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How long do you have to live somewhere to be a resident for tax purposes? | It's not so much about time but about intent. If your intent is to move there permanently, it would be when you arrive in the state for the purposes of living there (i.e. not from a while before that when you went to check a place out or for an interview). I believe that most (if not all) states expect you to get a Driver's License from that state within 30-days of moving there. Something like a Driver's License or State ID would be proof of your residency. These things vary greatly from state to state, so you'd have to research particular states. Or find someone who's done that already. A bit of searching, specifically for Texas, brought me to this forum thread: If you / he wish to establish residency here -- here being Texas -- get a Texas Driver's License and Voter Registration here. Government issued ID with a Texas address is pretty much bulletproof defense against being found to be a resident of elsewhere. Your battle, if there is one, will not be with Texas, but with your present home of record state and/or local government if there are income taxes associated with having been a resident there during the tax year. Which brings up the other question: You would need to make sure that California does not have some provision that would cause you issues. (This isn't so much a case of income from a company in the state as it about capital gains, but it is still prudent to check.) |
Should I invest in my house, when it's in my wife's name? | The prenup complicates things. The traditional vow of a marriage is "What's mine is yours, what's yours is mine". With such a traditional marriage it doesn't matter too much which partner's name something is in, in the event of a divorce the assets of the couple would be considered as a whole and then split. But you have a prenup which is presumably intended to change this traditional arrangement (and may or may not actually be enforceable). I think you are as such right to be wary. I think your only way forward long term is to amend the prenup and/or the legal status of the house to recognize it as a shared asset that you will both be contributing to and that it's value should be split in some way in the event of a divorce. In exchange you should probably be contributing some or all of the cash pile you have from selling your house to the common pot. Another loan may seem like a good option in the short term but in the long term the appreciation on a house is likely to be worth more than any interest on the loan (assuming you are using an interest rate comparable to commercial mortgage deals), plus any interest may well end up being taxable. |
Is an analyst's “price target” assumed to be for 12 months out? | The time horizon applicable to the price target is always specified by the broker or bank which published the research report. You will find this information in the disclaimer, which is present on every research report. Usually it is 12 months, but some firms give 6 months price targets. However, you should never rely on the price target alone and always combine it with the following details (to name a few): Are the analyst's estimate above or below consensus estimates (or company guidance), did the analyst rise or lower its estimates. What is the rating on the stock (Buy, Sell, Hold...), when did he change his rating or price target. Does the firm do business with the company? (which may influence a bullish tone and optimistic price target). |
What are the differences between an investment mortgage and a personal mortgage? | If you are going to live in the house for awhile, you can probably use a regular mortgage. Shop around and look for a mortgage program that works. Look at local banks/credit unions, particularly those with community development programs. Usually an investment mortgage is higher rate, higher payment and has higher underwriting standards. |
I have savings and excess income. Is it time for me to find a financial advisor? | Is my financial status OK? If not, how can I improve it? Based on the fact that you have $100K in the bank and no debts your situation is OK. You don't have credit card debt or an underwater car loan, though the fact you are thinking about a car and a home shows you have started to put some thought into planning. Is now a right time for me to see a financial advisor? The fact that you don't mention retirement savings: 401K, IRA, or pension, means that you have not planned for retirement, and you need to do so. The ESPP can be a part of a plan, but if that is you only investment you are focusing too much of your current and future income on one source of income. Is it worthy? It can be. you want to avoid working with a planner that makes money only if you invest in specific investments they suggest. You want to find a planner that takes a fixed fee for developing the plan, and only provides advice on types of investments. How would she/he help me? They will look at where you are. Where you can quickly make adjustments. And where you want to go over the next year, decade, and lifetime. Then they will provide guidance on those steps you should follow. If your situation changes in the future because of marriage or kids, you can then revisit with a planner and make changes |
