine, later on, not so much. Edit - The above is an example, to show that there will come a time when deposits are not enough to rebalance. The above single year produces a 52/48 split, and the rebalance deposits more than 2 years. If the market continues to rise a reasonable amount, 2 years later you are even more out of balance, perhaps 56/44. I chose reasonable numbers as a starting point, just 5X income saved, and a 10% annual deposit. In the end, you can waive off any divergence from your target. That's your choice.
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Margin when entered into a derivative contract
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A derivative contract can be an option, and you can take a short (sell) position , much the same way you would in a stock. When BUYING options you risk only the money you put in. However when selling naked(you don't have the securities or cash to cover all potential losses) options, you are borrowing. Brokers force you to maintain a required amount of cash called, a maintenance requirement. When selling naked calls - theoretically you are able to lose an INFINITE amount of money, so in order to sell this type of options you have to maintain a certain level of cash in your account. If you fail to maintain this level you will enter into whats often referred to as a "margin-call". And yes they will call your phone and tell you :). Your broker has the right to liquidate your positions in order to meet requirements. PS: From experience my broker has never liquidated any of my holdings, but then again I've never been in a margin call for longer then a few days and never with a severe amount. The margin requirement for investors is regulated and brokers follow these regulations.
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Historical stock prices: Where to find free / low cost data for offline analysis?
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You may refer to project http://jstock.sourceforge.net. It is open source and released under GPL. It is fetching data from Yahoo! Finance, include delayed current price and historical price.
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What is a bond fund?
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A mutual fund that purchases bonds is a bond fund. Bond funds are considered to be less risk than a traditional stock mutual fund. The cost of this less risk is that they have earned (on average) less than mutual funds investing in stocks. Sometimes, bonds have different tax consequences than stocks.
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Can I buy a new house before selling my current house?
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A bridge loan (or bridging loan) is designed for exactly this circumstance. They're short-term loans (6 months is common) designed to help home-buyers to bridge the gap between buying and selling. MoneySupermarket defines them like this: Bridging loans are designed to help people complete the purchase of a property before selling their existing home by offering them short-term access to money at a high-rate of interest. As well as helping home-movers when there is a gap between the sale and completion dates in a chain, this type of loan can also help someone planning to sell-on quickly after renovating a home, or help someone buying at auction. Interest rates are very high, and there are likely to be fees, because you'll only need the loan for a short period. Here are some links to Canadian websites that explain more.
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Why is Google's current nasdaq market cap almost twice the current share price * the No. of shares outstanding?
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For each class A share (GOOGL) there's a class C share (GOOG), hence the missing half in your calculation. The almost comes from the slightly higher market price of the class A shares (due to them having voting powers) over class C (which have no voting powers). There's also class B share which is owned by the founders (Larry, Sergei, Eric and perhaps some to Stanford University and others) and differs from class A by the voting power. These are not publicly traded.
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How does stock dilution work in relation to share volume?
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Let me answer with an extreme example - I own the one single share of a company, and it's worth $1M. I issue 9 more shares, and find 9 people willing to pay $1M for each share. I know find my ownership dropped by 90%, and I am now a 10% owner of a business that was valued at $1M but with an additional $9M in the bank for expansion. (Total value now $10M) Obviously, this is a simplistic view, but no simpler than the suggestion that your company would dilute its shares 90% in one transaction.
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One of my stocks dropped 40% in 2 days, how should I mentally approach this?
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Like @chirs, I'm of the opinion that you might want to buy more. I've done this a couple of times, price dropped a bunch, and I said, heck, I bought some last week, and this week I can get twice as much stock for about the same price. Brought down my average cost per share, and when the company was taken private, I actually didn't lose money - unlike some other people I know, who only bought at one price, watched the drop, and held on awaiting a recovery (which didn't happen in time before the big money swooped in on it). But to do this, you need to keep cash reserves (that, like @afforess says, you can afford to lose all of) on hand, awaiting buying opportunities. This, too, is a cost - an opportunity cost.
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Are there common stock price trends related to employee option plans?
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Say I am an employee of Facebook and I will be able to sell stares at enough of a profit to pay of my mortgage and have enough money left to cover my living costs for many years. I also believe that there is a 95% chance that the stock price will go up in the next few years. Do I take a 5% risk, when I can transform my life without taking any risk? (The USA tax system as explained by JoeTaxpayer increases the risk.) So you have a person being very logical and selling stocks that they believe will go up in value by more than any other investment they could have. It is called risk control. (Lot of people will know the above; therefore some people will delay buying stock until Lock Up expiration day hoping the price will be lower on that day. So the price may not go down.)
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Fractional Reserve Banking and Insolvency
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You bet if it was so simple. This is when financial acumen comes into its true form. The bank would never ever want to go insolvent. What it does is, take insurance against the borrower defaulting. Remember the financial crisis of 2008 which was the outcome of borrowers defaulting. The banks had created derivatives based on the loans distributed. CDO, CDS are some of the simple derivatives banks sell to cover their backs in case of defaults. There are derivatives using these derivatives as underlyings which they then sold it across to other buyers including other banks. Google for Fabrice Tourre and you would realise how much deep the banks go to save themselves from defaulters. If everything fails then go to the government for help. That was what happened when the US government doled out $600 billion to save the financial sector.
