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Canceling credit cards - insurance rate increase?
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The comments section to Dilip's reply is overflowing. First - the OP (Graphth) is correct in that credit scoring has become a game. A series of data points that predicts default probability, but of course, offers little chance to explain why you applied for 3 loans (all refinancing to save money on home or rentals) got new credit cards (to get better rewards) and have your average time with accounts drop like a rock (well, I canceled the old cards). The data doesn't dig that deep. To discuss the "Spend More With Plastic?" phenomenon - I have no skin in the game, I don't sell credit card services. So if the answer is yes, you spend more with cards, I'll accept that. Here's my issue - The studies are all contrived. Give college students $10 cash and $10 gift cards and send them into the cafeteria. Cute, but it produces no meaningful data. I can tell you that when I give my 13yr old $20 cash, it gets spent very wisely. A $20 Starbucks card, and she's treating friends and family to lattes. No study needed, the result is immediate and obvious. Any study worth looking at would first separate the population into two groups, those who pay in full each month and those who carry a balance. Then these two groups would need to be subdivided to study their behavior if they went all cash. Not a simply survey, and not cheap to get a study of the number of people you need for meaningful data. I've read quotes where The David claimed that card users spend 10% more than cash users. While I accept that Graphth's concern is valid, that he may spend more with cards than cash, there is no study (that I can find) which correlates to a percentage result as all studies appear to be contrived with small amounts to spend. As far as playing the game goes - I can charge gas, my cable bill, and a few other things whose dollar amounts can't change regardless. (Unless you're convinced I'll gas up and go joy-riding) Last - I'd love to see any link in the comments to a meaningful study. Quotes where conclusions are stated but no data or methodology don't add much to the discussion. Edit - Do You Spend More with Cash or Credit? is an article by a fellow Personal Finance Blogger. His conclusion is subjective of course, but along the same path that I'm on with this analysis.
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Where do traders take their prices data from? How can it be different from their brokers'?
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This is a complicated subject, because professional traders don't rely on brokers for stock quotes. They have access to market data using Level II terminals, which show them all of the prices (buy and sell) for a given stock. Every publicly traded stock (at least in the U.S.) relies on firms called "market makers". Market makers are the ones who ultimately actually buy and sell the shares of companies, making their money on the difference between what they bought the stock at and what they can sell it for. Sometimes those margins can be in hundreds of a cent per share, but if you trade enough shares...well, it adds up. The most widely traded stocks (Apple, Microsoft, BP, etc) may have hundreds of market makers who are willing to handle share trades. Each market maker sets their own price on what they'll pay (the "bid") to buy someone's stock who wants to sell and what they'll sell (the "ask") that share for to someone who wants to buy it. When a market maker wants to be competitive, he may price his bid/ask pretty aggressively, because automated trading systems are designed to seek out the best bid/ask prices for their trade executions. As such, you might get a huge chunk of market makers in a popular stock to all set their prices almost identically to one another. Other market makers who aren't as enthusiastic will set less competitive prices, so they don't get much (maybe no) business. In any case, what you see when you pull up a stock quote is called the "best bid/ask" price. In other words, you're seeing the highest price a market maker will pay to buy that stock, and the lowest price that a market maker will sell that stock. You may get a best bid from one market maker and a best ask from a different one. In any case, consumers must be given best bid/ask prices. Market makers actually control the prices of shares. They can see what's out there in terms of what people want to buy or sell, and they modify their prices accordingly. If they see a bunch of sell orders coming into the system, they'll start dropping prices, and if people are in a buying mood then they'll raise prices. Market makers can actually ignore requests for trades (whether buy or sell) if they choose to, and sometimes they do, which is why a limit order (a request to buy/sell a stock at a specific price, regardless of its current actual price) that someone places may go unfilled and die at the end of the trading session. No market maker is willing to fill the order. Nowadays, these systems are largely automated, so they operate according to complex rules defined by their owners. Very few trades actually involve human intervention, because people can't digest the information at a fast enough pace to keep up with automated platforms. So that's the basics of how share prices work. I hope this answered your question without being too confusing! Good luck!
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Calculating a stock's price target
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The price-earnings ratio is calculated as the market value per share divided by the earnings per share over the past 12 months. In your example, you state that the company earned $0.35 over the past quarter. That is insufficient to calculate the price-earnings ratio, and probably why the PE is just given as 20. So, if you have transcribed the formula correctly, the calculation given the numbers in your example would be: 0.35 * 4 * 20 = $28.00 As to CVRR, I'm not sure your PE is correct. According to Yahoo, the PE for CVRR is 3.92 at the time of writing, not 10.54. Using the formula above, this would lead to: 2.3 * 4 * 3.92 = $36.06 That stock has a 52-week high of $35.98, so $36.06 is not laughably unrealistic. I'm more than a little dubious of the validity of that formula, however, and urge you not to base your investing decisions on it.
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Are REIT worth it and is it a good option to generate passive income for a while?
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In financial markets, the gains you can expect to make (whether in the form of dividends or capital gains) correspond to the risks you are bearing. There are a variety of REITs but you can expect to make only as much money in them as you bear risk (meaning you can also lose a lot of money in the ones that earn a lot). In that sense they are just like other financial assets like stocks. If you are generically trying to increase your wealth by bearing risk, you can get a better risk/reward ratio in a fully diversified portfolio including stocks and bonds as well and REITs. "Passive income" means making money by bearing risk. REITs alone, without diversifying into other financial assets, do a poor job of generating income for the amount of risk you bear. So why are REITs not very comparable to buying a house and renting it out? Because in the latter case you are being paid not only for bearing the risk of the house depreciating but also you are being compensated for the work you do as a landlord. Moreover, because the house doesn't trade in a liquid market like REITs do, it is possible to actually get a good deal, as opposed to the fair deal you will get on a REIT. TL;DR: The "passive income" generated by REIT investment is more similar to generic equity/bond investment than it is to an investment in a physical home that you rent out. If what you want is to make money without doing anything besides bear risk, you should invest in a fully diversified portfolio of financial assets (equity and bonds being the primary constituents but REITs potentially being a part as well).
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Which r in perpetuity formula to pricing a business?
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In the equity markets, the P/E is usually somewhere around 15. The P/E can be viewed as the inverse of the rate of a perpetuity. Since the average is 15, and the E/P of that would be 6.7%, r should be 6.7% on average. If your business is growing, the growth rate can be incorporated like so: As you can see, a high g would make the price negative, in essence the seller should actually pay someone to take the business, but in reality, r is determined from the p and an estimated g. For a business of any growth rate, it's best to compare the multiple to the market, so for the average business in the market with your business's growth rate and industry, that P/E would be best applied to your company's income.
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Market Cap lower than Shares Outstanding x Share Price?
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You are comparing "market caps" and "enterprise value". If the company has four billion dollars cash in the bank, then the value would be four billion plus whatever the business itself is worth as a business. If the business itself is only worth 400 million, then you would have 4.4bn market caps and 400 million enterprise value. The "enterprise value" is basically how much the business would be worth if it had no cash or no debt. These numbers would be a very unusual situation. It could happen for example if a big company has sold 90% of its business for cash. When you buy a share of the company, you get a tiny share of the business and you own a tiny share of the cash. This stock will very likely keep its value, but won't make much money. On the other hand, more common would be a company where the business is worth 4bn, but the company has also 4bn debt. So it is worth exactly zero. Market caps close to zero, but enterprise value $4bn, because you ignore the debt in the enterprise value. Edit: Sorry, got the "enterprise value" totally wrong, read millions instead of billions: Your numbers would mean that you have a huge, huge company with close to 440bn debt. Most likely someone made a mistake here. A "normal" situation would be say a company with a business that is worth $500 million, but they have $100 million debt, so market caps = $400 million but enterprise value = $500 million. PS. Yahoo has the same nonsense numbers on their UK site, and for other companies (I just checked Marks and Spencer's which apparently has an enterprise value of 800 billion pound with a totally ridiculous P/E ratio.
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Should we prepay our private student loans, given our particular profile?
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Based on your numbers, it sounds like you've got 12 years left in the private student loan, which just seems to be an annoyance to me. You have the cash to pay it off, but that may not be the optimal solution. You've got $85k in cash! That's way too much. So your options are: -Invest 40k -Pay 2.25% loan off -Prepay mortgage 40k Play around with this link: mortgage calculator Paying the student loan, and applying the $315 to the monthly mortgage reduces your mortgage by 8 years. It also reduces the nag factor of the student loan. Prepaying the mortgage (one time) reduces it by 6 years. (But, that reduces the total cost of the mortgage over it's lifetime the most) Prepaying the mortgage and re-amortizing it over thirty years (at the same rate) reduces your mortgage payment by $210, which you could apply to the student loan, but you'd need to come up with an extra $105 a month.
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Are there alternatives to double currency account to manage payments in different currencies?
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Yes, there is indeed a great alternative for all European residents: getting a Revolut account. Revolut is a fully-online bank who's main benefits include the lack of fees (with some limits) and a great exchange rate for all currency operations (better than what you would get at any brick and mortar bank in Europe). In your particular scenario it would work as following: This is what I personally use to handle a salary in EUR while living in Czech Republic. Things might change in the future once they run out of investor money, but for now it's the only solution I know for converting currencies without a loss.
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What is a subsidy?
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subsidy - financial support. For example subsidized housing - when the government pays a part of your rent (usually for low income families). or subsidized student loan - when somebody else is paying interest on the money you borrowed while you are in school.
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What's a good option for passive income for a college student?
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There's no such thing as true "passive income." You are being paid the risk free rate to delay consumption (i.e., the super low rate you are getting on savings accounts and CDs) and a higher rate to bear risk. You will not find truly risk-free investments that earn more than the types of investments you have been looking at...most likely you will not keep up with inflation in risk-free investments. For a person who is very risk averse but wants to make a little more money than the risk-free rate, the solution is not to invest completely in slightly risky things. Instead the best thing you can do is invest partially in a fully diversified portfolio. A diversified portfolio (containing stocks, bonds, etc) will earn you the most return for the given amount of risk. If you want very little risk, put very little in that portfolio and keep the rest in your CDs. Put 90% of your money in a CD or something and the other 10% in stocks/bonds. Or choose a different percentage. You can also buy real assets, like real estate, but you will find yourself taking a different type of risk and doing a different type of work with those assets.