Found an old un-cashed paycheck. How long is it good for? What to do if it's expired? | The two banks involved may have different policies about honoring the check. It might not be written on the check. Your bank may decide that the stale check has to be treated differently and will withhold funds for a longer period of time before giving you access to the money. They will give time for the first bank to refuse to honor the check. They may be concerned about insufficient funds, the age of the check, and the fact that the original account could have been closed. If you are concerned about the age of the check. You could go to your bank in person, instead of using deposit by ATM, scanner, or smart phone. This allows you to talk to a knowledgeable person. And if they are going to treat the check differently or reject the check, they can let you know right away. The audit may not have been concerned about the fact that the check hadn't been cashed because when they did the audit the check was still considered fresh. Some companies will contact you eventually to reissue the check so you they can get the liability off their books. If the bank does refuse the check contact the company to see how you can get a replacement check issued. They may want proof the check can't be cashed so they don't have to worry about paying you twice. |
I need a car for 2 years. Buy or lease (or something else)? | Your short-term time frame makes buying used the best option, but it seems you already are aware of that. Look into a certified pre-owned model if you are concerned about lemons. You will usually get some sort of warranty. However, be aware that any car can be a headache with repairs. I would not recommend a lease because basically you are still paying for the depreciation on the car plus interest. Generally, this is the most expensive way to drive a car. You may find the numbers look good for a lease but beware of the 'gotchas' in the terms that can put you way over budget (over mileage, wear and tear, etc.). My best recommendation is to buy gently used with cash. This gives you the most flexibility and best resale value. If you finance a late-model vehicle, be aware that depreciation can leave you upside-down on your loan. That would put you in the position of having to shell out cash just to get rid of the car. |
Can I write off time I spent working on my business? | To expand a little on what littleadv said, you can only deduct what something cost you. Even if you had done volunteer work for a charity as a sole prop you could only deduct your actual costs. If you paid an employee to do charity work or to learn something related to the business that would be deductible as a normal business expense. Some common sense would show that if you could deduct something that didn't cost you anything (your time) you could deduct away all of your income and avoid paying taxes altogether. Back to your more nuanced question could 2 businesses you own bill each other for services? Yes, but you will still have to pay taxes for money earned under each of them. You will also need to be careful that the IRS does not construe the transactions as being done solely to lower your tax bill. |
Why do stock prices of retailers not surge during the holidays? | I used to be in research department for big financial data company. Tell your son that there are three factors: Most people think that net sales vs. expectations is the only factor. It might not even be the biggest. It is simply how much money did company make. Note that this is not how many units they sold. For most companies they will have adjustable pricing and incentives in their sector. For example let's talk about a new company selling Superman Kid's Bikes (with a cape the flips out when you hit a certain speed). The company has it in Walmart at one price, Target at another, Toys R' Us even cheaper, Amazon (making more profit there), and other stores. They are doing "OK" come Dec. 1 but holiday season being half way over they slash price from $100 to $80 because they have tons of inventory. What are looking at her is how much money did they make. Note that marketing, advertising, legal (setting up contracts) are a bit fixed. In my opinion consumer sentiment is the #1 thing for a company that sells a product. Incredible consumer sentiment is like millions of dollars in free advertising. So let's say Dec. 15th comes and the reviews on the Superman Bike are through the roof. Every loves it, no major defects. Company can't even supply the retailers now because after slashing the price it became a great buy. A common investor might be pissed that some dummy at the company slashed the prices so they could have had a much better profit margin, but at the same time it wouldn't have led to an onslaught of sales and consumer sentiment. And the last area is product sell-off. This doesn't apply to all product but most. Some products will only have a technology shelf life, some will actually go bad or out of fashion, and even selling Superman bikes you want to get those to the store because the product is so big. So ignoring making a profit can a company sell off inventory at or around cost. If they can't, even if they made a profit, their risk factor goes up. So let's get back to Superman Bikes. This is the only