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Personal loan to a friend procedure
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If this isn't a case where you would be willing to forgive the debt if they can't pay, it's a business transaction, not a friend transaction. Establish exactly what the interest rate will be, what the term of the loan is, whether periodic payments are required, how much is covered by those payments vs. being due at the end of the term as a balloon payment, whether they can make additional payments to reduce the principal early... Get it all in writing and signed by all concerned before any money changes hands. Consider having a lawyer review the language before signing. If the loan is large enough that it might incur gift taxes, then you may want to go the extra distance to make it a real, properly documented, intra-family loan. To do this you must charge (of at least pay taxes on) at least a certain minimal interest rate, and they have to make regular payments (or you can gift them the payments but you still won't up paying tax on the interest income). In this case you definitely want a lawyer to draw up the papers, I think. There are services on the web Antioch specialize in helping to set this up properly, and which offer services such as bookkeeping and monthly billing (aT extra cost) to make it less hassle for the lender. If the loan will be structured as a mortgage on the borrower's house -- making the interest deductible for the borrower in the US -- there are additional forms that need to be filled. The services can help with that too, for appropriate fees. Again, this probably wants experts writing the agreement, to make sure it's properly written for where you and the borrower live. Caveat: all the above is assuming USA. Rules may be very different elsewhere. I've done a formal intractability mortgage -- mostly to avoid gift tax -- and it wasn't too awful a hassle. Your mileage will vary.
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Any problem if I continuously spend my credit card more than normal people?
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How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? might answer your question if US based. In the US, what counts is what shows on the bill. I've run $20K through a card with a $10K limit, but still ended the month under $2K by making extra payments. As long as you stay ahead of the limit by making mid-cycle payments, I see no issue with this strategy. If you keep running $30K/mo through a card with a $10K limit, the bank will eventually catch this and raise your limit as you will have proven you are more credit worthy.
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Getting (historical) Standard & Poor Stock Guides
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I haven't seen one of these in quite some time. Back in the 1970s, maybe the 1980s, stock brokers would occasionally send their retail clients a complimentary copy once in a while. Also, I remember the local newspaper would offer a year-end edition for a few dollars (maybe $3) and that edition would include the newspaper company's name on the cover. They were very handy little guides measuring 5 1/2 x 8 (horizontal) with one line devoted to each company. They listed hundreds of publicly traded companies and had basic info on each company. As you stated, for further info you needed to go to the library and follow-up with the big S&P and/or Moody's manuals. That was long before the internet made such info available at the click of a button on a home computer!
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Where do large corporations store their massive amounts of cash?
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For tax optimization, cash is stored mostly overseas, according to the New York Times. For Apple, everytime a song or an app is bought in Europe, Africa or Middle East, money flows to iTunes Sàrl, in Luxemburg. Royalties on patents flow internally from Apple in California to Apple in Ireland. Then profits flow to the Carribean. The problem is that cash cannot be brought back to the USA without huge taxes.
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Account that is debited and account that is credited
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The credit and debit terms here is, talking from bank's point of view (shouldn't be a surprise, banks are never known to look at things from the customers' POV ;)). In accounting, a liability (loans, owners capital etc) is a credit balance and asset (cash, buildings and such) is a debit balance. Your account is a liability to the bank (in accounting parlance that is because they owe you every single penny that is there in your account, btw, in literal parlance too if you really make their life harder ;)) So when the bank accepts money from you, they need to increase their asset (cash) which they will debit (higher debit balance for asset means more assets), and at the same time they also have to account for the added liability by "crediting" the deposited money into your account. So when bank says they have credited your account, it means you have more money in your account. Now, if you transfer money from your account to another, or make a payment through your account, your account will be debited and the beneficiary account will be credited(bank's liability towards you reduces) More or less what everyone else said here... but hey, I could also take a swipe at banks ;))
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Paid cash for a car, but dealer wants to change price
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I've been an F&I Manager at a new car dealership for over ten years, and I can tell you this with absolute certainty, your deal is final. There is no legal obligation for you whatsoever. I see this post is a few weeks old so I am sure by now you already know this to be true, but for future reference in case someone in a similar situation comes across this thread, they too will know. This is a completely different situation to the ones referenced earlier in the comments on being called by the dealer to return the vehicle due to the bank not buying the loan. That only pertains to customers who finance, the dealer is protected there because on isolated occasions, which the dealer hates as much as the customer, trust me, you are approved on contingency that the financing bank will approve your loan. That is an educated guess the finance manager makes based on credit history and past experience with the bank, which he is usually correct on. However there are times, especially late afternoon on Fridays when banks are preparing to close for the weekend the loan officer may not be able to approve you before closing time, in which case the dealer allows you to take the vehicle home until business is back up and running the following Monday. He does this mostly to give you sense of ownership, so you don't go down the street to the next dealership and go home in one of their vehicles. However, there are those few instances for whatever reason the bank decides your credit just isn't strong enough for the rate agreed upon, so the dealer will try everything he can to either change to a different lender, or sell the loan at a higher rate which he has to get you to agree upon. If neither of those two things work, he will request that you return the car. Between the time you sign and the moment a lender agrees to purchase your contract the dealer is the lien holder, and has legal rights to repossession, in all 50 states. Not to mention you will sign a contingency contract before leaving that states you are not yet the owner of the car, probably not in so many simple words though, but it will certainly be in there before they let you take a car before the finalizing contract is signed. Now as far as the situation of the OP, you purchased your car for cash, all documents signed, the car is yours, plain and simple. It doesn't matter what state you are in, if he's cashed the check, whatever. The buyer and seller both signed all documents stating a free and clear transaction. Your business is done in the eyes of the law. Most likely the salesman or finance manager who signed paperwork with you, noticed the error and was hoping to recoup the losses from a young novice buyer. Regardless of the situation, it is extremely unprofessional, and clearly shows that this person is very inexperienced and reflects poorly on management as well for not doing a better job of training their employees. When I started out, I found myself in somewhat similar situations, both times I offered to pay the difference of my mistake, or deduct it from my part of the sale. The General Manager didn't take me up on my offer. He just told me we all make mistakes and to just learn from it. Had I been so unprofessional to call the customer and try to renegotiate terms, I would have without a doubt been fired on the spot.
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How to rebalance a passive portfolio if I speculate a war is coming?
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At a risk of stating the obvious: a passive portfolio doesn't try to speculate on such matters.
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How to invest 10k dollars, at the age of 23?
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An investment in knowledge always pays the best interest, as Ben Franklin said. However, this is not a question I can answer for you, as it depends on the opportunities that are specifically available to you as an individual. Sometimes opportunities will knock on your door and you can take advantage, other times you have to create that door to allow opportunities to knock. Maybe you have a friend that is opening a side business, maybe there is a class you can get into at a trivial cost. What I suggest is to start investing just to get into the habit of it, not so much for the returns. Before you do, however, any financial advisor will advise you to begin with a emergency fund, worth about 3-6 months of your expenses for that time. I wanted to hit the ground running and start investing in stocks, but first things first I guess. "Millionaire Next Door" will help you get into a saving mindset, "I will teach you to be rich" is ok, plenty of other books. My advice is keep doing what you're doing, learn to start saving, and once you have obtained an emergency fund of the amount of your choosing, start looking to invest in Index Funds or ETFs through any platform that has LOW FEES!! I use Betterment, but Vanguard is good too, as they allow you to get your feet wet and it's passive. Hope this helps.
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Finding out actual items bought via credit card issuer and not the store receipt?
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The store keeps track of what you buy. It is all part of their big data. The knowledge of what you buy helps them project future sales. It allows them to target their marketing. But maybe even more importantly they can sell this knowledge to outside companies. They aren't going to give away that information to another company that would love to have that data, just so they could sell it. Stores use those loyalty cards to be able to link your household to those purchases. Those discounts, or free products, are what they use to entice you to give up your privacy. The fact that in your town young adults love caramel apples, even more than the town next door, makes them confident that your town will love caramel apple scented shampoo. Thus they send you coupons when it become available. They will also sell this knowledge to the shampoo companies. Do some stores make it possible for you to download the data? Yes they do. Apple stores send all receipts via email. Kohls allows me to see detail information about my transactions on line. There must be others. I don't know if any are grocery stores.
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How can I spend less?
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Try having money automatically deducted from your paycheck and put into a retirement account or savings account. As long as you don't have a problem with spending more than you have, the easiest way to stop spending money is to have it automatically put somewhere that you can't (or are unlikely to) touch it.
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Why do some people say a house “not an investment”?
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There's an old saying: "Never invest in anything that eats or needs maintenance." This doesn't mean that a house or a racehorse or private ownership of your own company is not an investment. It just points out that constant effort is needed on your part, or on the part of somebody you pay, just to keep it from losing value. Common stock, gold, and money in the bank are three things you can buy and leave alone. They may gain or lose market value, but not because of neglect on your part. Buying a house is a complex decision. There are many benefits and many risks. Other investments have benefits and risks too.
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How can I live outside of the rat race of American life with 300k?
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An endowment is a large chunk of capital (i.e. money) held by a university or other nonprofit. It is meant to hold its value forever against inflation, and invested to generate income: from interest, dividends and appreciation. They seem like a contradiction: closely scrutinized by Boards of Directors, managed to a high and accountable standard, closely regulated -- and yet, invested aggressively for growth: ignoring short-term volatility to get the highest growth long-term. The law, UPMIFA (P for Prudent), requires growth investment, and says taking up to 7% of current value per year is prudent, even in down times when total value is shrinking. On average, this lets the endowment grow with inflation. 7% is the high end of "prudent". An endowment is watched, and the taken income is adjusted to keep the endowment healthy. 5% is very safe, assuming the endowment must pace inflation until the heat death of the universe. If you plan to die someday, drawing an extra 1-2% is appropriate. There you go. Invest like a university endowment, and count on up to 7% per year of income. That's $21,000 a year. There'll be taxes, but the long-term capital gain rate at $21,000/year is pretty low. That's pretty tight, but possible if your idea of entertaining is Netflix. It would work very effectively for #VanLife, or the British version, living on a Narrowboat.
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What's “wrong” with taking money from your own business?
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I'm no expert on this, but I would say that, if you own the business entirely yourself, there is nothing terribly wrong with using it for your own purposes as you would any other asset that you own. What is wrong is not keeping accurate records that distinguish between your money and the business's. As you say, this is wrong strategically, but it can also be dangerous legally, because if you mix your money and the business's money and don't keep track, you could find, for instance, that you've failed to pay the taxes you were supposed to. There is also a concern that might not fall under what people refer to as "ethics" but more "good corporate citizenship". Basically, people tend not to like companies that just shovel all their gains into the owners' pockets. This is especially true if there are ways the money could be used to improve the business. In other words, if you're able to live high on the hog with the profits while paying all your employees a pittance, the public may not look favorably on your business.
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Books, Videos, Tutorials to learn about different investment options in the financial domain
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Just by chance I recently encountered this link - Do It Yourself MFE, which describes an attempt to self-educate to the level of Master of Financial Engineering. It lists books, online courses, etc. which I think may be interesting for you too.
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For a major expensive home renovation (e.g. addition, finished basement, or new kitchen) should one pay cash or finance with a loan? Would such a loan be “good” debt?