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Shorting: What if you can't find lenders?
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You at least have some understanding of the pitfalls of shorting. You might not be able to borrow stock. You might not be able to buy it back when the time comes. You're moves are monitored, so you can't "run away" because the rules are enforced. (You don't want to find out how, personally.) "Shorting" is a tough, risky business. To answer your implicit question, if you have to ask about it on a public forum like this, you're not good enough to do it.
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Multiple accounts stagnant after quitting job.
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What is my best bet with the 401K? I know very little about retirement plans and don't plan to ever touch this money until I retire but could this money be of better use somewhere else? You can roll over a 401k into an IRA. This lets you invest in other funds and stocks that were not available with your 401k plan. Fidelity and Vanguard are 2 huge companies that offer a number of investment opportunities. When I left an employer that had the 401k plan with Fidelity, I was able to rollover the investments and leave them in the existing mutual funds (several of the funds have been closed to new investors for years). Usually, when leaving an employer, I have the funds transferred directly to the place my IRA is at - this avoids tax penalties and potential pitfalls. The student loans.... pay them off in one shot? If the interest is higher than you could earn in a savings account, then it is smarter to pay them off at once. My student loans are 1.8%, so I can earn more money in my mutual funds. I'm suspicious and think something hinky is going to happen with the fiscal cliff negotiations, so I'm going to be paying off my student loans in early 2013. Disclaimer: I have IRA accounts with both Fidelity and Vanguard. My current 401k plan is with Vanguard.
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Is trading stocks easier than trading commodities?
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I would not argue if its more difficult, its different, and it much depends what kind of stocks you refer to, i take large caps as example. The players are different. Companies and even govts may hedge in the commodities (futures) market while in big caps this and other entities mainly invest. (Of course there’s HFT in large caps too). Futures often come with way higher leverage, lower spread and less commissions than stocks attracting retail and institutional speculators/HFT. Another big difference is that commodity prices react to all kind of news events (Stocks do too, but not that much and frequent), this kind of reactions big caps only do on earnings or on news directly affecting the company. Commodities are much more volatile on geo economic / political news events. This combined with higher leverage & HFT produces astounding moves. To sum it up, the players are different and act different than in large stocks, liquidity may be another thing.
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How much of my home loan is coming from a bank, how much it goes back?
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Ditto mhoran_psprep. I'm not quite sure what you're asking. Where does the money come from? When someone starts a bank, they normally get together a bunch of investors -- perhaps people they know personally, perhaps they sell stock -- to raise initial capital. But most of the money in the bank comes from depositors. Fundamentally, what a bank does is take money from depositors and loan it to borrowers. (Banks also borrow money from other banks and from the government.) They charge the borrowers interest on the loan, and they pay depositors interest on their deposits. The difference between those two interest rates is where the bank gets their profit. Where does the money go when you pay it back? As mhoran_psprep said, some of it goes to pay interest to the depositors; some of it goes to pay the bank's expenses like employee salaries, cost of the building, etc; and some of it goes as profit to the owners or stockholders of the bank. If you're thinking, "Wow, I'm paying back a whole lot more than I borrowed", well, yes. But remember you're borrowing that money for 20 or 30 years. The bank isn't making very much money on the loan each year that you have it -- these days something like 4 or 5% in the U.S., I don't know what the going rates are in other countries.
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How do you measure the value of gold?
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I can describe the method for determining a price floor, which may help. It starts with looking at the cost of mining. There's a ridiculously small amount of gold in the best ore, so it's measured in tonnes of ore to produce a given ounce of gold. Mines will only operate at a loss for so long, so for any mine which focuses on gold, when the price of gold is below that price for long enough, the mine will cease operation. Since not all mines have the same cost, the supply will not appear as a step function, it will reduce slowly as mines close. "Gold Drops Below Cash Cost, Approaches Marginal Production Costs" offers a marginal cost of production just over $1100. This is not a floor price, as the market can act irrationally at times. It's just a number to consider. On the demand side, the industrial use (I am thinking gold plating in electronics manufacturing) will serve to provide demand almost regardless of price. When a $100 microprocessor uses say 10 cents worth of gold (at $300/oz) $1500 gold increases the final chip price by 1/2%. The industry is still trying to move away from Gold where they can, but that's a long process. As far as a ceiling goes, I highly recommend the book Extraordinary Popular Delusions & the Madness of Crowds which offers insight on a number of mania that have occurred not just in the past few decades, but over the centuries. At $1500/oz, the value of all the gold in the world is about US$7.5trillion (That's 12 zeros). Given that a portion of it is in jewelry and not available as an investment, it's safe to say that the entire world can only easily bid on about 1/3 of this (as the gold council cites 31% of gold going towards investments each year vs 57% jewelry and 11% industrial) or US$2.5T or so. With total world wealth at US$125T it would take a bit more hysteria to push gold from its current 2% of that value (funny how that number lined up perfectly) to much higher. Note: I provided a number of links, as it's too easy to just throw numbers around. See the links and provide more current data if you're so inclined. Data isn't real time.
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