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How can I stop a merchant from charging a credit card processing fee? | Mastercard rules also prohibit asking for ID along with the card. Yet, when I was at Disneyland, years ago (so I don't know if this is still a practice) they asked for my driver's license with every purchase. I can charge up to $200 at Costco with a swipe, not even a signature, but a $5 bottle of water (maybe it was $6) required me to produce my license. The answer is Pete's comment, don't patronize these merchants. By the way, it's legal now. From Visa web site - Note - 9* states still prohibit surcharges, so they tend to offer cash discounts. The question you linked is from 2010, things change. |
How to make a decision for used vs new car if I want to keep the car long term? | In a perfect world scenario you would get a car 2-5 years old that has very little mileage. One of the long standing archaic rules of the car world is that age trumps mileage. This was a good rule when any idiot could roll back an odometer. Chances are now that if you rolled your odometer back the car was serviced somewhere, had inspection or whatever and it is on a report. If seller was found to do this they could face jail time and obviously now their car is almost worthless. Why do I mention this? Because you can take a look at 2011 cars. Those with 20K miles go for just a little more than those with 100K miles. As an owner you will start incurring heavy maintenance costs around 100K on most newer cars. By buying cars with lower mileage, keeping them for a year or two, and reselling them before they get up in miles, you can stay in that magic area where you can drive a pretty good car for $200-300 a month. Note that this takes work on both the buying and selling side and you often need cash to get these cars (dealers are good about siphoning really good used cars to employees/friends). This is a great strategy for keeping costs down and car value up but obviously a lot of people try to do this and it takes work and you have to be willing to settle sometimes on a car that is fine, but not exactly what you want. As for leasing this really gets into three main components: If you are going to do EVERYTHING at a dealership and you want something new or newish you might as well lease. At least then you can shop around for apples to apples. The problem with buying a new/used car from the dealers in perpetuity isn't the buying process. It is the fact that they will screw you on the trade-in. A car that books for 20K may trade-in for 17K. Even if the dealer says they are giving you 20K, then they make you pay list price for the car. I have many many times negotiated a price of a car and then wife brought in our car separately and I can count on ZERO fingers how many times that the dealership honored both sides of the negotiations. Not only did they not honor them but most refused to talk with us after they found out. With a lease you don't have to worry about losing this money in the negotiations. You might pay a little extra (or not since you can shop around) but after the lease you wash your hands of the car. The one caveat to this is the high-end market. When you are talking your Acura, Mercedes, Lexus... It is probably better to buy and trade in every couple years. You lose too much equity by leasing, where it won't cover the trade-in gap and cost of your money being elsewhere. I have a friend that does this and gets a slightly better car every 2-3 years with same monthly payment. Another factor to consider is the price of a car. If your car will be worth over $15K at time of sale you are going to have a hard time selling it by owner. When amounts get this high people often need financing. Yes they can get personal financing but most people are too lazy to do this. So the number of used car buyers on let's say craigslist are way way fewer as you start getting over $10-12K and I have found $15K to be kind of that magic amount. The pro-buy-used side is easy. Aim for those cars around $12-18K that are out there (and many still under warranty). These owners will have issues finding cash buyers. They will drop prices somewhere between book price and dealer trade-in. In lucky cases where they need cash maybe below dealer trade-in. And remember these sellers aren't dealing with 100s let alone 10 buyers. You drive the car for 3-4 years. Maybe it is $7-10K. But now you will get much much closer to book price because there will be far more buyers in this range. |
Does it make any sense to directly contribute to reducing the US national debt? | No, it makes no sense. The US national debt is different from other debt on TWO KEY WAYS : 1.) The national debt is not money we owe to our government IT IS MONEY WE OWE TO OURSELVES. 2.) If the GNP of our country can grow at a rate equal to or greater than the national debt interest, then the figure of national debt has no bearing on anything. So a more philanthropic endeavor would be to help grow the economy. |
I paid a contractor to make roof repairs to a house in my LLC. How can I deduct this cost? | This new roof should go on the 2016 LLC business return, but you probably won't be able to expense the entire roof as a repair. A new roof is most likely a capital improvement, which means that it would need to be depreciated over many years instead of expensed all in 2016. The depreciation period for a residential rental property is 27.5 years. Please consider seeking a CPA or Enrolled Agent for the preparation of your LLC business return. See also: IRS Tangible Property Regulations FAQ list When you made the loan to the LLC (by paying the contractor and making a contract with the LLC), did you state an interest rate? If not, you and your brother should correct the contract so that an interest rate is stated, then follow it. The LLC needs to pay you interest until the loan is paid off. You need to report the interest income on your personal return, and the LLC needs to report the interest expense in its business return. |
What could be the harm in sharing my American Express statements online? | Call me overly paranoid, but letting unknown people know your charges and your personal information is asking for trouble. They know who you are and how to find you and how much money you typically make. If they are decent people - okay, but otherwise they have good ground for comitting a crime against you - blackmail you, con you, target thieves on you, steal your identity, anything else which you won't like if it happens. And it has noting to do with being from Philippines - disonest people are everywhere. Crimes happen all the time, just the less you expose yourself the less likely a crime will be committed against you. My suggestion would be to share as little financial and personal data as possible, especially to share as little actual money figures as possible. Also see this question. |
My Brokerage statement shows “Adjusted due to previous wash sale disallowed loss” what does this mean? | Summary of accepted answer: Your "loss" will not count as a loss (to the IRS). Which means no tax deduction for a "short-term capital loss" (on that sale). Instead, the IRS simply pretends like you had paid less for the stock to begin with. |
Does “income” include capital gains? | The $100,000 is taxed separately as "ordinary income". The $350,000 is taxed at long-term capital gains of 15%. Capital gains is not taxed at 20% until $415,050. Even though $100,000 + 350,000 = $450,000, only $350,000 can be taxed at capital gains. The total ordinary income tax burden will be $31,986 if single, in California. Caveat: By creating a holdings corporation (C-corp), you can section 351 that $100,000 into the C-corp for tax deferment, which won't be taxed until you take money from the corporation. Since you will hold 100% of the voting stock, all distributions will be considered pro rata. Additionally, you can issue yourself a dividend under the rules of 26 USC §§243-246 (a greather-than-80% shareholder who receives a dividend can write-off 100% of said dividend). As long as that dividend doesn't trigger §§1.243-246 of The Regulations by keeping the distribution just under 10% of E&P i.e. $10,000. Wages are deductible against basis so pay yourself $35,000 and keep $55,000 in the corporation and you can decrease the total liabilities down to $22,000 from $31,000, which includes the CA franchise tax. You don't have to pay yourself any money out a corporation to use the money. |
Why might it be advisable to keep student debt vs. paying it off quickly? | I see two advantages to not paying student loan debt off more quickly: For #1, however, there are plenty of other ways to build credit and I don't see this as being worth the downsides of not paying off the debt more quickly. In fact, in the United States student loan debt cannot be written off if you go bankrupt. This is important to know and understand. I would generally advise you to pay down your student loans as quickly as you can reasonably do so. |
Where can I find open source portfolio management software? | Have you looked into GnuCash? It lets you track your stock purchases, and grabs price updates. It's designed for double-entry accounting, but I think it could fit your use case. |
How do I report this cash bonus/tip on income tax return? | Daniel covered the correct way to file on the returns, I'm chiming in specifically to discuss the question of whether it could be a gift. The IRS will classify it as a tip even if the person giving it says it's a gift if a service was rendered before the gift was given. The only way that you could make a case to the IRS that it was a gift is if you have a personal relationship outside of the working environment, and the person giving the gift provides an explanation for the motivation behind the gift. Such explanations as "Happy Birthday" or "Congratulations on graduating" or other special occasions could be gifts. But "you did a good job, and I just want to reward you for your effort" is not a reason someone gives a gift, and the IRS will penalize you if you do not have evidence that it was a gift rather than a tip. |
Are multiple hard inquiries for a specific loan type okay? | Assuming I don't need any other new lines of credit, can I get pre-qualified repeatedly (and with different banks) with impunity? Yes, but only for a limited period. FICO says: Hard inquiries are inquiries where a potential lender is reviewing your credit because you've applied for credit with them. These include credit checks when you've applied for an auto loan, mortgage or credit card. Each of these types of credit checks count as a single inquiry. One exception occurs when you are "rate shopping". That's a smart thing to do, and your FICO score considers all inquiries within a 45 period for a mortgage, an auto loan or a student loan as a single inquiry. However for your situation, since you won't be getting a loan for several months, getting inquiries more than 45 days apart will each count as a separate inquiry. |
Credit Card Approval | Three big ones that are common in almost all banks (though, individually, they may have other criteria): Other criteria I've seen (while working in the banking industry - varying by bank): the average balance you keep on deposit accounts (checking/savings/CDs/etc), number of overdraft fees in the past 12 months (one bank I worked for wouldn't approve a credit card if a customer had more than 5 overdrafts in the past year), the length of time a customer had been with the bank. Note that a credit card only company, like AmEx, may have different criteria in that they don't offer all the other type of accounts that other other banks do. |
What does the -V indicate on MKC ticker | MKC is non-voting stock, MKC/V is voting stock. Ofter times you'll see two or more stock symbols for a company. These usually reflect different classes of stocks. For example, voting vs. non-voting (as in this case) or preferred vs non-preferred stock. |