product company ABC has. They had expected holiday sales at 100 million and profits at 40 million. They ended up at 120 million and 44 million. Let's say their stock was $20 before any information was gathered by the public (remember for most companies info is gathered daily now so this is rather simplistic). So you might expect that the stock would rise to maybe $24 - to which if you were an investor is a great profit. However this company has a cult consumer following who are waiting for the Captain America Bike (shoots discs) and the Hulk Bike (turns green when you go fast). Let's say consumer sentiment and projections base off that put next holiday sales at $250 million. So maybe the company is worth $40 a share now. But consumer sentiment is funny because not only does it effect future projections but it also effects perceived present value of company - which may have the stock trading at $60 a share (think earnings and companies like Google). Having a company people feel proud owning or thinking is cool is also a indicator or share worth. I gave you a really good example of a very successful company selling Superman Bikes... There are just as many companies that have the opposite happening. Imagine missing sales goals by a few million with bad consumer feedback and all of a sudden your company goes from $20 to $5 a share. |
Which is the better strategy for buying stocks monthly? | Powers makes a good point: trading costs may eat up a significant portion of your ROI. A fee as little as 2% can consume more than 50% of your long-term ROI! A rule of thumb is keep your fees to less than 1%. One way to do that is to buy stock in companies that have a DRIP with a Share Purchase Plan (SPP). Often the SPP allows investors to purchase shares for low fees or free. Once you have the ability to purchase shares for (virtually) free, you can use InvestMete. Roughly, you send more money to the companies whose share prices are near their 52-week low, and less money to those who are near their 52-week high. Getting back to your original question... |
Why would a company sell debt in order to buy back shares and/or pay dividends? | Businesses have bond ratings just like people have credit ratings. It has become common for businesses to issue low rate bonds to show that they are strong, and leave the door open for further borrowing if they see an opportunity, such as an acquisition. One of the reasons Microsoft might want to build a credit reputation, is that people become familiar with their bonds and will purchase at lower rates when they want to borrow larger amounts of money, rather than assuming they are having financial issues which would lead them to demand higher rates. |
1099 Misc for taking care of foreign exchange students | According to Intuit, you cannot claim the $50 charitable contribution, so the entire $2000 / month will be taxable instead of $1900. That's only an extra $35 if your combined tax rate is 35%. As TTT mentioned, do this for the experience, not for the money. My wife and I have been hosting international students for 10 years now. https://ttlc.intuit.com/questions/3152069-i-received-a-1099-misc-employee-compensation-for-hosting-a-foreign-exchange-student-can-i-complete-a-schedule-c-for-the-expenses |
Overnight charges for brokers holding stocks? | If you are trading CFDs, which are usually traded on margin, you will usually be charged an overnight financing fee for long positions held overnight and you will receive an overnight financing credit for short positions held overnight. Most CFD brokers will have their overnight financing rates set at + or - 2.5% or 3% from the country's official interest rates. So if your country's official interest rate is 5% and your broker uses + or - 2.5%, you will get a 2.5% credit for any short positions held overnight and pay 7.5% fee for any long positions held overnight. In Australia the official interest rate is 2.5%, so I get 0% for short positions and pay 5% for long positions held overnight. If you are looking to hold positions open long term (especially long positions) you might think twice before using CFDs to trade as you may end up paying quite a bit in interest over a long period of time. These financing fees are charged because you are borrowing the funds to open your positions, If you buy shares directly you would not be charged such overnight financing fees. |
How to spend more? (AKA, how to avoid being a miser) | Unless your stinginess has reach truly compulsive levels, it should be enough to consciously remind yourself of the value of your time when you make purchase decisions or find yourself chasing minor savings. Another way might be to deliberately give yourself a monthly or weekly budget that you're allowed to "waste" on luxuries and conveniences without worrying. |
Investing in USD from the Eurozone (Jan 2015) | No, this is not solid advice. It's a prediction with very little factual basis, since US interest rates are kept just as low and debt levels are just as high as in the Eurozone. The USD may rise or fall against the EUR, stay the same or move back and forth. Nobody can say with any certainty. However, it is not nearly as risky as "normal forex speculation", since that is usually very short term and highly leveraged. You're unlikely to lose more than 20-30% of your capital by just buying and holding USD. Of course, the potential gains are also limited. |
