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How do I protect myself from a scam if I want to help a relative? | Mostly ditto to @grade'eh'bacon, but let me add a couple of comments: Before I did anything, I'd find out more about what's going on. Anytime someone tells me that there's a problem with "security codes or something", I get cautious. Think about what the possibilities are here. Your relative is being scammed. In that case, helping him to transfer his money to the scammer is not the kind of help you really want to give. Despite your firm belief in your relative's integrity, he may have been seduced by the dark side. If he's doing something illegal, I'd be very careful about getting involved. My friends and relatives don't ask me to commit crimes for them, especially not in a way that leaves me holding the bag if things go wrong. Assuming that what is going on here is all legal and ethical, still there is the possibility that you could be making yourself liable for taxes, fees, whatever. At the very least I'd want to know what those are up front. As @Grade'eh'bacon, if he really has a problem with a lost password or expired account, by all means help him fix that problem. But become someone else's financial intermediary has many possible pitfalls. |
Where should I invest to hedge against the stock market going down? | If you believe the stock market will be down 20-30% in the next few months, sell your stock holdings, buy a protective put option for the value of the holdings that you want to keep. That would be hedging against it. Anything more is speculating that the market will fall. |
Can a wealthy investor invest in or make a deal with a company before it goes public / IPO? | Yes, it is common for investors to make equity investments in technology companies pre-IPO. There are technology incubators like Y Combinator that exist to make "angel" investments, which are early-stage equity investments in private technology companies (these investments are sometimes in notes that are convertible to equity, but are very similar to a stock investment). Wealthy individuals can also make angel investments (e.g. Peter Thiel made a $500K investment in Facebook in 2004 for 10.2% of the company). Additionally, venture capital firms exist to make equity investments in private companies. In the US, you need to be an Accredited Investor to make private equity investments (income greater than $200K or net worth greater than $1 million), but you probably need a lot more money than the minimum and connections to get in on these deals in reality. |
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home? | Basically, you have purchased 25% of the condo for $40,000, and your parents bought 75% of the condo for another $115,000. We imagine for a moment that it wasn't you who lived in the condo, but some unrelated person paying rent. You are paying $7,500 a year for tax and fees, plus $6,000 a year, so there is $13,500 leaving your wallet. If $15,500 a year was a reasonable rent, then the tax and fee would be paid out of that, there would be $8,000 left, of which you would get 25% = $2,000. If you were officially "renting" it, you would pay $15,500 a year, and get $2,000 back, again $13,500 leaving your wallet. So you are in exact the same situation financially as you would be if you paid $15,500 rent. Question: Is $15,500 a year or $1,290 a month an appropriate rent for your condo? If a neighbour is renting his condo, is he or she paying $1,290 or more or less? Could you rent the same place for the same money? If $1,290 is the correct rent then you are fine. If the rent should be lower, then you are overpaying. If the rent should be higher, then you are making money. Keep in mind that you will also be winning if rents go up in the future. |
Which student loans to pay off first: Stafford or private? | At the current rates, stated in the question, I would push additional funds towards your Stafford loans as their higher interest rates will incur interest charges almost 3 times faster than your private loans. With my loans I have not seen much information regarding private loans jumping the interest rate close to the 6.8% any time in the coming years (if others have insight to this I look forward to the comments). Due to the private loans being variable there is an element of risk to their rates increasing. Another way to look at it may be to prorate your amount of extra payments according to their interest rate. $1,000 x 0.068 /(0.068 + 0.025) = $731.18 Toward your Stafford Loans $1,000 x 0.025 /(0.068 + 0.025) = $268.82 Toward your Private Loans |
Do I need to invest to become millionaire? | You're ignoring inflation. Even if we assume the ECB sticks to its 2% inflation target, and your salary only rises in line with inflation, you will be saving considerably more in forty years' time than you are today. In fact, an interest rate of 2% and an inflation rate of 2% make the sums exceptionally easy. You need to save €25,000 per year in 2057 euros to be a millionaire by 2057, which is €11,322 in 2017 euros. Challenging, but achievable. Of course, you'll only be a millionaire in 2057 euros, which will be worth less than half as much as a euro is worth right now. |
Trouble sticking to a budget when using credit cards for day to day transactions? | Easy... Use cash, or keep a ledger. |
Is the financial advice my elderly relative received legal/ethical? | I can't speak about the UK, but here in the US, 1% is on the cheap side for professional management. For example Fidelity will watch your portfolio for that very amount. I doubt you could claim that they took advantage of her for charging that kind of fee. Given that this is grandma's money, no consultation with the family is necessary. Perhaps she did have dementia at the time of investment, but she was not diagnosed at the time. If a short time has past between the investment and the diagnosis, I would contact the investment company with the facts. I would ask (very nicely) that they refund the fee, however, I doubt they under obligation to do so. While I do encourage you to seek legal council, there does not seem to be much of substance to your claim. The fees are very ordinary or even cheap, and no diagnosis precluded decision making at the time of investment. |
Is it preferable to move emergency savings/retirement into offset mortgage? | Assuming no constraints on how much you can move (or how frequently) into and out of your offset mortgage account, the question becomes one of what rate of return you expect from your long-term savings/emergency cash fund. The rate you are getting from the offset mortgage account is known; since it reduces the principal amount owing and thus reduces interest charges, the return is the mortgage rate (though I would not be surprised if the offset mortgage account contract has bells and whistles reducing the effective rate, saying something like 3 pounds reduction of principal for every 5 pounds you put in). So, as a movie character once said, "Do you feel lucky today?" If so, move money from your offset mortgage account to savings, and earn more. If not, move money in the opposite direction. A "guaranteed" 2% return on the offset mortgage account might be better than taking a risk on the vagaries of the stock market, and even the possibility of loss in your long term savings account. |
How could strike price for new shares be higher than the market price | This can arise with very thinly traded stocks for large blocks of shares. If the market only has a few thousand dollars available at between 8.37 and 12.5 the price is largely meaningless for people who want to invest in hundreds of thousands/millions of dollars worth, as the quoted price can't get them anywhere near the number of shares they want. How liquid is the stock in question? |
Why can't you just have someone invest for you and split the profits (and losses) with him? | Written with some mild snark , but no insult intended, because financial stuff can be ridiculously confusing... Looked at another way, you're basically asking if the Biblical "Parable of the Talents" can be implemented as a business model. You as the investor wish to be the "master", with the entity doing the investing playing the part of the "servant". Since the law prohibits actual servitude as described in scripture, the model must substitute a contractual profit- and loss-sharing scheme. OK, based on what you've proposed, and by way of example, let's say you invested a thousand dollars. You give the investment service your money. At the end of a year, they give you back - Your capital ($1000) - Plus 1/2 of any profits OR - Less 1/2 of any losses So let's say the worst happens and they lose ALL of it. According to your proposal, they have to cover 1/2 of the loss. You end up with $500...but they end up with LESS than nothing. They will be in a deficit situation because all the expense was theirs. They don't just fail to make a profit. They go in the hole. It doesn't matter what percentages you use. Regardless of how the loss is shared, you've only guaranteed YOU can't lose all your money. The company CAN. Given a large enough investment, or enough market fluctuation, a big shared loss could shut down a smaller firm. To summarize: - You want a service that charges you nothing - Does all the work of expertly managing and investing your capital - Takes on part of the risk you would normally bear - (on top of their usual risk and liability) - Agrees to do so solely for a percentage of any return (where higher returns will likely involve a higher degree of risk) - AND that guarantees, after just 1 year, you'll get X% of your capital back, no matter what. Win or lose. - Even if the market crashes and all your capital, and theirs, is wiped out Superbest, um, to be serious briefly: what you're proposing is, if nothing else, inherently unfair and inequitable. I believe you intended it as a mutually beneficial scenario, but the real-world imbalance in risk and reward prevents it being so. Any financial service that would accept those terms along with the extra degree of risk would be fiscally irresponsible. From a business standpoint it's an untenable model, and no company would build on it. It would be tantamount to corporate suicide. The requirement that a service promise to give you back X% of your money, no matter how great the loss, makes your proposal impossible. You need to think about how much all this costs, realistically, as well what kind of returns you can actually expect. And that more risk for higher return is exactly what a service could NOT take a chance on if it had to "share" investors' losses. Besides, it's not really sharing, now is it? They will always lose more than you, always end up in a negative situation, unable even to recoup costs. Circumstances beyond their control could result in a drop in the value that not only wipes out any profit, but requires them to pay YOU for work performed and expenses incurred on your behalf. Why would they let anyon double-dip like that? Yeah, we all prefer getting something for nothing...but you want valuable services and for them to pay you money for the privilege of providing them? I totally agree that would be fantastic, but in this world even "free" doesn't come cheap anymore. And getting back to costs: Without consistent income the service would have nowhere to work and no resources to work with. No office, computer, phone, electricity, Internet, insurance, payroll, licensing, training, maintenance, security, lobbying, etc., etc., etc. Why do people always forget overhead? There's a reason these services operate the way they do. Even the best are working with fairly slim margins in a volatile sector. They're not into 1-year gambles unlikely to cover their cost of doing business, or having to pay for a negative return out of their own pocket. Look, if you're the Biblical master asking your servant to manage things, overhead is built-in. You're taking all the risk as well. You're paying for all three servants' food, home, clothing, etc, plus you had to buy the servants themselves. So its reasonable that you reap the reward of their labor. You paid for it, and you didn't even punish the servant who buried your money in a hole. The two good servants may have done the legwork, but you took on the burden of everything else. In your proposed service, however, contrary to the servant's usual role, the servant - i.e., the company - would be assuming a portion of your risk on top of their own, yet without any guarantee of profit, income, or even coverage of costs. They're also subject to regulations, fees, liability, legal stuff, etc. that you're not, against most of which you are indemnified and held harmless. If they agree to cover a share of your loss, it exposes to greater liability and more related risk. It robs them of resources they need to invest in their own business, while at the same time forcing them to do all the work. As a result, your model doesn't give such a service a fighting chance. Getting it off the ground and lasting past the first-year payouts would require more luck than skill. They'd be better off heading to Vegas and the blackjack table, where the only overhead is a cheap flight and room, where the odds and rules don't change overnight, and they at least get free drinks. If none of the equivalents satisfies, then the Biblical parable appears to describe your only option for obtaining exactly what you want: Move to a country where slavery is legal and buy an investor :-) Cheers, c |
Reasons behind a large price movement of a penny stock without any recent news releases? | Yes, in my humble opinion, it can be "safe" to assume that — but not in the sense that your assumption is necessarily or likely correct. Rather, it can be "safe" in the respect that assuming the worst — even if wrong! — could save you from a likely painful and unsuccessful speculation in the highly volatile stock of a tiny company with no revenue, no profits, next to no assets, and continued challenges to its existence: "There is material uncertainty about whether the Company will be able to obtain the required financing. This material uncertainty casts significant doubt about the Company’s ability to continue as a going concern." As a penny stock, they are in good company. Still, there are a variety of other reasons why such a stock might have gone up, or down, and no one [here] can say for sure. Even if there was a news item, any price reaction to news could just amount to speculation on the part of others having enough money to move the stock. There are better investments out there, and cheaper thrills, than most penny stocks. |
