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How much time would I have to spend trading to turn a profit?
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Yeah, too subjective of a question I shorted BP last year during the deep water crisis, using a leveraged account 20 times larger than the amount of cash I actually had, instantly profitable. I was long Freddie Mac in March 2009 and that took several months to turn to move and turned a 100% gain I've flipped penny stocks trading at .0001 cents, bought a few million shares and sold them at .0002 cents. Sometimes instantly, sometimes over several months because they were illiquid I'm primarily a derivatives trader right now, which I did not know about or understand less than a year ago. Dont have crazy targets, that how you will blow up your account. Have meticulously calculated plans. Also you need to determine what kind of trader you are.
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Why doesn't Japan just divide the Yen by 100?
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A Yen is like a penny. Buy a chocolate bar 100¥ or £1.00. Should the UK get rid of pennies and only price things to the pound?
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To pay off a student loan, should I save up a lump sum payoff payment or pay extra each month?
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Simply, you should put your money into whatever has the higher interest rate, savings or repayment of debt. Let's say at the beginning of month A you put $1000 into each account. In the case of the savings, at the end of month A you will have $1001.6 ($1000 + 1000 x 2% annual interest / 12) In the case of a loan, at the end of month A you will have $1005.7. ($17000 plus 6.8 interest for one month is 17096.3. On $16000, the new value is 16090.6. The difference between these is $1005.7. 5.7 / 1.6 = 3.56 Therefore, using your money to repay your loan nets you a return about 3.5 times greater.
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Where to Park Proceeds from House Sale for 2-5 Years?
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Your objectives are contradictory and/or not possible. Eliminating the non-taxable objective: You could divide the $100K in 5 increments, making a "CD ladder" $25K in 3mo CD (or savings a/c) $25K in 6 mo CD $25K in 9mo CD $25K in 1 yr CD or similar structure (6mo also works well) Every maturing CD you are able to access cash and/or invest in another longest maturity CD, and earn a higher rate of interest. This plan also works well to plan for future interest rates hikes. If you are forced to access (sell CD's) ALL the $$$ at any time, you will only lose accrued interest, none of the principal. All FDIC guaranteed. If non-taxable is the highest priority, "invest" in a tax-free money market fund....see Vanguard Funds. You will not have FDIC guarantee.
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Paying off student loan or using that money for a downpayment on a house
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Two years ago, I wrote an article titled Student Loans and Your First Mortgage in response to this exact question posed by a fellow blogger. The bottom line is that the loan payment doesn't lower your borrowing power as it fits in the slice between 28% (total housing cost) and 38% (total monthly debt burden) when applying for a loan. But, the $20K is 20% down on $100K worth of house. With median home prices in the US in the mid-high $100Ks, you're halfway there. In the end, it's not about finance, it's a question of how badly you want to buy a house. If I got along with the parents, I'd stay as long as I was welcome, and save every dollar I could. Save for retirement, save for as large a downpayment as you can, and after you buy the house, pay the student loan aggressively. I moved out the week after I graduated.
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What is the US Fair Tax?
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The fair tax is a proposal to replace the US income tax with a sales tax. Pros of Fair Tax: It's a large change to the way the United States currently does things. The "Fair Tax Act of 2011" is H.R.25 in the US House and S.13 in the Senate. The full text of the bill is available at the links provided. There are some fairly large consequences of implementing a fair tax. For example, 401ks and Roth IRAs serve no benefit over non-retirement investments. Mortgages would no longer have a tax advantage. Luxury items would get far more expensive.
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Why does capital gains tax apply to long term stock holdings?
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Most well-off people have investments which they have held for long periods of time, often of very substantial value such as a large part of a company. They also have influence on legislators and officials through various social contacts, lobbyists, and contributions. They managed to convince these law makers to offer a lower tax on income derived from sales of such investments. The fig leaf covering this arrangement is that it "contributes to the growth of economy by encouraging long-term investment in new enterprises."
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After Market Price change, how can I get it at that price?
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The price of the last trade... Is the price of the last trade. It indicates what one particular buyer and seller agreed upon. There is absolutely no requirement that one of them didn't offer too much or demand too little, so this is nearly meaningless as an indication of what anyone else will be willing to offer or demand. An average of trades across a sufficiently large number of transactions might indicate a rough consensus about the value of a stock, but transactions will be clustered around that average and the average itself moves over time. Either you offer to sell or buy at a particular price, wait for that price, and risk the transaction not taking place at all if nobody agrees, or you do a spot transaction and get the best price at that nanosecond (which may not be the best in the next nanosecond). Or you tell the broker what the limits are that you consider acceptable, trading these risks off against each other. Pick the one which comes closest to your intent and ignore the fact that others may be getting a slightly different price. That's just the way the market works. "If his price is lower, why didn't you buy it there?" "He's out of stock." "Well, come back when I'm out of stock and I'll be unable to sell it to you for an even better price!"
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Does dollar cost averaging really work?
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If you have a lump sum, you could put it into a low risk investment (which should also have low fluctuations) right away to avoid the risk of buying at a down point. Then move it into a higher risk investment over a period of time. That way you'll buy more units when the price is lower than when it's higher. Usually I hear dollar cost averaging applied to the practice of purchasing a fixed dollar amount of an investment every week or month right out of your salary. The effect is pretty minimal though, except on the highest growth portfolios, and is generally just used as a sales tool by investment councilors (in my opinion).
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Shorting: What if you can't find lenders?
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If you can't find anyone to lend you the shares, then you can't short. You can attempt to raise the interest rate at which you will borrow at, in order to entice others to lend you their shares. In practice, broadcasting this information is pretty convoluted. If there aren't any stocks for you to buy back, then you have to buy back at a higher price. As in, place a limit buy order higher and higher until someone decides to sell to you. This affects your profit. Regarding the public ledger: This functions different in different markets. United States stock markets have an evolving body of regulations to alleviate the exact concerns you detailed, but Canada's or Dubai's stock markets would have different provisions. You make the assumption that it is an efficient process, but it is not and it is indeed ripe for abuse. In US stocks, the public ledger has a 3 business day delay between showing change of ownership. Many times brokers and clearing firms and other market participants allow a customer to go short with fake shares, with the idea that they will find real shares within the 3 business day time period to cover the position. During the time period that there is no real shares hitting the market, this is called a "naked short". The only legal system that attempts to deter this practice is the "fail to deliver" (FTD) list. If someone fails to deliver, that means there is a short position active with fake shares for which no real shares have been borrowed against. Too many FTD's allow for a short selling restriction to be placed, meaning nobody else can be short, and existing short sellers may be forced to cover.
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What are some good ways to control costs for groceries?
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Set aside the amount of grocery money you want to spend in a week in cash. Then buy groceries only from this money. The first week make it a generous amount so you don't get rediculous and give up. And stick to it when you are out of money (make sure you have some canned goods or something around if you run out of money a day short). And do not shop when you are hungry.
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Why does a ETN that is supposed to track Crude Oil like UWTI show constant decline every year? And am I an idiot for investing in it?
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This security looks like it will require patience for it to pay off. The 200 day moving average looks as if it will soon cross over the 20 day moving average. When that happens the security can be said to be in a bull run. http://stockcharts.com/h-sc/ui?s=UWTI&p=D&yr=1&mn=6&dy=0&id=p10888728027 However, this is just speculation... trying to make money via 'buy low, sell high' as I have stated previously, you have about a 25% chance of buying at the low and selling at the high. Better to buy into a fund that pays dividends and reinvest those dividends. Such as: http://www.dividend.com/dividend-stocks/uncategorized/other/pgf-invesco-powershares-financial-preferred-portfolio/ http://stockcharts.com/h-sc/ui?s=PGF&p=D&yr=1&mn=6&dy=0&id=p59773821284
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For very high-net worth individuals, does it make sense to not have insurance?
