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What should I do with $4,000 cash and High Interest Debt?
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Every $1,000 you use to pay off a 26% interest rate card saves you $260 / year. Every $1,000 you use to pay off a 23% interest rate card saves you $230 / year. Every $1,000 you put in a savings account earning ~0.5% interest earns you $5 / year. Having cash on hand is good in case of emergencies, but typically if your debt is on high interest credit cards, you should consider paying off as much of it as possible. In your case you may want to keep only some small amount (maybe $500, maybe $1000, maybe $100) in cash for emergencies. Paying off your high interest debt should be a top priority for you. You may want to look on this site for help with budgeting, also. Typically, being in debt to credit card companies is a sign of living beyond your means. It costs you a lot of money in the long run.
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Does an option trading below parity always indicate an arbitrage opportunity?
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Defining parity as "parity is the amount by which an option is in the money", I'd say there may be an arbitrage opportunity. If there's a $50 strike on a stock valued at $60 that I can buy for less than $10, there's an opportunity. Keep in mind, options often show high spreads, my example above might show a bid/ask of $9.75/$10.25, in which case the last trade of $9.50 should be ignored in favor of the actual ask price you'd pay. Mispricing can exist, but in this day and age, is far less likely.
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Buy index mutual fund or build my own?
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Go with a Vanguard ETF. I had a lengthy discussion with a successful broker who runs a firm in Chicago. He boiled all of finance down to Vanguard ETF and start saving with a roth IRA. 20 years of psychology research shows that there's a .01 correlation (that's 1/100 of 1%) of stock/mutual fund performance to prediction. That's effectively zero. You can read more about it in the book Thinking Fast and Slow. Investors have ignored this research for years. The truth is you'd be just as successful if you picked your mutual funds out of a hat. But I'll recommend you go with a broker's advice.
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Should I be filling out form W-9 for somebody I sold used equipment to?
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They are a business. You're not a corporation. They paid you more than $600 during the year, so they're supposed to send 1099 to you and the IRS about it. They need your taxpayer certification (W9) for that. They were supposed to ask for it before they paid you, but yes - they're supposed to ask for it.
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TD Webbroker.ca did not execute my limit sell order even though my stock went .02 over limit
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On most exchanges, if you place a limit order to sell at 94.64, you will be executed before the market can trade at a higher price. However most stocks in the US trade across several exchanges and your broker won't place your limit order on all exchanges (otherwise you could be executed several times). The likeliest reason for wht happened to you is that your order was not on the market where those transactions were executed. Reviewing the ticks, there were only 8 transactions above your limit, all at 1:28:24, for a total 1,864 shares and all on the NYSE ARCA exchange. If your order was on a different exchange (NYSE for example) you would not have been executed. If your broker uses a smart routing system they would not have had time to route your order to ARCA in time for execution because the market traded lower straight after. Volume at each price on that day:
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How's the graph of after/pre markets be drawn?
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Graphs are nothing but a representation of data. Every time a trade is made, a point is plotted on the graph. After points are plotted, they are joined in order to represent the data in a graphical format. Think about it this way. 1.) Walmart shuts at 12 AM. 2.)Walmart is selling almonds at $10 a pound. 3.) Walmart says that the price is going to reduce to $9 effective tomorrow. 4.) You are inside the store buying almonds at 11:59 PM. 5.) Till you make your way up to the counter, it is already 12:01 AM, so the store is technically shut. 6.) However, they allow you to purchase the almonds since you were already in there. 7.) You purchase the almonds at $9 since the day has changed. 8.) So you have made a trade and it will reflect as a point on the graph. 9.) When those points are joined, the curves on the graph will be created. 10.) The data source is Walmart's system as it reflects the sale to you. ( In your case the NYSE exchange records this trade made). Buying a stock is just like buying almonds. There has to be a buyer. There has to be a seller. There has to be a price to which both agree. As soon as all these conditions are met, and the trade is made, it is reflected on the graph. The only difference between the graphs from 9 AM-4 PM, and 4 PM-9 AM is the time. The trade has happened regardless and NYSE(Or any other stock exchange) has recorded it! The graph is just made from that data. Cheers.
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For very high-net worth individuals, does it make sense to not have insurance?
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The general answer to this is "yes". When you're dealing with single-digit millionaires, the answer is that their insurance habits and needs are basically the same as everyone else. When you get into the double digit and triple digit millionaires, or people worth billions, they have additional options, but those basically boil down to using "self-insurance" rather than paying a company for an insurance policy. The following is based on both what I've read and a fair deal of personal experience working for or with various stripes of millionaire, and even one billionaire. Addressing the types of insurance you mention: This is generally used to provide survivors with a replacement for income you can no longer provide when dead, in addition to paying for costs associated with dying (funeral, hospital/hospice bills, etc). Even millionaires and billionaires have this, yes, but the higher your net worth, the less value it has. If you're worth 9 or 10 figures, you probably already have trust funds set up for your family members, so an extra payout from an insurance policy is probably going to represent a small fraction of the wealth you're leaving your survivors, and as has been noted, insurance makes a profit, so the expectation by the insurance company is that they'll make more money on the policy than they'll have to pay out on death. That being said, the members of the 9+ figure club I've worked for all had multi-million dollar life insurance policies on them, which were paid for or heavily subsidized by the companies they owned or worked for. I doubt they would have held those policies if they had to pay the full cost, but when it's free or cheap, why not? Absolutely. As health insurance in America is an untaxed employment benefit, owing to regulations from World War II, all the wealthy folks I've had contact with got outrageously good plans as part of the companies they work for or owned. Having said that, even their trust fund beneficiaries held health insurance, because this type of insurance (in America, at least) is actually not really insurance, it's more of a pre-payment plan for medical expenses, and as such, it provides broader access to health care than you'd get from simply having enough money to pay for whatever treatments you need. If you walk into a hospital as a millionaire and state that you'll definitely be able to pay for your open-heart surgery with cash, you'll get a very different response than if you walk in with your insurance card and your "diamond-level" coverage. So, in this case, it's not as much as about the monetary benefits (although this is a type of "insurance" that's generally free or heavily discounted to the individual, so that's a factor) as it is about easier access to health care. Although this is required by law, it's one of the common forms of insurance that the very wealthy can, and often do handle differently than the rest of us. Most (if not all) US states have a provision to allow motorists to self-insure themselves, which amount to putting up a bond to cover claims against them. Basically, you deposit the minimum amount the state determines is required for auto insurance with the responsible state organization, get a certificate of self-insurance and you're good to go. All the high wealth individuals I know when this route, for two reasons - first of all, they didn't have to deal with insurance companies (or pay sky-high rates on account of all the speeding tickets they picked up) and secondly, they made their deposit with government bonds they had in their portfolios anyway, and they could still collect the interest on their self-insurance deposits. Of course, this meant that if they wrecked or dinged up their Maserati or Bentley or whatever, they'd be out of pocket to repair or replace it... but I guess if you can afford one $200,000 car, you can afford to buy a second one if you wreck it, or get by riding one of your other luxury automobiles instead. Since someone else mentioned kidnapping insurance, I'll point out here that what Robert DeNiro did in Casino when he put a couple million dollars into a safety deposit box for his wife to use if he was kidnapped or needed to pay off a government official is essentially the same thing as "self-insurance". Putting money away somewhere for unexpected events in lieu of buying an insurance policy against them. In real life, the very wealthy will often do this with US treasuries, government bonds and other interest-bearing, safe investments. They make a little money, diversify their portfolios and at the same time, self-insure against a potential big loss. This is another insurance area where even the very wealthy are remarkably similar to the rest of us, in that they all generally have it, yes, although the reason is a little different. For normal folks, the home they own is generally the largest part of their net worth, or at least a very substantial fraction, for those older folks with retirement savings that exceed the value of their homes. So for us, we have home owners insurance to prevent a catastrophic event from wiping out the lion's share of our net worth. If you're an ultra-wealthy individual who can afford an 8 figure home, that's not really the case (at least with the ones I've dealt with, who made their fortunes in business and are good managing their wealth and diversifying their assets - could be different for sports stars or the entertainment industry), and these people generally own multiple homes anyway, so it's not as big a deal if they lose one. However, no one actually buys a multi-million dollar home by writing a multi-million dollar check. They get a mortgage, just like the rest of us. And to get a mortgage, insurance on the property is a requirement. So yes, even the ultra wealthy generally have insurance on their home(s). There is an element of not wanting to shell out another 20 million if the place burns down, or someone breaks in and steals your valuables, but the bigger part of the reason is that it's required to get a mortgage in the first place, which is generally done for financial reasons - interest on your mortgage is a tax deduction, and you don't want to sink millions of dollars all at once into buying a property that's not going to appreciate in value, when you can get a mortgage and invest those millions of dollars to make more money instead.
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Income in zero-interest environment
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anything that produces steady income will produce a "real return" (return above inflation) in a zero-interest rate environment: Note, however, that all of these will decline in value if interest rates rise.
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Why is Google's current nasdaq market cap almost twice the current share price * the No. of shares outstanding?
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http://mobile.nytimes.com/blogs/economix/2014/04/02/the-many-classes-of-google-stock/ Are you counting both class A and other share classes?
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A guy scammed me, but he gave me a bank account number & routing number. Can I use that to take out what he owes me?
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OK, reading between the lines here it looks like the services offered by your company are of an "adult" (possibly illegal?) nature and that this individual has actually paid you in full for the services rendered up to this point. The wrinkle here is that you say that you've been offered large cash "gifts" in return for unspecified future favours, but that your client hasn't provided a real Paypal account to do so. When you pressed him on it, he sent a fake email and invented a "financial adviser" to fob you off, then hasn't contacted you since. It's pretty clear that he hasn't got any intention of making these payments to you. What you're now proposing to do is to use his known banking details to collect money to cover those verbal promises. In pretty much every part of the world, that's a crime. Without a written agreement to use that payment method for those promises, he could easily call the police and have you arrested for theft of funds. The further wrinkle is that his actions (claiming to have made payment via paypal, forged email headers, etc) strongly suggest that this individual is involved in cyber-crime and may well have used a fake bank account to pay for your initial services. The bottom line here is that you need real legal advice, from an actual lawyer.
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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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If I go to a seminar held overseas, may I claim my flights on my tax return?
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You can deduct this if the main purpose of the trip is to attend the seminar. Travel expenses relating to the attendance at conferences, seminars and other work-related events are deductible to the extent that they relate to your income-producing activities. You will need to apportion your travel expenses where you undertake both work-related and private activities. Travel costs to and from the location of the work-related event will only be deductible where the primary purpose of the travel was to attend the event. Accommodation, food and other incidental costs must be apportioned between work-related and private activities taking into account the types of activities that you did on the day you incurred the cost. You might like to consider in advance what you would tell them if they questioned this - for instance you might say (if they are true):
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Why are there many small banks and more banks in the U.S.?