TOCOM oil in USD | TOCOM Crude is a cash-settled blend of Oman and Dubai crude oil, both quoted in USD. The daily settlement price is mark to market, but the final settlement price is based on reported prices from Dubai and Oman (or calculated in some cases with a known procedure), averaged and then converted to Yen using monthly average exchange rates as published by a reference bank (see Detailed Rules) You're trying to go all the way back and unfuddle quotes into a blend of USD-quoted oils. The correct procedure here would be to go with the Oman and Dubai prices in the first place (unless you're trying to arbitrage the TOCOM market). As to why they do it this way? It's a service. TOCOM takes on all the challenges to provide customers with a steady and consistent way of trading cash-oil. For physical oil, all you'd have to do is buy the blend on Dubai's and Oman's spot market. You trust TOCOM's price finding process, i.e. there will be no discrepancies between your TOCOM cash-oil and the Middle East physical oil. Edit: As to why Japan isn't buying WTI directly: There's a considerable cost of carry. WTI delivery location is Cushing, OK; there are pipelines but it's still a logistics act to get the oil to a port on the West Coast and then have it shipped to Japan. Dubai's delivery is at Jebel Ali (Persian Gulf), Omani crude can be shipped straight from Mina Al Fahal. Not only is it a shorter trip but also there are more shipping companies specialised in oil deliveries to the Asian hotspots. Why they pay in USD? Persian oil is highly sought after in nearly all of Asia's economies but there's little other exported goods from there. So naturally the market for currency crosses (AEDJPY, OMRJPY, AEDINR, OMRINR, etc.) is not that liquid. At least not as liquid as to make buying Persian oil a smooth deal. Anyway, both Dubai and Oman chose to follow Western practice to quote their contracts in USD and (maybe because of liquidity concerns) also to accept USD for payment only. |
Is there a standard check format in the USA? | Many years ago, I worked on software that had to print the date, payee, and amounts on pre-printed checks. Other than the MICR line (which had a particular placement with respect to the bottom edge and required a particular font in a particular point size), most aspects of the check layout and format were up to the particular check provider. Then there was a desire to start using optical character recognition to further automate check handling. A standard came out, that most checks I see now seem to follow. The standard dictated the exact dollar sign glyph to be printed to the left of the amount box. This glyph was used by the OCR to locate the amount. There were specific tolerances for where you could print/write the amount relative to that dollar sign. There were also some requirements for the box containing the amount to have some clearance from the noisy backgrounds pre-printed on many checks. But what font you used inside the amount box was, as far as I could tell, unspecified. After all, customers could always hand-write the amount. Interestingly, the part of the check where you spell out the amount is known as the "legal amount." If the amount in numerals and the amount in words don't match, the spelled version takes precedence, legally. (The theory being that it's easier to doctor the numerals to change the apparent value of the check than it is to change the words.) I always found it ironic that the layout standard to enable OCR standard was focused on reading the numerals rather than the legal amount. OCR has come a long way since then, so I wouldn't be surprised if, nowadays, both amounts are read, even on hand-written checks. A little search shows that current (voluntary) standards are put out by the ANSI X9 group. |
How do markets “factor in” a future event? | At the most fundamental level, every market is comprised of buyers and selling trading securities. These buyers and sellers decide what and how to trade based on the probability of future events, as they see it. That's a simple statement, but an example demonstrates how complicated it can be. Picture a company that's about to announce earnings. Some investors/traders (from here on, "agents") will have purchased the company's stock a while ago, with the expectation that the company will have strong earnings and grow going forward. Other agents will have sold the stock short, bought put options, etc. with the expectation that the company won't do as well in the future. Still others may be unsure about the future of the company, but still expecting a lot of volatility around the earnings announcement, so they'll have bought/sold the stock, options, futures, etc. to take advantage of that volatility. All of these various predictions, expectations, etc. factor into what agents are bidding and asking for the stock, its associated derivatives, and other securities, which in turn determines its price (along with overall economic factors, like the sector's performance, interest rates, etc.) It can be very difficult to determine exactly how markets are factoring in information about an event, though. Take the example in your question. The article states that if market expectations of higher interest rates tightened credit conditions... In this case, lenders could expect higher interest rates in the future, so they may be less willing to lend money now because they expect to earn a higher interest rate in the future. You could also see this reflected in bond prices, because since interest rates are inversely related to bond prices, higher interest rates could decrease the value of bond portfolios. This could lead agents to sell bonds now in order to lock in their profits, while other agents could wait to buy bonds because they expect to be able to purchase bonds with a higher rate in the future. Furthermore, higher interest rates make taking out loans more expensive for individuals and businesses. This potential decline in investment could lead to decreased revenue/profits for businesses, which could in turn cause declines in the stock market. Agents expecting these declines could sell now in order to lock in their profits, buy derivatives to hedge against or ride out possible declines, etc. However, the current low interest rate environment makes it cheaper for businesses to obtain loans, which can in turn drive investment and lead to increases in the stock market. This is one criticism of the easy money/quantitative easing policies of the US Federal Reserve, i.e. the low interest rates are driving a bubble in the stock market. One quick example of how tricky this can be. The usual assumption is that positive economic news, e.g. low unemployment numbers, strong business/residential investment, etc. will lead to price increases in the stock market as more agents see growth in the future and buy accordingly. However, in the US, positive economic news has recently led to declines in the market because agents are worried that positive news will lead the Federal Reserve to taper/stop quantitative easing sooner rather than later, thus ending the low interest rate environment and possibly tampering growth. Summary: In short, markets incorporate information about an event because the buyers and sellers trade securities based on the likelihood of that event, its possible effects, and the behavior of other buyers and sellers as they react to the same information. Information may lead agents to buy and sell in multiple markets, e.g. equity and fixed-income, different types of derivatives, etc. which can in turn affect prices and yields throughout numerous markets. |
Why have I never seen a stock split? | Are you sure you're not just looking at prices that are adjusted for the split, e.g. Yahoo? For example, Gilead Sciences (GILD) split a few months ago, but if you look at a price chart, there isn't an interruption even though the split is clearly marked. (Look in the past six months; it split in January). However, you could also simply be watching companies that happen to not split, for a variety of reasons. This isn't a criticism, but rather just a consequence of whatever stocks you happen to be watching. However, a quick search for information on stock splits yields a few articles (mainly from the Motley Fool) that argue that fewer companies are performing stock splits in recent years; the articles mainly talk about tech companies, and they make the argument that even though the shares in Google and Apple have a high stock price: Google and Apple aren't all that expensive by traditional valuation metrics. Google trades at just 15 times next year's projected profitability. Apple fetches a mere 13 times fiscal 2012's bottom-line estimates. These articles are a bit dated in terms of the stock prices, but the rationale is probably still good. Similar logic could apply for other companies; for example, since May 2009, Panera's stock price has climbed by almost a factor of 4 without splitting. The articles also make the point that stock splits were traditionally seen as bullish signs because: Companies splitting to bring their share prices back down to more accessible levels were optimistic in building those sand castles back up. One could make a fair argument that the overall economic climate isn't as bullish as it used to be, although I would only be convinced that this was affecting stock splits if data could be gathered and tested. A stock split can also raise the price of a stock because if small investors feel the stock is suddenly more accessible to them, they purchase more of it and might therefore drive up the price. (See the Investopedia article on stock splits for more information). Companies might not see the necessity in doing this because their stock price isn't high enough to warrant a split or because the price isn't high enough to outprice smaller investors. One interesting point to make, however, is that even though stock splits can drive small investors to buy more of the stock, this isn't always a gain for the company because professional investors (firms, institutions, etc.) have a tendency to sell after a split. The paper is a bit old, but it's still a very neat read. It's possible that more and more companies no longer see any advantage to splitting because it might not affect their stock price in the long run, and arguably could even hurt it. Considering that large/professional investors likely hold a higher percentage of a company's shares than smaller investors, if a stock split triggers a wave of selling by the former, the increasing propensity to buy of the latter may not be enough to offset the decline in price. Note: My answer only refers to standard stock splits; the reasons above may not apply to a decrease in the number of reverse stock splits (which may not be a phenomenon; I don't know). |
Is there such a thing as a deposit-only bank account? | Legally, no one else can withdraw from your account. If you suspect the direct-deposit websites are making withdrawals, you can monitor your account balance and dispute any transactions that were not made by you. But realistically, any company that did that would soon be out of business and in so much legal trouble that it wouldn't be worth the money they could get from you. |
I have more than $250,000 in a US Bank account… mistake? | First, what's the reason? Why do you have that much in cash at all - are you concerned about market volatility, are you planning to buy a house, do you have tens of millions of dollars and this is your slush fund? Are you a house flipper and this is part of business for you? If you need the money for short term use - ie, you're buying a house in cash next month - then as long as you're in a sound bank (one of the big national ones, for example) it seems reasonable. You can never predict a crash like 2008, but it seems unlikely that Chase or Citibank will go under in the next few weeks. If you like to have a cash position, then split the money among multiple banks. Buy a CD at one major bank with some of the amount. My in-laws have a trust which is partially invested in CDs, and they use multiple banks for this purpose to keep their accounts fully insured. Each separate bank you're covered up to 250k, so if you have $150k at Chase and $150k at a local bank, you're covered. (You're also covered in a much larger amount - up to 1MM potentially - if you are married, as you can have a separate account each for $250k and a joint account up to $500k.) Otherwise, why do you have that much in cash? You should invest it in something that will return more than inflation, at a minimum... Edit post-clarifications: $350k is around my level of 'Maybe, maybe not'. You're risking $100k on a pretty low risk (assuming this isn't a small local bank, and even those are pretty low still). In order to remove that risk you have to do something active - ie, take 100k somewhere else, open a new bank account, etc. - which isn't exactly the hardest thing in the world, but it does take effort. Is it worth the 0.001% chance (entirely made up) you lose the 100k? That's $10, if you agree with that risk chance. Up to you. It wouldn't be particularly hard, though, to open an account with an online bank, deposit $100k in there in a 6 month CD, then pay the IRS from your other account and when the 6 month CD expires take the cash back into your active account. Assuming you're not planning on buying a house in the next six months this should be fine, I'd think (and even then you'd still have $150k for the downpayment up front, which is enough to buy a $750k house w/o PMI). Additionally, as several commenters note: if you can reasonably do so, and your money won't be making significant interest, you might choose to pay your taxes now rather than later. This removes the risk entirely; the likely small interest you earn over 3 months may be similar to the amount you'd spend (mostly of your time, plus possibly actual expenses) moving it to another bank. If you're making 2% or 3% this may not be true, but if you're in a 0.25% account like my accounts are, $100k * 0.25% * 0.25 is $62.50, after all. |
Does an individual share of a stock have some kind of unique identifier? | Nope, think what a nightmare that would be, a bunch of shares would be issued and then sold to tonnes of people, who might sell various partial numbers of them to others, who might buy them and others from 20 others all as part of one order though multiple fills... It would be nuts, and if one were to issue a certificate with the IDs of shares that were carried through such a process the likelihood is the fragmentation would be so great that 100K shares would have consist of almost as many fragments! Imagine a share certificate with 70K IDs/ranges? Yikes! |