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Cost basis allocation question: GM bonds conversion to stock & warrants
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Your final tax basis could not be determined until June 14, 2012, the first day of separate trading of all four securities that you received from the GM bankruptcy reorganization.
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What are my options for paying off the large balance of my federal, high interest student loans?
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As someone with a lot of student loan debt, I can relate - the first thing you should do is read the promissory note on your current loans - there might be information there you can use. For govt loans (stafford, etc) made after July 1, 2006 the interest rate is going to be fixed and even a federal direct consolidation is not going to lower the rates themselves. If anything, consolidation will just increase the repayment period, which means you'll end up paying more in the long run. Most private Loans usually offer variable interest rates, which today are quite low. But unless your financial situation is very comfortable and stable, consolidating out of federally guaranteed loans into private loans might not be the best path. You might lose options like deferment, forbearance, and maybe even things like a death benefit (if you die, your loans die with you). related - if you have a co-signer you don't get that death benefit! But refinancing into a variable rate private loan is going to push a lot of risk to you in terms of interest rate inflation, etc. Most financial professionals will agree that interest rates can only go up in the long run. Keep in mind, student loans are completely unsecured - meaning lenders are taking a fairly large risk in loaning money (and probably why the fed govt has to guarantee most of them). I've heard of people borrowing against their home equity to pay down student loan debt - but I can't think of a reason you'd want to substitute secured for unsecured debt and possibly lose the loan interest tax deduction. The bottom line is you're unlikely to find an alternative lending source at a lower interest rate for an unsecured student loan. Another option may be the income based repayment plan. If you qualify, it caps student loan monthly payments at 15% of your discretionary income (discretionary is your income minus whatever the poverty threshold income amount is). And if that 15% doesn't even cover the interest on the loans, the govt picks up the tab for the difference (for up to 3 years). You have to re-qualify every year by sending in all sorts of documentation, but if you somehow stay on IBR for 25 years, your loans are then forgiven. Obviously the downside here is that you are probably paying little to no principal, but if you do the math and determine that your IBR payment would be next to nothing, and your current situation is barely paying interest-only... well, maybe IBR isn't a bad thing for a couple of years (or 25 if you think you will never have a larger income). Personally, I went through all these options as well and decided that my best option was to just earn more money... a 2nd job or side project here and there helps me pay down the debt faster, and with less risk, than moving to private variable rate loans.
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How to calculate ownership for property with a partner
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I can't quite follow your question, so I'm proceeding under the following assumptions: - You paid £31,000 - Your partner paid £4,242 - You have at least one mortgage, which you both pay equally. If the relationship terminates, sell the property. You are reimbursed £31,000 and your partner is reimbursed £4,242. Any remaining proceeds from the sale are split 50-50. If the result is a net loss (i.e. you are underwater on your mortgage), you split the debt 50-50. If you are not both paying the same toward the mortgage, I'd split the profit or loss according to how much you each pay toward the mortgage. Of course, this is not the only possible way you can split things up. You can use pretty much any way you both think is fair. For example, maybe you should get more benefits from a profit because you contributed more up-front. The key thing, though, is that you must both agree in writing, in advance. This is reasonable; this is what I did, for example. Note that if the relationship ends, one or the other of you may wish to keep the property. I'd suggest including a clause in your written agreement simply disallowing this; specify criteria to force a sale. But I know lots of people are happy to allow this. They treat that situation as a forced sale from both people to one person. For example, if your partner chooses to stay in the house, he or she must buy the property from you at prevailing market rates.
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How much should I be contributing to my 401k given my employer's contribution?
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For your first question, the general guidelines I've seen recommended are as follows: As to your second question, portfolio management is something you should familiarize yourself with. If you trust it to other people, don't be surprised when they make "mistakes". Remember, they get paid regardless of whether you make money. Consider how much any degree of risk will affect you. When starting out, your contributions make up most of the growth of your accounts; now is the time when you can most afford to take higher risk for higher payouts (still limiting your risk as much as possible, of course). A 10% loss on a portfolio of $50k can be replaced with a good year's contributions. Once your portfolio has grown to a much larger sum, it will be time to dial back the risk and focus on preserving your capital. When choosing investments, always treat your porfolio as a whole - including non-retirement assets (other investment accounts, savings, even your house). Don't put too many eggs from every account into the same basket, or you'll find that 30% of your porfolio is a single investment. Also consider that some investments have different tax consequences, and you can leverage the properties of each account to offset that.
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Can I use FOREX markets to exchange cash?
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As far as I understand, OP seems to be literally asking: "why, regarding the various contracts on various exchanges (CBE, etc), is it that in some cases they are 'cash settled' and in some 'physically settled' -?" The answer is only that "the exchange in question happens to offer it that way." Note that it's utterly commonplace for contracts to be settled out physically, and happens in the billions as a daily matter. Conversely zillions in "cash settled" contracts play out each day. Both are totally commonplace. Different businesses or entities or traders would use the two "varieties" for sundry reasons. The different exchanges offer the different varieties, ultimately I guess because they happen to think that niche will be profitable. There's no "galactic council" or something that enforces which mode of settlement is available on a given offering - ! Recall that "a given futures contracts market" is nothing more than a product offered by a certain exchange company (just like Burger King sells different products). I believe in another aspect of the question, OP is asking basically: "Why is there not, a futures contract, of the mini or micro variety for extremely small amounts, of currency futures, which, is 'physically' settled rather than cash settled ..?" If that's the question the answer is just "whatever, nobody's done it yet". (Or, it may well exist. But it seems extremely unlikely? "physically" settled currencies futures are for entities operating in the zillions.) Sorry if the question was misunderstood.
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Income At the Sell or Reception?
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It looks like fair-market value when you receive your virtual currency is counted as income. And you're also subject to self-employment tax on that income. Here's an FAQ from the IRS: Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities? A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.Q-9: Is an individual who “mines” virtual currency as a trade or business subject to self-employment tax on the income derived from those activities? A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute selfemployment income and are subject to the self-employment tax. See Chapter 10 of Publication 334, Tax Guide for Small Business, for more information on selfemployment tax and Publication 535, Business Expenses, for more information on determining whether expenses are from a business activity carried on to make a profit. You'd of course be able to offset that income with the expense of mining the virtual currency, depreciation of dedicated mining equipment, electricity, not sure what else. Edit: Here's a good resource on filing taxes with Bitcoin: Filling in the 1040 Income from Bitcoins and all crypto-currencies is declared as either capital gains income or ordinary income, for example from mining. Income Ordinary income will be declared on either your 1040 (line 21 - Other Income) for an individual, or within your Schedule C, if you are self-employed or have sole-proprietor business. Capital Gains Capital gains income, or losses, are declared on Schedule D. Since there are no reported 1099 forms from Bitcoin exchanges, you will need to include your totals with Box C checked for short-term gains, and with Box F checked for long-term gains. Interesting notes from that article, your first example could actually be trickier than expected if you started mining before there was a Monero to USD exchange. Also, there can also be capital gains implications from using your virtual currency to buy goods, which sounds like a pain to keep track of.
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Why would anyone want to pay off their debts in a way other than “highest interest” first?
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It may be the case that some of your debts have a flat regular fee in addition to the interest, which will go away when the debt is completely paid. For example, my mortgage has an approximately $400/year "package fee" as well as its (quite low) interest. When I finish paying the mortgage, I won't have to pay that fee anymore, so it is theoretically possible that spending extra money on paying off my mortgage would be better than spending it on paying off some other debt. I think it's unlikely that it would actually ever be my optimal move in practice, but the point is, there may be an advantage, financial or otherwise, to getting rid of a particular debt, other than merely removing the burden of interest. Those are special situations, though, and in the majority of cases, starting with the highest interest loan will be the right move.
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does interest payment on loan stay the same if I pay early
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It depends on the type of loan. Fully amortized loans have a schedule of payments don't recalculate as you pay. If you want to make an additional payment you need to contact the lender to apply your payment toward principle and reamortize the loan. Otherwise all your additional payment will do is change the amount due on your next payment, or push out your next payment due date. Regarding interest calculation, you owe interest on the principle outstanding. Say you have a 10 year loan (120 Months), at 5% APR, and a $1,000 payment (this means you borrowed roughly $94,000) Each month the amount of interest owed reduces because there is less principle outstanding. The reason loans are amortized like this is so the borrower has a predictable, known, monthly amount due.
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How can one protect oneself from a dividend stock with decreasing price?
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An alternative options strategy to minimize loss of investment capital is to buy a put, near the money around your original buy price, with a premium less than the total dividend. The value of the put will increase if the stock price falls quickly. Likely, a large portion of your dividend will go towards paying the option premium, this will however ensure that your capital doesn't drop much lower than your buy price. Continued dividend distributions will continue to pay to buy future put options. Risks here are if the stock does not have a very large up or down movement from your original buy price causing most of the dividend to be spent on insuring your position. It may take a few cycles, but once the stock has appreciated in value say 10% above buying price, you can consider either skipping the put insurance so you can pocket the dividend, or you can bu ythe put with a higher strike price for additional insurance against a loss of gains. Again, this sacrifices much of the dividend in favor of price loss, and still is open to a risk of neutral price movement over time.
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What is the compound annual growth rate of the major markets?
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Under construction, but here's what I have so far: Schwab Data from 1970-2012: About.com data from 1980-2012:
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Adding a 180 day expiration to checks
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While you can print that on the check, it isn't considered legally binding. If you are concerned about a check not being deposited in a timely manner, consider purchasing a cashier's check instead. This doesn't solve the problem per se, but it transfers responsibility of tracking that check from you to the bank.
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Anticipating being offered stock options in a privately held company upon employment. What questions should I ask?
