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How to get rid of someone else's debt collector? | Suing is a legitimate option as well as screening your calls but here's another idea which has personally worked and relates to the collections I did for awhile. Talk with the collector. Outstanding debt gets sold many times and each time a new collector gets their hands on an account they do their due diligence which means calling every single number multiple times. Collectors a looking for consumers who actively evade collections calls for years. My recommendation is to use logic and explain the situation. Give your first name and describe when you received the phone number and then ask a simple question. When in the last 3 1/2 years have you or any collector had a successful hit from this number. They'll respond never in 3 1/2 years. The collector notes the account for themselves and future collectors. Debt collectors are about about making money, not wasting time and they do review all notes pertaining to an account. Will it work? Maybe not but hopefully it will stop the calls with a short conversation. Good luck. |
What college degree should I pursue to learn about stock and forex markets? | Financial Economics, although, as I understand it, not all colleges offer this major. |
Can I profit from selling a PUT on BBY? | The time when you might want to do this is if you think BBY is undervalued already. If you'd be happy buying the stock now, you'd be happy buying it lower (at the strike price of the put option you sold). If the stock doesn't go down, you win. If it does, you still win, because you get the stock at the strike price. If I recall correctly Warren Buffett did this with Coca-Cola. But that's Warren Buffett. |
Is it worth having a pension? | On the face of it, it doesn't look like a very good deal - neither pension not annuity company are in it for the fun of it, so they'll take their cut from your money, and then invest it anyway. The rest depends on what they promise you - if they just promise you market returns then I don't see much sense to do it, you can do it yourself. If they promise you some pre-defined average return not depending on market conditions (and hope to get ahead by actually getting better return and pocket the difference) then it might make sense, if you are not a very proficient investor. This will get you a known benefit you can count on (at least if you get a company with good rating/insurance/etc.) without worrying about markets volatility and having to keep the discipline and calm when markets jump around. It may be hard, especially for somebody of advanced age. Also, there's the part of government adding money - it depends on how much of it is added, is it enough to cover the extra fees? |
One of my stocks dropped 40% in 2 days, how should I mentally approach this? | Like @chirs, I'm of the opinion that you might want to buy more. I've done this a couple of times, price dropped a bunch, and I said, heck, I bought some last week, and this week I can get twice as much stock for about the same price. Brought down my average cost per share, and when the company was taken private, I actually didn't lose money - unlike some other people I know, who only bought at one price, watched the drop, and held on awaiting a recovery (which didn't happen in time before the big money swooped in on it). But to do this, you need to keep cash reserves (that, like @afforess says, you can afford to lose all of) on hand, awaiting buying opportunities. This, too, is a cost - an opportunity cost. |
Stock prices using candlesticks | No it does not. Candlesticks really have nothing to do with this, a stock price can open different then the previous day's close. Examining the chart of TSLA provides an example it closed on 1/18 at 238.8 it opened on 1/19 at 243.7 In candlestick parlance is is known as a "gap up". |
Close to retirement & we may move within 7 years. Should we re-finance our mortgage, or not? | I would think it depends on when within the 7 years you're planning to move. If you want to move within a year or two, the closing costs for the new mortgage may postpone the break even until after your move date; that wouldn't be a financially smart decision. If your plans suggest you're going to move after the break even point I'd definitely refi sooner rather than later and would try to reduce the term, either by overpaying or by choosing a 15 year mortgage that should have an even lower interest rate anyway. |
Is there a mathematical formula to determine a stock's price at a given time? | A stock market is just that, a market place where buyers and sellers come together to buy and sell shares in companies listed on that stock market. There is no global stock price, the price relates to the last price a stock was traded at on a particular stock market. However, a company can be listed on more than one stock exchange. For example, some Australian companies are listed both on the Australian Stock Exchange (ASX) and the NYSE, and they usually trade at different prices on the different exchanges. Also, there is no formula to determine a stock price. In your example where C wants to buy at 110 and B wants to sell at 120, there will be no sale until one or both of them decides to change their bid or offer to match the opposite, or until new buyers and/or sellers come into the market closing the gap between the buy and sell prices and creating more liquidity. It is all to do with supply and demand and peoples' emotions. |
What does a contract's worth mean? | The amount stated is the total amount of money the customer will be paying to the company. How much profit that will translate into is dependent on the type of contract. Some types of contracts: Cost plus fixed fee: they are paid what it costs to complete the contract plus a fee on top of that. That fee represents their profits. The costs will include salary, benefits, overhead, equipment, supplies. Firm fixed price: They perform the service, and they get paid a fixed amount. If their costs are higher than they forecast, then they may lose money. If they can be more efficient than they forecast, then they make more money. Time and materials: They are paid for completing each sub-task based on the number of hours it takes to complete each sub task, plus materials. This is used to hire a company to maintain a fleet of trucks. If the trucks are used a lot they will need more standard maintenance, plus additional repairs based on the type of use. They pay X for labor and Y for materials for an oil change, but A for labor and B for materials for a complete engine rebuild. There are many variations on these themes. Some put the risk on the customer, some on the company. How and when the company is paid is based on the terms of the contract. Some pay X% a month, others pay based on meeting milestones. Some pay based on the number of tasks completed in each time period. Some contracts run for a specific period of time, others have an initial period plus option years. The article may or may not specify if the quoted amount is the minimum amount of the contract or the maximum amount. The impact on the stock price is much more complex. Much more needs to be known about the structure of the contract, and who will be providing the service to determine if there will be profits. Some companies will bid to lose money, if it will serve as a bridge to another contract or to fill a gap that will allow them to delay layoffs. |
Is it ok to have multiple life time free credit cards? | The following is based on my Experian credit scoring feedback and experience here in the UK over many years. (And for further information I currently hold a credit score of 999, the highest possible, with 6 credit cards.) Now I'm assuming that while there may be some differences in particulars in your case due to the difference in locality nevertheless the below should hopefully provide some broad guidelines and reasonable conclusion in your situation: Having a large number of active credit accounts may be seen as a negative. However having a large number of settled accounts should on the contrary have a positive effect on your score. As you keep your accounts mostly settled, I think having another card will not be to your detriment and should in time be beneficial. A large total credit balance outstanding may count against you. (But see the next point.) Having your total outstanding debt on all credit accounts be a smaller proportion of your total available credit, counts in your favour. This means having more cards for the same amount of credit in use, is net-net in your favour. It also has the effect of making even larger outstanding credit balances (as in point 2) to be a lower percentage of your total available credit, and consequently will indicate lower risk to lenders. It appears from my experience the higher the highest credit limit on a single card you are issued (and are managing responsibly e.g. either paid off or used responsibly) the better. Needless to say, any late payments count against you. The best thing to do then is to set up a direct debit for the minimum amount to be paid like clockwork every month. Lenders really like consistent payers. :) New credit accounts initially will count against you for a while. But as the accounts age and are managed responsibly or settled they will eventually count in your favour and increase your score. Making many credit applications in a short space of time may count against you as you may be seen to be credit reliant. Conclusion: On balance I would say get the other card. Your credit score might be slightly lower for a couple of months but eventually it will be to your benefit as per the above. Having another card also means more flexibility and more more options if you do end up with a credit balance that you want to finance and pay off over a period as cheaply as possible. In the UK the credit card companies are falling over themselves trying to offer one "interest free" or 0% "balance transfer" offers. Of course they're not truly 0% since you typically have to pay a "transfer fee" of a couple of percent. Still, this can be quite cheap credit, much much cheaper than the headline APR rates actually associated with the cards. The catch is that any additional spending on such cards are paid off first (and attract interest at the normal rate until paid off). Usually also if you miss a payment the interest rate reverts to the normal rate. But these pitfalls are easily avoided (pay by direct debit and don't use card you've got a special deal on for day to day expenses.) So, having more cards available is then very useful because you then have choice. You can roll expensive debts to the cheapest lender at your disposal for as long as they'll offer, and then simply not use that card for any purchases (while paying off the balance as cheaply as possible), meanwhile using another card for day to day expenses. |
Transfer from credit to debit | As other answers and comments suggest you are trying to do something... odd to say the least. No one wants to use a credit card to finance a checking/current account because you are creating a debt on that credit card (unless you are in the odd situation where the card is in credit) that will immediately start accruing interest at a rate probably in excess of 10% per annum. That is not a clever thing to do. What you really need to do is find an account that one of you owns that has a positive balance and use an internet banking service to transfer part of that positive balance onto the debit card. The other solution is not to use the debit card at all but use the credit card to complete the purchases you are trying to manage with the debit card. The reason that BofA and AmEx customer support can't help you is that no one would ever do what you want to do; they would either move existing money from another account or ask for a bank loan. |
What's the best online tool that can track my entire portfolio including gains/losses? | Google Portfolio does the job: https://www.google.com/finance/portfolio You can add transaction data, view fundamentals and much more. |
When is the right time to buy a new/emerging technology? | When is the right time to buy a new/emerging technology? When it's trading at a discount that allows you to make your money back and then some. The way you presented it, it is of course impossible to say. You have to look at exactly how much cheaper and efficient it will be, and how long that will take. Time too has a cost, and being invested has opportunity cost, so the returns must not only arrive in expected quantity but also arrive on time. Since you tagged this investing, you should look at the financial forecasts of the business, likely future price trajectories, growth opportunity and so on, and buy if you expect a return commensurate with the risk, and if the risk is tolerable to you. If you are new to investment, I would say avoid Musk, there's too much hype and speculation and their valuations are off the charts. You can't make any sensible analysis with so much emotion running wild. Find a more obscure, boring company that has a sound business plan and a good product you think is worth a try. If you read about it on mainstream news every day you can be sure it's sucker bait. Also, my impression that these panels are actually really expensive and have a snowball's chance in Arizona (heh) in a free market. Recently the market has been manipulated through green energy subsidies of a government with a strong environmentalist voter base. This has recently changed, in case you haven't heard. So the future of solar panels is looking a bit uncertain. I am thinking about buying solar panels for my roof. That's not an investment question, it's a shopping question. Do you actually need a new roof? If no, I'd say don't bother. Last I checked the payoff is very small and it takes over a decade to break even, unless you live in a desert next to the Mexican border. Many places never break even. Electricity is cheap in the United States. If you need a new roof anyway, I suppose look at the difference. If it's about the same you might as well, although it's guaranteed to be more hassle for you with the panels. Waiting makes no sense if you need a new roof, because who knows how long that will take and you need a roof now. If a solar roof appeals to you and you would enjoy having one for the price available, go ahead and get one. Don't do it for the money because there's just too much uncertainty there, and it doesn't scale at all. If you do end up making money, good for you, but that's just a small, unexpected bonus on top of the utility of the product itself. |