Why doesn't Japan just divide the Yen by 100? | I think the tradition within the country would outweigh any convenience it would have for the rest of the world. The US hasn't even been able to switch to the Metric system, even though it's taught in school and used in math / science. The costs involved with changing price tags, and re-organizing everything in their world would be pretty crazy. |
How do I handle fund minimums as a beginning investor? | I like Keshlam's answer and would like to add a few notes: While your enthusiasm to invest is admirable learning patience is a key aspect of wealth building and keeping. |
Is it ok to use a check without a pre-printed check number? | They are valid checks, but you're going to get hassled when you try to use them. There's a perception that people using starter checks are more likely to bounce or otherwise be troublesome. When more payments were made with checks, some vendors would not accept checks with low numbers either! Checks are very cheap to get printed these days, save yourself some trouble and get some printed. |
What benefits do “title search companies” have over physically visiting a land records offices? | Basically what @littleadv said, but let me amplify what I think is the most important point. As he/she says, one thing you're paying them for is their expertise. If the title on record at the county office had a legal flaw in it, would you recognize it? In a way your question is like asking, Why should I go to a doctor when I could just make my own medicine out of herbs I grow in my garden and treat myself? Maybe you could. But the doctor and the pharmacist have years of training on how to do this right. You probably don't. Is it possible for you to learn everything you need to do it right? Sure. But do you want to spend the time to study all that for something that you will do -- buy a house -- maybe once every ten years? Will you remember it all next time or have to learn it all over? But really most important is, title companies offer insurance in case the title turns out to be flawed. That, to me, is the big reason why I would use a title company even if I was paying cash and there was no bank involved to insist on it. If there's some legal flaw in the title and it turns out that someone else has a claim to my house, and I lose in court, I would be out about $100,000. Your house might be costing you much more. That's a huge risk to take. Paying the couple of hundred dollars for insurance against that risk seems well worth it to me. And by the way, I don't think the "due diligence" is easy. It's NOT just a matter of making sure a title is really on file at the court house and has the proper stamp on it. It's all about, Does someone else have a legal claim to this property? Like, maybe three owners ago someone forged a signature on a deed, so the sale is fraudulent, and now the person who was defrauded or his heirs discover the issue and claim the property. Or maybe the previous owner failed to pay a contractor who did repairs on the house, and now he goes to court and gets a lien on the property. It's unlikely that you have the expertise to recognize a forged document. You almost surely have no way to recognize a forged signature of someone you never met on an otherwise valid-looking document. And you'd have to do a lot of research to find every contractor who ever worked on the house and insure none of them have a claim. Etc. |
How late is Roth (rather than pretax) still likely to help? | Years before retirement isn't related at all to the Pretax IRA/Roth IRA decision, except insomuch as income typically trends up over time for most people. If tax rates were constant (both at income levels and over time!), Roth and Pretax would be identical. Say you designate 100k for contribution, 20% tax rate. 80k contributed in Roth vs. 100k contributed in Pretax, then 20% tax rate on withdrawal, ends up with the same amount in your bank account after withdrawal - you're just moving the 20% tax grab from one time to another. If you choose Roth, it's either because you like some of the flexibility (like taking out contributions after 5 years), or because you are currently paying a lower marginal rate than you expect you will be in the future - either because you aren't making all that much this year, or because you are expecting rates to rise due to political changes in our society. Best is likely a diversified approach - some of your money pretax, some posttax. At least some should be in a pretax IRA, because you get some tax-free money each year thanks to the personal exemption. If you're working off of 100% post-tax, you are paying more tax than you ought unless you're getting enough Social Security to cover the whole 0% bucket (and probably the 10% bucket, also). So for example, you're thinking you want 70k a year. Assuming single and ignoring social security (as it's a very complicated issue - Joe Taxpayer has a nice blog article regarding it that he links to in his answer), you get $10k or so tax-free, then another $9k or so at 10% - almost certainly lower than what you pay now. So you could aim to get $19k out of your pre-tax IRA, then, and 51k out of your post-tax IRA, meaning you only pay $900 in taxes on your income. Of course, if you're in the 25% bucket now, you may want to use more pretax, since you could then take that out - all the way to around $50k (standard exemption + $40k or so point where 25% hits). But on the other hand, Social Security would probably change that equation back to using primarily Roth if you're getting a decent Social Security check. |
Recommendation for learning fundamental analysis? | Definition: Fundamental analysis involves analyzing financial statements and health, management and competitive advantages, and competitors and markets. Books are a great way to learn fundamental analysis but can be time consuming for something that really isn't very difficult. So the internet might be a better way to get started. When using fundamental analysis all you are doing is trying to figure out how much a company is worth. The vocabulary and huge range of acronyms can be intimidating but really its a fairly simple task. You can use (investopedia) for definitions and simple examples when you do not fully understand something. IE: (PEG) You can search for definitions using the search bar on the top right (google also is a good source to look for additional definitions). I recommend starting out by doing an independent analysis on a well known name such as Proctor & Gamble or Mcdonald's. Then you can compare your analysis to a professionals and see how they stack up. Books and Resources: Getting Started in Fundamental Analysis Fundamental Analysis For Dummies Fundamental analysis Wiki What Is Fundamental Analysis? - Video tut from Investopedia Fundamental Analysis: Introduction Step by Step example of fundamental analysis - It's a pretty in depth forum post. Side Notes: Personally when I first began using fundamental analysis I found it difficult to understand why something is considered undervalued or overvalued. I couldn't figure out who was the "authority" on saying this. Well in short the "authority" basically is the market. You can say you believe XYZ is undervalued but you are only proven correct if the market agrees with you over long period of time. Some key facts you should know: Many times a stock can be "broken" for many reasons. The price can go far beyond what would be considered a "normal valuation" (this is considered a bubble, e.g. the tech bubble of 1999-2000). It can also go far below a "normal valuation". In most cases these types of valuations are short lived and in the end a stock should return to "normal valuation" or at least this is the theory behind fundamental analysis. |
Minor stakes bought at a premium & valuation for target company | In some cases, when a company purchases a minor stake, they often intend to increase the size of the stake over time. As a reference, note that Coca Cola has increased their stake in Green Mountain Coffee Roasters (GMCR) over time. It also adds some "support" to the price because these investors may be willing to step in and purchase the stock if there is any distress or poor performance. Finally, its generally a good "tell" that the stock has good things going for it and may be subject to additional interest from large investors. |
Effect on Bond asset allocation if Equity markets crash? | what will happen to the valuation of Tom's bond holdings after the equity crash? This is primarily opinion based. What will happen is generally hard to predict. Bond Price Bump due to Demand: Is a possible outcome; this depends on the assumption that the bonds in the said country are still deemed safe. Recent Greece example, this may not be true. So if the investors don't believe that Bonds are safe, the money may move into Real Estate, into Bullion [Gold etc], or to other markets. In such a scenario; the price may not bump up. Bond Price Decline due to Rising Interest Rates: On a rising interest rates, the long-term bonds may loose in value while the short term bonds may hold their value. Related question How would bonds fare if interest rates rose? |
Student loan payments and opportunity costs | The only real consideration I would give to paying off the debt as slowly as possible is if inflation were much higher than it is now. If you had a nice medium to low interest (fixed rate) loan, like yours, and then inflation spiked to 7-8%, for example, then you're better off not paying it now because it's effectively making you money (and then when inflation calms back down, you pay it off with your gains). However, with a fairly successful and active Federal Reserve being careful to avoid inflation spikes, it seems unlikely that will occur during your time owing this debt - and certainly isn't anywhere near that point now. Make sure you're saving some money not for the return but for the safety net (put it in something very safe), and otherwise pay off your debt. |
Can my U.S. company do work for a foreign company and get wire transfers to my personal account? | It seems that you're complicating things quite a bit. Why would you not create a business entity, open one or more bank accounts for it, and then have the money wired into those accounts? If you plan on being a company then set up the appropriate structure for it. In the U.S., you can form an S-corporation or an LLC and choose pass-through taxation so that all you pay is income tax on what you receive from the business as personal income. The business itself would not have tax liability in such a case. Co-mingling your personal banking with that of your business could create real tax headaches for you if you aren't careful, so it's not worth the trouble or risk. |
Strategies for putting away money for a child's future (college, etc.)? | Others have given some good answers. I'd just like to chime in with one more option: treasury I-series bonds. They're linked to an inflation component, so they won't lose value (in theory). You can file tax returns for your children "paying" taxes (usually 0) on the interest while they're minors, so they appreciate tax-free until they're 18. Some of my relatives have given my children money, and I've invested it this way. Alternatively, you can buy the I-bonds in your own name. Then if you cash them out for your kids' education, the interest is tax-free; but if you cash them out for your own use, you do have to pay taxes on the interest. |
Why is being “upside down” on a mortgage so bad? | The problem comes when the borrower cannot afford his home. If a borrower buys more home than they can afford, as long as he can sell the house for more than he owes, he's not in a disastrous situation. He can sell the house, pay off the mortgage, and choose more affordable housing instead. If he is upside-down on his home, he doesn't have that option. He's stuck in his home. If he sells it, he will have to come up with extra money to pay off the mortgage (which he doesn't have, because he is in a home he can't afford). It used to be commonplace for banks to issue mortgages for 100% of the value of the home. As long as the home keeps appreciating, everybody is happy. But if the house drops in value and the homeowner finds himself unable to make house payments, both the homeowner and the bank are at risk. Recent regulations in the U.S. have made no-down-payment mortgages less common. |
Are there Investable Real Estate Indices which track Geographical Locations? | Not to my knowledge. Often the specific location is diversified out of the fund because each major building company or real estate company attempts to diversify risk by spreading it over multiple geographical locations. Also, buyers of these smaller portfolios will again diversify by creating a larger fund to sell to the general public. That being said, you can sometimes drill down to the specific assets held by a real estate fund. That takes a lot of work: You can also look for the issuer of the bond that the construction or real estate company issued to find out if it is region specific. Hope that helps. |