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While a lot of the answers focus on cost to replace and how much money you should have for tangible goods. There are a few more issues to consider. However before we get started, these issues are not related to ones net worth. They are related to other factors. Having money certainly helps, but someone worth only $10 may not need to insure their stuff under some circumstances. Insurance is a risk avoidance strategy. As such, it should be used to avoid risks that would otherwise cause issues for you. The normal example is a house. If you lost your house due to fire, would you be able to "make it" while you paid the mortgage off, and got a new mortgage to pay for a new house? This is a relatively simple view, but a good one. These days people tend to look at insurance as a savings account. I payed in X so I am entitled to Y. Heath insurance (a bit more on this later) is exacerbating the issue by selling it's self that way, but it simply isn't true. What your paying the premium for to avoid the risk of loss. Not so you can have a pool of money to draw from in time of need, but so that a time of need should never arise. Which brings us back to, should you get insurance? Tangible Assets Let's assume you have no legal or contractual obligation to have insurance. If you put the money you were spending aside would you have enough money to secure a new asset should your current one just vanish? This is the normal argument. But it has a second side. Do you need the asset at all, or can you just accept the loss. Lets pick on a red neck for a second. While certainly not millionaires, or "well off" by conventional means, the guy with 6 cars on bricks in his lawn does not need to insure 6 cars. If one were to vanish, it may make a hardship but hey, he's got 5 more. So with tangible goods it's more of a question of can you afford to replace the item, do you need to replace the item, and how big a risk is it to you to loose the item? What would you rather loose, the item, or the cost of the insurance? Non-tangible Assets I am going to try to keep this as un-rant like as I can manage, but be aware that I am biased. There are two big examples of non-tangible assets that are commonly insured. Life Insurance, and Health insurance. There are others, but it's very hard to get people to pay money to insure something that they don't actually have. Ideas can be insured, for example, but in order to insure an idea you have to spell it out, at that point why not just file for the patent etc. etc. Keep in mind that a lot of people and companies will insure against losses due to IP theft or other such intangible things. Largely these follow the same rules as tangible assets. This section is meant to focus on those insurances that do not. Life Insurance Life insurance is a bit odd. Were all going to die, so it seems like a "good bet" but what your insuring against with life insurance is an early death. For term life insurance it's a gamble. Will you die before your term runs out. For full life insurance (with no term) it's a different gamble. Will you die before you have paid in what they agreed to pay out. In many cases it's also a gamble that you will miss a payment or two and cancel the policy before you die. If the risk of your death worth the insurance. Usually while young the answer is yes. Do you leave your Family short one earner? Will they make it without the insurance? But as you get older, as life insurance becomes more of a sure thing it also becomes less needed. Your kids move out, there not dependent on you any more. You have retirement accounts setup so your partner need not worry should something happen. What risk exactly are your trying to avoid at this point. You will die. You have planned for that eventuality, it's not a risk anymore, it's a fact. Heath Insurance Is another beast all together. Historically you insured against some catastrophic event, that you couldn't really plan for. Say a heart attack. Surgery and treatment would run in the tens of thousands, so it would ruin you if you didn't have insurance to cover that. That was the risk that you were avoiding. A big, expensive event, causing financial ruin. However, over time it has shifted into something else. The general concept is still there, insure to avoid a risk. But the "risk" has been widened to include all manor of things that are not actually risks. For example a flu. You would go to your doctor, pay your co-pay, and your insurance would pay the rest of the visit. Then you would go to the drug store and get the drugs, pay your co-pay and the insurance pays the rest. But what risk, in this instance are you insuring against? That you can't cover the cost of a doctors visit? That you can't cover the cost of the medication? In this example, a common one, historically the "mother of the house" would go you have a flu, have some chicken noodle soup and go to bed. That would be the end of it. Cost of care is a day's lost wages (or maybe a weeks) and a few cans of soup. However today, because we choose to, the cost of care is much higher. We go to the doctor, pay our co-pays, the insurance has to pay it's part. The doctors office has to carry the cost of the staff it takes to see you, and the staff it takes to handle the claims with the insurance company. And now your flu, cost $1,500. But again that's not exactly true either. With heath insurance and "normal" medical care (like sprained ankles, and colds, etc.) the insurance only really covers the cost of having insurance. In that same flu example, if you went to the doctor as a "self pay" (no insurance) you would often time get a much lower, and reasonable rate. Frequently, under the cost of your standard co-pay. This seems like the doctors being "bad" but it's not. They don't have to file a claim, they don't have to keep track of it. They get immediate payment, not payment 6 months down the line that they need to share with other businesses. With "critical" or "catastrophic" care, heath insurance is still a good thing. If you have a big, unforeseen event, then heath insurance is great at helping you avoid that risk. With chronic (long term) care, your back in the same boat as the flu. Often times you can get better, and cheaper, care as a self pay patent, then as a insured patent. That is not always the case however. So you have to measure your own circumstance, and decide if insurance is right for you. But remember insurance is about risk avoidance, and not about paying less. You will ALWAYS pay more for insurance. It's designed that way. Even if the cost is hidden in many ways. (Taxes, spread out over visits, or prescriptions, etc.)
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On what dates do the U.S. and Canada release their respective federal budgets?
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Canada does not have a set date on which a (Federal) budget plan is unveiled. In 2011 it was June 6th. In 2012 it was March 29th and in 2013 it was 21st March.
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How do I calculate ownership percentage for shared home ownership?
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Sister is putting down nothing, and paying sub-market rent. It looks to me like if she is assigned anything, it's a gift. You on the other hand, have put down the full downpayment, and instead of breaking even via fair rent, are feeding the property to the tune of $645/mo. In the old days, the days of Robert Allen's "no money down" it was common to see shared equity deals where the investor would put up the down payment, get 1/2 the equity build up, and never pay another dime. This deal reminds me of that, only you are getting the short end of the stick. "you never think something will cause discourse" - I hope you meant this sarcastically. The deal you describe? No good can come of it.
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Why is auto insurance ridiculously overpriced for those who drive few miles?
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4000 miles a year is not a few! European average is about 9000... But nevertheless... But when it comes to risk, then: 1) Nothing stops you from changing circumstances and drive 10 times as much as in previous yers. The insurance remains the same. The only thing the insurance company can do is to charge you more next year (taking the miles you've made this year as a basis for calculations)* 2) Drivers who drive very seldom are a huge risk because of their low experience. I know a few people that drive more than 100 miles only a few times a year, and on average once a year have accident during that drives. It doesn't mean that an average sunday driver have similar risk of accident as daily driver, but it's in no way similar. *) Germany/Switzerland based, the whole EU is likely to be the same
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Is it acceptable to receive payment from U.S. in Indian saving bank account via PayPal?
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It is fine to receive payments into Indian Savings Bank account. There are no restriction on deposits. There are only restrictions on number of withdrawls in a quarter. A Current[a.k.a Checking] account makes it easier to manage. You haven't asked about tax, but I you may already know you would need to pay taxes irrespective of whether you got the money in Savings or Current account. Edit: Any individual can open a Current Account on individual's name. There is no restriction. There are multiple aspects to determine whether the activity you are doing is a service as defined by the Service Tax Rules. Please consult a CA to guide you. For less than 5K INR he would not only advice you but also do everything required to file taxes.
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For a car loan, how much should I get preapproved for?
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—they will pull your credit report and perform a "hard inquiry" on your file. This means the inquiry will be noted in your credit report and count against you, slightly. This is perfectly normal. Just don't apply too many times too soon or it can begin to add up. They will want proof of your income by asking for recent pay stubs. With this information, your income and your credit profile, they will determine the maximum amount of credit they will lend you and at what interest rate. The better your credit profile, the more money they can lend and the lower the rate. —that you want financed (the price of the car minus your down payment) that is the amount you can apply for and in that case the only factors they will determine are 1) whether or not you will be approved and 2) at what interest rate you will be approved. While interest rates generally follow the direction of the prime rate as dictated by the federal reserve, there are market fluctuations and variances from one lending institution to the next. Further, different institutions will have different criteria in terms of the amount of credit they deem you worthy of. —you know the price of the car. Now determine how much you want to put down and take the difference to a bank or credit union. Or, work directly with the dealer. Dealers often give special deals if you finance through them. A common scenario is: 1) A person goes to the car dealer 2) test drives 3) negotiates the purchase price 4) the salesman works the numbers to determine your monthly payment through their own bank. Pay attention during that last process. This is also where they can gain leverage in the deal and make money through the interest rate by offering longer loan terms to maximize their returns on your loan. It's not necessarily a bad thing, it's just how they have to make their money in the deal. It's good to know so you can form your own analysis of the deal and make sure they don't completely bankrupt you. —is that you can comfortable afford your monthly payment. The car dealers don't really know how much you can afford. They will try to determine to the best they can but only you really know. Don't take more than you can afford. be conservative about it. For example: Think you can only afford $300 a month? Budget it even lower and make yourself only afford $225 a month.
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Which kind of investment seems feasible to have more cashflow every week or month?
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Ignoring the wildly unreasonable goal, I'll answer just the Headline question asked. It's possible to choose dividend paying stocks so that you receive a dividend check each month. Dividends are typically paid quarterly, so 3 stocks chosen by quality first, but also for their dividend date will do this. To get $2000/mo or $24,000/yr would only take an investment of $600,000 in stocks that are yielding a 4% dividend.
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Tax me more: Can I pay extra to the government so I don't have to deal with all this paperwork?
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Perhaps the real question you are asking is "How can the tax code be fixed to make it simple for everyone (including me), and what would it take to effect those changes"? There are really two causes for the complexity of the tax code. Many of those who enter Government hold a desire for power, and Government uses the tax code as one lever of power to distribute largess to their supporters, and to nudge everyone to behaviors which they favor. The current system enables incumbents to spend taxpayer money to reward those they favor, and thus they accumulate power and security. Those who enter Government also love to spend money (especially other people's money), and their rapacious behavior recognizes no boundaries. They will spend money without control until the taxpayers yank them to a brutal stop. They enact complex rules which are used to ease the (tax) burden for some, which buys their support (with taxpayer money), and they spend money to benefit those which they favor. The system of lobbyists and contributors exists to entice Government to treat them and the causes they support favorably. This system enables incumbents to spend taxed money to reward those they favor, and to tax those they disfavor. Thus their greed is satisfied, and their power is increased. The freedom you seek is not available, although you can minimize the effort required for compliance. You can take the standard deduction, and use nothing but the W-2 provided by your employer, and unless you are subject to the Alternative Minimum Tax, you will find that the tax software will do most of the work for you. Do you want to approach the Nirvana of minimal effort to appease your tax collectors? Avoid starting your own business, charitable donations, investment income, 1099 income, and you will need minimal paperwork. Avoid earning enough to risk the AMT (Alternative Minimum Tax). Refuse to take the mortgage interest deduction, tax credits for electric vehicles, tax credits for high-efficiency appliances and air conditioners, tax credits for residential solar panel installations. Do not own investments which pay interest, or own stocks where you need to track the "basis" (purchase price) of the stocks, nor buy and then sell valuable items that might gain value (where you would need to track the purchase price, the "basis"). Avoid owning and leasing a rental home for income, deducting businesses expenses and mileage for business purposes, contributions to a retirement plan (outside an employer plan) -- all complicate your tax filing. The solution you truly desire is either a "Flat Tax" or the "Fair Tax". These solutions would effect either a single tax rate (with no deductions or adjustments to income, yeah right), or a national retail sales tax, which would tax the money spent in the economy regardless of the source of the money (legal, gifts, crime) and there would be no need to report income, or classify it. The largest objection to either is that the tax code might become less "progressive" (increasing tax rate with increasing income). Good Luck!
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Options liquidity and trading positions larger than the daily volume?
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You definitely cannot be guaranteed to get the bid or ask if you are selling more than are available/desired at those prices. What prices you do get depends on who is watching that contract and how willing they are to trade with you. This question is not much different from the question of whether you can easily get into or out of a large position in an illiquid small stock easily. You can get out quickly if you are willing to take pennies on the dollar, or you may get a reasonable price if you take a long time to get out of (or into) your position. You can't normally do both. In general taking large positions in illiquid assets is not something people want to do without lining up a buyer/seller beforehand. Instead see if you can achieve your objective with liquid investments.
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Why do grocery stores in the U.S. offer cash back so eagerly?
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It doesn't cost them anything, they don't pay commission on you taking cash-back. But it brings customers to the stores because these customers would rather buy something and use cash-back to get cash, than go to an ATM and pay the ATM commission.
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Is it normal to think of money in different “contexts”?