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Good questions. I can only add that it may be valuable if the company is bought, they may buy the options. Happened to me in previous company.
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Are variable rate loans ever a good idea?
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It all has to do with risk and reward. The risk is that interest rates will rise. To entice you to go with the variable, they make it so it is cheaper if interest rates never rise. Your job is to guess whether interest rates are likely to go up or not. In a first approximation, you should go fixed. The bank employs very smart people whose entire job is to know whether interest rates will go up or not. Those people chose the price difference between the two, and it's sure to favour the bank. That is, the risk of extra payments you'll make on the variable is probably more than the enticement. But, some people can't sleep at night if their payments (or more realistically, the interest part of their payments) might double. If that's you, go fixed. If that's not you, understand that the enticement actually has to be turned up a bit, to get more people to go variable, because of the sleeping-at-night feature. Think long and hard about your budget and what would happen if your payment jumped. If you could handle it, variable might be the better choice. Personally, I have been taking "variable" on my mortgage for decades (and now I don't have one) and never once regretted it. I also counselled my oldest child to take variable on her mortgage. Over this century so far, if rates ticked up, they didn't tick up to the level the fixed was offered at. Mostly they have sat flat. But if ever there was a world in which "past performance does not predict future results" it would be interest rate trends. Do your own research.
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Some U.S. Tax Questions (CPA Concerns)
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He has included this on Schedule D line 1a, but I don't see any details on the actual transaction. It is reported on form 8949. However, if it is fully reported in 1099-B (with cost basis), then you don't have to actually detail every position. Turbotax asked me to fill in individual stock sales with proceeds and cost basis information. ... Again, it seems to be documented on Schedule D in boxes 1a and 8a. See above. I received a 1099-Q for a 529 distribution for a family member. It was used for qualified expenses, so should not be taxable. Then there's nothing to report. I believe I paid the correct amounts based on my (possibly flawed) understanding of estimated taxes. His initial draft had me paying a penalty. I explained my situation for the year, and his next draft had the penalties removed, with no documentation or explanation. IRS assesses the penalty. If you volunteer to pay the penalty, you can calculate it yourself and pay with the taxes due. Otherwise - leave it to the IRS to calculate and assess the penalty they deem right and send you a bill. You can then argue with the IRS about that assessment. Many times they don't even bother, if the amounts are small, so I'd suggest going with what the CPA did.
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Finding a good small business CPA?
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Ask your colleagues! I know that sounds obvious, but just go to where people who do your sort of business hang out (or better, find some venture capital firms and ask their portfolio companies). It's not something people would keep secret from you...
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What is an effective way to convert large sums of US based investments to foreign currencies?
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A stock, bond or ETF is basically a commodity. Where you bought it does not really matter, and it has a value in USD only inasmuch as there is a current market price quoted at an American exchange. But nothing prevents you from turning around and selling it on a European exchange where it is also listed for an equivalent amount of EUR (arbitrage activities of investment banks ensure that the price will be equivalent in regard to the current exchange rate). In fact, this can be used as a cheap form of currency conversion. For blue chips at least this is trivial; exotic securities might not be listed in Europe. All you need is a broker who allows you to trade on European exchanges and hold an account denominated in EUR. If necessary, transfer your securities to a broker who does, which should not cost more than a nominal fee. Mutual funds are a different beast though; it might be possible to sell shares on an exchange anyway, or sell them back to the issuer for EUR. It depends. In any case, however, transferring 7 figure sums internationally can trigger all kinds of tax events and money laundering investigations. You really need to hire a financial advisor who has international investment experience for this kind of thing, not ask a web forum!
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Does the stock market create any sort of value?
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When you own stock in a company, you do literally own part of the business, even if it's a small portion. Anyone amassing over 50% of shares really does have a controlling interest. No, you can't trade a handful of AAPL shares back to Apple for an iPod, but you can sell the shares and then go buy an iPod with the proceeds. Stock prices change over time because the underlying companies are worth more or less and people are willing to pay more or less for those shares. There is no Ponzi scheme because each share you own can be bought or sold on the open market. Dividends come from the company profits, not from other investors. On the other hand, money only has value because everyone believes it has value. There's the real conspiracy.
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Is it legal to receive/send “gifts” of Non-Trivial Amounts to a “friend”?
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This is tax fraud, plain and simple. I recently wrote an article The Step Transaction Doctrine, in which I explain that a series of events may each be legal, but aggregate to one transaction and the individual steps are ignored. In this case, it goes beyond that, by accepting $5/mo you are already outside the tax code. As littleadv noted, you can't work for a legitimate business for free and not expect to have some kind of issue. The $14K/yr gift isn't a bona fide gift, but ties to that work.
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Price graphs: why not percent change?
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I am in complete agreement with you. The place i have found with the sort of charts you are looking for is stockcharts.com. To compare the percentage increase of several stocks over a period of 2 market-open days or more, which is quite useful to follow the changes in various stocks… etc., an example: Here the tickers are AA to EEEEE (OTC) and $GOLD / $SILVER for the spot gold / silver price (that isn't really a ticker). It is set to show the last 6 market days (one week+)...the '6' in '6&O'. You can change it in the URL above or change it on the site for the stocks you want... up to 25 in one chart but it gets really hard to tell them apart! By moving the slider just left of the ‘6’ at the bottom right corner of the chart, you can look at 2 days or more. For a specific time period in days, highlight the ‘6’ and type any number of market-open days you want (21 days = about one month, etc.). By setting a time period in days, and moving the entire slider, you can see how your stocks did in the last bull/bear run, as an example. The site has a full how-to, for this and the other types of charts they offer. The only problem is that many OTC stocks are not charted. Save the comparison charts you use regularly in a folder in your browser bookmarks. Blessings. I see the entire needed link isn't in blue... but you need it all.
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Is it worth it to buy TurboTax Premier over Deluxe if I sold investments in a taxable account?
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I have used turbo tax for years. Apart from the snafu in 2014, I have had no problem using deluxe, and I have lots of asset sales to report. I prefer form mode anyway. I can import the data from my broker, and I can e-file with no problem. So the only thing I'm missing is the support. I can usually find answers to questions on the web, anyway.
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Can saving/investing 15% of your income starting age 25, likely make you a millionaire?
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Yes, quite easily, in fact. You left a lot of numbers out, so lets start with some assumptions. If you are at the median of middle income families in the US that might mean $70,000/year. 15% of that is an investment of $875 per month. If you invest that amount monthly and assume a 6% return, then you will have a million dollars at approximately 57 years old. 6% is a very conservative number, and as Ben Miller points out, the S&P 500 has historically returned closer to 11%. If you assumed an aggressive 9% return, and continued with that $875/month for 40 years until you turn 65, that becomes $4 million. Start with a much more conservative $9/hr for $18,720 per year (40 hours * 52 weeks, no overtime). If that person saved 14% of his/her income or about $219 per month from 25 to 65 years old with the same 9%, they would still achieve $1 million for retirement. Is it much harder for a poor person? Certainly, but hopefully these numbers illustrate that it is better to save and invest even a small amount if that's all that can be done. High income earners have the most to gain if they save and the most to lose if they don't. Let's just assume an even $100,000/year salary and modest 401(k) match of 3%. Even married filing jointly a good portion of that salary is going to be taxed at the 25% rate. If single you'll be hitting the 28% income tax rate. If you can max out the $18,000 (2017) contribution limit and get an additional $3,000 from an employer match (for a total monthly contribution of $1750) 40 years of contributions would become $8.2 million with the 9% rate of return. If you withdrew that money at 4% per year you would have a residual income of $300k throughout your retirement.
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Should I buy a house or am I making silly assumptions that I can afford it?
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A common rule of thumb is the 28/36 ratio. It's described here. In your case, with a gross (?) salary of £50,000, that means that you should spend no more than 28% of it, or £1,167 per month on housing. You may be able to swing a bit more because you have no debts and a modest amount in your savings. The 36% part comes in as the amount you can spend servicing all your debt, including mortgage. In your case, based on a gross (?) salary of £50,000, that'd be £1,500 per month. Again, that is to cover your housing costs and any additional debt you are servicing. So, you need to figure out how much you could bring in through rent to make up the rest. As at least one other person has commented, the rule of thumb is that your mortgage should be no more than 2.5 - 3 times your income. I personally think you are not a good candidate for a mortgage of the size you are discussing. That said, I no longer live in England. If you could feel fairly secure getting someone to pay you enough in rent to bring down your total mortgage and loan repayment amounts to £1,500 or so a month, you may want to consider it. Remember, though, that it may not always be easy to find renters.
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How To Report Cryptocurrency Earnings?
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While this does fall under the "All-inclusive income" segment of GI (gross income), there are two questions that come up. I invested in a decentralized bitcoin business and earned about $230 this year in interest from it Your wording is confusing here only due to how bitcoin works.
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Paying taxes on dividends even though your capital gains were $0?
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In the US, and in most other countries, dividends are considered income when paid, and capital gains/losses are considered income/loss when realized. This is called, in accounting, "recognition". We recognize income when cash reaches our pocket, for tax purposes. So for dividends - it is when they're paid, and for gains - when you actually sell. Assuming the price of that fund never changes, you have this math do to when you sell: Of course, the capital loss/gain may change by the time you actually sell and realize it, but assuming the only price change is due to the dividends payout - it's a wash.
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Can zero-coupon bonds go down in price?