How to prepare to purchase a house? (Germany) | Figure out how much money you earn, what you spend it on, and how that will change when you have kids (will one of you stay at home? if not, how much will daycare cost and how do you finance the first few month when your child is still too young for daycare?) You will usually plan to spend your current Kaltmiete (rent without utilities) on your mortgage (the Darlehen that is secured by your house) - keep in mind though that a house usually has a higher utility cost than an appartment. When you've figured out what you can save/pay towards a house now and how that will change when you have kids, you can go on to the next step. If you don't want to buy now but want to commit to saving up for a house and also want to secure today's really low interest rates, consider getting a "Bausparvertrag". I didn't find a good translation for Bausparvertrag, so here is a short example of how it works: You take a building saving sum (Bausparsumme) of 150000€ with a savings goal (Sparziel) of 50000€ (the savings goal is usually between 20% and 50% of the sum) and then you make monthly payments into the Bausparvertrag until you reach the savings goal at which point you can take out your savings and a loan of 100000 € (or whatever your difference between the Bausparsumme and Sparziel is). If you're living in an expenisve area, you're likely to need more than 150000 but this is just an example. Upsides: Downsides: If you decide to buy sooner, you can also use your Bausparvertrag to refinance later. If you have a decent income and a permanent job, then ask your bank if they would consider financing your house now. To get a sense of what you'll be able to afford, google "wie viel Haus kann ich mir leisten" and use a few of the many online calculators. Remember that these websites want to sell you on the idea of buying a house instead of paying rent, so they'll usually overestimate the raise in rents - repeat the calculation with rent raise set to 0% to get a feeling for how much you'll be able to afford in today's money. Also, don't forget that you're planning to get children, so do the calculation with only one income, not two, and add the cost of raising the kids to your calculation. Once you've decided on a property, shop around a bit at different banks to get the best financing. If you decide to buy now (or soon), start looking at houses now - go to model homes (Musterhäuser) to find out what style of house you like - this is useful whether you want to buy an existing house or build a new one. If buying an existing house is an option for you, start visiting houses that are on sale in your area in order to practice what to ask and what to look for. You should have a couple of visits under your belt before you really start looking for the one you want to buy. Once you're getting closer to buying or making a contract with a construction company, consider getting an expert "Bausachverständiger". When buying an existing house they can help you estimate the price and also estimate the renovation cost you'll have to factor in for a certain house (new heating, better insulation, ...). When building a new house they can advise you on the contract with the construction company and also examine the construction company's work at each major step (Zwischenabnahme). Source: Own experience. |
Does Joel Greenblatt's “Magic Formula Investing” really beat the market? | I read the book, and I'm willing to believe you'd have a good chance of beating the market with this strategy - it is a reasonable, rational, and mechanical investment discipline. I doubt it's overplayed and overused to the point that it won't ever work again. But only IF you stick to it, and doing so would be very hard (behaviorally). Which is probably why it isn't overplayed and overused already. This strategy makes you place trades in companies you often won't have heard of, with volatile prices. The best way to use the strategy would be to try to get it automated somehow and avoid looking at the individual stocks, I bet, to take your behavior out of it. There may well be some risk factors in this strategy that you don't have in an S&P 500 fund, and those could explain some of the higher returns; for example, a basket of sketchier companies could be more vulnerable to economic events. The strategy won't beat the market every year, either, so that can test your behavior. Strategies tend to work and then stop working (as the book even mentions). This is related to whether other investors are piling in to the strategy and pushing up prices, in part. But also, outside events can just happen to line up poorly for a given strategy; for example a bunch of the "fundamental index" ETFs that looked at dividend yield launched right before all the high-dividend financials cratered. Investing in high-dividend stocks probably is and was a reasonable strategy in general, but it wasn't a great strategy for a couple years there. Anytime you don't buy the whole market, you risk both positive and negative deviations from it. Here's maybe a bigger-picture point, though. I happen to think "beating the market" is a big old distraction for individual investors; what you really want is predictable, adequate returns, who cares if the market returns 20% as long as your returns are adequate, and who cares if you beat the market by 5% if the market cratered 40%. So I'm not a huge fan of investment books that are structured around the topic of beating the market. Whether it's index fund advocates saying "you can't beat the market so buy the index" or Greenblatt saying "here's how to beat the market with this strategy," it's still all about beating the market. And to me, beating the market is just irrelevant. Nobody ever bought their food in retirement because they did or did not beat the market. To me, beating the market is a game for the kind of actively-managed mutual fund that has a 90%-plus R-squared correlation with the index; often called an "index hugger," these funds are just trying to eke out a little bit better result than the market, and often get a little bit worse result, and overall are a lot of effort with no purpose. Just get the index fund rather than these. If you're getting active management involved, I'd rather see a big deviation from the index, and I'd like that deviation to be related to risk control: hedging, or pulling back to cash when valuations get rich, or avoiding companies without a "moat" and margin of safety, or whatever kind of risk control, but something. In a fund like this, you aren't trying to beat the market, you're trying to increase the chances of adequate returns - you're optimizing for predictability. I'm not sure the magic formula is the best way to do that, focused as it is on beating the market rather than on risk control. Sorry for the extra digression but I hope I answered the question a bit, too. ;-) |
Is insurance worth it if you can afford to replace the item? If not, when is it? | Insurance is for events that are both and Unexpected and, for many people, catastrophic events are, for example, sickness, disability, death, car accidents, house fires, and burglaries, for which you may buy health, disability, life, auto, home, and renter's insurance. It may be catastrophic for a family relying on a very old earner for that earner to die, and you can buy life insurance up to a very old age, but the premiums will reflect the likelihood of someone of that age dying within the covered period. The more expected an event is, the more anything referred to as insurance is actually forced savings. Health insurance with no copays on regular checkups expects the insured to use them, so the cost of those checkups plus a profit for the insurance company is factored into the premiums ahead of time. A wooden pencil breaking may be unexpected. Regardless of foreseeability, no one buys insurance on wooden pencils, as the loss of a pencil is not catastrophic. What is catastrophic can be context dependent. Health-care needs are typically unforeseeable, as you don't know when you'll get sick. For a billionaire, needing health-care, while unforeseeable, the situation would not be catastrophic, and the billionaire can easily self-insure his or her health to the same extent as most caps offered by health insurance companies. If you're on a fixed budget buying a laptop, if it unexpectedly failed, that would be catastrophic to you, so budgeting in the cost of insurance or an extended warranty while buying your laptop would probably make sense. Especially if you need that $2000 laptop, spending an extra 17.5% would safeguard against you having to come out of pocket and depleting your savings to replace it, even though that brings you to a grand total of $2350 before taxes. However, if you're in that tight of a situation, I would strongly recommend you to find a less expensive option that would allow you to self-insure. If you found a used laptop for much less (I can even see Apple selling refurbished Macs for less than $1000) you might decide that your budget allows you to self-insure, and you could profit from being careful with your hardware and resolving to cover any issues with it yourself. |
What to sell when your financial needs change, stocks or bonds? | Don't set mental anchor points. I am saying this as a total hypocrite, mind you, it isn't easy to follow that advice. My suggestion would be to look at each investment and ask yourself, "Would I buy that at today's price?", because if you wouldn't you need to sell regardless of whether you are cashing out. Effectively by staying in an investment you no longer believe in, you are giving up the opportunity cost of investing that money in something with a real chance to give you a return, or in your case whatever purpose you have in mind for the cash. |
Can my own corporation deduct my expenses even if I am a full time employee? | No, your business cannot deduct your non-business expenses. You can only deduct from your business income those reasonable expenses you paid in order to earn income for the business. Moreover, for there to be a tax benefit, your business generally has to have income (but I expect there are exceptions; HST input tax credits come to mind.) The employment income from your full-time job wouldn't count as business income for your corporation. The corporation has nothing to do with that income – it's earned personally, by you. With respect to restaurant bills: These fall under a category known as "meals & entertainment". Even if the expense can be considered reasonable and business-related (e.g. meeting customers or vendors) the Canada Revenue Agency decided that a business can only deduct half of those kinds of expenses for tax purposes. With respect to gasoline bills: You would need to keep a mileage and expense log. Only the portion of your automobile expenses that relate to the business can be deducted. Driving to and from your full-time job doesn't count. Of course, I'm not a tax professional. If you're going to have a corporation or side-business, you ought to consult with a tax professional. (A point on terminology: A business doesn't write off eligible business expenses — it deducts them from business income. Write off is an accounting term meaning to reduce the value of an asset to zero. e.g. If you damaged your car beyond repair, one could say "the car is a write-off.") |
What price can *I* buy IPO shares for? | It depends a large part on your broker's relationship with the issuing bank how early you can participate in the IPO round. But the nature of the stock market means the hotter the stock and the closer to the market (away from the issuing bank) you have to buy the higher the price you'll pay. The stock market is a secondary market, meaning the only things for sale are shares already owned by someone. As a result, for a hot stock the individual investor will have to wait for another investor (not the issuing bank) to trade (sell) the stock. |
Are Certificates of Deposit worth it compared to investing in the stock market? | Another factor to consider, beyond the fact that growth and volatility go together, is that the times when many people will need to liquidate their investments will correlate with the times that many other people need to liquidate their investments, and such correlation will push down the immediate value of those investments. While certificates of deposit have penalties for early withdrawal, one can establish up front what the worst-case penalty would be for cashing it in at the most inopportune time. By contrast, stocks offer no such assurance. Stocks sometimes have weird downward spikes that may be short-lived, but if life circumstances force one to liquidate stocks during such a downward spike the "penalty" can be much larger than on a CD. |
As a beginner investor, should I start investing with mutual funds through my bank, or with an online broker? | What is the best option to start with? and I am not sure about my goals right now but I do want to have a major retirement account without changing it for a long time That is a loaded question. Your goals should be set up first, else what is stopping you from playing the mega millions lottery to earn the retirement amount instantly. If you have the time and resources, you should try doing it yourself. It helps you learn and at a latter stage if you don't have the time to manage it yourself, you can find an adviser who does it for you. To find a good adviser or find a fund who/which can help you achieve your monetary goals you will need to understand the details, how it works and other stuff, behind it. When you are thrown terms at your face by somebody, you should be able to join the dots and get a picture for yourself. Many a rich men have lost their money to unscrupulous people i.e. Bernie Madoff. So knowing helps a lot and then you can ask questions or find for yourself to calm yourself i.e. ditch the fund or adviser, when you see red flags. It also makes you not to be too greedy, when somebody paints you a picture of great returns, because then your well oiled mind would start questioning the rationale behind such investments. Have a look at Warren Buffet. He is an investor and you can follow how he does his investing. It is simple but very difficult to follow. Investing through my bank I would prefer to stay away from them, because their main service is banking and not allowing people to trade. I would first compare the services provided by a bank to TD Ameritrade, or any firm providing trading services. The thing is, as you mentioned in the question, you have to go through a specific process of calling him to change your portfolio, which shouldn't be a condition. What might happen is, if he is getting some benefits out of the arrangement(get it clarified in the first place if you intend to go through them), from the side of the fund, he might try to dissuade you from doing so to protect his stream of income. And what if he is on a holiday or you cannot get hold of him. Secondly from your question, it seems you aren't that investing literate. So it is very easy to get you confused by jargon and making you do what he gets the maximum benefit out of it, rather than which benefits you more. I ain't saying he is doing so but that could be a possibility too, so you have consider that angle too. The pro is that setting up an account through them might be much easier than directly going to a provider. But the best point doing it yourself is, you will learn and there is nothing which tops that. You don't want somebody else managing your money, however knowledgeable they maybe i.e. Anthony Bolton. |