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All value given to products is subjective and is different from person to person. It can also vary for the same person from year to year, month to month, day to day, or even hour to hour as a person analyzes different products and prices to determine which imparts the most value to him or her at a given point in time. In regards to losing money in your investment accounts. This reminds of a book I read on Jesse Livermore. Jesse was a famous stock broker who made millions (in the 1920's so he would be a billionaire in today's money) in the stock market multiple times. Jesse felt like you - he felt like after a while the losses on paper did not seem to concern him as much as he thought it should. He thought it was due to the investment accounts being simply being numbers on papers and not cold, hard cash. So what did Jesse do to remove the abstract nature of investment accounts? From here: Livermore always sold out all his positions at the end of every year and had the cash deposited in his account at the Chase Manhattan Bank. Then he would arrange with the bank to have the money, in cash, in the bank’s vault in chests. “There was a desk, a chair, a cot and an easy chair in the middle of the cash.” On the occasion described in 1923, there was $50 million in cash. In the corner was a fridge with food, enough for a few days. There was lighting installed. Then, like Scrooge McDuck, Livermore would have himself locked in the vault with his cash. He would stay a couple of days and “review his year from every aspect.” After his stay was over, he would fill his pockets with cash and go on a shopping spree. He would also take a vacation and not re-enter the market until February. But unlike Scrooge McDuck, this was not the act of a miser, explains Smitten. Livermore lived a world of paper transactions all year long. He believed that “by the end of the year he had lost his perception of what the paper slips really represented, cash money and ultimately power.” He “needed to touch the money and feel the power of cash.” It made him re-appraise his stock and commodity positions. Imagine the $60,000 from your investment account sitting on your kitchen table. Imagine seeing $1,000 dumped into the trash can one day. I know I would appreciate the money much more seeing that happen.
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Trying to figure out my student loans
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Is there anything here I should be deathly concerned about? A concern I see is the variable rate loans. Do you understand the maximum rate they can get to? At this time those rates are low, but if you are going to put funds against the highest rate loan, make sure the order doesn't change without you noticing it. What is a good mode of attack here? The best mode of attack is to pay off the one with the highest rate first by paying more than the minimum. When that is done roll over the money you were paying for that loan to the next highest. Note if a loan balance get to be very low, you can put extra funds against this low balance loan to be done with it. Investigate loan forgiveness programs. The federal government has loan forgiveness programs for certain job positions, if you work for them for a number of years. Some employers also have these programs. What are the payoff dates for the other loans? My inexact calculations put a bunch in about 2020 but some as late as 2030. You may need to talk to your lender. They might have a calculator on their website. Why do my Citi loans have a higher balance than the original payoff amounts? Some loans are subsidized by the federal government. This covers the interest while the student is still in school. Non-subsidized federal loans and private loans don't have this feature, so their balance can grow while the student is in school.
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Can we buy and sell stocks without worrying about settlement period
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In the United States, regulation of broker dealer credit is dictated by Regulation T, that for a non-margin account, 100% of a trade must be funded. FINRA has supplemented that regulation with an anti-"free rider" rule, Rule 4210(f)(9), which reads No member shall permit a customer (other than a broker-dealer or a “designated account”) to make a practice, directly or indirectly, of effecting transactions in a cash account where the cost of securities purchased is met by the sale of the same securities. No member shall permit a customer to make a practice of selling securities with them in a cash account which are to be received against payment from another broker-dealer where such securities were purchased and are not yet paid for. A member transferring an account which is subject to a Regulation T 90-day freeze to another member firm shall inform the receiving member of such 90-day freeze. It is only funds from uncleared sold equities that are prohibited from being used to purchase securities. This means that an equity in one's account that is settled can be sold and can be purchased only with settled funds. Once the amount required to purchase is in excess of the amount of settled funds, no more purchases can be made, so an equity sold by an account with settled funds can be repurchased immediately with the settled funds so long as the settled funds can fund the purchase. Margin A closed position is not considered a "long" or "short" since it is an account with one loan of security and one asset of security and one cash loan and one cash liability with the excess or deficit equity equal to any profit or loss, respectively, thus unexposed to the market, only to the creditworthiness of the clearing & settling chain. Only open positions are considered "longs" or "shorts", a "long" being a possession of a security, and a "short" being a liability, because they are exposed to the market. Since unsettled funds are not considered "longs" or "shorts", they are not encumbered by previous trades, thus only the Reg T rules apply to new and current positions. Cash vs Margin A cash account cannot purchase with unsettled funds. A margin account can. This means that a margin account could theoretically do an infinite amount of trades using unsettled funds. A cash account's daily purchases are restricted to the amount of settled funds, so once those are exhausted, no more purchases can be made. The opposite is true for cash accounts as well. Unsettled securities cannot be sold either. In summation, unsettled assets can not be traded in a cash account.
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TFSA over-contributions: How would the penalty apply in this scenario?
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First, if your stock is trading at $1 and you transfer the 5000 shares in-kind to your TFSA on August 2, 2011, you are deemed to have disbursed that stock in your (assumed) non-registered account. This may have tax consequences depending on the ACB of the original purchase. As for your TFSA overcontribution, you will only have to pay the 1% monthly penalty on the value of the overcontribution, i.e. $5000. You will pay 1%/month for each month the overcontribution exists, regardless of what the value of the overcontributed assets end up being. Thus, you'll pay a $250 penalty for an overcontribution life of 5 months. The stock price could go to $2 or $0, but you'll pay a fixed tax of $250 for the value of the initial overcontribution. See these articles at the CRA website for more information:Tax payable on excess TFSA amount and Examples - Tax payable on excess TFSA amount.
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How separate individual expenses from family expenses in Gnucash?
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In your words, you want to "easily determine whether an item was purchased as part of our individual accounts, or our combined family account." It's not clear exactly to me what kind of reporting you're trying to get. (I find a useful approach here to be to start with the output you're trying to get from a system, and then see how that maps to the input you want to give the system.) Here's some possibilities:
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College student lacking investment experience: How to begin investing money?
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If you have wage income that is reported on a W2 form, you can contribute the maximum of your wages, what you can afford, or $5500 in a Roth IRA. One advantage of this is that the nominal amounts you contribute can always be removed without tax consequences, so a Roth IRA can be a deep emergency fund (i.e., if the choice is $2000 in cash as emergency fund or $2000 in cash in a 2015 Roth IRA contribution, choice 2 gives you more flexibility and optimistic upside at the risk of not being able to draw on interest/gains until you retire or claim losses on your tax return). If you let April 15 2016 pass by without making a Roth IRA contribution, you lose the 2015 limit forever. If you are presently a student and partially employed, you are most likely in the lowest marginal tax rate you will be in for decades, which utilizes the Roth tax game effectively. If you're estimating "a few hundred", then what you pick as an investment is going to be less important than making the contributions. That is, you can pick any mutual fund that strikes your fancy and be prepared to gain or lose, call it $50/year (or pick a single stock and be prepared to lose it all). At some point, you need to understand your emotions around volatility, and the only tuition for this school is taking a loss and having the presence of mind to examine any panic responses you may have. No reason not to learn this on "a few hundred". While it's not ideal to have losses in a Roth, "a few hundred" is not consequential in the long run. If you're not prepared at this time in your life for the possibility of losing it all (or will need the money within a year or few, as your edit suggests), keep it in cash and try to reduce your expenses to contribute more. Can you contribute another $100? You will have more money at the end of the year than investment choice will likely return.
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Theoretically, if I bought more than 50% of a company's stocks, will I own the company?
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I almost agree. I am not completely sure about the ownership of stock, but to have the majority ownership of any company you must own more than 50% of a company's outstanding shares. Although a board in majority, could out vote a majority shareholder in most cases depending on the company policy regarding shareholders and the general law of the country, and to how the company is managed.
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Double-entry bookkeeping: When selling an asset, does the money come from, Equity or Income?
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It's better to use the accounting equation concept: Asset + Expenses = Capital + Liabilities + Income If you purchase an asset: Suppose you purchased a laptop of $ 500, then its journal will be: If you sell the same Laptop for $ 500, then its entry will be:
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How do I get into investing?
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Don't do it until you have educated yourself enough to know what you are doing. I hope you won't take this personally, but given that you are wandering around asking random strangers on the Internet how to "get into investing," I feel safe in concluding that you are by no means a sophisticated enough investor to be choosing individual investments, nor should you be trusting financial advisors to choose investments for you. Believe me, they do not have your interests at heart. I usually advise people in your position to start by reading one book: A Random Walk Down Wall Street by Burton Malkiel. Once you've read the book by Malkiel you'll understand that the best strategy for all but the most sophisticated investors is to buy an index fund, which simply purchases a portfolio of ALL available stocks without trying to pick winners and losers. The best index funds are at Vanguard (there is also a Vanguard site for non-US residents). Vanguard is one of the very, very, very few honest players in the business. Unlike almost any other mutual fund, Vanguard is owned by its investors, so it has no profit motive. They never try to pick individual stocks, so they don't have to pay fancy high-priced analysts to pick stocks. If you find it impossible to open a Vanguard account from wherever you're living, find a local brokerage account that will allow you to invest in the US stock market. Many Vanguard mutual funds are available as ETFs which means that you buy and sell them just like any other stock on the US market, which should be easy to do from any reasonably civilized place.
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How much cash on hand should one have?