Is keeping old credit cards and opening new credit cards with high limits and never using an ideal way to boost credit scores? | Your plan will work to increase your total credit capacity (good for your credit score) and reduce your utilization (also good). As mentioned, you will need to be careful to use these cards periodically or they will get closed, but it will work. The question is whether this will help you or not. In addition to credit capacity and utilization, your credit score looks at things like These factors may hurt you as you continue to open accounts. You can easily get to the stage where your score is not benefitting much from increased capacity and it is getting hurt a lot by pulls and low average age. BTW you are correct that closing accounts generally hurts your score. It probably reduces average age, may reduce maximum age, reduces your capacity, and increases your utilization. |
In a house with shared ownership, if one person moves out and the other assumes mortgage, how do we determine who owns what share in the end? | Market value and assessments are two different things. No matter how amical the agreement seems on buying and selling, the future could result in damaged relationships without an absolute sale. I would strongly recommend getting into an agreement to split the purchase of a house as a means to save money. If it's too late, sell immediately. |
Deferring claim of significant purchase of RRSPs | You can defer RRSP deductions like you've suggested. Here's an article from the CBC about it: http://www.cbc.ca/news/business/taxseason/story/2010/03/15/f-taxseason-delay.html |
When an investor makes money on a short, who loses the money? | The correct answer to this question is: the person who the short sells the stock to. Here's why this is the case. Say we have A, who owns the stock and lends it to B, who then sells it short to C. After this the price drops and B buys the stock back from D and returns it to A. The outcome for A is neutral. Typically stock that is sold short must be held in a margin account; the broker can borrow the shares from A, collect interest from B, and A has no idea this is going on, because the shares are held in a street name (the brokerage's name) and not A. If A decides during this period to sell, the transaction will occur immediately, and the brokerage must shuffle things around so the shares can be delivered. If this is going to be difficult then the cost for borrowing shares becomes very high. The outcome for B is obviously a profit: they sold high first and bought (back) low afterwards. This leaves either C or D as having lost this money. Why isn't it D? One way of looking at this is that the profit to B comes from the difference in the price from selling to C and buying from D. D is sitting on the low end, and thus is not paying out the profit. D bought low, compared to C and this did not lose any money, so C is the only remaining choice. Another way of looking at it is that C actually "lost" all the money when purchasing the stock. After all, all the money went directly from C to B. In return, C got some stock with the hope that in the future C could sell it for more than was paid for it. But C literally gave the money to B, so how could anybody else "pay" the loss? Another way of looking at it is that C buys a stock which then decreases in value. C is thus now sitting on a loss. The fact that it is currently only a paper loss makes this less obvious; if the stock were to recover to the price C bought at, one might conclude that C did not lose the money to B. However, in this same scenario, D also makes money that C could have made had C bought at D's price, proving that C really did lose the money to B. The final way of seeing that the answer is C is to consider what happens when somebody sells a stock which they already hold but the price goes up; who did they lose out on the gain to? The person again is; who bought their stock. The person would buys the stock is always the person who the gain goes to when the price appreciates, or the loss comes out of if the price falls. |
What is a Student Loan and does it allow you to cover a wide range of expenses relating to school? | Is a student loan a type of loan or just a generic name used to refer to a loan for someone who is going back to school? A student loan from the federal government is a specific type of loan used for education purposes (i.e. attending college). They have guidelines associated with them that are very flexible as compared to a student loan from a private bank. If a student loan is a different type of loan, does it only cover the costs of going to the school? Every student at a university has a "budget" or the "cost of attendance". That includes direct and indirect costs. Direct costs are ones billed directly to you (i.e. tuition, room and board - should you choose to live on campus, and associated fees). Indirect costs are such things like books, travel expenses (if you live out of state), and personal things. Direct costs are controlled by the school. Indirect costs are estimated. The school will usually conduct market research to determine the costs for indirect items. Some students go above that, and some go below. For example, transportation is an indirect cost. A school could set that at $500. There are students who will be above that, and some below that. If you choose not to live on campus, then rent and food will become an indirect cost. Student loans can cover up to 100% of your budget (direct and indirect added together). If your total budget is $60,000 (tuition, room and board, transportation, books, supplies, etc.) Then you are able to borrow up to that amount ($60,000). However, because your budget is both direct and indirect costs, you will only be billed for your direct costs (tuition, etc.). So if your direct costs equal $50,000 and your student loan was certified for $60,000, then you will get that $10,000 back in the form of a refund from the school. That does not mean you don't have to pay it back - you still do. But that money is meant for indirect costs (i.e. books, rent - if you're not staying on campus, etc.). If your school is on semesters vs quarters, then that amount is divided between the terms. Summer term is not factored in, that's another process. Also with student loans, there are origination costs - the money associated with processing a loan. A good rule of thumb is to never borrow more than you need. Source: I used to work in financial aid at my college. |
How to approach building credit without a credit card | Apply for a secured credit card (several financial institutions provide these, including most banks. WalletHub gives you a way to search/filter for these cards quite easily). You will need to deposit funds to cover your credit limit. Deposit as much as they allow, I believe it is 500.00. Pay for EVERYTHING with the card. Monitor your balance due and keep paying it off, to bring the balance due down so you can continue using your card. I know you mentioned your area requires you to be 19, not sure if that still applies if you are applying online, in another state. Also, there's no real reason to get a card with an annual fee in this case. The main reason for an annual fee would be a lower interest charge - simply don't get charged interest, and you'll be better off with not having to pay for a card annually. Good luck. |
Why might it be advisable to keep student debt vs. paying it off quickly? | There are several ways you can get out of paying your student loans back in the USA: You become disabled and the loan is dismissed once verified by treating doctor or the Social Security Administration. You become a peace officer. You become a teacher; generally K-12, but I have heard from the DOE that teachers at state schools qualify as well. So the "malicious" friend B is prescribing to the theory that if one of those conditions becomes true, friend A will not have to pay back the loan. The longer you drag it out, the more chance you have to fulfill a condition. Given that 2 of these methods require a commitment, my guess is that they are thinking more along the lines of the first one, which is horrible. Financially, it makes no sense to delay paying back your loans because deferred loans are only interest-free until you graduate and are past your grace period, after which they will begin accruing interest. Unsubsidized loans accrue interest from the day you get them, only their payback is deferred until you graduate and exhaust your grace period. Anytime you ask for forbearance, you are still accruing interest and it is capitalizing into your principal — you are just given a chance to delay payback due to financial hardship, bad health, or loss of job. Therefore, at no point are you benefiting beyond the time you are in school and getting an education, still looking for a job, or dealing with health issues. In the current market, no CD, no savings account, and no investment will give you substantially more return that will offset the loss of the interest you are accruing. Even those of us in the old days getting 4.X % rates would not do this. There was a conditional consolidation offer the DOE allowed which could bring all your loans under one roof for a competitive 5.x-6.x % rate allowing you a single payment, but even then you would benefit if you had rates that were substantially higher. From a credit worthiness aspect, you are hurt by the outstanding obligation and any default along the way, so you really want to avoid that — paying off or down your loans are a good way to ensure you don't shoot yourself in the foot. |
How to get a down payment for your next home? Use current home as the down payment on the new one? | I know you've clarified that you're in the US, but in case anyone else comes across this question: in the UK this is completely normal (including if you still have outstanding mortgage on your current home). We end up with long "chains" of buyers and sellers all completing / moving on the same day so that the proceeds from one sale can be used as the downpayment on the next. |
Job Offer - Explain Stock Options [US] | Its important that you carefully read the agreement, if you accept the job. The options agreement will usually specify the vesting schedule, the strike price, and the number of options you will have. When you start vesting options, you can choose to buy stock at the strike price. When you do exercise the options, your employer will likely withhold state and federal income tax. The strike price will hopefully be well below the market price. Unlike stock, when your employment ends, you usually are not able to hold on to your options. There's typically a small window of time in which you can exercise your options. You should read this part of the agreement carefully and plan accordingly. |
How to reconcile a credit card that has an ongoing billing dispute? | What I would prefer is top open a new category charges under dispute and park the amount there. It can be made as an account as well in place of a income or expenses category. This way your account will reconcile and also you will be able to track the disputes. |
When I calculate “internal rate of return (IRR)”, should I include cash balance? | Both are correct depending on what you are really trying to evaluate. If you only want to understand how that particular investment you were taking money in and out of did by itself than you would ignore the cash. You might use this if you were thinking of replacing that particular investment with another but keeping the in/out strategy. If you want to understand how the whole investment strategy worked (both the in/out motion and the choice of investment) than you would definitely want to include the cash component as that is necessary for the strategy and would be your final return if you implemented that strategy. As a side note, neither IRR or CAGR are not great ways to judge investment strategies as they have some odd timing issues and they don't take into account risk. |
Why credit cards are sold through banks and not from Visa or MasterCard directly | Visa and Mastercard are not consumer-oriented companies. They do not consider individual consumers as their direct clients, and do not sell directly to them. Instead, their clients are financial institutions who participate in their networks (which is what they're selling). The institutions target the individual consumers (merchants and credit card holders). American Express, for example, has a different business model. AX doesn't only sell network services to financial institutions, but also services to individual consumers. You can get a AX credit card/merchant account directly with AX, or through their client bank. |
Which type of investments to keep inside RRSP? | Everything else can be held inside or outside your registered account depending on your investment or tax needs |
Looking for a stock market simulation that's as close to the real thing as possible | I have a free account on http://optionshouse.com/ that allows me to invest fake money into different stocks and test their tracking software. It is free and easy to do, just create an account there and they give you $4000 (fake) to invest in the stock market. They do this so that you can test their tracking and other assorted tools, in hopes that you'll choose to invest your real hard earned money with them. |
Is Investments by Bodie just an expanded version of Essentials of Investments? | Reading the descriptions on Amazon.com it appears Investments is a graduate text and Elements of Investments is the undergraduate version of the text. |
How come we can find stocks with a Price-to-Book ratio less than 1? | Note that the formula for Price to Book ratio is: Stock Price / {[Total Assets - (Intangible Assets + Liabilities)] / Stock Outstanding} http://www.investopedia.com/terms/p/price-to-bookratio.asp http://www.investopedia.com/articles/fundamental/03/112603.asp There's a number of factors that could lead to a lower than 1. The primary reason, imho, could be the company is in a state of retiring stock with debt. The company is selling penny stocks (only to get people more interested in it's later development) which are inherently undervalued. There may be other reasons, but definitely check out both articles. |
GNUCash: How to count up equity? | I would take each of these items and any others and consider how you would count it as an expense in the other direction. If you have an account for parking expenses or general transportation funds, credit that account for a refund on your parking. If you have an account for expenses on technology purchases, you would credit that account if you sell a piece of equipment as you replace it with an upgrade. If you lost money (perhaps in a jacket) how would you account for the cash that is lost? Whatever account would would subtract from put a credit for cash found. |