For net worth, should I value physical property at my cost to replace it, or the amount I could get for selling it? | You are not asking for insurance purposes. So I'll go with this - I have two asset numbers I track. All investments, retirement accounts, etc, the kind that are valued at day's end by the market, etc. From that number I subtract the mortgage. This produces the number that I can say is my net worth with a paid in full house. The second number simply adds back the house's value, give or take. Unless I owned art that was valued in the six figures, it seems pointless to me to add it up, except for insurance. If my wife and I died tomorrow, the kid can certainly auction our stuff off, but knowing that number holds no interest for us. When most people talk 'net worth', I don't see them adding these things up. Cars, maybe, but not even that. |
What are the basics of apartment rental finances? | Well for starters you want to rent it for more than the apartment costs you. Aside from mortgage you have insurance, and maintenance costs. If you are going to have a long term rental property you need to make a profit, or at a bare minimum break even. Personally I would not like the break even option because there are unexpected costs that turn break even into a severe loss. Basically the way I would calculate the minimum rent for an apartment I owned would be: (Payment + (taxes/12) + (other costs you provide) + (Expected annual maintenance costs)) * 100% + % of profit I want to make. This is a business arrangement. Unless you are recouping some of your losses in another manner then it is bad business to maintain a business relationship that is costing you money. The only thing that may be worth considering is what comparable rentals go for in your area. You may be forced to take a loss if the rental market in your area is depressed. But I suspect that right now your condo is renting at a steal of a rate. I would also suspect that the number you get from the above formula falls pretty close to what the going rate in your area is. |
What are the marks of poor investment advice? | To evaluate any advice, this lists some of the things to consider: There are good advisors out there. There are also Bernie Madoffs who give the entire industry a black eye. In the end, the best path is to educate yourself, read as much as you can before you invest. Better to lose a bit by staying out of the market than to lose it all by getting scammed. |
How much house can a retired person afford | Consider a single person with a net worth of N where N is between one and ten million dollars. has no source of income other than his investments How much dividends and interest do your investments return every year? At 5%, a US$10M investment returns $500K/annum. Assuming you have no tax shelters, you'd pay about $50% (fed and state) income tax. https://budgeting.thenest.com/much-income-should-spent-mortgage-10138.html A prudent income multiplier for home ownership is 3x gross income. Thus, you should be able to comfortably afford a $1.5M house. Of course, huge CC debt load, ginormous property taxes and the (full) 5 car garage needed to maintain your status with the Joneses will rapidly eat into that $500K. |
Why would you ever turn down a raise in salary? | I once turned down a raise because I didn't agree with the employee review that supposedly substantiated the raise. I felt the review to be superficial and incomplete. Then I refused to sign it, or take the accompanying raise, due to that fact. |
Are stock purchases on NASDAQ trackable to personal information? | In the United States, when key people in a company buy or sell shares there are reporting requirements. The definition of key people includes people like the CEO, and large shareholders. There are also rules that can lock out their ability to buy and sell shares during periods where their insider knowledge would give them an advantage. These reporting rules are to level the playing field regarding news that will impact the stock price. These rules are different than the reporting rules that the IRS has to be able to tax capital gains. These are also separate than the registration rules for the shares so that you get all the benefits of owning the stock (dividends, voting at the annual meeting, voting on a merger or acquisition). |
Paying extra on a mortgage. How much can I save? [duplicate] | If you're truly ready to pay an extra $1000 every month, and are confident you'll likely always be able to, you should refinance to a 15 year mortgage. 15 year mortgages are typically sold at around a half a point lower interest rates, meaning that instead of your 4.375% APR, you'll get something like 3.875% APR. That's a lot of money over the course of the mortgage. You'll end up paying around a thousand a month more - so, exactly what you're thinking of doing - and not only save money from that earlier payment, but also have a lower interest rate. That 0.5% means something like $25k less over the life of the mortgage. It's also the difference in about $130 or so a month in your required payment. Now of course you'll be locked into making that larger payment - so the difference between what you're suggesting and this is that you're paying an extra $25k in exchange for the ability to pay it off more slowly (in which case you'd also pay more interest, obviously, but in the best case scenario). In the 15 year scenario you must make those ~$4000 payments. In the 30 year scenario you can pay ~$2900 for a while if you lose your job or want to go on vacation or ... whatever. Of course, the reverse is also true: you'll have to make the payments, so you will. Many people find enforced savings to be a good strategy (myself among them); I have a 15 year mortgage and am happy that I have to make the higher payment, because it means I can't spend that extra money frivolously. So what I'd do if I were you is shop around for a 15 year refi. It'll cost a few grand, so don't take one unless you can save at least half a point, but if you can, do. |
Car financed at 24.90% — what can I do? | You could look into refinancing with a bank or credit union. But to weed out options quickly, use a service like LendingTree, which can vet multiple options for you a whole lot more quickly than you could probably do yourself. (I don't work for, or get any benefit from LendingTree.) Whatever you do, try to do all the applying within a short span of time, as to not negatively affect your credit score (read here) by creating extraneous inquiries. Then again, if your credit sucks, you might not qualify for a re-fi. If you are turned down, make your payments on time for six months or so, and try again. |
If I were to get audited, what would I need? | While IANAL (tax or otherwise), I have always found that keeping original receipts is the only way to go. While anything can, at some level, be forged or faked, a photo is one more step removed from the original. A mere listing on a web site isn't much proof of anything. Keep your originals for a suggested seven years; while the IRS is trying to audit much faster than that, and any inkling of fraud can be investigated at any time, you should be well and clear with originals kept that long. |
Technical Analysis: the concepts of overbought / oversold don't make sense | You are right that every transaction involves a seller and a buyer. The difference is the level of willingness from both parties. Overbought and oversold, as I understand them (particularly in the context of stocks), describe prolonged price increase (overbought, people are more willing to buy than sell, driving price up) and price decrease (oversold, people are more willing to sell than buy, driving price down). |
How will Brexit affect house mortgages? | Only you can decide whether it's wise or not given your own personal circumstances. Brexit is certainly a big risk, and noone can really know what will happen yet. The specific worries you mention are certainly valid. Additionally you might find it hard to keep your job or get a new one if the economy turns bad, and in an extreme "no deal" scenario you might find yourself forced to leave - though I think that's very unlikely. House prices could also collapse leaving you in "negative equity". If you're planning on staying in the same location in the UK for a long time, a house tends to be a worthwhile investment, particularly as you always need somewhere to live, so owning it is a "hedge" against prices rising. Even if prices do fall, you do still have somewhere to live. If you're planning on going back to your home country at some point, that reduces the value of owning a house. If you want to reduce your risk, consider getting a mortgage with a long-term fixed rate. There are some available for 10 years, which I'd hope would be enough to get us over most of the Brexit volatility. |
Are prepayment penalties for mortgages normal? | It's not uncommon to have a small penalty if you pre-pay the mortgage in a short time. After all, making the loan isn't free for the bank. But as Nathan says, if a bank is planning to try very hard to stop you from giving them money, there is probably a reason. Try to convince your wife: there is nothing inherently wrong with debt. Like anything, too much can be bad for you, but when debt is deployed wisely -- that is almost always, when it is used to finance a capital asset (an asset that produces value) -- it can be a very good thing. |
What assets would be valuable in a post-apocalyptic scenario? | This is a long term investment but can be very useful during tough times. Be prepared not only to take but to give as well. Moreover: |
Are there good investment options to pay off student loans? | What you're getting at is the same as investing with leverage. Usually this comes in the form in a margin account, which an investor uses to borrow money at a low interest rate, invest the money, and (hopefully!) beat the interest rate. is this approach unwise? That completely depends on how your investments perform and how high your loan's interest rate is. The higher your loan's interest rate, the more risky your investments will have to be in order to beat the interest rate. If you can get a return which beats the interest rates of your loan then congratulations! You have come out ahead and made a profit. If you can keep it up you should make the minimum payment on your loan to maximize the amount of capital you can invest. If not, then it would be better to just use your extra cash to pay down the loan. [are] there really are investments (aside from stocks and such) that I can try to use to my advantage? With interest rates as low as they are right now (at least in the US) you'll probably be hard-pressed to find a savings account or CD that will return a higher interest rate than your loan's. If you're nervous about the risk associated with investing in stocks and bonds (as is healthy!), then know that they come in a wide spectrum of risk. It's up to you to evaluate how much risk you're willing to take on to achieve a higher return. |
Borrowing money for a semi-urgent medical expense | The best option would be to have the dental office allow you pay in installments. That would be probably the cheapest and most convenient way. When high amounts are involved - many medical offices are flexible with payments and allow spreading over long period of time, so you should check it out. Otherwise, credit cards would probably be the most expensive loan, but you should shop around and compare the rates offered to you, it is hard to guess would you may get. |