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There are two or three issues here. One is, how quickly can you get cash out of your investments? If you had an unexpected expense, if you suddenly needed more cash than you have on hand, how long would it take to get money out of your Scott Trade account or wherever it is? I have a TD Ameritrade account which is pretty similar, and it just takes a couple of days to get money out. I'm hard pressed to think of a time when I literally needed a bunch of cash TODAY with no advance warning. What sudden bills is one likely to have? A medical bill, perhaps. But hey, just a few weeks ago I had to go to the emergency room with a medical problem, and it's not like they demanded cash on the table before they'd help me. I just got the bill, maybe 3 weeks after the event. I've never decided to move and then actually moved 2 days later. These things take SOME planning. Etc. Second, how much risk are you willing to tolerate? If you have your money in the stock market, the market could go down just as you need the cash. That's not even a worst case scenario, extreme scenario. After all, if the economy gets bad, the stock market could go down, and the same fact could result in your employer laying you off. That said, you could reduce this risk by keeping some of your money in a low-risk investment, like some high-quality bonds. Third, you want to have cash to cover the more modest, routine expenses. Like make sure you always have enough cash on hand to pay the rent or mortgage, buy food, and so on. And fourth, you want to keep a cushion against bookkeeping mistakes. I've had twice in my life that I've overdrawn a checking account, not because I was broke, but because I messed up my records and thought I had more money in the account than I really did. It's impossible to give exact numbers without knowing a lot about your income and expenses. But for myself: I keep a cushion of $1,000 to $1,5000 in my checking account, on top of all regular bills that I know I'll have to pay in the next month, to cover modest unexpected expenses and mistakes. I pay most of my bills by credit card for convenience --and pay the balance in full when I get the bill so I don't pay interest -- so I don't need a lot of cushion. I used to keep 2 to 3 months pay in an account invested in bonds and very safe stocks, something that wouldn't lose much value even in bad times. Since my daughter started college I've run this down to less than 1 months pay, and instead of replacing that money I'm instead putting my spare money into more general stocks, which is admittedly riskier. So between the two accounts I have a little over 2 months pay, which I think is low, but as I say, I'm trying to get my kids through college so I've run down my savings some. I think if I had more than 6 months pay in easily-liquidated assets, then unless I expected to need a bunch of cash for something, buying a new house or some such, I'd be transferring that to a retirement account with tax advantages.
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How big of a mortgage can I realistically afford?
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If you are not planning on living in your condo for at least 10 years don't do it. For about 5 years your mortgage will be more then rent, after 5 years you start to break even and may start paying less. On the other hand, if you plan to be there for 10 years or more it might be a great savings tool,
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Will I always be able to get a zero-interest credit card?
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No. There is no guarantee that credit card issuing banks will always use 0% introductory rates to entice anyone.
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Didn't apply for credit card but got an application denied letter?
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I would keep the letter in a file for follow-up, and I would do what you are already planning to do and wait to see what shows up on the credit report. If this does reflect an identity theft attempt, chances are that others will follow, so vigilance is key here. If there is a hard credit check, then you can dispute that on your credit report. If there is not a hard credit check, there is nothing further this credit card company can do to help you anyway.
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When trading put options, is your total risk decreased if you are in a position to exercise the option?
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In absolute terms the risk is about the same. If you own the stock and your put option goes in the money, then you have the option to get rid of your stock at yesterday's higher price. If you don't, you can sell the option for a higher price than you paid for it. But, as you calculated yourself, the net gain or loss (in absolute terms, not percentage terms) is the same either way.
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Is my wash sale being calculated incorrectly?
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According to Wikipedia this is still a wash sale: In the USA wash sale rules are codified in "26 USC § 1091 - Loss from wash sales of stock or securities." Under Section 1091, a wash sale occurs when a taxpayer sells or trades stock or securities at a loss, and within 30 days before or after the sale:
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Looking to buy a property that's 12-14x my income. How can it be done?
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It is your choice to have "insignificant income", and that has consequences. One is that you cannot borrow money to purchase a home independent of your credit score. In order to purchase a home you must also have the ability to repay in addition to a good history. IMHO your question suggest that you have a unrealistic outlook on life. If you cannot come up with 10K, how can you afford a home? What happens when the HVAC system goes out? While I certainly hope you meet and exceed your goals, you can change your whole world by simply getting a job at a fast food restaurant. When you are not working you can then do the entrepreneurship thing. Life is often a choice of priorities. If you choose to "back-burner" the entrepreneur dream, for a time, and choose to focus on earning the best possible wage. Then perhaps you could afford to purchase a place of your own.
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Questioning my Realtor
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My realtor told me that even though they're only asking for 1/2 the money and have excellent credit that the mortgage company may not lend it to them if I'm over priced. Is this true? I've never heard of it before. It is a chance, but it is a red herring to the discussion. Having excellent credit has nothing to do with being eligible for a debt object of a specific size. Just because you have excellent credit, would you get approved for a property of $10,000,000 if you only made $35,000 a year (and had no other net worth)? But regarding your potential buyers, a chance vs a good chance is different. Your realtor just told you some basic always true lending fact that has nothing to do with your situation.
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Where can publicly traded profits go but to shareholders via dividends?
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If a company earns $1 Million in net profit (let's say all cash, which is not entirely realistic), it can do one of three things with it: On the balance sheet - profits that have not been distributed show up as "retained earnings". When dividends are paid, Retained Earnings and cash are reduced. None of the other options change the fact that it is still "profit" - they all just affect the balance sheet, not the income statement: Note that when a company issues dividends, it reduces its per-share value since cash is leaving the door with nothing in return. In Apple's case, since a significant amount of its profit was earned in other countries (where it was not taxed by the US), it would pay a significant amount in US corporate tax by bringing it back to the US by investing it or paying dividends. They are betting that at some point, the US will change the rules to make it more favorable to "repatriate" the money and reduce their tax significantly.
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Do stock splits make one's shares double in voting power?
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Ordinarily a stock split increases all shareholders' share counts, so that there is no change in anybody's voting power. For example, if you owned 1% of the company before the split, after the split you now have twice as many shares, but there are now twice as many shares outstanding, so you still own 1% of the company. Also, stock splits are not ordinarily "triggered". Usually they happen when the board decides that for one reason or another it's desirable to increase the number of shares in circulation, which causes the price of each share to decrease proportionally. I'm not familiar with the show, and in particular I don't know what the action is that the character being addressed is thinking of taking, but it sounds like they are describing something akin to a "poison pill". In these arrangements, the "pill" is triggered by some predefined condition, say a party acquiring shares in excess of a defined threshold. What typically happens is that shareholders other than the ones who triggered the pill get a chance to buy shares at a substantial discount, thereby diluting the shares of the party that triggered it. Because the other shareholders have to buy their additional shares, albeit at a discount, and because it applies only to certain shares, it's not really a split, but it's close enough that the writers of the show may have felt it was worth using the term that is more familiar to the public.
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Business Investment Loss from prior year
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You need to give specific dates! In the United States, you have three years to file an amended tax return. https://www.irs.gov/uac/Newsroom/Ten-Facts-about-Amended-Tax-Returns Did the restaurant fail in 2012? If so, that's probably the year to take the loss. If you need to amend your 2012 return, which you filed in 2013, you should have until 2016 to file this. The exact date may be based on when you filed 2012 taxes!
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Real estate agent best practice
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There are people that make up a small segment of the population that have an unsatisfied need to see the insides of other people's houses. There's also a segment of the population that don't quite understand the "big picture" of how service professions work... for example, any group of friends going into a restaurant and requesting a table and sitting at it for over an hour, but feel they don't need to leave a tip because they only ordered espressos or shared a desert. Sure, you're paying for the service of a service professional, but it should also include their time and resources you consume outside of the actual service but many don't have that perspective. Why should I pay you if you aren't providing your actual "service" to me even though I'm consuming your time and resources that would be earning you your expected salary otherwise, is their justification. So when you encounter an individual from both small segments of the population mentioned above, the result is the problem your wife faces with perspective buyers. I look at the Agent / Buyer relationship from a different perspective when I encounter these no-harm intended individuals. I don't see it as the buyer is hiring the agent... for if that was the case, a contract of some sorts would be involved detailing the menu of services provided by the agent with associated costs, the buyer would make selections from the menu, pay the costs, and services rendered. but that's not how it works. so its important to understand the perspective of the agent looking to hire the buyer.. you're not paying the buyer to be your client, but you are looking to select the prospective buyer that's going to generate cash flow. In a commissions based work force that is also your main source of income, you have to look at prospective clients as that.. simply prospects..but who are a vital component of your salary. So when allocating your time and resources, especially if you're dealing with several prospects, you literally have to turn away these cold leads who are just looking for design tips and paint color pattern suggestions and you as their escort. If I was in the shoe-making business, i wouldn't hire a walk-in, give him access to materials and work space with the assumption that if its to his liking, it'll generate profit towards my salary needs, if the only thing he's interested in doing is looking around at all the other shoes, a behavior that requires my presence, time, and resources. You almost can't even justify it as "looking at it as possible income in the future" if it's costing you revenue now, whether its in the form of having to neglect actual buyers or you could be investing your time in things that would impact salary needs, such as advance course work (attending optional trainings offered by your broker), or investing time finding more serious leads.
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Remote jobs and incidental wage costs: What do I have to consider?
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In the US we have social security taxes, where for a full time employee the company pays half and the employee pays half. When you work as a business, what we call 1099 for the form that the wages are reported on, then the contractor pays the full amount of social security tax. There are times when a contractor can negotiate a higher rate because the company does not have to pay that tax. However, most of the time the company just prefers to negotiate the rate based on your value. If you are a 60K year guy, then that is what they will pay you. From the company's perspective it does not matter what your tax rate is, only the value you can bring to the company. If you can add about 180K to the bottom line, then they will be happy to pay you 60K, and you should be happy to get it. Here in the US a contractor can expect to make about 7.5% more of an equivalent employee because of the social security tax savings to the company. However, not all companies are willing to provide that in compensation. Some companies see the legal and administrative costs of employees as normal, and the same costs with contractors as extra so they don't perceive a cost savings. There are other things that would preclude employers from giving the bump although it is logical to do so. First you will really have to feel out your employer for the attitude on the subject. Then I would make a logical case if they are open to providing extra compensation in return for tax savings. If I am an employee at 60K, you would also have to pay the government 18K. How about you pay me 75K as a contractor instead? That would be a great deal for all in the US.
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Can a car company refuse to give me a copy of my contract or balance details?
