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Optimize return of dividends based on payout per share
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What you're referring to is the yield. The issue with these sorts of calculations is that the dividend isn't guaranteed until it's declared. It may have paid the quarterly dividend like clockwork for the last decade, that does not guarantee it will pay this quarter. Regarding question number 2. Yield is generally an after the fact calculation. Dividends are paid out of current or retained earnings. If the company becomes hot and the stock price doubles, but earnings are relatively similar, the dividend will not be doubled to maintain the prior yield; the yield will instead be halved because the dividend per share was made more expensive to attain due to the increased share price. As for the calculation, obviously your yield will likely vary from the yield published on services like Google and Yahoo finance. The variation is strictly based on the price you paid for the share. Dividend per share is a declared amount. Assuming a $10 share paying a quarterly dividend of $0.25 your yield is: Now figure that you paid $8.75 for the share. Now the way dividends are allocated to shareholders depends on dates published when the dividend is declared. The day you purchase the share, the day your transaction clears etc are all vital to being paid a particular dividend. Here's a link to the SEC with related information: https://www.sec.gov/answers/dividen.htm I suppose it goes without saying but, historical dividend payments should not be your sole evaluation criteria. Personally, I would be extremely wary of a company paying a 40% dividend ($1 quarterly dividend on a $10 stock), it's very possible that in your example bar corp is a more sound investment. Additionally, this has really nothing to do with P/E (price/earnings) ratios.
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How to report house used for 100% business?
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As DJClayworth said, be very careful with this one! The property is a residence, not a business location. Given that, it is almost a certainty that the IRS is not going to let you claim 100% of the expenses for the home as a business expense, even if nobody's actually living there. You may get away with doing this for a period of time and not run into zoning or other issues such as those DJ mentioned, but it's like begging for trouble. You run the very real risk of being audited if you try to do what you're proposing, and rest assured, whatever you saved in taxes will disappear like smoke in the wind under an audit. That being said, there's no reason you can't call a tax service and ask a simple question, because in answering it they're going to hope to gain your business. It'd be well worth the phone call before you land yourself in any hot water with the IRS. I can tell you that I'd rather have a double root canal with no anesthetic than go through an audit, even when I didn't do anything wrong! (grin) Good luck!
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What does it mean for a normal citizen like me when my country's dollar value goes down?
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This may make Australian exports cheaper, which can be a good thing. However it is at the expense of making imports more expensive. Look to Japan, which is devaluing their currency, and is a large importer of energy: I wont say its bad or unnecessary to hold money in other currencies. However, keep in mind that all AUD-denominated assets will, or at least should, rise as the currency falls. If just AUD/USD falls this may not apply, but if AUD is weakened all around it should hold true. Again, look to Japan, where the Nikkei is closely correlated with the strength of the yen: Another possibility is to buy gold which should rise in AUD terms but other forces are at work with gold price so some would not agree with this.
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How can I cash out a check internationally?
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I've been a landlord and also a tenant. I have been able to deposit money in an account, where I have the account number, and/or a deposit slip. In a foreign bank you can deposit by a machine if in the bank or someone is there for you and knows the account number. With regards to cashing a check in another country, it is up to the bank and the time is at least 14 to 21 business days, with a fee is added. As of a winning check, since its in your name, if you are in another country sign the check, for deposit only with a deposit slip and send it to your out of country bank by FedEx - you will have a tracking number, where as regular mail it might get there in 3 months. I hope by now you came to your solution.
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Are leverage/ko products the only reasonable way to trade stocks?
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I am assuming you mean derivatives such as speeders, sprinters, turbo's or factors when you say "derivatives". These derivatives are rather popular in European markets. In such derivatives, a bank borrows the leverage to you, and depending on the leverage factor you may own between 50% to +-3% of the underlying value. The main catch with such derivatives from stocks as opposed to owning the stock itself are: Counterpart risk: The bank could go bankrupt in which case the derivatives will lose all their value even if the underlying stock is sound. Or the bank could decide to phase out the certificate forcing you to sell in an undesirable situation. Spread costs: The bank will sell and buy the certificate at a spread price to ensure it always makes a profit. The spread can be 1, 5, or even 10 pips, which can translate to a the bank taking up to 10% of your profits on the spread. Price complexity: The bank buys and sells the (long) certificate at a price that is proportional to the price of the underlying value, but it usually does so in a rather complex way. If the share rises by €1, the (long) certificate will also rise, but not by €1, often not even by leverage * €1. The factors that go into determining the price are are normally documented in the prospectus of the certificate but that may be hard to find on the internet. Furthermore the bank often makes the calculation complex on purpose to dissimulate commissions or other kickbacks to itself in it's certificate prices. Double Commissions: You will have to pay your broker the commission costs for buying the certificate. However, the bank that issues the derivative certificate normally makes you pay the commission costs they incur by hiding them in the price of the certificate by reducing your effective leverage. In effect you pay commissions twice, once directly for buying the derivative, and once to the bank to allow it to buy the stock. So as Havoc P says, there is no free lunch. The bank makes you pay for the convenience of providing you the leverage in several ways. As an alternative, futures can also give you leverage, but they have different downsides such as margin requirements. However, even with all the all the drawbacks of such derivative certificates, I think that they have enough benefits to be useful for short term investments or speculation.
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Pay online: credit card or debit card?
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I completely agree with @littleadv in favor of using the credit card and dispute resolution process, but I believe there are more important details here related to consumer protection. Since 1968, US citizens are protected from credit card fraud, limiting the out-of-pocket loss to $50 if your card is lost, stolen, or otherwise used without your permission. That means the bank can't make you pay more than $50 if you report unauthorized activity--and, nicely, many credit cards these days go ahead and waive the $50 too, so you might not have to pay anything (other than the necessary time and phone calls). Of course, many banks offer a $50 cap or no fees at all for fraudulent charges--my bank once happily resolved some bad charges for me at no loss to me--but banks are under no obligation to shield debit card customers from fraud. If you read the fine print on your debit card account agreement you may find some vague promises to resolve your dispute, but probably nothing saying you cannot be held liable (the bank is not going to lose money on you if they are unable to reverse the charges!). Now a personal story: I once had my credit card used to buy $3,000 in stereo equipment, at a store I had never heard of in a state I have never visited. The bank notified me of the surprising charges, and I was immediately able to begin the fraud report--but it took months of calls before the case was accepted and the charges reversed. So, yes, there was no money out of my pocket, but I was completely unable to use the credit card, and every month they kept on piling on more finance fees and late-payment charges and such, and I would have to call them again and explain again that the charges were disputed... Finally, after about 8 months in total, they accepted the fraud report and reversed all the charges. Lastly, I want to mention one more important tool for preventing or limiting loss from online purchases: "disposable", one-time-use credit card numbers. At least a few credit card providers (Citibank, Bank of America, Discover) offer you the option, on their websites, to generate a credit card number that charges your account, but under the limits you specify, including a maximum amount and expiration date. With one of these disposable numbers, you can pay for a single purchase and be confident that, even if the number were stolen in-transit or the merchant a fraud, they don't have your actual credit card number, and they can never charge you again. I have not yet seen this option for debit card customers, but there must be some banks that offer it, since it saves them a lot of time and trouble in pursuing defrauders. So, in short: If you pay with a credit card number you will not ever have to pay more than $50 for fraudulent charges. Even better, you may be able to use a disposable/one-time-use credit card number to further limit the chances that your credit is misused. Here's to happy--and safe--consumering!
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Why do passive ETFs require so much trading (and incur costs)?
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Now, if I'm not mistaken, tracking a value-weighted index is extremely easy - just buy the shares in the exact amount they are in the index and wait. Yes in theory. In practise this is difficult. Most funds that track S&P do it on sample basis. This is to maintain the fund size. Although I don't have / know the exact number ... if one wants to replicate the 500 stocks in the same %, one would need close to billion in fund size. As funds are not this large, there are various strategies adopted, including sampling of companies [i.e. don't buy all]; select a set of companies that mimic the S&P behaviour, etc. All these strategies result in tracking errors. There are algorithms to reduce this. The only time you would need to rebalance your holdings is when there is a change in the index, i.e. a company is dropped and a new one is added, right? So essentially rebalance is done to; If so, why do passive ETFs require frequent rebalancing and generally lose to their benchmark index? lets take an Index with just 3 companies, with below price. The total Market cap is 1000 The Minimum required to mimic this index is 200 or Multiples of 200. If so you are fine. More Often, funds can't be this large. For example approx 100 funds track the S&P Index. Together they hold around 8-10% of Market Cap. Few large funds like Vangaurd, etc may hold around 2%. But most of the 100+ S&P funds hold something in 0.1 to 0.5 range. So lets say a fund only has 100. To maintain same proportion it has to buy shares in fraction. But it can only buy shares in whole numbers. This would then force the fund manager to allocate out of proportion, some may remain cash, etc. As you can see below illustrative, there is a tracking error. The fund is not truly able to mimic the index. Now lets say after 1st April, the share price moved, now this would mean more tracking error if no action is taken [block 2] ... and less tracking error if one share of company B is sold and one share of company C is purchased. Again the above is a very simplified view. Tracking error computation is involved mathematics. Now that we have the basic concepts, more often funds tracking S&P; Thus they need to rebalance.