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First, is population density. You didn't say where exactly, but for example here in Tampa, Wells Fargo has 25 branches in the area (though that is a bit larger then what I would think of the Tampa area as a local) Second, we can mix in service expectation. I expect that in addition to "good" online service, "great" phone service, "great" email service, that when I have a problem, don't understand something, or want to talk about my options for investing or choosing account types, that I am able to go into a branch. That I can "walk in" and see someone quickly, or schedule an appointment and see some one right away (at my appointment time). Together, these two options means that on a busy day, the nearest Wells Fargo Branch to me has at any one time, 50 - 60 people in it. Smaller branches, of course have less, and larger branches exist. So it just takes that many branches to address the number of people and their expected needs. As to why there are so many different brands/banks Well that's just the USA. We believe in capitalism. We have believed in it much stronger in the past, but banks are the central to capitalism so why shouldn't they serve as an example. At it's core (a very simplistic look) Capitalism and a free market means that we as customers are better served by having lots of different brands fighting for our business. It should drive more consumer desired features (like lower prices, higher interest rates, better fee schedules, etc.) while forcing those brands to operate "better". (Just ignore the bail out, that's a loaded topic) So for some of us, we want a big bank like Wells Fargo, because we want the rates, structure, and service they can provide as a "big bank". For others they want the more personal touch of a "small bank". There are benefits both ways. For example there may be a bank that only allows people with excellent credit to open accounts. That allows they to have lower over all mortgage rates, but means their checking accounts have higher minimums. While the next bank may be more inclusive, and have smaller minimum balances, but as a result charge more for loans. We like our options, and rest assured all those "brands" offer products that have differences that attract customers.
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Should I pay off a 0% car loan?
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Between now and October, your $3,000 will earn $30 in your savings account. If you are late on a payment for your 0% loan, your interest rate will skyrocket. In my opinion, the risk is just not worth the tiny gain you are trying to achieve in the savings account. If it was me, I would pay off the loan today. A few more thoughts: There is a reason that businesses offer 0% consumer loans. They are designed to trick you into thinking that you are getting a better deal than you are. Businesses don't lose money on these loans. The price of the loan is built into the cost of the purchase, whether you are buying expensive furniture, or a car. Typically with a car, you forfeit a rebate by taking the 0% loan, essentially paying all the interest up-front. Now that you have the loan, you might be ahead a few dollars by waiting to pay it off, but only because you've already paid the interest. Don't make the mistake of thinking that you can come out ahead by buying things at 0%. It's really not free money. In the comments, @JoeTaxpayer mentioned that fear of mistakes can lead to missed rewards. I understand that; however, these 0% loans are full of small print designed to trip you up. A single mistake can negate years and years of these small gains. You don't want to be penny wise and pound foolish.
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As an independent contractor, should I always charge the client the GST/HST?
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Hourly rate is not the determinant. You could be selling widgets, not hours. Rather, there's a $30,000 annual revenue threshold for GST/HST. If your business's annual revenues fall below that amount, you don't need to register for GST/HST and in such case you don't charge your clients the tax. You could still choose to register for GST/HST if your revenues are below the threshold, in which case you must charge your clients the tax. Some businesses voluntarily enroll for GST/HST, even when below the threshold, so they can claim input tax credits. If your annual revenues exceed $30,000, you must register for GST/HST and you must charge your clients the tax. FWIW, certain kinds of supplies are exempt, but the kind of services you'd be offering as an independent contractor in Canada aren't likely to be. There's more to the GST/HST than this, so be sure to talk to a tax accountant. References:
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How to negotiate when you have something to give back?
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I don't think that there is a generic answer that will apply to this question across all goods. The answer depends on how the related businesses work, how much insight you have into the true value of the goods, and probably other things. Your car example is a good one that shows multiple options - There are dealers who will buy as a single transaction, sell as a single transaction, or do a simultaneous sell with trade-in. I had a hot tub once, on the other hand, where I could find people who would do a trade-in, but there was no dealer who would just buy my used tub. There's not much parallel between the car and the tub because the options available are very different. To the extent that there is a generic answer, I generally agree with the point in @keshlam's answer about trying to avoid entrapment, but I take a slightly different view. If you want to get your best deal, you need to have an idea going into the process of what you want in net and keep focused on meeting your goal. If for some reason, it's convenient for the dealer to "move money around" between the new car and the trade-in, I'm ok with that as long as I'm getting what I want out of the deal. If possible, I prefer to deal with both transactions at once because it's simpler. At the same time, I'm willing to remove the trade-in from the deal if I'm not getting what I want. (Threatening to do so can also give you some information about where the dealer really puts the value between the new car and trade-in since, if you threaten to pull the trade-in, the price on the car will probably change in response.)
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What is a good rental yield?
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I would just like to point out that the actual return should be compared to your down payment, not the property price. After all, you didn't pay $400K for that property, right? You probably paid only 20%, so you're collecting $20K/year on a $80K investment, which works out to 25%. Even if you're only breaking even, your equity is still growing, thanks to your tenants. If you're also living in one of the units, then you're saving rent, which frees up cash flow. Your increased savings, combined with the contributions of your tenants will put you on a very fast track. In a few years you should have enough to buy a second property. :)
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2 UAN Numbers allotted to my PAN Number
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Option 1: You can write to uanepf@epfindia.gov.in giving the details of both the UAN's. This will be able to merge both these under the current EPF. Option 2: You can request a transfer of EPF from old EPF [under different UAN] to the current EPF. This can be done by submitting the required form. Your company should be able to assist you with the paperwork. Alternatively if you are registered online with EPFO India, you can submit the request online. Once submitted, the system will identify that a duplicate UAN has been issued and automatically merge the accounts.
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When is the right time to buy a car and/or a house?
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My recommendation is to pay off your student loans as quickly as possible. It sounds like you're already doing this but don't incur any other large debts until you have this taken care of. I'd also recommend not buying a car, especially an expensive one, on credit or lease either. Back during the dotcom boom I and many friends bought or leased expensive cars only to lose them or struggle paying for them when the bottom dropped out. A car instantly depreciates and it's quite rare for them to ever gain value again. Stick with reliable, older, used cars that you can purchase for cash. If you do borrow for a car, shop around for the best deal and avoid 3+ year terms if at all possible. Don't lease unless you have a business structure where this might create a clear financial advantage. Avoid credit cards as much as possible although if you do plan to buy a house with a mortgage you'll need to maintain some credit history. If you have the discipline to keep your balance small and paid down you can use a credit card to build credit history. However, these things can quickly get out of hand and you'll wonder why you suddenly owe $10K, $20K or even more on them so be very careful with them. As for the house (speaking of US markets here), save up for at least a 20% down payment if you can. Based on what you said, this would be about $20-25K. This will give you a lot more flexibility to take advantage of deals that might come your way, even if you don't put it all into the house. "Stretching" to buy a house that's too expensive can quickly lead to financial ruin. As for house size, I recommend purchasing a 4 bedroom house even if you aren't planning on kids right away. It will resell better and you'll appreciate having the extra space for storage, home office, hobbies, etc. Also, life has a way of changing your plans for having kids and such.
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Why did the price of ASH common stock drop when the market opened on May 15, 2017?
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Ashland Global Holdings Inc. (ASH) sold off their ownership in Valvoline Inc. (VVV). Friday, May 12 was the distribution date of the sale; at the end of the day, every stockholder of ASH received 2.745338 shares of VVV stock for each share of ASH held. That is why the value of ASH has dropped significantly on open this morning. Sources:
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Thrift Saving Plan (TSP) Share Price Charts
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If you're looking to generate your own charts, you can get up-to-date TSP fund share prices in a Google Docs spreadsheet by "scraping" the data from the HTML of certain TSP webpages. You'll need to do this because the GoogleFinance function does not recognize "private" funds or collective trusts like those of the TSP. See this thread for tips: Bogleheads • View topic - GoogleFinance price quotes for TSP Funds
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Boyfriend is coowner of a house with his sister, he wants to sell but she doesn't
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Dear "benevolent" sister, The mortgage, utilities, and taxes for this home can no longer be paid and the bank will repossess it within the coming months. Thank you for your time
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How to deal with intraday prices conflicting with EOD highs and lows
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In the US, stocks are listed on one exchange but can be traded on multiple venues. You need to confirm exactly what your data is showing: a) trades on the primary-listed exchange; or b) trades made at any venue. Also, the trade condition codes are important. Only certain trade condition codes contribute towards the day's open/high/low/close and some others only contribute towards the volume data. The Consolidated Tape Association is very clear on which trades should contribute towards each value - but some vendors have their own interpretation (or just simply an erroneous interpretation of the specifications). It may surprise you to find that the majority of trading volume for many stocks is not on their primary-listed exchange. For example, on 2 Mar 2015, NASDAQ:AAPL traded a total volume across all venues was 48096663 shares but trading on NASDAQ itself was 12050277 shares. Trades can be cancelled. Some data vendors do not modify their data to reflect these busted trades. Some data vendors also "snapshot" their feed at a particular point in time of the data. Some exchanges can provide data (mainly corrections) 4-5 hours after the closing bell. By snapshotting the data too early and throwing away any subsequent data is a typical cause of data discrepancies. Some data vendors also round prices/volumes - but stocks don't just trade to two decimal places. So you may well be comparing two different sets of trades (with their own specific inclusion rules) against the same stock. You need to confirm with your data sources exactly how they do things. Disclosure: Premium Data is an end-of-day daily data vendor.
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Do credit checks affect credit scores?
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There are two types of credit checks. First is the hard pull which is typically done when you apply for a credit line. The lender will hard pull your file and make his/her decision based on that. This affects your score negatively. You might lose few points for one hard inquiry. Second type is soft pull, which is done as a background check. Typically done by credit card companies to send you a pre-approved offer, or renting an apartment etc. This does not affect your score. One thing to keep in mind is a company will not do a hard pull without your permission, where as they can do soft pulls without you even knowing. Soft inquiries vs hard inquiries
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Should I invest in the world's strongest currency instead of my home currency?
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Currency speculation is a very risky investment strategy. But when you are looking for which currency to denote your savings in, looking at the unit value is quite pointless. What is important is how stable the currency is in the long term. You certainly don't want a currency which is prone to inflation, because it means any savings denoted in that currency constantly lose purchasing power. Rather look for a currency which has a very low inflation rate or is even deflating. Another important consideration is how easy it is to exchange between your local currency and the currency you want to own. A fortune in some exotic currency is worth nothing when no local bank will exchange it into your local currency. The big reserve currencies like US Dollar, Euro, Pound Sterling and Japanes yen are usually safe bets, but there are regional differences which can be easily converted and which can't. When the political relations between your country and the countries which manage these currencies is unstable, this might change over night. To avoid these problems, rather invest into a diverse portfolio of commodities and/or stocks. The value of these kinds of investments will automatically adjust to inflation rate, so you won't need to worry about currency fluctuation.