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Good debt is very close to an oxymoron. People say student loans are "good debt," but I beg to differ. The very same "good debt" that allowed me to get an education is the very same "bad debt" that doesn't allow me to take chances in my career - meaning, I would prefer to have a 'steady' job over starting a business. (That's my perogative, of course, but I am not willing to take that 'risk.' /endtangent @Harmanjd provided the two really good reason for using cash over borrowing. We have a tendency in this culture to find reasons to borrow. It is better for you to make a budget, based on what you want, and save up for it. Make a "dream list" for what you want, then add up the costs for everything. If that number makes your head hurt, start paring down on things you 'want.' Maybe you install just a wine cooler instead of a wine cooler and a beer tap, or vice-versa. And besides, if something comes up - you can always stop saving money for this project and deal with whatever came up and then resume saving when you're done. Or in the case of the kitchen, maybe you do it in stages: cabinets one year, countertops the next, flooring the year after that, and then the appliances last. You don't have to do it all at once. As someone who is working toward debt freedom, it feels nice whenever we have one less payment to budget for every month. Don't burden yourself to impress other people. Take your time, get bids for the things you can't (or won't) do yourself, and then make a decision that's best for your money.
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Is there any reason not to put a 35% down payment on a car?
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I am going to give advice that is slightly differently based on my own experiences. First, regarding the financing, I have found that the dealers do in fact have access to the best interest rates, but only after negotiating with a better financing offer from a bank. When I bought my current car, the dealer was offering somewhere around 3.3%, which I knew was way above the current industry standard and I knew I had good credit. So, like I did with my previous car and my wife's car, I went to local and national banks, came back with deals around 2.5 or 2.6%. When I told the dealer, they were able to offer 2.19%. So it's ok to go with the dealer's financing, just never take them at face value. Whatever they offer you and no matter how much they insist it's the best deal, never believe it! They can do better! With my first car, I had little credit history, similar to your situation, and interest rates were much higher then, like 6 - 8%. The dealer offered me 10%. I almost walked out the door laughing. I went to my own bank and they offered me 8%, which was still high, but better than 10%. Suddenly, the dealer could do 7.5% with a 0.25% discount if I auto-pay through my checking account. Down-payment wise, there is nothing wrong with a 35% down payment. When I purchased my current car, I put 50% down. All else being equal, the more cash down, the better off you'll be. The only issue is to weigh that down payment and interest rate against the cost of other debts you may have. If you have a 7% student loan and the car loan is only 3%, you're better off paying the minimum on the car and using your cash to pay down your student loan. Unless your student loan balance is significantly more than the 8k you need to finance (like a 20k or 30k loan). Also remember that a car is a depreciating asset. I pay off cars as fast as I can. They are terrible debt to have. A home can rise in value, offsetting a mortgage. Your education keeps you employed and employable and will certainly not make you dumber, so that is a win. But a car? You pay $15k for a car that will be worth $14k the next day and $10k a year from now. It's easy to get underwater with a car loan if the down payment is small, interest rate high, and the car loses value quickly. To make sure I answer your questions: Do you guys think it's a good idea to put that much down on the car? If you can afford it and it will not interfere with repayment of much higher interest debts, then yes. A car loan is a major liability, so if you can minimize the debt, you'll be better off. What interest rate is reasonable based on my credit score? I am not a banker, loan officer, or dealer, so I cannot answer this with much credibility. But given today's market, 2.5 - 4% seems reasonable. Do you think I'll get approved? Probably, but only one way to find out!
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How to realize capital gains before going from non-resident alien to resident alien in USA
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This will work as intended, but there's another point to consider. In the US, the tax rate on proceeds from stock sales is higher for short term holdings, which are defined as held for less than one year. Both rates vary based on your income. Bracket numbers are for fiscal year 2014, filing as single. The difference between short and long term capital gains tax in the US is a minimum of ten percentage points, and works out to 15 percentage points on average. This is substantial. If you won't be reporting much income the year you move to the US (say because you only worked for a portion of the year) it is decidedly to your advantage to wait and sell the stocks in the US, to get that sweet 0% rate. At a minimum, you should hold the position for a year if you sell and rebuy, from a tax optimization perspective. Two caveats:
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Typical return for an IRA? How can I assess if my returns were decent?
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To try and address your 'how' it goes a bit like this. You need to first assess how your stuff is invested, if for example half is in stocks, and the other half is in bonds, then you will need to calculate a 'blended' rate for what are reasonable 'average return' for both. That might mean looking at the S&P500 or Russell 3000 for the stock portion, and some bond index for that portion, then 'blend the rates', in this case using a formula like this then compare the blended rate with the return in your IRA. It is generally a lot more useful to compare the various components of your total return separately, especially if you investing with a particular style such as 'agressive growth' or you are buying actual bonds and not a bond fund since most of the bond oriented indexes are for bond funds, which you can't really compare well with buying and holding bonds to maturity. Lets say your stock side was two mutual funds with different styles, one 'large cap' the other 'aggressive growth'. In that case you might want to compare each one of those funds with an appropriate index such as those provided by Morningstar If you find one of them is consistently below the average, you might want to consider finding an alternative fund who's manager has a better track record (bearing in mind that "past performance....") For me (maybe someone has a good suggestion here) bonds are the hard thing to judge. The normal goal of actually owning bonds (as opposed to a fund) is to retain the entire principal value because there's no principal fluctuation if you hold the bond to maturity (as long as you choose well and the issuer doesn't default) The actual value 'right now' of a bond (as in selling before maturity) and bond funds, goes up and down in an inverse relationship with interest rates. That means the indexes for such things also go up and down a lot, so it's very hard to compare them to a bond you intend to hold to maturity. Also, for such a bond, there's not a lot of point to 'switch out' unless you are worried about the issuer defaulting. If rates are up from what you are getting on your bonds, then you'll have to sell your bond at a discount, and all that happens is you'll end up holding a different bond that is worth less, but has higher interest (basically the net return is likely to be pretty much the same). The better approach there is generally to 'ladder' your maturity dates so you get opportunities to reinvest at whatever the prevailing rates are, without having to sell at a discount.. anyway the point is that I'm not sure there's a lot of value to comparing return on the bond portion of an IRA unless it's invested in bond funds (which a lot of people wanting to preserve principal tend to avoid)
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Best way to make most of savings with ISA and Offset mortgage
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I am not a Financial Advisor, but I an tell you what I did in exactly this situation - which is pretty much what you are proposing. I put money into the offset savings account until I had only a small amount of mortgage "balance" left (less than a year's worth of mortgage payments), then I set it up so that each month I did the transfer from the offset savings pot into the mortgage itself. This depleted the offset savings in line with the mortgage debt, and the interest on the two balanced out almost to zero. This was self-sustaining and meant that I kept the same margin owing over time (i.e. if I was in this situation for 5 years, for the whole 5 years I would effectively have 1 year remaining on the mortgage). Meanwhile, since I now didn't have any mortgage outgoings from my regular income, I put any spare money into ISA savings. No need to withdraw money from the mortgage to move to the ISA. The benefits of this (as opposed to just paying off the damn mortgage already) were that I kept the full liquidity of the mortgage amount - I could withdraw all the offset savings pot if I wanted to, although I would then have to have funded the mortgage payments differently, and as that liquidity went down over time I was building up other savings in parallel. It worked well for me. It almost doesn't matter what the offset mortgage rate is since you are effectively paying it off by keeping the offset savings pot so high.
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Do real nappies (reusable / cloth diapers) really save money?
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I don't think they do. And here's why. If you don't want your child to get skin irritation, you need to watch closely and change the "nappy" right when it got wet. For newborns it means like every 2 hours. It creates a big pile of laundry, but the main thing — additional burden on mother. So, even if you save a little on diapers, you will spend that on water+electricity bill + comforting the mother more often than you would otherwise.
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One company asks for picture of my debit card
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Sounds questionable to me. If there is no way around this I would suggest opening a new account with only the minimum balance necessary and sending them the debit card associated with that account. If anything goes wrong then the amount of damage they can do will be limited. I would definitely be looking for other options though. Maybe they can just mail you a check or something?
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How to calculate new price for bond if yield increases
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Edited to incorporate the comments elsewhere of @Atkins Assuming, (apparently incorrectly) that duration is time to maturity: First, note that the question does not mention the coupon rate, the size of the regular payments that the bond holder will get each year. So let's calculate that. Consider the cash flow described. You pay out 1015 at the start of Year #1, to buy the bond. At the end of Years #1 to #5, you receive a coupon payment of X. Also at the end of Year #5, you receive the face value of the bond, 1000. And you are told that the pay out equals the money received, using a time value of money of 4.69% So, if we use the date of maturity of the bond as our valuation date, we have the equation: Maturity + Future Value of coupons = Future value of Bond Purchase price 1000 + X *( (1 + .0469)^5-1)/0.0469 = 1015 * 1.0469^5 Solving this for X, we obtain 50.33; the coupon rate is 5.033%. You will receive 50.33 at the end of each of the five years. Now, we can take this fixed schedule of payments, and apply the new yield rate to the same formula above; only now, the unknown is the price paid for the bond, Y. 1000 + 50.33 * ((1 + 0.0487)^5 - 1) / .0487 = Y * 1.0487^5 Solving this equation for Y, we obtain: Y = 1007.08
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Trouble sticking to a budget when using credit cards for day to day transactions?
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If you keep going over budget with your credit card, then stop using the credit card. If you plan to pay off the card every month, then your balance should always be under whatever your budget is. For example, if you budget to spend $500, then even though your card has a limit of $5,000 you will never carry a balance of over $500. Most banks have an option to email and / or text message you when you pass a certain balance threshold; in this instance, you would set two notices, one when your balance exceeds $400 (warning you that you're close & need to start paying closer attention), and one when you exceed $500. Additionally, maybe you aren't ready to pay for everything with your credit card. I prefer to use mine just for groceries, and then pay it off at the end of the month. Whatever rewards you get for putting all of your purchases on the card are more than paid for when you cross your budget limit, costing you more in interest and fees. Perhaps starting with just one type of purchase (groceries or gas are good choices, as most consumers are fairly consistent in their purchases of both) would allow you to ease into using the card until you get used to managing your budget with it. Personal finances are all about behavior, not knowledge. Don't worry too much about slipping up right now and making a mistake; just keep practicing good behavior with your credit card, and soon managing your budget with it will be as natural for you as when you only used cash.
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Canadian personal finance software with ability to export historical credit card transactions?
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If you're willing to use OFX or QIF files, most Canadian banks can spit output more data than 90 days. The files are typically used to import into Quicken-like local programs, but can be easily parsed for your webapp, I imagine.
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What is the fair value of a stock given the bid and ask prices? Is there such a relationship?
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If you need to show that the sale/purchase was at FMV, then showing that you made a trade on a public exchange with an unrelated counterpart is enough to establish FMV. However, this is only one of the possible "fair market value" definitions. This is usually used to determine basis or value for tax purposes. For valuation purposes or general accounting, one specific trade is not enough to establish FMV, and much more research is required.
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Choosing the limit when making a limit order?