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The Asset Allocation Paradox
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Asset Allocation serves many purposes, not just mitigating risk via a diversification of asset classes, but also allowing you to take a level of risk that is appropriate for a given investor at a given time by how much is allocated to which asset classes. A younger investor with a longer timeframe, may wish to take a lot more risk, investing heavily in equities, and perhaps managed funds that are of the 'aggressive growth' variety, seeking better than market returns. Someone a little older may wish to pull back a bit, especially after a bull market has brought them substantial gains, and begin to 'take money off the table' perhaps by starting to establish some fixed income positions, or pulling back to slightly less risky index, 'value' or 'balanced' funds. An investor who is near or in retirement will generally want even less risk, going to a much more balanced approach with half or more of their investments in fixed income, and the remainder often in income producing 'blue chip' type stocks, or 'income funds'. This allows them to protect a good amount of their wealth from potential loss at a time when they have to be able to depend on it for a majority of their income. An institution such as Yale has very different concerns, and may always be in a more aggressive 'long term' mode since 'retirement' is not a factor for them. They are willing to invest mostly in very aggressive ways, using diversification to protect them from one of those choices 'tanking' but still overall taking a pretty high level of risk, much more so than might be appropriate for an individual who will generally need to seek safety and to preserve gains as they get older. For example look at the PDF that @JLDugger linked, and observe the overall risk level that Yale is taking, and in addition observe the large allocations they make to things like private equity with a 27%+ risk level compared to their very small amount of fixed income with a 10% risk level. Yale has a very long time horizon and invests in a way that is atypical of the needs and concerns of an individual investor. They also have as you pointed out, the economy of scale (with something like #17B in assets?) to afford to hire proven experts, and their own internal PHD level experts to watch over the whole thing, all of which very few individual investors have. For either class of investor, diversification, is a means to mitigate risk by not having all your eggs in one basket. Via having multiple different investments (such as picking multiple individual stocks, or aggressive funds with different approaches, or just an index fund to get multiple stocks) you are protected from being wiped out as might happen if a single choice might fail. For example imagine what would have happened if you had in 2005 put all your money into a single stock with a company that had been showing record profits such as Lehman Brothers, and left it there until 2008 when the stock tanked. or even faster collapses such as Enron, etc that all 'looked great' up until shortly after they failed utterly. Being allocated across multiple asset classes provides some diversification all on it's own, but you can also be diversified within a class. Yale uses the diversification across several asset classes to have lower risk than being invested in a single asset class such as private equity. But their allocation places much more of their funds in high risk classes and much less of their funds in the lowest risk classes such as fixed income.
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Is it possible for all the owners of a stock to gain or lose money at the same time?
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I'm not sure I understand your question. If the stock price is at an all-time high, everyone who owns the stock is 'in the money'. Of course, they won't actually realise a capital gain until they sell the stock. Similarly, if the stock becomes worthless (the company shuts down after declaring bankruptcy, etc.), everyone who owns the stock is out whatever they paid for the stock.
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Can capital loss in traditional IRA and Roth IRA be used to offset taxable income?
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No, you cannot. If you withdraw everything from all your Roth IRA's and end up with less than the total basis - you can deduct the difference on your schedule A (at the time of the last withdrawal) as an itemized deduction (as misc. deductions with 2% AGI cap). Regular IRA's are pre-tax, you cannot deduct anything from them.
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Do Americans really use checks that often?
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Sorry for this late reply. I currently live in Iceland (I am a United Statesian). People here told me they thought checks were just something that were in movies. I was amazed by this. So here are some reasons that I see to being why it works still in the usa. 1. Social Security system. Most Euro, Nordic countries have their lives, bank accounts, ect tied to their 'Social Security' number and that number is not top secret like it is in the USA. In fact here in Iceland you throw your number around to anyone who wants it because they cant do anything with it but pay you money really. 2. Banks. In the USA there are millions, MILLIONS of small town banks. That means that doing direct deposits or transfers is much much harder to achieve. Example: Iceland has two banks. The most common way of loaning a friend money or paying for that hotel room if you forgot to bring cash or your card is to say 'Give me your SSN and I will transfer to you'. It takes about 30 seconds to do a funds transfer. In the USA you can't do that. They would think you are lying or not want to give they bank info or because of the fees from small town banks it would be pointless. Also a lot of these small banks will not accept direct deposit (I had a bank growing up that still does not) These are some of the main reasons that I think cause the flow of checks in the usa.
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What is the median retirement savings in the United States today?
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Statistics are often tough to grasp. Specifically, we need to understand the exact context and implication of the data and how it's presented. An example - I look at real estate sales data for a given town, and find that for the last 10 years, the average sale price has dropped, 3%/yr, every year for these 10. What can I conclude? Now, to your data. You don't mention age. When we look at this chart, combined with the next - The picture, while still bleak, is at least more clear. Nearly half of pre-retirees have no "retirement" savings. If that lower half is running close to zero, the average for the upper half is nearly twice the reported $164K. Even now, there are important bits going unaddressed. People who have had no access to retirement accounts, either through lack of company availability, or self-employeds who just ignored them, may very well have saved outside of retirement-labled accounts. You can see these graphs are tracking only 401(k), IRA, and Keogh accounts. Last, social security for the $30K earner will replace nearly half their working income at retirement, almost 65% if they work till 70. I don't advocate counting on SS for the entirety of one's retirement income, but the way SS benefits are structured, replacement benefits are far higher (as a percent) for lower wage workers, as the system intended. To conclude, median alone is too small a data point to be useful, in my opinion. This kind of information presented in these charts is far more preferable to get a fuller picture.
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Is it possible to sell a stock at a higher value than the market price?
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Yes You could write a covered call and the stock gets called away at the price + premium. You could convince someone to buy it regardless of the market price.
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Filing 1040-NR when I have been outside the US the entire year?
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Yes, you can still file a 1040nr. You are a nonresident alien and were: engaged in a trade or business in the United States Normally, assuming your withholding was correct, you would get a minimal amount back. Income earned in the US is definitely Effectively Connected Income and is taxed at the graduated rates that apply to U.S. citizens and resident aliens. However, there is a tax treaty between US and India, and it suggests that you would be taxed on the entirety of the income by India. This suggests to me that you would get everything that was withheld back.
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Borrow from 401k for down payment on rental property?
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Two simple possibilities:
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Where should I invest my savings?
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Since you mention the religion restriction, you should probably look into the stock market or funds investing in it. Owning stock basically means you own a part of a company and benefit from any increase in value the company may have (and 'loose' on decreases, provided you sell your stock) and you also earn dividends over the company's profit. If you do your research properly and buy into stable companies you shouldn't need to bother about temporary market movements or crashes (do pay attention to deterioration on the businesses you own though). When buying stocks you should be aiming for the very long run. As mentioned by Victor, do your research, I recommend you start it by looking into 'value stocks' should you choose that path.
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Unemployment Insurance Through Options
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Options do act, somewhat, like insurance.... However.... An insurance policy will not have such short term expiration time frames. A 20 year term life insurance policy can be thought of as insurance with an expiration. But the expiration on options is in weeks, not decades. So (IMO) options make terrible insurance policies because of the very short term expirations they have.
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Why is Dell currently trading above the buyout price?
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Dividends would be a possible factor you are ignoring. If Dell has another quarter or two to pay out dividends that could account for some of the difference there. I don't think there is a confirmed date of when the deal is done yet other than around the end of Dell's second quarter which was in the LA Times link you cited. There is also the potential for the terms of the deal to be revised that is another possibility here. Have you examined other deals where a public company went private to see how the stock performed in the last few months before the deal closed?
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How to account for startup costs for an LLC from personal money?
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An LLC is a pass-through entity in the USA, so profits and losses flow through to the individual's taxes. Thus an LLC has a separate TIN but the pass-through property greatly simplifies tax filings, as compared to the complicated filings required by C-corps.
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How can I find a high-risk, high-reward investment that is not strongly correlated with the U.S. economy?
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It requires fairly large levels of capital, but what about seed funding/angel investments in startups? This would be before venture capital gets involved, so the amounts are relatively low (tens of thousands, vs. millions of USD), but as valuations this early in the game are also low, you can get a significant portion of equity in a startup that you feel is being run by good people and is in a promising market. Paul Graham of Y-Combinator has a number of articles about this from both sides of the table that you can take a look at and see if this is for you. It's definitely very high-risk, but if you can pick successful startups before their valuation shoots up, get some equity, help them succeed, and they eventually go public or get acquired, you can stand to bring in some big returns. Note that this isn't a hands-off investment. You'll need to build connections in the startup community, and it isn't uncommon for angel investors to become involved in the day-to-day operations of the businesses in which they invest.
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What is the purpose of property tax?
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Property taxes are levied by the local authorities to pay for their services. Since the services are continuous - so are the charges. You need someone to pave a road to your house, to build infrastructure, to maintain the police force, fire department, local schools etc. That's what your property taxes are going to. However, at times the property taxes become more than what the owners have actually paid for the house. Think of a house bought in the midst of a recession at a bargain price of $20K, but at the top of the market bubble costs $2M. The poor guy who bought it for $20K should pay as if he had ever had $2M? It can certainly be the case that the property taxes change drastically over the years and sometimes people have to give up their property because they cannot afford the taxes. That is exactly the thought that had led Californians to amend the Constitution in Prop 13.
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What does it mean for a company to have its market cap larger than the market size?
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It is ALWAYS possible for a company's valuation in the market to be larger than the market it serves, and in fact it is not uncommon. There's valid argument that Uber would be a good example of this, with a market cap of more than $60 billion. Market cap is the total value of all shares outstanding. Keep in mind that what a company's shares trade for is less a reflection of its past (or, to some degree, even present) revenue activity and more of a speculative bet on what the company will do in the future.