Finding a good small business CPA? | Ask your colleagues! I know that sounds obvious, but just go to where people who do your sort of business hang out (or better, find some venture capital firms and ask their portfolio companies). It's not something people would keep secret from you... |
Can a US bank prevent you from making early payments to the principal on a home mortgage? | littleadv's first comment - check the note - is really the answer. But your issue is twofold - Every mortgage I've had (over 10 in my lifetime) allows early principal payments. The extra principal can only be applied at the same time as the regular payment. Think of it this way - only at that moment is there no interest owed. If a week later you try to pay toward only principal, the system will not handle it. Pretty simple - extra principal with the payment due. In fact, any mortgage I've had that offered a monthly bill or coupon book will have that very line "extra principal." By coincidence, I just did this for a mortgage on my rental. I make these payments through my bank's billpay service. I noted the extra principal in the 'notes' section of the virtual check. But again, the note will explicitly state if there's an issue with prepayments of principal. The larger issue is that your friend wishes to treat the mortgage like a bi-weekly. The bank expects the full amount as a payment and likely, has no obligation to accept anything less than the full amount. Given my first comment above here is the plan for your friend to do 99% of what she wishes: Tell her, there's nothing magic about bi-weekly, it's a budget-clever way to send the money, but over a year, it's simply paying 108% of the normal payment. If she wants to burn the mortgage faster, tell her to add what she wishes every month, even $10, it all adds up. Final note - There are two schools of thought to either extreme, (a) pay the mortgage off as fast as you can, no debt is the goal and (b) the mortgage is the lowest rate you'll ever have on borrowed money, pay it as slow as you can, and invest any extra money. I accept and respect both views. For your friend, and first group, I'm compelled to add - Be sure to deposit to your retirement account's matched funds to gain the entire match. $1 can pay toward your 6% mortgage or be doubled on deposit to $2 in your 401(k), if available. And pay off all high interest debt first. This should stand to reason, but I've seen people keep their 18% card debt while prepaying their mortgage. |
Has anyone compared an in-person Tax Advisor to software like Turbo Tax? | I have fairly simple tax returns and my experience was that TurboTax software produced roughly the same result as human accountant and costs much less. The accountant was never able to find any deductions that the program couldn't find. Of course, if you have business, etc. you probably need an accountant to help you navigate all the rules, requirements, etc. But for simple enough cases I found that the additional pay is not justified. |
How long should I keep an uncleared transaction in my checkbook? | With a check, there are limits on cashing the stale check, but that is set by the banks involved. With a debit card transaction, it will be up the the debit card company and your bank. Imagine a situation where a person finds an old check and tries to cash it at their bank. If the bank considers the check stale, they might reject it, or put a longer hold on the check. When the check writers bank gets the transaction, they will also decide what to do. If they reject it, the first bank will reverse the transaction. You can't count on a 90 day, or 180 day limit; most banks will ask you to put a stop payment on an old check that you don't want cashed. This is especially important step if you write a replacement check. Because there is no check number to put a stop payment on, in fact the temporary hold will fall off after a few days. There doesn't appear to be a way to stop an old transaction. Be careful if you do contact the restaurant, you could end up double paying for the meal if they swipe your card again. Your best option may be just to keep the transaction as pending. |
Diversification reduces risk, but does this base on the assumption that expected return of each asset is always in proportion to its risk? | If you are diversifying just for diversification purposes then all you are doing is averaging down your returns. You shouldn't just buy two securities because you think it is safer than putting all your money into one. A better method is to use money management and position sizing to limit your risk and exposure in any one security. You should know what your maximum risk is before you buy any security and know when it is time to get out of it. There are better ways to manage your risk. Don't put all your eggs in the one basket - yes, but don't diversify just for diversification purposes. |
How to find out if a company is legit? | If you are trying to weed out companies that are fronts for scams, one way is to look for a physical address that checks out with the phone book and a phone number posted on the site that connects you to an actual person. By itself this isn't a guarantee that the company is legit, but it will weed out a large number of fraudulent companies hiding behind PO boxes. That is, companies that defraud a lot of people don't usually make it very easy to track them down or contact them to complain or sue them. |