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There are a couple of things you could do, but it may depend partly on the type of orders your broker has available to you. Firstly, if you are putting your limit order the night before after close of market at the top of the bids, you may be risking missing out if bid & offer prices increase by the time the market opens the next day. On the other hand, if bid & offer prices fall at the open of the next day you should get your order filled at or below your limit price. Secondly, you could be available at the market open to see if prices are going up or down and then work out the price you want to buy at then and work out the quantity you can buy at that price. I personally don't like this method because you usually get too emotional, start chasing the market if prices start rising, or start regretting buying at a price and prices fall straight afterwards. My preferred method is this third option. If your broker provides stop orders you can use these to both get into and out of the market. How they work when trying to get into the market is that once you have done your analysis and picked a price that you would want to purchase at, you put a stop buy order in. For example, the price closed at $9.90 the previous day and there has been resistance at $10.00, so you would put a stop buy trigger if the price goes over $10, say $10.01. If your stop buy order gets triggered you can have either a buy market order or a limit order above $10.01 (say $10.02). The market order would go through immediately whilst the limit order would only go through if the price continues going to $10.02 or above. The advantage of this is that you don't get emotional trying to buy your securities whilst sitting in front of the screen, you do your analysis and set your prices whilst the market is closed, you only buy when the security is rising (not falling). As your aim is to be in long term you shouldn't be concerned about buying a little bit higher than the previous days close. On the other hand if you try and buy when the price is falling you don't know when it will stop falling. It is better to buy when the price shows signs of rising rather than falling (always follow the trend).
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Does it make sense to buy a house in my situation?
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The $3K includes property tax, right? It looks like the mortgage alone will be about $2150 or so. If your (cal) state tax is enough to put you into itemized deductions, your mortgage and property tax are a write off, and the $3k will actually be closer to the $2K you are considering for rent. The wild card as I see it is that your budget is so tight that any unforeseen expenses will be charged. As a long time homeowner, I know these expenses sometime appear to be high, and regular, despite their random nature. The money earmarked for credit card payments will go a long way to cover the tight budget you seem to have. This and your decreasing support makes this look tight but not impossible. The condition of the house would make or break the deal, in my opinion.
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If I go to a seminar held overseas, may I claim my flights on my tax return?
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You can deduct this if the main purpose of the trip is to attend the seminar. Travel expenses relating to the attendance at conferences, seminars and other work-related events are deductible to the extent that they relate to your income-producing activities. You will need to apportion your travel expenses where you undertake both work-related and private activities. Travel costs to and from the location of the work-related event will only be deductible where the primary purpose of the travel was to attend the event. Accommodation, food and other incidental costs must be apportioned between work-related and private activities taking into account the types of activities that you did on the day you incurred the cost. You might like to consider in advance what you would tell them if they questioned this - for instance you might say (if they are true):
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Exercising an option without paying for the underlying
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It would be nice if the broker could be instructed to clear out the position for you, but in my experience the broker will simply give you the shares that you can't afford, then freeze your account because you are over your margin limit, and issue a margin call. This happened to me recently because of a dumb mistake: options I paid $200 for and expected to expire worthless, ended up slightly ITM, so they were auto-exercised on Friday for about $20k, and my account was frozen (only able to close positions). By the next Monday, market news had shifted the stock against me and I had to sell it at a loss of $1200 to meet the margin call. This kind of thing is what gives option trading a reputation for danger: A supposedly max-$200-risk turned into a 6x greater loss. I see no reason to ever exercise, I always try to close my positions, but these things can happen.
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What happens if a purchase is $0.02 in Canada?
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The rounding should always follow the same rule. If the value ends in .01 or .02 then you round to .00. Doesn't matter if it's 10.01 rounding to 10.00 or 0.01 to 0.00. The decision on what a company wants to do if an invoice total is $0.01 or $0.02 would be up to the company. The POS system should follow the rule and round to $0.00 if the method of payment is cash, but the company has the right to not give things away for free. They can impose a minimum cash invoice amount of $0.05. But you would do this by requiring the customer to add more items to their purchase. You couldn't just round the invoice up to $0.05 and to charge them $0.05 for a $0.01 item It would be similar to companies having a minimum purchase amount when paying by credit card. If their minimum amount is $10.00 and you want to buy something that's $5.00, you either pay cash or add something to your order. They don't just charge you $10.00 for your $5.00 item. I think this would be a extreme edge case where you have an invoice with a total of $0.01 or $0.02, without any discounts, partial payments, etc. If the customer's total was $10.01 and they paid with a $10.00 gift card, the final amount owing of $0.01 would round down to $0.00 and they wouldn't owe any more. If they had paid cash, the total would have rounded to $10.00 anyway. Similarly, if the customer returned an item and bought a new item, or used coupons, and the total owing was $0.01 or $0.02, then you would round down to $0.00 and they wouldn't pay anything. As BobbyScon said, you can implement some options to allow the company to decide how they want to handle this. You could have an option that doesn't allow a sale to be processed if the total amount is less than $0.03 and the sale doesn't include any discounts, returned items, coupons, etc. The option could be to completely block the sale, require a supervisor override, or just display a warning to the cashier. Best bet is to talk to as many of your current or potential clients as you can to see how they would like this edge case handled. For many, it's probably a mute case since they wouldn't have items that have a unit price less than $0.03. Maybe a place like a hardware store that sells individual nuts, bolts, and washers.
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Why can Robin Hood offer trading without commissions?
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They mostly make money off of the spread between your order and the spread of the buy and sell currently in the market. As others have previously explained, their buy/sell spreads are a little lacklustre.
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Co- Signed car loan and need to have the other signer relinquish claim to ownership
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Your arrangements with the bank are irrelevant. Whoever is named on the title of the vehicle owns it. If she is the "primary", then I assume her name is on the title, therefore she owns the car. If you drive off with the car and it is titled in her name, she can report it stolen and have you arrested for grand theft auto unless you have a dated and signed permission in writing from her to use the car. Point #2: If a car loan was involved, then you didn't "purchase" the car, the bank did. If you want to gain ownership of the car, then you need to have her name removed from the title and have yours put in its place. Since the bank has possession of the title, this will require the cooperation of both your girlfriend and the bank.
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Explanations on credit cards in Canada
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I think it's worth pointing out explicitly that the biggest difference between a credit card (US/Canada) and a debit card (like your French carte de crédit) is that with a credit card, it's entirely possible to not pay the bill or to pay only the "minimum payment" when asked. This results in you owing significantly more money due to interest, which can snowball into higher and higher levels of debt, and end up getting rapidly out of control. This is the reason why you should ALWAYS pay off the ENTIRE balance every month, as attested to in the other answers; it's not uncommon to find people in the US with thousands of dollars of debt they can't pay off from misuse of credit cards.
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Credit card transactions for personal finances
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I use mint.com for tracking my finances. It works on mobile phones, tablets, and in a browser. If you don't mind the initial hassle of putting in the credentials you use to access your account online, you'll find that you're able to build a comprehensive picture of the state of your finances relatively quickly. It does a great job of separating the various types of financial transactions you engage in, and also lets you customize those classifications with tags. It's ad-supported, so there's no out-of-pocket cost to you, and it doesn't preclude you from using the personal finance software you already have on your phone.
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How to check the paypal's current exchange rate?
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I cannot speak for Paypal specifically and I doubt anyone who doesn't actually work on their internal automated payment systems could. However, I can speak from experiencing in working on automated forex transaction systems and tell you what many institutions do and it is often NOT based on live rates. There is no law stating an institution must honor a specific market exchange rate. Institutions can determine their own rates how and when they want to. However, there is some useful information on their website: https://www.paypal.com/an/cgi-bin/webscr?cmd=p/sell/mc/mc_convert-outside "The most readily available information on currency exchange rates is based on interbank exchange rates. Interbank exchange rates are established in the course of currency trading among a global network of over 1,000 banks, and are not available through consumer or retail channels." This leads me to believe they pull exchange rates from either Oanda or XE periodically and then use these rates throughout the day to conduct business. Paypal does not disclose who they use to determine rates. And it's highly doubtful they do this for every transaction (using live rates). Even if they did, there would be no way for you to check and be certain of a particular exchange rate as paypal states: " Consumers may use these rates as a reference, but should not expect to use interbank rates in transactions that involve currency conversion. To obtain actual retail rates, contact your local financial institution or currency exchange, or check the rate displayed in your PayPal transaction." This is partly because rates can change by the second just like stock prices or anything else which is susceptible to the open market's variables of supply, demand news events etc. So, even if you check the rates on Oanda (which you can do here: http://www.oanda.com/currency/converter/) you are not going to get a 100% accurate representation of what you would get by doing an exchange immediately afterwards from Paypal or any other financial institution. However, if you want to estimate, using Oanda's currency converter will likely get you close in most scenarios. That is assuming Paypal doesn't charge a premium for the exchange, which they may. That is also assuming they use live rates, it's also possible they only update their rates based on market rates periodically and not for every transaction. You may want to test this by checking the exchange rate on your transaction and comparing that to the Oanda rates at the same time.
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Is it normal for brokers to ask whether I am a beginner?
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In many places there are legal requirements to do so, essentially made to prevent brokers from selling high-risk products as if they were deposits with guaranteed safety of your funds. There also may be prohibitions on offering high-risk/high-return products to beginner customers, e.g. requiring accredited investor status claiming that yes, you really know how this works and are informed of the involved risks or you're not allowed to invest in that product. Making untrue claims of being not a beginner may limit your options if your broker does cheat you in some manner, as it gives them a solid argument that you confirmed that you understand how their pump-and-dump scheme works and are yourself responsible for losing your money to them.
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Why don't more people run up their credit cards and skip the country?
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Quality of life, success and happiness are three factors that are self define by each individual. Most of the time all three factors go hand by hand with your ability to generate wealth and save. Actually, a recent study showed that there were more happy families with savings than with expensive products (car, jewelry and others). These 3 factors, will be very difficult to maintain after someone commit such action. First, because you will fear every interaction with the origin of the money. Second, because every individual has a notion of wrong doing. Third, for the reasons that Jaydles express. Also, most cards, will call you and stop the cards ability to give money, if they see an abusive pattern. Ether, skipping your country has some adverse psychological impact in the family and individual that most of the time 100K is not enough to motivate such change. Thanks for reading. Geo
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“Debt Settlement Order” Text Spams – How do they work?
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There are likely to be two approaches: An autodialer of any description would be more than capable of sending an SMS or initiating a direct telephone call with any set of telephone numbers. Such autodialiers can run off a personal computer via VoIP or some such third-party. As to getting the numbers, it can be either from a purchased list (if they're serious about this and are obeying any call opt-out lists) or simply a number range dialed sequentially, whether they work or not. In a more serious operation, any returns are fed directly to a call centre where real human beings then initiate direct contact. Otherwise it is simply a fishing expedition and any valid numbers can then be sold to other agencies as a screened list (and, therefore, more valuable). From an SMS perspective, anyone can purchase a vendor-level SMS Gateway subscription (of which there are loads of vendors - and note the number that allow "web-to-SMS") which permits you to receive and respond to any SMS received. This is always about the "law of large numbers". If they can get in the hundreds of thousands of valid numbers and a small number respond then they can make money. Like any spam, because a few are gullible, the rest of us are targets too. Update: A few searches for "software auto sms" and similar results in a fair number of prospects. As I don't wish this to become too much of a "how-to" I'm not going to link.
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What is the difference between equity and assets?