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Are stories of turning a few thousands into millions by trading stocks real?
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If they could really do this, do you really think they would be wasting their time offering this course? You are being lied to. (Or more accurately: It's certainly possible to gamble and get lucky, but those gambles are more likely to result in your rapidly losing your money than in your rapidly gaining value.) It is possible to make money in the market. But "market rate of return" has historically averaged around 8%. That won't make you rich by itself, but it's better return than you can get from banks... at higher risk, please note. There are places in the market where, by accepting more risk of losing your money, you can improve on that 8%. For me the risk and effort are too much for the potential additional gains, but de gustibus.
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What emergencies could justify a highly liquid emergency fund?
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Emergency funds are defined in terms of months of tightened-belt living -- that's according to the usual gurus such as Suze Orman, Dave Ramsey etc. They aren't for short-term emergencies like a blown transmission. Use other money for those. Why? People with bad financial habits have short-term emergencies all the time, and that emergency fund doesn't have a chance of lasting. This is just their financial habits manifesting. Here's what an emergency fund is for. Scenario: big economic bubble bursts. Stock market drops 50%. Credit dries up. This happened in 2007 by the way. The dominoes start falling boom, boom, boom: I'm exaggerating a bit here, but a lot of people lived at least half this stuff in 2007-11. Nothing starts those dominoes falling like lack of cash at a key moment. That's what an emergency fund is all about - keeping things tight-normal for long enough to get back on your feet. If you want to keep your emergency fund in something risky -- keep a lot more of it!
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Purpose of having good credit when you are well-off?
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I have never had a credit card and have been able to function perfectly well without one for 30 years. I borrowed money twice, once for a school loan that was countersigned, and once for my mortgage. In both cases my application was accepted. You only need to have "good credit" if you want to borrow money. Credit scores are usually only relevant for people with irregular income or a past history of delinquency. Assuming the debtor has no history of delinquency, the only thing the bank really cares about is the income level of the applicant. In the old days it could be difficult to rent a car without a credit car and this was the only major problem for me before about 2010. Usually I would have to make a cash deposit of $400 or something like that before a rental agency would rent me a car. This is no longer a problem and I never get asked for a deposit anymore to rent cars. Other than car rentals, I never had a problem not having a credit card.
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Loan to son - how to get it back
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I started a business a few years ago. At one point it wasn't going so well and my father "loaned" me an amount not too dissimilar to what you've done. From a personal perspective, the moment I took that loan there was a strain the relationship. Especially when I was sometimes late on the interest payments... Unfortunately thoughts like "he doesn't need this right now, but if I don't pay the car loan then that is taken away" came up a few times and paying the interest fell to the bottom of the monthly bill payment stack. At some point my wife and I finally took a hard look at my finances and goals. We got rid of things that simply weren't necessary (car payment, cable tv, etc) and focused on the things we needed to. Doing the same with the business helped out as well, as it helped focus me to to turn things around. Things are now going great. That said, two of my siblings ran into their own financial trouble that our parents helped them on. When this happened my father called us together and basically forgave everyone's debt by an equal amount which covered everything plus wrote a check to the one that was doing fine. This "cleared the air" with regards to future inheritance, questions about how much one sibling was being helped vs another, etc. Honestly, it made family gatherings more enjoyable as all that underlying tension was now gone. I've since helped one of my children. Although I went about it an entirely different way. Rather than loan them money, I gave it to them. We also had a few discussions on how I think they ought to manage their finances and a set of goals to work towards which we co-developed. Bearing in mind that they are an individual and sometimes you can lead a horse... Given the current state of things I consider it money well "spent".
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Difference between Hedge Fund and Private Equity?
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Private Equity is simply some type of an investment company, which is owned in a way not accessible to the public. ie: Warren Buffet runs Berkshire Hatheway, which is an investment company which itself is traded on the New York Stock Exchange. This means that anyone can buy shares in the company, and own a small fraction of it. If Warren Buffet owned all the shares of Berkshire Hatheway, it would be a Private Equity company. Note that 'Equity' refers to the ownership of the company itself; a private investment company may simply buy Bonds (which are a form of Debt), in which case, they would not be technically considered a 'Private Equity' company. A Hedge Fund is a very broad term which I don't believe has significant meaning. Technically, it means something along the lines of an investment fund (either public or private) which attempts to hedge the risks of its portfolio, by carefully considering what type of investments it purchased. This refers back to the meaning of 'hedge', ie: 'hedging your bets'. In my opinion, 'Hedge Fund' is not meaningfully different from 'investment fund' or other similar terms. It is just the most popular way to refer to this type of industry at the present time. You can see the trend of using the term 'investment fund' vs 'hedge fund' using this link: https://trends.google.com/trends/explore?date=all&q=hedge%20fund,investment%20fund Note that the high-point of the use of 'hedge fund' occurred on October 2008, right at the peak of the global financial crisis. The term evokes a certain image of 'high finance' / 'wall-street types' that may exploit various situations (such as tax legislation, or 'secret information') for their own gain. Without a clear definition, however, it is a term without much meaning. If you do a similar comparison between 'hedge fund' and 'private equity', you can see that the two correlate very closely; I believe the term 'private equity' is similarly misused to generally refer to 'investment bankers'. However in that case, 'private equity' has a more clear definition on its own merits.
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Why would anyone want to pay off their debts in a way other than “highest interest” first?
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One reason to not do that is if you consider that one of the loans is at risk of being called in early. e.g. You have a line of credit which is close to its limit, and the bank decides to reduce that limit, forcing you to quickly come up with the money to pay it down below the new limit, which can really throw a wrench into your plans.
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What is the best credit card for someone with no credit history
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Consider getting yourself a gas card. Use it for a year. Make your payments on time. Then reapply for a credit card.
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Why do credit cards have minimum limits?
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They have a minimum to discourage applications for that particular card. Every application costs them money because they have to pay the credit agencies to pull the applicant's credit history. So one way they save money and reduce their cost of business is to discourage people from applying if they're not creditworthy enough for that product. Credit card companies tailor their products into different income/credit brackets. Those who have less creditworthiness would be better suited for a different product than what you're referring, similar to those with greater creditworthiness.
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How does the bank/IRS know whether a bank transfer over $14k is a gift or loan repayment?
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You don't need to file or do anything. The bank will report all transfers over 10 000, but chances are slim that it will even be looked at, if you don't do this every week. Worst case, someone will ask you about the source, and you tell them exactly what you wrote above (I had multiple international transfers over 60k and nobody ever asked). You said you paid his tuition, and he is now paying you back, so in case someone asks, you should be able to produce the documentation on the tuition payment - a bill, or your bank statement showing you paid it; and the amount should be matching, so you have proof. Note that if he pays you interest, it is taxable income. You are obligated to list it on your next tax filing.
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How do I protect myself from a scam if I want to help a relative?
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What can I do to help him out, but at the same time protect myself from any potential scams? Find out why he can't do this himself. Whether your relative is being sincere or not, if he owns both accounts then he should be able to transfer money between them by himself. If you can find a way to solve that issue without involving your bank account, so much the better. Don't settle for "something about authorized payees and expired cards." Get details, write them down. If possible, get documents. Then go to a bank or financial adviser you can trust and run those details by them to see what they have to say. Even if there's no scam, if what he's trying to do is illegal (even if he doesn't realize it himself) then you want to know before you get involved. You say you're willing to deal with "other issues" separately, but keep in mind that, even if there's no external scam here, those "other issues" could include hefty fees, censures on your own account, or jail time. Ask yourself: Does it make sense that this relative has an account overseas? I don't have any overseas accounts, because I don't do business in other countries. Is your relative a dual-citizen? Does he travel a lot? What country is the overseas account in? How long has he had this account? What bank is it with? Where the money is going is just as important as how it gets there (ie: through your account.) Arguably more so. Keep in mind that many scammers tell their marks not to share what's going on with anyone else. (Because doing so increases the odds of someone telling them to snap out of it.) It's entirely possible he's being scammed himself and just not telling you the whole story because the 419er is telling him to keep it quiet. (Check out that link for more details on common scams that your relative may be unwittingly part of, btw.) Get as many details as possible about what he's doing and why. If he's communicating with anyone else regarding this transfer, find out who. If there are emails, ask his permission to read them and watch for anything suspicious (ie: people who can't spell their own name consistently, constant pressure to act quickly, etc.)
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I cosigned for a friend who is not paying the payment
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Another option, not yet discussed here, is to allow the loan to go into default and let the loaning agency repossess the property the loan was used for, after which they sell it and that sale should discharge some significant portion of the loan. Knowing where the friend and property is, you may be able to help them carry out the repossession by providing them information. Meanwhile, your credit will take a significant hit, but unless your name is on the deed/title of the property then you have little claim that the property is yours just because you're paying the loan. The contract you signed for the loan is not going to be easily bypassed with a lawsuit of any sort, so unless you can produce another contract between you and your friend it's unlikely that you can even sue them. In short, you have no claim to the property, but the loaning agency does - perhaps that's the only way to avoid paying most of the debt, but you do trade some of your credit for it. Hopefully you understand that what you loaned wasn't money, but your credit score and earning potential, and that you will be more careful who you choose to lend this to in the future.
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Why would you elect to apply a refund to next year's tax bill?