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Why is the fractional-reserve banking not a Ponzi scheme?
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It is possible to pay down debt (including interest) without issuing new debt money to pay for it. I think this is the heart of your question. Let me present a highly contrived example in which society has four people and one bank. Here is a bank with $100 in initial deposits. Total money supply in this society is $100. (We assume there is no currency circulating, since you're interested in debt money.) This bank lends out $90 to Bob at 1 year maturity and 10% APR. Bob spends this $90 with Charlie to buy raw materials. Charlie deposits $90 in the bank. The money supply just grew from $100 to $190. Bob does something with the raw materials and adds some kind of value, eventually selling the finished goods for $110. In our little silly economy, the only people who have money are Adam and Charlie, so we must assume that between the two of them they buy $110 worth of goods from Bob. Let's say Adam buys $60 and Charlie buys $50 -- the actual amounts don't matter. Bob deposits this money at the bank. Still $190 of money supply. At the end of 1 year, Bob instructs the bank to transfer payment from his deposit account to his loan account. The bank wipes clean his debt and the money remaining in Bob's account represents his return. Who is this David guy? He's the owner of the bank. He grosses $9 in interest from the loan to Bob, and he pays $5 to Adam as interest on Adam's deposit. The remaining $4 is the profit to the bank's owner. Money supply decreased from $190 to $100 after Bob pays off his loan. I realized after writing this, the one thing I left out is, "where does Adam get $100 to start with?" Presumably Adam starts off with some kind of currency, either fiat money or commodity money. (IOW, debt money can't be created out of nothing, it has to be expanded on top of some kind of currency.)
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Why would selling off some stores improve a company's value?
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I'd like to modify the "loss" idea that's been mentioned in the other two answers. I don't think a retail location needs to be losing money to be a candidate for sale. Even if a retail location is not operating at a loss, there may be incentive to sell it off to free up cash for a better-performing line of business. Many large companies have multiple lines of business. I imagine Sunoco makes money a few ways including: refining the gas and other petroleum products, selling those petroleum products, selling gas wholesale to franchised outlets or other large buyers, licensing their brand to franchised outlets, selling gas and convenience items direct to consumers through its own corporate-owned retail outlets, etc. If a company with multiple lines of business sees a better return on investment in certain businesses, it may make sense to sell off assets in an under-performing business in order to free up the capital tied up by that business, and invest the freed-up capital in another business likely to perform better. So, even "money making" assets are sometimes undesirable relative to other, better performing assets. Another case in which it makes sense to sell an asset that is profitable is when the market is over-valuing it. Sell it dear, and buy it back cheap later.
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What is the best source of funding to pay off debt?
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Please take a look a Dave Ramsey's Baby Step plan. It has all the details that you need to clean up your personal finance situation. None of your options are good. As some of the other answers mentioned, behavior modification is the key. Any idea will be worthless if you just wind up in debt again. Many, many people, including me, have made the change using Dave's plan. You can too. With regard to helping your son with tuition, are there better or cheaper options? It does not make sense to put yourself in financial peril in order to cover college expenses. I understand that is a tough decision but he is a man now and needs to be part of the real world solution. Following the Baby Steps: The biggest factor is a belief that you can fix the mess. 30k is not really that much, with a good plan and focus, you can clean it up. Good luck.
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If I want to take cash from Portugal to the USA, should I exchange my money before leaving or after arriving?
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I would just rely on the salary from my job in the US. If you don't have a job in the US, you're very unlikely to get a visa to move there and look for work, and so the question of how to take money there (except for a holiday) doesn't arise. (Unless you have dual Portuguese/American citizenship.)
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Should I sell when my stocks are growing?
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You should constantly look at your investment portfolio and sell based on future outlook. Don't get emotional. Selling a portfolio of stocks at once without a real reason is foolish. If you have a stock that's up, and circumstances make you think it's going to go up further, hold it. If prospects are not so good, sell it. Also, you don't have to buy or sell everything at once. If you've made money on a stock and want to realize those gains, sell blocks as it goes up. Stay diversified, monitor your portfolio every week and keep a reserve of cash to use when opportunity strikes. If you have more stocks or funds than you can keep current on every week, you should consolidate your positions over time.
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In what order should I save?
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This is a bit of an open-ended answer as certain assumptions must be covered. Hope it helps though. My concern is that you have 1 year of university left - is there a chance that this money will be needed to fund this year of uni? And might it be needed for the period between uni and starting your first job? If the answer is 'yes' to either of these, keep any money you have as liquid as possible - ie. cash in an instant access Cash ISA. If the answer is 'no', let's move on... Are you likely to touch this money in the next 5 years? I'm thinking house & flat deposits - whether you rent or buy, cars, etc, etc. If yes, again keep it liquid in a Cash ISA but this time, perhaps look to get a slightly better interest rate by fixing for a 1 year or 2 year at a time. Something like MoneySavingExpert will show you best buy Cash ISAs. If this money is not going to be touched for more than 5 years, then things like bonds and equities come into play. Ultimately your appetite for risk determines your options. If you are uncomfortable with swings in value, then fixed-income products with fixed-term (ie. buy a bond, hold the bond, when the bond finishes, you get your money back plus the yield [interest]) may suit you better than equity-based investments. Equity-based means alot of things - stocks in just one company, an index tracker of a well-known stock market (eg. FTSE100 tracker), actively managed growth funds, passive ETFs of high-dividend stocks... And each of these has different volatility (price swings) and long-term performance - as well as different charges and risks. The only way to understand this is to learn. So that's my ultimate advice. Learn about bonds. Learn about equities. Learn about gilts, corporate bonds, bond funds, index trackers, ETFs, dividends, active v passive management. In the meantime, keep the money in a Cash ISA - where £1 stays £1 plus interest. Once you want to lock the money away into a long-term investment, then you can look at Stocks ISAs to protect the investment against taxation. You may also put just enough into a pension get the company 'match' for contributions. It's not uncommon to split your long-term saving between the two routes. Then come back and ask where to go next... but chances are you'll know yourself by then - because you self-educated. If you want an alternative to the US-based generic advice, check out my Simple Steps concept here (sspf.co.uk/seven-simple-steps) and my free posts on this framework at sspf.co.uk/blog. I also host a free weekly podcast at sspf.co.uk/podcast (also on iTunes, Miro, Mixcloud, and others...) They were designed to offer exactly that kind of guidance to the UK for free.
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Got a “personal” bonus from my boss. Do I have to pay taxes and if so, how do I go about that?
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I actually think your boss is creating a problem for you. Of course it's taxable. The things IRS will look at (and they very well might, as it does stand out) what kind of payment is that. Why did it not go through payroll? The company may be at risk here for avoiding FICA/FUTA/workers' compensation insurance/State payroll taxes. Some are mandatory, and cannot be left to the employee to pay. On your side it raises your taxable income without the appropriate withholding, you may end up paying underpayment penalties for that (that is why you've been suggested to keep proofs of when you were paid). Also, it's employment income. If it is not wages - you're liable for self-employment taxes (basically the portion of FICA that the employer didn't pay, and your own FICA withholding). When you deposit the check is of no matter to the IRS, its when you got it that determines when you should declare the income. You don't have a choice there. I suggest asking the company payroll why it didn't go through them, as it may be a problem for you later on.
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Do company-provided meals need to be claimed on my taxes?
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It looks like the resource to deciding these is here Concerning the meals, the law seems a bit vague to me. You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests. This exclusion does not apply if you allow your employee to choose to receive additional pay instead of meals. If the whole point of google providing meals is to benefit Google as such people will not leave the googleplex when to obtain meals elsewhere causing increased productivity for Google, then this is covered as a business expense. (Even if it wasn't, Google would have to notify you that it was providing you a non-expensable benefit, i.e. compensation, by giving you a 1099 at the end of the year). Concerning the other benefits, the only way I could see those items not being taxable benefits is if one of the two applies.
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Are in-kind donations from my S-Corp tax-deductible in any way?
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The relevant IRS publication is 526, Charitable Contributions. The section titled "Contributions you cannot deduct" begins on page 6; item 4 reads: "The value of your time or services." I read that to mean that, if the website you built were a product, you could deduct its value. I don't understand the legal distinction between goods and services I originally said that I believe that a website is considered a service. Whether a website is a service or a product appears to be much more controversial that I originally thought. I cannot find a clear answer. I'm told that the IRS has a phone number you can call for rulings on this type of question. I've never had to use it, so I don't know how helpful it is. The best I can come up with is the Instructions for Form 1120s, the table titled "Principal Business Activity Codes," starting on page 39. That table suggests to me that the IRS defines things based on what type of business you are in. Everything I can find in that table that a website could plausibly fall under has the word "service" in its name. I don't really feel like that's a definitive answer, though. Almost as an afterthought, if you were able to deduct the value of the website, you would have to subtract off whatever the value of the advertisement is. You said that it's not much, but there's probably a simple way of estimating that.
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Do large market players using HFT make it unsafe for individual investors to be in the stock market?
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There's a lot of hype about HFT. It involves computers doing things that people don't really understand and making a bunch of rich guys a bunch of money, and there was a crisis and so we hate rich wall street guys this year, and so it's a hot-button issue. Meh. There's some reason for concern about the safety of the markets, but I think there's also a lot more of people trying to sell you a newspaper. Remember that while HFT may mean there are a lot of trades, the buying and the selling add up to the same thing. Meanwhile, people who buy stock to hold on to it for significant periods of time will still affect the quantity of stock out there on the market, applying pressure to the price, buying and selling at the prices that they think the security is worth. As a result, it's unlikely that high-frequency trading moves the stock price very far from the price that the rest of the market would determine for very long; if it did, the lower-frequency traders could take advantage of it, buying if it's too low and selling if it's too high. How long do you plan to hold a stock? If you're trying to do day-trading, you might have some trouble; these people are competing with you to do the same thing, and have significant resources at their disposal. If you're holding onto your stock for years on end (like you probably should be doing with most stock) then a trivial premium or discount on the price probably isn't going to be a big deal for you.