Should I move my money market funds into bonds? | Your only real alternative is something like T-Bills via your broker or TreasuryDirect or short-term bond funds like the Vanguard Short-Term Investment-Grade Fund. The problem with this strategy is that these options are different animals than a money market. You're either going to subject yourself to principal risk or lose the flexibility of withdrawing the money. A better strategy IMO is to look at your overall portfolio and what you actually want. If you have $100k in a money market, and you are not going to need $100k in cash for the forseeable future -- you are "paying" (via the low yield) for flexibility that you don't need. If get your money into an appropriately diversified portfolio, you'll end up with a more optimal return. If the money involved is relatively small, doing nothing is a real option as well. $5,000 at 0.5% yields $25, and a 5% return yields only $250. If you need that money soon to pay tuition, use for living expenses, etc, it's not worth the trouble. |
Understanding the phrase “afford to lose” better | Well.... If you have alllll your money invested, and then there's a financial crisis, and there's a personal crisis at the same time (e.g. you lose your job) then you're in big trouble. You might not have enough money to cover your bills while you find a new job. You could lose your house, ruin your credit, or something icky like that. Think 2008. Even if there's not a financial crisis, if the money is in a tax-sheltered retirement account then withdrawing it will incur ugly penalities. Now, after you've got an emergency fund established, things are different. If you could probably ride out six to twelve months with your general-purpose savings, then with the money you are investing for the long term (retirement) there's no reason you shouldn't invest 100% of the money in stocks. The difference is that you're not going to come back for that money in 6 months, you're going to come back for it in 40 years. As for retirement savings over the long term, though, I don't think it's a good idea to think of your money in those terms. If you ever lose 100% of your money on the stock market while you've invested in diversified instruments like S&P500 index funds, you're probably screwed one way or another because that represents the core industrial base of the US economy, and you'll have better things to worry about, like looking for a used shotgun. Myself, I prefer to give the suggestion "don't invest any money in stocks if you're going to need to take it out in the next 5 years or so" because you generally shouldn't be worried about a 100% loss of all the money in stocks your retirement accounts nearly so much as you should be worried about weathering large, medium-term setbacks, like the dot-com bubble crash and the 2008 financial crisis. I save the "don't invest money unless you can afford to lose it all" advice for highly speculative instruments like gold futures or social-media IPOs. Remember also that while you might lose a lot of your money on the stock market, your savings accounts and bonds will earn you pathetic amounts by comparison, which you will slowly lose to inflation. If you've had your money invested for decades then even during a crash you may still be coming out ahead relative to bonds. |
Cheapest way to “wire” money in an Australian bank account to a person in England, while I'm in Laos? | I successfully used Currency Fair a few times, they seem to cater for both Australia and the UK. If I remember correctly, you can set everything up via Internet. As they explain on their website, first you open an account with them, then you transfer AUD to an Australian bank account that they will give you, then you exchange and transfer the money to your friend on their web page. Usually they are cheaper than PayPal, especially if you have time to play with their exchange by marketplace functionality (not recommended if you just want to do the transfer). |
Basic mutual fund investment questions | In summary, you are correct that the goal of investing is to maximize returns, while paying low management fees. Index investing has become very popular because of the low fees. There are many actively traded mutual funds out there with very high management fees of 2.5% and up that do not beat the market. This begs the question of why you are paying high management fees and not just investing in index funds. Consider maxing out your tax sheltered accounts (401(k) and ROTH IRA) to avoid even more fees on your returns. Also consider having a growth component of your portfolio which is generally filled with equity, along with a secure component for assets such as bonds. Bonds may not have the exciting returns of equity, but they help to smooth out the volatility of your portfolio, which may help to keep peace of mind when the market dips. |
At what point is it most advantageous to cease depositing into a 401k? | The only time to stop saving money for retirement is when you have enough money to retire tomorrow. Not all of your "retirement savings" need to be in a 401k, it is just better if you can. Be sure to get as much as you can from the employer matching program. Unfortunately some employer matching programs discourage you from putting in too much. I've been able to max out the 401k contribution a number of times, which helps. Remember: you are likely to live to 100, so you better save enough to live that long. I don't trust social security to be there. I recommend saving so that you end up with "enough to be comfortable" -- this is usually about 25x your current income - PLUS inflation between now and when you plan to retire (age 62 is a good target). It is worth knowing your "retirement savings number". If you are making $100K per year now, you need to target $2.5M - PLUS allowance for inflation between now and when you plan to retire. This usually means you need to also arrange to make more money as well as save as much as you can and to use passive investing. Finance advisors are not worth it if you have less than $1M to invest. |
What tax can I expect on US stocks in a UK ISA? | non-resident aliens to the US do not pay capital gains on US products. You pay tax in your home country if you have done a taxable event in your country. http://www.investopedia.com/ask/answers/06/nonusresidenttax.asp#axzz1mQDut9Ru but if you hold dividends, you are subject to US dividend tax. The UK-US treaty should touch on that though. |
Yahoo finance vs SEC filings fundamentals | Sure, Yahoo Finance makes mistakes from time to time. That's the nature of free data. However, I think the issue here is that yahoo is aggregating several line items into one. Like maybe reporting cash equivalents plus total investment securities minus loans as "cash equivalents." This aggregation is done by a computer program somewhere and may or may not be appropriate for a particular purpose and firm. For this reason, if you are trying to do top quality research, it's always better to go to the original SEC filings, if you can. Then you will know for sure which items you are looking at. The only mistakes will be the ones made by the accountants at the firm in question. If there's a reason you prefer to use yahoo, like if it's easier for your code to scrape, then spend a little time comparing to the SEC filing to ensure you know where the numbers really come from before using it. |
At what point is the contents of a trust considered to be the property of the beneficiary? | Both a trust and an estate are separate, legal, taxpaying entities, just like any individual. Income earned by the trust or estate property (e.g., rents collected from real estate) is income earned by the trust or the estate. Who is liable for taxes on income earned by a trust depends on who receives or retains benefits from the trust. Who is liable for taxes on income received by an estate depends on how the income is classified (i.e., income earned by the decedent, income earned by the estate, income in respect of the decedent, or income distributed to beneficiaries). Generally, trusts and estates are taxed like individuals. General tax principles that apply to individuals therefore also apply to trusts and estates. A trust or estate may earn tax−exempt income and may deduct certain expenses. Each is allowed a small exemption ($300 for a simple trust, $100 for a complex trust, $600 for an estate). However, neither is allowed a standard deduction. The tax brackets for income taxable to a trust or estate are much more compressed and can result in higher taxes than for individuals. In short, the trust should have been paying taxes on its gains all along, when the money transfers to you it will be taxed as ordinary income. |
What's the benefit of opening a Certificate of Deposit (CD) Account? | Yes. Savings accounts and CDs today pay almost nothing. They are not a way to grow your money for the future. They are a place to keep some spare cash for emergencies. I don't have such accounts any more. Personally, I generally keep about $2000 in my checking account for any sudden surprise expenses. Any other spare money I have I put into very safe mutual funds. They don't grow much either, but it's better than what I'd get on a savings account or CD. |
Is it bad etiquette to use a credit or debit card to pay for single figure amounts at the POS | I would like to offer a different perspective here. The standard fee for a credit card transaction is typically on the order of 30 cents + 2.5% of the amount (the actual numbers vary, but this is the ballpark). This makes small charges frequently unprofitable for small merchants. Because of this they will often have minimum purchase requirements for credit/debit card payments. The situation changes for large retailers (think Wal-mart, Target, Safeway, Home Depot). I cannot find a citation for this right now, but large retailers are able to negotiate volume discounts from credit card companies (a guy who used to work in finance at Home Depot told me this once). Their transaction fees are MUCH lower than 30 cents + 2.5%. But you get the same reward points on your credit card/debit card regardless of where you swipe it. So my personal philosophy is: large chain - swipe away without guilt for any amount. Small merchant - use cash unless it's hundreds of dollars (and then they may give you a cash discount in that case). And make sure to carry enough cash for such situations. When I was a student, that was about $20 (enough for coffee or lunch at a small place). |
What is the difference between a bond and a debenture? | Investopedia has definitions for both: Debenture: A type of debt instrument that is not secured by physical asset or collateral. Bond: A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Wikipedia's entry for debenture says: In some countries [debenture] is used interchangeably with bond, loan stock or note. Seems to me that there's not much difference. |
Highest market cap for a company from historical data | Adjustments can be for splits as well as for dividends. From Investopedia.com: Historical prices stored on some public websites, such as Yahoo! Finance, also adjust the past prices of the stock downward by the dividend amount. Thus, that could also be a possible factor in looking at the old prices. |
IRR vs. Interest Rates | IRR is not subjective, this is a response to @Laythesmack, to his remark that IRR is subjective. Not that I feel a need to defend my position, but rather, I'm going to explain his. My company offered stock at a 15% discount. We would have money withheld from pay, and twice per year buy at that discount. Coworkers said it was a 15% gain. I offered some math. I started by saying that 100/85 was 17.6%, and that was in fact, the gain. But, the funds were held by the company for an average of 3 months, not 6, so that gain occurred in 3 months and I did the math 1.176^4 and resulted in 91.5% annual return. This is IRR. It's not that it's subjective, but it assumes the funds continue to be invested fully during the time. In our case the 91.5% was real in one sense, yet no one doubled their money in just over a year. Was the 91% useless? Not quite. It simply meant to me that coworkers who didn't participate were overlooking the fact that if they borrowed money at a reasonable rate, they'd exceed that rate, especially for the fact that credit lines are charged day to day. Even if they borrowed that money on a credit card, they'd come out ahead. IRR is a metric. It has no emotion, no personality, no goals. It's a number we can calculate. It's up to you to use it correctly. |