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The advice above is generally good, but the one catch I haven't seen addressed is which specific laws apply. You said that you are in Arkansas, but the dealer is in Texas. This means that the laws of at least two different states are in play, possibly three if the contract contains a clause stating that disputes will be handled in a certain jurisdiction, and you are going to have to do some research to figure out what actually applies. One thing that may significantly impact this issue is whether you were in TX or AR when you signed the contracts. If you borrowed the money in TX, and the lender is in TX, then it is almost certain that the laws of Texas will govern. However, if you were living in AR at the time you acquired the loan, particularly if you were in AR when you signed the papers, you have a decent case for claiming that the laws of Arkansas govern. I don't know enough about either state to know if one is more favorable to the consumer than the other, but it is a question you really want to have answered. That said, I would be shocked if any state did not have provisions requiring the lender to provide a copy of the terms and a detailed statement of the account and transaction history upon request. Spend some time on the web site of the Texas attorney general and/or legislator (because that is where the lender is, they are more likely to respect Texas law) to see if you can track down any specific laws or codes that you can reference. You might also look into the federal consumer protection laws, though I can't think of one off hand that would apply in the scenario you have described. Then work on putting together a letter asking them to provide a copy of the contract and a full history of the account. As others noted, make sure you send it certified/return receipt, or better yet use a private carrier such as fedex, and check the box about requiring a signature. Above all you need to get the dialog transferred to a written form. I can not stress this point enough. Everything you tell them or ask for from here out needs to be done in a written format. If they call you about anything, tell them you want to see their issue/offer in writing before you will consider it. You do not necessarily need a lawyer to do any of this, but you do need to know the applicable laws. Do the research to know what your legal standing is. Involve a lawyer if you feel you need to, but I have successfully battled several large utility companies and collection agencies into behaving without needing one.
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Was this a good deal on a mortgage?
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That seems a very bad offer, it borders on fraud. In the current US economy, you should be able to get between 3 and 4 % APR (and that number is what you should look at). That means that for $300,000 over 30 years, you'd pay $1,265 to $1,432 per month. If you are able to pay more than that monthly rate, you should go for less than 30 years - 20, 15, 10, whatever you can afford - but don't overextend yourself. Google 'mortgage calculator' to do your own calculations.
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Why is tax loss harvesting helpful for passive investing?
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Your assertion that you will not be selling anything is at odds with the idea that you will be doing tax loss harvesting. Tax loss harvesting always involves some selling (you sell stocks that have fallen in price and lock in the capital losses, which gives you a break on your taxes). If you absolutely prohibit your advisor from selling, then you will not be able to do tax loss harvesting (in that case, why are you using an advisor at all?). Tax loss harvesting has nothing to do with your horizon nor the active/passive difference, really. As a practical matter, a good tax loss harvesting plan involves mechanically selling losers and immediately putting the money in another stock with more-or-less similar risk so your portfolio doesn't change much. In this way you get a stable portfolio that performs just like a static portfolio but gives you a tax benefit each year. The IRS officially prohibits this practice via the "wash sale rule" that says you can't buy a substantially identical asset within a short period of time. However, though two stocks have similar risk, they are not generally substantially similar in a legal sense, so the IRS can't really beat you in court and they don't try. Basically you can't just buy the same stock again. The roboadvisor is advertising that they will perform this service, keeping your portfolio pretty much static in terms of risk, in such a way that your tax benefit is maximized and you don't run afoul of the IRS.
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Is it worth it to re-finance my car loan?
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Seems like a good deal to me. You are paying less interest over the lifetime of the loan. And what I would do is take the difference between the new payments and the old, put it into a savings account each month, and when the savings account exceeds the balance of the loan pay it off.
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Why divide by ask rate to get the spread?
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Mathematically it's arbitrary - you could just as easily use the bid or the midpoint as the denominator, so long as you're consistent when comparing securities. So there's not a fundamental reason to use the ask. The best argument I can come up with is that most analysis is done from the buy side, so looking at liquidity costs (meaning how much does the value drop instantaneously purely because of the bid-ask spread) when you buy a security would be more relevant by using the ask (purchase price) as the basis. Meaning, if a stock has a bid-ask range of $95-$100, if you buy the stock at $100 (the ask), you immediately "lose" 5% (5/100) of its value since you can only sell it for $95.
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Buy tires and keep car for 12-36 months, or replace car now?
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If You use the car regulary, I don't think that driving on the bald tires for 3 years is a reasonable option. Have You considered buying used tires? Those will be cheaper and will last till You get to replace the car.
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Are there tax liabilities (in the US) for having a US bank account while I am abroad?
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I don't think so in your case. Unless the account generates so much interest income that it became reportable (I don't know the exact limit, but I think it's in the hundreds if not thousands of dollars, you might get a 1099 form if it generates over $10 of interest income, but you don't have to file taxes if your overall income is too low anyways). The US does not typically tax assets, only income. There are some states (Florida is the only one I can think of) that has odd tax treatment of intangible assets, but I doubt that would apply in your case. If this were a large enough amount, usually over $10,000, it might trigger some reporting requirements (possibly by your home country).
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Why does Yahoo Finance and Google Finance not match historical prices?
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The difference is that Yahoo is showing the unadjusted price that the security traded for on that date, while google is adjusting for price splits. This means that Google is showing how much you would have had to pay to get what is now one share. Since 1979, JNJ has split 3-for-1 once, and 2-for-1 four times. 3x2x2x2x2 = 48. If you bought 1 share at that time, you would now have 48 shares today. Yahoo is showing a price of $66 for what was then 1 share. $66/48 = 1.375, which Google rounds to 1.38. You can see this if you get the prices from May 14-21, 1981. The stock split 3-for-1, and the price dropped from 108 to 36.38. Yahoo's adjusted close column has not been accurate since they re-wrote the Finance website. It now just represents the closing price. The other relevant field on Yahoo is the Adj. Close. This adjusts for splits, but also adjusts for dividends. Hence why this doesn't match either the Google or Yahoo numbers.
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First time investor and online brokerage accounts
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Most mutual funds are designed to make the investment banks that sell them money, not to make investers money. They do this by taking significant fees out. Because they make lots of money on these funds, they advertise them a lot, and give them important-sounding names, like "Advanced technology global diversity long term appreciation". Index funds are the exception; they attempt to mirror the performance of a specific index (such as the S&P 500 index). They generally have very low fees.
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Do my kids need to file a tax return?
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If the gift was stock that they have owned for years there can be one hitch: The basis of the stock doesn't reset when it is gifted. For example if grandparents have owned stock that is currently worth $10,000 today, but they bought it decades ago when it only cost them $1,000; then if the new owner sells it today they will have a gain of $9,000. The clock to determine short term/long term also doesn't reset; which is good. The basis needs to be determined now so that the gain can be accurately calculated in the future. This information should be stored in a safe place. Gains for dividends are investment income and the rules regarding the kiddie tax need to be followed.
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As a 22-year-old, how risky should I be with my 401(k) investments?
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Current evidence is that, after you subtract their commission and the additional trading costs, actively managed funds average no better than index funds, maybe not as well. You can afford to take more risks at your age, assuming that it will be a long time before you need these funds -- but I would suggest that means putting a high percentage of your investments in small-cap and large-cap stock indexes. I'd suggest 10% in bonds, maybe more, just because maintaining that balance automatically encourages buy-low-sell-high as the market cycles. As you get older and closer to needing a large chunk of the money (for a house, or after retirement), you would move progressively more of that to other categories such as bonds to help safeguard your earnings. Some folks will say this an overly conservative approach. On the other hand, it requires almost zero effort and has netted me an average 10% return (or so claims Quicken) over the past two decades, and that average includes the dot-bomb and the great recession. Past results are not a guarantee of future performance, of course, but the point is that it can work quite well enough.
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value of guaranteeing a business loan
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The standard goal of valuing anything is to seek the fair price for that thing in the open market. Depending on what is being valued, that may or may not be an easy task. eg: to value your home, get a real estate appraiser, who will look at recent market sales in your area, and adjust for nuances of your property. To value your loan guarantee, you would need to figure out what it is actually worth to the business, which may be difficult. In a perfect world, you would be able to ask the bank to tell you the interest rate you would have to pay, if the loan was not guaranteed. This would show you the value you are providing to the business by guaranteeing it. ie: if the interest would be $100k a year unguaranteed, but is only $40k a year guaranteed, you are saving the business $60k a year. If the loan is to last 5 years, that's a total of $300k. Of course, it is likely the bank simply won't offer you an unguaranteed loan at all. This makes the value quite difficult to determine, and highlights the underlying transaction you are considering: You are taking on personal risk of loan default, to profit the business. If you truly can't find an equitable way to value the guarantee, consider whether you understand the true risk of what you are doing. If you are able to determine an appropriate value for the loan, consider whether increasing your equity is fair compensation. There are other methods of compensation available, such as having the company pay you directly, or decrease the amount of capital you need to invest for this new set of equity. In the end, what is fair is what the other shareholders agree to. If you go to the shareholders with anything less than professional 3rd party advice (and stackexchange does not count as professional), then they may be wary of accepting your 'fee', no matter how reasonable.
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Working remotely from Canada for a US company. How to get paid?
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I'm no lawyer and no expert, so take my remarks as entertainment only. Also see this question. If you have a U.S. SSN which is eligible for work, they may be able to pay you on 1099 basis with your SSN as a sole proprietor, unless they have some personal reason for avoiding that. So perhaps try asking about that specifically. HR policies can be weird and tricky, maybe a nudge in the right direction will help. Not What You Asked: regardless, I might recommend you register as an LLC and get an EIN (sort of SSN for companies) for a variety of reasons. It's called a "limited liability" company for a reason. You may also have an easier time reaping various business-related rewards, like writing off expenses. If you do so, consider a state with no income tax like Wyoming. (Or, for convenience sake, WA if you live in BC, or maybe NH if you live in Ontario.. etc.)
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Can stock market gains be better protected under an LLC arrangement?
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The thing you get wrong is that you think the LLC doesn't pay taxes on gains when it sells assets. It does. In fact, in many countries LLC are considered separate entities for tax properties and you have double taxation - the LLC pays its own taxes, and then when you withdraw the money from the LLC to your own account (i.e.: take dividends) - you pay income tax on the withdrawal again. Corporate entities usually do not have preferential tax treatment for investments. In the US, LLC is a pass-though entity (unless explicitly chosen to be taxed as a corporation, and then the above scenario happens). Pass-through entities (LLCs and partnerships) don't pay taxes, but instead report the gains to the owners, which then pay taxes as if the transaction was their personal one. So if you're in the US - investing under LLC would have no effect whatsoever on your taxes, or adverse effect if you chose to treat it as a corporation. In any case, investing in stocks is not a deductible expense, and as such doesn't reduce profits.
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Non US-resident, need to file 83b election TODAY with the IRS - I have an SSN but it says “valid for work only with DHS auth” - is this OK?