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How is initial stock price (IPO) of a stock determined
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Who determines company value at IPO? The Owners based on the advice from Lead Bankers and other Independent auditors who would determine the value of the company at the time of listing. At times instead of determining a fixed price a range is given [lower side and higher side]. The Market participants [FI / Institutional Investor Segments] then decide the price by bidding at an amount. There are multiple aspects in play that help stabalize the IPO and roles of various parties. A quick read of question with IPO tag is recommended Edits: Generally at a very broad level, one of the key purpose of the IPO is to either encash Owner equity [Owner wants some profits immediately] or Raise additional Capital. More often it is a mix of both. If the price is too low, one loose out on getting the true value, this would go to someone else. If the price is too high, then it may not attract enough buyers or even there are buyers, there is substantial -ve sentiment. This is not good for the company. Read the question From Facebook's perspective, was the fall in price after IPO actually an indication that it went well? This puts determining the price of IPO more in the realm of art than science. There are various mechanism [Lead bankers, Institutional Investors, Underwriters] the a company would put in place to ensure the IPO is success and that itself would moderate the price to realistic level. More often the price is kept slightly lower to create a positive buzz about the stock.
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Where do I invest my Roth IRA besides stock market and mutual funds?
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Nowhere. To back up a bit, mutual funds are the stock market (and the bond market). That is, when you invest in a mutual fund, your money is ultimately buying stocks on the open market. Some of it might be buying bonds. The exact mix of stocks and bonds depends on the mutual fund. But a mutual fund is just a basket of stocks and/or bonds (and/or other, more exotic investments). At 25, you probably should just be investing your Roth IRA in index stock mutual funds and index bond mutual funds. You probably shouldn't even be doing peer-to-peer lending (unless you're willing to think of any losses as the cost of a hobby); the higher interest rate you're getting is a reflection of the risk that your borrowers will default. I'm not even sure if peer-to-peer lending is allowed in Roth IRA's. Investing in just stocks, bonds, and cast is boring, but these are easy investments to understand. The harder the investment is to understand, the easier it is for it to be a scam (or just a bad investment). There's not necessarily anything wrong with boring.
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Best way to buy Japanese yen for travel?
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You don't. When you get to Japan, use your ATM card to withdraw local currency. My bank (ETrade) doesn't charge me int'l fees.
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Sale of house profit gifted to child
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1) You parents will have to pay tax on the gain as it wasn't their primary home. You don’t pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply: As I look at it, it is your parents are the ones who own the property and they will have to pay on £60000. But as you say you pay part of the mortgage, I would go to a tax advisor/accountant to confirm if they will only pay on the £15000. I couldn't find any guidance on that matter on gov.uk 2) Inheritance tax will not be levied on it as it is below £325000, but tax will be levied on £325000, less £3000 annual gift allowance. Two articles for further information - GOV.UK's Tax when you sell your home Money.co.UK's Gifting money to your children: FAQs
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When (if) I should consider cashing in (selling) shares to realize capital gains?
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In a perfect world of random stock returns (with a drift) there is no reason to "take profit" by exiting a position because there is no reason to think price appreciation will be followed by decline. In our imperfect world, there are many rules of thumb that occasionally work but if any one of them works consistently over a long period of time, everyone starts to practice that rule and then it stops working. Therefore, there are no such rules of thumb that work reliably and consistently over long periods of time and are expected to continue doing so. Finding such a rule is and always has been a moving target. The rational, consistently sensible reasons to sell a stock are: These rules are very different from my interpretation of the "walk with your chips" behavior mentioned in your question.
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How and why does the exchange rate of a currency change almost everyday?
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Money is money because people believe it is money. By "believe it is money", I mean that they expect they will be able to turn it into useful goods or services (food, rent, houses, truckloads full of iron ore, mining equipment, massages at the spa, helicopter rides, iPads, greenhouses, income streams to support your future retirement, etc). Foreign exchange rates change because people's ideas about how much useful goods or services they can get with various currencies change. For example: if the Zimbabwe government suddenly printed 10 times as much money as used to exist, you probably couldn't use that money to buy as much food at the Zimbabwe-Mart, so you wouldn't be willing to give people as many US-dollars (which can buy food at the US-Mart) for a Zimbabwe-dollar as you used to be able to. (It's not exactly that easy, because - for instance - food in the US is more useful to me than food in Zimbabwe. But people still move around all sorts of things, like oil, or agricultural products, or minerals, or electronics components.) The two main things that affect the value of a currency are the size of the economy that it's tied to (how much stuff there is to get), and how much of the currency there is / how fast it's moving around the economy (which tells you how much money there is to get it with). So most exchange rate shifts reflect a change in people's expectations for a regional economy, or the size of a money supply. (Also, Zimbabwe is doing much better now that it's ditched their own currency - they kept printing trillions of dollars' worth - and just trade in US dollars. Their economy still needs some work, but... better.)
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Is it a good idea to get an unsecured loan to pay off a credit card that won't lower a high rate?
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I am answering this in light of the OP mentioning the desire to buy a house. A proper mortgage uses debt to income ratios. Typically 28/36 which means 28% of monthly gross can go toward PITI (principal, interest, tax, insurance) and the total debt can go as high as 36% including credit cards and car payment etc. So, if you earn $5000/mo (for easy math) the 8% gap (between 28 and 36) is $400. If you have zero debt, they don't let you use it for the mortgage, it's just ignored. So a low interest long term student loan should not be accelerated if you are planning to buy a house, better put that money to the down payment. But for credit cards, the $400/mo carries $8000 (banks treat it as though the payment is 5% of debt owed). So, I'd attack that debt with a vengeance. No eating out, no movies, beer, etc. Pay it off as if your life depended on it, and you'll be happier in the long run.
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Are the “debt reduction” company useful?
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They don't do anything you can't do yourself and they charge you money for it. And of course the only way they manage to negotiate the debt down is by not paying it for a while in the first place, have it referred to collections and then negotiating with the collectors. At that time, your credit rating (if you care about that at all) will have suffered a lot more damaged than it is from a few late payments. I would address the issue as to why you end up paying late first - it sounds to me like you're cutting the time left to pay to the bone and this turned around and bit you in the you-know-where. In case you are able to pay but not organised enough to do it on time, find a way to remind yourself to pay the bill a few days early for peace of mind. That won't do anything about the 28% interest but those might serve as an additional motivation to pay the debt off faster. Once you're back to showing regular on-time payments on your credit record, you might want to investigate transferring the balance to a cheaper card or negotiate the interest down (or both). If you genuinely can't pay after you've taken care of the essentials (food, shelter, transportation) then you don't need a third party to stop paying the credit card bill, you can do that yourself.
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What items are exempt from the VAT? [U.K.]
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Some items are VAT Exempt or Reduced, but in short you will pay it on almost any all consumer goods. Assuming you are a visitor to the UK from a non-EU nation then Her Majesty will refund you with the appropriate paperwork
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I spend too much money. How can I get on the path to a frugal lifestyle?
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Gail Vaz-Oxlade from the television show Til Debt Do Us Part has a great interactive budget worksheet that helps you set up a "jar" or envelope system for each month based on your income and fixed expenses. We have used this successfully in the past. What we found most useful was, as others have said, writing everything down, keeping receipts, and thus being accountable and aware of our spending.
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Why do the 1 and 2 euro cent coins exist and why are they used?
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I guess other than tradition and inflation, probably because the merchants want them. In the US, what currently costs $2.00 used to cost $0.10. So 75 years ago, those individual cents made a pretty bid difference. Inflation causes prices to go up, but doesn't get us to just change our currencies patterns. In your example, you are assuming that in an average day, the rounding errors you are willing to accept happen a couple of times. 2 or 3 cents here and there mean nothing to you. However to the merchant, doing hundreds or thousands of transactions per day, those few cents up and down mean quite a bit in terms of profit. To an individual, looking at a time frame more than a single day (because who only participates in economies for a single day) there are potentially millions of transactions in a lifetime, mean potentially giving away millions of dollars because they didn't want to wait. And as for the comment that people working each 3 cents every 10 seconds, I would assume at least some of the time when they are waiting for rounding errors, they are not at work getting paid. That concept is assuming that somebody is always willing to pay them for their time regardless of where that person is in the world; I have no facts and wild assumptions, but surely that can't be true for even a majority of workers. Finally, you should be happy if you happy to have an income high enough that you don't care about individual cents. But there are those business people who see opportunity in folks like you and profit greatly from it. I personally worry very much about who has my money; gov't gets paid to the penny and I expect returns to the penny. A super polite service employee who smiled a lot serving me a beer is getting all the rounding errors I have.
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Where can I find open source portfolio management software?
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Have you looked into GnuCash? It lets you track your stock purchases, and grabs price updates. It's designed for double-entry accounting, but I think it could fit your use case.
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Investing small amounts at regular intervals while minimizing fees?
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I think your best bet would be commission-free ETFs, which have no minimum and many have a share price under $100. Most online brokerages have these now, e.g. Vanguard, Fidelity, etc. Just have to watch out for any non-trading fees brokerages may charge with a low balance.
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How are shares used, and what are they, physically?
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Shares used to be paper documents, but these days they are more commonly held electronically instead, although this partly depends on what country you're in. But it doesn't make any significant practical difference. Regardless of their physical form, a share simply signifies that you own a certain proportion of a company, and are thus entitled to receive any dividends that may be paid to the shareholders. To sell your shares, you need a broker -- there are scores of online ones who will sell them for a modest fee. Your tax forms are entirely dependent on the jurisdiction(s) that tax you, and since you've not told us where you are, no one can answer that.
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If I short-sell a dividend-paying stock, do I have to pay the dividend?
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The answer provide by @mbhunter is correct, however there are contexts, shorting in spot market and carrying the position over settlement usually does not entail payment of dividend to the broker, one of the reason being post ex-date the price of the share downward adjusts to the extent of the dividend, so practically if you have shorted at 100 and post ex-date (assuming a dividend of 2 and no movement of the stock price), the price would slide to 98, the party who longed the stock @ 100 now is sitting on a price of 98 and received a dividend of 2 which equates to 100. The above is also contextual to the law of the country governing the exchange and the security exchange board regulations.
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Should I sell a 2nd home, or rent it out?
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I don't see anything in this forum on the leverage aspect, so I'll toss that out for discussion. Using generic numbers, say you make a $10k down payment on a $100,000 house. The house appreciates 3% per year. First year, it's $103,000. Second year, $106090, third it's 109,272.70. (Assuming straight line appreciation.) End of three years, you've made $9,272.70 on your initial $10,000 investment, assuming you have managed the property well enough to have a neutral or positive cash flow. You can claim depreciation of the property over those rental years, which could help your tax situation. Of course, if you sell, closing costs will be a big factor. Plus... after three years, the dreaded capital gains tax jumps in as mentioned earlier, unless you do a 1031 exchange to defer it.