why is the money withdrawn from traditional IRA taxed at the ordinary income tax rate? | In a Traditional IRA contributions are often tax-deductible. For instance, if a taxpayer contributes $4,000 to a traditional IRA and is in the twenty-five percent marginal tax bracket, then a $1,000 benefit ($1,000 reduced tax liability) will be realized for the year. So that's why they tax you as income, because they didn't tax that income before. If a taxpayer expects to be in a lower tax bracket in retirement than during the working years, then this is one advantage for using a Traditional IRA vs a Roth. Distributions are taxed as ordinary income. So it depends on your tax bracket UPDATE FOR COMMENT: Currently you may have heard on the news about "the fiscal cliff" - CNBC at the end of the year. This is due to the fact that the Bush tax-cuts are set to expire and if they expire. Many tax rates will change. But here is the info as of right now: Dividends: From 2003 to 2007, qualified dividends were taxed at 15% or 5% depending on the individual's ordinary income tax bracket, and from 2008 to 2012, the tax rate on qualified dividends was reduced to 0% for taxpayers in the 10% and 15% ordinary income tax brackets. After 2012, dividends will be taxed at the taxpayer's ordinary income tax rate, regardless of his or her tax bracket. - If the Bush tax cuts are allowed to expire. - Reference - Wikipedia Capital Gains tax rates can be seen here - the Capital Gains tax rate is relative to your Ordinary Income tax rate For Example: this year long term gains will be 0% if you fall in the 15% ordinary tax bracket. NOTE: These rates can change every year so any future rates might be different from the current year. |
In double entry book-keeping, how should I record writing of a check? | I'm no accounting expert, but I've never heard of anyone using a separate account to track outstanding checks. Instead, the software I use (GnuCash) uses a "reconciled" flag on each transaction. This has 3 states: n: new transaction (the bank doesn't know about it yet), c: cleared transaction (the bank deducted the money), and y: reconciled transaction (the transaction has appeared on a bank statement). The account status line includes a Cleared balance (which should be how much is in your bank account right now), a Reconciled balance (which is how much your last bank statement said you had), and a Present balance (which is how much you'll have after your outstanding checks clear). I believe most accounting packages have a similar feature. |
Can the Securities Investor Protection Corporation (SIPC) itself go bankrupt? | SIPC is a corporation - a legal entity separate from its owners. In the case of SIPC, it is funded through the fees paid by its members. All the US brokers are required to be members and to contribute to SIPC funds. Can it go bankrupt? Of course. Any legal entity can go bankrupt. A person can go bankrupt. A country can go bankrupt. And so can anything in between. However, looking at the history of things, there are certain assumptions that can be made. These are mere guesses, as there's no law about any of these things (to the best of my knowledge), but seeing how things were - we can try and guess that they will also be like this in the future. I would guess, that in case of a problem for the SIPC to meet its obligation, any of the following would happen (or combinations): Too big to fail - large insurance companies had been bailed out before by the governments since it was considered that their failure would be more destructive to the economy than the bailout. AIG as an example in the US. SIPC is in essence is an insurance company. So is Lloyd's of London. Breach of trust of the individual investors that can lead to a significant market crash. That's what happened in the US to Fannie Mae and Freddie Mac. They're now "officially" backed by the US government. If SIPC is incapable of meeting its obligation, I would definitely expect the US government to step in, even though there's no such obligation. Raising funds through charging other members. If the actuary calculations were incorrect, the insurance companies adjust them and raise premiums. That is what should happen in this case as well. While may not necessarily solve a cashflow issue, in the long term it will allow SIPC to balance, so that bridge loans (from the US government/Feds/public bonds) could be used in between. Not meeting obligations, i.e.: bankruptcy. That is an option, and insurance companies have gone bankrupt before. Not unheard of, but from the past experience - again, I'd expect the US government to step in. In general, I don't see any significant difference between SIPC in the US and a "generic" insurance coverage elsewhere. Except that in the US SIPC is mandatory, well regulated, and the coverage is uniform across brokerages, which is a benefit to the consumer. |
Why should one only contribute up to the employer's match in a 401(k)? | The matching funds are free money, so it is a very good idea to take that money off the table. Look at it as free 100% return: you deposit $1000, your employer matches that $1000, you now have $2000 in your 401(k). (Obviously, I'm keeping things simple. Vesting schedules mean that the employer match isn't yours to keep immediately, but rather after some time; usually in chunks.) Beyond the employer match, you need to consider what is available for investment in a 401(k). Typically, your options are more limited then in an IRA. The cost of the 401(k) should be considered, as it isn't trivial for most. (The specifics will of course vary, but in large IRA accounts are cheaper.) So, it's about the opportunity costs. Up to the employer match, it doesn't matter as much that your investment choices are more limited in a 401(k), because you're getting 100% return just on the matching funds. Once that is exhausted, you have more opportunity for returns, due to having more options available to you, by going with an account that provides more choices. The overall principle here is that you have to look at the whole picture. This is similar to the notion that you should pay-down your high interest debt before investing, because from the perspective of investing the interest you're paying represent a loss, or negative return on investment, since money is going out of your accounts. Specific to your question, you have to consider the various types of investment vehicles available to you. It is not just about 401(k) and IRA accounts. You may also consider a straight brokerage account, a savings account, CDs, etc. The costs and returns that you can typically expect are your guides through the available choices. |
Why do stock brokers charge fees | Retail brokers and are generally not members of exchanges and would generally not be members of exchanges unless they are directly routing orders to those exchanges. Most retail brokers charging $7 are considered discount brokers and such brokers route order to Market Makers (who are members of the exchanges). All brokers and market makers must be members of FINRA and must pay FINRA registration and licensing fees. Discount brokers also have operational costs which include the cost of their facilities, technology, clearing fees, regulation and human capital. Market makers will have the same costs but the cost of technology is probably much higher. Discount brokers will also have market data fees which they will have to pay to the exchanges for the right to show customer real time quotes. Some of their fees can be offset through payment for order flow (POF) where market makers pay routing brokers a small fee for sending orders to them for execution. The practice of POF has actually allowed retail brokers to keep their costs lower but to to shrinking margins and spread market makers POF has significantly declined over the years. Markets makers generally do not pass along Exchange access fees which are capped at $.003 (not .0035) to routing brokers. Also note that The SEC and FINRA charges transactions fees. SEC fee for sales are generally passed along to customers and noted on trade confirms. FINRA TAF is born by the market makers and often subtracted from POF paid to routing firms. Other (full service brokers) charging higher commissions are charging for the added value of their brokers providing advice and expertise in helping investors with investment strategies. They will generally also have the same fees associated with membership of all the exchanges as they are also market makers subject to some of the list of cost mentioned above. One point of note is that Market Making technology is quite sophisticates and very expensive. It has driven most of wholesale market makers of the 90s into consolidation. Retail routing firm's save a significant amount of money for not having to operate such a system (as well as worry about the regulatory headaches associated with running such a system). This allows them to provide much lower commissions that the (full service) or bulge bracket brokers. |
How to check stock prices online? | Yes, there are a lot of places you can research stocks online, Google Finance, Yahoo Finance, Reuters etc. It's important to understand that the price of the stock doesn't actually mean anything. Share price is just a function of the market capitalization divided by the number of shares outstanding. As an example take two companies that are both worth $1 million, but Company A has issued 10,000 shares and Company B has issued 100,000 shares. Company A has a share price of $100 while Company B has a share price of just $10. Comparing share price does nothing to indicate the relative value or health of Company A versus Company B. I know there are supposed to be no product recommendations but the dictionary area of investopedia.com is a good source of beginner investing information. And as Joe points out below the questions here with the "stock" tag would also be a good place to start. And while I'm on a roll, the book "A Random Walk Down Wall Street" is a good starting point in investing in the stock market. |
Debit card funds on preauthorization hold to paypal: can it be used for another transaction? | In short you have to wait till the hold expires. If its one week, its great. Few years back it was one Month. It is advisable you use a Credit Card for these type of transactions. With Credit Cards you are not out of funds like in Debit Cards. Plus the reversals are as much as I know automatic. In case of Debit Cards, the Holds are not automatically released on cancelled transactions but released only after expiry. Where as in Credit Cards, the holds are released immediately on cancelled transactions. "Does the hold reserve it for them or for the original transaction?" Yes hold is for that specific transaction from that specific merchant. i.e. if you try and book the same item from the same merchant, you will not be able to as you have money blocked. Although the merchant sends an unblock message when cancelling, on Debit cards these messages are not supported in India |
Why does gold have value? | Why does the value of gold go up when gold itself doesn't produce anything? Why do people invest in gold? Your perception, that the value of gold goes up in the long run, is based on the price of gold measured in your favorite paper currency, for example the US Dollar. An increasing price of gold means that in the visible gold market, market participants are willing to exchange more paper currency units for the same amount of gold. There are many possible reasons for this: While HFT became extremely important for the short term price movements, I will continue with long term effects, excluding HFT. So when - as a simple thought experiment - the amount of available paper currency units (US $ or whatever) doubles, and the amount of goods and services in an economy stay the same, you can expect that the price of everything in this economy will double, including gold. You might perceive that the value of gold doubled. It did not. It stayed the same. The number of printed dollars doubled. The value of gold is still the same, its price doubled. Does the amount of paper currency units grow over time? Yes: https://research.stlouisfed.org/fred2/series/BASE/ In this answer my term "paper currency units" includes dollars that exist only as digits in bank accounts and "printing currency" includes creating those digits in bank accounts out of thin air. So the first answer: gold holds its value while the value of paper currency units shrinks over time. So gold enables you to pass wealth to the next generation (while hiding it from your government). That gold does not produce anything is not entirely true. For those of us mortals who have only a few ounces, it is true. But those who have tons can lease it out and earn interest. (in practice it is leased out multiple times, so multiple that gain. You might call this fraud, and rightfully so. But we are talking about tons of gold. Nobody who controls tons of physical gold goes to jail yet). Let's talk about Fear. You see, the perceived value of gold increases as more paper currency is printed. And markets price in expected future developments. So the value of gold rises, if a sufficient number of wealthy people fear the the government(s) will print too much paper currency. Second Answer: So the price of gold not only reflects the amount of paper currency, it is also a measurement of distrust in government(s). Now you might say something is wrong with my argument. The chart mentioned above shows that we have now (mid 2015) 5 times as much printed currency units than we had 2008. So the price of gold should be 5 times as high as 2008, assuming the amount of distrust in governments stayed the same. There must be more effects (or I might be completely wrong. You decide). But here is one more effect: As the price of gold is a measurement of distrust in governments (and especially the US government since the US Dollar is perceived as the reserve currency), the US government and associated organizations are extremely interested in low gold prices to prove trust. So people familiar with the topic believe that the price of gold (and silver) is massively manipulated to the downside using high frequency trading and shorts in the futures markets by US government and wall street banks to disprove distrust. And wall street banks gain huge amounts of paper currency units by manipulating the price, mostly to the downside. Others say that countries like china and russia are also interested in low gold prices because they want to buy as much physical gold as possible. Knowing of the value that is not reflected by the price at the moment. Is there one more source of distrust in governments? Yes. Since 1971, all paper currencies are debt. They receive their value by the trust that those with debt are willing and able to pay back their debt. If this trust is lost, the downward manipulation (if you think that such a thing exists) of the gold and silver prices in the futures markets might fail some day. If this is the case (some say when this is the case). you might see movements in gold and silver prices that bring them back to equilibrium with the amount of printed paper currencies. In times of the roman empire you got a good toga and a pair of handmade shoes for an ounce of gold. In our days, you get a nice suite and a good pair of shoes for an ounce of gold. In the mean time, the value of each paper currency in the history of each country went to zero and the US $ lost 98% of its initial value. As long as there is not enough distrust, more paper currency is made in equity markets and bond markets on average. (Be aware that you earn that currency only after you were able to sell at this price, not while you hold it) Gerd |