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If you expect your taxes to be higher next year, it saves you the trouble of sending estimates or changing the withholding levels. But yes, its basically a free loan you're giving to the government.
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How do you choose which mortgage structure is appropriate when buying a home?
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Down payment: Emphatically avoid PMI if at all possible; it's pouring money down the drain. Do 20% down if you can, or pay off enough to bring you above 20% and ask for PMI to be removed as soon as you can. Beyond that it's a matter of how much risk you want to accept and how long you'll own the place, and you'll have to run the numbers for the various alternatives -- allowing for uncertainty in your investments -- to guide your decision. Do not assume you will be able to make a profit when you sell the house; that's the mistake which left many people under water and/or foreclosed on. Do not assume that you will be able to sell it quickly; it can take a year of more. Do not assume immediate or 100% occupancy it you rent it out; see many other answers here for more realistic numbers.... and remember that running a rental is a business and has ongoing costs and hassles. (You can contract those out, but then you lose a good percentage of the rent income.) Double mortgage is another great way to dig yourself into a financial hole; it can be a bigger cost than the PMI it tries to dodge and is definitely a bigger risk. Don't.
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Could the loan officer deny me even if I have the money as a first time home buyer?
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A financial institution is not obligated to offer you a loan. They will only offer you a loan if they believe that they will make money off you. They use all the info available in order to determine if offering you a loan is profitable. In short, whether they offer you a loan, and the interest rate they charge for that loan, is based on a few things: How much does it cost the bank to borrow money? [aka: how much does the bank need to pay people who have savings accounts with them?]; How much does the bank need to spend in order to administer the loan? [ie: the loan officer's time, a little time for the IT guy who helps around the office, office space they are renting in order to allow the transaction to take place]; and How many people will 'default' and never be able to repay their loan? [ex: if 1 out of 100 people default on their loans, then every one of those 100 loans needs to be charged an extra 1% in order to recover the money the bank will lose on the person who defaults]. What we are mostly interested in here is #3: how likely are you to default? The bank determines that by determining your income, your assets, your current debts outstanding, your past history with payments (also called a credit score), and specifically to mortgages, how much the house is worth. If you don't have a long credit history, and because you don't have a long income history, and because you are putting <10% down on the condo [20% is often a good % to strive for, and paying less than that can often imply you will need mandatory mortgage insurance, depending on jurisdiction] the bank is a little more uncertain about your likelihood to pay. Banks don't like uncertainty, and they can deal with that uncertainty in two ways: (1) They can charge you a higher interest rate; OR (2) They can refuse you the loan. Now just because one bank refuses you a loan, doesn't mean all will - but being refused by one bank is probably a good indication that many / most institutions would refuse you, because they all use very similar analytical tools to determine your 'risk level'. If you are refused a loan, you can try again at another institution, or you can wait, save a larger down payment, and build your credit history by faithfully paying your credit card every month, paying your utilities, and making your car and rent payments on time. This will give the banks more comfort that you will have the ability to pay your mortgage every month, and a larger down payment will give them comfort that if the housing market dips, you won't owe more than the house is worth. My parting shot is this: If you are new in your career with no income history, be very careful about buying a property immediately, even if you get approved. A good rule of thumb is to only buy a property when you plan on living there for at least 5 years, or else you are likely to lose money overall, after factoring closing costs and maintenance fees. If you are refused a loan, that's probably a good sign that you aren't financially ready yet, but even if a bank approves you for a loan, you might not be ready yet either.
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Why is the bid-ask spread considered a cost?
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This is a misconception. One of the explanations is that if you buy at the ask price and want to sell it right away, you can only sell at the bid price. This is incorrect. There are no two separate bid and ask prices. The price you buy (your "bid") is the same price someone else sells (their "sell"). The same goes when you sell - the price you sell at is the price someone else buys. There's no spread with stocks. Emphasized it on purpose, because many people (especially those who gamble on stock exchange without knowing what they're doing) don't understand how the stock market works. On the stock exchange, the transaction price is the match between the bid price and the ask price. Thus, on any given transaction, bid always equals ask. There's no spread. There is spread with commodities (if you buy it directly, especially), contracts, mutual funds and other kinds of brokered transactions that go through a third party. The difference (spread) is that third party's fee for assuming part of the risk in the transaction, and is indeed added to your cost (indirectly, in the way you described). These transactions don't go directly between a seller and a buyer. For example, there's no buyer when you redeem some of your mutual fund - the fund pays you money. So the fund assumes certain risk, which is why there's a spread in the prices to invest and to redeem. Similarly with commodities: when you buy a gold bar - you buy it from a dealer, who needs to keep a stock. Thus, the dealer will not buy from you at the same price: there's a premium on sale and a discount on buy, which is a spread, to compensate the dealer for the risk of keeping a stock.
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Does a larger down payment make an offer stronger?
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There is considerable truth to what your realtor said about the Jersey City NJ housing market these days. It is a "hot" area with lots of expensive condos being bought up by people working on Wall Street in NYC (very easy commute by train, etc) and in many cases, the offers to purchase can exceed the asking price significantly. Be that as is may, the issue with accepting a higher offer but smaller downpayment is that when the buyer's lender appraises the property, the valuation might come in lower and the buyer may have to come up with the difference, or be required to accept a higher interest rate, or be refused the loan altogether if the lender estimates that the buyer is likely to default on the loan because his credit-worthiness is inadequate to support the monthly payments. So, the sale might fall through. Suppose that the property is offered for sale at $500K, and consider two bids, one for $480K with 30% downpayment ($144K) and another for $500K with 20% downpayment ($100K). If the property appraises for $450K, say, and the lender is not willing to lend more than 80% of that ($360K), then Buyer #1 is OK; it is only necessary to borrow $480K - $144K = $336K, while Buyer #2 needs to come up with another $40K of downpayment to be able to get the loan, or might be asked to pay a higher interest rate since the lender will be lending more than 80% of the appraised value, etc. Of course, Buyer #2's lender might be using a different appraiser whose valuation might be higher etc, but appraisals usually are within the same ballpark. Furthermore, good seller's agents can make good estimates of what the appraisal is likely to be, and if the asking price is larger than the agent's estimate of appraised value, then it might be to the advantage of the selling agent to recommend accepting the lower offer with higher downpayment over the higher offer with smaller downpayment. The sale is more likely to go through, and an almost sure 6% of $480K (3% if there is a buyer's agent involved) in hand in 30 days time is worth more than a good chance of nothing at the end of 15 days when the mortgage is declined, during which the house has been off the market on the grounds that the sale is pending. If you really like a house, you need to decide what you are willing to pay for it and tailor your offer accordingly, keeping in mind what your buyer's agent is recommending as the offer amount (the higher the price, the more the agent's commission), how much money you can afford to put down as a downpayment (don't forget closing costs, including points that might be need to be paid), and what your pre-approval letter says about how much mortgage you can afford. If you are Buyer #1, have a pre-approval letter for $360K, and have enough savings for a downpayment of up to $150K, and if you (or your spouse!) really, really, like the place and cannot imagine living in any other place, then you could offer $500K with 30% down (and blow the other offer out of the water). You could even offer more than $500K if you want. But, this is a personal decision. What your realtor said is perfectly true in the sense that for Y > Z, an offer at $X with $Y down is better than an offer at $X with $Z down. It is to a certain extent true that for W > X, a seller would find an offer at $X with $Y down to be more attractive that an offer at $W with $Z$ down, but that depends on what the appraisal is likely to be, and the seller's agent's recommendations.
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Is refinancing my auto loan just to avoid dealing with the lender that issued it a crazy idea?
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I’d say No, it’s not crazy. I did that even for a mortgage, because the bank tended to lose my checks or let them sit for some days, and then claim I paid late. They were known on the internet for their poor processing department, so I decided to avoid that monthly hassle with calling and arguing, and refinanced. Compare the pain with the cost for refinancing, and if you think it’s worth it, change. You might even get a cheaper credit, and save on it.
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How to rebalance a passive portfolio if I speculate a war is coming?
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Normally, in a war everybody suffers and the entire economy goes down. Military contractors do better than average, but the average sucks. The way to take advantage of knowing a war is coming is to leave as soon as possible. There are strategic materials that can become valuable in a war, but such investments are generally very specialized and not something an ordinary investor would be in a position to exploit. The most profitable businesses in war are food, oil, and ammunition.
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Wife sent to collections for ticket she paid ten years ago
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I had this happen to me with parking ticket when I was still in school. The tickets were issued by the school police and later dismissed (because I had purchased a year-long parking pass). 3 years later I got a letter alleging that I had unpaid parking ticket. So they lost the record of dismissal. But they did not lose the record of having issued the ticket. I am fairly certain this happens because legal entities either lose electronic records and restore data from backups without realizing that some corrupted data remains lost or because they transition to a new system and certain real-world events don't get transferred properly to the new system. Of course, the people with whom you end up interacting at that point have no idea of any potential technical problems (because they may occur only in some technical one-off cases). In my case, I was able to show that I had received a judgement of dismissal. I actually kept the paperwork. The question is what do you do if you lost the records and the state had lost all electronic records of your payments. Let's assume the collections agency has a record (produced by the state) that you owed the ticket amount, but the state claims that no record exists of you having paid the tickets. What do you do, then? Carefully compile the list of all possible banks which you could have possibly used. Then request duplicate statements from all the banks which you have on that list. Assuming you were a regular consumer and not running a business, this should not amount to more than 100 pages or so. If you do manage to find the transactions in those bank records, you are in luck. States, unlike the federal government, are not immune from law suits. So you can consult a lawyer. By fraudulently claiming that you defaulted on payments, the state caused you material harm (by lowering your credit rating and increasing your cost of borrowing). Once you have all the paperwork in hand, you still will have difficult time finding anyone in the state to listen to you. And even if you do, you will not be compensated for the time and expenses you expanded to obtain these records. If you indeed paid the tickets, then you are being asked to prove your innocence and you are assumed guilty until you do. Again, a good lawyer should be able to do something with that to get you a proper compensation for this.