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Let's say today you buy the bond issued by StateX at 18$. Let's say tommorow morning the TV says that StateX is going towards default (if it happens it won't give you back not even the 18$ you invested). You (and others that bought the same bond like you) will get scared and try to sell the bond, but a potential buyer won't buy it for 18$ anymore they will risk maximum couple of bucks, therefor the price of your bond tomorrow is worth 2$ and not 18 anymore. Bond prices (even zero coupon ones) do fluctuate like shares, but with less turbolence (i.e. on the same period of time, ups and downs are smaller in percentage compared to shares) EDIT: Geo asked in the comment below what happens to the bond the FED rises the interest. It' very similar to what I explained above. Let's say today you buy the bond just issued by US treasury at 50$. Today the FED rewards money at 2%, and the bond you bought promised you a reward of 2% per year for 10 years (even if it's zero coupon, it will give you almost the same reward of one with coupons, the only difference is that it will give you all the money back at once, that is when the bond expires). Let's say tommorow morning the TV says that FED decided to rise the interest rates, and now on it lends money rewarding a wonderful 4% to investors. US treasury will also have to issue bonds at 4%. You can obviously keep your bond until expiration (and unless US goes default you will get back all your money until the last cent), but if you decide to sell your bond, you will find out that people won't be willing to pay 50$ anymore because on the market they can now buy the same type of bond (for the same period of time, 10 years) that give them 4% per year and not a poor 2% like yours. So people will be willing to pay maximum 40$ for your bond or less.
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mortgage vs car loan vs invest extra cash?
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Without knowing actual numbers it's tough to say. Personally, I would pay off the car then, going forward, use the money that would have been paid on your car note toward your mortgage. I always think of things in the worst possible scenario. It's easier, and faster, to repossess a car than to foreclose on real estate. Also, in an emergency situation, depleting your fund for your car loan and your mortgage would be significantly more detrimental than only paying a mortgage with a car owned outright. Fewer obligations means fewer things to draw down your funds in an emergency. Whether the tax deductability of the mortgage interest outweighs the lower rate on your car loan will depend on a lot of factors that haven't been shared. I think it's safe to assume with only 1% of separation the real difference isn't significant. I think when determining which credit cards to pay off, choosing the one with the highest rate is smart. But that's not the situation you're in. If you don't have foreclosure concerns I'd still pay off the car then start investing.
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Capital Gains Tax with Multiple 'buy' Transactions per Stock (U.S.)
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According to the following article the answer is "first-in, first-out": http://smallbusiness.chron.com/calculate-cost-basis-stock-multiple-purchases-21588.html According to the following article the last answer was just one option an investor can choose: https://www.usaa.com/inet/pages/advice-investing-costbasis?akredirect=true
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Paying off student loan or using that money for a downpayment on a house
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Yes, one is certainly better than the other. Which one depends on your priorities and the interest and tax rates on your student loan, your savings, and your (future) mortgage plus how much you can afford to save and still enjoy the lifestyle you want as well as how soon you want to move out. Basically, you havn't given enough information.
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Question about MBS and how it pays
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A security is a class of financial instrument you can trade on the market. A share of stock is a kind of security, for example, as is a bond. In the case of your mortgage, what happens: You take out a loan for $180k. The loan has two components. a. The payment stream (meaning the principal and the interest) from the loan b. The servicing of the loan, meaning the company who is responsible for accepting payments, giving the resulting income to whomever owns it. Many originating banks, such as my initial lender, do neither of these things - they sell the payment stream to a large bank or consortium (often Fannie Mae) and they also sell the servicing of the loan to another company. The payment stream is the primary value here (the servicing is worth essentially a tip off the top). The originating bank lends $180k of their own money. Then they have something that is worth some amount - say $450k total value, $15k per year for 30 years - and they sell it for however much they can get for it. The actual value of $15k/year for 30 years is somewhere in between - less than $450k more than $180k - since there is risk involved, and the present value is far less. The originating bank has the benefit of selling that they can then originate more mortgages (and make money off the fees) plus they can reduce their risk exposure. Then a security is created by the bigger bank, where they take a bunch of mortgages of different risk levels and group them together to make something with a very predictable risk quotient. Very similar to insurance, really, except the other way around. One mortage will either default or not at some % chance, but it's a one off thing - any good statistician will tell you that you don't do statistics on n=1. One hundred mortgages, each with some risk level, will very consistently return a particular amount, within a certain error, and thus you have something that people are willing to pay money on the market for.
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Do I pay a zero % loan before another to clear both loans faster?
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This is more of an interesting question then it looks on first sight. In the USA there are some tax reliefs for mortgage payments, which we don’t have in the UK unless you are renting out the property with the mortgage. So firstly work out the interest rate on each loan taking into account any tax reliefs, etc. Then you need to consider the charges for paying off a loan, for example often there is a charge if you pay off a mortgage. These days in the UK, most mortgagees allow you to pay off at least 10% a year without hitting such a charge – but check your mortgage offer document. How interest is calculated when you make an early payment may be different between your loans – so check. Then you need to consider what will happen if you need another loan. Some mortgages allow you to take back any overpayments, most don’t. Re-mortgaging to increase the size of your mortgage often has high charges. Then there is the effect on your credit rating: paying more of a loan each month then you need to, often improves your credit rating. You also need to consider how interest rates may change, for example if you mortgage is a fixed rate but your car loan is not and you expect interest rates to rise, do the calculations based on what you expect interest rates to be over the length of the loans. However, normally it is best to pay off the loan with the highest interest rate first. Reasons for penalties for paying of some loans in the UK. In the UK some short term loans (normally under 3 years) add on all the interest at the start of the loan, so you don’t save any interest if you pay of the loan quicker. This is due to the banks having to cover their admin costs, and there being no admin charge to take out the loan. Fixed rate loans/mortgagees have penalties for overpayment, as otherwise when interest rates go down, people will change to other lenders, so making it a “one way bet” that the banks will always loose. (I believe in the USA, the central bank will under right such loans, so the banks don’t take the risk.)
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looking for research tool to plug in and evaluate theoretical historical returns
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The professional financial advisors do have tools which will take a general description of a portfolio and run monte-carlo simulations based on the stock market's historical behavior. After about 100 simulation passes they can give a statistical statement about the probable returns, the risk involved in that strategy, and their confidence in these numbers. Note that they do not just use the historical data or individual stocks. There's no way to guarantee that the same historical accidents would have occurred that made one company more successful than another, or that they will again. "Past performance is no guarantee of future results"... but general trends and patterns can be roughly modelled. Which makes that a good fit for those of us buying index funds, less good for those who want to play at a greater level of detail in the hope of doing better. But that's sorta the point; to beat market rate of return with the same kind of statistical confidence takes a lot more work.
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Why don't some places require a credit card receipt signature, and some do?
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My understanding it that the signature requirement is at the retailer's discretion. If the merchant decides to require a signature it protects them against fraudulent charge-back claims, but increases their administrative costs. In some situations it just isn't practical for a retailer to require a signature. Consider for example mail-order or online purchases, which I've never had to sign a credit card slip for.
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Filing taxes on stocks
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Generally stock trades will require an additional Capital Gains and Losses form included with a 1040, known as Schedule D (summary) and Schedule D-1 (itemized). That year I believe the maximum declarable Capital loss was $3000--the rest could carry over to future years. The purchase date/year only matters insofar as to rank the lot as short term or long term(a position held 365 days or longer), short term typically but depends on actual asset taxed then at 25%, long term 15%. The year a position was closed(eg. sold) tells you which year's filing it belongs in. The tiny $16.08 interest earned probably goes into Schedule B, typically a short form. The IRS actually has a hotline 800-829-1040 (Individuals) for quick questions such as advising which previous-year filing forms they'd expect from you. Be sure to explain the custodial situation and that it all recently came to your awareness etc. Disclaimer: I am no specialist. You'd need to verify everything I wrote; it was just from personal experience with the IRS and taxes.
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How Does A Special Memorandum Account Work
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Here is another explanation of an SMA. SMA refers to the Special Memorandum Account which represents neither equity nor cash but rather a line of credit created when the market value of securities in a Reg. T margin account increase in value. For example, assume the market value of securities purchased at a cost of $10,000 on margin (at 50%) increase in value to $12,000. This $2,000 increase in market value would create SMA of $1,000, which provides the account holder the ability to either: 1) buy additional securities valued at $2,000 (assuming a 50% margin rate) without depositing up additional funds; or 2) withdraw $2,000 in cash, which may be financed by increasing the debit balance if the account holds no cash. It should be noted that while an increase in market value over original cost creates SMA, a subsequent decline in market value has no effect on SMA. SMA will only decline if used to purchase securities or withdraw cash and the only restriction with respect to its use is that the additional purchases or withdrawals do not bring the account below the maintenance margin requirement. SMA will also increase on a dollar for dollar basis in the event of cash deposits or dividends. More details at http://ibkb.interactivebrokers.com/article/66
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Is this the right formula to use implied volatility to gauge probability of a stock being within a certain range?
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To get the probability of hitting a target price you need a little more math and an assumption about the expected return of your stock. First let's examine the parts of this expression. IV is the implied volatility of the option. That means it's the volatility of the underlying that is associated with the observed option price. As a practical matter, volatility is the standard deviation of returns, expressed in annualized terms. So if the monthly standard deviation is Y, then Y*SQRT(12) is the volatility. From the above you can see that IV*SQRT(DaysToExpire/356) de-annualizes the volatility to get back to a standard deviation. So you get an estimate of the expected standard deviation of the return between now and expiration. If you multiply this by the stock price, then you get what you have called X, which is the standard deviation of the dollars gained or lost between now and expiration. Denote the price change by A (so that the standard deviation of A is X). Note that we seek the expression for the probability of hitting a target level, Q, so mathematically we want 1 - Pr( A < Q - StockPrice) We do 1 minus the probability of being below this threshold because cumulative distribution functions always find the probability of being BELOW a threshold, not above. If you are using excel and assuming a mean of zero for returns, the probability of hitting or exceeding Q at expiration, then, is That's your answer for the probability of exceeding Q. Accuracy is in the eye of the beholder. You'd have to specify a criterion by which to judge it to know the answer. I'm sure more sophisticated methods exist that are more unbiased and have less error, but I think it's a fine first approximation.
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File bankruptcy, consolidate, or other options?