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Not to detract from the other answers at all (which are each excellent and useful in their own right), but here's my interpretation of the ideas: Equity is the answer to the question "Where is the value of the company coming from?" This might include owner stakes, shareholder stock investments, or outside investments. In the current moment, it can also be defined as "Equity = X + Current Income - Current Expenses" (I'll come back to X). This fits into the standard accounting model of "Assets - Liabilities = Value (Equity)", where Assets includes not only bank accounts, but also warehouse inventory, raw materials, etc.; Liabilities are debts, loans, shortfalls in inventory, etc. Both are abstract categories, whereas Income and Expense are hard dollar amounts. At the end of the year when the books balance, they should all equal out. Equity up until this point has been an abstract concept, and it's not an account in the traditional (gnucash) sense. However, it's common practice for businesses to close the books once a year, and to consolidate outstanding balances. When this happens, Equity ceases to be abstract and becomes a hard value: "How much is the company worth at this moment?", which has a definite, numeric value. When the books are opened fresh for a new business year, the Current Income and Current Expense amounts are zeroed out. In this situation, in order for the big equation to equal out: Assets - Liabilities = X + Income - Expeneses the previous net value of the company must be accounted for. This is where X comes in, the starting (previous year's) equity. This allows the Assets and Liabilities to be non-zero, while the (current) Income and Expenses are both still zeroed out. The account which represents X in gnucash is called "Equity", and encompasses not only initial investments, but also the net increase & decreases from previous years. While the name would more accurately be called "Starting Equity", the only problem caused by the naming convention is the confusion of the concept Equity (X + Income - Expenses) with the account X, named "Equity".
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Why would anyone buy a government bond?
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Why would a bank buy government bonds? Why couldn't they just deposit their money in another bank instead? Generally, banks are limited by laws and regulations about how much they must set aside as reserves. Of the money they receive as deposits, they may loan a certain amount, but must keep some as a reserve (this is called "fractional reserve banking"). Different countries have a different amount that they must set aside in reserves. In countries where bank deposits are guaranteed, there is almost always some upper limit to how much is guaranteed. The amount of money that a bank would deposit in another bank would be far greater than the guarantee.
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Superannuation: When low risk options have higher return, what to do?
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The long term view you are referring to would be over 30 to 40 years (i.e. your working life). Yes in general you should be going for higher growth options when you are young. As you approach retirement you may change to a more balanced or capital guaranteed option. As the higher growth options will have a larger proportion of funds invested into higher growth assets like shares and property, they will be affected by market movements in these asset classes. So when there is a market crash like with the GFC in 2007/2008 and share prices drop by 40% to 50%, then this will have an effect on your superannuation returns for that year. I would say that if your fund was invested mainly in the Australian stock market over the last 7 years your returns would still be lower than what they were in mid-2007, due to the stock market falls in late 2007 and early 2008. This would mean that for the 7 year time frame your returns would be lower than a balanced or capital guaranteed fund where a majority of funds are invested in bonds and other fixed interest products. However, I would say that for the 5 and possibly the 10 year time frames the returns of the high growth options should have outperformed the balanced and capital guaranteed options. See examples below: First State Super AMP Super Both of these examples show that over a 5 year period or less the more aggressive or high growth options performed better than the more conservative options, and over the 7 year period for First State Super the high growth option performed similar to the more conservative option. Maybe you have been looking at funds with higher fees so in good times when the fund performs well the returns are reduced by excessive fees and when the fund performs badly in not so good time the performance is even worse as the fees are still excessive. Maybe look at industry type funds or retail funds that charge much smaller fees. Also, if a fund has relatively low returns during a period when the market is booming, maybe this is not a good fund to choose. Conversely, it the fund doesn't perform too badly when the market has just crashed, may be it is worth further investigating. You should always try to compare the performance to the market in general and other similar funds. Remember, super should be looked at over a 30 to 40 year time frame, and it is a good idea to get interested in how your fund is performing from an early age, instead of worrying about it only a few years before retirement.
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Owing state tax Interest and a result of living in Maryland and working in Virginia
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The reciprocity agreement in the Washington DC area means that you only pay income taxes where you live, not where you work. Because you live in Maryland you only need to pay income taxes to Maryland. You need to do the following things. Line 3. If you are not subject to Virginia withholding, check the box on this line. You are not subject to withholding if you meet any one of the conditions listed below. Form VA-4 must be filed with your employer for each calendar year for which you claim exemption from Virginia withholding. (a) You had no liability for Virginia income tax last year and you do not expect to have any liability for this year. ... (d) You are a domiciliary or legal resident of Maryland, Pennsylvania or West Virginia whose only Virginia source income is from salaries and wages and such salaries and wages are subject to income taxation by your state of domicile. My company has its only office in Maryland, and conducts all of its business there. Several of our employees are Virginia residents who commute to work on a daily basis. Are we required to withhold Virginia income tax from their wages? No. Because your company is not paying wages to employees for services performed in Virginia, you are not required to withhold Virginia tax. If you would like to withhold the tax as a courtesy to your employees, you may register for a Virginia withholding tax account online or by submitting a Registration Application. Additional withholding per pay period under agreement with employer. If you are not having enough tax withheld, you may ask your employer to withhold more by entering an additional amount on line 2.
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How do I make a small investment in the stock market? What is the minimum investment required?
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Many brokers offer a selection of ETFs with no transaction costs. TD Ameritrade and Schwab both have good offerings. Going this route will maximize diversification while minimizing friction.
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What to do if my aging father is sustaining a hobby that is losing several thousand dollars every month?
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You've already counted the cost. It will cost your family ~$10,000 per month until your father dies, or until there's no money left, to enable him to pretend that he is a successful business owner. I'd ask him when he thinks business is going to pick up again. He may be honest with himself. Or, ask him to consider what will happen if he outlives the money that's going out the door. Ask him if he would like to be bankrupt on top of needing to close his business. (I don't view asking those questions as being unloving, by the way.)
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If I believe a stock is going to fall, what options do I have to invest on this?
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Shorting Stocks: Borrowing the shares to sell now. Then buying them back when the price drops. Risk: If you are wrong the stock can go up. And if there are a lot of people shorting the stock you can get stuck in a short squeeze. That means that so many people need to buy the stock to return the ones they borrowed that the price goes up even further and faster. Also whoever you borrowed the stock from will often make the decision to sell for you. Put options. Risk: Put values don't always drop when the underlying price of the stock drops. This is because when the stock drops volatility goes up. And volatility can raise the value of an option. And you need to check each stock for whether or not these options are available. finviz lists whether a stock is optional & shortable or not. And for shorting you also need to find a broker that owns shares that they are willing to lend out.
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Why would you ever turn down a raise in salary?
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It would make sense to refuse a raise when it pushes your effective marginal 'tax' (including reduced benefits) above 100%. The working poor (family of 4, 20K-40K in the US) often face marginal rates above 100% when you consider the phase out of various government benefits (EITC, insurance, housing,etc.) You can see the research here and here.
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Why do people always talk about stocks that pay high dividends?
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Someone who buys a stock is fundamentally buying a share of all future dividends, plus the future liquidation value of the company in the event that it is liquidated. While some investors may buy stocks in the hope that they will be able to find other people willing to pay more for the stock than they did, that's a zero sum game. The only way investors can make money in the aggregate is if either stocks pay dividends or if the money paid for company assets at liquidation exceeds total net price for which the company sold shares. One advantage of dividends from a market-rationality perspective is that dividend payments are easy to evaluate than company value. Ideally, the share price of a company should match the present per-share cash value of all future dividends and liquidation, but it's generally impossible to know in advance what that value will be. Stock prices may sometimes rise because of factors which increase the expected per-share cash value of future dividends and liquidations. In a sane market, rising prices on an item will reduce people's eagerness to buy and increase people's eagerness to sell. Unfortunately, in a marketplace where steady price appreciation is expected the feedback mechanisms responsible for stability get reversed. Rapidly rising prices act as a red flag to buyers--unfortunately, bulls don't see red flags as signal to stop, but rather as a signal to charge ahead. For a variety of reasons including the disparate treatment of dividends and capital gains, it's often not practical for a company to try to stabilize stock prices through dividends and stock sales. Nonetheless, dividends are in a sense far more "real" than stock price appreciation, since paying dividends generally requires that companies actually have sources of revenues and profits. By contrast, it's possible for stock prices to go through the roof for companies which have relatively few assets of value and no real expectation of becoming profitable businesses, simply because investors see rising stock prices as a "buy" signal independent of any real worth.
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Where can I trade FX spot options, other than saxobank.com?
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You can trade currency ETF options on IB. It is SIPC insured; the options are just like vanilla options in Saxo.
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How to get started with options investing?
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One answer in four days tells you this is a niche, else there should be many replies by now. The bible is McMillan on Options Note - I link to the 1996 edition which starts at 39 cents, the latest revision will set you back $30 used. The word bible says it all, it offers a great course in options, everything you need to know. You don't get a special account for option trading. You just apply to your regular broker, so depending what you wish to do, the amount starts at You sell calls against stock you own in your IRA. You see, selling covered calls always runs the risk of having your stock called away, and you'd have a gain, I'd hope. By doing this within the IRA, you avoid that. Options can be, but are not always, speculative. Covered calls just change the shape of your return curve. i.e. you lower your cost by the option premium, but create a fixed maximum gain. I've created covered calls on the purchase of a stock or after holding a while depending on the stock. Here's the one I have now: MU 1000 shares bought at $8700, sold the $7.50 call (jan12) for $3000. Now, this means my cost is $5700, but I have to let it go for $7500, a 32% return if called. (This was bought in mid 2010, BTW.) On the flip side, a drop of up to 35% over the time will still keep me at break even. The call seemed overpriced when I sold it. Stock is still at $7.20, so I'm close to maximum gain. This whole deal was less risky than just owning one risky stock. I just wrote a post on this trade Micron Covered Call, using today's numbers for those actually looking to understand this as new position. (The article was updated after the expiration. The trade resulted in a 42% profit after 491 days of holding the position, with the stock called away.) On the other hand, buying calls, lots of them, during the tech bubble was the best and worst thing I did. One set of trades' value increased by a factor of 50, and in a few weeks blew up on me, ended at 'only' triple. I left the bubble much better off than I went in, but the peak was beautiful, I'd give my little toe to have stayed right there. From 99Q2 to 00Q2, net worth was up by 3X our gross salary. Half of that (i.e. 1.5X) was gone after the crash. For many, they left the bubble far far worse than before it started. I purposely set things up so no more than a certain amount was at risk at any given time, knowing a burst would come, just not when. If nothing else, it was a learning experience. You sell calls against stock you own in your IRA. You see, selling covered calls always runs the risk of having your stock called away, and you'd have a gain, I'd hope. By doing this within the IRA, you avoid that. Options can be, but are not always, speculative. Covered calls just change the shape of your return curve. i.e. you lower your cost by the option premium, but create a fixed maximum gain. I've created covered calls on the purchase of a stock or after holding a while depending on the stock. Here's the one I have now: MU 1000 shares bought at $8700, sold the $7.50 call (jan12) for $3000. Now, this means my cost is $5700, but I have to let it go for $7500, a 32% return if called. (This was bought in mid 2010, BTW.) On the flip side, a drop of up to 35% over the time will still keep me at break even. The call seemed overpriced when I sold it. Stock is still at $7.20, so I'm close to maximum gain. This whole deal was less risky than just owning one risky stock. I just wrote a post on this trade Micron Covered Call, using today's numbers for those actually looking to understand this as new position. (The article was updated after the expiration. The trade resulted in a 42% profit after 491 days of holding the position, with the stock called away.) On the other hand, buying calls, lots of them, during the tech bubble was the best and worst thing I did. One set of trades' value increased by a factor of 50, and in a few weeks blew up on me, ended at 'only' triple. I left the bubble much better off than I went in, but the peak was beautiful, I'd give my little toe to have stayed right there. From 99Q2 to 00Q2, net worth was up by 3X our gross salary. Half of that (i.e. 1.5X) was gone after the crash. For many, they left the bubble far far worse than before it started. I purposely set things up so no more than a certain amount was at risk at any given time, knowing a burst would come, just not when. If nothing else, it was a learning experience.