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For a car, what scams can be plotted with 0% financing vs rebate?
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The car deal makes money 3 ways. If you pay in one lump payment. If the payment is greater than what they paid for the car, plus their expenses, they make a profit. They loan you the money. You make payments over months or years, if the total amount you pay is greater than what they paid for the car, plus their expenses, plus their finance expenses they make money. Of course the money takes years to come in, or they sell your loan to another business to get the money faster but in a smaller amount. You trade in a car and they sell it at a profit. Of course that new transaction could be a lump sum or a loan on the used car... They or course make money if you bring the car back for maintenance, or you buy lots of expensive dealer options. Some dealers wave two deals in front of you: get a 0% interest loan. These tend to be shorter 12 months vs 36,48,60 or even 72 months. The shorter length makes it harder for many to afford. If you can't swing the 12 large payments they offer you at x% loan for y years that keeps the payments in your budget. pay cash and get a rebate. If you take the rebate you can't get the 0% loan. If you take the 0% loan you can't get the rebate. The price you negotiate minus the rebate is enough to make a profit. The key is not letting them know which offer you are interested in. Don't even mention a trade in until the price of the new car has been finalized. Otherwise they will adjust the price, rebate, interest rate, length of loan, and trade-in value to maximize their profit. The suggestion of running the numbers through a spreadsheet is a good one. If you get a loan for 2% from your bank/credit union for 3 years and the rebate from the dealer, it will cost less in total than the 0% loan from the dealer. The key is to get the loan approved by the bank/credit union before meeting with the dealer. The money from the bank looks like cash to the dealer.
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What can I replace Microsoft Money with, now that MS has abandoned it?
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I have been using Acemony http://www.mechcad.net/products/acemoney/ for a couple of years now and extremely happy with it. Very simple and intuitive to use. The best part is - life-long free upgrades
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Why do some online stores not ask for the 3-digit code on the back of my credit card?
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As a general premise: In most of the online transactions in case of dispute the benefit of doubt is given to the customer. IE if the customer refuses to pay and claims that its not his transaction, the card company reverses the charges and does not pay the merchant (or recovers if its already paid). There are many types of online vendors who use a variety of methods to ensure that they are not at loss. Some of these are:
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how derivatives transfer risk from one entity to another
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By buying the call option, you are getting the benefit of purchasing the underlying shares (that is, if the shares go up in value, you make money), but transferring the risk of the shares reducing in value. This is more apparent when you are using the option to offset an explicit risk that you hold. For example, if you have a short position, you are at unlimited risk of the position going up in value. You could decide you only want to take the risk that it might rise to $X. In that case, you could buy a call option with $X strike price. Then you have transferred the risk that the position goes over $X to the counterpart, since, even if the shares are trading at $X+$Y you can close out the short position by purchasing the shares at $X, while the option counterpart will lose $Y.
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Basic questions about investing in stocks
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For point two.. The norm for buying stock is to just register online with a major broker: Fidelity, Schwab,TD Ameritrade...etc, send them money to fund your purchase, make the stock purchase in your account, and then have a little faith. You could probably get them to physically transfer the stock certificates from them to you, but it is not the norm at all. I would plan on a fee being involved also. The 10$ is for one trade... regardless of if you buy one share or many. So you wouldn't buy 1 share of a five dollar stock as your cost would be absurd. You might buy a hundred shares.
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What should my finances look like at 18?
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I was in a similar situation at age 18/19, but not making quite as much money. I maxed out an IRA and bought savings bonds, although rates were decent then. I did flitter away about half of what I earned, which in retrospect was probably dumb. But I had a good time!
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What is the opposite of a hedge?
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I'd say the opposite of hedging is speculating. If you are convinced an asset will appreciate in value, or rather the probability of gains is enough to induce you to hold the asset, you are a speculator. There are lots of ways of speculating, including holding risky assets without hedging that risk and possibly magnifying that risk and return via leverage or the embedded leverage in a derivative contract. Generally speaking, if in expectation you are paying to reduce your risk, you are a hedger. If you are (in expectation) being paid to bear the risk that otherwise someone else would bear, you are a speculator. The word speculation has been tainted by politicians and others trying to vilify the practice, but at the end of the day it's what we are all doing when we buy stock or any other risky asset.
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What does it mean to long convexity of options?
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Long convexity is achieved by owning long dated low delta options. When a significant move occurs in the underlying the volatility curve will move higher. Instead of a linear relationship between your long position and it's return, you receive a multiple of the linear return. For example: Share price $50 Long 1 (equals 100 shares) contract of a 2 year 100 call Assume this is a 5 delta option If the stock price rises to $70 the delta of the option will rise because it is now closer to the strike. Lets assume it is now a 20 delta option. Then Expected return on a $20 price move higher, 100 shares($20)(.20-.05)=$300 However what happens is the entire volatility surface rises and causes the 20 delta option to be 30 delta option. Then The return on a $20 price move higher, 100 shares($20)(.30-.05)=$500 This $200 extra gain is due to convexity and explains why option traders are willing to pay above the theoretical price for these options.
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What time period is used by yahoo finance to calculate beta
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Citing the Yahoo Finance Help page, Beta: The Beta used is Beta of Equity. Beta is the monthly price change of a particular company relative to the monthly price change of the S&P500. The time period for Beta is 3 years (36 months) when available. Regarding customised time periods, I do not think so.
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High dividend stocks
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Future tax increases on dividends are likely. The Wall Street Journal says. "The millions of Americans who receive dividend income ... need to begin adjusting their investment strategy accordingly." (ref) "Last week the Senate Budget Committee passed a fiscal 2011 budget resolution that includes an increase in the top tax rate on dividends to 39.6% from the current 15%—a 164% increase." ... "You can expect fewer businesses either to offer or increase dividend payouts."
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Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building?
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Banks should be risk averse by default. They make loans to people and businesses after measuring their ability to repay. After they approve a big project loan like an apartment building, they don't give all the money to the builders upfront. They give money as progress is made and they make sure the funds are not being used inappropriately. There's no reason they couldn't do all this while owning the project, but that would also open them to lawsuits later on if anything wasn't built to code. By keeping the project at arm's length, they avoid future liability.
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Claiming mileage allowances, what are the rules/guidelines?
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I believe so (that you can, not that you are greedy) I run my own business and, generally speaking, am 'charging' my company 40p per mile as per the quote above. I did not know about the ability to claim the shortfall, as it is not relevant to me, but it makes perfect sense and I'm sure that a phone call to HMRC will help you understand how to claim. As for the greedy question - personally I think that laws are there for a reason (both ways) so if there's money to be claimed - there's no reason not to do so, unless of course the hassle is greater than the potential gain. One last note - not sure exactly what the rules around this are, but I know that the allowance is not applicable for one's general commute and so if you're travelling to the same place over 40% of the time for more than two years you are no longer allowed to claim these miles.
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Does the stock market create any sort of value?
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You are right, it is a Ponzi scheme unless it pays all of the profits as dividends. Here's why: today's millenials are saving a lot less, and instead they choose to be spenders. It's just that their mentality is different. If the trend continues there will be more spenders and less savers. That means that in 20 years from now, a company might sell more and make more profits, but because there are less investors on the market it will worth less (judging by supply and demand this has to be true). Doesn't that seem like a disconnect to you guys? Doesn't that just prove that all those profits are not really yours, but instead you're just sitting on the side making bets about them? If I own a company from the point where it goes public and while the value goes up I hold on to it for 50 years. Let's say for 45 years it made tons of profits but never paid a cent in dividend, and then in 5 years it goes out of business. What happened to all the profits they made throughout the 45 years? If you owned a restaurant that made a profit for 45 years and then went bankrupt you are fine, you took your profits every year because why on earth would you reinvest 100% of the profit forever? But what if you could sell 49.9% of that restaurant on the stock market, get all of that IPO money and still keep all of the profits while claiming that you reinvest it forever? That's exactly what they do! They just buy expensive things for personal use, from fancy cars to private jets, they just write it down as an investment and you can't see what the money was spent on because you are not a majority stakeholder, you have no power. It was not like this forever, companies used to pay all of their profits in dividends and be valued according to that. Not anymore. Now they are just in it for the growth, it will keep growing as long as people keep buying into it, and that's the exact definition of a Ponzi scheme.
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Is it ok to have multiple life time free credit cards?
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Do you need it? It doesn't sound like it - you seem to be able to manage with just the cards you have. Will it hurt anything? Probably not either, unless it entices you to spend more than you make. Another downside might be that you would spend more than you normally would just to have activity on every card. So all in all, I don't see much upside.
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Why do banks encourage me to use online bill payment?
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It’s more convenient for both you and the bank; its much simpler to handle things electronically than it is to go through paperwork. Also, its eco-friendly and by saying that they care about the environment, banks earn brownie points with environmentally-conscious customers.
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What are the contents of fixed annuities?