How to properly report income without 1099-MISC | You are right that even if you do not receive a 1099-MISC, you still need to report all income to the IRS. Report the $40 on Schedule C or Schedule C-EZ. Since your net profit was less than $400, you do not need to file Schedule SE. From the IRS web site: Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer. |
Why do people invest in mutual fund rather than directly buying shares? | Buying the right shares gives higher return. Buying the wrong ones gives worse return, possibly negative. The usual recommendation, even if you have a pro advising you, is to diversify most of your investments to reduce the risk, even though that may reduce the possible gain. A mutual fund is diversification-in-a-can. It requires little to no active maintenance. Yes, you pay a management fee, but you aren't paying per-transaction fees every time you adjust your holdings, and the management costs can be quite reasonable if you pick the right funds; minimal in the case of computer-managed (index) funds. If you actively enjoy playing with stocks and bonds and are willing/able to accept your failures and less-than-great choices as part of the game, and if you can convince yourself that you will do better this way, go for it. For those of us who just want to deposit out money, watch it grow, and maybe rebalance once a year if that, index funds are a perfectly good choice. I spend at least 8 hours a day working for my money; the rest of the time, I want my money to work for me. Risk and reward tend to be proportional to each other; when they aren't, market prices tend to move to correct that. You need to decide how much risk you're comfortable with, and how much time and effort and money you're willing to spend managing that risk. Personally, I am perfectly happy with the better-than-market-rate-of-return I'm getting, and I don't have any conviction that I could do better if I was more involved. Your milage will vary. If folks didn't disagree, there wouldn't be a market. |
Should I pay my Education Loan or Put it in the Stock Market? | For the sake of sanity, pay off your debt maybe not all but some part of it. You never know what the monster, the stock market may turn out to be. It may gobble up all your money without belching or it may gift you with a bounty. But if you pay off all your debt and the stock market monster is rewarding everybody else, you may rue your decision. So put some part of it the markets too, but a more safer one would be a good bet. The proportions of money for loan repayment and for investing in markets is your decision, after you evaluate all your future predictions. |
Placing limit order and stop loss on same stock at same time | From your question, I am guessing that you are intending to have stoploss buy order. is the stoploss order is also a buy order ? As you also said, you seems to limit your losses, I am again guessing that you have short position of the stock, to which you are intending to place a buy limit order and buy stoploss order (stoploss helps when when the price tanks). And also I sense that you intend to place buy limit order at the price below the market price. is that the situation? If you place two independent orders (one limit buy and one stoploss buy). Please remember that there will be situation where two orders also get executed due to market movements. Add more details to the questions. it helps to understand the situation and others can provide a strategic solution. |
Has anyone compared an in-person Tax Advisor to software like Turbo Tax? | I did my own taxes previously using both H&R Block Tax Cut and TurboTax. When I had a simple return and was single, it worked great. Once I got married it was a little more complicated. When I started a small side business, I switched to an accountant. He does a great job of adjusting deductions between my wife and I and filing separately. This minimizes the amount of taxes we have to pay. It has been a few years since I used the software, but I did not see the ability to easily make adjustments like that. |
First time investor wanting to invest in index funds especially Vanguard | Congratulations on deciding to save money and choosing to invest it. One thing to know about mutual funds including index funds is that they typically require a minimum investment of a few thousand dollars, $3000 being a typical amount, unless the investment is in an IRA in which case $1000 might be a minimum. In some cases, automated monthly investments of $50 or $100 might need to be set up if you are beginning with a small balance. There is nothing wrong with your approach. You now should go and look at the various requirements for specific index funds. The Fidelity and Vanguard families are good choices and both offer very low-cost index funds to choose from, but different funds can have different requirements regarding minimum investments etc. You also have a choice of which index you want to follow, the S&P 500 Index, MidCap Indexes, Small-Cap Indexes, Total Stock Market Indexes etc., but your choice might be limited until you have more money to invest because of minimum investment rules etc. Most important, after you have made your choice, I urge you to not look every day, or even every month, to see how your investment is doing. You will save yourself a lot of anxiety and will save yourself from making wrong decisions. Far too many investors ignore the maxim "Buy Low, Sell High" and pull money out of what should be long-term investments at the first flicker of a downturn and end up buying high and selling low. Finally, the time is approaching when most stock funds will be declaring dividends and capital gains distributions. If you invest now, you may end up with a paper profit on which you will have to pay taxes (in non-tax-advantaged accounts) on your 2012 tax return (this is called "buying a dividend"), and so you might want to spend some time investigating now, but actually make the investment in late December after your chosen fund has made its distributions (the date for this will be on the fund's web site) or in early 2013. |
Friend was brainwashed by MLM-/ponzi investment scam. What can I do? | If this 'scam' has a name, address and/or phone number, I forward it to the FBI anonymously. That is my advice. You may also wish to consult a lawyer. |
Can I default on my private student loans if I was an international student? | You signed a contract to pay the loan. You owe the money. Stories of people being arrested over defaulted student loans are usually based in contempt of court warrants when the person failed to appear in court when the collection agency filed suit against them. Explore student loan forgiveness program. Research collections and bankruptcy and how to deal with collection agencies. There are pitfalls in communicating with them which restart the clock on bad debt aging off the credit report, and which can be used to say that you agreed to pay a debt. For instance, if you make any sort of payment on any debt, a case can be made that you have assumed the debt. Once you are aware of the pitfalls, contact the collection agency (in writing) and dispute the debt. Force them to prove that it is your debt. Force them to prove that they have the right to collect it. Force them to prove the amount. Dispute the fairness of the amount. Doubling your principal in 6 years is a bit flagrant. So, work with the collectors, establish that the debt is valid and negotiate a settlement. Or let it stay in default. Your credit report in the US is shot. It will be a long time before the default ages off your report. This is important if you try to open a bank account, rent an apartment, or get a job in the US. These activities do not always require a credit report, but they often do. You will not be able to borrow money or establish a credit card in the US. Here's a decent informational site regarding what they can do to collect the loan. Pay special attention to Administrative Wage Garnishment. They can likely hit you with that one. You might be unreachable for a court summons, but AWG only requires that the collectors be able to confirm that you work for a company that is subject to US laws. Update: I am informed that federally funded student loans are not available to international students. AWG is only possible for debts to the federal government. Private companies must go through the courts to force settlement of debt. OP is safe from AWG. |
Why do card processing companies discourage “cash advance” activities | I thought this was because credit card companies charge the retailer a fee to accept credit card payments. If you spend $100, the retailer pays $1 (or whatever percentage they have negotiated) to the credit card provider. Handing over $100 cash and paying $1 fee to Visa means a loss to the retailer. The same transaction on $100 worth of product means the loss is accepted out of the profit margin which the retailer accepts to attract custom. |
Advice on what to do with my equity? | How will 45K-60K "end up in your pocket"? Are you selling your home? Where are you going to live? You talk about moving to Arizona, what is so magical about that place? Congratulations on making a wise purchase. Some people with new found money use it to correct past mistakes. However, if they do not change their behavior they end up in the same situation just less them money they once had. While 50K income is respectable at your age, it is below the national average for households. One factor in having a college education is those with them tend to experience shorter and fewer periods of unemployment especially for males. Nothing will ever replace hustle, however. I'd ask you to have a plan to raise your income. Can you double it in 5 years? You need to get rid of the revolving debt. Do that out of current income. No need to touch the house proceeds for something so small. Shoot for 9 months. Then you need to get rid of the speeding fines and the vehicle loan. That is a lot of vehicle for your income. Again, I would do that out of current income or by selling the vehicle and moving to something more inline with your income. As far as to moving or flipping foreclosures that is more of a question that has to do with your hopes and dreams. Do you want to move your children every 3 years? What if you move to Arizona and it turns out to be quite horrible? You and your wife need to sit down and discuss what is best for your family. |
Getting a mortgage while self-employed | Would it be worth legitimizing his business or is it too late at this point? To be blunt, you're asking if we recommend that he stop breaking the law. The answer is obviously yes, he should be declaring his income. And it would probably benefit him to get on the same page as his employer (or client) so they can both start obeying the law together. Once he's filed a tax return for 2016 that would certainly help his cause as far as a lender is concerned, and as soon as he can provide some recent pay stubs (or paid invoices) he should be ready to move forward on the mortgage based on that additional income. |
How can I invest in an index fund but screen out (remove) certain categories of socially irresponsible investments? | I think the answer to your question is no, in theory. By screening out funds, you must actively manage the investments. To then try to ensure you track the index closely enough, you have to do further management. Either you spend your own time to do this or you pay someone else. This is ok, but it seems contrary to the primary reasons most people choose an index fund and why the product exists. You want a specific type of ethical investment(s) that has lower fees and performs well. I think you can get close, it just won't be like an "index fund". Don't expect equal results. |
The Benefits/Disadvantages of using a credit card | There are a couple of things to consider. First, in order to avoid interest charges you generally just need to pay the statement balance before the statement due date. This is your grace period. You don't need to monitor your activity every day and send immediate payments. If you're being really tight with money, you can actually make a little profit by letting your cash sit in an interest bearing account before you pay your credit card before the due date. Second, credit card interest rates are pretty terrible, and prescribed minimum payments are comically low. If you buy furniture using your credit card you will pay some interest, be sure to pay way more than the minimum payment. You should avoid carrying a balance on a credit card. At 20% interest the approximate monthly interest charge on $1,000 is $16.67. Third, if you carry a balance on your credit card you lose the interest grace period (the first point above) on new charges. If you buy your couch, and carry the balance, when you buy a soda at 7-11, the soda begins to accrue interest immediately. If you decide to carry a balance on a credit card, stop using that card for new charges. It generally takes two consecutive billing period full balance payments to restore the grace period. Fourth, to answer your question, using a credit card to carry a balance has no impact on your score. Make your payments on time, don't exceed your limits, keep your utilization reasonable. The credit agencies have no idea if you're carrying a balance or how much interest you're paying. To Appease the people who think point four needs more words: Your credit report contains your limit, your reported balance (generally your statement balance), and approximate minimum payment. There is no indication related to whether or not the balance contains a carried balance and/or accrued interest. The mere fact of carrying a balance will not impact your credit score because the credit reporting bureaus don't know you're carrying a balance. Paying interest doesn't help or hurt your score. Obviously if your carried balance and interest charges push your utilization up that will impact your score because of the increased utilization. Make your payments on time, don't exceed your limits, keep your utilization reasonable and your score will be fine. |