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Should you always max out contributions to your 401k?
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To be clear, a 401K is a vehicle, you make investments WITHIN it, if you choose poorly such as say putting all your money into company stock when working for the next Enron, you can still get hurt badly. So it is important to have diversity and an appropriate risk level based on your age, tolerance for risk, etc. That said, as vehicles go it is outstanding, and the 'always max your 401K' is very very common advice for a large number of investing professionals, CFA's, pundits, etc. That said there are a few priorities to consider here. First priority, if there is some level of company matching, grab that, it's hard to beat that kind of 'return' in almost any other case. Second, since you never want to tap into a 401K (if you can at all avoid it) before you are ready to retire, you should first be sure you have a good 'emergency fund' set aside in the event you lose your job, or some other major catastrophy happens. Many recommend setting aside at least 6 months of basic living expenses. Third, if you have any high interest debt (like credit card debt) pay that stuff down as fast as you can. You'll save a ton of interest (it's pretty much the same as investing the money you use to pay it down, and getting a return equal to the interest rate you are paying, with zero risk.. can't be beat. You'll also end up with a lot better cash flow, and the ability to start saving first and spending out of savings, so you earn interest instead of paying it. Once you have those things out of the way, then it is time to think about fully funding the 401K. and keep in mind, since you don't pay taxes on it, the 'felt effect' to you pocket is about 80% or even less, of what goes into the account, so it's not as painful as you might think, and the hit to your take home may be less than you'd expect. Contributing as much as you can, as early as you can also lets you benefit from the effect of compounding, and has a far larger affect on the balance than money put into the account closer to retirement. So if you can afford to max it out, I surely would advise you to do so.
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Can I deduct child's charitable deduction from my taxes?
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No, you may not deduct the charitable contributions of your children. The Nest covers this in detail: The IRS only allows you to deduct charitable contributions that you personally funded, whether the contribution was made in your name or in someone else's. If your child or dependent makes a donation to a charity, you are not allowed to claim it as a tax deduction. This is true even if your dependent does not claim the contribution on his own tax return because he opts for the standard deduction rather than itemizing or claims exemption. Now, had you constructed the transaction differently, it's possible you could've made the contribution in your child's name and thus claimed the deduction. Allowance is technically a gift, and if she agrees to forgo allowance in exchange for you making a contribution, well, the IRS can't really complain (though they might try if it were a large amount!). Contributions in the name of someone else, but funded by yourself, are deductible: [Y]ou can deduct contributions you make in someone else’s name. So if you donated a certain amount of money to XYZ charity in your child’s name, for example, you would be able to deduct this amount on your taxes, as long as the deduction requirements are met. You will need to keep accurate records of the payment along with the receipt from the organization to prove you financed the donation.
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Assessing risk, and Identifying scams in Alternative Investments
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I have personally invested $5,000 in a YieldStreet offering (a loan being used by a company looking to expand a ridesharing fleet), and would certainly recommend taking a closer look if they fit your investment goals and risk profile. (Here's a more detailed review I wrote on my website.) YieldStreet is among a growing crop of companies launched as a result of legislative and regulatory changes that began with the JOBS Act in 2012 (that's a summary from my website that I wrote after my own efforts to parse the new rules) but didn't fully go into effect until last year. Most of them are in Real Estate or Angel/Venture, so YieldStreet is clearly looking to carve out a niche by assembling a rather diverse collection of offerings (including Real Estate, but also other many other categories). Unlike angel/venture platforms (and more like the Real Estate platforms), YieldStreet only offers secured (asset-backed) investments, so in theory there's less risk of loss of principal (though in practice, these platforms haven't been through a serious stress test). So far I've stuck with relatively short-term investments on the debt crowdfunding platforms (including YieldStreet), and at least for the one I chose, it includes monthly payments of both principal and interest, so you're "taking money off the table" right away (though presumably then are faced with how to redeploy, which is another matter altogether!) My advice is to start small while you acclimate to the various platforms and investment options. I know I was overwhelmed when I first decided to try one out, and the way I got over that was to decide on the maximum I was willing to lose entirely, and then focus on finding the first opportunity that looked reasonable and would maximize what I could learn (in my case it was a $1,000 in a fix-and-flip loan deal via PeerStreet).
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Am I exposed to currency risk when I invest in shares of a foreign company that are listed domestically?
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Yes, you're still exposed to currency risk when you purchase the stock on company B's exchange. I'm assuming you're buying the shares on B's stock exchange through an ADR, GDR, or similar instrument. The risk occurs as a result of the process through which the ADR is created. In its simplest form, the process works like this: I'll illustrate this with an example. I've separated the conversion rate into the exchange rate and a generic "ADR conversion rate" which includes all other factors the bank takes into account when deciding how many ADR shares to sell. The fact that the units line up is a nice check to make sure the calculation is logically correct. My example starts with these assumptions: I made up the generic ADR conversion rate; it will remain constant throughout this example. This is the simplified version of the calculation of the ADR share price from the European share price: Let's assume that the euro appreciates against the US dollar, and is now worth 1.4 USD (this is a major appreciation, but it makes a good example): The currency appreciation alone raised the share price of the ADR, even though the price of the share on the European exchange was unchanged. Now let's look at what happens if the euro appreciates further to 1.5 USD/EUR, but the company's share price on the European exchange falls: Even though the euro appreciated, the decline in the share price on the European exchange offset the currency risk in this case, leaving the ADR's share price on the US exchange unchanged. Finally, what happens if the euro experiences a major depreciation and the company's share price decreases significantly in the European market? This is a realistic situation that has occurred several times during the European sovereign debt crisis. Assuming this occurred immediately after the first example, European shareholders in the company experienced a (43.50 - 50) / 50 = -13% return, but American holders of the ADR experienced a (15.95 - 21.5093) / 21.5093 = -25.9% return. The currency shock was the primary cause of this magnified loss. Another point to keep in mind is that the foreign company itself may be exposed to currency risk if it conducts a lot of business in market with different currencies. Ideally the company has hedged against this, but if you invest in a foreign company through an ADR (or a GDR or another similar instrument), you may take on whatever risk the company hasn't hedged in addition to the currency risk that's present in the ADR/GDR conversion process. Here are a few articles that discuss currency risk specifically in the context of ADR's: (1), (2). Nestle, a Swiss company that is traded on US exchanges through an ADR, even addresses this issue in their FAQ for investors. There are other risks associated with instruments like ADR's and cross-listed companies, but normally arbitrageurs will remove these discontinuities quickly. Especially for cross-listed companies, this should keep the prices of highly liquid securities relatively synchronized.
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Can I estimate other people's credit limit at the grocery store?
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What you're referring to is Visa Easy Payment Services (VEPS). Other payment processors have similar programs. Basically, certain merchants (based on merchant category code - or MCC), are not required to obtain a signature under $50. This limit was raised to $50 from $25 last year. Here is the press release from Visa describing the increase, and the program in general.
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Simple and safe way to manage a lot of cash
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You can move most or all of those financial products into a single account at one institution, but I wouldn't go with a "mutual fund account" like Vanguard. The big online brokerages should offer: Consolidating everything into one statement can vastly simplify your record keeping. With a balance of $250k, you should be able to get a paper statement without a fee. Depending on where the accounts are currently held (e.g. if the stocks are at a full-service broker), you may also be able to save on fees.
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Where to borrow money between college graduation and employment?
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You have asked about getting a loan, the issue is that you don't have collateral to offer up in exchange for the loan, you also don't have a regular source of income. Getting a low level job, even one not related to your major will provide income. Getting a not-so-perfect job related to your major will allow your to sustain yourself, and provide experience that can help you find the perfect job. The time from application to interview to offer letter to start date can be measured in months. This is even with positions you are perfect for. Since it can take months to get started in a new job you should focus on something that you can get started right away. This type of job will have a shorter time frame for the interview cycle. You may feel overqualified for the jobs based on the fact you just graduated from college but this was the type of job you should have had to bridge you from school to the job you want. Regarding the end goal of getting the perfect job, you might have to refocus your efforts. When you had time and money you could afford to be picky about company, location and salary. Now that money is in short supply you will need to change your standards. Keep in mind it is not just an issue about being able to travel to job interviews, it is also about needing a way to afford food, and health insurance. Go back to your college campus and talk to the career counselors they can help your with your resume, and give job search advice. They may also have contacts that can help you find a position with a good local company or even a national company. They may even know of companies that need employees for just a few months to fill a need.
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Shares; are they really only for the rich/investors?
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I think I have a better answer for this since I have been an investor in the stock markets since a decade and most of my money is either made through investing or trading the financial markets. Yes you can start investing with as low as 50 GBP or even less. If you are talking about stocks there is no restriction on the amount of shares you can purchase the price of which can be as low as a penny. I stared investing in stocks when I was 18. With the money saved from my pocket money which was not much. But I made investments on a regular period no matter how less I could but I would make regular investments on a long term. Remember one thing, never trade stock markets always invest in it on a long term. The stock markets will give you the best return on a long term as shown on the graph below and will also save you money on commission the broker charge on every transaction. The brokers to make money for themselves will ask you to trade stocks on short term but stock market were always made to invest on a long term as Warren Buffet rightly says. And if you want to trade try commodities or forex. Forex brokers will offer you accounts with as low as 25 USD with no commissions. The commission here are all inclusive in spreads. Is this true? Can the average Joe become involved? Yes anyone who wants has an interest in the financial markets can get involved. Knowledge is the key not money. Is it worth investing £50 here and there? Or is that a laughable idea? 50 GBP is a lot. I started with a few Indian Rupees. If people laugh let them laugh. Only morons who don't understand the true concept of financial markets laugh. There are fees/rules involved, is it worth the effort if you just want to see? The problem with today's generation of people is that they fear a lot. Unless you crawl you dont walk. Unless you try something you dont learn. The only difference between a successful person and a not successful person is his ability to try, fail/fall, get back on feet, again try untill he succeeds. I know its not instant money, but I'd like to get a few shares here and there, to follow the news and see how companies do. I hear that BRIC (brasil, russia, india and china) is a good share to invest in Brazil India the good thing is share prices are relatively low even the commissions. Mostly ROI (return on investment) on a long term would almost be the same. Can anyone share their experiences? (maybe best for community wiki?) Always up for sharing. Please ask questions no matter how stupid they are. I love people who ask for when I started I asked and people were generous enough to answer and so would I be.
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Is this formula accurate for weighing the difference between an S-Corp and LLC?