Higher auto insurance costs: keep car or switch to public transit? | I'm guessing Toronto? Sell the car! Use public transit. Save a ton of money. You can always rent a car for the day or weekend (or use a service like Uber) when necessary at a fraction of the cost of car ownership, and feel good about it! |
Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building? | The most succinct answer is "Banks are in the Money business". Not construction, not real estate, not any of the other things they may find find themselves sometimes being dragged (foreclosure) or tempted (construction) into. "Money" is their core competence, and as good business people they recognize that straying outside that just dilutes their focus. |
Why is a stock that pays a dividend preferrable to one that doesn't? | Check out the questions about why stock prices are what they are. In a nutshell, a stock's value is based on the future prospects of the company. Generally speaking, if a growth company is paying a dividend, that payment is going to negatively affect the growth of the business. The smart move is to re-invest that capital and make more money. As a shareholder, you are compensated by a rising stock price. When a stock isn't growing quickly, a dividend is a better way for a stockholder to realize value. If a gas and electric company makes a billion dollars, investing that money back into the company is not going to yield a large return. And since those types of companies don't really grow too much, the stocks typically trade in a range and don't see the type of appreciation that a growth stock will. So it makes sense to pay out the dividend to the shareholders. |
Why is it important to research a stock before buying it? | The following is only an overview and does not contain all of the in-depth reasons why you should look more deeply. When you look at a stock's financials in depth you are looking for warning signs. These may warn of many things but one important thing to look for is ratio and growth rate manipulation. Using several different accounting methods it is possible to make a final report reflect a PE ratio (or any other ratio) that is inconsistent with the realities of the company's position. Earnings manipulation (in the way that Enron in particular manipulated them) is more widespread than you might think as "earnings smoothing" is a common way of keeping earnings in line (or smooth) in a recession or a boom. The reason that PE ratio looks so good could well be because professional investors have avoided the stock as there appear to be "interesting" (but legal) accounting decisions that are of concern. Another issue that you don't consider is growth. earnings may look good in the current reporting period but may have been stagnant or falling when considered over multiple periods. The low price may indicate falling revenues, earnings and market share that you would not be aware of when taking only your criteria into account. Understanding a firm will also give you an insight into how future news might affect the company. If the company has a lot of debt and market interest rates rise or fall how will that effect their debt, if another company brings out a competing product next week how will it effect the company? How will it effect their bottom line? How much do they rely on a single product line? How likely is it that their flagship product will become obsolete? How would that effect the company? Looking deeply into a company's financial statements will allow you to see any issues in their accounting practices and give you a feel for how they are preforming over time, it will also let you look into their cost of capital and investment decisions. Looking deeply into their products, company structure and how news will effect them will give you an understanding of potential issues that could threaten your investment before they occur. When looking for value you shouldn't just look at part of the value of the company; you wouldn't just look at sales of a single T-shirt range at Wallmart when deciding whether to invest in them. It is exactly the same argument for why you should look at the whole of the company's state when choosing to invest rather than a few small metrics. |
Do people tend to spend less when using cash than credit cards? | One study found that, while people using gift certificates bought no more items than those who used cash, they tended to spend more per item. In "Study 3" the paper "Monopoly money: The effect of payment coupling and form on spending behavior", sets up a case where shoppers are given $50 in cash and $50 in gift certificates (the leftover of which can be exchanged for cash). They were asked to choose different brands and types of items to buy. They study found that There was no difference in the number of items purchased as a function of payment form for scrip However means across all product categories show that participants spent more per item when they were given [the gift certificate] |