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A couple of thoughts from someone who's kind of been there... Is the business viable at all? A lot of people do miss the jumping-off point where the should stop throwing good money after bad and just pull the plug on the business. If the business is not that viable, then selling it might not be an option. If the business is still viable (and I'd get advice from a good accountant on this) then I'd be tempted to try and pull through to until I'd get a good offer for the business. Don't just try to sell it for any price because times are bad if it's self-sustaining and hopefully makes a little profit. I does sound like their business is on the up again and if that's a trend and not a fluke, IMHO pouring more energy into (not money) would be the way to go. Don't make the mistake of buying high and selling low, so to speak. I'm also a little confused re their house - do they own it or do they still owe money on it? If they owe money on it, how are they making their payments? If they close the business, do they have enough income to make the payments still? Before they find another job, even if it's just a part-time job? As to paying off their debts or at least helping with paying them off, I'd only do that if I was in a financial position to gift them the money; anything else is going to wreak havoc with the family dynamics (including co-signing debt for them) and everybody will wish they didn't go there. Ask me how I know. Re debt consolidation, I don't think it's going to do much for them, apart from costing them more money for something they could do themselves. Bankruptcy - well, are they bankrupt or are they looking for the get-out-of-debt-free card? Sorry to be so blunt, but if they're so deep in the hole that they truly have no chance whatsoever to pay off their debt ever, then they're bankrupt. From what you're saying they're able to make the minimum payments they're not really what I'd consider bankrupt... Are your parents on a budget? As duffbeer703 said, depending on how much money the business is making they should be able to pay off the debt within a reasonable amount of time (which again doesn't make them bankrupt).
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Covered Call Writing - What affects the price of the options?
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Matthew - what was the stock price and strike price of the option when you did this? I've never seen an at-the-money strike with only a month to run have a price 25% of the underlying stock. Jaydles covers the variables really well in his answer.
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What does investment bank risk during IPO?
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There are two kinds of engagements in an IPO. The traditional kind where the Banks assume the risks of unsold shares. Money coming out of their pockets to hold shares no one wants. That is the main risk. No one buying the stock that the bank is holding. Secondly, there is a "best efforts" engagement. This means that bank will put forth its best effort to sell the shares, but will not be on the hook if any don't sell. This is used for small cap / risky companies. Source: Author/investment banker
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Why do stock prices of retailers not surge during the holidays?
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While there are lots of really plausible explanations for why the market moves a certain way on a certain day, no one really knows for sure. In order to do that, you would need to understand the 'minds' of all the market players. These days many of these players are secret proprietary algorithms. I'm not quibbling with the specifics of these explanations (I have no better) just pointing out that these are just really hypotheses and if the market starts following different patterns, they will be tossed into the dust bin of 'old thinking'. I think the best thing you can explain to your son is that the stock market is basically a gigantic highly complex poker game. The daily gyrations of the market are about individuals trying to predict where the herd is going to go next and then after that and then after that etc. If you want to help him understand the market, I suggest two things. The first is to find or create a simple market game and play it with him. The other would be to teach him about how bonds are priced and why prices move the way they do. I know this might sound weird and most people think bonds are esoteric but there are bonds have a much simpler pricing model based on fundamental financial logic. It's much easier then to get your head around the moves of the bond markets because the part of the price based on beliefs is much more limited (i.e. will the company be able pay & where are rates going.) Once you have that understanding, you can start thinking about the different ways stocks can be valued (there are many) and what the market movements mean about how people are valuing different companies. With regard to this specific situation, here's a different take on it from the 'priced in' explanation which isn't really different but might make more sense to your son: Pretend for a second that at some point these stocks did move seasonally. In the late fall and winter when sales went up, the stock price increased in kind. So some smart people see this happening every year and realize that if they bought these stocks in the summer, they would get them cheap and then sell them off when they go up. More and more people are doing this and making easy money. So many people are doing it that the stock starts to rise in the Summer now. People now see that if they want to get in before everyone else, they need to buy earlier in the Spring. Now the prices start rising in the Spring. People start buying in the beginning of the year... You can see where this is going, right? Essentially, a strategy to take advantage of well known seasonal patterns is unstable. You can't profit off of the seasonal changes unless everyone else in the market is too stupid to see that you are simply anticipating their moves and react accordingly.
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Saving for retirement without employer sponsored plan
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Variable Annuities would be one option though there are SEC warnings about them, for an option that is tax-deferred and intended to be used for long-term investing such as retirement. There is a bit of a cost to gain the tax-deferral which may not always make them worthwhile.
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I'm 23 and was given $50k. What should I do?
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Here are some possibilities: avoid buying a car for as long as you can; if forced to own one, buy a used dependable car like a Toyota Corolla- 4 cyl and don't abuse it. open a Roth IRA, depositing max possible, the plan on doing so until you've investing the remaining balance. A Roth IRA, while not tax deductible now (you're in a low tax bracket now) will provide for tax-free distributions when you are both older and not in a low bracket. of course, invest in low cost equity funds. Come back for more ideas once the dust settles, you've got money left over and some of the above accomplished. You've got one asset many of us don't have: time.
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What is a good 5-year plan for a college student with $15k in the bank?
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I disagree with the IRA suggestion. Why IRA? You're a student, so probably won't get much tax benefits, so why locking the money for 40 years? You can do the same investments through any broker account as in IRA, but be able to cash out in need. 5 years is long enough term to put in a mutual fund or ETF and expect reasonable (>1.25%) gains. You can use the online "analyst" tools that brokers like ETrade or Sharebuilder provide to decide on how to spread your portfolio, 15K is enough for diversifying over several areas. If you want to keep it as cash - check the on-line savings accounts (like Capitol One, for example, or Ally, ING Direct that will merge with Capitol One and others) for better rates, brick and mortar banks can not possible compete with what you can get online.
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Best Time to buy a stock in a day
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The best thing to do is not worry about what time is best to buy but put in a conditional order before the market opens. If your conditions are met during the trading day your order will go through and you will buy the shares. This keeps your emotions out of your trading and will stop you from either chasing the market or buying when you consider the wrong time. As you have already done your analysis and made your decision before market open, thus you should place your conditional orders and stop losses before market opens as well.
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Looking to buy a house in 1-2 years. Does starting a Roth IRA now make sense?
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Lets do the math (assuming a lot of stuff, like your interest rates and that you make the contribution at the beginning of the year, also your tax bracket at the withdrawal time frame.) 1.) Beginning of year 1 Roth Option $5k contribution Non Roth Option $5k contribution 2.) Beginning of year 2 Roth Option $5000 + $150 interest + 5K contribution = $10150 Non Roth Option $5000 + $75 interest + 5K contribution = $10075 3.) End of year 2 Buy a house! yay! Roth Option---before withdrawal account value = 10150+10150*.03=10454.5 after withdrawl (assuming 38% tax on earnings withdrawal (10%penalty + 28% income tax estimate.) = 10327.17 Non Roth Option = 10 226.125 So you are talking about a significant amount of paperwork to either 1.) Net yourself $100 toward the purchase 2.) Cost yourself $226 on the purchase but have $454.50 in your roth ira. I am not sure I would do that, but it might be worth it.
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I don't live in America. How can I buy IPO stock of newly listed companies in the United States?
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First thing to consider is that getting your hands on an IPO is very difficult unless you have some serious clout. This might help a bit in that department (http://www.sec.gov/answers/ipoelig.htm) However, assuming you accept all that risk and requirements, YES - you can buy stocks of any kind in the US even if you are a foreigner. There are no laws prohibiting investment/buying in the US stock market. What you need is to get an online trading account from a registered brokerage house in the US. Once you are registered, you can buy whatever that is offered.
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Is foreign stock considered more risky than local stock and why?
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If you intend to be responsive to news and intraday price moves, for foreign stocks these will often happen while you're asleep (e.g. the Tokyo Stock Exchange opens at roughly midnight UK time).
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What should I look at before investing in a start-up?
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In addition to evaluating the business (great answer), consider the potential payoff. If bonds pay off in the 5-10% range, the S&P500 has averged 10.5%. You should be expecting a payoff of 15-20% to invest in something riskier than the stock market. That means that if you invest $10k, then in 5 years you'll need to get out $25K (20% returns over 5 years). If you get less than this much in 5 years, the risk-to-reward ratio probably rules this out as a good investment.
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Estimated Taxes Fall Short of tax liability — how do I pay extra online (Federal and NYS)
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If you qualify for the safe harbor, you are not required to pay additional quarterly taxes. Of course, you're still welcome to do so if you're sure you'll owe them; however, you will not be penalized. If your income is over $150k (joint) or $75k (single), your safe harbor is: Estimated tax safe harbor for higher income taxpayers. If your 2014 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2015 or 110% of the tax shown on your 2014 return to avoid an estimated tax penalty. Generally, if you're under that level, the following reasons suggest you will not owe the tax (from the IRS publication 505): The total of your withholding and timely estimated tax payments was at least as much as your 2013 tax. (See Special rules for certain individuals for higher income taxpayers and farmers and fishermen.) The tax balance due on your 2014 return is no more than 10% of your total 2014 tax, and you paid all required estimated tax payments on time. Your total tax for 2014 (defined later) minus your withholding is less than $1,000. You did not have a tax liability for 2013. You did not have any withholding taxes and your current year tax (less any household employment taxes) is less than $1,000. If you paid one-fourth of your last year's taxes (or of 110% of your last-year's taxes) in estimated taxes for each quarter prior to this one, you should be fine as far as penalties go, and can simply add the excess you know you will owe to the next check.
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Where can I find accurate historical distribution data for mutual funds?
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If you want to go far upstream, you can get mutual fund NAV and dividend data from the Nasdaq Mutual Fund Quotation Service (MFQS). This isn't for end-users but rather is offered as a part of the regulatory framework. Not surprisingly, there is a fee for data access. From Nasdaq's MFQS specifications page: To promote market transparency, Nasdaq operates the Mutual Fund Quotation Service (MFQS). MFQS is designed to facilitate the collection and dissemination of daily price, dividends and capital distributions data for mutual funds, money market funds, unit investment trusts (UITs), annuities and structured products.
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I spend too much money. How can I get on the path to a frugal lifestyle?