Primary Residence to Investment Property - Changing PMI Terms | You could be in a bit of a bind. I wouldn't push it any more until you read your loan papers very carefully. Going back to the lender for a refinance after you converted it to a rental (presumably without their knowledge) is risky. I doubt they'd let you refinance anyway, as the house is underwater. If the loan is performing then I wouldn't think they'd look too hard for reasons to upset the flow of checks by calling the loan due, but if you brazenly advertise the change of property use to them they may reconsider. Read your loan papers carefully to see what they can do before you lean on them too much. As for managing the finances on that property, I'd build up a cushion to deal with the fact that your payment is going to shoot up considerably in year 8. Also consider building up a side business to get another income stream going to compensate as well. You have a little time before it shoots up. |
Placing limit order and stop loss on same stock at same time | Although this is possible with many brokers, it's not advisable. In many cases you may end up with both trades executed at the same time. This is because during the opening, the stock might spike up or down heavily, bid/ask spread widens, and both of your orders would get picked up, resulting in an instant loss. Your best bet is to place the stop manually sometime after you get filled. |
What is 'consolidating' debt and why do people do it? | With the scenario that you laid out (ie. 5% and 10% loans), it makes no sense at all. The problem is, when you're in trouble the rates are never 5% or 10%. Getting behind on credit cards sucks and is really hard to recover from. The problem with multiple accounts is that as the banks tack on fees and raise your interest rate to the default rate (usually 30%) when you give them any excuse (late payment, over the limit, etc). The banks will also cut your credit lines as you make payments, making it more likely that you will bump over the limit and be back in "default" status. One payment, even at a slightly higher rate is preferable when you're deep in the hole because you can actually pay enough to hit principal. If you have assets like a house, you'll get a much better rate as well. In a scenario where you're paying 22-25% interest, your minimum payment will be $150-200 a month, and that is mostly interest and penalty. "One big loan" will usually result in a smaller payment, and you don't end up in a situation where the banks are jockeying for position so they get paid first. The danger of consolidation is that you'll stop triggering defaults and keep making your payments, so your credit score will improve. Then the vultures will start circling and offering you more credit cards. EDIT: Mea Culpa. I wrote this based on experiences of close friends whom I've helped out over the years, not realizing how the law changed in 2009. Back around 2004, a single late payment would trigger universal default on most cards, jacking all rates up to 30% and slashing credit lines, resulting in over the limit and other fees. Credit card banks generally apply payments (in order, to interest on penalties, penalties, interest on principal, principal) in a way that makes it very difficult to pay down principal for people deep in debt. They would also offer "payment plans" to entice you to pay Bank B vs. Bank A, which would trigger overlimit fees from Bank A. Another change is that minimum payments were generally 2% of statement balance, which often didn't cover the monthly finance charge. The new law changed that, resulting in a payment of 1% of balance + accrued interest. Under the old regime, consolidation made it less likely that various circumstances would trigger default, and gave the struggling debtor one throat to choke. With the new rules, there are definitely a smaller number of scenarios where consolidation actually makes sense. |
What is the easiest way to back-test index funds and ETFs? | check pastsat-backtesting , backtesting tool, where one can can test on well known technical indicators without coding skills |
Is a company allowed to give employees an option for a bonus to be paid out as a 401k match or cash? | This has to do with the type of plan offered: is it a 401(k) plan or a profit-sharing plan, or both? If it's 401(k) I believe the IRS will see this distribution as elective and count towards the employee's annual elective contribution limit. If it's profit sharing the distribution would be counted toward the employer's portion of the limit. However -- profit sharing plans have a formula that's standard across the board and applied to all employees. i.e. 3% of company profits given equally to all employees. One of the benefits of the profit sharing plans is also that you can use a vesting schedule. I'd consult your accountant to see how this specifically impacts your business - but in the case you describe this sounds like an elective deferral choice by an employee and I don't see how (or why) you'd make this decision for them. Give them the bonus and let them choose how it's paid out. Edit: in re-reading your question it actually sounds like you're wanting to setup a profit sharing type situation - but again, heed what I said above. You decide the amount of "profit" - but you also have to set an equation that applies across the board. There is more complication to it than this brief explanation and I'd consult your accountant to see how it applies in your situation. |
If the co-signer on my car loan dies, can the family take the car from me like they're threatening to? | My family members, particularly my aunt (his daughter), are telling me that when my grandpa dies they are taking my car. Bring this up with Grandpa. If this is what he wants to have happen, then help him make it happen before you finish paying $12,000 on a car worth only $6,000. Let the Aunt and other relatives deal with the remaining $12,000. If that isn't what he wants to have happen, then work out how you and he can legally make sure that what he wants to have happen actually happens. If the Aunt or others bring it up, make sure they understand that you still owe $12,000 on the car, and if they get the car they also get the loan. If they refuse to pay the loan then make sure they know you will cooperate with the bank when they attempt to repossess the car - up to and including providing them with keys and location. This will hurt your credit, and you will be on the hook for the remaining portion of the loan, but you at least won't have to deal with all of it - they'll sell it at auction and your loan amount will fall a little. But the best course of action is to work with Grandpa, and make sure that he understands the family's threats, how that will affect you since you're on the loan, and what options you'd like to pursue. |
Risks associated with investing in dividend paying stocks for short term income. Alternatives? | Your back of the envelope calculation shows an income of about 5.5% per year, which is much better than a bank. The risk of course is that in a few years when you want to sell the stock, the price may not be at the level you want. The question is what are you giving up with this plan. You have 80K in cash, will cutting it to 30K in cash make it harder for your business to survive? If your income from the business starts slowly, having that 50K in cash may be better. Selling the stock when the business is desperate for money may lock in losses. |
As director, can I invoice my self-owned company? | No, as a director normally you can't. As a director of a Limited company, all those payments should be accounted for as directors' remuneration and have been subject to PAYE and NIC, even if you are self-employed. Currently there is no legislation which prevents a director from receiving self-employment income from a company in which he is a director, however the default position of HMRC's is that all the payments derived from the directorship are subject to PAYE. In other words, it's possible only invoice from an unconnected business or in a consultancy role that's not directly related to the trade of business. But it really depends on the circumstances and the contracts in place. Sources: Monsoon at AAT forum, David Griffiths at UKBF, Paula Sparrow and Abutalib at AW More sources: If a person does other work that’s not related to being a director, they may have an employment contract and get employment rights. Source: Employment status as director at Gov.uk In principle, it is possible for an employee or office holder to tender for work with their employer outside their normal duties, in circumstances where that individual will not be providing service as an employee or office holder but as a self-employed contractor. Where there is any doubt about whether service is provided constitutes employment or self-employment, see the Employment Status Manual (ESM). Source: Section 62 ITEPA 2003 at HMRC |
Do the proceeds from selling an option immediately convert to buying power in a margin account? | I'd say yes, and hope that my anecdotal evidence serves as proof. My IRA is not a margin account. It can't be. I attempt to create a covered call, buying a stock at say $20, and selling a call for $4, for net $16 cost. The account only had $1610 at the time, and the trades go through just fine. Yes, I needed to enter as a limit order, at the same time, a single order with the $16 debit limit. If this is not enough proof, I'd be curious - why not? The option proceeds must clear, of course, which it does. |
Claiming business expenses for a business with no income | Yes you can claim your business deductions if you are not making any income yet. But first you should decide what structure you want to have for your business. Either a Company structure or a Sole Trader or Partnership. Company Structure If you choose a Company Structure (which is more expensive to set up) you would claim your deductions but no income. So you would be making a loss, and continue making losses until your income from the business exceed your expenses. So these losses will remain inside the Company and can be carried forward to future income years when you are making profits to offset these profits. Refer to ATO - Company tax losses for more information. Sole Trader of Partnership Structure If you choose to be a Sole Trader or a Partnership and your business makes a loss you must check the non-commercial loss rules to see if you can offset the loss against your income from other sources, such as wages. In order to offset your business losses against your other income your business must pass one of these tests: If you don't pass any of these tests, which being a start-up you most likely won't, you must carry forward your business losses until an income year in which you do pass one of the tests, then you can offset it against your other income. This is what differentiates a legitimate business from someone having a hobby, because unless you start making at least $20,000 in sales income (the easiest test to pass) you cannot use your business losses against your other income. Refer to ATO - Non-commercial losses for more information. |
Do the tax consequences make it worth it for me to hold ESPP stock? | Your gain is $1408. The difference between 32% of your gain and 15% of your gain is $236.36 or $1.60 per share. If you sell now, you have $3957.44 after taxes. Forget about the ESPP for a moment. Are you be willing to wager $4000 on the proposition that your company's stock price won't go down more than $1.60 or so over the next 18 months? I've never felt it was worth it. Also, I never thought it made much sense to own any of my employer's stock. If their business does poorly, I'd prefer not to have both my job and my money at risk. If you sell now: Now assuming you hold for 18 months, pay 15% capital gains tax, and the stock price drops by $1.60 to $23.40: |
Are Forex traders forced to use leverage? | It isn't that the companies force traders, it is more the other way around. Traders wouldn't trade without margin. The main reason is liquidity and taking advantage of minor changes in the forex quotes. It goes down to pips and traders make profit(loss) on movement of pips maybe by 1 or 2 and in some cases in 1/1000 or less of a pip. So you need to put in a large amount to make a profit when the quotes move up or down. Supposedly if they have put in all the amount upfront, their trading options are limited. And the liquidity in the market goes out of the window. The banks and traders cannot make a profit with the limited amount of money available at their disposal. So what they would do is borrow from somebody else, so why not the broker itself in this case maybe the forex company, and execute the trades. So it helps everybody. Forex companies make their profit from the fees, more the trades done, more the fees and hence more profit. Traders get to put their fingers in many pies and so their chances of making profits increases. So everybody is happy. |
What is the correct pronunciation of CAGR? | Most readers probably know that an acronym is an invented word made up of the initial letters or syllables of other words, like NASA or NATO. Fewer probably know that an initialism is a type of acronym that cannot be pronounced as a word, but must be read letter-by-letter, like FBI or UCLA. A quote from Daily Writing Tips. CAGR is an initialism, and should not be pronounced. |
If I put dividend-paying stocks in my IRA, where does the dividend go when paid? | The dividend goes into the IRA (either reinvested automatically or remains as cash until you invest it, per your choice). You're not taxed on this dividend (IRA is a taxed-deferred account - you're taxed on the distributions, but not on the capital gains within the account). |
Why are residential investment properties owned by non-professional investors and not large corporations? | Because the returns are not good. One of the big drivers in Australia is "negative gearing": if your investment loses money you can offset losses against your tax on other income. Institutional investors and corporations are in the business of making money: not losing it. Housing market investors are betting that these year to year revenue losses will ultimately be made up in a big capital gain: for which individuals get a huge tax break that is also not available to corporations. Capital gains are not guaranteed. Australia has benefited from 25+ years of economic, employment and wages growth: a result of good government planning, strong corporate governance and a fair slice of luck. If this were to end housing prices would plateau at best and crash at worst. A person who has negative cash flow investments has to sell them urgently if they lose their job. A glut of mortgagee sales and property prices could easily come off 20-30%. Rental yields on residential property in Sydney are about 4% with a capital gain of currently 10% but this has been flat or negative within the last 5 years and no doubt will be again within the next 5. Rental yields for residential property are constrained by mortgage rates: if it significantly cheaper to buy then to rent, why would anyone rent? In contrast, industrial and commercial property gets a yield of about 7% and gets exactly the same capital gain. This is because land is land and if the price of industrial land doesn't grow at the same rate as the residential land next door eventually one will be converted into the other. Retail rentals are even higher. In addition commercial tenants are responsible for more outgoings and have fewer legal rights than residential tenants. Further, individual residential properties are horribly illiquid and have large transaction costs. While it is possible to bundle them up into property trusts so that units can be sold on the stock exchange it is far more common to do this with office and retail buildings. This is what companies like Westfield and AMP Capital do. Notwithstanding, heavily geared property trusts can get into deep water because of the illiquid nature of property as the failure of Centro illustrates. That said, there are plenty of companies that develop residential houses and units for sale to owner occupiers or investors because that's where the money is. |