What evidence is there that rising interest rates causes Canadian condo prices to go down? | If money is more expensive (costs more to borrow) then fewer people will be able to qualify to make the payments for a particular size of mortgage. This reduces the number of potential buyers for property at that price. As sellers still want to sell, they will move their prices down to where more people can afford to buy. So rising interest rates create downward pressure on housing prices. But Toronto is the biggest city in Canada. I'd expect part of the high prices there is the location: lots of people want to be close to lots of activities, action, and opportunity. Unless something catastrophic happens, I don't see Toronto losing that advantage. If anything, it's going to get a tad warmer up there in the coming decades. |
Buying a multi-family home to rent part and live in the rest | A professional home inspection will clue you in on any problems you might be buying, so it's important in any real estate transaction. If the seller finances the loan, you need a lawyer. It might be a nice opportunity - being in the right place at the right time. You just have to investigate all angles. |
Good book-keeping software? | I think Peachtree is a double entry system |
If a company's assets are worth more than its market cap, can one say the shares must be undervalued? | Imagine a poorly run store in the middle of downtown Manhattan. It has been in the family for a 100 years but the current generation is incompetent regarding running a business. The store is worthless because it is losing money, but the land it is sitting on is worth millions. So yes an asset of the company can be worth more than the entire company. What one would pay for the rights to the land, vs the entire company are not equal. |
When an investor makes money on a short, who loses the money? | Michael gave a good answer describing the transaction but I wanted to follow up on your questions about the lender. First, the lender does charge interest on the borrowed securities. The amount of interest can vary based on a number of factors, such as who is borrowing, how much are they borrowing, and what stock are they trying to borrow. Occasionally when you are trying to short a stock you will get an error that it is hard to borrow. This could be for a few reasons, such as there are already a large amount of people who have shorted your broker's shares, or your broker never acquired the shares to begin with (which usually only happens on very small stocks). In both cases the broker/lender doesnt have enough shares and may be unwilling to get more. In that way they are discriminating on what they lend. If a company is about to go bankrupt and a lender doesnt have any more shares to lend out, it is unlikely they will purchase more as they stand to lose a lot and gain very little. It might seem like lending is a risky business but think of it as occurring over decades and not months. General Motors had been around for 100 years before it went bankrupt, so any lender who had owned and been lending out GM shares for a fraction of that time likely still profited. Also this is all very simplified. JoeTaxpayer alluded to this in the comments but in actuality who is lending stock or even who owns stock is much more complicated and probably doesnt need to be explained here. I just wanted to show in this over-simplified explanation that lending is not as risky as it may first seem. |
Who maintains receipt for employee expense reimbursements? | In the normal course of events, you should receive a separate check for the amount of the purchase, and that amount should not be included in your wages as shown on your W-2 statement. If the amount is included on your paycheck, it should still be listed separately as a non-taxable item, not as part of wages paid. In other words, the IRS should not even be aware that this money was paid to you, there is no need to list the amount anywhere on your income tax return, and if you are paranoid about the matter, staple the stub attached to the reimbursement to a copy of your bank statement showing that you deposited the money into your account and save it in your file of tax papers for the year, just in case the IRS audits you and requires you to document every deposit in your checking account. The amount is a business expense that is deductible on your employer's tax return, and your employer is also required to keep documentation that the employee expense reimbursement plan is running as per IRS rules (i.e., the employer is not slipping money to you "under the table" as a reimbursement instead of paying you wages and thus avoiding the employer's share of FICA taxes etc) and that is why your employer needs the store receipt, not a hand-written note from you, to show the IRS if the IRS asks. You said you paid with "your own cash" but in case this was not meant literally and you paid via credit card or debit card or check, then any mileage award, or points, or cash back for credit card use are yours to keep tax-free, and any interest charges (if you are carrying a revolving balance or paid through your HELOC) or overdraft or bounced check fees are yours to pay. |