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It might be best to step back and look at the core information first. You're evaluating an LLC vs a Corporation (both corporate entities). Both have one or more members, and both are seen similarly (emphasis on SIMILAR here, they're not all the same) to the IRS. Specifically, LLC's can opt for a pass-through tax system, basically seen by the IRS the same way an S-Corp is. Put another way, you can be taxed as a corporate entity, or it's P/L statements can "flow through" to your personal taxes. When you opt for a flow-through, the business files and you get a separate schedule to tie into your taxes. You should also look at filing a business expense schedule (Schedule C) on your taxes to claim legitimate business expenses (good reference point here). While there are several differences (see this, and this, and this) between these entities, the best determination on which structure is best for you is usually if you have full time employ while you're running the business. S corps limit shares, shareholders and some deductions, but taxes are only paid by the shareholders. C corps have employees, no restrictions on types or number of stock, and no restrictions on the number of shareholders. However, this means you would become an employee of your business (you have to draw monies from somewhere) and would be subject to paying taxes on your income, both as an individual, and as a business (employment taxes such as Social Security, Medicare, etc). From the broad view of the IRS, in most cases an LLC and a Corp are the same type of entity (tax wise). In fact, most of the differences between LLCs and Corps occur in how Profits/losses are distributed between members (LLCs are arbitrary to a point, and Corps base this on shares). Back to your question IMHO, you should opt for an LLC. This allows you to work out a partnership with your co-worker, and allows you to disburse funds in a more flexible manner. From Wikipedia : A limited liability company with multiple members that elects to be taxed as partnership may specially allocate the members' distributive share of income, gain, loss, deduction, or credit via the company operating agreement on a basis other than the ownership percentage of each member so long as the rules contained in Treasury Regulation (26 CFR) 1.704-1 are met. S corporations may not specially allocate profits, losses and other tax items under US tax law. Hope this helps, please do let me know if you have further questions. As always, this is not legal or tax advice, just what I've learned in setting several LLCs and Corporate structures up over the years. EDIT: As far as your formulas go, the tax rate will be based upon your personal income, for any pass through entity. This means that the same monies earned from and LLC or an S-corp, with the same expenses and the same pass-through options will be taxed the same. More reading: LLC and the law (Google Group)
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Should I invest in the world's strongest currency instead of my home currency?
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The best thing is to diversify across multiple currencies. USD and EUR seem reliable. But not 100% reliable to keep all your investments in this types of currencies. Invest part of your savings in USD, part - in EUR, and part in your home country's currency. Apart from investing I recommend you to have certain sum in cash and certain on your bank account.
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If a stock doesn't pay dividends, then why is the stock worth anything?
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Not sure how this has got this far with no obvious discussion about the huge tax advantages of share buy backs vs dividend paying. Companies face a very simple choice with excess capital - pay to shareholders in the form of a taxable dividend, invest in future growth where they expect to make more than $1 for every $1 invested, or buy back the equivalent amount of stock on the market, thus concentrating the value of each share the equivalent amount with no tax issues. Of these, dividends are often by far the worst choice. Virtually all sane shareholders would just rather the company put the capital to work or concentrate the value of their shares by taking many off the market rather than paying a taxable dividend.
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What factors would affect the stock price of a sports team?
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Costs are almost entirely salaries Apart from all the usual costs incurred by running a large, complex, business, ManU are servicing debt that is getting up around the GBP500M mark. This is debt racked up by the Glazer family since purchasing the team, as well as debt they took with them to the team. What sort of factors would affect their share price? Product endorsements, ticket prices, attendance, and merchandise sales are all important contributors. But also, performance in the domestic league and in domestic and European cups are also factors. Should their participation falter for any reason, that ripples through everything (decrease in brand exposure) - and this is, along with the debt problem, the biggest risk. Edit: By the way, you are aware that this is an NYSE IPO; you can see how they have done on the FTSE over the past 10 years or so.
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What kind of trade is this?
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A limit order is simply an order to buy at a maximum price or sell at a minimum price. For example, if the price is $100 and you want to sell if the price rises to $110, then you can simply put a limit order to sell at $110. The order will be placed in the market and when the price reaches $110 your order will be executed. If the price gaps at the open to $111, then you would end up selling for $111. In other words you will get a minimum of $110 per share. A stop limit order is where you put a stop loss order, which when it gets triggered, will place a limit order in the market for you. For example, you want to limit your losses by placing a stop loss order if the price drops to $90. If you chose a market order with your stop loss as soon as the price hits $90 your stop loss would be triggered and the shares would sell at the next available price, usually at $90, but could be less if the market gaps down past $90. If on the other hand you placed a limit order at $89.50 with your stop loss, when the stop loss order gets triggered at $90 your limit order will be placed into the market to sell at $89.50. So you would get a minimum of $89.50 per share, however, if the market gaps down below $89.50 your order will be placed onto the market but it won't sell, unless the price goes back to or above $89.50. Hope this helps.
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How to approach building credit without a credit card
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One possible route is to try to have no credit. This is different than bad credit. If you build up a good downpayment (20%), a number of banks would do manual underwriting for you.
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How fast does the available amount of gold in the world increase due to mining?
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Approximately 5.3 billion ounces have been mined. This puts the total value of all gold in the world at about $9.5 trillion, based on $1800/oz. Total world net worth was $125T in 2006. There's an odd thing that happens when one asset's value is suddenly such a large percent of all assets. (This reminds me of how and why the tech bubble burst. Cisco and EMC would have been worth more than all other stocks combined if they grew in the 00's like they did in the 90's.) Production (in 2005/6) ran about 80 million oz/yr. Just over 1.5% impact to total supply, so you are right in that observation. On the other hand, the limited amount out here, means that if everyone decided to put their wealth in gold, it would be done by driving the price to bubblicious levels. One can study this all day, and parse out how much is in investment form (as compared to jewelry, etc) and realize that a few trillion dollars in value pales in comparison to the wealth of the US alone, let alone the world. Half the world can't buy two oz if they tried. Of course there's pressure to reopen mines that had costs pushing $800/oz. Understand that the supply of $300 gold is long gone. As the easy gold has been mined, and cost goes up, there's a point where mines close. But as the price of gold trades at these levels, the mines that couldn't produce at $600 are now opening.
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How does a high share price benefit a company when it is raising funds?
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A private company say has 100 shares with single owner Mr X, now it needs say 10,000/- to run the company, if they can get a price of say 1000 per share, then they just need to issue 10 additional shares, so now the total shares is 110 [100 older plus 10]. So now the owner's share in the company is around 91%. However if they can get a price of only Rs 200 per share, they need to create 50 more shares. So now the total shares is 150 [100 older plus 50]. So now Mr X's equity in his own company is down to 66%. While this may still be OK, if it continues and goes below 50%, there is chances that he [Original owner] will be thrown out
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Are PINs always needed for paying with card?
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As far as I'm aware, PINs are only used for in-person transactions, not 'remote' (over the Internet or phone).
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What do “cake and underwear” stocks refer to?
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JoeTaxpayer's answer is dead on... but let me give my own two cents with a little bit of math. Otherwise, I personally find that people talking about diversified portfolios tends to be full of buzzwords. Let's say that Buffett's investments are $10 million. He would like to earn ≥7% this year, or $700,000. He can invest that money in coca-cola//underwear, which might return: Or he can invest in "genius moves" that will make headlines: (like buying huge stakes in Goldman Sachs), which might return: And he makes plays for the long haul based on the expected value of the investments. So if he splits it 50/50... ($5 million/ $5 million), then his expected value is 822,250: By diversifying, he does reduce the expected value of the portfolio... (He is not giving $10 M the chance to turn into $1.5 million or $2 million for him!). The expected value of that shock-and-awe portfolio with all $10 million invested in it is $1.2M. By taking less risk... for less reward... his expected return is lower. But his risk is lower too. Scale this example back up into the $100 million or billion range that Buffett invests in and that extra margin makes the difference. In the context of your original article, the lower-risk 'cake and underwear' investments let Buffett go big on the things that will make 20%+ returns on billions of dollars, without completely destroying his investment capital when things take a turn for the worse.
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Deceived by car salesman
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At this point there is not much you can do. The documentation probably points to you being the sole owner and signer on the loan. Then, any civil suit will degenerate into a "he said, she said" scenario. Luckily, no one was truly harmed in the scenario. Obtaining financing through a car dealer is almost always not advisable. So from here, you can do what should have been done in the first place. Go to banks and credit unions so your daughter can refinance the car. You will probably get a lower rate, and there is seldom a fee. I would start with the bank/CU where she does her checking or has some other kind of a relationship. If that fails, anywhere you can actually sit and talk with a loan officer is preferable over the big corporate type banks. Car dealers lying is nothing new, it happens to everyone. Buying a car is like a battle.
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Can I buy only 4 shares of a company?
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Yes you can. it's called Odd Lot
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2 houses 450k each or one 800k?
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Having someone else paying you rent is always going to be the better deal financially. The question is, what does $450k buy in the neighborhood in which you want to live, vs $800k? I'm going to assume you can afford either option (buying a $450k home and not selling, or an $800k home and selling your current one) whether someone's paying you rent or not. Let's make up some numbers here; a $450k home, financed 80/20 (360k principal) at 4% for 30 years will cost you about $1720 in P&I payments per year (plus escrows such as RE taxes, PMI, and homeowners insurance where applicable). An $800k home financed 80/20 (640k principal) at 4% for 30yr will give you payments of about $3,055/mo before taxes and insurance. So, the worst case overall is that you buy a 450k home in the new neighborhood and are not, at any given time, collecting rent on the old property. That would (assuming the mortgage terms on both home loans were comparable) cost you $3440/mo and you'd be living in a $450k home in a neighborhood where 450k may not buy a home as nice as the one you moved out of. The question as I stated above is this; assuming you had a reliable tenant in your home for the entire remaining life of the loan on your current home, which is more acceptable to you: buying $450k of home (which might be a downgrade in sqft or amenities) and paying $2020 in P&I, or paying about a grand more ($3055/mo) for a much nicer home in the new location? Strictly from a money perspective, the renter is going to be the best option, IF you get reliable tenancy for the entire life of the mortgage on that house; you'll be paying $2020/mo for 30 years, which is $727,200, to end up with $950k of total home value (plus adjustments for actual home value appreciation/depreciation). That's the only way you'll come out ahead on any mortgage; have someone else pay most of it for you. If you don't rent, the $800k home will cost you $1,099,800, while two $450k homes will cost you $1,454,400. The percentage of home value over total payments for the 800k home would be 72% (you will have paid 137% of the value of the home), while you will have paid 153% of the value of two 450k homes.
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How can this stock have an intra-day range of more than 90% on 24Aug2015?
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As you know, the market is in turmoil today. At this moment, 11:45 am, the S&P is down 2.3%, 45 points. But, premarket, it was down 100 points. Now, premarket, I heard Jim Cramer say, "today is not the day to use market orders." Yes, on Mad Money, he seems a bit eccentric, but he does offer some wise advice at times. In my opinion, your stock had some people that did just that. A market order. And, regardless of the fundamentals of this company, buyers had no orders to buy. Except a couple wise guys (in both senses) that put in buys at crazy prices. And they filled. With an Apple, trading around $100, the book probably has millions of shares on order with a buy at $80 or higher. Just an example. I'd bet there were a number of stocks that had the profile of yours, i.e. a chart reflecting trades similar to a flash crash. There are some traders smiling ear to ear, and some crying in their beer. (Note - I use the phrase "in my opinion." This is the only explanation I can imagine. Occam's Razor.)
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How to deal with the credit card debt from family member that has passed away?
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Don't pay it, see a lawyer. Given your comment, it will depend on the jurisdiction on the passing of the house and the presence of a will or lack thereof. In some states all the assets will be inherited by your mom. Debts cannot be inherited; however, assets can be made to stand for debts. This is a tricky situation that is state dependent. In the end, with few assets and large credit card debt, the credit card companies are often left without payment. I would not pay the debt unless your lawyer specifically told you to do so. Sorry for your loss.