Most common types of financial scams an individual investor should beware of? | If an offer "is only valid right now" and "if you don't act immediately, it will expire" that is almost always a scam. |
How should I think about stock dividends? | Dividends are actually a very stable portion of equity returns, the Great recession and Great Depression notwithstanding: However, dividends, with lower variance have lower returns. Most of the return is due to the more variant price: So while dividends fell by 25% during the worst drop since the Great Depression, prices fell almost by 2/3. If one can accumulate enough wealth to live only off of dividend income, the price risk becomes much more manageable. This is the ideal circumstance for retirement. |
UK Resident exploring freelance work for a Swiss Company | If the firm treats you as an employee then they are treated as having a place of business in the UK and therefore are obliged to operate PAYE on your behalf - this rule has applied to EU States since 2010 and the non-EU EEA members, including Switzerland, since 2012. If you are not an employee then your main options are: An umbrella company would basically bill the client on your behalf and pay you net of taxes and NI. You potentially take home a bit less than you would being 100% independent but it's a lot less hassle and potentially makes sense for a small contract. |
How does a brokerage firm work? | The brokerage executes the transactions you tell them to make on your behalf. Other than acting as your agent for those, and maintaining your account, and charging a fee for the service, they have no involvement -- they do not attempt to predict optimal anything, or hold any assets themselves. |
Car finance (loan) insurance requirements (store car) | Okay, definitive answer for this particular company (Toyota Finance) is (somewhat surprisingly, and glad I asked) it must be fully insured at all times, including liability, even if being stored. I asked at a dealership and they answered "just fire and theft (of course)" but I ended up calling their finance department and the answer was the opposite. So there you go. Thanks for the answers (and for trying to talk me out of wasting money). |
Is it possible for US retail forex traders to trade exotic currencies? | You are in a difficult situation because of US regulation, that is much more demanding to fulfill than in EU or rest of the world. Second, Interactive Brokers stopped serving FX for US clients. Third, EU brokers - like Saxo Bank - don't accept US clients: Almost any private client can open an account with Saxo Bank, although there are few exceptions. You can’t open an account if you are US, Iranian or North Korean resident - Brokerchooser: Saxo Bank Review Working for Brokerchooser, I would say you are limited to Oanda or Gain Capital. The latter is an ECN broker, and operates through other white label partners, you could try Forex.com also. |
Responsible investing - just a marketing trick? | A share is just a part ownership of a company. If you buy a share of a green stock in the open market, you now just own part of a green company. Just like if you buy a house, the money you paid moves to the former owner, but what you are getting is a clear asset in return that you now own. Via mutual funds/indexes this can get a little more complicated (voting rights etc tend to go to the mutual/indexing company rather than the holders of the fund), but is approximately the same thing: the fund buys assets on the open market, then holds them, buys more, or sells them on behalf of the fund investors. |
For a car, would you pay cash, finance for 0.9% or lease for 0.9%? | While this question is old and I generally agree with the answers given I think there's another angle that needs a little illuminating: insurance. If you go with an 84 month loan your car will likely be worth less than the amount owed for substantially all of the entire 84 month loan period; this will be exacerbated if you put zero down and include the taxes and fees in the amount borrowed. Your lender will require you to carry full comprehensive/collision/liability coverage likely with a low maximum deductible. While the car is underwater it will probably also be a good idea to carry gap insurance because the last thing you want to do is write a check to your lender to shore up the loan to value deficit if the thing is totaled. These long term car loans (I've seen as high as 96 months) are a bear when it comes to depreciation and related insurance costs. There is more to this decision than the interest calculation. Obviously, if you had the cash at the front of this decision presumably you'll have the cash later to pay off the loan at your convenience. But while the loan is outstanding there are costs beyond interest to consider. |
Analyze a security using Benjamin Graham's Defensive Investor Criteria | Everything you are doing is fine. Here are a few practical notes in performing this analysis: Find all the primary filing information on EDGAR. For NYSE:MEI, you can use https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000065270&type=10-K&dateb=&owner=exclude&count=40 This is the original 10-K. To evaluate earnings growth you need per share earnings for the past three years and 10,11,12 years ago. You do NOT need diluted earnings (because in the long term share dilution comes out anyway, just like "normalized" earnings). The formula is avg(Y_-1+Y_-2+Y_-3) / is avg(Y_-10+Y_-11+Y_-12) Be careful with the pricing rules you are using, the asset one gets complicated. I recommend NOT using the pricing rules #6 and #7 to select the stock. Instead you can use them to set a maximum price for the stock and then you can compare the current price to your maximum price. I am also working to understand these rules and have cited Graham's rules into a checklist and worksheet to find all companies that meet his criteria. Basically my goal is to bottom feed the deals that Warren Buffett is not interested in. If you are interested to invest time into this project, please see https://docs.google.com/document/d/1vuFmoJDktMYtS64od2HUTV9I351AxvhyjAaC0N3TXrA |
How to deal with IRS response of no action to 83(b) election? | I think you should consult a professional with experience in 83(b) election and dealing with the problems associated with that. The cost of the mistake can be huge, and you better make sure everything is done properly. For starters, I would look at the copy of the letter you sent to verify that you didn't write the year wrong. I know you checked it twice, but check again. Tax advisers can call a dedicated IRS help line for practitioners where someone may be able to provide more information (with your power of attorney on file), and they can also request the copy of the original letter you've sent to verify it is correct. In any case, you must attach the copy of the letter you sent to your 2014 tax return (as this is a requirement for the election to be valid). |
How to respond to a customer's demand for payment extension? | In the event that payment is not made by the due date on the invoice then the transaction is essentially null and void and you can sell the work to another client. For your particular situation I would strongly suggest that you implement a sales contract and agreement of original transfer of work of art for any and all future sales of your original works of art. In this contract you need to either enforce payment in full at time of signing or a deposit at signing with payment in full within (X) amount of days and upon delivery of item. In your sales contract you will want to stipulate a late fee in the event that the client does not pay the balance by the date specified, and a clause that stipulates how long after the due date that you will hold the artwork before the client forfeiting deposit and losing rights to the work. You will also want to specify an amount of time that you provide as a grace period in the event client changes their mind about the purchase, and you can make it zero grace period, making all sales final and upon signing of the agreement the client agrees to the terms and is locked into the sale. In which point if they back out they forfeit all deposits paid. I own a custom web design business and we implement a similar agreement for all works that we create for a client, requiring a 50% deposit in advance of work being started, an additional 25% at time of client accepting the design/layout and the final 25% at delivery of finished product. In the event that a client fails to meet the requirements of the contract for the second or final installment payments the client forfeits all money paid and actually owes us 70% of total quoted project price for wasting our time. We have only had to enforce these stipulations on one client in 5 years! The benefit to you for requiring a deposit if payment is not made in full is that it ensures that the client is serious about purchasing the work because they have put money in the game rather than just their word of wanting to purchase. Think of it like putting earnest money down when you make an offer to buy a house. Hope this helps! |
What are the reasons to get more than one credit card? | 1- To max out rewards. I have 5 different credit cards, one gives me 5% back on gas, another on groceries, another on Amazon, another at restaurants and another 2% on everything else. If I had only one card, I would be missing out on a lot of rewards. Of course, you have to remember to use the right card for the right purchase. 2- To increase your credit limit. One card can give you a credit limit of $5,000, but if you have 4 of them with the same limits, you have increased your purchasing power to $20,000. This helps improve your credit score. Of course, it's never a good idea to owe $20,000 in credit card debt. |
Does Implied Volatilty factor in all known future events? | From every article I've encountered, the chicken and egg aspect suggests that IV is produced by looking at options pricing, and calculating the IV from that. The implication is that whatever is known at that time is included in the price. And that when you see a particular option trade an unusual number of contracts at a given price, the implication is that someone thinks they know something that's not already priced in, i.e. that the current price is not accurate, they can profit on the future event. |
How can small children contribute to the “family economy”? | Similar to the lawn care you mentioned: if you have space, you could have the kids create a mini-farmstand. They could grow flowers for cutting, some vegetables, etc. It would be a different twist on the classic lemonade stand. If the kids are into animals and space and zoning allows, you could keep chickens and add eggs to your mini-farmstand. Upfront costs for the garden would be small enough that they can learn about how investing in a business works at a very small scale. Along with learning about money, they also learn responsibility because it requires commitment and daily attention. It's also seasonal in a way that meshes well with school (though having animals is a constant year-round responsibility). |