Can we amend last year's Schedule C to indicate reduced income due to a customer refund this year for a product we sold last year? | I am not an accountant, but I have a light accounting background, despite being primarily an engineer. I also have a tiny schedule C business which has both better and worse years. I am also in the United States and pay US taxes. I assume you are referring to the US Form 1040 tax return, with the attached Schedule C. However little I know about US taxes, I know nothing about foreign taxes. You are a cash-basis taxpayer, so the transactions that happen in each tax year are based on the cash paid and cash received in that year. You were paid last year, you computed your schedule C based on last year's actual transactions, and you paid taxes on that income. You can not recompute last years schedule C based on the warranty claim. You might want to switch to an accrual accounting method, where you can book allowances for warranty claims. It is more complex, and if your business is spotty and low volume, it may be more trouble than it is worth. At this point, you have two months to look for ways to shift expenses into next year or being income into this year, both of which help offset this loss. Perhaps a really aggressive accountant would advise otherwise (and remember, I am not an accountant), but I would take the lumps and move on. This article on LegalZoom (link here) discusses how to apply a significant net operating loss (NOL) in this year to the previous two years, and potentially carry it forward to the next two years. This does involve filing amended returns for the prior two years, showing this year's NOL. For this to be relevant, your schedule C loss this year must exceed your other W2 and self-employment income this year, with other tests also applied. Perhaps a really aggressive accountant would advise otherwise (and remember, I am not an accountant), but I would take the lumps and move on. |
Why would a car company lend me money at a very low interest rate? | This is "incentive financing". Simply put, the car company isn't in the business of making money by buying government bonds. They're in the business of making money by selling cars. If you are "qualified" from a credit standpoint, and want to buy a $20k car on any given Sunday, you'll typically be offered a loan of between 6% and 9%. Let's say this loan is for three years and you can offer $4000 down payment and/or trade. The required monthly payment on the remaining $16k at the high end of 9% is $508.80, which over 3 years means you'll pay $2,316.64 in interest. Now, that may sound like a good chunk of change, and for the ordinary individual, it is, possibly enough that you decide not to buy today. Now, let's say, all other things being equal, that the company is offering 0.9% incentive financing. Same price, same down payment, same loan term. Your payments over 3 years decrease to $450.64, and over the same loan term you would only pay $222.97 in interest. You save over $2,093.67 in interest over three years, which for you is again a decent chunk of change. Theoretically, the car company's losing that same $2,093.67 in interest by offering this deal, and depending on how it's getting the money it lends you (most financial companies are middlemen, getting money from bond-buying investors who expect a rate of return), that could be a real loss and not just opportunity cost. But, that incentive got you to walk in their door, and not their competitor's. It helped convince you to buy the $20,000 car. The gross margin on that car (price minus direct costs) is typically 20% for the dealer, plus another 20% for the manufacturer, so by giving up the $2,000 on the financing side, the dealer and manufacturer just earned themselves 4 times that much. On top of that, by buying that car, you're committing to buy the parts for the car, a side business with even higher margins, of which the car company gets a pretty big chunk. You may even be required to use dealer service while the car's under warranty in order to keep the warranty valid, another cha-ching. When you get right down to it, the loss from the incentive financing is drowned in the gross profits they make from selling the car to you. Now, in reality, it's a fine balance. The percentages I mentioned are gross margins (EBITDASG&A - Earnings Before Interest, Taxes, Depreciation, Amortization, Sales, General and Administrative costs; basically, just revenue minus direct cost of goods sold). Add in all these side costs and you get a net margin of only about 3.5% of revenue, so your $20k car purchase may only make the car company's stakeholders $700 on the sale, plus slightly higher net margins on parts and service over the life of the car. Because incentive financing is typically only offered through the company's own financing subsidiary, the loss isn't in the form of a cost paid, but simply a revenue not realized, but it can still move a car company from net positive to net negative earnings if the program is too successful. This is why not everyone does it, and not all at the same time; if you're selling enough cars without it, why give away money? Typically, these incentives are offered for two reasons; to clear out old cars or excess inventory, or to maintain ground against a competitor's stronger sales numbers. Keeping cars on a lot ready to sell is expensive, and so is not having your brand driving around on the street turning heads and imprinting their name on the minds of potential customers. |
Buy Php in Malaysia and sell to Philippines | basically the selling (for banks) means you will exchange PHP to MYR buying simply MYR to PHP the bank will buy your MYR in exchange to PHP. and you will sell your MYR to PHP. I think it has something to do with processing fee.. |
What is a Master Limited Partnership (MLP) & how is it different from plain stock? | I own a few MLPs that operate oil/gas pipelines (TSE:IPL-UN, NYSE:BPT, NYSE:APL), and I'm very happy with their performance. Because they don't pay corporate tax MLPs tend to pay higher dividends than most regular stocks. I pay H&R Block to do my taxes, and they sort out all the arcane details. |
What is the best credit card for someone with no credit history | Capital One's normal master card is known to approve people with limited or bad credit history. If not that look into a secured credit card. You put down a deposit of $200 or more and you get that much in credit, sometimes more. |
Why have I never seen a stock split? | You haven't seen one because you haven't looked for one properly. You can set a google alert for stock split and get information about major issues splitting their stocks quite regularly, as well as a daily dose of recommendations from people without a say in the matter for big companies to split their stock. Stock splits are announced in advance by company management. |
What is the incentive for a bank to refinance a mortgage at a lower rate? | It can be a good thing for the bank to refinance your loan for you - since you will be keeping the loan at that particular institution. This gives them more time to enjoy the free money you pay them in interest for the remaining life of the loan. Banks that offer "No closing costs" are betting that mortgage payers will move their mortgage to get the lower interest rates - and whomever holds the loan, gets the interest payments. |
How to value employee benefits? | To fairly compare a comp-only job to a job that offers insurance, get a quote for health insurance. Call your local insurance broker and find out what it would cost. Because if you aren't getting insurance from your employer, you'll have to get it elsewhere. If you get a quote on an HSA, don't forget to add in the annual deductible as part of the cost. On the ESPP, I'd count it as zero. The rationale being that so much of your financial status is tied to your employer that you don't really want to tie up too much more in company stock. (I.e. Company hits hard times, stock tanks, and then they lay you off. Double whammy -- both your assets and income.) But given that I've only been employed by companies that no longer exist in their original form, my perspective may be warped. |
Should I stockpile nickels? | You would have to collect an awful lot to make it profitable. The melting process alone will cost an arm and a leg. Go silver hunting with rolls of Half dollars. You might strike it lucky with rolls of Kennedy's. Its good fun too :) 1964 Kennedy's 90% silver 1965-1970 Kennedy's 40% silver I go looking on ebay collecting for typo errors on pre 1920's British silver coinage. Picked up a George 3rd 1816 Shilling for £3....worth £30....but even if your doing it just for the silver content, you can pick up a real bargain. Just think of how your going to offload them. Here in the UK its easy because there is a huge market for Numismatic coins. |
As an investor or speculator, how might one respond to QE3 taper? | As I tell all my clients... remember WHY you are investing in the first. Make a plan and stick to it. Find a strategy and perfect it. A profit is not a profit until you take it. the same goes with a loss. You never loose till you sell for less than what you paid. Stop jumping for one market to the next, find one strategy that works for you. Making money in the stock market is easy when you perfect your trading strategy. As for your questions: Precious metal... Buying or selling look for the trends and time frame for your desired holdings. Foreign investments... They have problem in their economy just as we do, if you know someone that specializes in that... good for you. Bonds and CD are not investments in my opinion... I look at them as parking lots for your cash. At this moment in time with the devaluation of the US dollar and inflation both killing any returns even the best bonds are giving out I see no point in them at this time. There are so many ways to easily and safely make money here in our stock market why look elsewhere. Find a strategy and perfect it, make a plan and stick to it. As for me I love Dividend Capturing and Dividend Stocks, some of these companies have been paying out dividends for decades. Some have been increasing their payouts to their investors since Kennedy was in office. |
Who owned my shares before me? | Not sure about US. In India all Demat shares have a unique identity. Incase of splits or merging of shares, new ID's are created maintaining the linking of older ID's. The Demat holding entity would have all the history of a particular stock. It is mandatory to disclose the name of the person / entity who has purchased the shares. Of Course if shares are purchased by Fund houses or other aggregators then its the aggregators name that would be available. All this data is confidential and not meant for common consumption. |
What does F[YY]e mean in reporting | It means it's estimate and not final numbers and generally used for future years |
Are bonds really a recession proof investment? | That depends on how you're investing in them. Trading bonds is (arguably) riskier than trading stocks (because it has a lot of the same risks associated with stocks plus interest rate and inflation risk). That's true whether it's a recession or not. Holding bonds to maturity may or may not be recession-proof (or, perhaps more accurately, "low risk" as argued by @DepressedDaniel), depending on what kind of bonds they are. If you own bonds in stable governments (e.g. U.S. or German bonds or bonds in certain states or municipalities) or highly stable corporations, there's a very low risk of default even in a recession. (You didn't see companies like Microsoft, Google, or Apple going under during the 2008 crash). That's absolutely not the case for all kinds of bonds, though, especially if you're concerned about systemic risk. Just because a bond looks risk-free doesn't mean that it actually is - look how many AAA-rated securities went under during the 2008 recession. And many companies (CIT, Lehman Brothers) went bankrupt outright. To assess your exposure to risk, you have to look at a lot of factors, such as the credit-worthiness of the business, how "recession-proof" their product is, what kind of security or insurance you're being offered, etc. You can't even assume that bond insurance is an absolute guarantee against systemic risk - that's what got AIG into trouble, in fact. They were writing Credit Default Swaps (CDS), which are analogous to insurance on loans - basically, the seller of the CDS "insures" the debt (promises some kind of payment if a particular borrower defaults). When the entire credit market seized up, people naturally started asking AIG to make good on their agreement and compensate them for the loans that went bad; unfortunately, AIG didn't have the money and couldn't borrow it themselves (hence the government bailout). To address the whole issue of a company going bankrupt: it's not necessarily the case that your bonds would be completely worthless (so I disagree with the people who implied that this would be the case). They'd probably be worth a lot less than you paid for them originally, though (possibly as bad as pennies on the dollar depending on how much under water the company was). Also, depending on how long it takes to work out a deal that everyone could agree to, my understanding is that it could take a long time before you see any of your money. I think it's also possible that you'll get some of the money as equity (rather than cash) - in fact, that's how the U.S. government ended up owning a lot of Chrysler (they were Chrysler's largest lender when they went bankrupt, so the government ended up getting a lot of equity in the business as part of the settlement). Incidentally, there is a market for securities in bankrupt companies for people that don't have time to wait for the bankruptcy settlement. Naturally, people who buy securities that are in that much trouble generally expect a steep discount. To summarize: |
What taxes are assessed on distributions of an inherited IRA? | Distributions from an inherited IRA will be taxed as ordinary income and there are required minimum distributions for the inherited account. Assuming you were 55 at the time of your mother's death, your life expectancy according to the IRS is 29.6 years. Your required yearly distributions on $200,000 would be roughly $6800. For each year that you didn't withdraw that, you would owe a 50% penalty of the distribution amount (~$3400). That's probably better than the tax hit you would take if you pulled it all in as income in a 5 year window (ie. all right now since you're at the end of the window). |