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My father imparted this advice to me when I was a teenager, and it hasn't failed me yet. > Pay yourself first What this means is that the first "bill" you pay should always be your savings. Preferably in a way that automatically comes out of your paycheck or account without requiring you to take an active step to make it happen. I save a ton of money, but I am no more disciplined than anyone else. I just realized that over the years of progressing in my career that I gradually got higher and higher salaries, yet never had a substantial increase in the money I had leftover in my bank at the end of the month despite the fact that I make about 8x the money I used to live reasonably comfortably on. Therein is the point, we spend whatever money we see, so you almost have to hide it from yourself. First, participate to the fullest in your company's 401k if they offer it. After a while you will adjust naturally to the net take home pay and won't miss the savings you are accumulating. Absent that, or in addition to that, set up a separate bank or investment account and arrange an automatic transfer from your checking account every month. Then set up automatic investing in CD's or some other less-liquid-than-cash investment so you it is just enough hassle to get at the money that you won't do it on a whim. It sounds too simple, but it works.
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How to prevent myself from buying things I don't want
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To me, your question emphasizes something I've heard many times before: personal finance is as much or more about behavior than it is about mathematics or "head knowledge". Sure, you know you shouldn't be wasting a lot of money on something you will use very infrequently, but how do you make this behavior stick? Here are a few tricks that might help: The other aspects of your question really touch more on psychology than finance. But getting yourself into a discipline habit with money will help. And realizing the full cash price of items in relation to how much your disposable income is will help you get control of your impulses, as you review your budget monthly, and keep limit yourself using the envelope system. But honestly, everybody wants stuff they don't have, it's human nature. The key is finding ways to put physical limits and guards on yourself to keep you from obeying the self-destructive impulses.
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What are the economic benefits of owning a home in the United States?
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It is almost a sure thing that the housing market will crash again hugely.For this reason I prefer to own several houses that way when it does no one can ask for their money back and leave me homeless. Current economics suggest a fall of between 40-60% from 2011 prices meaning that if you have bought a house in the last 12 years you can wave bye bye to any and all equity, and this will happen very soon. I recommend saving your money and buying a house outright (like I did 3 times) from someone who has spent 12 years or so paying a mortgage.
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Can a car company refuse to give me a copy of my contract or balance details?
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No, they cannot refuse to provide you with the current balance or a balance history. The other answers point you to resources that are available to help you put pressure on the dealership. The bottom line is that you now know that you have the right to the details and to audit their recording of the transactions. You should now use that information and demand a better response in writing. If they have to give you a response in writing, they can't deny the answer they gave in a court of law later on. They understand this, and they will take you more seriously if you send a letter. Make sure to keep copies of the letter and send it with certified delivery.
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Is it safe to take a new mortgage loan in Greece?
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No it is not safe to take out a new mortgage - loan or anything credit related or any investment - in greece. Growing political risk, bonds have junk credit rating. You will be underwater on your mortgage the day you apply for it. And you better believe that the buyers will be dry once you realize that it doesn't make sense to keep paying the mortgage. If you want to have some assets, there are more liquid things you can own, in your case: paper gold. Just rent.
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What assets would be valuable in a post-apocalyptic scenario?
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This is going to be a list of some things that will likely be of value immediately after some apocalyptic event. However, note that I am not answering your question of what you should invest in now to take advantage of such an event. That is a pretty ridiculous notion. Preparing oneself for such a possibility is certainly a good idea. That said, there are some realistic limitations to how you could take advantage of such a situation. Namely, the very real requirement of physical security. Unless you have a huge posse -- armed to the teeth -- to defend your cache, someone will come along with a bigger and better armed group to take it. (Not to mention that I am the type of person that would -- at least -- consider organizing such a group to take you down; if only as a matter of principle.) Guns & ammo (Also, knives; ideally ones that can be used as weapons and for food preparation/hunting.) Alcohol. Especially liquor. It's concentrated and easier to store than beer or wine. Beside for getting inebriated, it is useful as a sedative and antiseptic. Non-perishable foods. Canned goods are obvious. Though, grains and cereals can be stored with relative ease under some circumstances. (Obviously, not so easily done in an urban area.) Methods of starting a fire. Preferably rugged ones, such as flint and steel. (Lighters would only be of limited use. Matches are bulky and require water-tight storage.) Salt and/or salt-licks. (Possibly, other forms of non-perishable bait.) As bstpierre puts it, hunting will be about survival not sport. Hand-tools. Textiles, fabrics, thread and needles. Medicines of all sorts, though especially antibiotics, antiseptics and painkillers. Books of a practical nature. Topics such as: wilderness survival, cooking, carpentry, etc. The list is mostly ordered in terms of value & practicality. Ultimately, I doubt there is much that will provide a practical investment idea for such a scenario. The physical security issue is a big limiting factor. In a post-apocalyptic scenario it goes back to who is bigger, stronger and better armed. One thing does come to mind: knowledge. Prepare yourself with the skills and knowledge you need to survive in such a scenario and you will be invaluable. Also, as bstpierre notes in the comments, connections will likely also be important. (Probably local or nearby connections.) No one person can do it all alone. It will come down to cooperation.
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Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan?
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You are expecting, that if you pay off a 30 mortgage after 16 years, you should be charged the same amount of interest as someone who had a 16 year mortgage for the same amount and with the same interest rate. This isn't correct, and here's why: the person with the 16 year mortgage paid it off faster than you. They paid more each month and the size of their loan shrunk faster than yours. After 15 years they had paid off a LOT more than you. You paid a lump sum after 16 years, but at this point, the extra money which they had paid had been in the banks hands for a long time. You caught up with them then, but you had been behind them for all of the previous years. On the other hand, you owed the same amount in each of those years as the person who took out a 30 year mortgage and didn't prepay. Therefore you paid the same amount of interest as this person, not the first person. If you could arrange in advance a loan where you made the same payment as you did for 16 years, then paid the balance in a lump sum, then you would have paid exactly what you did.
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Contribute to both a SEP IRA and solo Roth 401(k)?
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In addition to the normal limits, A Solo 401(k) allows you to contribute up to 20% of net profits (sole proprietor) or 50% of salary (if a corporation), up to $49,000. Note that the fees for 401(k) accounts are higher than with the IRA. See 401(k)s for small business.
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Which banks have cash-deposit machines in Germany?
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This may not answer your question but it may be an alternative. My credit union credits my account for deposits immediately (ones I make in an envelope). They view it as a service to their members. They take the risk that the member could deposit an empty envelope, say they deposited $400, and then withdraw the money. There may be banks in your country that do business this way.
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How to bet against IPOs?
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There are 2 primary ways to bet against a stock if you think it will decline. The first is to short sell shares of that stock the second is to buy put options (I would also add that selling naked call options would also be a bet against but I don't believe that is as common as the other 2 mentioned methods). The problem with short selling an IPO is that you first have to borrow the shares you are going to sell. Since the shares are privately held prior to the IPO that can be problematic. Even after the IPO you may have to wait a bit before shares become available to borrow. The problem with options (either buying puts or seeking naked calls) is similar. Options are traded on a different exchange than the stock and they have their own requirements that a stock must meet to have options traded. Both of these problems eventually correct themselves however, not in time for you to catch the initial fall you seem to be looking for.
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What are the contents of fixed annuities?
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This is really two questions about yield and contents. Content As others have noted, an annuity is a contractual obligation, not a portfolio contained within an investment product per se. The primary difference between whether an annuity is fixed or variable is what the issuer is guaranteeing and how much risk/reward you are sharing in. Generally speaking, the holdings of an issuer are influenced by the average "duration" of the payments. However, you can ascertain the assets that "back" that promise by looking at, for example, the holdings of a large insurance or securities firm. That is why issuers are generally rated as to their financial strength and ability to meet their obligations. A number of the market failures you mentioned were in part caused by the failure of these ratings to represent the true financial strength of the firm. Yield As to the second question of how they can offer a competitive rate, there are at least several reasons (I am assuming an immediate annuity) : 1) Return/Depletion of Principal The 7% you are being quoted is the percent of your principal that will be returned to you each year, not the rate of return being earned by the issuer. If you invest $100 in the market personally and get a 5% return, you have $105. However, the annuity's issuer is also returning part of your principal to you each year in your payment, as they don't return your principal when you eventually die. Because of this, they can offer you more each year than they really make in the market. What makes a Ponzi scheme different is that they are also paying out your principal (usually to others), but lie to you by telling you it's still in your account. :) 2) The Time Value of Money A promise to pay you $500 tomorrow costs less than $500 today A fixed annuity promises to pay you a certain amount of money each year. This can be represented as a rate of return calculated based on how much you have to pay to get that annual payment, but it is important to remember that the first payment will be worth substantially more in real purchasing power than the last payment you get. The longer you live, the less your fixed payment is worth in real terms due to inflation! In short, the rate of return has to be discounted for inflation, it is not a "real" rate of return. In other words, if you give me $500 today and I promise to pay you $100 for the next 5 years, I am making money not only because I can invest the money between now and then, but also because $100 will be worth less five years from now than it is today. With annuities, if you want your payment to rise in step with inflation, you have to pay more for that (a LOT more!). These are the two main reasons - here are a few smaller ones: 3) A very long Time Horizon If the stock market or another asset class is performing well/poorly, the issuer can often afford to wait much longer to buy or sell than an individual, and can take better advantage of historical highs and lows over the long term. 4) "Big Boy" investing A large, financially sound issuer can afford to take risks that an individual cannot, such as in very large or illiquid assets, such as a private company (a la Warren Buffet). 5) Efficiencies of scale Institutional investors have a number of legal advantages over individuals, which I won't discuss in detail here. However, they exist. Large issuers are also often in related business (insurance, mutual funds) such that they can deal in large volumes and form an internal clearinghouse (i.e. if I want to buy Facebook and you want to sell it, they can just move the stock around without doing any trading), with the result that their costs of trading are lower than those of an individual. Hope that helps!
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In the stock market, why is the “open” price value never the same as previous day's “close”?