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For a variable annuity, you need to know the underlying investments and how your returns are credited to your account. For a fixed annuity, the issuer is responsible for the commitment to provide the promised rate to you. In a sense, how they invest isn't really your concern. You should be concerned about the overall health of the company, but in general, insurance companies tend to know their business when they stick to their strengths: writing insurance on groups and producing annuity contracts. I don't care for VAs or the fixed annuities you asked about, but I don't believe they resemble a ponzi scheme, either.
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When to sell a stock?
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Keep a diary, before buying write down why are you buying the stock, how long do you plan to keep it. Put down reasons when you would sell it. For example you buy a stock because it has lot of cash reserve, it is a focused company, good management. You would sell when management leaves or it starts to use its cash for acquisition that are not fitting in profile.
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Dividends - Why the push to reinvest?
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Three major advantages that I can think of (and some of these have been pointed out in comments):
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1031 Exchange and Taxes?
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You bought a rental property in 2001. Hopefully you paid fair value else other issues come into play. Say you paid $120K. You said you have been taking depreciation, which for residential real estate is taken over 27.5 years, so you are about halfway through. Since you don't depreciate land, you may have taken a total $50K so far. With no improvements, and no transaction costs, you have $50K in depreciation recapture, taxed at a maximum 25% (or your lower, marginal rate) and a cap gain of the 5-10K you mentioned. Either can be offset by losses you've been carrying forward if you suffered large stock losses at some point.
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GnuCash register reimbursements
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You should be recording the reimbursement as a negative expense on the original account the expense was recorded. Let's assume you have a $100 expense and $100 salary. Total $200 paycheck. You will have something like this In the reports, it will show that the expense account will have $0 ($100 + ($100)), while income account will have $100 (salary).
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Question about stock taxes buy/sell short term
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If you have made $33k from winning trades and lost $30k from loosing trades your net gain for the year would be $3k, so obviously you would pay taxes only on the net $3k gains.
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Pending euro payment to a usd account
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Currency exchange is rather the norm than the exception in international wire transfers, so the fact that the amount needs to be exchanged should have no impact at all. The processing time depends on the number of participating banks and their speeds. Typically, between Europe and the US, one or two business days are the norm. Sending from Other countries might involve more steps (banks) which each takes a bit of time. However, anything beyond 5 business days is not normal. Consider if there are external delays - how did you initiate the sending? Was it in person with an agent of the bank, who might have put it on a stack, and they type it in only a day later (or worse)? Or was it online, so it is in the system right away? On the receiver side, how did you/your friend check? Could there be a delay by waiting for an account statement? Finally, and that is the most common reason, were all the numbers, names, and codes absolutely correct? Even a small mismatch in name spelling might trigger the receiving bank to not allocate the money into the account. Either way, if you contact the sender bank, you will be able to make them follow up on it. They must be able to trace where they money went, and where it currently is. If it is stuck, they will be able to get it ‘unstuck’.
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What does the term “match the market” mean?
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From Investopedia: "Beating the market" is a difficult phrase to analyze. It can be used to refer to two different situations: 1) An investor, portfolio manager, fund or other investment specialist produces a better return than the market average. The market average can be calculated in many ways, but usually a benchmark - such as the S&P 500 or the Dow Jones Industrial Average index - is a good representation of the market average. If your returns exceed the percentage return of the chosen benchmark, you have beaten the market - congrats! (To learn more, read Benchmark Your Returns With Indexes.) 2) A company's earnings, sales or some other valuation metric is superior to that of other companies in its industry. Matching the market, I would presume will be generating returns equivalent to the index you are comparing your portfolio with. If for a sector/industry then it would be the returns generated by the sector/industry. As an index is more or less a juxtaposition of the market as a whole, people tend to use an index.
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Am I still building a credit score if I use my credit card like a debit card?
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I always hesitate to provide an answer to "how does this affect my credit score?" questions, because the credit agencies do not publish their formulas and the formulas do change over time. And many others have done more reverse engineering than I to figure out what factors do affect the scores. To some extent, there is no way to know other than to get your credit score and track it over time. (The credit report will tell you what the largest negative factors are.) However, let me make my prediction. You have credit, you aren't using a large percentage of it, and don't have defaults/late payments. So, yes, I think it would help your credit score and would build a history of credit. Since this is so unusual, this is just an educated guess.
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Analyst estimates for an insurance company
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Something to consider is how broad is Yahoo! Finance taking in their data for making some comparisons. For example, did you look at the other companies in the same industry? On the Industry page, the Top Life Insurance Companies by Market Cap are mostly British companies which could make things a bit different than you'd think. Another point is how this is just for one quarter which may be an anomaly as the data could get a bit awkward if some companies are just coming back to being profitable and could have what appears to be great growth but this is because their earnings grow from $.01/share to $1/share which is a growth of $10,000 percent as this is an increase of 100 times but really this may just be from various accounting charges the company had that hit its reserves and caused its earnings to dip temporarily.
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CEO entitlement from share ownership?
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You can apply for a position with any company you like, whether or not you are a shareholder. However, owning shares in a company, even lots of shares in a company, does not entitle you to having them even look at your resume for any job, let alone the CEO position. You generally cannot buy your way into a job. The hiring team, if they are doing their job correctly, will only hire you if you are qualified for the job, not based on what your investments are. Stockholders get a vote at the shareholders' meeting and a portion of the profits (dividend), and that's about it. They usually don't even get a discount on products, let alone a job. Of course, if you own a significant percentage of the stock, you can influence the selections to the board of directors. With enough friends on the board, you could theoretically get yourself in the CEO position that way.
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Is there an online cost-basis calculator that automatically accounts for dividend re-investments and splits?
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Google Finance portfolios take into account splits and cash deposits/withdrawals.
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When can you use existing real estate as collateral to buy more?
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@victor has the most descriptive and basic idea on how this is done. The only thing I would add is that one benefit to real estate is that you can control how much the property is worth. By increasing rents and making the property one of the best in the neighborhood, you increase the value. As for the comment that this is the type of investing that caused the 1929 stock market crash, there are many other aspects that are overlooked. Taking equity out of real estate has been happening long before and after the depression. People do it all the time by taking out home equity loans, just not everyone uses it to purchase another investment.
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(Legitimate & respectable) strategies to generate “passive income” on the Internet?
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One such place where you can sell your photos is iStockPhoto. They are pretty picky about the photos they allow, so you should be a pretty good photographer and have good equipment. It can take a while to build up an interest in your photos, but once you do you can make some decent money off it. My sister is a semi-pro photographer and makes about $500 a month off photos she sells there.
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Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home?
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Actually if you look at a loan for $115,000 over 30 years at current interest rates you would have a payment of about $500 a month. I would argue your $500 monthly payments are building equity the same way a loan repayment schedule would. Is your agreement in writing? If it is, there's nothing you can do unless they agree. If it's not then write up a contract for a $115k loan that you will pay back over 30 years at $500 a month with the amortization table. That will show how much equity you're building over time. (It's not much the first 10 years!) Note that some states require real estate contract to be in writing or else they are voidable by either party. Whatever you do, get something in writing or you'll probably either end up in court or feeling bitter for the next few decades.
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Should I wait to save up 20% downpayment on a 500k condo?
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I'm of the belief that you should always put 20% down. The lower interest rate will save you thousands over the life of the loan. Also PMI is no different then burning that much cash in the fireplace every month. From Wikipedia Lenders Mortgage Insurance (LMI), also known as Private mortgage insurance (PMI) in the US, is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property. You are basically paying money each month for the bank to be insured against you not paying your mortgage. But in actuality the asset of the condo should be that insurance. Only you can decide if you are comfortable with having $50k in liquidity or not. It sounds like a good cushion to me but I don't know the rest of your expenses.
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What is an effective way to invest in electric car industry?
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At this time I would say that the electric car industry as a whole is too new to be able to invest in it as a sector. There are only a handful of companies that focus solely on electric cars to create a moderately diverse portfolio, let alone a mutual fund. You can invest in mutual funds that include EV stocks as part of an auto sector or clean energy play, for example, but there's just not enough for an EV-only fund at this point. At this point, perhaps the best you can do if you want an exclusively EV portfolio is add some exposure to the companies that are the biggest players in the market and review the market periodically to see if any additional investments could be made to improve your diversification. Look at EV-only car makers, battery makers, infrastructure providers, etc. to get a decent balance of stocks. I would not put any more than 10% of your entire investment portfolio into any one stock, and not more than 20% or so in this sector.
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Should I take a student loan to pursue my undergraduate studies in France?
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Edit: lazy math The answer to this question depends on two things: How bad will it be if you cannot repay this loan in the way you expected? - How likely are you to actually get into a PhD program with a stipend? Is there a possibility that you will not get a stipend? What is the penalty for failure to repay? Will you have to support yourself after university? How much money could you expect to earn if you found a job after your undergraduate degree? How much could taking this loan improve your finances/life? - Could you get your degree at anther institution without going into debt? Would your career be better if you went to Ecole Polytechnique? I would take the loan if:
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How will Brexit affect house mortgages?