How are long-term/short-term capital gains tax calculated on restricted stock? | Fidelity has a good explanation of Restricted Stock Awards: For grants that pay in actual shares, the employee’s tax holding period begins at the time of vesting, and the employee’s tax basis is equal to the amount paid for the stock plus the amount included as ordinary compensation income. Upon a later sale of the shares, assuming the employee holds the shares as a capital asset, the employee would recognize capital gain income or loss; whether such capital gain would be a short- or long-term gain would depend on the time between the beginning of the holding period at vesting and the date of the subsequent sale. Consult your tax adviser regarding the income tax consequences to you. So, you would count from vesting for long-term capital gains purposes. Also note the point to include the amount of income you were considered to have earned as a result of the original vesting [market value then - amount you paid]. (And of course, you reported that as income in 2015/2016, right?) So if you had 300 shares of Stock ABC granted you in 2014 for a price of $5/share, and in 2015 100 of those shares vested at FMV $8/share, and in 2016 100 of those shares vested, current FMV $10/share, you had $300 in income in 2015 and $500 of income in 2016 from this. Then in 2017 you sold 200 shares for $15/share: |
Can a Zelle Bank Transfer be reversed or denied after credit has been added? | After collecting information via web searching, the comments above, and a additional call to BOA, i have concluded the following to the best of my knowledge. Zelle Transfers are final. Irreversible. As Jay mentioned above, funds are subtracted from the sending account before the transfer is made, therefore it eliminates sending funds that do not exist. I validated this information with BOA, and the BOA representative said that once a zelle transfer is initiated and the receiving party has received the funds, it can no longer be canceled. Funds received by the receiving party is credited immediately. I will note that the BOA representative was a BOA representative and not a Zelle representative. I say this because the representatives seemed to be slightly weary in answering my questions about Zelle, as if he was looking up the information as we spoke. If someone is reading this and plans to transfer huge amount of cash from a highly likely malicious user, i would recommend contacting Zelle or your personal bank directly to further validate this information. Zelle, from what i can find, is a fairly new technology. I could not find a Zelle contact number via the web for questioning, so i can only rely on the knowledge on my BOA representative. |
How to protect your parents if they never paid Social Security? | Wow. She really is in a pickle. Even though I can intellectualize that she ought have paid more attention to her family's finances, and assuming she wasn't complicit in her husband's obvious tax evasion, I can sympathize to some extent. This is a great demonstration of how dangerous it is to just let your spouse handle all the finances because they understand the money stuff. Even if they pay the bills you should have at least a fundamental understanding of the taxes being paid, estate and retirement plans. So here's some practical advice based on the hole she has dug for herself: |
How to avoid getting back into debt? | Depending on how marketable your degree is, in the long run you may be better aquiring some student debt rather than slowing down your studies. For example finishing finance, medicine, or engineering a year later would mean one less year of your life that you are earning substantial income. The only situation where slowing down your studies is of benefit is if your savings plus interest would be greater than the income you are giving up by taking longer. Live frugally, take whatever work you can without hurting your studies, don't stress if you can't get this to balance perfectly. I speak from experience on this. Screwing around with working through school cost me 2.5 years of earning potential ($120,000+). |
Do my 401k/Roth accounts benefit from compounding? | During the course of the year, the S&P individual stocks will have some dividends. Not every last stock but a good number of them. Enough that the average dividend for the S&P has been about 2% recently. So if the S&P index goes up, say 10%, an S&P fund should go up closer to 12%. For a fund holder, you'd normally see a declared dividend and cap gain distribution toward the end of each year. When you hold shares in a 401(k), dividends are reinvested into the fund, usually with no involvement from the members. |
Is there a good rule of thumb for how much I should have set aside as emergency cash? | The main factor should be what sorts of emergencies you are trying and also need to protect yourself against. Overall I'd say at least 6-9 months of expenses, adjusted for the above factors. More might be better but I'd probably keep that in a different type of investment vehicle, mainly because it doesn't really need to be accessible instantaneously like your normal emergency fund would need to be. |