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Basic finance: what should everyone know?
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The statement "Finance is something all adults need to deal with but almost nobody learns in school." hurts me. However I have to disagree, as a finance student, I feel like everyone around me is sound in finance and competition in the finance market is so stiff that I have a hard time even finding a paid internship right now. I think its all about perspective from your circumstances, but back to the question. Personally, I feel that there is no one-size-fits-all financial planning rules. It is very subjective and is absolutely up to an individual regarding his financial goals. The number 1 rule I have of my own is - Do not ever spend what I do not have. Your reflected point is "Always pay off your credit card at the end of each month.", to which I ask, why not spend out of your savings? plan your grocery monies, necessary monthly expenditures, before spending on your "wants" should you have any leftovers. That way, you would not even have to pay credit every month because you don't owe any. Secondly, when you can get the above in check, then you start thinking about saving for the rainy days (i.e. Emergency fund). This is absolutely according to each individual's circumstance and could be regarded as say - 6 months * monthly income. Start saving a portion of your monthly income until you have set up a strong emergency fund you think you will require. After you have done than, and only after, should you start thinking about investments. Personally, health > wealth any time you ask. I always advise my friends/family to secure a minimum health insurance before venturing into investments for returns. You can choose not to and start investing straight away, but should any adverse health conditions hit you, all your returns would be wiped out into paying for treatments unless you are earning disgusting amounts in investment returns. This risk increases when you are handling the bills of your family. When you stick your money into an index ETF, the most powerful tool as a retail investor would be dollar-cost-averaging and I strongly recommend you read up on it. Also, because I am not from the western part of the world, I do not have the cultural mindset that I have to move out and get into a world of debt to live on my own when I reached 18. I have to say I could not be more glad that the culture does not exist in Asian countries. I find that there is absolutely nothing wrong with living with your parents and I still am at age 24. The pressure that culture puts on teenagers is uncalled for and there are no obvious benefits to it, only unmanageable mortgage/rent payments arise from it with the entry level pay that a normal 18 year old could get.
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FATCA compliance for small Foreign Company. What do I need to do?
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Unless you started a bank or other kind of a financial institution (brokerage, merchant processor, etc etc), the page you linked to is irrelevant. That said, there's enough in the US tax code for you to reconsider your decision of not living in the US, or at least of being a shareholder of a foreign company. Your compliance costs are going to go through the roof. If you haven't broken any US tax laws yet (which is very unlikely), you may renounce your citizenship and save yourself a lot of money and trouble. But in the more likely case of you already being a criminal with regards the US tax law, you should probably get a proper tax advice from a US-licensed CPA/EA who's also proficient in the Japanese-American tax treaty and expats' compliance issues resolution.
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Is this investment opportunity problematic?
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it seems you have 3 concerns:
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How to buy out one person's share of a jointly owned vehicle with the lowest taxes and fees
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You should be able to refinance the vehicle and have the financing in just your name (assuming you can secure the financing). Since you are already on the vehicle registration, this would not constitute a sale, and thus would not incur additional sales tax. To remove the other person from the vehicle registration, leaving you as the sole registered owner, in the state of New York, you only need to file an MV-82. It will cost you $3. https://dmv.ny.gov/registration/register-vehicle-more-one-owner-or-registrant
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Is insurance worth it if you can afford to replace the item? If not, when is it?
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As a rule, purchasing fairly priced (minus a spread) insurance on items you can afford to replace is a bad idea. However, in addition to the points mentioned in the previous answers, one should note that many types of insurance are UNDERpriced because on average people do not make claims even though they are entitled to them. If you purchase something moderately priced at Best Buy and get the extended warranty and it breaks down a year later, you will be unlikely to even remember that you purchased the insurance much less go through the trouble of making a claim. More likely you will just go buy a replacement or whatever the latest and greatest iteration is. It's like homeowner's insurance--an amazing number of things is covered but no one ever makes claims, so it is cheap. If you are a person who remembers and utilizes warranties and insurance, there are many types of insurance that will save you money in expectation. The other thing is that you know more about your own riskiness than the insurer does. I had a girlfriend who bought super comprehensive insurance on her crappy old car. I was quite stern with her about it but could not change her mind. She totaled it a few months later. They bought her a replacement. She got in a more serious accident with that car and got yet another one in addition to payment of her medical care, which did not even go to her health care insurance. Yes, her rates went up, but not fast enough to deal with how risky she was. Another example: I used to carry an e-book reader around in my shirt pocket and read it any time I had a chance. Cheap item and not that delicate, but since I had it with me all the time and used it constantly, it was a big risk for the store. The extended warranty would have been a great idea. In short, avoid extended warranties and insurance on things you can afford to lose unless you know that you are high risk or are otherwise more likely than average to make a claim.
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Is it wise to sell company stock to pay down a mortgage?
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Simply if your stock is still rising in price keep it. If it is falling in price sell it and pay off your mortgage. To know when to do this is very easy. If it is currently rising you can put a trailing stop loss on it and sell it when it drops and hits your stop loss. A second easy method is to draw an uptrend line under the increasing price and then sell when the price drops down below the uptrend line, as per the chart below. This will enable you to capture the bulk of the price movement upward and sell before the price drops too far down. You can then use the profits (after tax) to pay down your mortgage. Of course if the price is currently in a downtrend sell it ASAP.
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Where to park money low-risk on interactivebrokers account?
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I would refrain from commenting on market timing strategy, but please don't park extra AUD cash in IB. Park cash in your local bank high interest savings, and get a Margin account at IB. When you want to pull the trigger, use margin loan to buy stocks immediately, then transfer cash from local bank to IB afterwards.
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Do stock prices really go down by the amount of the dividend?
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It might be clearer to think of it as price going up when a dividend is expected, since that's money you'll get right back. As the delay before the next dividend payment increases, that becomes less of a factor,
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Mortgage or not?
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Here is something that should help your decision: Currently you are 57, suppose that means that you will still work for 10 years, and then be retired for another 20 before you sell the house. Your retirement account is nearly flat, so you will have to support yourself with your own income. If there are no surprises, you and your wife could expect to earn 1.16 million over the next 10 years. There will be interest on your savings, but also inflation, so to simplify I will ignore both. That means you will have an average of 40k (gross?) per year available to live from during the next 30 years. If you get a mortgage where you only pay nett 3% interest (no payback of the loan), that would cost you 6k per year on interest (based on 350k-150k), if you also want to pay back the 200k difference within 30 years, it would totally be close to 13k in annual interest+payback. Now consider whether you would rather live on 40k per year in your current place, or on a lower amount in a bigger place. Personally I would not choose to make a 200k investment at this point, perhaps after trying to live on a budget for a while. (This has the additional benefit that you can even build some cash reserve before buying anything.)
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Buy tires and keep car for 12-36 months, or replace car now?
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It depends how detailed you want to get in your calculation, but fundamentally, 1K < 25K. On a very basic level, divide the cost (less what you sell it for) by the time you'll have the car for. If you junk it, $1K/12 month = $83/month to buy tires to have a car for a year. If you sell it for $1K, then it become $0/month. (Plus other maintenance, etc..., obviously). If you pay 25K and keep the new car for ten years and sell it for nothing, it becomes roughly $208/month (plus maintenance). If you want to get more accurate, there are a lot of variables you can take into account--time cost of money, financing, maintenance costs of different vehicle types, etc...
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What would a stock be worth if dividends did not exist? [duplicate]
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A share of stock is a small fraction of the ownership of the company. If you expect the company to eventually be of interest to someone who wants to engineer a merger or takeover, it's worth whatever someone is willing to pay to help make that happen or keep it from happening. Which means it will almost always track the company's value to some degree, because the company itself will buy back shares when it can if they get too cheap, to protect itself from takeover. It may also start paying dividends at a later date. You may also value being able to vote on the company's actions. Including whether it should offer a dividend or reinvest that money in the company. Basically, you would want to own that share -- or not -- for the same reasons you would want to own a piece of that business. Because that's exactly what it is.
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Is it normal that US Treasury bills(0.07%) yield smaller than interest rate(0.25%)?
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I have been charting the CPI reported inflation rate vs . the yeald on the 10-year T-note. Usually, the two like to keep pace with each other. Sometimes the T-note is a bit higher than the inflation rate, sometimes the inflation rate is a bit higher than the T-note yeald. One does not appear to follow the other, but (until recently) the two do not diverge from each other by much. But all that changed recently and I am without an explanation as to why. Inflation dropped to zero (or a bit negative) yet the yeald on the 10-year T-note seemed to seek 2%. Edit: If you give this response a downvote then please be kind enough to explain why in a comment. Edit-2: CPI and 10-year T-note are what I have tracked, and continue to track. If you do not like my answer then provide a better one, yourself.
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How to invest in a currency increasing in value relative to another?
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What you're looking for are either FX Forwards or FX Futures. These products are traded differently but they are basically the same thing -- agreements to deliver currency at a defined exchange rate at a future time. Almost every large venue or bank will transact forwards, when the counterparty (you or your broker) has sufficient trust and credit for the settlement risk, but the typical duration is less than a year though some will do a single-digit multi-year forward on a custom basis. Then again, all forwards are considered custom contracts. You'll also need to know that forwards are done on currency pairs, so you'll need to pick the currency to pair your NOK against. Most likely you'll want EUR/NOK simply for the larger liquidity of that pair over other possible pairs. A quote on a forward will usually just be known by the standard currency pair ticker with a settlement date different from spot. E.g. "EUR/NOK 12M" for the 12 month settlement. Futures, on the other hand, are exchange traded and more standardized. The vast majority through the CME (Chicago Mercantile Exchange). Your broker will need access to one of these exchanges and you simply need to "qualify" for futures trading (process depends on your broker). Futures generally have highest liquidity for the next "IMM" expiration (quarterly expiration on well known standard dates), but I believe they're defined for more years out than forwards. At one FX desk I've knowledge of, they had 6 years worth of quarterly expirations in their system at any one time. Futures are generally known by a ticker composed of a "globex" or "cme" code for the currency concatenated with another code representing the expiration. For example, "NOKH6" is 'NOK' for Norwegian Krone, 'H' for March, and '6' for the nearest future date's year that ends in '6' (i.e. 2016). Note that you'll be legally liable to deliver the contracted size of Krone if you hold through expiration! So the common trade is to hold the future, and net out just before expiration when the price more accurately reflects the current spot market.
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Why would a long-term investor ever chose a Mutual Fund over an ETF?
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There is little difference between buying shares in your broker's index fund and shares of their corresponding ETF. In many cases the money invested in an ETF gets essentially stuffed right into the index fund (I believe Vanguard does this, for example). In either case you will be paying a little bit of tax. In the ETF case it will be on the dividends that are paid out. In the index fund case it will additionally be on the capital gains that have been realized within the fund, which are very few for an index fund. Not a ton in either case. The more important tax consideration is between purchase and sale, which is the same in either case. I'd say stick it wherever the lowest fees are.
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Canadian in California - filing taxes as a non-resident
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What do you mean by "Canadian income"? Was it income paid to you as wages for the job you did in the US? Or rental/interest income in Canada? If the former - then it doesn't go to NEC, it goes to the main part of the return. If the latter - it doesn't appear on your NR return at all. Yes, it is to validate your residency status. It has no other effect on your taxes.
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When a stock price rises, does the company get more money?