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College student - I'm a 'dependent' and my parents won't apply for the Parent PLUS loan or cosign a private loan
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I was in that same situation years ago with my parents. One way she could apply for a loan in her name without her parents is if she is not currently living with them she shouldn't need them to cosign if she doesn't have bad credit. But if she isn't living with them and they aren't financing her room and board they can't claim her as a dependent so if she really wants to stick it to them she can go and try to politely explain how the loans work and tell them if they don't cosign for her then she will apply on her own (which she can only do while not living with them I believe but not sure) and they will HAVE to STOP claiming her as a dependent on their taxes. If they don't agree she can put her foot down and force them to stop claiming her and tell them she will file her own application anyway and if they continue claiming her and get in trouble for it it's their own fault cause she warned them to stop first. They may agree to cosign rather than lose her as a dependent if it makes that big of a difference on their taxes, if they don't then she can forcefully punish them financially and their taxes will go up. Those were my choices when my parents refused to cosign for me to live at school but that was back in 1999-2000 and things may have changed since then, things also change state by state and I live in PA.
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How to incorporate dividends while calculating annual return of a Stock
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You simply add the dividend to the stock price when calculating its annual return. So for year one, instead of it would be
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I'm upside down on my car loan and need a different car, what can I do?
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I am new to the site and hope I can help! We just purchased a used car a few weeks ago and used dealer's finance again so that's not the issue here. I want to focus on what you can do to resolve your issue and not focus on the mistakes that were made. 1 - DO NOT PURCHASE A NEW CAR! Toyota Camrys are great cars that will last forever. I live in Rochester, NY and all you need is snow tires for the winter as ChrisInEdmonton suggested. This will make a world of difference. Also, when you get a car wash get an under-spray treatment for salt and rust (warm climate cars don't usually come with this treatment). 2 - Focus on paying this loan off. Pay extra to the monthly note, put any bonuses you get to the note. Take lunches to work to save money so you can pay extra. I'm not sure if you put any money down but your monthly note should be around $300? I would try putting $400+ down each month until it is paid off. Anything you can do. But, do not buy a new car until this one is fully paid off! Let me know if this helps! Thanks!
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Shares in Chinese startup company
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Setting up an entity that is partially foreign owned is not that difficult. It takes an additional 1-1.5 months in total, and in this particular case, you guys would be formed as a Joint Venture. It will cost a bit more (about 3-5000). If you're serious about owning a part of a business in China, you should carefully examine what he means by 'more complicated'. From my point of view, I have set up my own WOFE in China, and examined the possibilities of a JV and even considered using a friend to set up the company under their personal name as a domestic company (which is what your supervisor is doing), any difference between the three are not really a big deal anymore, and comes down to the competency of the agencies you are using and the business partner themselves. It cost me 11,000 for a WOFE including the agency and government registration fees (only Chinese speaking). You should also consider the other shareholders who may be part of this venture as well. If there are other shareholders, and you are not providing further tangible contribution, you will end up replaced and penniless (unless of course you trust them too...), because they are actually paying money to be part of the business and you are not. They will not part with equity for you. I'm not a lawyer, but think you should not rely on any promises other than what it says on a company registration paper. Good luck!
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How Should I Start my Finance Life and Invest?
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I'd suggest looking at something like the Dummies series of books for this. Something like: Sometimes the books are combined into one big book. This would be the best bet. It's were I started. Every time I wondered something I just looked it up and learned. They are perfectly fine for the novice. Hope this helps.
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What does it mean that stocks are “memoryless”?
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@jidugger mostly got it right. It basically mean that past performance of a stock, or a basket of stocks, are not at all useful when trying to predict its future. There is no proven correlation between past and future performance. If there was such a correlation, that was "proven" or known, then investors would quickly exploit this correlation by buying or selling this stock, thus nullifying the prediction. It doesn't mean the specific individuals cannot predict the future stock market - hell, if I set up 2^100 different robots, where every robots gives a different series of answers to the 100 questions "how will stock X do Y days from now" (for 1<=Y<=100), then one of those robots would be perfectly correct. The problem is that an outside observer has no way of knowing which of the predictor robots is right. To say that stock is memoryless strikes me as not quite right -- to the extent that stocks are valued based on earnings, much of what we infer about future earnings relies on past and present earnings. To put it another way - you have $1000 now, and need to decide whether to invest in a particular stock, or a stock index. The "memoryless" property means that no matter how many earning reports you view ... by the time you see them, the stock price already accounts for them, so they're not useful to you. If the earning reports are positive, the stock is already "too high" because people bought it before you did. So on average, you can't use this information to predict the stock's future performance, and are better off investing in an index fund (unless you desire extra risk that doesn't come with more profitability).
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What is a typical investment portfolio made up of?
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Paying off the high-interest debt is a good first start. Paying interest, or compound interest on debt is like paying somebody to make you poor. As for your 401k, you want to contribute enough to get the full match from your employer. You might also consider checking out the fees associated with your 401k with an online fee analyzer. If it turns out you're getting reamed with fees, you can reduce them by fiddling with your investments. Checking your investment options is always a good idea since jobs frequently change them. Opening an IRA is a good call. If you're eligible for both Roth and Traditional IRAs, consider the following: Most financial institutions (brokers or banks) can help you open an IRA in a matter of minutes. If you shop around, you will find very cheap or even no fee options. Many brokers might try to get your business by giving away something for ‘free.' Just make sure you read the fine print so you understand the conditions of their promotional offer. Whichever IRA you choose, you want to make sure that it's managed properly. Some people might say, ‘go for it, do it yourself’ but I strongly disagree with that approach. Stock picking is a waste of time and market timing rarely works. I'd look into flat fee financial advisors. You have lots of options. Just make sure they hear you out, and can design/execute an investment plan specific to your needs At a minimum, they should: Hope this is helpful.
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Legal restrictions for EU-foreigners to setup bank account in Czech republic
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It depends on what exactly do you mean by "seat of residence". That term has different meanings (legally) in different countries and different contexts. If you're foreigner (even from within the EU), any czech bank will most likely ask you to provide a residence permit. Here are some details: http://www.mvcr.cz/mvcren/article/third-country-nationals-long-term-residence.aspx http://www.czech.cz/en/Business/How-it-works-here/Making-business/How-to-open-a-bank-account-%E2%80%93-Part-1
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Does a market maker sell (buy) at a bid or ask price?
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The everyday investor buys at the ask and sells at the bid but the market maker does the opposite This is misleading; it has nothing to do with being either an investor or a market maker. It is dependent on the type of order that is submitted. When a market trades at the ask, this means that a buy market order has interacted with a sell limit order at the limit price. When a market trades at the bid, this means that a sell market order has interacted with a buy limit order at the limit price. An ordinary investor can do exactly the same as a market maker and submit limit orders. Furthermore, they can sit on both sides of the bid and ask exactly as a market maker does. In the days before high frequency trading this was quite common (an example being Daytek, whose traders were notorious for stepping in front of the designated market maker's bid/ask on the Island ECN). An order executes ONLY when both bid and ask meet. (bid = ask) This is completely incorrect. A transaction occurs when an active (marketable) order is matched with a passive (limit book) order. If the passive order is a sell limit then the trade has occurred at the ask, and if it is a buy limit the trade has occurred at the bid. The active orders are not bids and asks. The only exception to this would be if the bid and ask have become crossed. When a seller steps in, he does so with an ask that's lower than the stock's current ask Almost correct; he does so with an order that's lower than the stock's current ask. If it's a marketable order it will fill the front queued best bid, and if it's a limit order his becomes the new ask price. A trade does not need to occur at this price for it to become the ask. This is wrong, market makers are the opposite party to you so the prices are the other way around for them. This is wrong. There is no distinction between the market maker and yourself or any other member of the public (beside the fact that designated market makers on some exchanges are obliged to post both a bid and ask at all times). You can open an account with any broker and do exactly the same as a market maker does (although with nothing like the speed that a high frequency market-making firm can, hence likely making you uncompetitive in this arena). The prices a market maker sees and the types of orders that they are able to use to realize them are exactly the same as for any other trader.
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How can I get a home loan within 2 years of bankruptcy?
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There are a few loan programs that grant exceptions to bankruptcy requirements in the event of extenuating circumstances that can be proven to be outside of your control (i.e. massive medical bills that you used bankruptcy to settle, etc.) however, in order to make the case for this exemption, you would need to make a strong case for your solvency, shown the ability to re-establish your credit reputation since the discharge of your bankruptcy, and would almost certainly have to go through a bank that offers manual underwriting. Additionally, if you are Native American, the HUD-184 program is a great option for your situation as it allows for a wide latitude in terms of underwriter discretion and is always manually underwritten as there is no automated underwriting system developed for the loan program. There are several great lenders that offer nationwide financing (as long as you're in a HUD-184 eligible area) and would be a great potential solution if you meet the qualifying parameter of being Native American.
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F-1 Visa expired - Unable to repay private student loan. What to do?
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As an international student, the tuition is sky high. Typically, most students take loans for Education and start paying it back once they get a job. If you have exhausted your OPT period and have not got H1B, your options are either to go for further education(Hint: Phd), you can hope to cover living expense by part-time on campus job. This will give you additional time to look for a job and try for H1B again!
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What are the alternatives to compound interest for a Muslim?
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It depends whether you want to be technically compliant with the letter of the law or compliant with the underlying meaning. For instance, in some countries you can find shell companies that do nothing but deal in fixed income instruments (those that you want to avoid) and dividend stocks (those that you might or might not be allowed to use). You can buy stock of that shell company, which does not hand out dividends itself. Thereby, you transform interest and dividends into capital gains. These shell companies exist for fiscal reasons, the more risky capital gains are often less taxed than interest or dividends. This might technically solve your problem, but not really change anything in the underlying reality. P.S. Don't worry too much about missing compounding interest. The rates are incredibly low right now.
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Is it true that 90% of investors lose their money?
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The game is not zero sum. When a friend and I chop down a tree, and build a house from it, the house has value, far greater than the value of a standing tree. Our labor has turned into something of value. In theory, a company starts from an idea, and offers either a good or service to create value. There are scams that make it seem like a Vegas casino. There are times a stock will trade for well above what it should. When I buy the S&P index at a fair price for 1000 (through an etf or fund) and years later it's 1400, the gain isn't out of someone else's pocket, else the amount of wealth in the world would be fixed and that's not the case. Over time, investors lag the market return for multiple reasons, trading costs, bad timing, etc. Statements such as "90% lose money" are hyperbole meant to separate you from your money. A self fulfilling prophesy. The question of lagging the market is another story - I have no data to support my observation, but I'd imagine that well over 90% lag the broad market. A detailed explanation is too long for this forum, but simply put, there are trading costs. If I invest in an S&P ETF that costs .1% per year, I'll see a return of say 9.9% over decades if the market return is 10%. Over 40 years, this is 4364% compounded, vs the index 4526% compounded, a difference of less than 4% in final wealth. There are load funds that charge more than this just to buy in (5% anyone?). Lagging by a small fraction is a far cry from 'losing money.' There is an annual report by a company named Dalbar that tracks investor performance. For the 20 year period ending 12/31/10 the S&P returned 9.14% and Dalbar calculates the average investor had an average return of 3.83%. Pretty bad, but not zero. Since you don't cite a particular article or source, there may be more to the story. Day traders are likely to lose. As are a series of other types of traders in other markets, Forex for one. While your question may be interesting, its premise of "many experts say...." without naming even one leaves room for doubt. Note - I've updated the link for the 2015 report. And 4 years later, I see that when searching on that 90% statistic, the articles are about day traders. That actually makes sense to me.