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A stock is only worth what someone is willing to pay for it. If it trades different values on different days, that means someone was willing to pay a higher price OR someone was willing to sell at a lower price. There is no rule to prevent a stock from trading at $10 and then $100 the very next trade... or $1 the very next trade. (Though exchanges or regulators may halt trading, cancel trades, or impose limits on large price movements as they deem necessary, but this is beside the point I'm trying to illustrate). Asking what happens from the close of one day to the open of the next is like asking what happens from one trade to the next trade... someone simply decided to sell or pay a different price. Nothing needs to have happened in between.
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How will a 1099 work with an existing W-2?
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You can do either a 1099 or a W-2. There is no limitations to the number of W-2s one can have in reporting taxes. Problems occur, with the IRS, when one "forgets" to report income. Even if one holds only one job at a time, people typically have more than one W-2 if they change jobs within the year. The W-2 is the simplest way to go and you may want to consider doing this if you do not intend to work this side business into significant income. However, a 1099 gig is preferred by many in some situations. For things like travel expenses, you will probably receive the income from these on a 1099, but you can deduct them from your income using a Schedule C. Along these lines you may be able to deduct a wide variety of other things like travel to and from the client's location, equipment such as computers and office supplies, and maybe a portion of your home internet bill. Also this opens up different retirement contributions schemes such as a simplified employee pension. This does come with some drawbacks, however. First your life is more complicated as things need to be documented to become actual business expenses. You are much more likely to be audited by the IRS. Your taxes become more complicated and it is probably necessary to employee a CPA to do them. If you do this for primary full time work you will have to buy your own benefits. Most telling you will have to pay both sides of social security taxes on most profits. (Keep in mind that a good account can help you transfer profits to dividends which will allow you to be taxed at 15% and avoid social security taxes.) So it really comes down to what you see this side gig expanding into and your goals. If you want to make this a real business, then go 1099, if you are just doing this for a fes months and a few thousand dollars, go W-2.
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What is a mutual fund?
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Let's say that you want to invest in the stock market. Choosing and investing in only one stock is risky. You can lower your risk by diversifying, or investing in lots of different stocks. However, you have some problems with this: When you buy stocks directly, you have to buy whole shares, and you don't have enough money to buy even one whole share of all the stocks you want to invest in. You aren't even sure which stocks you should buy. A mutual fund solves both of these problems. You get together with other investors and pool your money together to buy a group of stocks. That way, your investment is diversified in lots of different stocks without having to have enough money to buy whole shares of each one. And the mutual fund has a manager that chooses which stocks the fund will invest in, so you don't have to pick. There are lots of mutual funds to choose from, with as many different objectives as you can imagine. Some invest in large companies, others small; some invest in a certain sector of companies (utilities or health care, for example), some invest in stocks that pay a dividend, others are focused on growth. Some funds don't invest in stocks at all; they might invest in bonds, real estate, or precious metals. Some funds are actively managed, where the manager actively buys and sells different stocks in the fund continuously (and takes a fee for his services), and others simply invest in a list of stocks and rarely buy or sell (these are called index funds). To answer your question, yes, the JPMorgan Emerging Markets Equity Fund is a mutual fund. It is an actively-managed stock mutual fund that attempts to invest in growing companies that do business in countries with rapidly developing economies.
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Equity As Part of Compensation
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With LLCs, the operation agreement can define different shares for different kinds of income or equity, and different partners may be treated differently. In essence, you can end up with a different stock class for each partner/member. So you need to read the grant document and the OA really carefully to know what you're getting. You may want to have a lawyer read through it for you. This may be way more complicated than classes of shares in a corporation.
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Comparing keeping old car vs. a new car lease
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Look at the basic cost of the lease. Option 1: keep the car for three years. Pay for repairs during that time then sell it for $7,000. Option 2: Sell the current car for $10,000. Lease a new car for three years. Assume no need for repairs during those three years. At the end of the three years return the car in return for $0. Cost of option 1 is $3000 plus repairs. Cost of Option 2 is 36 months x monthly lease cost. The first $83 of the monthly lease cost is to cover the $3000 fixed cost of option 1. The rest of the monthly lease cost is to cover the cost of repairs. Also remember that some leases have a initial down payment due at signing, and penalties for condition, and excess mileage. The lease company may also require a higher level of insurance for the lease to cover their investment if you have an accident. Plus If you fall in love with a different car two year from now, or your needs change you are locked in until the end of the lease period.
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Saving $1,000+ per month…what should I do with it?
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If you can get a rate of savings that is higher than your debt, you save. If you can't then you pay off your debt. That makes the most of the money you have. Also to think about: what are you goals? Do you want to own a home, start a family, further your education, move to a new town? All of these you would need to save up for. If you can do these large transactions in cash you will be better off. If it were me I would do what I think is a parroting of Dave Ramsay's advice Congratulations by the way. It isn't easy to do what you have accomplished and you will lead a simpler life if you don't have to worry about money everyday.
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I can make a budget, but how can I get myself to consistently follow my budget?
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Switch to cash for a few months. No debit. No credit. This will help for two reasons: Once you've broken the bad habits, you should be able to go back to cards for the convenience factor.
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When can we exercice an option?
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American options (like those on ADBE) can be exercised by the holder anytime before expiration. They will be exercised automatically at expiration if they are in the money. However, if there is still time before expiration (as in this case), and they are not extremely in the money, there is probably extrinsic value to the option, and you should sell it, not exercise it. European options are only automatically exercised at expiration, and only if they are in the money. These are usually cash settled on products like SPX or VIX. They can not be exercised before expiration, but can be sold anytime.
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Why do consultants or contractors make more money than employees?
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All the existing answers are right and the general theme is: contracting is a different kind of relationship. It's a business-to-business relationship rather than a business-to-employee relationship. This has implications such as: Of course, some contractors are effectively just over-paid employees, and some of the above points don't apply to them, but that's the idea behind bona fide contracting.
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In the UK, can authors split a single advance on a book over multiple tax returns?
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HMRC calls it: Averaging for creators of literary or artistic works, and it is the averaging of your profits for 2 successive years. It's helpful in situations like you describe, where income can fluctuate wildly from year to year, the linked article has the full detail, but some of the requirements are: You can use averaging if: you’re self-employed or in a partnership, and the business started before 6 April 2014 and didn’t end in the 2015 to 2016 tax year your profits are wholly or mainly from literary, dramatic, musical or artistic works or from designs you or your business partner (if you’re in a partnership) created the works personally. Additionally: Check that your profit for the poorer year, minus any adjusted amounts, is less than 75% of the figure for your better year. If it is, you can use averaging. Then, check if the difference between your profits for the 2 years is more than 30% of your profit for the better year. If it is, work out the average by adding together the profits for the 2 years, and divide the total by 2.
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Reconciling transactions reimbursing myself for expenses as self-employed (UK)
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For anyone that's curious, I had a number of chats with Quickbooks who recommended I import only the relevant business transactions from my personal account & personal credit card in order to lower the tax liability. This way money "paid" from the business account to myself rightly shows up as a transfer and not as income. This means when generating a tax report, it calculates the correct rate of tax to be paid based on income minus allowable expenses, regardless which account they came from.
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If a stock doesn't pay dividends, then why is the stock worth anything?
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It seems to me that your main question here is about why a stock is worth anything at all, why it has any intrinsic value, and that the only way you could imagine a stock having value is if it pays a dividend, as though that's what you're buying in that case. Others have answered why a company may or may not pay a dividend, but I think glossed over the central question. A stock has value because it is ownership of a piece of the company. The company itself has value, in the form of: You get the idea. A company's value is based on things it owns or things that can be monetized. By extension, a share is a piece of all that. Some of these things don't have clear cut values, and this can result in differing opinions on what a company is worth. Share price also varies for many other reasons that are covered by other answers, but there is (almost) always some intrinsic value to a stock because part of its value represents real assets.
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Investments other than CDs?
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First off, you have done very well to be in your financial position at your age. Congratulations. I first started investing seriously about 10 years ago, and when I started, I had a similar attitude to you. Learning how to invest is a journey, and it will take you a while to learn both the intellectual and emotional sides of investing. First off, there is nothing wrong with having a chunk of cash that you aren't investing effectively. It is far better to be losing earning power WRT inflation that it is to make a bad investment, where you can lose all your money quite quickly. I have perhaps 15% of my capital just sitting around right now because I don't have any place where I'm excited to put it. For your IRA, I would look at the options you have, and choose one that is reasonably well diversified and has low costs. In most cases, an index fund is a reasonable choice. My 401K goes into an S&P 500 index fund, and I don't have to worry about it. Beyond that, I suggest spending some time learning about investing, and then making some small and conservative investments. I've learned a lot from the Motley Fool web site.
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Valuation, pricing, and analysis of securities
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Pricing would just be another way to describe valuation. I guess if you want to get technical, pricing - is the act of getting somethings valuation. While valuation - is the estimate of somethings worth. Security analysis - An examination and evaluation of the various factors affecting the value of a security. Side Note: While pricing is valuation, price is not. Price is how much the stock, or security costs most commonly determined by a market. Add On: The meaning of two words might matter depending on what context it is being used in. For example if we were talking about a market where an individual actually sets a price at random without doing any type of evaluation then this->answer that AlexR provides would better highlight the differences.
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How Does A Special Memorandum Account Work
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The Margin Account holds the funds that are MUST for any margin trades. Any funds excess of the MUST for margin trades are kept in the SMA account. These funds can be used for further Margin trades in new securities [funds get transfered into the Margin Account]. They cannot be used to met the Shortfall due to margin calls on existing trades. New funds need to be arranged. More at http://en.wikipedia.org/wiki/Special_memorandum_account
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Why do gas stations charge different amounts in the same local area?
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One factor I haven't seen mentioned is volume. Suppliers will charge a slightly lower price to the station if they buy in full tanker truck loads instead of smaller quantities. Where I am this is probably still the largest factor in price spread with all newer bigger stations being 20-30 cents cheaper than the old small ones (often a repair shop with 2 pumps out front); the only reason it's slowly becoming less pronounced is that the old small stations are steadily closing up as their tanks fail leak inspections because they don't sell enough gas to justify repair and replacement.