Why would a company care about the price of its own shares in the stock market? | The other answer has some good points, to which I'll add this: I believe you're only considering a company's Initial Public Offering (IPO), when shares are first offered to the public. An IPO is the way most companies get a public listing on the stock market. However, companies often go to market again and again to issue/sell more shares, after their IPO. These secondary offerings don't make as many headlines as an IPO, but they are typical-enough occurrences in markets. When a company goes back to the market to raise additional funds (perhaps to fund expansion), the value of the company's existing shares that are being traded is a good indicator of what they may expect to get for a secondary offering of shares. A company about to raise money desires a higher share price, because that will permit them to issue less shares for the amount of money they need. If the share price drops, they would need to issue more shares for the same amount of money – and dilute existing owners' share of the overall equity further. Also, consider corporate acquisitions: When one company wants to buy another, instead of the transaction being entirely in cash (maybe they don't have that much in the bank!), there's often an equity component, which involves swapping shares of the company being acquired for new shares in the acquiring company or merged company. In that case, the values of the shares in the public marketplace also matter, to provide relative valuations for the companies, etc. |
My landlord is being foreclosed on. Should I confront him? | Verbal agreements are not legally binding. Unless you have signed a new lease agreement, you are not obligated to continue renting the property - you are free to go. On the other hand, if you really like the place and want to stay, you should sign another lease agreement. This agreement will be binding on whomever owns the home - whether it is your current landlord, a bank or a new purchaser. But, if you go this route, make sure that there is not a clause that says the lease agreement is void upon foreclosure (or something similar). This is a standard clause in lease agreements allowing the bank to cancel the lease. Another option, if you really like the house is to offer to buy the property. If the property is being foreclosed on, you could suggest buying on a short sale. Here is a link to an article I wrote entitled "Buy Instead of Rent: A Recovering Real Estate Market" that discusses the benefits of buying rather than renting. |
Why do credit cards require a minimum annual household income? | Here's one reason that's being overlooked in answers so far. (@ChrisInEdmonton, this is for your comment on @Chad's answer.) How do credit card companies make money? Sure, there's interest charges, but those are offset significantly by the cost of borrowing money, and by people defaulting on their debt / entering bankruptcy. The other way they make money is by processing transactions. They get a cut of whatever you buy. If you're a high-income person, and you're going to process a lot of expenditures with this credit card, your business is worth more. They will be willing to bribe you with things like cash-back, frequent flier miles, and insurance on your auto rentals, so that they can be your #1 go-to card. (This works in concert with the way that some credit card vendors with richer clientele overall - American Express - get to charge higher merchant fees for access to these customers' wallets. But that was mentioned in other answers.) If you're not a high-income person, your business is worth less. If you go somewhere asking for credit, they're going to try and give you a card which will earn them the most money - which probably isn't the one where they give you back 50% of their transaction fee in rewards. It's a calculated risk, since they still have to compete against cash, debit cards, and all the other credit card companies, so they don't have you totally over a barrel, but you shouldn't expect as many freebies, either. |
Can PayPal transfer money automatically from my bank account if I link it in PayPal? | Practically, as an ebay buyer I have never seen any way to keep a balance in paypal and top it off from my bank account under my own control. It is all automated, and as I seem to recall linking with a bank account or credit card was necessary to get some kind of "confirmed address" status out of Paypal so that eBay sellers would be more willing to trust me as a buyer and know that my shipping address was legitimate. As a seller, I can keep a balance at paypal from eBay sales and ask for it back in my checking account instead of keeping it in paypal to purchase items later. In terms of advice, in my opinion the paypal transfer limits or how to set them is not the answer needed to protect one's finances in this situation. In an error or cyberattack scenario, you have to consider the possibility that any limits are exceeded. When your online activity of any kind is linked to a bank account, any amount in that linked bank account is probably at risk. It doesn't really matter if it is paypal, or a server rental account, or amazon. If it can be abused, and it is linked to your bank account, then someone might abuse it and leave you with a bill. That you might be ultimately victorious is of little consequence if someone steals money you really needed right now and the devotion of time and energy to "work the bureaucracy" to get your money back will distract from performance at work or school. So the next step up in protection is to firewall the bank account you use for online purchases from your other bank accounts where your salary is received. The best way to do it is with different banks instead of merely different accounts, but that is also the most inconvenient for filling the account back up. Nowadays -- at least in the USA -- at several banks you can open a "free" checking account for a minimum deposit like $500 or $1000 that must stay in the account to be fee free at the end of each month. Whatever balance you keep in the account you use for your "risky" online transactions will be the maximum that can disappear in an incident, downside being you have to feed the account from time to time to keep it above the minimum as you make purchases. |
Avoiding Capital Gains Long Term | It's correct. Be sure of your personal opportunity cost and not that you're letting the tax tail wag the dog just to score "tax free". Your upside is $3,700 (single) or $7,000 (married) in taxes saved until you're out of the 0% zone. Is that worth not receiving an income? Even if your savings are such that you don't need to work for income for a fiscal year, how would this affect the rest of your career and lifetime total earning prospects? Now, maybe: Otherwise, I'd hope you have solid contacts in your network who won't be fazed by a resume gap and be delighted to have a position open for you in 2019 (and won't give you the "mother returning to the workforce" treatment in salary negotiations). |
What are the pitfalls of loaning money to friends or family? Is there a right way to do it? | I recently lent some money to my sister. While I generally agree with Phillip that lending to family and friends should be avoided, I felt I needed to make an exception. She really needed the cash, and my husband and I agreed that we would be ok without it. Here are some guidelines I used that may be helpful to others: In the end, I think lending to family and friends should be avoided, and certainly should not be done lightly, but by communicating clearly and directly, and keeping careful records, I think you can help someone out and still avoid the lingering awkwardness at future Thanksgivings when one person is convinced that the other owes one more payment, and the other swears it was paid in full. |
What is the fair value of a stock given the bid and ask prices? Is there such a relationship? | None of the above. The fair value is a term used to describe an analytical result of projecting the company's future dividends and profits into a present value. Such estimates are published by the likes of Morningstar, S&P and Value Line. It is quite common for a stock to trade well above or below such estimated fair values. |
What option-related strategies are better suited to increasing return potential? | I think you need to be very careful here. Covered calls don't reduce risk or increase performance overall. If they did, every investment manager would be using them. In a typical portfolio, over the long term, the gains you give up when your stock goes beyond the strike of your calls will negate the premiums you receive over time. Psychologically, covered calls are appealing because your gains happen over a long period and this is why many people suggest it. But if you believe the Black-Scholes model (used for pricing options) this is what the model predicts over the long term - that you won't do any better than just holding stock (unless you have some edge other traders don't). Now you say you want to reduce diversification and raise your risk. Keeping in mind that there is no free lunch, there are several ways to reduce your risk but they all come at a price. For simplicity, there are three elements to consider - risk, potential gain and cash. These are tradeoffs and you can't simultaneously make them all favorable. You must trade one or more of them to gain in the others. Let's say you wanted to concentrate into a few stocks... how could you counteract the additional risk? 1) Covered calls: very popular strategy usually intended (erroneously) for increasing returns. You get the bonus of cash along with marginally less risk. But you give up a substantial amount of potential return. You won't have blowout returns if you do this. You still face substantial risk. 2) Collar your stock: You sell a covered call while using the cash from the sale to buy puts for protection. You give up potential gains, you're neutral on cash but gain significantly on reducing risk. 3) Use calls as proxy for stock: You don't hold stock but only calls in equivalent delta to the stock you would have held. Substantially lower risk while still having potential gain. Your tradeoff is the cash you have to pay for the calls. When using this, one must be very, very careful not to overleverage. 4) Puts as protection for stocks: This is basically the same as #3 in tradeoffs. You won't overleverage and you also get dividends. But for the most part it's the same. These are the main ways to reduce the risk you gain by concentrating. Options themselves are far broader. But keep in mind that there is no free money. All these techniques involve tradeoffs that you have to be aware of. |
First time homeowner and getting a mortgage? | Make sure you shop around and ask a lot of places for a good faith estimate. Last I knew, the good faith document is the same everywhere and long form that makes it easy enough to compare the hard numbers from place to place. I have gotten several estimates for various scenarios and I have had them hand written and printed. (I discounted the hand written ones because that broker seemed pretty disorganized in general) Learn the terms online, and start comparing. Use the good faiths as a negotiation tool to get lower rates or lower costs from other brokers. See how accurate the person is at listening to you and filling out the paperwork. See how responsive they are to you when you call with questions and want some changes. Check with at least four places. The more places you shop, the better idea you will have of what fees are high and what interest rates are low. I might pay a higher fee to get a lower interest rate, so there are lots of trade offs to consider. |
Why is day trading considered riskier than long-term trading? | Day trading is probably the most often tried and failed activity in the financial world. People think they can parlay $1,000 investment into $1,000,000 in a week with little or no knowledge on how to evaluate stocks and or companies. They think they can just look at where the line graphs' been and forecast where it's going to be next week. Unfortunately if it were that simple everyone would be making money hand over fist in the market. So in short, the reason day trading is considered a risky venture is because most of the people that attempt to do it are willfully ignorant. They intentionally choose not to read about day trading. They intentionally choose not to learn about how to read a company's financial report and they intentionally choose not to learn how to compare one stock to another. They also don't consider the fact that most of their data is 15 or more min old because of the shady rules brokers have worked into the system. Real everyday investors that make money in the market do it by careful evaluation of the purchase they are about to make. Guess what, even they lose time to time. That's the game! |
Why the volume disparity between NUGT and DUST? | NUGT and DUST are opposites - DUST is a 'bear' (tracks 3x the inverse) and NUGT is a 'bull' (tracks 3x the actual). So if NUGT is much higher, sounds like people are betting on Gold (or specifically, on the NYSEARCA Gold Miners Index). When this Investopedia article was written in July 2016, the volumes were reversed: DUST traded ~18m and NUGT traded ~7m. Just differences in stock market activity. |
Total gain of portfolio including sold stocks? | You could create your own spreadsheet of Cash Flows and use the XIRR function in Excel: The formula is: |