New 1099 employee with Cobra insurance | While COBRA premiums are not eligible to be a "business" expense they can be a medical expense for personal deduction purposes. If you're itemizing your deductions you may be able to deduct that way. However, you will only be able to deduct the portion of the premium that exceeds 10% of your AGI. Are you a full time employee now or are you a 1099 contractor? Do you have access to your employers health plan? |
Loan to son - how to get it back | I think you've made a perfectly valid suggestion, and, if your son is struggling somewhat financially now, one that may be very welcome. If you agree to forgive the debt at this time in lieu of a similar amount forgone in future inheritance, it will eliminate the never ending interest-only payments, free up $200+ a month for you son on a tight budget, and improve your own credit score once you pay off the credit line. It's also, in my opinion, a good idea to be open about this in advance with your other children heirs so that everyone will understand what is expected during the eventual probate. My paternal grandfather was the recipient of a great deal of financial largess from his wealthy mother during her life, and it was fully understood by him, her, and his siblings, that in exchange he would not share in her estate when she passed. He didn't, there were no problems, and he and his siblings stayed close for the rest of their lives. |
How to record a written put option in double-entry accounting? | Because you've sold something you've received cash (or at least an entry on your brokerage statement to say you've got cash) so you should record that as a credit in your brokerage account in GnuCash. The other side of the entry should go into another account that you create called something like "Open Positions" and is usually marked as a Liability account type (if you need to mark it as such). If you want to keep an accurate daily tally of your net worth you can add a new entry to your Open Positions account and offset that against Income which will be either negative or positive depending on how the position has moved for/against you. You can also do this at a lower frequency or not at all and just put an entry in when your position closes out because you bought it back or it expired or it was exercised. My preferred method is to have a single entry in the Open Positions account with an arbitrary date near when I expect it to be closed and each time I edit that value (daily or weekly) so I only have the initial entry and the current adjust to look at which reduces the number of entries and confusion if there are too many. |
401k vs. real estate for someone who is great at saving? | Apples and oranges. The stock market requires a tiny bit of your time. Perhaps a lot if you are interested in individual stocks, and pouring through company annual reports, but close to none if you have a mix of super low cost ETFs or index fund. The real estate investing you propose is, at some point, a serious time commitment. Unless you use a management company to handle incoming calls and to dispatch repair people. But that's a cost that will eat into your potential profits. If you plan to do this 'for real,' I suggest using the 401(k), but then having the option to take loans from it. The ability to write a check for $50K is pretty valuable when buying real estate. When you run the numbers, this will benefit you long term. Edit - on re-reading your question Rental Property: What is considered decent cash flow? (with example), I withdraw my answer above. You overestimated the return you will get, the actual return will likely be negative. It doesn't take too many years of your one per year strategy to wipe you out. Per your comment below, if bought right, rentals can be a great long term investment. Glad you didn't buy the loser. |
What are the marks of poor investment advice? | Any investment advice that is not targeted to your situation should be avoided. |
What is title insurance, and should I get title insurance for my home? | Title insurance protects you from losing rights to your property in case of a court decision. Let's look at an example I recently found in local newspapers. One old woman sold her apartment to person A. The deed was attested by a notary public who verified that indeed in was that old woman putting her signature on the deed. Then person A sold the apartment to person B, etc, then after several deals some unfortunate Buyer bought that apartment. The deal looked allright, so he's got a mortgage to pay for the apartment. Later it turned out that the old lady died three months before she "sold" the apartment and the notary public was corrupt. Old lady's heirs filed a lawsuit and the deal was void. So the ultimate Buyer lost all rights to the apartment although he purchased it legally. This is the case when title insurance kicks in. You need one if there's a chance for a deal to be deemed void. |
Withdraw USD from PayPal without conversion to my home currency of EUR? | I just tried doing that on my PP which is in the Netherlands, I have added a USD bank account (from my dutch bank) and they sent the verification amount in Euros, I called the bank and wonder why they didn't let me choose account currency they said it's not possible and if I cashout Dollars that I have in my PP (cause we usually do international business so we set it to dollars) it will be changed to Euros, So we decided to keep the dollars in account to pay our bills instead of getting ripped off by PayPal in xchange rates. |
Advantage of credit union or local community bank over larger nationwide banks such as BOA, Chase, etc.? | Don't switch just because you hear people panicking on the talk shows. Banks are competitive business and won't start charging for using debit cards too fast. If and when they decide to do such a thing after all - then start shopping and see who doesn't catch up with the fees and still provides the services you want for the price you're willing to pay. |
Cheapest way to wire or withdraw money from US account while living in Europe | I prefer to use a Foreign Exchange transfer service. You will get a good exchange rate (better than from Paypal or from your bank) and it is possible to set it up with no transfer fees on both ends. You can use an ACH transfer from your US bank account to the FX's bank account and then a SEPA transfer in Europe to get the funds into your bank account. Transfers can also go in the opposite direction (Europe to USA). I've used XE's service (www.xe.com) and US Forex's service (www.usforex.com). Transferwise (www.transferwise.com) is another popular service. US Forex's service calls you to confirm each transfer. They also charge a $5 fee on transfers under $1000. XE's service is more convenient: they do not charge fees for small transfers and do not call you to confirm the tramsfer. However, they will not let you set up a free ACH transfer from US bank accounts if you set up your XE account outside the US. In both cases, the transfer takes a few business days to complete. EDIT: In my recent (Summer 2015) experience, US Forex has offered slightly better rates than XE. I've also checked out Transferwise, and for transfers from the US it seems to be a bit of a gimmick with a fee added late in the process. For reference, I just got quotes from the three sites for converting 5000 USD to EUR: |
What tax advantage should I keep an eye for if I am going to relocate? | Look for states that have no income tax. A lot of these states supplement their revenue with higher property taxes, but if you rent and do not own property in the state, then you will have no state tax liability. Similarly, many states treat capital gains no differently than income tax, so if you make your earnings due to a large nest egg, then way you will still incur no tax liability on the state level Look for "unincorporated" areas, as these are administrative divisions of states that do not have a municipal government, and as such do not collect local taxes. Look for economic development perks of the new jurisdiction. Many states have some kind of formal tax credit for people that start business or buy in certain areas, but MONEY TALKS and you can make an individual arrangement with any agency, municipality etc. If the secretary at city hall doesn't know about a prepackaged formal arrangement that is offered to citizens, then ask for the "expedited development package" which generally has a "processing fee" involved. This is something you make up ie. "What is the processing fee for the expedited development package, quote on quote" States like Maryland and Nevada have formalized this process, but you are generally paying off the Secretary of State for favorable treatment. You'll always be paying off someone. |
Are there any statistics that support the need for Title Insurance? | The point of title insurance is that when you buy a house, it is possible that you may eventually find out that the seller didn't actually own the property - either because they were trying to deceive you, or some transfer of ownership in the past wasn't carried out properly. If that happens you can find yourself with no house, and still owing the mortgager the purchase price. Hardly anybody can afford to take that kind of hit, which is why you need some form of protection against it. The traditional way of doing this was to get a lawyer to do a title search, in which they check that everything in order. However this costs tens of dollars at least to do the work for every sale, and hardly ever finds anything. Title Insurance is a company volunteering to take the hit for you if there turns out to be a problem, in return for a payment of less than the title search would cost. In essence they are saying that it's cheaper to take the risk than do the work. What are the statistics? This report seems to indicate that payout is around 5% of premium, but title insurance is a one-off premium and the payout can theoretically happen many years down the line. However it is almost certain that the insurance companies have done the math and believe that selling this insurance will be profitable for them, so they believe that payouts are going to be substantially less than 100%. Is title insurance worth it for you? If the payout is 5% of premiums, the in a purely statistical sense it is not worth it. You would on average gain more by not taking it. However that is true of almost all insurance. The policy is there to protect you in the unlikely but not impossible event where you would otherwise lose a huge amount of money. Unless you can afford to lose the value of your house, you need some form of protection. We've already seen that the only other form of protection is a title search, and they cost more. The other issue is that if you are taking a mortgage, your mortgager will absolutely insist that you have either a title search or title insurance. There is no other way - and title insurance is the cheaper of the two. In this case it is best to look on the title insurance as simply a cost of doing business. It's irrelevant whether it's worth it or not - you can't do the transaction without it. |
How do I determine if sale proceeds from an asset are taxable? | Profit = Sale price - Basis Basis = Purchase price - any depreciation taken, including expensing it. |
Warren Buffett and Charles Munger advice for small investors? | Warren Buffett: 'Investing Advice For You--And My Wife' (And Other Quotes Of The Week): What I advise here is essentially identical to certain instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s benefit…My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors… Similarly from Will Warren Buffett's investment advice work for you?: Specifically, Buffett wants the trustee of his estate to put 10 percent of his wife's cash inheritance in short-term government bonds and 90 percent in a low-cost S&P index fund - and he tips his hat specifically to Bogle's Vanguard in doing so. Says Buffett: "I believe the trust's long-term results from this policy will be superior to those attained by most investors - whether pension funds, institutions or individuals." |
Does an option trading below parity always indicate an arbitrage opportunity? | 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. |
person on loan with cosigner | This will probably require asking the SO to sign a quitclaim and/or to "sell" him her share of the vehicle's ownership and getting it re-titled in his own name alone, which is the question you actually asked. To cancel the cosigner arrangement, he has to pay off the loan. If he can't or doesn't want to do that in cash, he'd have to qualify for a new loan to refinasnce in his name only, or get someone else (such as yourself) to co-sign. Alternatively, he might sell the car (or something else) to pay what he still owes on it. As noted in other answers, this kind of mess is why you shouldn't get into either cosigning or joint ownership without a written agreement spelling out exactly what happens should one of the parties wish to end this arrangement. Doing business with friends is still doing business. |
Is it safer to send credit card number via unsecured website form or by e-mail? What safer options are there? | Your biggest risk with a vendor like this is not that your Credit Card Number will be stolen in transit, it is that it will be stolen from the vendor. I agree with @mhoran that using a one-time number is the best plan, provided you have a bank that offers such numbers. Bank of America calls it "Shop Safe" while Citibank calls it "Virtual Account Numbers". I think Discover card has something similar, but less useful, in that they aren't really one-time use, and I think American Express discontinued their service. AFAIK no one else offers anything like it. If you can't get a one-time number, then I was going to suggest buying a Visa gift card, until I put together the fact that you are making a purchase in Asia and the gift cards are not authorized for international payments (due to PATRIOT act restrictions). Visa does offer the V.me service which might help, but I doubt your vendor participates (or would even be allowed to participate) if they don't offer a secure order form. You can open a pre-paid Visa card account, which is probably what I'd do. You can buy pre-paid Visa cards the same way you buy Visa gift cards, the difference being you have to register the pre-paid cards (thanks, PATRIOT act) before you can use them. But it's not that big a deal to register one, you just fill out the online form your your SSN etc and you're good to go. Load it up with enough money to cover your purchase and the FX fees and then cut it up. |