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What are the pros and cons of buying a house just to rent it out?
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There are actually a few questions you are asking here. I will try and address each individually. Down Payment What you put down can't really be quantified in a dollar amount here. $5k-$10k means nothing. If the house costs $20k then you're putting 50% down. What is relevant is the percent of the purchase price you're putting down. That being said, if you go to purchase a property as an investment property (something you wont be moving into) then you are much more likely to be putting a down payment much closer to 20-25% of the purchase price. However, if you are capable of living in the property for a year (usually the limitation on federal loans) then you can pay much less. Around 3.5% has been my experience. The Process Your plan is sound but I would HIGHLY suggest looking into what it means to be a landlord. This is not a decision to be taken lightly. You need to know the tenant landlord laws in your city AND state. You need to call a tax consultant and speak to them about what you will be charging for rent, and how much you should withhold for taxes. You also should talk to them about what write offs are available for rental properties. "Breaking Even" with rent and a mortgage can also mean loss when tax time comes if you don't account for repairs made. Financing Your first rental property is the hardest to get going (if you don't have experience as a landlord). Most lenders will allow you to use the potential income of a property to qualify for a loan once you have established yourself as a landlord. Prior to that though you need to have enough income to afford the mortgage on your own. So, what that means is that qualifying for a loan is highly related to your debt to income ratio. If your properties are self sustaining and you still work 40 hours a week then your ability to qualify in the future shouldn't be all that impacted. If anything it shows that you are a responsible credit manager. Conclusion I can't stress enough to do YOUR OWN research. Don't go off of what your friends are telling you. People exaggerate to make them seem like they are higher on the socioeconomic ladder then they really are. They also might have chicken little syndrome and try to discourage you from making a really great choice. I run into this all the time. People feel like they can't do something or they're to afraid so you shouldn't be able to either. If you need advice go to a professional or read a book. Good luck!
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Can banks deny that you've paid your loan?
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Maybe there's more to this story, because as written, your sister seems, well, a little irrational. Is it possible that the bank will try to cheat you and demand that you pay a loan again that you've already paid off? Or maybe not deliberately cheat you, but make a mistake and lose track of the fact that you paid? Sure, it's POSSIBLE. But if you're going to agonize about that, what about all the other possible ways that someone could cheat you? What if you go to a store, hand over your cash for the purchase, and then the clerk insists that you never gave him any cash? What if you buy a car and it turns out to be stolen? What if you buy insurance and when you have a claim the insurance company refuses to pay? What if someone you've never met or even heard of before suddenly claims that you are the father of her baby and demands child support? Etc etc. Realistically, banks are fanatical about record-keeping. Their business is pretty much all about record-keeping. Mistakes like this are very rare. And a big business like a bank is unlikely to blatantly cheat you. They can and do make millions of dollars legally. Why should they break the law and risk paying huge fines and going to prison for a few hundred dollars? They may give you a lousy deal, like charge you outrageous overdraft fees and pay piddling interest on your deposit, but they're not going to lie about how much you owe. They just don't. I suggest that you not live your life in fear of all the might-be's. Take reasonable steps to protect yourself and get on with it. Read contracts before you sign, even if the other person gets impatient while you sit there reading. ESPECIALLY if the other person insists that you sign without reading. When you pay off a loan, you should get a piece of paper from the bank saying the loan has been paid. Stuff this piece of paper in a filing cabinet and keep it for years and years. Get a copy of your credit report periodically and make sure that there are no errors on it, like incorrect loan balances. I check mine once every year or two. Some people advise checking it every couple of months. It all depends how nervous you are and how much time you want to spend on it. Then get on with your life. Has your sister had some bad experience with loans in the past? Or has she never borrowed money and she's just confused about how it works? That's why I wonder if there's more to the story, if there's some basis for her fears.
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Is it common in the US not to pay medical bills?
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Is it common in the US not to pay medical bills? Or do I misunderstood what had been said? I would feel comfortable saying that most people who face medical bills don't pay them. They are unable. If they were able, they would have gotten medical insurance. In America, something like 55% of individuals do not have even $500 of savings, so when a big medical bill rolls in especially on top of lost work hours, they don't have a lot of options. Hospitals charge reasonable prices to insurance companies and Medicare. These fees are negotiated in advance and reflect the hospital's actual costs. This is called "usual, reasonable and customary". Hospitals charge a wildly inflated, criminally outrageous "cash price" to the uninsured. For instance back when Medicare paid about $175 for an ambulance ride, a friend was billed $1100 for the exact same thing. The hospital aims to scare the living daylights out of the patient (caring nothing about what that does to their health!) Perfect world, the patient pays them the $1100 instead of paying their rent. If the patient puts up a fight, they hope to haggle them down to something like $400, remember it really costs $175. This tactic is a huge profit-center for hospitals, even the "charity" hospitals, and they feel justified because so many uninsured don't pay at all (the hospital considers them "deadbeats".) Well, patients don't pay because cash prices are unreachable, so they just give up. Anyway, your friends are correct, don't even think of paying those cash billing amounts. Research and find out what Medicare pays, offer 60% of that, and haggle it to 100%. And sleep well knowing you paid what is fair. Not all services are as overpriced as my example, but most are at least 50% too high. The hospital does send you all the bills as a formality, even while they submit them to your insurance company. And then the insurance company usually pays them, so it is correct to "not pay that bill". A lot of medical offices will check with your insurance company even before you leave the office, and ask you to immediately pay anything the insurance won't cover. For instance they often have "co-pays" where you pay $20 and they pay the rest. To be clear: if your insurance company negotiates a rate with the hospital, say $185 for the ambulance ride, that is your price, which you are entitled to as a member of that insurance system. A lot of people get their livelihood from the inefficiency in medical insurance and billing. Their political power is why it's so hard for America to install a simpler system (or even replace Obamacare in an ideal political environment). It is also a big part of why America spends 18% of GDP on healthcare instead of 7-11% like our European peers who do not have to account for every gauze or rebill multiple insurers. Sorting out "who pays" would be expensive even if everyone did pay.
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Is an analyst's “price target” assumed to be for 12 months out?
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I wouldn't put too much stock in the guidance generically... it's more a measure of confidence in the company. When you listen to the earnings calls and start following a particular analyst, you'll understand where they come from when they kick out a number.
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Indie Software Developers - How do I handle taxes?
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The "hire a pro" is quite correct, if you are truly making this kind of money. That said, I believe in a certain amount of self-education so you don't follow a pro's advice blindly. First, I wrote an article that discussed Marginal Tax Rates, and it's worth understanding. It simply means that as your income rises past certain thresholds, the tax rate also will change a bit. You are on track to be in the top rate, 33%. Next, Solo 401(k). You didn't ask about retirement accounts, but the combined situations of making this sum of money and just setting it aside, leads me to suggest this. Since you are both employer and employee, the Solo 401(k) limit is a combined $66,500. Seems like a lot, but if you are really on track to make $500K this year, that's just over 10% saved. Then, whatever the pro recommends for your status, you'll still have some kind of Social Security obligation, as both employer and employee, so that's another 15% or so for the first $110K. Last, some of the answers seemed to imply that you'll settle in April. Not quite. You are required to pay your tax through the year and if you wait until April to pay the tax along with your return, you will have a very unpleasant tax bill. (I mean it will have penalties for underpayment through the year.) This is to be avoided. I offer this because often a pro will have a specialty and not go outside that focus. It's possible to find the guy that knows everything about setting you up as an LLC or Sole Proprietorship, yet doesn't have the 401(k) conversation. Good luck, please let us know here how the Pro discussion goes for you.
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When Employees are “Granted” Stock Options, is the Company encouraging Long-Term investments from them?
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There are two things to consider: taxes - beneficial treatment for long-term holding, and for ESPP's you can get lower taxes on higher earnings. Also, depending on local laws, some share schemes allow one to avoid some or all on the income tax. For example, in the UK £2000 in shares is treated differently to 2000 in cash vesting - restricted stocks or options can only be sold/exercised years after being granted, as long as the employee keeps his part of the contract (usually - staying at the same place of works through the vesting period). This means job retention for the employees, that's why they don't really care if you exercise the same day or not, they care that you actually keep working until the day when you can exercise arrives. By then you'll get more grants you'll want to wait to vest, and so on. This would keep you at the same place of work for a long time because by quitting you'd be forfeiting the grants.
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How did my number of shares get reduced?
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How can they reduce the number of shares I hold? They may have purchased them. You don't say what stock it is, so we can only speculate. Let's say that the stock is called PENNY. So they may have taken your 1600 PENNY shares and renamed them to 1600 PENNYOLD shares. Then they created a new $5 PENNY share and gave you .2357 shares of that in exchange for your 1600 PENNYOLD shares. This suggests that your old shares were worth $1.1785 or less than a tenth of a cent each. As an example, MYLAN did this in 2015 as part of their tax inversion (moved official headquarters from the US to Europe). They did not change the number of shares at that time, but MYLAN is not a penny stock. This is the kind of thing that might happen in a bankruptcy. A reverse split (where they give you one share in exchange for more than one share) is also possible, although you received an odd amount for a reverse split. Usually those produce rounder numbers. A number like .2357 sounds more like a market price, as those can be bizarre.
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When will the U.K. convert to the Euro as an official currency?
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In many countries in Europe the prices shot through the roof, so it is not all positive. Also the switching country gives out lot of monetary control that is not welcomed by many. I think that UK is not going to change to euro for a long long time.
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Moving savings to Canada?
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Yes, you can put assets in Canadian banks. Will it protect your wealth to a greater extent than the FDIC protection provided by the US Government? Probably not. If you do business or spend significant time in Canada, then having at least some money in Canada makes sense. Otherwise, you're trying to protect yourself against some outlying risk of a US banking collapse, while subjecting yourself to a very real currency exchange risk.
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Advantage of Financial Times vs. free news sources for improving own knowledge of finance?