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Nobody can predict the affects of Brexit but it is wise to consider them. We saw the pound weaken after the vote to leave and it is possible the pound will weaken further after Brexit and this devaluation could be quite dramatic. If that happens it is likely to increase inflation, UK inflation has gone from under 1% around the time of the referendum to 3% today and it could well go higher. https://www.rateinflation.com/inflation-rate/uk-historical-inflation-rate If inflation continues to increase, the Bank of England is likely to put up interest rates, as it has historically done this to hedge against inflation. We have been living in a world of artificially low interest rates since the global crash of 2008 as the BoE has tried to stimulate recovery with lower rates. The rates cannot continue at this level if inflation starts to rise. http://www.thisismoney.co.uk/money/news/article-2387744/Base-rate-vs-inflation-chart-How-tell-things-really-got-better.html That in turn will put up mortgage rates. So for example if you have a £100k mortgage at 3.92% (currently this is a reasonable rate to have) your repayments will be £523 a month. If your mortgage rate goes up to say 7% then your repayments are £707 a month, if it goes up to 10% then it's £909 a month and so on. There is a mortgage calculator you can use to try playing with different amounts here: https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator My advice would therefore be try to get as small a mortgage as you can and make sure you can afford it quite comfortably, in case rates go up and you need to find a few hundred pounds a month extra. There are other risks from Brexit as well, house prices could fall as people decide not to buy properties due to excessive interest rates! Overall nobody knows what will happen but it is good to be planning ahead for all eventualities. ** I am not a financial advisor, this advice is given in good faith but with no financial qualification.
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If a trendline or pattern breaks due to some bad news but it returns back what to do?
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There is a technique called the Elliott wave which explains these 'shocks'. The reversal directions you are questioning are part of the pattern, it is known as corrections. The Elliott wave is an indicator based on psychology of investors. Think about it this way, if you see a huge up trend what are you most likely to do, sell and make profit or continue, this is why there is a shock before it continues. Many people will sell to be safe, especially after hearing the bad news they won't risk it. By learning the Elliott wave you'll be able to make an educated decision on whether or not to stay or leave. Here are websites on the Elliott wave: http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:elliott_wave_theory http://www.swing-trade-stocks.com/elliott-wave.html The Elliott wave is helpful in any time frame and works well with momentum. Hope this helps.
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Details on opening a small corporation in ontario
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The Canada Revenue Agency does indeed put out just the guide you want. It's at http://www.cra-arc.gc.ca/E/pub/tg/rc4070/rc4070-e.html - you should always take a good look at URLs to make sure they're really from the government and not from some for-profit firm that will charge you to fill out forms for free services. It covers ways to structure your business (probably a sole proprietor in your case), collecting and submitting GST or HST, sending in payroll remittances (if you pay yourself a T4 salary), and income tax including what you can deduct. It's a great place to start and you can use it as a source of keywords if you want to search for more details.
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What credit card information are offline US merchants allowed to collect for purposes other than the transaction?
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Zip code, as well as billing address, is used in conjunction with the Address Verification Service (AVS). AVS is a web (or phone) service that actually verifies the address with the billing address on file with the issuing bank. It does not use the credit card stripe. You can see more information from various sources such as bank merchant help pages like Bank of America's. As far as what is stored on the stripe, it varies some by bank (as there are some "optional" areas). The standards are discussed here. Fields include your account number, name, the expiration date, some card-specific stuff, and then the discretionary section. I would not expect much in terms of address type information there. So - the answer to your question is that they can't really take much more than your name and CC #, unless you give it to them. If you give a false zip code, you may have your purchase rejected. They certainly do keep track of the credit card number, and I would suppose that is the most valuable piece to them; they can see you make purchases across time and know for a fact that it's the same exact person (since it's the same card). Additionally, zip codes for AVS from pay-at-the-pump are supposedly not generally used for marketing (see this article for example). That is probably not true at at-the-register (in-person) collections, most of those aren't for AVS anyway. Even California permits the pay-at-the-pump zip verification as long as it's only used for that (same article). I would assume any information given, though, is collected for marketing purposes.
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How do I build wealth?
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CEOs are compensated with stocks and options on top of their salary. Most is in the form of stocks and options. You may see them with a fancy car, but they don't necessarily possess the car, house, etc. They merely control it, which is nearly as good. You may lease it, or time share it. It might be owned by the company and provided as a perk. To earn a million, there are 4 ways: a job, self-employed, own a business, and invest. The fastest way is to own a business. The slowest way is a job or self-employed. Investing is medium. To learn more, read Rich Dad's Cashflow Quadrants.
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Need to change cash to cashier's check without bank account (Just arrived to the US)
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A cashier's check costs money to get and is not connected to an account. You have cash. You should be able to get a bank to sell you one, even without an account. Find a bank where you would like to open an account and explain the situation. I can't guarantee that that will work, but I would expect it to do so. If not, the bank can probably suggest an alternative. You might also ask the landlord if you can do it with postal money orders. I am positive that you can buy those with cash. You might have to buy a bunch to reach your desired amount. Or perhaps a Western Union money order might be better. You also might be able to open an account with your passport and Social Security Number (SSN).
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What causes US Treasury I bond fixed interest to increase?
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The Fed is trying to keep the money supply growing at a rate just slightly faster than the increase in the total production in the economy. If this year we produced, say, 3% more goods and services than last year, than they try to make the money supply grow by maybe 4% or 5%. That way there should be a small rate of inflation. They are trying to prevent high inflation rates on one hand or deflation on the other. When the interest rate on T-bills is low, banks will borrow more money. As the Fed creates this money out of thin air when banks buy a T-bill, this adds money to the economy. When the interest rate on T-bills is high, banks will borrow little or nothing. As they'll be repaying older T-bills, this will result in less growth in the money supply or even contraction. So the Feds change the rate when they see that economic growth is accelerating or decelerating, or that the inflation rate is getting too high or too low.
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Why are capital gains taxed at a lower rate than normal income?
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There are two alternative explanations: Choose the explanation you prefer based on your level of cynicism.
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Option Trading / Demo Account
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How would this trade behave IRL? I don't know how the simulation handles limit orders and bid/ask spreads to know it's feasible, but buying at 4.04 when the current ask is 8.00 seems unlikely. That would mean that all other sell orders between 8.00 and 4.04 were fulfilled, which means that there were very few sellers or that sell pressure spiked, both of which seem unlikely. In reality, it seems more likely that your order would have sat there until the ask dropped to $4.04 (if it ever did), and then you'd have to wait until the bid rose to $7.89 in order to sell them at that price. However, that kind of swing in option prices in not unrealistic. Options near at-the-money tend to move in price at about 50% of the change in the underlying, so if amazon suddenly dropped by $5, the option price could drop by $2.60 (from 6.66 to $4.04), and then rise back to $7.89 if the price rose $8 (which would be 1% swing and not unheard of intra-day). But it sounds like you got very lucky (or the simulation doesn't handle option trading realistically) - I've traded options in the past and have had some breaks similar to yours. I've also had bad breaks where I lost my entire investment (the options expire out-of-the money). So it should be a very limited part of your portfolio, and probably only used for risk management (e.g. buying put options to lock in some gains but keeping some upside potential).
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How to find out if a company has purchased government (or other) bonds?
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This is in the balance sheet, but the info is not usually that detailed. It is safe to assume that at least some portion of the cash/cash equivalents will be in liquid bonds. You may find more specific details in the company SEC filings (annual reports etc).
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Is there any benefit to investing in an index fund?
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when the index is altered to include new players/exclude old ones, the fund also adjusts The largest and (I would say) most important index funds are whole-market funds, like "all-world-ex-US", or VT "Total World Stock", or "All Japan". (And similarly for bonds, REITS, etc.) So companies don't leave or enter these indexes very often, and when they do (by an initial offering or bankruptcy) it is often at a pretty small value. Some older indices like the DJIA are a bit more arbitrary but these are generally not things that index funds would try to match. More narrow sector or country indices can have more of this effect, and I believe some investors have made a living from index arbitrage. However well run index funds don't need to just blindly play along with this. You need to remember that an index fund doesn't need to hold precisely every company in the index, they just need to sample such that they will perform very similarly to the index. The 500th-largest company in the S&P 500 is not likely to have all that much of an effect on the overall performance of the index, and it's likely to be fairly correlated to other companies in similar sectors, which are also covered by the index. So if there is a bit of churn around the bottom of the index, it doesn't necessarily mean the fund needs to be buying and selling on each transition. If I recall correctly it's been shown that holding about 250 stocks gives you a very good match with the entire US stock market.
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Abundance of Cash - What should I do?
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Since your 401k/IRA are maxed out and you don't need a 529 for kids, the next step is a plain ol' "Taxable account." The easiest and most hassle-free would be automatic contributions into a Mutual Fund. Building on poolie's answer, I think mutual funds are much more automatic/hassle-free than ETFs, so in your case (and with your savings rate), just invest in the Investor (or Admiral) shares of VEU and VTI. Other hassle-free options include I-Bonds ($5k/year), and 5-year CDs.
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Buying a house. I have the cash for the whole thing. Should I still get a mortgage to get the homeowner tax break?
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Your wealth will go up if your effective rate after taxes is less than the inflation rate. That is, if your interest rate is R and marginal tax rate is T, then you need R*(1-T) to be less than inflation to make a loan worth it. Lately inflation has been bouncing around between 1% and 1.8%. Let's assume a 25% tax rate. Is your interest rate lower than between 1.3% and 2.4%? If not, don't take out a loan. Another thing to consider: when you take out a loan you have to do a ton of extra stuff to make the lender happy (inspections, appraisals, origination charges, etc.). These really add up and are part of the closing costs as well as the time/trouble of buying a house. I recently bought my house using 100% cash. It was 2 weeks between when I agreed to a price to when the deal was sealed and my realtor said I probably saved about $10,000 in closing costs. I think she was exaggerating, but it was a lot of time and money I saved. My final closing costs were only a few hundred, not thousands, of dollars. TL;DR: Loans are for suckers. Avoid if possible.