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Google that "valid for work..." phrase. You'll find that you have a SSN; it is valid for many purposes; it is valid for obtaining work, only when accompanied by DHS authorization. Doesn't anyone know how to use commas anymore?
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What are the tax implications of earnings from the stock market (BSE)?
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If you have held the stocks longer than a year, then there is no tax apart from the STT that is already deducted when you sell the shares. If you have held the stock for less than a year, you would have to pay short term capital gains at the rate of 15% on the profit. Edit: If you buy different shares from the total amount or profits, it makes no difference to taxes.
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How to invest with a low net worth
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I have an opposite view from all the other contributions here. Why not consider starting your own business. With the little money you have the return will most times be much higher than stocks return. The business is yours; you keep the business and the profit streams in the long term. Simply find businesses you can even start with a 100 or 200 euros and keep the rest with your bank. this is a sure way to become millionaire my friends.
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Does an index have a currency?
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From Wikipedia - To calculate the value of the S&P 500 Index, the sum of the adjusted market capitalization of all 500 stocks is divided by a factor, usually referred to as the Divisor. For example, if the total adjusted market cap of the 500 component stocks is US$13 trillion and the Divisor is set at 8.933 billion, then the S&P 500 Index value would be 1,455.28. From a strictly mathematical perspective, the divisor is not canceling out the units, and the S&P index is dollar denominated even though it's never quoted that way. A case in point is that the S&P is often said to have a P/E, and especially an E, the earnings attributed to one 'unit' of S&P. And if you buy a mutual fund sporting a low expense ratio, you can invest exactly that much money (the current S&P index value) and see the dividends accrue to your account, less the fee.
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Where should I park my rainy-day / emergency fund?
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Something with an FDIC guarentee, so a bank. With an emergency fund, I think the 'return of capital' is more important than the 'return on the capital', so I'm fine with putting it in a standard savings account in a local bank(not an internet account) even if it pays next to nothing. The beauty is that since the bank is local, you can walk in and withdraw it all during any weekday.
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Using Loan to Invest - Paying Monthly Installments with Monthly Income
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Here are my re-run figures. Not counting capital gains taxes, I calculate you need to be making 1.875% per annum or 0.155% per month on your $8,000 investment to break-even on the loan. It's interesting that the return you need to gain to break-even is less than the interest you're paying, even with commission. It happens because the investment is gaining a return on an increasing amount while the load is accruing interest on a decreasing amount. Ref. r, logarithmic return
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Fund or ETF that simulates the investment goals of an options “straddle” strategy?
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Why bother with the ETF? Just trade the options -- at least you have the ability to know what you actually are doing. The "exotic" ETFs the let you "double long" or short indexes aren't options contracts -- they are just collections of unregulated swaps with no transparency. Most of the short/double long ETFs also only attempt to track the security over the course of one day -- you are supposed to trade them daily. Also, you have no guarantee that the ETFs will perform as desired -- even during the course of a single day. IMO, the simplicity of the ETF approach is deceiving.
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Advantage of credit union or local community bank over larger nationwide banks such as BOA, Chase, etc.?
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Don't switch just because you hear people panicking on the talk shows. Banks are competitive business and won't start charging for using debit cards too fast. If and when they decide to do such a thing after all - then start shopping and see who doesn't catch up with the fees and still provides the services you want for the price you're willing to pay.
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Why would Two ETFs tracking Identical Indexes Produce different Returns?
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The top ten holdings for these funds don't overlap by even one stock. It seems to me they are targeting an index for comparison, but making no attempt to replicate a list of holdings as would, say, a true S&P index.
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What benefits do “title search companies” have over physically visiting a land records offices?
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Title agencies perform several things: Research the title for defects. You may not know what you're looking at, unless you're a real-estate professional, but some titles have strings attached to them (like, conditions for resale, usage, changes, etc). Research title issues (like misrepresentation of ownership, misrepresentation of the actual property titled, misrepresentation of conditions). Again, not being a professional in the domain, you might not understand the text you're looking at. Research liens. Those are usually have to be recorded (i.e.: the title company won't necessarily find a lien if it wasn't recorded with the county). Cover your a$$. And the bank's. They provide title insurance that guarantees your money back if they missed something they were supposed to find. The title insurance is usually required for a mortgaged transaction. While I understand why you would think you can do it, most people cannot. Even if they think they can - they cannot. In many areas this research cannot be done online, for example in California - you have to go to the county recorder office to look things up (for legal reasons, in CA counties are not allowed to provide access to certain information without verification of who's accessing). It may be worth your while to pay someone to do it, even if you can do it yourself, because your time is more valuable. Also, keep in mind that while you may trust your abilities - your bank won't. So you may be able to do your own due diligence - but the bank needs to do its own. Specifically to Detroit - the city is bankrupt. Every $100K counts for them. I'm surprised they only charge $6 per search, but that is probably limited by the State law.
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How converted stock is taxed due to an acquisition
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I don't think its a taxable event since no income has been constructively received (talking about the RSU shareholders here). I believe you're right with the IRC 1033, and the basis of the RSU is the basis of the original stock option (probably zero). Edit: see below. However, once the stock becomes vested - then it is a taxable event (not when the cash is received, but when the chance of forfeiture diminishes, even if the employee doesn't sell the stock), and is an ordinary income, not capital. That is my understanding of the situation, do not consider it as a tax advice in any way. I gave it a bit more though and I don't think IRC 1033 is relevant. You're not doing any exchange or conversion here, because you didn't have anything to convert to begin with, and don't have anything after the "conversion". Your ISO's are forfeited and no longer available, basically - you treat them as you've never had them. What happened is that you've received RSU's, and you treat them as a regular RSU grant, based on its vesting schedule. The tax consequences are exactly as I described in my original response: you recognize ordinary income on the vested stocks, as they vest. Your basis is zero (i.e.: the whole FMV of the stock at the time of vesting is your ordinary income). It should also be reflected in your W2 accordingly.
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classify investments in to different asset types
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A foreign stock mutual fund definitely belongs in stocks. It's composed of stocks. Your self occupied house is definitely real estate. You don have to keep in mind,however that selling it would create costs such as rent. I wouldn't leave it out, if doing that would cause you to buy more real estate. This would cause you to be overweighted in the real estate area. I would tend to think if a CD as cash. While it could be considered a bond, as you said the principal doesn't go down. The REIT is the toughest one. I would really like to see a graph showing how correlated it is to the real estate market. That would determine where I would put it.
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How do rich people guarantee the safety of their money, when savings exceed the FDIC limit?
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With a lot excess cash you eventually have two goals: Since interest on cash bank deposits does not exceed inflation and you have currency risk, you may want to get into other asset classes. Options that might be, but not limited to are:
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What is the different between one company's two OTCMKTS symbols?
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I have not looked in details but apparently the company has (at least) a dual listing in Hong Kong (its main listing, ticker 700) and in the US (ticker TCTZF). It also has an ADR (TCEHY), the underlying of which is the HK line. The two US listings essentially trade at the same price and will provide very similar returns but a major difference is that TCTZF pays dividends in HKD whereas TCEHY pays its dividends in USD. The latter may be more convenient depending on the account you use to trade the stock. The ADR line is also more liquid.
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What happens if I just don't pay my student loans?
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employed under the table and doesn't have a bank account If I could make that size 10,000,000 font I would. Your friend likely also isn't paying taxes. The student loan penalties will be nothing compared to what the IRS does to you. Avoid taking financial advice from that person.
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Covered call when stock position is at a loss
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I don't think you understand options. If it expires, you can't write a new call for the same expiration date as it expired that day. Also what if the stock price decreases further to $40 or even more? If you think the stock will move in either way greatly, and you wish to be profit from it, look into straddles.
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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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Hard to say in general. It depends on the actual numbers. First you need to check the suggested retail price of a new car, and the price that you can actually get it for. The difference between these prices is between non-existing and huge, depending on the car. Some dealers will sell you a car that has done 50 miles for a huge rebate - that means they can't sell their cars at full price but don't want to reduce the price. Used cars can be quite expensive compared to a new car or not, also depending on the brand. Estimate that a brand new car should drive 12 years and 200,000 miles without major repairs (go for a car with generous warranty or check reviews to make sure you are buying a long lasting car). Calculate the cost per year. Since you prefer driving a nicer new car, increase the cost for the first four years and reduce the cost for the last four years. With that information, check what the used car costs and if that is reasonable. Assuming 12 years life, a six your old car should be quite a bit less than 50% of a new one. You can improve your cost a bit: If your annual mileage is low, you might find a rather new car with huge mileage quite cheap which will still last many years. Or if your annual mileage is excessively high, you can look for a car that is a bit older with low mileage. Anyway, paying 70% of the price of a new passenger car for a used car that is six years old (you say <7 years, so I assume six years) seems excessive; it would mean the first user effectively paid 30% of the new price to drive the car for six years, and you pay 70% to drive another six years (estimated). You'd be much much better off buying a new car and selling it for 70% after six years.
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Can I write off time spent learning my trade - Two-Man S-Corp
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I'm not sure what you mean by "writing off your time," but to answer your questions: Remember that, essentially, you are a salaried employee of a corporation. So if you are spending time at your job, even if you are not billing anything to a client, you are earning your salary. If there are costs involved with these activities (maybe class fees, a book purchase, or travel expenses), the corporation should be paying the costs as business expenses. However, the logistics of this, whether the corporation writes a business check to the vendor directly, or you put the expenses on a personal credit card and are reimbursed with an expense check from the corporation, don't matter. Your accountant can show you the right way to do this.
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What happens when a non-U.S. citizen who's been making money from the U.S. moves to the U.S.?
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Its not for US citizens - its for US residents. If the US considers you as a tax resident - you'll be treated the same as a US citizen, regardless of your immigration status. The question is very unclear, since it is not mentioned whether your US sourced income "from the Internet" is sales in the US, sales on-line, services you provide, investments, or what else. All these are treated differently. For some kinds of US-sourced income you should have paid taxes in the US already, regardless of where you physically reside. For others - not. In any case, if you become US tax resident, you'll be taxed on your worldwide income, not only the $10K deposited in the US bank account. ALL of your income, everywhere in the world, must be declared to the US government and will be taxed. You should seek professional advice, before you move to the US, in order to understand your responsibilities, liabilities and rights. I suggest looking for a EA/CPA licensed in California and experienced with taxation of foreigners (look for someone in the SF or LA metropolitan areas). Keep in mind that there may be a tax treaty between the US and your home country that may affect your Federal (but not California) taxes.