Tenant wants to pay rent with EFT | You can consider opening accounts either in Paypal or Google Wallet. In this way, you link your bank information to these accounts and the only information you need to provide your tenant is your e-mail id. Its safe and in this scenario -- just money transfer through bank account, there is no fee either for the sender (your tenant) or the receiver (you). |
Why are stocks having less institutional investors a “good thing”? | Institutional investors are the "elephant" in the room. When they "sneeze," everyone else "catches cold." They're fine, if they're buying after YOU do. They're not bad, if you want to buy after they sell en masse. But when you read about moves of 10 percent, 15 percent or more in a single day, it's because a bunch of institutional investors all decided to do the same thing on the same day. That's more volatility than most people can stomach. Fewer institutional investors in a stock mean fewer chances of those things happening. |
SEP-IRA doing 1099 work on the side of a W2 employee job | The limit on SEP IRA is 25%, not 20%. If you're self-employed (filing on Schedule C), then it's taken on net earning, which in your example would be 25% of $90,000. (https://www.irs.gov/retirement-plans/retirement-plans-for-self-employed-people) JoeTaxpayer is correct as regards the 401(k) limits. The elective deferrals are per person - That's a cap in sum across multiple plans and across both traditional and Roth if you have those. In general, it's actually across other retirement plan types too - See below. If you're self-employed and set-up a 401(k) for your own business, the elective deferral is still aggregated with any other 401(k) plans in which you participate that year, but you can still make the employer contribution on your own plan. This IRS page is current a pretty good one on this topic: https://www.irs.gov/retirement-plans/one-participant-401k-plans Key quotes that are relevant: The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both: •Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit: ◦$18,000 in 2015 and 2016, or $24,000 in 2015 and 2016 if age 50 or over; plus •Employer nonelective contributions up to: ◦25% of compensation as defined by the plan, or ◦for self-employed individuals, see discussion below It continues with this example: The amount you can defer (including pre-tax and Roth contributions) to all your plans (not including 457(b) plans) is $18,000 in 2015 and 2016. Although a plan's terms may place lower limits on contributions, the total amount allowed under the tax law doesn’t depend on how many plans you belong to or who sponsors those plans. EXAMPLE Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2015. He deferred $18,000 in regular elective deferrals plus $6,000 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2015 were $36,500. This is the maximum that can be contributed to the plan for Ben for 2015. A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that his limits on elective deferrals are by person, not by plan. He must consider the limit for all elective deferrals he makes during a year. Notice in the example that Ben contributed more that than his elective limit in total (his was $24,000 in the example because he was old enough for the $6,000 catch-up in addition to the $18,000 that applies to everyone else). He did this by declaring an employer contribution of $12,500, which was limited by his compensation but not by any of his elective contributions. Beyond the 401(k), keep in mind that elective contributions are capped across different types of retirement plans as well, so if you have a SEP IRA and a solo 401(k), your total contributions across those plans are also capped. That's also mentioned in the example. Now to the extent that you're considering different types of plans, that's a whole question in itself - One that might be worth consulting a dedicated tax advisor. A few things to consider (not extensive list): As for payroll / self-employment tax: Looks like you will end up paying Medicare, including the new "Additional Medicare" tax that came with the ACA, but not SS: If you have wages, as well as self-employment earnings, the tax on your wages is paid first. But this rule only applies if your total earnings are more than $118,500. For example, if you will have $30,000 in wages and $40,000 in selfemployment income in 2016, you will pay the appropriate Social Security taxes on both your wages and business earnings. In 2016, however, if your wages are $78,000, and you have $40,700 in net earnings from a business, you don’t pay dual Social Security taxes on earnings more than $118,500. Your employer will withhold 7.65 percent in Social Security and Medicare taxes on your $78,000 in earnings. You must pay 15.3 percent in Social Security and Medicare taxes on your first $40,500 in self-employment earnings and 2.9 percent in Medicare tax on the remaining $200 in net earnings. https://www.ssa.gov/pubs/EN-05-10022.pdf Other good IRS resources: |
I'm only spending roughly half of what I earn; should I spend more? | Goodness, I wish I could put away half my paycheck. Not to rain on your parade, but a 6-month emergency fund is not quite "very good." It is the typical starting time frame. Personally, I would feel more comfortable with a 2+ year fund. That is a bit extreme, but only because many of us can barely seem to make it around to a 6-month fund. So, we focus on the more attainable goal. I say you do all three. Make saving money your priority, but do enjoy some of it; in moderation. Do not plan on making any big purchases with it, but know that you will eventually be able able to do so. Money not spent is worthless Idle money is worthless. Make some -- hopefully -- prudent investments with some of your money. A small portion of that investment portfolio can/should be in speculative investments. Maybe even as much as 20% of your investment portfolio, since you are young. Consider that money gone and you will hopefully be surprised by one of those speculative investments. That is the crucial point: earmark a small portion of your investment portfolio which you are willing to lose. However, do not gamble with it. Research the hot emerging technologies, for example, and find a way to make an investment. So, in summary: You may have more money that you know what do with, right now. However, that does not mean you need to go out and spend it all. Trust me, as you get older you will think of plenty of good uses for that money. |
Double-entry bookkeeping: When selling an asset, does the money come from, Equity or Income? | There are basically two approaches, based on how detailed you want to be in your own personal accounting: Obviously the more like a business or like "real" accounting you want to be, the more complex you can make it, but in general I find that the purpose of personal accounting is (1) to track what I own, and (2) to ensure I have documented anything I need to for tax purposes, and as long as you're meeting those goals any reasonable approach is workable. |
ISA trading account options for US citizens living in the UK | This sounds like a FATCA issue. I will attempt to explain, but please confirm with your own research, as I am not a FATCA expert. If a foreign institution has made a policy decision not to accept US customers because of the Foreign Financial Institution (FFI) obligations under FATCA, then that will of course exclude you even if you are resident outside the US. The US government asserts the principle of universal tax jurisdiction over its citizens. The institution may have a publicly available FATCA policy statement or otherwise be covered in a new story, so you can confirm this is what has happened. Failing that, I would follow up and ask for clarification. You may be able to find an institution that accepts US citizens as investors. This requires some research, maybe some legwork. Renunciation of your citizenship is the most certain way to circumvent this issue, if you are prepared to take such a drastic step. Such a step would require thought and planning. Note that there would be an expatriation tax ("exit tax") that deems a disposition of all your assets (mark to market for all your assets) under IRC § 877. A less direct but far less extreme measure would be to use an intermediary, either one that has access or a foreign entity (i.e. non-US entity) that can gain access. A Non-Financial Foreign Entity (NFFE) is itself subject to withholding rules of FATCA, so it must withhold payments to you and any other US persons. But the investing institutions will not become FFIs by paying an NFFE; the obligation rests on the FFI. PWC Australia has a nice little writeup that explains some of the key terms and concepts of FATCA. Of course, the simplest solution is probably to use US institutions, where possible. Non-foreign entities do not have foreign obligations under FATCA. |
Can value from labor provided to oneself be taxed? | I've heard of handyman type people making a living this way untaxed. They move into a fixer-upper, fix it up while living there, stay over two years and sell. They can pocket $125k/yr tax free this way assuming they produce that much value in their fixing-up. (Beware, though, that this will bite you in low social security payments in retirement!) |
What is a call spread and how does it work? | A bullish (or 'long') call spread is actually two separate option trades. The A/B notation is, respectively, the strike price of each trade. The first 'leg' of the strategy, corresponding to B, is the sale of a call option at a strike price of B (in this case $165). The proceeds from this sale, after transaction costs, are generally used to offset the cost of the second 'leg'. The second 'leg' of the strategy, corresponding to A, is the purchase of a call option at a strike price of A (in this case $145). Now, the important part: the payoff. You can visualize it as so. This is where it gets a teeny bit math-y. Below, P is the profit of the strategy, K1 is the strike price of the long call, K2 is the strike price of the short call, T1 is the premium paid for the long call option at the time of purchase, T2 is the premium received for the short call at the time of sale, and S is the current price of the stock. For simplicity's sake, we will assume that your position quantity is a single option contract and transaction costs are zero (which they are not). P = (T2 - max(0, S - K2)) + (max(0, S - K1) - T1) Concretely, let's plug in the strikes of the strategy Nathan proposes, and current prices (which I pulled from the screen). You have: P = (1.85 - max(0, 142.50 - 165)) - (max(0, 142.50 - 145)) = -$7.80 If the stock goes to $150, the payoff is -$2.80, which isn't quite break even -- but it may have been at the time he was speaking on TV. If the stock goes to $165, the payoff is $12.20. Please do not neglect the cost of the trades! Trading options can be pretty expensive depending on the broker. Had I done this trade (quantity 1) at many popular brokers, I still would've been net negative PnL even if NFLX went to >= $165. |
Formula that predicts whether one is better off investing or paying down debt | Old question I know, but I have some thoughts to share. Your title and question say two different things. "Better off" should mean maximizing your ex-ante utility. Most of your question seems to describe maximizing your expected return, as do the simulation exercises here. Those are two different things because risk is implicitly ignored by what you call "the pure mathematical answer." The expected return on your investments needs to exceed the cost of your debt because interest you pay is risk-free while your investments are risky. To solve this problem, consider the portfolio problem where paying down debt is the risk-free asset and consider the set of optimal solutions. You will get a capital allocation line between the solution where you put everything into paying down debt and the optimal/tangent portfolio from the set of risky assets. In order to determine where on that line someone is, you must know their utility function and risk parameters. You also must know the parameters of the investable universe, which we don't. |