What benefits are there to having a Pension (Retirement Account) In Ireland? | Here's an Irish government publication that should give you some background information to get you started. In a nutshell, you get tax benefits, but cannot withdraw money without penalty until you reach retirement age. |
Can I cash a cashier's check at any bank? | Normally if the amount of a cashiers check is over $5,000, a bank (like Wells Fargo) may put a 10 business day hold on it to make sure the transaction is sound. |
Is there any reason not to put a 35% down payment on a car? | Makes sense so long as you can afford it while still maintaining at least six months living reserves. The sooner you own outright a decreasing asset the better which should be considered when selecting your loan term. However, with today's low rates and high performing stock market you may want to consider allowing that money to be put to better use. It all depends how risk adverse you are. That emotional aide of this decision and emotions have value, but only you can determine what that value is. So - generally speaking, the sooner you own an asset of decreasing value the better off you are, but in exceptionally low interest rate environments such as today there are, as mentioned, other things you may want to consider. Good luck and enjoy your new ride. Nothing better then some brand new wheels aye. |
I'm in the U.S. What are vehicles to invest in international stocks? | You can look into specific market targeted mutual funds or ETF's. For Norway, for example, look at NORW. If you want to purchase specific stocks, then you'd better be ready to trade on local stock exchanges in local currency. ETrade allows trading on some of the international stock exchanges (in Asia they have Hong Kong and Japan, in Europe they have the UK, Germany and France, and in the Americas they have the US and Canada). Some of the companies you're interested in might be trading there. |
Standard Deviation with Asset Prices? | Almost every online datasources provide historical prices on given company / index's performance; from this, you can easily calculate "standard deviation" by yourself. With that said, standard deviation presumes a fixed set of data. Most public corporations have data spanning multiple decades, during which a number of things have changed: For these reasons, I have doubts on simplistic measures, such as "standard deviation" measuring any reality on the underlying vehicle. Professional investors usually tend to more time-point data, such as P/E ratio. |
US tax - effectively connected income | ECI is relevant to non-resident aliens who are engaged in trade or business in the US. For that, you have to be present in the US, to begin with, or to own a business or property in the US. So the people to whom it is relevant are non-resident aliens in the US or business/property owners, not foreign contractors. From the IRS: The following categories of income are usually considered to be connected with a trade or business in the United States. You are considered to be engaged in a trade or business in the United States if you are temporarily present in the United States as a nonimmigrant on an "F," "J," "M," or "Q" visa. The taxable part of any U.S. source scholarship or fellowship grant received by a nonimmigrant in "F," "J," "M," or "Q" status is treated as effectively connected with a trade or business in the United States. If you are a member of a partnership that at any time during the tax year is engaged in a trade or business in the United States, you are considered to be engaged in a trade or business in the United States. You usually are engaged in a U.S. trade or business when you perform personal services in the United States. If you own and operate a business in the United States selling services, products, or merchandise, you are, with certain exceptions, engaged in a trade or business in the United States. For example, profit from the sale in the United States of inventory property purchased either in this country or in a foreign country is effectively connected trade or business income. Gains and losses from the sale or exchange of U.S. real property interests (whether or not they are capital assets) are taxed as if you are engaged in a trade or business in the United States. You must treat the gain or loss as effectively connected with that trade or business. Income from the rental of real property may be treated as ECI if the taxpayer elects to do so. |
Stocks and bonds have yields, but what is a yield? | For bonds bought at par (the face value of the bond, like buying a CD for $1000) the payment it makes is the same as yield. You pay $1000 and get say, $40 per year or 4%. If you buy it for more or less than that $1000, say $900, there's some math (not for me, I use a finance calculator) to tell you your return taking the growth to maturity into account, i.e. the extra $100 you get when you get the full $1000 back. Obviously, for bonds, you care about whether the comp[any or municipality will pay you back at all, and then you care about how much you'll make when then do. In that order. For stocks, the picture is abit different as some companies give no dividend but reinvest all profits, think Berkshire Hathaway. On the other hand, many people believe that the dividend is important, and choose to buy stocks that start with a nice yield, a $30 stock with a $1/yr dividend is 3.3% yield. Sounds like not much, but over time you expect the company to grow, increase in value and increase its dividend. 10 years hence you may have a $40 stock and the dividend has risen to $1.33. Now it's 4.4% of the original investment, and you sit on that gain as well. |
Is debt almost always the cause of crashes and recessions? | A lack of trust in the regulator can also stop everyone trading. If you don’t believe the bank notes you are getting paid with are real, why do any work? |
What's the most correct way to calculate market cap for multi-class companies? | Some companies issue multiple classes of shares. Each share may have different ratios applied to ownership rights and voting rights. Some shares classes are not traded on any exchange at all. Some share classes have limited or no voting rights. Voting rights ratios are not used when calculating market cap but the market typically puts a premium on shares with voting rights. Total market cap must include ALL classes of shares, listed or not, weighted according to thee ratios involved in the company's ownership structure. Some are 1:1, but in the case of Berkshire Hathaway, Class B shares are set at an ownership level of 1/1500 of the Class A shares. In terms of Alphabet Inc, the following classes of shares exist as at 4 Dec 2015: When determining market cap, you should also be mindful of other classes of securities issued by the company, such as convertible debt instruments and stock options. This is usually referred to as "Fully Diluted" assuming all such instruments are converted. |
Why is Net Asset Value (NAV) only reported by funds, but not stocks? | The (assets - liabilities)/#shares of a company is its book value, and that number is included in their reports. It's easy for a fund to release the net asset value on a daily basis because all of its assets (stocks, bonds, and cash) are given values every day by the market. It's also necessary to have a real time value for a fund as it will be bought and sold every day. A company can't really do the same thing as it will have much more diverse assets - real estate, cars, inventory, goodwill, etc. The real time value of those assets doesn't have the same meaning as a fund; those assets are used to earn cash, while a fund's business is only to maximize its net asset value. |
How can I get the most value from my employer's ESPP? | A 15% discount is a 17.6% return. (100/85 = 1.176). For a holding period that's an average 15.5 days, a half month. It would be silly to compound this over a year as the numbers are limited. The safest way to do this is to sell the day you are permitted. In effect, you are betting, 12 times a year, that the stock won't drop 15% in 3 days. You can pull data going back decades, or as long as your company has been public, and run a spreadsheet to see how many times, if at all, the stock has seen this kind of volatility over 3 day periods. Even for volatile stocks, a 15% move is pretty large, you're likely to find your stock doing this less than once per year. It's also safest to not accumulate too many shares of your company for multiple reasons, having to do with risk spreading, diversification, etc. 2 additional points - the Brexit just caused the S&P to drop 4% over the last 3 days trading. This was a major world event, but, on average we are down 4%. One would have to be very unlucky to have their stock drop 15% over the specific 3 days we are discussing. The dollars at risk are minimal. Say you make $120K/yr. $10K/month. 15% of this is $1500 and you are buying $1765 worth of stock. The gains, on average are expected to be $265/mo. Doesn't seem like too much, but it's $3180 over a years' time. $3180 in profit for a maximum $1500 at risk at any month's cycle. |
Is keeping track of your money and having a budget the same thing? | The two are closely related. A budget is a detailed plan for how to spend. Expense tracking is a tool to analyze your previous spending performance. Creating a plan for how to spend your money without any record of your previous spending--is an empty promise to yourself that you will never follow up on. Did I stay within my budget? Doesn't matter, I didn't track the spending anyway. Even if you do plan to track your performance, if you have not previously done so, you won't have a good basis for how much to expect in each category. Most people have a general idea of how much they have spent and many budgets are formed based on that general intuition, but they are often surprised when they track how every penny is spent and look at the totals from month to month and over years. By actually seeing how much has been spent it's easier to pick the big financial drains and target them for reduction, if your desire is more savings, for example. I know people who keep a close eye on what they spend each month, but they don't allocate money in categories for the next month. They don't perform as well on reducing spending, but they often don't care. They feel like they make enough and they save enough, so why worry? I also know people who create an unrealistic budget each month because they haven't done a good job tracking their previous spending. They know what the monthly bills are, but they don't account well for variable or cyclical expenses like repairs, Christmas, etc. Both tools are essential for maximizing your own personal finance. |
Is it smart to only invest in mid- and small-cap stock equity funds in my 401(k)? | The benefit of the 401K and IRAs are that reallocating and re balancing are easy. They don't want you to move the funds every day, but you are not locked in to your current allocations. The fact that you mentioned in a comment that you also have a Roth IRA means that you should look at all retirements as a whole. Look at what options you have in the 401K and also what options you have with the IRA. Then determine the overall allocation between bonds, stocks, international, REIT, etc. Then use the mix of funds in the IRA and 401K to meet that goal. Asking if the 401K should be small and mid cap only can't be answered without knowing not just your risk tolerances but the total money in the 401K and IRA. Pick an allocation, map the available funds to that allocation. Rebalance every year. But review the allocation in a few years or after a life event such as: change of job, getting married, having kids, or buying a house. |
Investments beyond RRSP and TFSA, in non-registered accounts? | You haven't looked very far if you didn't find index tracking exchange-traded funds (ETFs) on the Toronto Stock Exchange. There are at least a half dozen major exchange-traded fund families that I'm aware of, including Canadian-listed offerings from some of the larger ETF providers from the U.S. The Toronto Stock Exchange (TSX) maintains a list of ETF providers that have products listed on the TSX. |
Are stock index fund likely to keep being a reliable long-term investment option? | The idea behind investing in index funds is that you will not under perform the market but also at the same time not over perform against the market either. It is meant for those (majority of the investing population) who do not or cannot invest more time in actively researching different investment options. So even considering for a moment that the yields on the index funds will drop significantly in the future, since the fund is supposed to be replication of the whole market itself, the market too can be assumed to be giving significantly lower future yields. In my opinion the question that you ask is confusing/contradictory because, its like pegging the fund performance to an avg and then asking if it will be higher or lower in the future. But rather its always going to be exactly the average, even if the absolute yields turn higher or lower |
Help required on estimating SSA benefit amounts | Some details in case you are interested: Being a defined benefit kind of pension plan, the formula for your Social Security benefits isn't tied directly to FICA contributions, and I'm not aware of any calculator that performs an ROI based on FICA contributions. Rather, how much you'll get in retirement is based on your average indexed monthly earnings. Here's some information on the Social Security calculation from the Social Security Administration - Primary Insurance Amount (PIA): For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2013, or who dies in 2013 before becoming eligible for benefits, his/her PIA will be the sum of: (a) 90 percent of the first $791 of his/her average indexed monthly earnings, plus (b) 32 percent of his/her average indexed monthly earnings over $791 and through $4,768, plus (c) 15 percent of his/her average indexed monthly earnings over $4,768. Here's an example. Of course, to calculate a benefit in the future, you'll need to calculate projected average indexed monthly earnings; more details here. You'll also need to make assumptions about what those bend points might be in the future. The average wage indexing values for calculating the AIME are available from the Social Security Administration's site, but future indexing values will also need to be projected based on an assumption about their inflation. You'll also need to project the Contribution and Benefit Base which limits the earnings used to calculate contributions and benefits. Also, the PIA calculation assumes benefits are taken at the normal retirement age. Calculating an early or late retirement factor is required to adjust benefits for another age. Then, whatever benefits you get will increase each year, because the benefit is increased based on annual changes in the cost of living. Performing the series of calculations by hand isn't my idea of fun, but implementing it as a spreadsheet (or a web page) and adding in some "ROI based on FICA contributions" calculations might be an interesting exercise if you are so inclined? For completeness sake, I'll mention that the SSA also provides source code for a Social Security Benefit Calculator. |