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I recommend using Morning Brew. They email you a free daily newsletter with the top financial news stories and earnings events. I have subscribed to the Wall Street Journal and Financial Times before. Morning Brew basically covers all of the headlines you would see on those sites.
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Saving up for an expensive car
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I've read online that 20% is a reasonable amount to pay for a car each month - Don't believe everything you read on the internet. But, let me ask, does your current car have zero expense? No fuel, no oil change, no repairs, no insurance? If the 20% is true, you are already spending a good chunk of it each month. My car just celebrated her 8th birthday. And at 125,000 miles, needed $3000 worth of maintenance repairs. The issue isn't with buying the expensive car, you can buy whatever you can afford, that's a personal preference. It's how you propose to budget for it that seems to be bad math. Other members here have already pointed out that this financial decision might not be so wise.
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ETF's for early retirement strategy
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If your intention is to purchase ETFs on a regular basis (like $x per month), then ETFs may not make sense. You may have to pay a fixed transaction cost like you were buying a stock for each purchase. In a similar no load mutual fund, there are more likely to be no transaction costs (depending on how it is bought). The above paragraph is not very definitive, and is really dependent upon how you would purchase either ETFs or Mutual funds. For example if you have a Fidelity brokerage account, they may let you buy certain ETFs commission free. Okay then either ETFs make great sense. It would not make sense to buy ones that they charge $35 per transaction if you have regular transactions that are smallish. The last two questions seem to be asking if you should buy MF or buy stocks directly. For most people the later is a losing proposition. They do not have the time or ability to buy stocks directly, effectively. Even if they did they may not have the capital to make enough of a difference when one considers all the cost involved. However, if that kind of thing interests you, perhaps you should dabble. Start out small and look at the higher costs of doing so as part of the "cost of doing business".
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How can I legally and efficiently help my girlfriend build equity by helping with a mortgage?
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I'm looking for something simple, legal, reasonably formal, easy to setup and tax efficient. You just described marriage. Get married.
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Is there a Canadian credit card which shows holds?
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PC MasterCard recently added this as a new feature to their online system. It lets you see "Pending Authorizations" for your card when you log in. Their email said: Along with your purchases, you'll see a list of every transaction that's been approved, but not yet applied to your balance. You'll be able to identify these with the word “Pending” in the date column. Here's a link with more information: http://pcfinancial.ca/pendingauthorization/
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What is the meaning of “writing put options”?
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Writing options means "selling" options and "put" options are contracts to sell a defined security (the underlying), at a specific date (expiration date) and at a specific price (strike price). So, writing put options simply mean selling to others contracts to sell. Your profit is limited to the premium but your loss may be unlimited in a falling market.
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Value of credit score if you never plan to borrow again?
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There's many concrete answers, but there's something circular about your question. The only thing I can think of is that phone service providers ask for credit report when you want to start a new account but I am sure that could be worked around if you just put down a cash deposit in some cases. So now the situation is flipped - you are relying on your phone company's credit! Who is to say they don't just walk away from their end of the deal now that you have paid in full? The amount of credit in this situation is conserved. You just have to eat the risk and rely on their credit, because you have no credit. It doesn't matter how much money you have - $10 or $10000 can be extorted out of you equally well if you must always pay for future goods up front. You also can't use that money month-by-month now, even in low-risk investments. Although, they will do exactly that and keep the interest. And I challenge your assumption that you will never default. You are not a seraphic being. You live on planet earth. Ever had to pay $125,000 for a chemo treatment because you got a rare form of cancer? Well, you won't be able to default on your phone plan and pay for your drug (or food, if you bankrupt yourself on the drug) because your money is already gone. I know you asked a simpler question but I can't write a good answer without pointing out that "no default" is a bad model, it's like doing math without a zero element. By the way, this is realistic. It applies to renting in, say, New York City. It's better to be a tenant with credit who can withhold rent in issue of neglected maintenance or gross unfair treatment, than a tenant who has already paid full rent and has left the landlord with little market incentive to do their part.
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How do dividend reinvestment purchases work?
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In order: A seller of the stock (duh!). You don't know who or why this stock was sold. It could be any reason, and is of no concern of yours. It doesn't matter. Investors (pension funds, hedge funds, individual investors, employees, management) sell stock for many reasons: need cash, litigation, differing objectives, sector rotation, etc. To you, this does not matter. Yes, it does affect stock market prices: If you were not willing to buy that amount of shares, and there were no other buyers at that price, the seller would likely choose to lower the price offered. By your purchase, you are supporting the price.
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What does an x% inflation rate actually mean?
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Let's say there's a product worth $10 in July and the inflation rate in August is 10%. Will it then cost $11 in August? Yes. That's basically what inflation means. However. The "monthly" inflation numbers you typically see are generally a year over year inflation rate on that month. Meaning August 2017 inflation is 10% that means inflation was 10% since last July 2016, not since July 2017. At the micro consumer level, inflation is very very very vague. Some sectors of the economy will inflate faster than the general inflation rate, others will be slower or even deflate. Sometimes a price increase comes with a value increase so it's not really inflation. And lastly, month over month inflation isn't something you will feel. Inflation is measured on the whole economy, but actual prices move in steps. A pear today might cost $1, and a pear in five years might cost $1.10. That's 10% over 5 years or about 2% per year but the actual price change might have been as abrupt as yesterday a pear was $1 and now it's $1.10. All of the prices of pears over all of the country won't be the same. Inflation is a measure of everything in the economy roughly blended together to come up with a general value for the loss in purchasing power of a currency and is applicable over long periods. A USD inflation rate of 3% does not mean the pear you spent $1 on today will necessarily cost $1.03 next year.
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Do you know of any online monetary systems?
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I'm the equivalent of the FED at ROBLOX. I run a virtual economy there worth millions of dollars. Even though we are in the business of printing our own money, we've seen much more stability in our currency than in the USD. It actually appreciates over time. I don't think it would make a good investment though, nor would any of the online virtual currencies that I am aware of.
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What is a Discount Called in the Context of a Negative Interest Rate?
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Even though the article doesn't actually use the word "discount", I think the corresponding word you are looking for is "premium". The words are used quite frequently even outside of the context of negative rates. In general, bonds are issued with coupons close to the prevailing level of interest rates, i.e. their price is close to par (100 dollar price). Suppose yields go up the next day, then the price moves inversely to yields, and that bond will now trade at a "discount to par" (less than 100 dollar price). And vice versa, if yields went down, prices go up, and the bond is now at a "premium to par" (greater than 100 dollar price)
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When can you adjust for (and re-allow) a disallowed year-end (December) wash-sale loss?
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Disallowed losses are created when you buy a stock */- 30 days of a sale at a loss. When you sell and have no shares left, the loss is taken. You can't have no shares and leftover disallowed loss.
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How to get 0% financing for a car, with no credit score?
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Yes, of course it is. Car dealers are motivated to write loans even more than selling cars at times. When I bought a new car for the first time in my life, in my 40's, it took longer to get the finance guy out of my face than to negotiate and buy the car. The car dealer selling you the used car would be happy to package the financing into the selling price. Similar to how 'points' are used to adjust the actual cost of a mortgage, the dealer can tinker with the price up front knowing that you want to stretch the payment out a bit. To littleadv's point, 3 months isn't long, I think a used car dealer wold be happy to work with you.
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Using 2 different social security numbers
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Social security number should only be needed for things that involve tax withholding or tax payment. Your bank or investment broker, and your employer, need it so they can report your earnings. You need it when filing tax forms. Other than those, nobody should really be asking you for it. The gym had absolutely no good reason to ask and won't have done anything with the number. I think we can ignore that one. The store cards are a bigger problem. Depending on exactly what was done with the data, you may have been messing up the credit record of whoever legitimately had that number... and if so you might be liable on fraud charges if they or the store figure out what happened and come after you. But that's unrelated to the fact that you have a legitimate SSN now. Basically, you really don't want to open this can of worms. And I hope you're posting from a disposable user ID and not using your real name... (As I noted in a comment, the other choice would be to contact the authorities (I'm not actually sure which bureau/department would be best), say "I was young, foolish, and confused by America's process... do I need to do anything to correct this?", and see what happens... but it might be wise to get a lawyer's advice on whether that's a good idea, a bad idea, or simply unnecessary.)
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US citizen sometimes residing in spain, wanting to offer consulting services in Europe, TAXES?
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With something this complicated you are going to want to consult professionals. Either a professional with international experience, who will tell you the best tax arrangement overall but might come expensive, or one professional in each country who will optimize for that country. You will have to pay US taxes, and depending on your residency probably some in Spain. Double tax agreements should kick in to prevent you paying tax on the same money twice. You do not have to pay separate 'European' taxes. If you do substantial business in another country you might have to pay there, but one of your professionals should sort it out.
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Can signing up at optoutprescreen.com improve my credit score?
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Sounds like a case of false causality. If somebody is taking the time to sign up at opt out sites, then that same person is probably making other smart decisions with their credit, causing scores to rise. Optoutprescreen.com does not help your score, the other actions taken might. People seeing different results can probably be tied to the timeframe they signed up. People who signed up then took care of their credit vs. people whose credit was already good and then signed up. A 10 pt bounce one way or the other is not significant.
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Freehold and Leasehold for Pub/Bar?
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You should be aware that many pubs in the London (indeed, the UK as a whole) are sold as a leasehold with a beer tie. This typically means you pay less rent for the building and premises, but must enter a contract with the Pub Company to buy their beer and day-to-day supplies. You have the legal option to instead pay market rent for some (but not all) Pub Cos, under certain conditions. If you go with leasehold, the landlord can usually close your pub at their will. This is becoming a quite common occurrence in the booming real estate market of London. While your interest will be in running a pub, the Pub Co's interest will be in getting change of use planning permission and selling it to a real estate developer.
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What to know before purchasing Individual Bonds?
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A few points that I would note: Call options - Could the bond be called away by the issuer? This is something to note as some bonds may end up not being as good as one thought because of this option that gets used. Tax considerations - Are you going for corporate, Treasury, or municipals? Different ones may have different tax consequences to note if you aren't holding the bond in a tax-advantaged account,e.g. Roth IRA, IRA or 401k. Convertible or not? - Some bonds are known as "convertibles" since the bond comes with an option on the stock that can be worth considering for some kinds of bonds. Inflation protection - Some bonds like TIPS or series I savings bonds can have inflation protection built into them that can also be worth understanding. In the case of TIPS, there are principal adjustments while the savings bond will have a change in its interest rate. Default risk - Some of the higher yield bonds may have an issuer go under which is another way one may end up with equity in a company rather than getting their money back. On the other side, for some municipals one could have the risk of the bond not quite being as good as one thought like some Detroit bonds that may end up in a different result given their bankruptcy but there are also revenue bonds that may not meet their target for another situation that may arise. Some bonds may be insured though this requires a bit more research to know the credit rating of the insurer. As for the latter question, what if interest rates rise and your bond's value drops considerably? Do you hold it until maturity or do you try to sell it and get something that has a higher yield based on face value?