Should I pay off my credit card online immediately or wait for the bill? | It probably doesn't matter since your credit and your checking are at the same institution, but I don't like to let my credit auto draft my checking. I always do it the other way around (and keep them at different places) I feel like there is more control when my money is gone that way. |
Is 401k as good as it sounds given the way it is taxed? | Don't forget inflation. With a Roth 401k (or IRA), you don't pay any taxes on inflationary or real gains. You pay taxes at the beginning and then no more taxes (unless you invest money after you distributed from it). With a regular, taxable investment account (not a 401k or IRA), you pay taxes on the initial amount. And then you pay taxes on the gains, both inflationary and real. So you effectively pay taxes on the inflated principal twice. Once at initial earning and once when it shows up as inflationary gains. I'll give an example later. With a traditional 401k (or IRA), you pay no taxes on the initial amount. You pay taxes on the distributed amount. That includes taxes on gains, but it only taxes them once, not twice. All the taxes are paid at distribution time. Here's a semirealistic example. This is not a real example with real numbers, but the numbers shouldn't be ridiculously off. They could happen. I'm going to ignore variation and pretend that all the numbers will be the same each year so as to simplify the math. So you pay a 25% marginal tax rate and want to invest $12,000 plus any tax savings. Roth: $12,000 principal Traditional IRA (Trad): $16,000 principal with $4000 in tax savings Taxable Investment Account (TIA): $12,000 principal Let's assume that you make an 8% rate of return and inflation is 3%. Both numbers are possible, although higher and lower numbers have occurred in the past. That gives you returns of $960 for the Roth and TIA cases and a return of $1280 for the Trad case. Pay no annual taxes on the Roth or Trad cases. Pay 25% marginal tax on the TIA case, that's $240. Balances after one year: Roth: $12,960 Trad: $17,280 TIA: $12,720 Inflation decreases the value of the Roth and TIA cases by $360 in the Roth and TIA cases. And by $480 in the Trad case. Ten years of inflationary gains (cumulative): Roth: $5354 Trad: $7138 TIA: $4872 Net buildup (including inflationary gains): Roth: $25,907 Trad: $34,543 TIA: $23,168 Real value (minus inflation to maintain spending power): Roth: $20,554 Trad: $27,405 TIA: $18,109 Now take out $3000 per year, after taxes. That's $3000 in the the Roth and TIA cases, as you already paid the taxes. In the Trad case, that's $4000 because you have to pay 25% tax which will cost $1000. Do that for five years and the new balances are Roth: $9931 Trad: $13,241 TIA: $5973 The TIA will run out in the 8th year. The Roth and Trad will both run out in the 9th year. So to summarize. The Traditional IRA initially grows the most. The TIA grows the least. The TIA is tax-advantaged over the Traditional IRA at that point, but it still runs out first. The Roth IRA grows about the same as the Traditional after taxes are included. Note that I left out the matching contribution from a 401k. That would help both those options. I assumed that the marginal tax rate would be 25% on the Traditional IRA distributions. It might be only 15%, which would increase the advantage of the Traditional IRA. I assumed that the 15% rate on capital returns would still be true for the entire period. If that is increased, the TIA option gets a lot worse. Inflation could be higher or lower. As stated earlier, the TIA account is hit the worst by inflation. |
What's a good personal finance management web app that I can use in Canada? | CashBase has a web app, an iPhone app and an Android app, all sync'ed up. It doesn't integrate with banks automatically, but you can import bank statements as CSV. Disclosure: Filip is CashBase's founder. |
What would I miss out on by self insuring my car? | You're trading a fixed liability for an unknown liability. When I graduated from college, I bought a nice used car. Two days later, a deer came out of nowhere, and I hit it going 70 mph on a highway. The damage? $4,500. If I didn't have comprehensive insurance, that would have been a real hit to me financially. For me, I'd rather just pay the modest cost for the comprehensive. |
How to transfer money to yourself internationally? | Hmmm... As far as I know wire transfers are still the best option. If you make sure your US account accepts international wires for free (like TD Bank does) you'll have eliminated most of the costs (assuming your foreign bank doesn't charge too much for wiring the funds in the first place). Also, if your able to, you could consider wiring 6 or so months at the same time. I'm not familiar with XE.com but it seems it's not set up for transferring money so much as for trading currencies. While you could probably use it to transfer funds if you'd link both your accounts it seems a rather complicated way to go about things. Paypal could be an option if they'd allow you to set up an account in each country (or if you have a relative that could help out), but it gets more expensive than wire-transfers quickly. As for getting the best exchange rate... I've given up on that a long time ago and have accepted that as the cost of living internationally :). |
Can an F1 student working on OPT with a STEM extension earn unrelated self employed income from a foreign employer? | From tax perspective, any income you earn for services performed while you're in the US is US-sourced. The location of the person paying you is of no consequence. From immigration law perspective, you cannot work for anyone other than your employer as listed on your I-20. So freelancing would be in violation of your visa, again - location of the customer is of no consequence. |
What are the benefits of opening an IRA in an unstable/uncertain economy? | Even Gold lost 1/2 of it's value between 1980 and 2000. You would not have fared well if you retired during that period heavily invested in Gold. http://www.usagold.com/reference/prices/history.html You said yourself that one can not foresee what the future will bring. At least IRA's force you to into dollar cost averaging, whereas if your money was outside of a retirement account, you might be tempted to speculate. -Ralph Winters |
How much is university projected to cost in Canada in 18 years? | Here's a great Canadian college/university cost calculator I used; found at Canadian Business - they say: Our tool is divided into three easy steps. First, calculate the tuition cost for the university and faculty you wish to attend. Then, calculate any additional fees for residence (on campus student housing), meal plans, athletics, health and student services. This will give you the total cost a student will pay at a Canadian university in 2006/7. Once you know the total annual cost, take the third step to calculate the total cost for the duration of the course of study. Of course, this only calculates what it will cost you NOW, not eighteen years from now, but it's a good start :) |
Why is there inconsistent returns difference between direct and regular Mutual Funds? | If this is the case, then shouldn't the difference between their annualized returns be same year on year? In general yes, however there difference has a compounding effect. i.e. if the difference if 5% first year, this money is invested and it would generate more of the said returns. However in reality as the corpus size of direct funds is very small, there difference is not very significant as other factors come into play. |
How do you invest in real estate without using money? | There is (almost) always money involved somewhere, but it doesn't have to come from you. It can be investors, credit cards, or even seller-financing (I've done all 3). Examples: If you can find partners with the money to make the deals happen, then your job is to put the deal together. Find the properties, negotiate the price, even get the property under contract (all without any obligation or cost on your part... yes it absolutely can be done). Then your partners will fund the deal if it's good enough and their terms are met, etc. In some areas you can put a property on a credit card. If you find a house say for $25,000 that will rent for $300/month, and you can put it on a credit card (especially at zero percent for a year or something similar), then you can generate cashflow as a landlord without putting up any cash of your own on the purchase. Of course there are many risks associated with landlording and i could tell you horror stories... but we're not addressing that here. You can negotiate a sale with an owner who agrees to finance the entire purchase for you. I once purchased 3 properties at once this way from a seller who financed the entire sale, all closing costs, everything, this way. Of course they needed a lot of repair and such so I had to fund that another way, but at least the purchase itself cost me no money out of pocket. So these infomercials/courses are not inherently scams in the sense that what they are teaching is (usually... I'm sure there are exceptions) true. However they generally give you enough information to get into trouble, and not out. But that's what true learning is... it's getting into trouble and finding a way out that doesn't kill you. =) That's called experience, and you can't buy that for any price. |
Online Foreign Exchange Brokerages: Which ones are good & reputable for smaller trades? | I used Oanda.com for Forex trading a couple years ago. I am in the US but I think it's available in the UK as well. At the time, they had no commissions and their spreads were comparable or better than other brokers. The spreads would just quite considerably when a big event like a Fed meeting or the unemployment figures come out, but I suspect that that is the same everywhere (or they have constant spreads and reject trades). They did not push the high leverages like other brokers were at the time. I considered this to be very reputable, because though the profits to be gotten through 100:1 leverage are great advertising, the reality is that one unexpected spike and a newbie would lose a bunch of money in a margin call. |
Minimizing loss during two-way currency transfers involving foreign entities | The solution was to get a foreign bank in each country we do business in. Get a credit card processor there, and simply make our money and keep our money in that country, and taking quarterly gains from those accounts and bringing them to the US account. |
What's the difference between Buy and Sell price on the stock exchange [duplicate] | This is copying my own answer to another question, but this is definitely relevant for you: A bid is an offer to buy something on an order book, so for example you may post an offer to buy one share, at $5. An ask is an offer to sell something on an order book, at a set price. For example you may post an offer to sell shares at $6. A trade happens when there are bids/asks that overlap each other, or are at the same price, so there is always a spread of at least one of the smallest currency unit the exchange allows. Betting that the price of an asset will go down, traditionally by borrowing some of that asset and then selling it, hoping to buy it back at a lower price and pocket the difference (minus interest). Going long, as you may have guessed, is the opposite of going short. Instead of betting that the price will go down, you buy shares in the hope that the price will go up. So, let's say as per your example you borrow 100 shares of company 'X', expecting the price of them to go down. You take your shares to the market and sell them - you make a market sell order (a market 'ask'). This matches against a bid and you receive a price of $5 per share. Now, let's pretend that you change your mind and you think the price is going to go up, you instantly regret your decision. In order to pay back the shares, you now need to buy back your shares as $6 - which is the price off the ask offers on the order book. Similarly, the same is true in the reverse if you are going long. Because of this spread, you have lost money. You sold at a low price and bought at a high price, meaning it costs you more money to repay your borrowed shares. So, when you are shorting you need the spread to be as tight as possible. |