The cost of cleaning the house that we rented far exceeds the security deposit. Should we bother? | I am surprised at the amount of work this contract wants done. I'd question if it's even legal given the high costs. I suspect it's only there to remind abusive tenants of responsibilities they already have in law for extraordinary abuse beyond ordinary wear-and-tear: they are already on the hook to repaint if they trash the paint (think: child writing on walls, happens a lot), and already need to fumigate (and a lot more) if they are a filth-type hoarder who brings in a serious infestation (happens a lot). The landlord can already go after these people for additional money beyond the deposit. But that's not you. So don't freak out about those clauses, until you talk to the landlord and see what he's really after. Almost certainly, he really wants a "fit and ready to rent" unit upon your departure, so he doesn't have to take the unit off the market for months fixing it. As long as that's done, there's no reasonable reason for further work -- a decent landlord wouldn't require that. Nor would a court, IMO. The trouble with living in a place for awhile is you become blind to its deficiencies. What's more, it's rather difficult to "size up" a unit as ready when it's still occupied by your stuff. A unit will look rather different when reduced to a bare room, without furniture and whatnot distracting you. Add to it a dose of vanity and it becomes hard to convince yourself of defects others will easily see. So, tread carefully here. If push comes to shove, first stop is whether it's even legal. Cities and states with heavy tenant populations tend to have much more detailed laws, and as a rule, they favor the tenant. Right off the bat, in most states the tenant is not responsible for ordinary wear-and-tear. In my opinion, 6 years of ordinary, exempt wear would justify a repaint, so that shouldn't be on the tenant at all. As for the fumigation, I'm not in Florida so I don't know the deal, maybe there's some special environmental issue there which somehow makes that reasonable, it sure wouldn't fly in CA. Again that assumes you're a reasonable prudent tenant, not a slob or hoarder. As for the pro carpet cleaning, that's par for the course in any of the tough rent control areas I've seen, so that's gotten a pass from the legislators. Though $600 seems awfully high. Other than that, you can argue the terms are "unconscionable" -- too much of a raw deal to even be fair. However, this will depend on the opinion of a judge. Hit or miss. I'm hoping your landlord will be happy to negotiate based on the good condition of the unit (which he may not know; landlords rarely visit tenant units unless they really need to.) You certainly should make the case that you make here; that the work is not really needed and it's prohibitive. Your best defense against unconscionable deals is don't sign them. Remember, you didn't know the guy when you initially signed... the now-objectionable language should have been a big red flag back then, saying this guy is epic evil, run screaming. (even if that turned out not to be true, you should't have hung around to find out.) You may have gotten lucky this time, but don't make that mistake again. Unless one of the above pans out, though... a deal is a deal. You gave your word. The powerful act here is to keep your word. Forgive me for getting ontological, but successful people say it creates success for them. And here's the thing. You have to read your contracts because you can't keep your word if you don't know what word you gave. It's a common mistake: thinking good business is trust, hope, faith, submission or giving your all. No. In business, you take the time to hammer out mutually beneficial (win-win) agreements, and you set them on paper to eliminate confusion, argument and stress in the future as memories fade and conditions change. That conflict resolution is how business partners remain friends, or at least professional colleagues. |
I've tracked my spending and have created a budget, now what do I do with it? | I'm reminded of a conversation I had regarding food. I used the word 'diet' and got pushback, as I meant it in sense of 'what one eats'. That's what a diet is, what you eat in an average week, month, year. That list has no hidden agenda unless you want it to. If your finances are in good shape, debt under control, savings growing, etc, a budget is more of an observation than a constraint. In the same way that my bookshelf tells you a lot about who I am, books on finance, math, my religion, along with some on English and humor, my budget will also tell you what my values are. Edit - In a recent speech, regarding Joe Biden, Hillary Clinton said "He has a saying: ‘Don’t tell me what you value. Show me your budget and I will tell you what you value.’ " - nearly exactly my thoughts on this. For the average person, a budget helps to reign in the areas where spending is too high. $500/mo eating out? For the couple hacking away at $30k in credit card debt, that would be an obvious place to cut back. If this brings you happiness, there's little reason to cut back. The budget becomes a reflection of your priorities, and if, at some point in the future, you need to cut back, you'll have a good understanding of where the money is going. |
Ideal investments for a recent college grad with very high risk tolerance? | Congratulations on being in this position. Your problem - which I think that you identified - is that you don't know much about investing. My recommendation is that you start with three goals: The Motley Fool (www.fool.com) has a lot of good information on their site. Their approach may or may not align with what you want to do; I've subscribed to their newsletters for quite a while and have found them useful. I'm what is known as a value investor; I like to make investments and hold them for a long time. Others have different philosophies. For the second goal, it's very important to follow the money and ask how people get paid in the investment business. The real money in Wall Street is made not by investment, but by charging money to those who are in the investment business. There are numerous people in line for some of your money in return for service or advice; fees for buying/selling stocks, fees for telling you which stocks to buy/sell, fees for managing your money, etc. You can invest without spending too much on fees if you understand how the system works. For the third goal, I recommend choosing a few stocks, and creating a virtual portfolio. You can then then get used to watching and tracking your investments. If you want a place to put your money while you do this, I'd start with an S&P 500 index fund with a low expense ratio, and I'd buy it through a discount broker (I use Scottrade but there are a number of choices). Hope that helps. |
How to find cheaper alternatives to a traditional home telephone line? | Try to use VOIP service provider or web enabled conference calling services in your home phone. Now a days communication technologies have seen a boost as well as integration of different formats and platforms which easily reduces phone bills of a user. Service such as UberConference, Skype, Webinar etc enables audio/video as well as web conferencing feature for their user. Service tiers such as free plans, basic plans and business plans allow user to use these conference calling services per their need. Have a look at any such service and use it as an alternative of your home phone line. |
Is there a way to buy raw oil today and sell it in 1 year time? | Unless you have the storage and transportation facilities for it, or can come up with the money needed to rent or build those, no -- or not in any significant quantity. Buying oil futures is essentially an on-paper version of the same bet. Futures prices are already taking into account both expectations about price changes and the fact that there's cash tied up until they come due, but storage costs also adjust to follow those expectations. |
What market conditions favor small cap stocks over medium cap stocks? | I think to answer this question it is best for you to learn more about why people diversify through asset allocation. Look at related questions involving Asset Allocation here. I've asked a couple questions about asset allocation - I think you'll find the top rated answer on this post useful. |
I have a million dollars of disposable income. What should I do to best benefit the economy? | At first, I thought this might be too broad. There are of course thousands of things that you can do with your money to "help the economy". But I think that there is room to discuss some broad strokes without trying to list a thousand details. Regular investing (as you are now) helps the economy in that companies obtain money by selling their stock. They can then use that money to fund expansion, etc. These things can help the economy permanently. Of course, they can also use the money to pay executive bonuses, which don't help the economy so much. Similarly, just spending money does not normally help the economy. Unless we are in a recession, it is mildly harmful to spend wastefully. Money that could be going to support long term improvements in production instead is used to buy a luxury that doesn't terribly interest you. I.e. if you don't want a bigger house or a more luxurious car don't buy it to "stimulate" the economy. Many charitable donations have the same problem. They help short term consumption somewhere. And of course the charity starts asking you for more money. Many charities waste most of a donation trying to get another one from the same person or family. Sir John Maynard Keynes proposed that the best thing that people could do to help the economy is to invest in things that cause economic activity in turn. He was mostly talking about things like roads, bridges, and dams that are out of the investing range of most people, so he wanted governments to do it, particularly during a recession. So we are looking for ways to invest in durable improvements that will support economic activity in the future. A million dollars is a small amount for many things, but there are some activities that work. I'm going to list a few examples, but there are certainly others: Fund microfinance. Basically loan your million dollars to people who need a small amount of money. These programs often allow you to determine the initial recipient and then that person determines the next recipient. A million dollars can finance hundreds if not thousands of these loans. They may be in the United States or in a developing country. Set up a scholarship. My recommendation would be to find an existing scholarship with a few recipients and ask them to add one a year for the million dollars. A million dollars should typically produce about a scholarship a year in returns after inflation. Of course, that's just regular inflation. Education inflation is higher. Solar prize. Fund a program that gives out one solar installation every year or five to a family that owns a house, is struggling to pay utilities, and makes a compelling case. Basically, whenever the investment grows enough to support it, make a new prize. Buy something that will help other people make money. This is just six ideas off the top of my head. The goal here is to create something lasting that will promote economic activity. So a program that loans money forward. Or a scholarship or free textbook, particularly in a STEM field. A small piece of infrastructure that helps people move around to work or spend their money. Solar is a bit of a stretch here, but it can be justified if you believe that an investment now is an investment in moving towards the future. The key thing here is to make your money do double duty. By spending your money during a recession or investing during the rest of the business cycle, you can get some value for your money. But even better is if that spending has a societal return as well. Microfinance, scholarships, and infrastructure do that. There is the immediate spending, plus there is the effect of the spending. A business is established. A mind is trained and working at a high income job. People can move, work, and spend their own money. |
An online casino owes me money and wants to pay with a wire transfer. Is this safe? | I have won a large amount of money on an online casino. How reputed is the company? Have you done any research around it? It has taken 2 months for me to see any payouts. Last week I received $2300 check from them. Did you win everything in the same period? If so there is no reason why they sent you a smaller check of $2300 instead of the full amount. This should raise a red flag. Why would someone write multiple checks. The only valid reason is you won in different months. The payout for first month was $2300 and they sent a check. The payout for next month is large amount ... the request for Bank Details. that they would rather wire me the money and they are asking for my banking account number and routing number. Although giving bank account number and routing has some risks. This is the fundamental information that is need to make a credit to your account directly. You would be giving this to quite a few entities / people. In most countries, this information is printed on every check that you write from your account. Is this safe? Or am I stupid for even considering this? Online world is full of traps and this could be a scam. So proceed with extreme caution. Insist of check. In worst case open a different savings account, that does not allow direct debits, does not have over draft, etc. Use this to receive money and move it into your regular account. |
End of financial year: closing transactions | I'm not sure there's a good reason to do a "closing the books" ceremony for personal finance accounting. (And you're not only wanting to do that, but have a fiscal year that's different from the calendar year? Yikes!) My understanding is that usually this process is done for businesses to be able to account for what their "Retained Earnings" and such are for investors and tax purposes; generally individuals wouldn't think of their finances in those terms. It's certainly not impossible, though. Gnucash, for example, implements a "Closing Books" feature, which is designed to create transactions for each Income and Expenses account into an end-of-year Equity Retained Earnings account. It doesn't do any sort of closing out of Assets or Liabilities, however. (And I'm not sure how that would make any sense, as you'd transfer it from your Asset to the End-of-year closing account, and then transfer it back as an Opening Balance for the next year?) If you want to keep each year completely separate, the page about Closing Books in the Gnucash Wiki mentions that one can create a separate Gnucash file per year by exporting the account tree from your existing file, then importing that tree and the balances into a new file. I expect that it makes it much more challenging to run reports across multiple years of data, though. While your question doesn't seem to be specific to Gnucash (I just mention it because it's the accounting tool I'm most familiar with), I'd expect that any accounting program would have similar functionality. I would, however, like to point out this section from the Gnucash manual: Note that closing the books in GnuCash is unnecessary. You do not need to zero out your income and expense accounts at the end of each financial period. GnuCash’s built-in reports automatically handle concepts like retained earnings between two different financial periods. In fact, closing the books reduces the usefulness of the standard reports because the reports don’t currently understand closing transactions. So from their point of view it simply looks like the net income or expense in each account for a given period was simply zero. And that's largely why I'm just not sure what your goals are. If you want to look at your transactions for a certain time, to "just focus on the range of years I'm interested in for any given purpose" as you say, then just go ahead and run the report you care about with those years as the dates. The idea of "closing books" comes from a time when you'd want to take your pile of paper ledgers and go put them in storage once you didn't need to refer to them regularly. Computers now have no challenges storing "every account from the beginning of time" at all, and you can filter out that data to focus on whatever you're looking for easily. If you don't want to look at the old data, just don't include them in your reports. I'm pretty sure that's the "better way to keep the books manageable". |