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Might I need a credit score to rent, or for any other non-borrowing finances?
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Typically one wants to see a credit score, just because you may have money in the bank and decent income does not mean your going to pay, there are plenty of people who have the money but simply refuse to cough it up. Credit is simply a relative way of seeing where one fits against another in a larger group, it shows that this person not only can pay, but does pay. While not having a credit history should make no difference, I can and hopefully easily posited above why it can be necessary to have one. Not all landlords will require a credit check, I was not required to give one, I did not have much credit to begin with, given that, I was forced to cough up a higher degree of a security deposit.
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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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FICA was not withheld from my paycheck
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According to this section in Publication 15: Collecting underwithheld taxes from employees. If you withheld no income, social security, or Medicare taxes or less than the correct amount from an employee's wages, you can make it up from later pay to that employee. But you’re the one who owes the underpayment. Reimbursement is a matter for settlement between you and the employee. [...] it seems that if the employer withheld less than the correct amount of FICA taxes from you, it is still the employer who owes your FICA taxes to the government, not you. I do not believe there is a way for you, an employee (not self-employed), to directly pay FICA taxes to the government without going through the employer. The employer can deduct the underwithheld amount from you future paychecks (assuming you still work for them), or settle it with you in some other way. In other words, you owe the employer, and the employer owes the government, but you do not directly owe the government. If they do deduct it from your future pay, then they can issue a corrected W-2, to reflect the amount deducted from you. But they cannot issue a corrected W-2 that says FICA were deducted from you if it wasn't.
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For very high-net worth individuals, does it make sense to not have insurance?
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Yes, and the math that tells you when is called the Kelly Criterion. The Kelly Criterion is on its face about how much you should bet on a positive-sum game. Imagine you have a game where you flip a coin, and if heads you are given 3 times your bet, and if tails you lose your bet. Naively you'd think "great, I should play, and bet every dollar I have!" -- after all, it has a 50% average return on investment. You get back on average 1.5$ for every dollar you bet, so every dollar you don't bet is a 0.5$ loss. But if you do this and you play every day for 10 years, you'll almost always end up bankrupt. Funny that. On the other hand, if you bet nothing, you are losing out on a great investment. So under certain assumptions, you neither want to bet everything, nor do you want to bet nothing (assuming you can repeat the bet almost indefinitely). The question then becomes, what percentage of your bankroll should you bet? Kelly Criterion answers this question. The typical Kelly Criterion case is where we are making a bet with positive returns, not an insurance against loss; but with a bit of mathematical trickery, we can use it to determine how much you should spend on insuring against loss. An "easy" way to undertand the Kelly Criterion is that you want to maximize the logarithm of your worth in a given period. Such a maximization results in the largest long-term value in some sense. Let us give it a try in an insurance case. Suppose you have a 1 million dollar asset. It has a 1% chance per year of being destroyed by some random event (flood, fire, taxes, pitchforks). You can buy insurance against this for 2% of its value per year. It even covers pitchforks. On its face this looks like a bad deal. Your expected loss is only 1%, but the cost to hide the loss is 2%? If this is your only asset, then the loss makes your net worth 0. The log of zero is negative infinity. Under Kelly, any insurance (no matter how inefficient) is worth it. This is a bit of an extreme case, and we'll cover why it doesn't apply even when it seems like it does elsewhere. Now suppose you have 1 million dollars in other assets. In the insured case, we always end the year with 1.98 million dollars, regardless of if the disaster happens. In the non-insured case, 99% of the time we have 2 million dollars, and 1% of the time we have 1 million dollars. We want to maximize the expected log value of our worth. We have log(2 million - 20,000) (the insured case) vs 1% * log(1 million) + 99% * log(2 million). Or 13.7953 vs 14.49. The Kelly Criterion says insurance is worth it; note that you could "afford" to replace your home, but because it makes up so much of your net worth, Kelly says the "hit it too painful" and you should just pay for insurance. Now suppose you are worth 1 billion. We have log(1 billion - 20k) on the insured side, and 1%*log(999 million) + 99% * log(1 billion) on the uninsured side. The logs of each side are 21.42 vs 20.72. (Note that the base of the logarithm doesn't matter; so long as you use the same base on each side). According to Kelly, we have found a case where insurance isn't worth it. The Kelly Criterion roughly tells you "if I took this bet every (period of time), would I be on average richer after (many repeats of this bet) than if I didn't take this bet?" When the answer is "no", it implies self-insurance is more efficient than using external insurance. The answer is going to be sensitive to the profit margin of the insurance product you are buying, and the size of the asset relative to your total wealth. Now, the Kelly Criterion can easily be misapplied. Being worth financially zero in current assets can easily ignore non-financial assets (like your ability to work, or friends, or whatever). And it presumes repeat to infinity, and people tend not to live that long. But it is a good starting spot. Note that the option of bankruptcy can easily make insurance not "worth it" for people far poorer; this is one of the reasons why banks insist you have insurance on your proprety. You can use Kelly to calculate how much insurance you should purchase at a given profit margin for the insurance company given your net worth and the risk involved. This can be used in Finance to work out how much you should hedge your bets in an investment as well; in effect, it quantifies how having money makes it easier to make money.
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stock for a particular brand
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If you want to invest in the Windows Phone, then you go and find out who makes the Windows Phone i.e. Microsoft. Then you go and decide if Windows Phone is successful will the share price of Microsoft go up (own research/deduction) and if you think that the price of Microsoft has a positive correlation with the Windows Phone, then you could buy shares of Microsoft. There is no way to invest directly in individual products on stock exchanges, you are generally investing in the companies that produce them. You find the ticker of a company by googling. NASDAQ: MSFT
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How to have a small capital investment in US if I am out of the country?
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For $100 you better just hold it in Mexico. The cost of opening an account could eat 10% or more of your capital easily, and that won't be able to buy enough shares of an ETF or similar investment to make it worthwhile.
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Is stock trading based more on luck than poker playing?
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This depends strongly on what you mean by "stock trading". It isn't a single game, but a huge number of games grouped under a single name. You can invest in individual stocks. If you're willing to make the (large) effort needed to research the companies and their current position and potentialities, this can yield large returns at high risk, or moderate returns at moderate risk. You need to diversify across multiple stocks, and multiple kinds of stocks (and probably bonds and other investment vehicles as well) to manage that risk. Or you can invest in managed mutual funds, where someone picks and balances the stocks for you. They charge a fee for that service, which has to be subtracted from their stated returns. You need to decide how much you trust them. You will usually need to diversify across multiple funds to get the balance of risk you're looking for, with a few exceptions like Target Date funds. Or you can invest in index funds, which automate the stock-picking process to take a wide view of the market and count on the fact that, over time, the market as a whole moves upward. These may not produce the same returns on paper, but their fees are MUCH lower -- enough so that the actual returns to the investor can be as good as, or better than, managed funds. The same point about diversification remains true, with the same exceptions. Or you can invest in a mixture of these, plus bonds and other investment vehicles, to suit your own level of confidence in your abilities, confidence in the market as a whole, risk tolerance, and so on. Having said all that, there's also a huge difference between "trading" and "investing", at least as I use the terms. Stock trading on a short-term basis is much closer to pure gambling -- unless you do the work to deeply research the stocks in question so you know their value better than other people do, and you're playing against pros. You know the rule about poker: If you look around the table and don't see the sucker, he's sitting in your seat... well, that's true to some degree in short-term trading too. This isn't quite a zero-sum game, but it takes more work to play well than I consider worth the effort. Investing for the long term -- defining a balanced mixture of investments and maintaining that mixture for years, with purchases and sales chosen to keep things balanced -- is a positive sum game, since the market does drift upward over time at a long-term average of about 8%/year. If you're sufficiently diversified (which is one reason I like index funds), you're basically riding that rise. This puts you in the position of betting with the pros rather than against them, which is a lower-risk position. Of course the potential returns are reduced too, but I've found that "market rate of return" has been entirely adequate, though not exciting. Of course there's risk here too, if the market dips for some reason, such as the "great recession" we just went through -- but if you're planning for the long term you can usually ride out such dips, and perhaps even see them as opportunities to buy at a discount. Others can tell you more about the details of each of these, and may disagree with my characterizations ... but that's the approach I've taken, based on advice I trust. I could probably increase my returns if I was willing to invest more time and effort in doing so, but I don't especially like playing games for money, and I'm getting quite enough for my purposes and spending near-zero effort on it, which is exactly what I want.
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What is a W-8 form, and how should I fill it in?
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The IRS W-8BEN form (PDF link), titled "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding", certifies that you are not an American for tax purposes, so they won't withhold tax on your U.S. income. You're also to use W-8BEN to identify your country of residence and corresponding tax identification number for tax treaty purposes. For instance, if you live in the U.K., which has a tax treaty with the U.S., your W-8BEN would indicate to the U.S. that you are not an American, and that your U.S. income is to be taxed by the U.K. instead of tax withheld in the U.S. I've filled in that form a couple of times when opening stock trading accounts here in Canada. It was requested by the broker because in all likelihood I'd end up purchasing U.S.-listed stocks that would pay dividends. The W-8BEN is needed in order to reduce the U.S. withholding taxes on those dividends. So I would say that the ad revenue provider is requesting you file one so they don't need to withhold full U.S. taxes on your ad revenue. Detailed instructions on the W-8BEN form are also available from the IRS: Instruction W-8BEN (PDF link). On the subject of ad revenue, Google also has some information about W8-BEN: Why can't I submit a W8-BEN form as an individual?
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What should I look at before investing in a start-up?
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Turukawa's answer is quite good, and for your own specific situation, you might begin by being sceptical about what you are getting for investing a few thousand dollars. With the exception of Paul Graham's Y-Combinator, there are very few opportunities to invest at that type of level, and Y-Combinator provides a lot of other assistance besides their modest initial investment. I can tell from your post that you think like an investor. It is highly unlikely that the entrepreneurial programmers that you will be backing will be wired that way. From the modest amount that you are investing, you are unlikely to be the lead investor in this opportunity. If you are interested in proceeding, simply stick along for the ride, examining the terms and documents that more significant investors will be demanding. Remain positive and supportive, but simply wait to sign on the dotted line until others have done the heavy lifting. For more insights into startups themselves, see Paul Graham's essays at www.paulgraham.com. He's the real deal, and his recent essays will provide you with current insights about software startups. Good luck.
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