Priced out of London property market. What are my accommodation investment options? | NB - I live in Surrey and bought my house in January 2014. If you don't have a very social life, it does pay to stay outside London. Places outside London are cheap and you will get a better deal in relation to houses or flats as compared to London. I feel very priced out of the market regarding London mortgages I will strongly question you logic behind this ? Why only London ? Why not live in the commuter belt outside London. Good places to reside, good schools, nice neighbourhood and away from the hustle and bustle of London. Many of my colleagues commute from Cambridge and Oxford daily into Central London and they laugh at people who want to buy a house in London, just for the sake of buying a house. It seems that the housing market is generally in a bubble due to being distorted by the finance market London house market is different from the rest of UK. People from overseas tend to invest in London property market, so it is always inflated. Even the property tax hasn't deterred many. I could look into buying somewhere and renting it out You are trying to join the same people, because of whom you have been put out of the housing market. I strictly question this logic unless your mortgage is less than the rent you pay and what rent you get. Buy a roof over your head first, then think of profiting from property. |
Buying and selling the same stock | Unfortunately, we don't know your country, but I'd guess "Not US" with the hint being your use of the word bugger in a comment. Realized profits are taxed by all tax authorities I'm aware of, i.e. the Tax Man in every country. Annually, so that you can let the profits run during the year, and offset by the losses during that year. The exception is within a qualified retirement account. Many countries offer accounts that will let you do just what you're suggesting, start with XXX number of Quatloos in your account, trade for decades, and only take the tax hit on withdrawal. In some cases there's an opportunity to fund the account post tax, and never pay tax again. But to repeat, this is with a retirement account, not the usual trading accounts. |
How do I get a Tax Exemption Certificate for export from the US if I am in another country? | Depends on the state, in Texas you should charge sales tax because the shipment is going to a freight forwarder in Texas. That being said, once you have the bill of lading you can have your tax credited by the vendor. It is one of the documents the state will except in lieu of sales tax for exports. There are five. You can find this info at the Comptrollers website. I would validate that you are being charged sales/use tax and not withholding tax, withholding would be related to your country. Doc requirements for export vary from state to state. |
Co- Signed car loan and need to have the other signer relinquish claim to ownership | The key here is the bank, they hold the title to the car and as such have the final say in things. The best thing you can do is to pay off the loan. Could you work like crazy and pay off the car in 6 months to a year? The next best thing would be to sell the car. You will probably have to cover the depreciation out of pocket. You will also need to have some cash to buy a different car, but buy it for cash like you should have done in the first place. The worst option and what most people opt for, which is why they are broke, is to seek to refinance the car. I am not sure why you would have to wait 6 months to a year to refinance, but unless you have truly horrific credit, a local bank or credit union will be happy for your business. Choose this option if you want to continue to be broke for the next five years or so. Once any of those happen it will be easy to re-title the car in your name only provided you are on good terms with the girlfriend. It is just a matter of going to the local title office and her signing over her interest in the car. My hope is that you understand the series of foolish decisions that you made in this vehicle purchase and avoid them in the future. Or, at the very least, you consciously make the decision to appear wealthy rather than actually being wealthy. |
How does spot-futures arbitrage work in the gold market? | As proposed: Buy 100 oz of gold at $1240 spot = -$124,000 Sell 1 Aug 2014 Future for $1256 = $125,600 Profit $1,600 Alternative Risk-Free Investment: 1 year CD @ 1% would earn $1240 on $124,000 investment. Rate from ads on www.bankrate.com "Real" Profit All you are really being paid for this trade is the difference between the profit $1,600 and the opportunity for $1240 in risk free earnings. That's only $360 or around 0.3%/year. Pitfalls of trying to do this: Many retail futures brokers are set up for speculative traders and do not want to deal with customers selling contracts against delivery, or buying for delivery. If you are a trader you have to keep margin money on deposit. This can be a T-note at some brokerages, but currently T-notes pay almost 0%. If the price of gold rises and you are short a future in gold, then you need to deposit more margin money. If gold went back up to $1500/oz, that could be $24,400. If you need to borrow this money, the interest will eat into a very slim profit margin over the risk free rate. Since you can't deliver, the trades have to be reversed. Although futures trades have cheap commissions ~$5/trade, the bid/ask spread, even at 1 grid, is not so minimal. Also there is often noisy jitter in the price. The spot market in physical gold may have a higher bid/ask spread. You might be able to eliminate some of these issues by trading as a hedger or for delivery. Good luck finding a broker to let you do this... but the issue here for gold is that you'd need to trade in depository receipts for gold that is acceptable for delivery, instead of trading physical gold. To deliver physical gold it would likely have to be tested and certified, which costs money. By the time you've researched this, you'll either discover some more costs associated with it or could have spent your time making more money elsewhere. |
As a 22-year-old, how risky should I be with my 401(k) investments? | At 50 years old, and a dozen years or so from retirement, I am close to 100% in equities in my retirement accounts. Most financial planners would say this is way too risky, which sort of addresses your question. I seek high return rather than protection of principal. If I was you at 22, I would mainly look at high returns rather than protection of principal. The short answer is, that even if your investments drop by half, you have plenty of time to recover. But onto the long answer. You sort of have to imagine yourself close to retirement age, and what that would look like. If you are contributing at 22, I would say that it is likely that you end up with 3 million (in today's dollars). Will you have low or high monthly expenses? Will you have other sources of income such as rental properties? Let's say you rental income that comes close to covering your monthly expenses, but is short about 12K per year. You have a couple of options: So in the end let's say you are ready to retire with about 60K in cash above your emergency fund. You have the ability to live off that cash for 5 years. You can replenish that fund from equity investments at opportune times. Its also likely you equity investments will grow a lot more than your expenses and any emergencies. There really is no need to have a significant amount out of equities. In the case cited, real estate serves as your cash investment. Now one can fret and say "how will I know I have all of that when I am ready to retire"? The answer is simple: structure your life now so it looks that way in the future. You are off to a good start. Right now your job is to build your investments in your 401K (which you are doing) and get good at budgeting. The rest will follow. After that your next step is to buy your first home. Good work on looking to plan for your future. |
How can I help my friend change his saving habits? | Get him the book "Total Money Makeover" (http://www.amazon.com/Total-Money-Makeover-Classic-Financial/dp/1595555277/ref=sr_1_1?ie=UTF8&qid=1448904191&sr=8-1&keywords=total+money+makeover) and tell him to follow the baby steps. If he comes to you again or doesn't follow your advice, remind him to follow the baby steps. Repeat as needed. |
Advice on strategy for when to sell | Consider trailing stop losses maybe 5% below your profit target, if you want a simplistic answer. |
Why do people buy new cars they can not afford? | The car you dream of might not be available in your local used car market. Or if it is, there might be something wrong with it. Here are some reasons that a person might want to buy a new car. Basically, if you have a picture in your mind of what your next car should look like, it is easier to shop for a new car: New cars are getting better. Here are some reasons that a person might want a newer generation car rather than an older generation car: Cars wear out. Here are some reasons a person shopping for a car might pass on a used car: In other words, there are good reasons to want a car that is either brand new, exactly two years old, or 3 - 5 years old. The brand new car might be better than the old car ever was. |
How best to grow my small amount of money starting at a young age? [duplicate] | I would like to add my accolades in saving $3000, it is an accomplishment that the majority of US households are unable to achieve. source While it is something, in some ways it is hardly anything. Working part time at a entry level job will earn you almost three times this amount per year, and with the same job you can earn about as much in two weeks as this investment is likely to earn, in the market in one year. All this leads to one thing: At your age you should be looking to increase your income. No matter if it is college or a high paying trade, whatever you can do to increase your life time earning potential would be the best investment for this money. I would advocate a more patient approach. Stick the money in the bank until you complete your education enough for an "adult job". Use it, if needed, for training to get that adult job. Get a car, a place of your own, and a sufficient enough wardrobe. Save an emergency fund. Then invest with impunity. Imagine two versions of yourself. One with basic education, a average to below average salary, that uses this money to invest in the stock market. Eventually that money will be needed and it will probably be pulled out of the market at an in opportune time. It might worth less than the original 3K! Now imagine a second version of yourself that has an above average salary due to some good education or training. Perhaps that 3K was used to help provide that education. However, this second version will probably earn 25,000 to 75,000 per year then the first version. Which one do you want to be? Which one do you think will be wealthier? Better educated people not only earn more, they are out of work less. You may want to look at this chart. |