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What does a high theta mean for an option position?
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Option prices consist of two parts: the intrinsic value (the difference between the strike and the current price of the stock) and a time premium, representing the probability that the stock will end up above the strike for a call (or below for a put). All else being equal, options decline in value as time passes, since there is less uncertainty about the expected value of the stock at expiration and thus the time premium is smaller. Theta is the measure of the change in value in one day. So for every day that passes, the calls you sold are going down by $64.71 (which is positive to you since you sold them at a higher value) and the calls you sold are going down by $49.04. So your position (a short spread) is gaining $15.67 each day (assuming no change in stock price or volatility). In reality, the stock price and volatility also change every day, and those are much stronger drivers of the value of your options. In your case, however, the options are deep out of the money, meaning it's very likely that they'll expire worthless, so all you have left is time premium, which is decaying as time goes on.
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What is a good 5-year plan for a college student with $15k in the bank?
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First thing to do right now, is to see if there's somewhere equally liquid, equally risk free you can park your cash for higher rate of return. You can do this now, and decide how much to move into less liquid investments on your own pace. When I was in grad school, I opened a Roth IRA. These are fantastic things for young people who want to keep their options open. You can withdraw the contributions without penalty any time. The earnings are tax free on retirement, or for qualified withdrawls after five years. Down payments on a first home qualify for example. As do medical expenses. Or you can leave it for retirement, and you'll not pay any taxes on it. So Roth is pretty flexible, but what might that investment look like? It in depends on your time horizon; five years is pretty short so you probably don't want to be too stock market weighted. Just recognize that safe short term investments are very poorly rewarded right now. However, you can only contribute earnings in the year they are made, up to a 5000 annual maximum. And the deadline for 2010 is gone. So you'll have to move this into an IRA over a number of years, and have the earnings to back it. So in the meanwhile, the obvious advice to pay down your credit card bills & save for emergencies applies. It's also worth looking at health and dental insurance, as college students are among the least likely to have decent insurance. Also keep a good chunk on hand in liquid accounts like savings or checking for emergencies and general poor planning. You don't want to pay bank fees like I once did because I mis-timed a money transfer. It's also great for negotiating when you can pay in cash up front; my car insurance for example, will charge you more for monthly payments than for every six months. Or putting a huge chunk down on a car will pretty much guarantee the best available dealer financing.
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Shouldn't a Roth IRA accumulate more than 1 cent of interest per month?
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Terminology aside. Your gains for this year in a mutual fund do seem low. These are things that can be quickly, and precisely answered through a conversation with your broker. You can request info on the performance of the fund you are invested in from the broker. They are required to disclose this information to you. They can give you the performance of the fund overall, as well as break down for you the specific stocks and bonds that make up the fund, and how they are performing. Talk about what kind of fund it is. If your projected retirement date is far in the future your fund should probably be on the aggressive side. Ask what the historic average is for the fund you're in. Ask about more aggressive funds, or less if you prefer a lower average but more stable performance. Your broker should be able to adequately, and in most cases accurately, set your expectation. Also ask about fees. Good brokerages charge reasonable fees, that are typically based on the gains the fund makes, not your total investment. Make sure you understand what you are paying. Even without knowing the management fees, your growth this year should be of concern. It is exceptionally low, in a year that showed good gains in many market sectors. Speak with your broker and decide if you will stick with this fund or have your IRA invest in a different fund. Finally JW8 makes a great point, in that your fund may perform well or poorly over any given short term, but long term your average should fall within the expected range for the type of fund you're invested in (though, not guaranteed). MOST importantly, actually talk to your broker. Get real answers, since they are as easy to come by as posting on stack.
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What's a good option for passive income for a college student?
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There's no such thing as true "passive income." You are being paid the risk free rate to delay consumption (i.e., the super low rate you are getting on savings accounts and CDs) and a higher rate to bear risk. You will not find truly risk-free investments that earn more than the types of investments you have been looking at...most likely you will not keep up with inflation in risk-free investments. For a person who is very risk averse but wants to make a little more money than the risk-free rate, the solution is not to invest completely in slightly risky things. Instead the best thing you can do is invest partially in a fully diversified portfolio. A diversified portfolio (containing stocks, bonds, etc) will earn you the most return for the given amount of risk. If you want very little risk, put very little in that portfolio and keep the rest in your CDs. Put 90% of your money in a CD or something and the other 10% in stocks/bonds. Or choose a different percentage. You can also buy real assets, like real estate, but you will find yourself taking a different type of risk and doing a different type of work with those assets.
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Can I claim a tax deduction for working from home as an employee? I work there 90% of the time
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Talk to a tax professional. The IRS really doesn't like the deduction, and it's a concept (like independent contractors) that is often not done properly. You need to, at a minimum, have records, including timestamped photographs, proving that: Remember, documentation is key, and must be filed and accessible for a number of years. Poor record keeping will cost you dearly, and the cost of keeping those records is something that you need to weigh against the benefit.
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Cheapest way to wire or withdraw money from US account while living in Europe
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Atm machine and my Credit Union account. Low fees (often zero, if the machine is on any of the same networks) and decent exchange rate, and no need to carry cash or traveler's checks to be exchanged. Alternatively, pay by credit card, though there is a foreign transaction fee on that.
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1000 pound to invest
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1000 (£/$/€) is also not a lot to start with. Assuming you want to buy stocks or ETFs you will be paying fees on both ends. Even with online brokerages you are looking at 7.95 (£/$/€) a trade. That of course translates to a min of .795% x 2 = 1.59% increase in value you would need just to break even already. There is a way around some of this as a lot of the brokerages do not charge fees for their ETFs or their affiliated ones. However, I would try to hold out till at least $5000 before investing in assets such as stocks. In the meantime there are many great books out there to "invest in knowledge".
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Why does capital gains tax apply to long term stock holdings?
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It's a matter of social policy. The government wants people to make long term investments because that would lead to other long-term government goals: employment, manufacturing, economical growth in general. While speculative investments and day-trading are not in any way discouraged, investments that contribute to the economy as a whole and not just the investor are encouraged by the lower tax rates on the profits. While some people consider it to be a "fig leaf", I consider these people to be populists and dishonest. Claiming that long term social goals are somehow bad is hypocrisy. Claiming that short-term trading contributes to the economy as a whole is a plain lie.
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interest rate on online banks
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I beg to differ: Israel has an incredibly well managed central bank, and the usury market is wonderfully competitive. It's a shame Stanley Fischer has retired. His management is the case study in central bank management. Rates are low because inflation is low. The nominal rate is irrelevant to return because a 2% nominal return with 1% inflation is superior to a 5% nominal return with 9% inflation. A well-funded budget is the best first step, so now a tweak is necessary: excess capital beyond budgeting should be moved quickly to internationally diversified equities after funding, discounted and adjusted, longer term budgets. Credit will not pay the rate necessary for long term investment. Higher variance is the price to pay for higher returns.
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Are solar cell panels and wind mills worth the money?
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Although this isn't related to homes directly, as an IT professional I know that wind power tends to be cost effective to the point that many data centers (the massive buildings holding the servers that are the backbone of the internet) actually invest in their own wind turbines to slash costs since servers tend to be power hogs. As far as going "off the grid" that ultimately depends on how much wind/sun you're getting at your residence, but if you look at places like Dallas, PA, CA, and other areas where the major hosts place centers, they're typically in areas where there's plenty of sunlight or wind. Going back to small scale thinking however, one of my contacts actually leases a colocation building in PA where he has a few server racks, and while he currently has electric there, he also owns a couple of turbines which have been powering <60% of the demand, and he's actually planning to add solar and also feed that back to the grid at a profit. So overall wind/solar definitely has the potential for a decent ROI, at both large and small levels, but performance will vary greatly from area to area. I know that Lowes actually started advertising about carrying solar panels, so going in and asking about the performance and if you can arrange an audit of your home might be a good place to start. If you Google "green audits" I'm sure you can find a trillion companies "specializing" in green power, but as with any sales rep (including at Lowe's) I'd do some due-diligence so you don't get taken for a ride, and also to check references because I don't think "green audit" companies have any official certifications/standards.
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After Market Price change, how can I get it at that price?
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If the price used to be 2.50 but by the time you get in an order it's 2.80, you're going to have to pay 2.80. You can't say, "I want to buy it at the price from an hour ago". If you could, everybody would wait for the price to go up, then buy at the old price and have an instant guaranteed profit. Well, except that when you tried to sell, I suppose the buyer could say, "I want to pay the lower price from last July". So no, you always buy or sell at the current price. If you submit an order after the markets close, your broker should buy the stock for you as soon as possible the next morning. There's no strict queue. There are thousands of brokers out there, they don't take turns. So if your broker has 1000 orders and you are number 1000 on his list, while some other broker has 2 orders and number 1 is someone else wanting to buy the same stock, then even if you got your order in first, the other guy will probably get the first buy. LIFO and FIFO refer to any sort of list or queue, but don't really make sense here. When the market opens a broker has a list of orders he received overnight, which he might think of as a queue. He presumably works his way down the list. But whether he follows a strict and simple first-in-first-out, or does biggest orders first, or does buys for stocks he expects to go up today and sells for stocks he expects to go down today first, or what, I don't know. Does anybody on this forum know, are there rules that say brokers have to go through the overnight orders FIFO, or what is the common practice?
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2016, USA banks with low/no fee for incoming OVERSEAS USD wire transfers?