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Why do employer contributions count against HSA limits?
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am I comparing apples and oranges? Yes - different purposes, different laws, different regulations. One rationale could be that HSA benefits are immediate while retirement benefits are deferred, so the benefit of employer contributions are not felt until retirement and thus do not need as stringent a limit, but that's a complete guess.
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Recommendation for learning fundamental analysis?
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The Bible of fundamental analysis was written by Graham and Dodd, and is titled Security Analysis. If you don't know the name Benjamin Graham, Warren Buffet was his student and attribute his own success to Graham. If Security Analysis is a bit too intense for you, Graham also wrote The Intelligent Investor which is probably a better starting point.
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Who owned my shares before me?
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The answer in theory is yes. The answer in reality is no. Let me explain: Combine all of these lists and perhaps you could get a complete record.
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What is a good rental yield?
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Our two rentals have yielded 8.5% over the past two years (averaged). That is net, after taxes, maintenance, management, vacancy, insurance, interest. I am only interested in cash flow - expenses / original investment. If you aren't achieving at least 4.5-5% net on your original investment you probably could invest elsewhere and earn a better return on a similar risk profile.
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How can a U.S. citizen open a bank account in Europe?
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Each country will have different rules. I can only speak about the Netherlands. There, there are two options as a resident to open an account. You needed a BSN (Dutch ID number) or a strong reference from an international company sponsoring your residence there at a bank branch that dealt frequently with foreign customers. It was not possible to open an account as a nonresident although high wealth customers probably get special treatment. Recent US reporting requirements have made European banks very unwilling to deal with US people. I have received a letter from my Dutch bank saying they will continue my current products but not offer me anything new. If I call the bank, the normal staff cannot see anything about my accounts. I need to call a special international department even for mundane questions.
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If I plan to buy a car in cash, should I let the dealer know?
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In the UK at least, dealers definitely want you to take finance. They get benefits from the bank (which are not insubstantial) for doing this; these benefits translate directly to increased commission and internal rewards for the individual salesman. It's conceivable that the salesman will be less inclined to put himself out for you in any way by sweetening your deal as much as you'd like, if he's not going to get incentives out of it. Indeed, since he's taking a hit on his commission from you paying in cash, it's in his best interests to perhaps be firmer with you during price negotiation. So, will the salesman be frustrated with you if you choose to pay in cash? Yes, absolutely, though this may manifest in different ways. In some cases the dealer will offer to pay off the finance for you allowing you to pay directly in cash while the dealer still gets the bank referral reward, so that everyone wins. This is a behind-the-scenes secret in the industry which is not made public for obvious reasons (it's arguably verging on fraud). If the salesman likes you and trusts you then you may be able to get such an arrangement. If this does not seem likely to occur, I would not go out of my way to disclose that I am planning to pay with cash. That being said, you'll usually be asked very early on whether you are seeking to pay cash or credit (the salesman wants to know for the reasons outlined above) and there is little use lying about it when you're shortly going to have to come clean anyway.
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How do you invest in real estate without using money?
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Sounds like the seminar is about using OPM (other people's money), which means you're going to have to find not just real estate, but investors. Those investors are going to need a business plan, contracts, and a lot of work from you to provide as much equity as possible before the property is sold. If you're serious about Real Estate, I suggest finding the most successful broker/agent you can, buying them a beer, glass of wine, or cup of coffee, and picking their brain about it. It'll be cheaper then a scam seminar.
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Tenant wants to pay rent with EFT
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Alternative solution with possibly better results: Use a 3rd party to transfer money between both of you. 2 Services you may want to look at: Rent share might be the best option. We are using it to split payment between 3 people in our unit. The owner is getting a single check that appears to be coming from all of us. The payment is automatic and goes through every month. I'm not sure if you as the owner could collect money electronically as opposed to receiving a check. It sounded like you didn't necessarily care about that though.
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Can institutional, quant, or other professional traders “prey on” (make money from) retail investors?
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The primary advantage of HFTs is their speed to act upon opportunities that exist for only fractions of a second. The reason why they are able to do this is because they invest heavily in hardware, custom software, and custom algorithms. Most of the fleeting advantage, as they all manage to top each other's hardware seemingly every other day, is from the hardware investment. To see the extremes that HFTs will go to invest in hardware, one might view this. It is highly likely that the trader with the market making algorithm could have been ignorant of the "hide not slide" order and missed out on many more opportunities while still being successful. Haim Bodek, who is very much against this order type, was not so lucky. If it was truly an investment bank then it was unlikely that they were actually front running, which is very illegal and easily possible with much more low tech means, since companies like Citadel handle most orders now, and they have not been successful in investment banking. The reality of HFT is slowly coming to light, that while HFT can provide extremely consistent returns with enormous sharpe ratios, the capital investment is equally enormous, and the amount of capital that can be employed is also as enormously limited. After all, the richest people on the planet are not HFT owners. Also, when it comes to time periods longer than 500ms, their results become very human.
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Retired, want to buy a mobile home; how to finance?
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Do you think your 403b will earn more than the mortgage interest rate? If so, then mortgage seems the way to go. Conservative investment strategies might not earn much more than a 3-4% mortgage, and if you're paying 5-6% it's more likely you'll be earning less than the mortgage. From another point of view, though, I would probably take a loan anyway just from a security standpoint - you have more risk if you put a third of your retirement savings into one purchase directly, whereas if you do a 10-15 year loan, you'll have more of a cushion. Also, if you don't outlive the mortgage, you'll have had use of more of your retirement income than otherwise - though I do wonder if it puts you at some risk if you have significant medical bills (which might require you to liquidate your 403b but wouldn't require you to sell your house, so paying it off has some upside). Also, as @chili555 notes in comments, you should consider the taxation of your 403(b) income. If you pull it out in one lump sum, some of it may be taxed at a higher rate than if you pulled it out more slowly over time, which will easily overwhelm any interest rate differences. This assumes it's not a Roth 403(b) account; if it is Roth then it doesn't matter.
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When does it make financial sense to take advantage of employer's tuition reimbursement program?
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If you know that you want that advanced degree; And there is a way to have your employer pay for some of it or all of it; And you are reasonably certain that you will not be quitting for X years after completing the degree; Then it is financially sound to consider having the company pay for it. If you are interested in finding out if an advanced degree in that field is possible/feasible for you; but you aren't 100% sure; And it is possible for your company to pay for the first few classes; then it is financially sound to consider having them pay for the first semesters worth of classes. The key is to determine if the company has a requirement that you must complete the degree, or you will owe them the money. In many cases you are not committed to having them pay for all semesters. I have known employees who used the company to pay for the early classes, then paid for the last few on their own. Keep in mind that most employers only pay you for the classes that you have good grades; they require you to submit paperwork before the semester; but don't pay you back until after the semester. Because of a rolling time frame you can protect yourself by keeping in reserve the maximum amount that you would have to repay the employer if you quit. For the companies I have worked for you only had to stay an extra year, you would only have owed them for that last year if you quit. Keeping a years tuition in reserve allows you to mitigate the risk of having to quit. If the question is about risk, then hedging make sense.
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How is yahoo finance P/E Ratio TTM calculated?
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The correct p/e for bp.l is 5.80. Bp.l is on the London stock exchange and prices are in local currency. The share price of 493 is reported in pence (not dollars). The EPS is reported in pounds. Using .85 pounds = 85 pence, you calculate the EPS as follows: 493.40/85 = 5.80 PE Yahoo totally screwed up. They converted the .85 pounds into US dollars ($1.34) but didn't convert the 493 pence. By using the 493 as dollars, they got 493.9/1.34 = 368 pe! Notice that Yahoo reports the American Depository Shares (symbol 'BP') with an EPS of $8.06. That correctly reflects that there are 6 shares of BP.l per ADS (1.34 * 6 = 8.04). But why is the share price listed at $46.69? Well... 493 GBp (pence) = 4.93 pounds 4.93 pounds = 7.73 USD 7.73 USD * 6 shares per ADS = 46.38 USD
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Why does Warren Buffett say his fund performance, relatively, is likely to be better in a bear market than in a bull market?
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To understand his comments about bear-market performance it's important to take them in context. (My research method was Crtl+F: bear; read around the highlights. This is not a complete survey of 60+ years of letters.) In his earlier letters, statements about bull market performance are always made in reference to Buffet's belief that many of BH's current holdings are in undervalued securities. Ex: To the extent possible, therefore, I am attempting to create my own work-outs by acquiring large positions in several undervalued securities. Such a policy should lead to the fulfillment of my earlier forecast – an above average performance in a bear market. It is on this basis that I hope to be judged (p 6; emphasis mine). Similar statements are made throughout the earlier letters, along with this interesting note: In a year when the general market had a substantial advance I would be well satisfied to match the advance of the Averages (p 6). So to your question of why BH fund performance is likely to be better in a bear market than in a bull market, I believe the implicit assertion is that undervalued securities are more resilient in a bear market (presumably because they don't have as far to fall, and are also less likely to be subject to a bubble). Buffet is also explicitly asserting that when facing a choice to either (a) position BH to weather a possible downturn or (b) position BH to enjoy a bullish stock that is outpacing the market, he would choose the former over the later. As to your assertion that he always says this, I can find no reference to bear market's in the letters past 1960.
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