How does a Value Added Tax (VAT) differ from a Sales Tax? | Sales taxes are charged at the point of purchase, while a VAT is assessed during the production process of the item. In the end, the amount paid by the consumer is the same, but with the VAT, the tax was collected from the manufacturer, instead of the consumer. One of the big arguments for VAT is that it prevents lost revenue due to things like smuggling (if sales tax increases past 10% smuggling spikes, so the VAT is a good mechanism if you're looking to implement large taxes on goods). It also keeps the tax burden away from shippers and other tiers of the production process that don't change the intrinsic value of the item. |
Dividend yield for multiple years? | Dividend yield is a tough thing to track because it's a moving target. Dividends are paid periodically the yield is calculated based on the stock price when the dividend is declared (usually, though some services may update this more frequently). I like to calculate my own dividend by annualizing the dividend payment divided by my cost basis per share. As an example, say you have shares in X, Co. X issues a quarterly dividend of $1 per share and the share price is $100; coincidentally this is the price at which you purchased your shares. But a few years goes by and now X issues it's quarterly dividend of $1.50 per share, and the share price is $160. However your shares only cost you $100. Your annual yield on X is 6%, not the published 3.75%. All of this is to say that looking back on dividend yields is somewhat similar to nailing jello to the wall. Do you look at actual dividends paid through the year divided by share price? Do you look at the annualized dividend at the time of issue then average those? The stock price will fluctuate, that will change the yield; depending on where you bought your stock, your actual yield will vary from the published amount as well. |
MasterCard won't disclose who leaked my credit card details | File a John Doe lawsuit, "plaintiff to be determined", and then subpoena the relevant information from Mastercard. John Doe doesn't countersue, so you're pretty safe doing this. But it probably won't work. Mastercard would quash your subpoena. They will claim that you lack standing to sue anyone because you did not take a loss (which is a fair point). They are after the people doing the hacking, and the security gaps which make the hacking possible. And how those gaps arise among businesses just trying to do their best. It's a hard problem. And I've done the abuse wars professionally. OpSec is a big deal. You simply cannot reveal your methods or even much of your findings, because that will expose too much of your detection method. The ugly fact is, the bad guys are not that far from winning, and catching them depends on them unwisely using the same known techniques over and over. When you get a truly novel technique, it costs a fortune in engineering time to unravel what they did and build defenses against it. If maybe 1% of attacks are this, it is manageable, but if it were 10%, you simply cannot staff an enforcement arm big enough - the trained staff don't exist to hire (unless you steal them from Visa, Amex, etc.) So as much as you'd like to tell the public, believe me, I'd like to get some credit for what I've done -- they just can't say much or they educate the bad guys, and then have a much tougher problem later. Sorry! I know how frustrating it is! The credit card companies hammered out PCI-DSS (Payment Card Industry Data Security Standards). This is a basic set of security rules and practices which should make hacking unlikely. Compliance is achievable (not easy), and if you do it, you're off the hook. That is one way Amy can be entirely not at fault. Example deleted for length, but as a small business, you just can't be a PCI security expert. You rely on the commitments of others to do a good job, like your bank and merchant account salesman. There are so many ways this can go wrong that just aren't your fault. As to the notion of saying "it affected Amy's customers but it was Doofus the contractor's fault", that doesn't work, the Internet lynch mob won't hear the details and will kill Amy's business. Then she's suing Mastercard for false light, a type of defamtion there the facts are true but are framed falsely. And defamation has much more serious consequences in Europe. Anyway, even a business not at fault has to pay for a PCI-DSS audit. A business at fault has lots more problems, at the very least paying $50-90 per customer to replace their cards. The simple fact is 80% of businesses in this situation go bankrupt at this point. Usually fraudsters make automated attacks using scripts they got from others. Only a few dozen attacks (on sites) succeed, and then they use other scripts to intercept payment data, which is all they want. They are cookie cutter scripts, and aren't customized for each site, and can't go after whatever personal data is particular to that site. So in most cases all they get is payment data. It's also likely that primary data, like a cloud drive, photo collection or medical records, are kept in completely separate systems with separate security, unlikely to hack both at once even if the hacker is willing to put lots and lots of engineering effort into it. Most hackers are script kiddies, able to run scripts others provided but unable to hack on their own. So it's likely that "none was leaked" is the reason they didn't give notification of private information leakage. Lastly, they can't get what you didn't upload. Site hacking is a well known phenomenon. A person who is concerned with privacy is cautious to not put things online that are too risky. It's also possible that this is blind guesswork on the part of Visa/MC, and they haven't positively identified any particular merchant, but are replacing your cards out of an abundance of caution. |
Long term investment for money | I recommend you two things: I like these investments because they are not high risk. I hope this helps. |
Understanding stock market terminology | One of the most useful ways to depict Open, High, Low, Close, and Volume is with a Candlestick Chart. I like to use the following options from Stockcharts.com: http://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=0&mn=3&dy=0&id=p57211761385 |
Are COBRA premiums deductible when self-employed? | I am very late to this forum and post - but will just respond that I am a sole proprietor, who was just audited by the IRS for 2009, and this is one of the items that they disallowed. My husband lost his job in 2008, I was unable to get health insurance on my own due to pre-existing ( not) conditions and so we had to stay on the Cobra system. None of the cost was funded by the employer and so I took it as a SE HI deduction on Line 29. It was disallowed and unfortunately, due to AGI limits, I get nothing by taking it on Sch. A. The auditor made it very clear that if the plan was not in my name, or the company's name, I could not take the deduction above the line. In his words, "it's not fair, but it is the law!" |
Shorting stocks: Indicators that a stock will drop? | The Art of Short Selling by Kathryn Stanley providers for many case studies about what kind of opportunities to look for from a fundamental analysis perspective. Typically things you can look for are financing terms that are not very favorable (expensive interest payments) as well as other constrictions on cash flow, arbitrary decisions by management (poor management), and dilution that doesn't make sense (usually another product of poor management). From a quantitative analysis perspective, you can gain insight by looking at the credit default swap rate history, if the company is listed in that market. The things that affect a CDS spread are different than what immediately affects share prices. Some market participants trade DOOMs over Credit Default Swaps, when they are betting on a company's insolvency. But looking at large trades in the options market isn't indicative of anything on its own, but you can use that information to help confirm your opinion. You can certainly jump on a trend using bad headlines, but typically by the time it is headline news, the majority of the downward move in the share price has already happened, or the stock opened lower because the news came outside of market hours. You have to factor in the short interest of the company, if the short interest is high then it will be very easy to squeeze the shorts resulting in a rally of share prices, the opposite of what you want. A short squeeze doesn't change the fundamental or quantitative reasons you wanted to short. The technical analysis should only be used to help you decide your entry and exit price ranges amongst an otherwise random walk. The technical rules you created sound like something a very basic program or stock screener might be able to follow, but it doesn't tell you anything, you will have to do research in the company's public filings yourself. |
Does the stock market create any sort of value? | When you own a share, you also own a vote (in most cases). That vote is your means of controlling the assets and management of the company. If you had enough votes and wanted to trade a share for an iPhone or liquidate the company entirely, you could do it. The only thing that prevents you from doing that is that companies are not set up to handle the transaction that way. Stock holders are usually trying to buy investments, not iPhones. There are companies that have more cash in the bank than the market cap (total value) of their stock. They usually don't remain as public companies for long in that case. An investor or group of investors buy them up and split the cash. If you had enough shares of Apple, you could do that to; or, just trade one for an iPhone. |
What low-fee & liquid exchange-traded index funds / ETFs should I consider holding in a retirement portfolio? | @bstpierre gave you an example of a portfolio similar to IFA's 70 portfolio. Please, look other variants of example portfolios there and investigate which would suit to you. Although the example portfolios are not ETF-based, required by the op, you can rather easily check corresponding components with this tool here. Before deciding your portfolio, fire up a spreadsheet (samples here) and do calculations and do not underestimate things below: Bogleheads have already answered this type of questions so why not look there? Less reinventing the wheel: google retirement portfolios site:bogleheads.org. I am not making any recommendations like other replies because financial recommendations devalue. I hope I steered you to the right track, use less time to pick individual funds or stocks and use more time to do your research. |
Should I pay off my student loan before buying a house? | It depends on the terms. Student loans are often very low interest loans which allow you to spread your costs of education over a long time without incurring too much interest. They are often government subsidized. On the other hand, you often get better mortgage rates if you can bring a down payment for the house. Therefore, it might be more beneficial for you to use money for a down payment than paying off the student load. |
The Benefits/Disadvantages of using a credit card | I just want to stress one point, which has been mentioned, but only in passing. The disadvantage of a credit card is that it makes it very easy to take on a credit. paying it off over time, which I know is the point of the card. Then you fell into the trap of the issuer of the card. They benefit if you pay off stuff over time; that's why taking up a credit seems to be so easy with a credit (sic) card. All the technical aspects aside, you are still in debt, and you never ever want to be so if you can avoid it. And, for any voluntary, non-essential, payment, you can avoid it. Buy furniture that you can pay off in full right now. If that means only buying a few pieces or used/junk stuff, then so be it. Save up money until you can buy more/better pieces. |
Something looks off about Mitsubishi financial data | All but certainly, Mitsubishi is selling so cheaply because of the fuel scandal. It has been providing false fuel efficiency data for decades. As a result, it may face significant penalties and may have lost the trust of consumers, who will now be less likely to purchase a Mitsubishi vehicle. Nissan is taking a controlling stake in Mitsubishi. This is important news for the company, too. The stock price reflects the consensus of investors on how significant these issues are. It's quite possible the stock will recover over the next few years, in which case it's a bargain at the moment. On the other hand, it's quite possible the company will never recover. |
Why would a company care about the price of its own shares in the stock market? | Fiduciary They are obligated by the rules of the exchanges they are listed with. Furthermore, there is a strong chance that people running the company also have stock, so it personally benefits them to create higher prices. Finally, maybe they don't care about the prices directly, but by being a good company with a good product or service, they are desirable and that is expressed as a higher stock price. Not every action is because it will raise the stock price, but because it is good for business which happens to make the stock more valuable. |
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