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Low Fee Income Generating Investments for a Trust
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If your primary goal is no / minimized fees, there are 3 general options, as I see it: Based on the fact that you want some risk, interest-only investments would not be great. Consider - 2% interest equals only $1,500 annually, and since the trust can only distribute income, that may be limited. Based on the fact that you seem to have some hesitation on risk, and also limited personal time able to govern the trust (which is understandable), I would say keep your investment mix simple. By this I mean, creating a specific portfolio may seem desirable, but could also become a headache and, in my opinion, not desirable for a trust executor. You didn't get into the personal situation, but I assume you have a family / close connection to a young person, and are executor of a trust set up on someone's death. That not be the case for you, but given that you are asking for advice rather than speaking with those involved, I assume it is similar enough for this to be applicable: you don't want to set yourself up to feel emotionally responsible for taking on too much risk, impacting the trustee(s)'s life negatively. Therefore, investing in a few limited index funds seems to match what you're looking for in terms of risk, reward, and time required. One final consideration - if you want to maximize annual distributions to the trustee(s)'s, consider that you may be best served by seeking high-dividend paying stock (although again, probably don't do this on a stock-by-stock basis unless you can commit the time to fully manage it). Returns in the form of stock increases are good, but they will not immediately provide income that the trust can distribute. If you also wish to grow the corpus of the trust, then stock growth is okay, but if you want to maximize immediate distributions, you need to focus on returns through income (dividends & interest), rather than returns through value increase.
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how does one start an investing club (as a company)?
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+1 for noting that you are in it for the long haul. I also think this is a great project and activity to do with friends. Setting up and start-up investment company could be done as a simple LLC. The decision making process can be decided among the members -- if you want to defer to the others then so be it. Make it flexible so that you can change your mind in the future. If this is not intended to be a source of revenue or income for you (note your "in it for the long haul") One way of sourcing the capital and managing the resulting taxes you might want to consider is setting up a self-directed retirement account and making the investment from there. proceeds as you and your friends choose to take them would flow back into the retirement account. As with most investment and tax related questions we should all take the little extra time and money to follow up on internet-based advice with your own lawyer, investment adviser and accountant. These licensed individuals when under contract assume a degree of responsibility for their answer which is not available online. :)
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Why do people take out life insurance on their children? Should I take out a policy on my child?
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If the child can take over the life insurance when they wish to get a mortgage or have their own children, there may be a case for buying insurance for the child in the event that your child's health is not good enough for them to get cover at that time. However I don’t think this type of insurance is worth having.
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What should my finances look like at 18?
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Assume you will need to retire with a few million in the bank to maintain an average lifestyle. I had an analysis done for me (at 33) that shows my family, to keep it up lifestyle will need to have 3.4MM in the bank so in retirement I can draw down enough cash. This number reflects inflation. Now that you are 18, if you make consistent but small savings you will achieve that financial stability. Try to make it automatic so you aren't tempted to spend. There is more you can do but since you have such an early start, you can do less than most people and still have plenty. Even thought it is great you are thinking about it, don't forget to be young, move around lots and have fun. Just pay yourself first and have fun second. Also, thank whoever guided you to this point. If you did it all on your own, be proud.
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What is high trading volume in a stock indicative of? Is high liquidity a good thing or a bad thing?
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High liquidity doesn't necessarily mean that "everybody is getting rid of the stock", since somebody is obviously buying whatever stock that is being sold. Also, as mentioned, low liquidity may mean that you would have trouble selling the stock in the future.
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What are the downsides that prevent more people from working in high-income countries, and then retiring in low-income (and cost of living) ones?
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At retirement age, your life priorities are somewhat different, and two key items come to mind. Your social circle, community and extended family contacts are highly related with your lifespan at retirement age. Loneliness kills, literally. Long distance relocation would weaken those ties exactly at the time when you most need and want them. You are also likely to need at least occasional physical assistance at random times, so living in a spot where none your friends&family can visit at a day's notice is hard. Cheaper living locations tend to have worse healthcare. Again, this doesn't matter much for a 25 year old expat, but at an age where you likely have one or multiple chronic diseases, general frailty and a very frequent need for healthcare this is a priority. This might work if you can do it as a family. I met a retired British couple in southern India, and they had a nice system where they were living in UK during the (UK) summer, and in India for the rest of the year. However, the above concerns don't disappear - when at a later time their health deterioates and one of them dies, then it would probably be better for the widow[er] to stay in UK permanently closer to their extended family and with the local healthcare system.
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How does a TFSA work? Where does the interest come from?
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As to where the interest comes from: The same place it comes from in other kinds of savings accounts. The bank takes the money you deposit and invests it elsewhere, traditionally by lending it out to others (hence the concept of a "savings and loan" bank). They make a profit as long as the interest they give for "borrowing" from you, plus the cost of administering the savings accounts and loans, is less than the interest they charge for lending to others. No, they don't have to pay you interest -- but if they didn't, you'd be likely to deposit your funds at another bank which did. Their ideal goal is to pay as little as possible without losing depositors, while charging as much as possible without losing borrowers. (yeah, I know, typo corrected) Why do they get higher interest rate than they pay you? Mostly because your deposits and interest are essentially guaranteed, whereas the folks they're lending to may be late paying or default on those loans. As with any kind of investment, higher return requires more work and/or higher risk, plus (ususally) larger reserves so you can afford to ride out any losses that do occur.
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Will a credit card issuer cancel an account if it never incurs interest?
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While technically true, a card issuer can cancel your card for almost any reason they want, it's highly unlikely they'll cancel it because you pay your bills! There are many, many people out there that pay their bills in full every month without ever paying a cent in credit card interest. I wouldn't ever purposefully incur any interest on a credit card. Related anecdote: I used to have a credit card that I only used for gas purchases because they gave 5% off for fuel. The issuer eventually discontinued the program (I assume because people like me took advantage of it.) So while they didn't cancel my card, the bonus eventually went away. I miss that card. My conclusion: if you can take advantage of promotional rates, by all means, go for it. You don't owe them any favors. Enjoy it as long as it lasts.
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I made an investment with a company that contacted me, was it safe?
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You can contact the french agency for stock regulation and ask them : http://www.amf-france.org/
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Are Forex traders forced to use leverage?
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No one is FORCED to use leverage. But most people do. Trading companies like it because, the more leverage, the more "business" (and total commissions). If someone starts with $1 million and leverages it up ten times to ten million, companies would rather do ten million of business than one. That's a given. On the other hand, if you're Warren Buffett or Bill Gates, and you say I want to do $1 billion of FX, no leverage, no trading company is going to turn it down. More often, it's a company like IBM or Exxon Mobil that wants to do FX, no leverage, because they just earned, say $1 billion Euros. Individuals USUALLY want to use more leverage in order to earn (or lose) more with their capital.
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What software do you recommend for Creating a To-The-Penny, To-The-Day Budget?
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I really don't know about will it help you, but here is what I do: It is not classic solution, but maybe it will work for you (works for me very well).
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I'm about to be offered equity by my employer. What should I expect?
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In my experience, any kind of equity you may be offered by the company is just a carrot. Your offer may be written in such a way that your potential ownership represents, say, 1% of the company today. But if the company goes for a round of financing your ownership percentage can get diluted. If this happens a couple of times and the terms of financing aren't very favorable then your percentage can go from that 1% down to 0.001%, making the equity worthless. I've known people who heard their company was being bought and thought they might get some kind of payoff. Come to find out the company hadn't done all that well and there wasn't anything to pay out after the main investors got some money back. (The main investors took a loss.) For obvious reasons, management wasn't keeping the staff up to date about the fact that they were operating in the red and their options were worthless. Some people grumbled about lawyers and filing lawsuits, but at the end of the day, there wasn't any money to be won. Keep this in mind. As to your question regarding what to look out for:
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First Time Home Buyers - Down Payment, PMI and Points
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1 - For FHA loans PMI is required for mortages where there is not at least 20% equity. Bank Financed Non-FHA loans may have other standards. If you are getting an FHA loan ,if possible put down 20% so that you do not have to pay PMI. That said your PMI costs should be reduced by the size of your down payment since the PMI covers the difference between your equity value (Based on the appraisal at time of purchase) and 20% equity value of the home. So if you buy a home for 425k(assuming 100% appraisal price) 20% equity would be 85k. So if you put 10% down you would be paying PMI until you accrue an addition 42500 in equity. And you will be paying PMI on that for about 12 years(typical on 30 year mortgage) or until you refinance(having home appraised at higher value than purchase price where you would have 20% equity). There are ways to get out of PMI early but few banks are willing to help you through the hoops unless you refinance(and pay more closing costs). 2 - Different banks offer better rates or other benefits for paying points. We paid $300 for a 1.5% reduction in our interest rate (less than 1%) but it was called a point. We were offered a few other points (.25% for 2500 and an one time on demand interest rate adjustment for ~3k) but declined but they may make more sense on a 425k home than our more modest one. You can talk to a banker about this now, get preapproved(which helps with getting offers accepted sometimes), and find out more details about the mortgage they will offer you. This meeting should be free(I would say will but some bank would charge just to prove me wrong) and help answer your questions more authoritatively than anyone here can. 3 - The costs will come out of your down payment. So if you put down 42.5k down your costs will come out of that. So you will probably end up with 30~35k being applied towards your purchase price with the rest going for costs. You can tell the banker you want to put 10% towards the price and the banker will give you a down payment probably around 50k to cover costs etc. (My figures are hopefully intentionally high better to find out that it will cost less than my guesstimate than get your hopes up just to find out the costs are higher than expected.)
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Is stock trading based more on luck than poker playing?
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I assert not so. Even if we assume a zero sum game (which is highly in doubt); the general stock market curves indicate the average player is so bad that you don't have to be very good to have better that 50/50 averages. One example: UP stock nosedived right after some political mess in Russia two years ago. Buy! Profit: half my money in a month. I knew that nosedive was senseless as UP doesn't have to care much about what goes on in Russia. Rising oil price was a reasonable prediction; however this is good for railroads, and most short-term market trends behave as if it is bad.
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