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When a stock price rises, the company's assets are worth more. This doesn't mean it gets more cash directly, but it can liquidate (= sell) some of its stocks for a higher return than before.
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Is human interaction required to open a discount brokerage account?
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You definitely do not need human interaction to open an account at Schwab. You just need to provide a social security number and US drivers license. See http://www.schwab.com/public/schwab/investing/accounts_products/accounts/brokerage_account You can do it online or through the mail. They usually have some questions about your level of experience with investing. They are required to ask these questions to ensure that you don't get confused and put your money in inappropriate investments.
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Is Real Estate ever a BAD investment? If so, when?
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There's an aspect to real estate that's under-discussed. When you take all factors into account, it just about keeps up with inflation over the long term. Three factors: Now - when you normalize all of this, calculating the "hours worked" needed to pay for the median home, you find a nearly flat line at just over 40 or so hours of pay per month.
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Accounting for reimbursements that exceed actual expenses
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I've been in a very similar situation to yours in the past. Since the company is reimbursing you at a flat rate (I assume you don't need to provide documentation/receipts in order to be paid the per diem), it's not directly connected to the $90 in expenses that you mention. Unless they were taking taxes out that would need to be reimbursed, the separate category for Assets:Reimbursable:Gotham City serves no real purpose, other than to categorize the expenses. Since there is no direct relationship between your expenses and the reimbursement, I would list them as completely separate transactions: Later, if you needed to locate all of the associated expenses with the Gotham trip, gnucash lets you search on memo text for "Gotham" and will display all of the related transactions. This is a lot cleaner than having to determine what piece of the per diem goes to which expenses, or having to create a new Asset account every time you go on a trip.
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Ways to trade the Euro debt crisis
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The way I am trading this is: I am long the USD / EUR in cash. I also hold USD / EUR futures, which are traded on the Globex exchange. I am long US equities which have a low exposure to Europe and China (as I expect China to growth significantly slower if the European weakens). I would not short US equities because Europe-based investors (like me) are buying comparatively "safe" US equities to reduce their EUR exposure.
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Personal checks instead of business ones
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I'll assume you are asking about a check for some kind of work or service that you provided them, that they hired your company to do. No large business will do that. In their records they have a contract with your company to provide services. If they write you a personal check it won't match with the contract, and when the auditors see that they will scream blue murder. Whoever wrote the check will have to prove that you are legitimately the same thing as the company (that doesn't mean taking your word for it). They may also have to show they weren't conspiring with you to commit tax fraud ( that wasn't your intention of course, was it?) .
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How does an index rearrange its major holdings
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S & P Index Announcements would have notes on when there are changes to the index. For example in the S & P Small-cap 600 there is a change that takes affect on Feb. 19, 2013. As for how index funds handle changes to the fund, this depends a bit on the nature of the fund as open-end mutual funds would be different than exchange-traded funds. The open-end fund would have to sell and purchase to keep tracking the index which can be interesting to see how well this is handled to keep the transaction costs down while the ETFs will just unload the shares in the redemption units of the stock leaving the index while taking in new shares with creation units of the newly added stock to the index.
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Why do sole proprietors in India generally use a current account?
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Current account offers a lot of benefits for sole proprietors. Think of it like bank account for a company. The bank provides a host of facilities for the company. A sole proprietor does not have enough value as that of a company for a bank but needs similar services. Thus Indian banks offer a toned down version of the account offered to a company. Current account offer very good overdraft ( withdrawing money even if balance is zero). This feature is very useful as business cycles and payment schedules can be different for each supplier/customer the sole proprietor does business with. Imagine the sole proprietor account has balance of zero on day 0. customer X made payment by cheque on day 1. Cheques will get credited only on Day 3 (Assume Day 2 is a national holiday or weekend). Sole proprietor gave a cheque to his supplier on day 0. The supplier deposited the cheque on Day 0 and the sole proprietor's bank will debit the the proprietor's account on day 1. As customer's cheque will get credited only day 3, the overdraft facility will let the proprietor borrow from the bank Interestingly, current accounts were offered long before Indian banks started offering customized accounts to corporate customers. The payment schedule mentioned in my example is based on a clearing system > 10 years ago. Systems have become much simpler now but banks have always managed to offer something significantly extra on lines similar to my example above to proprietor over a savings bank account
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I'm 23, living at home, and still can't afford my own property. What could I do?
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I wouldn't be too concerned, yet. You're young. Many young people are living longer in the family home. See this Guardian article: Young adults delay leaving family home. You're in good company. Yet, there will come a time when you ought to get your own place, either for your own sanity or your parents' sanity. You should be preparing for that and building up your savings. Since you've got an income, you should – if you're not already – put away some of that money regularly. Every time you get paid, make a point of depositing a portion of your income into a savings or investment account. Look up the popular strategy called Pay Yourself First. Since you still live at home, it's possible you're a little more loose with spending money than you should be – at least, I've found that to be the case with some friends who lived at home as young adults. So, perhaps pretend you're on your own. What would your rent be if you had to find a place of your own? If, say, £600 instead of the £200 you're currently paying, then you should reduce your spending to the point where you can save at least £400 per month. Follow a budget. With respect to your car, it's great you recognize your mistake. We're human and we can learn from our mistakes. Plan to make it your one and only car mistake. I made one too. With respect to your credit card debt, it's not an insurmountable amount. Focus on getting rid of that debt soon and then focus on staying out of debt. The effective way to use credit cards is to never carry a balance – i.e. pay it off in full each month. If you can't do that, you're likely overspending. Also, look at what pensions your employer might offer. If they offer matching contributions, contribute at least as much to maximize the tax free extra pay this equates to. If you have access to a defined benefit plan, join it as soon as you are eligible. Last, I think it's important to recognize that at age 23 you're just starting out. Much of your career income earning potential is ahead of you. Strive to be the best at what you do, get promotions, and increase your income. Meanwhile, continue to save a good portion of what you earn. With discipline, you'll get where you want to be.
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What are the economic benefits of owning a home in the United States?
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To add to what other have stated, I recently just decided to purchase a home over renting some more, and I'll throw in some of my thoughts about my decision to buy. I closed a couple of weeks ago. Note that I live in Texas, and that I'm not knowledgeable in real estate other than what I learned from my experiences in the area when I am located. It depends on the market and location. You have to compare what renting will get you for the money vs what buying will get you. For me, buying seemed like a better deal overall when just comparing monthly payments. This is including insurance and taxes. You will need to stay at a house that you buy for at least 5-7 years. You first couple years of payments will go almost entirely towards interest. It takes a while to build up equity. If you can pay more towards a mortgage, do it. You need to have money in the bank already to close. The minimum down payment (at least in my area) is 3.5% for an FHA loan. If you put 20% down, you don't need to pay mortgage insurance, which is essentially throwing money away. You will also have add in closing costs. I ended up purchasing a new construction. My monthly payment went up from $1200 to $1600 (after taxes, insurance, etc.), but the house is bigger, newer, more energy efficient, much closer to my work, in a more expensive area, and in a market that is expected to go up in value. I had all of my closing costs (except for the deposit) taken care of by the lender and builder, so all of my closing costs I paid out of pocket went to the deposit (equity, or the "bank"). If I decide to move and need to sell, then I will get a lot (losing some to selling costs and interest) of the money I have put in to the house back out of it when I do sell, and I have the option to put that money towards another house. To sum it all up, I'm not paying a difference in monthly costs because I bought a house. I had my closing costs taking care of and just had to pay the deposit, which goes to equity. I will have to do maintenance myself, but I don't mind fixing what I can fix, and I have a builder's warranties on most things in the house. To really get a good idea of whether you should rent or buy, you need to talk to a Realtor and compare actual costs. It will be more expensive in the short term, but should save you money in the long term.
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For a major expensive home renovation (e.g. addition, finished basement, or new kitchen) should one pay cash or finance with a loan? Would such a loan be “good” debt?
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The number one reason to borrow is quite simple; when you have no other choice. The primary reason to do this is when renovations or additions must be made in a timeframe that precludes you being able to save enough money to pay cash. Harmanjd's example of a kid on the way with no space to put him is a very good hypothetical. Disaster recovery is another; insurance doesn't cover everything and can sometimes be slow to pay out, and even if the payoff will rebuild the house exactly the way it was, these situations are deceptively good opportunities to improve on what you had. Since you already have to call in the contractors to demo and rebuild, the cost to do that is sunk, and the incremental cost of improvements or even additional square footage is relatively minor. Other acceptable reasons to borrow are: When cost of capital is very cheap. A typical amortized HELOC is pretty expensive when paid on-schedule, but if you can pay it off very early (i.e. when you sell the home next month) or you get a good deal on the interest rate (a subsidized disaster recovery loan, perhaps; you have to be careful with these as they're not intended to turn a burnt-down hovel into a McMansion) the cost of borrowing can be acceptable even if you had cash savings for the project. You have other uses for the cash that can offset cost of borrowing. This generally requires the first point to be true as well, as it's a general rule that borrowing $10,000 costs you more than you would gain by investing $10,000, but there are situations in which the reverse can be true (if you have $10k in oil or major tech stocks right now, it would probably be a bad move to liquidate them for home improvements if you can get a HELOC at less than 6%). You can realize a net gain in home value from the reno. These situations are rare in cases of an already livable home; "flippers", which make their living on renovating homes for a profit, generally choose homes with obvious but easy-to-fix problems that depress home value because they look worse than they are. If you bought your home without any such problems, you probably paid something close to market value at the time, and so you're probably behind the curve. However, if you (or your family in the case of an estate transfer) have owned the home for a long time, long enough for things to fall WAY out of date, then you can catch up a lot of market value with one renovation, where if the home had had two or three renovations along the way a reno now wouldn't gain you as much value.
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On what time scales are stock support and resistance levels meaningful?
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Stock support and resistance levels mean that historically, there was "heavy" buying/selling at those levels. This suggests, but does not guarantee, that "someone" will buy at "support" levels, and "someone" will sell at "resistance levels. Any "history" is meaningful, but most analysts will say that after six months to a year, the impact of events declines the further back in time you go. They can be meaningful for periods as short as days.
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Should I pay myself a dividend or a salary?
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In cases like this you should be aware that tax treaties may exist and that countries are generally willing to enter into them. Their purpose is to help prevent double taxation. Tax treaties often times give you a better tax rate than even being a resident of the countries in question! (For instance, the Italy to US tax rate is lower than simply doing business in many United States) This should guide your google search, here is something I found for Germany/Spain http://tmagazine.ey.com/wp-content/uploads/2011/03/2011G_CM2300_Spain-Germany-sign-new-tax-treaty.pdf It appears that the dividend tax rate under that treaty is 5% , to my understanding, the income tax rates are often multiples higher! I read that spain's income tax rate is 18% So what I would do is see if there is the possibility of deferring taxes in the lower tax jurisidiction and then doing a large one time dividend when conveninet. But Germany isn't really known for its low taxes, being a Federal Republic, the taxes are levied by both the states and the federal government. Look to see if your business structure can avoid being taxed as the entity level: ie. your business' earnings are always distributed to the owners - which are not germany citizens or residents - as dividends. So this way you avoid Germany's 15% federal corporate tax, and you avoid Spain's 18% income tax, and instead get Spanish dividends at 5% tax. Anyway, contact a tax attorney to help interpret the use of the regulations, but this is the frame of mind you should be thinking in. Because it looks like spain is willing to do a tax credit if you pay taxes in germany, several options here to lower your tax footprint.
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