Definition of gross income (Arizona state tax filing requirements) | I would suggest reading through page 1 of the Arizona Nonresident form instructions at the web address below: https://www.azdor.gov/Portals/0/ADOR-forms/TY2015/10100/10177_inst.pdf To quote: "You are subject to Arizona income tax on all income derived from Arizona sources. If you are in this state for a temporary or transitory purpose or did not live in Arizona but received income from sources within Arizona during 2015, you are subject to Arizona tax. Income from Arizona sources includes the following: ...the sale of Arizona real estate..." |
Auto loan and student loan balance | So, in general, pay to the higher interest rate. Some contrived reasons you would want to pay your auto loan more could be: |
Put-Call parity - what is the difference between the two representations? | Well, the first one is based on the "Pert" formula for continuously-compounded present value, while the second one is the periodically-compounded variant. Typically, the continuously-compounded models represent the ideal; as the compounding period of time-valued money shrinks towards zero, and the discount rate (or interest rate if positive) stays constant over the time period examined, the periodic equation's results approach that of the continuously-compounded equation. Those two assumptions (a constant rate and continuous balance adjustment from interest) that allow simplification to the continuous form are usually incorrect in real-world finance; virtually all financial institutions accrue interest monthly, for a variety of reasons including simpler bookkeeping and less money paid or owed in interest. They also, unless prohibited by contract, accrue this interest based on a rate that can change daily or even more granularly based on what financial markets are doing. Most often, the calculation is periodic based on the "average daily balance" and an agreed rate that, if variable, is based on the "average daily rate" over the previous observed period. So, you should use the first form for fast calculation of a rough value based on estimated variables. You should use the second form when you have accurate periodic information on the variables involved. Stated alternately, use the first form to predict the future, use the second form in retrospect to the past. |
I've tracked my spending and have created a budget, now what do I do with it? | I think the answers you're going to receive are all going to be a bit subjective. Looking at it from a high-level point of view, having this budget nailed down lets you analyze: Now you've got your budget, stick to it! This is really the most important part. You've done your homework, now make sure you don't exceed it without a good reason. If you're under budget in any given month, have a plan on what to do with the excess funds. If you go over budget on a certain area, you can react accordingly. I, personally, recommend hiring a financial planner. Ours has been a huge help with looking further down the line than we had been originally. If you show up to your first meeting with an FP and have this budgetary breakdown ready to go, you'll probably get a high-five. Well done, you! |
Ghana scam and direct deposit scam? | It used to be Nigerian royalty, now it's Ghanaian porn stars. Great. This is a bog-standard 419 scam. It's probably the most lucrative single swindle in the world. It's always hard to get people to believe they have been tricked, but don't let your dad participate. |
Why do people buy US dollars on the black market? | The main reason people buy dollars (or other currency) on the black market is because they are prevented from exchanging currency on the official government market. Venezuela for example restricts citizens to a maximum number of dollars the citizen can buy or sell per year, depending on various factors such as whether or not the person is studying at a foreign university. If the citizen wants to exchange more dollars than legally allowed, that person must buy or sell at the "black" market rate, rather than through the official/government market. |
What to do with an expensive, upside-down car loan? | If you can't sell it, refinance the bugger. Even if you can knock the interest rate down to 8% and take out a 3-year loan, you'll save about $100 per month. Or really kill the payment (but pay more interest) by taking out another 6-year. A 6-year at 9% on $12k is only $215/month. My credit union routinely advertises specials on car loans. It shouldn't be difficult to get out of the usurious loan you have now. As for others' advice about getting another job, having been a PhD student I hesiate to suggest that you get another one, because your job is probably your life right now. But can your wife (or even you) start a blog on a subject that interests you? A few posts a week add up over time, and pretty soon you have a real asset that can be another basket to put your eggs in. |
Ballpark salary equivalent today of “healthcare benefits” in the US? | Healthcare for the employee is more valuable to the employer than is providing healthcare for the rest of the family members. Depending on the family situation, you're going to see significant differences in price between out of pocket costs for insurance of just the employee, vs cost for insuring the entire family. This is because in the first instance the insurance is more subsidized by the company (as a percentage of the total cost). The costs to the company for insuring just the individual (mid-career) are in the neighborhood of $5000 per year. If this is all that's being negotiated (single person coverage) then I would use that amount as a baseline. |
What's the best application, software or tool that can be used to track time? | Time Tracker I'm a software engineer and have been using this tool. It is free and has a good user interface. I believe it can very well be used by professional of other areas too. It does support the features that you're looking for regarding project and task tracking. |
Currency exchange problem | For the purposes of report generation, I would recommend that you present the data in the currency of the user's home country. You could present another indicator, if needed, to indicate that a specific transaction was denominated in a foreign currency, where the amount represents the value of the foreign-denominated transaction in the user's home country Currency. For example: Airfare from USA to London: $1,000.00 Taxi from airport to hotel: $100.00 (in £) In terms of your database design, I would recommend not storing the data in any one denomination or reference currency. This would require you to do many more conversions between currencies that is likely to be necessary, and will create additional complexity where in some cases, you will need to do multiple conversions per transaction in and out of your reference currency. I think it will be easier for you to store multiple currencies as themselves, and not in a separate reference currency. I would recommend storing several pieces of information separately for each transaction: This way, you can create a calculated Amount for each transaction that is not in the user's "home" currency, whereas you would need to calculate this for all transactions if you used a universal reference currency. You could also get data from an external source if the user has forgotten the conversion rate. Remember that there are always fees and variations in the exchange rate that a user will get for their home country's currency, even if they change money at the same place at two different times on the same day. As a result, I would recommend building in a simple form that allows a user to enter how much they exchanged and how much they got back to calculate the exchange rate. So for example, let's say I have $ 200.00 USD and I exchanged $ 100.00 USD for £ 60.00, and there was a £ 3.00 fee for the exchange. The exchange rate would be 0.6, and when the user enters a currency conversion, your site could create three separate transactions such as: USD Converted to £: $100.00 £ Received from Exchange: £ 60.00 Exchange Fee: £ 3.00 So if the user exchanged currency and then ran a balance report by Currency, you could either show them that they now have $ 100.00 USD and £ 57.00, or you could alternatively choose to show the £ 57.00 that they have as $95.00 USD instead. If you were showing them a transaction report, you could also show the fee denominated in dollars as well. I would recommend storing your balances and transactions in their own currencies, as you will run into some very interesting problems otherwise. For example, let's say you used a reference currency tied to the dollar. So one day I exchange $ 100.00 USD for £ 60.00. In this system I would still have 100 of my reference currency. However, if the next day, the exchange rate falls and $ 1.00 USD is only worth £ 0.55, and I change my £ 60.00 back into USD, I will get approxiamately $ 109.09 USD back for my £ 60.00. If I then go and buy something for $ 100.00 USD, the balance of the reference currency would be at 0, but I will still have $ 9.09 USD in my pocket as a result of the fluctuating currency values! That is why I'd recommend storing currencies as themselves, and only showing them in another currency for convenience using calculations done "on the fly" at report runtime. Best of luck with your site! |
Where can I buy stocks if I only want to invest a little bit at a time, and not really be involved in trading? | I don't want to get involved in trading chasing immediate profit That is the best part. There is an answer in the other question, where a guy only invested in small amounts and had a big sum by the time he retired. There is good logic in the answer. If you put in lump sum in a single stroke you will get at a single price. But if you distribute it over a time, you will get opportunities to buy at favorable prices, because that is an inherent behavior of stocks. They inherently go up and down, don't remain stable. Stock markets are for everybody rich or poor as long as you have money, doesn't matter in millions or hundreds, to invest and you select stocks with proper research and with a long term view. Investment should always start in small amounts before you graduate to investing in bigger amounts. Gives you ample time to learn. Where do I go to do this ? To a bank ? To the company, most probably a brokerage firm. Any place to your liking. Check how much they charge for brokerage, annual charges and what all services they provide. Compare them online on what services you require, not what they provide ? Ask friends and colleagues and get their opinions. It is better to get firsthand knowledge about the products. Can the company I'm investing to be abroad? At the moment stay away from it, unless you are sure about it because you are starting. Can try buying ADRs, like in US. This is an option in UK. But they come with inherent risk. How much do you know about the country where the company does its business ? Will I be subject to some fees I must care about after I buy a stock? Yes, capital gains tax will be levied and stamp duties and all. |
Merchant dispute with airline over missed flight, and which credit cards offer protection? | What you are looking for is travel insurance. I have never heard of this being offered as a credit card perk, but there might be something out there. You can buy this separately, but only you can decide if it is worth the costs. To me, it would seem to only be worth it for something quite expensive, like a cruise that costs thousands of dollars. The more you travel, the less likely it is to be worth it, since at some point the cost of one canceled trip is less than the insurance paid on the rest of the trips that went through fine. As a frequent traveller, I recommend that you build some flexibility into your plans, especially during the winter. It is not always possible, but try not to need to be somewhere the day of or the day after your flight. Try to book flights early in the day, as they are less likely to be delayed by problems in flights before them, and you have more options for rebooking. Flight delays due to weather and mechanical problems are not uncommon, and with generally full flights it is sometimes hard to be rebooked in a reasonable amount of time. Finally, be nice to the gate agents and other airline personel. In general, they aren't any happier about delays than you are (flight crews want to get home too) and don't have any power over weather or mechanical delays. Being rude to them will not help, and will make them less likely to go out of their way to find a solution. Be assertive in asking for what you want, but a smile and a kind word goes a long way. |
How is a relocation fee of more than 40k taxed? | It is ordinary income to you. You should probably talk to a California licensed CRTP/EA/CPA, but I doubt they'll say anything different. You would probably ask them whether you can treat some of it as a refund of rent paid, but I personally wouldn't feel comfortable with that. |
Are the AARP benefits and discounts worth the yearly membership cost? | It depends on you. If you're not an aggressive shopper and travel , you'll recoup your membership fee in hotel savings with one or two stays. Hilton brands, for example, give you a 10% discount. AARP discounts can sometimes be combined with other offers as well. From an insurance point of view, you should always shop around, but sometimes group plans like AARP's have underwriting standards that work to your advantage. |
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