Do my parents need to pay me minimum wage? | There is actually a restriction on how high a wage they can pay you. There didn't use to be, but now it has to be reasonable for the work you are doing, so they can't pay you $100/hr while other people doing the same work get minimum wage. You might ask why on earth a parent would want to pay a child way more than they're worth? The salary is tax deductible to the company. Then the child pays their "expenses" - hockey fees and equipment, field trips, birthday presents for their friends and so on - out of the money the company paid them. They also save for their post-secondary education. The rest of the family budget now has a little more room, and the parents can lower their own salaries if they have expensive children. This means more net money in the company and less total income tax paid by the family for the same total income. My concern is that if your parents don't know whether or not you must be paid minimum wage (you must, there's no family exemption) then they also don't know whether you should have EI deducted (probably not) and various other special cases like eligibility for summer student subsidies. The firm's accountant should be able to help with these things and the company should know all this. It's not the role of a 14 year old to ask the Internet how to run a business, the business owners should know it. |
Can a company charge you for services never requested or received? | No. A company cannot bill you for services you did not request nor receive. If they could, imagine how many people would just randomly get bills in their mail. Ignore them. They don't have a contract or agreement with you and can't do anything other than make noise. If they get aggressive or don't stop requesting money, hire an attorney and it will be taken care of. |
How much life insurance do I need? | If I remember the information in "The Wealthy Barber" correctly, he said: And as someone once said to me, "make sure you're worth more alive than dead!" :-) |
Beginner questions about stock market | If I bought 1 percent share of company X, Most countries company X, is treated as a separate legal entity than individual. So max loss is what you have invested. However certain types of companies, generally called partnerships are not separate entities and you have to pay back the said loss. However such companies are not traded on stock exchanges. Is there an age requirements to enter the stock market? Depends on country. Generally a minor can hold an account with a guardian. |
Executing a stop loss at the purchase price? | You will lose out on your spread, you always pay a spread. Also, if you are looking at a strategy for using stop losses, try taking into account the support lines if you are going long. So, if the stock is on an upward trend but is dropping back from profit taking, your best best is to take a position closest to the next support line. You place your stop just below the support. this will give you the best chance of a winning position as most technical analysts will have looking towards the support as a buy back area. Obviously, in a bear market the opposite is true. If you have taken your position and the market move past the first resistance line, then bring your stop to just below that line as once resistance is broken, it then becomes support. You then have a profitable position with profit locked in. Leave the position to break the next resistance and repeat. |
Owning REIT vs owning real estate - which has a better hypothetical ROI? | Your question may have another clue. You are bullish regarding the real estate market. Is that for your city, your state, your nation or for the whole world? Unless you can identify particular properties or neighborhoods that are expected to be better than the average return for your expected bull market in real estate, you will be taking a huge risk. It would be the same as believing that stocks are about to enter a bull market, but then wanting to put 50% of your wealth on one stock. The YTD for the DOW is ~+7%, yet 13 of the 30 have not reached the average increase including 4 that are down more than 7%. Being bullish about the real estate segment still gives you plenty of opportunities to invest. You can invest directly in the REIT or you can invest in the companies that will grow because of the bullish conditions. If your opinion changes in a few years it is hard to short a single property. |
Personal Banking using accrual method | You would add your daily earnings every day. For example, you work full time job (8 hours a day) at $20/hour. At the end of the 1st day of the month, you'd add $160 to your salary account. You've earned it, even though its still almost a month till you actually get paid. So its accrued. What if you don't get paid? You've accrued it already, its on your books, but not in your wallet. You might have paid taxes on it, etc. But you don't really have it. This is what is called "bad debt", and eventually, after you can show that the payee is not going to pay, you write it off - remove it from your books (and adjust your taxes etc that you paid on that income already). Generally, it is a very bad idea to use accrual method of accounting for an individual or a small business. For large volume business using accrual mode solves other accounting and revenue recognition problems. |
Deducting business expenses paid for by gift card | To quote the answer you linked to: Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. So, if your business purchased the $1000 gift card for $800, you should see a $800 charge appearing on a business CC or bank statement. You would therefore be able to deduct the $800, but not the full $1000 of items that you purchase with it. Side Notes: |
Is there any benefit to investing in an index fund? | Index funds may invest either in index components directly or in other instruments (like ETFs, index options, futures, etc.) which are highly correlated with the index. The specific fund prospectus or description on any decent financial site should contain these details. Index funds are not actively managed, but that does not mean they aren't managed at all - if index changes and the fund includes specific stock, they would adjust the fund content. Of course, the downside of it is that selling off large amounts of certain stock (on its low point, since it's being excluded presumably because of its decline) and buying large amount of different stock (on its raising point) may have certain costs, which would cause the fund lag behind the index. Usually the difference is not overly large, but it exists. Investing in the index contents directly involves more transactions - which the fund distributes between members, so it doesn't usually buy individually for each member but manages the portfolio in big chunks, which saves costs. Of course, the downside is that it can lag behind the index if it's volatile. Also, in order to buy specific shares, you will have to shell out for a number of whole share prices - which for a big index may be a substantial sum and won't allow you much flexibility (like "I want to withdraw half of my investment in S&P 500") since you can't usually own 1/10 of a share. With index funds, the entry price is usually quite low and increments in which you can add or withdraw funds are low too. |
Which graduate student loans are preferable? | All new loans must be originated from the direct loan program. In most cases, the Stafford loan is better, as the rate is lower (6.8% vs. 7.9% for the PLUS loan). There aren't many viable alternatives for most people. Private student loans exist, but carry significantly higher rates and worse payment terms. The exceptions are programs that exist for professions like medicine and dentistry. Credit cards usually carry higher rates and limited credit lines, but you have the option of negotiating the balance down or declaring bankruptcy to discharge the debt if you are unable to repay. |
Car financed at 24.90% — what can I do? | If you are a subprime borrower, that may not be an unreasonable rate given the risk they are accepting. In any case, it's what you agreed to. As others have said, you could/should have shopped elsewhere for the loan. In fact, you can still shop elsewhere for a loan to refinance that vehicle and thus lower the rate, unless the existing loan has equally obnoxious rules about that. |
Requirements for filing business taxes? | While she can certainly get an LLC or EIN, it isn't necessarily required or needed. She can file as a sole-proprietor on her (or your joint) taxes by filling out a schedule-C addition to the 1040. Any income or losses will pass through to your existing income situation (from W-2's and such). The general requirement for filing as a business in this regard has nothing to do with any minimum income, revenue, or size. It is simply the intent to treat it as a business, and unlike a hobby, the overall intent to earn a profit eventually. If you're currently reporting the 1099-MISC income, but not deducting the expenses, this would be a means for you to offset the income with the expenses you mentioned (and possibly other legitimate ones). There is no "2% AGI" restriction for schedule-C. |
Refinancing a vehicle, longer term with extra in the kitty, or shorter term and just make scheduled payment? | It really depends on the answers to two questions: 1) How tight is your budget going to be if you have to make that $530 payment every month? Obviously, you'd still be better off than you are now, since that's still $30 cheaper. But, if you're living essentially paycheck to paycheck, then the extra flexibility of the $400/month option can make the difference if something unforeseen happens. 2) How disciplined (financially) have you proven you can be? The "I'll make extra payments every month" sounds real nice, but many people end up not doing it. I should know, I'm one of them. I'm still paying on my student loans because of it. If you know (by having done it before), that you can make that extra $130 go out each and every month and not talk yourself into using it on all sorts of "more important needs", then hey, go for it. Financial flexibility is a great thing, and having that monthly nut (all your minimum living expenses combined) as low as possible contributes greatly to that flexibility. Update: Another thing to consider Another thing to consider is what they do with your extra payment. Will they apply it to the principal, or will they treat it as a prepayment? If they apply it to principal, it'll be just like if you had that shorter term. Your principal goes down additionally by that extra amount, and the next month, you owe another $400. On the other hand, if they treat it as a prepayment, then that extra $130 will be applied to the next month's bill. Principal stays the same, and the next month you'll be billed $270. There are two practical differences for you: 1) With prepayment, you'll pay slightly more interest over that 60 months paying it off. Because it's not amortized into the loan, the principal balance doesn't go down faster while the loan exists. And since interest is calculated on the remaining principal balance, end result is more interest than you otherwise would have paid. That sucks, but: 2) with the prepayment, consider that at the end of year 2, you'd have over 7 months of payments prepaid. So, if some emergency does come up, you don't have to send them any money at all for 7 months. There's that flexibility again. :-) Honestly, while this is something you should find out about the loan, it's really still a wash. I haven't done the math, but with the interest rate, amount of the loan and time frame, I think the extra interest would be pretty minor. |
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