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Ally Bank $0 - from their website (emphasis mine): To receive a wire transfer from a non-U.S. bank: Incoming wire transfers from a non-US bank are processed by our designated receiving bank, JP Morgan Chase Bank, N.A. You'll need to provide the following information to the person or business sending the wire transfer to you: Receiving Bank: JP Morgan Chase Bank, N.A. ABA/Routing Number: 021000021 Address: 1 Chase Manhattan PLZ, New York, NY 10005 SWIFT Code or Bank Identification Code: CHASUS33 Beneficiary Account Number: 802904391 Beneficiary Name: List 'Ally Bank' since the wire is being processed by JP Morgan Chase Bank, N.A. Further Credit: Your Ally Bank Account Number and your name as it appears on your Ally Bank account. Note: We won't charge you to receive a wire transfer into your Ally account. https://www.ally.com/help/search.html?term=SWIFT&console=false&context=Help&domain=www.ally.com§ion=Help+%26+FAQs Alliant Credit Union $0 - from their website (emphasis mine): Direct international wire transfers International wire transfers are handled through our correspondent bank for processing. International wires can take up to 10 business days to be credited to the receiving institution. Funds should be wired to: Northern Trust ABA# 071000152 "Note: US Banks do not use SWIFT codes. This ABA # is used in place of SWIFT codes for US Banks." 50 South La Salle Street, Chicago, IL 60603 For further credit: Alliant Credit Union Account Number 35101804 11545 W. Touhy Avenue, Chicago, IL 60666 For final credit: Member’s name and complete address (No P.O. Box) Member’s 14-digit account number Destination of funds (checking, savings or loan number) Incoming wire transfers: Wire transfers received Monday - Friday, 7:00am - 3:00pm, CT, will be credited to your account the same day. Wire transfers received after 3:00pm, CT, Monday - Friday and on the weekend will be credited the next business day. Fees: We do not charge a fee to receive incoming wire funds. However, the financial institution wiring the funds may charge for this service. http://www.alliantcreditunion.org/help/receiving-a-wire-transfer-to-your-alliant-account
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“Infinite Banking” or “Be Your Own Bank” via Whole Life Insurance…where to start?
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There are a lot of false claims around the internet about this concept - the fact of the matter is you are giving yourself the ability to have money in a tax favored environment with consistent, steady growth as well as the ability to access it whenever you want. Compare this to a 401k plan for example....money is completely at risk, you can't touch it, and you're penalized if you don't follow the government's rules. As far as commissions to the agent - an agent will cut his commission in half by selling you an "infinite banking" style policy as opposed to a traditional whole life policy. @duffbeer703 clearly doesn't understand life insurance in the slightest when he says that the first three years of your premium payements will go to the agents pocket. And as usual offers no alternative except "pick some high yielding dividen stocks and MLPs" - Someone needs to wake up from the Dave Ramsey coma and realize that there is no such thing as a 12% mutual fund....do your research on the stock market (crestmont research). don't just listen to dave ramseys disciples who still thinking getting 12-15% year in and year out is possible. It's frustrating to listen to people who are so uneducated on the subject - remember the internet has turned everyone into "experts" if you want real advice talk to a legitimate expert that understands life insurance and how it actually works.
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Should an ADR that is being delisted be sold off?
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I'm a bit out of my element here, but my guess is the right way to think about this is: knowing what you do now about the underlying company (NZT), pretend they had never offered ADR shares. Would you buy their foreign listed shares today? Another way of looking at it would be: would you know how to sell the foreign-listed shares today if you had to do so in an emergency? If not, I'd also push gently in the direction of selling sooner than later.
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What's my risk of buying a house for a friend and sell back to him?
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Also you would need to consider any taxation issues. As he will be paying you rent you will need to include this as income, plus any capital gains tax on the re-sale of the property may need to be paid.
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fastest way to move USD to EUR
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You're asking three different things: What is the fastest way, what is the cheapest way and what is the easiest way. You will not find one method that is all three at once. The fastest way is a wire transfer. The cheapest way that I've encountered is a foreign exchange service like XE. The easiest way is probably Paypal since the money is already in Paypal.
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Why do requirements after a margin call vary?
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Initial Margins and Maintenance margins can be used for both stocks as well as futures. It depends on which broker you use and what services they offer. The initial Margin is used to cover the purchase, the maintenance margin is used to ask additional funds in case the value of the underlying equity changes drastically before settlement. You can start with the investopedia article on initial margin and Maintenance margin
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Why do people take out life insurance on their children? Should I take out a policy on my child?
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Why do people take out life insurance on their children? They do so largely because it's being sold to them. The insurance companies generally push them on the basis that if you have to pay for a funeral and burial, the cost would devastate a family's finances. In some rare instances that might actually be true, but not generally. Should I take out a policy on my child? Generally no. When they sell you a policy they have to dance around a catch-22 - if you have enough money to afford the 'cheap' life insurance, then you have enough money to pay for a funeral and burial that's probably not going to happen. If you don't have enough money to pay those expenses in the rare case that a child does die, then you really can't afford the insurance, even if it's only 'pennies a day for peace of mind.' And why would schools send these home to parents, year-after-year? The schools are paid a commission. It is not much more than a fundraiser for them, just like school pictures. Am I missing something? Yes, in fact, you could be making money hand over fist if you were willing to prey on parental insecurities. Just set up a stand outside the hospital and get parents who are just about to deliver to sign up for your amazing insurance plan in case the tragic occurs.
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How should I pay off my private student loans that have a lot of restrictions?
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Excellent question and it is a debate that is often raised. Mathematically you are probably best off using option #1. Any money that is above and beyond minimum payments earns a pretty high interest rate, about 6.82% in the form of saved interest payments. The problem is you are likely to get discouraged. Personal finance is a lot about behavior, and after working at this for a year, and still having 5 loans, albeit a lower balance, might take a bit of fight out of you. Paying off such a large balance, in a reasonable time, will take a lot of fight. With the debt snowball, you pay the minimum to the student loan, save in an outside account, and when it is large enough, you execute option #2. So a year from now you might only have three loans instead of five. If you behaved exactly the same your balance would be higher after that year then using the previous method. However often one does not behave the same. Because the goals are shorter and more attainable it is easier to delay some gratification. The 8 dollars you are saving in your weekly gas budget, because of low prices, is meaningful when saving for a 4K goal, where it is meaningless when looking at it as a 74K goal. With the 4K goal you are more apt to put that money in your savings, where the 74K goal you might spend it on a latte. For me, the debt snowball worked really well. With either option make sure that excess payments actually go to a reduction in principle not a prepayment of interest. Given this you may be left with no option. For example if method #1 you only prepay interest, you are forced to use option #2.
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Does settlement of second mortgage count as short sale?
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No that will not count as a short sale although it may still affect your chances of getting a loan because some lenders wont want to see it on your credit if you are pursuing a new FHA loan. In the best case scenario you will need an explanation letter of why you did this. In the worst case scenario the lender will want you to wait to get financing. Try and find a lender with NO FHA overages which means they don't put additional restrictions on giving you an FHA insured loan. That type of lender will be your best choice because they just follow FHA rules and don't add any additional requirements.
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How can I live outside of the rat race of American life with 300k?
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So my read on the question is "How do I invest 300k such that it earns me a 'living wage' without the ongoing grind inherent in most formal employment?" Reading the other answers to date it looks like most of them are thinking in terms of investment accounts and trying to live off of the earnings from such. I wanted to throw out a couple of alternative choices that may be worth considering... The first is real-estate investing. $300k should allow you to pick up 2 or 3 single family dwellings with little or no mortgage. Turning them into rentals placed with a good property management company should easily pay their expenses and provide a consistent income with minimal effort/attention from you. Similar story with buying into multifamily housing or commercial real-estate. Your key concern here is picking the right market in which to buy and finding a reputable manager to handle the day to day issues on your behalf. Note that you are not overly concerned with the potential resale value of the property(s), but the probable rental income they can generate, these are separate concerns that may not align with each other. Second is buying/founding a business that has a general manager other than yourself. Franchise ownership may be a potential option for you under the circumstances. The key concern here is picking the business, location, and manager that make you comfortable in terms of the risk involved. You need the place to make enough money to pay for itself and the salary of everyone working there, with enough left over for you to live on. Sounds easy enough, but not so much in practice. Generally you can expect at least a few years of being hands on and watching things very closely to make sure it is going the way you want it to. Finding a mentor who has done this type of transition before to walk you through it would be strongly advised. So would preparing yourself for a failure or two before you work out the exact combination of factors that work for you.
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Credit card closed. Effect on credit score (USA)
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As documented in MyFICO (http://www.myfico.com/credit-education/whats-in-your-credit-score/), there are several factors that affect credit scores. Payment history (35%) The first thing any lender wants to know is whether you've paid past credit accounts on time. This is one of the most important factors in a FICO® Score. As @Ben Miller mentioned, checking your credit report to determine whether or not late payments were reported to credit bureaus will give you a sense of whether or not this was effected. You mentioned several bounced payments, which certainly could have caused this. This would be my largest concern with a closed account, is to investigate why and what was reported to the bureaus, and in turn, other lenders. Also, since this has the highest impact on credit scores (35%), it's arguably, the most important. This is further detailed here, which details the public record and late payment effect on your score. Amounts owed (30%) Having credit accounts and owing money on them does not necessarily mean you are a high-risk borrower with a low FICO® Score....However, when a high percentage of a person's available credit is been used, this can indicate that a person is overextended, and is more likely to make late or missed payments. Given that this card was closed, whatever your credit limit was is now no longer added into your total credit limit. However, your utilization on that card is gone (assuming it gets paid off), depending on any other credit lines, and since you reported "heavy use" that could be a positive impact, though likely not. Length of credit history (15%) In general, a longer credit history will increase your FICO® Scores. However, even people who haven't been using credit long may have high FICO Scores, depending on how the rest of the credit report looks. Depending how old your card was, and particularly since this was your only credit card, it will likely impact your average age of credit lines, depending on other lines of credit (loans etc) you have open. This accounts for about 15% of your score, so not as large of an impact as the first two. Credit mix in use (10%) FICO Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Given that this was your only credit card, your loan mix has been reduced (possibly to none). New credit (10%) Research shows that opening several credit accounts in a short period of time represents a greater risk - especially for people who don't have a long credit history. This focuses on credit inquiries, which as you mentioned, you will likely have another either re-opening this credit card or opening another at some point in the future. Regardless, paying off the rest of that card is a priority, as interest rates on average credit cards are over 13%, and often higher (source). This rate comes into play when not paying the balance in full every month, and also as @Ben Miller suggested, I would not utilize a credit card without being able to pay it in full. It can often be a dangerous cycle of debt.
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Where can I find closed dates for the New York Stock Exchange for the coming year?
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The NYSE holidays are listed online here: https://www.nyse.com/markets/hours-calendars
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