What traditionally happens to bonds when the stock market crashes? | The short answer is if you own a representative index of global bonds (say AGG) and global stocks (say ACWI) the bonds will generally only suffer minimally in even the medium large market crashes you describe. However, there are some caveats. Not all bonds will tend to react the same way. Bonds that are considered higher-yield (say BBB rated and below) tend to drop significantly in stock market crashes though not as much as stock markets themselves. Emerging market bonds can drop even more as weaker foreign currencies can drop in global crashes as well. Also, if a local market crash is caused by rampant inflation as in the US during the 70s-80s, bonds can crash at the same time as markets. There hasn't been a global crash caused by inflation after countries left the gold standard, but that doesn't mean it can't happen. Still, I don't mean to scare you away from adding bond exposure to a stock portfolio as bonds tend to have low correlations with stocks and significant returns. Just be aware that these correlations can change over time (sometimes quickly) and depend on which stocks/bonds you invest in. |
Why are interest rates on saving accounts so low in USA and Europe? | The United States Federal Reserve has decided that interest rates should be low. (They think it may help the economy. The details matter little here though.) It will enforce this low rate by buying Treasury bonds at this very low interest rate. (Bonds are future money, so this means they pay a lot of money up front, for very little interest in the future. The Fed will pay more than anyone who offers less money up front, so they can set the price as long as they're willing to buy.) At the end of the day, Treasury bonds pay nearly no interest. Since there's little money to be made with Treasuries, people who want better-than-zero returns will bid up the current-price of any other bonds or similar loan-like instruments to get what whatever rate of return that they can. There's really no more than one price for money; you can think of the price of those bonds as basically (Treasury rate + some modifier based on the risk) percent. I realize thinking about bond prices is weird and different than other prices (you're measuring future-money using present-money and it's easy to be confused) and assure you it ultimately makes sense :) Anyway. Your savings account money has to compete with everyone else willing to lend money to banks. Everyone-else lends money for peanuts, so you get peanuts on your savings account too. Your banking is probably worth more to your bank on account of your check-card payment processing fees (collected from the merchant) than from the money they make lending out your savings (notice how many places have promotional rates if you make your direct deposits or use your check card to make a purchase N times a month). In Europe, it's similar, except you've got a different central bank. If Europe's bank operated radically differently for an extended period of time, you'd expect to see a difference in the exchange rates which would ultimately make the returns from investing in those currencies pretty similar as well. Such a change may show up domestically as inflation in the country with the loose-money policy, and internationally as weakness against other currencies. There's really only one price for money around the entire world. Any difference boils down to a difference in (perceived) risk. |
Do I live in a state for tax purposes if my permanent home is in another state? | You're most likely required to file in both for 2013 - since you've lived in both. From 2014 and on you're definitely a NY resident (since you're renting a place there and live there), and you may very well continue being NJ resident (since you're essentially continue being domiciled there). I suggest talking to a EA/CPA licensed in NY and NJ to try and see what you can do to avoid being resident in both the states, or see if it is at all an issue other than filing everything double. |
How can I remove the movement of the stock market as a whole from the movement in price of an individual share? | The portion of a stock movement not correlated with stocks in general is called Alpha. I don't know of any online tools to graph alpha. Keep in mind that a company like Apple is so huge right now that any properly weighted index will have to correlate with it to some degree. |
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. |
Should I finance a used car or pay cash? | Unless you are getting better than a 2.95% return on that money market account. Pay cash. That's the purely logical way to make the decision. However if it were me I'd pay cash anyway just because I like the idea of not owing money and having the hassle of dealing with a payment every month. |
How to invest with a low net worth | You might want to consider 'investing' a portion of that money into educating yourself. The payoff might not be as immediately obvious or gratifying but with appropriate determination, in the long term it will generate you a much greater return. If you would like to learn about investing, a great starting point would be to buy and read the book 'The Intelligent Investor' by Benjamin Graham. This will be a great barometer for how ready you are to invest in the stock market. If you are able to understand the concepts discussed and comprehend why they are important, you will have gone far in ensuring that you will make adequate returns over your lifetime and will - more importantly - increase the odds of safeguarding your capital. |
I am a contractor with revenue below UK's VAT threshold. Should I register for VAT? | The most important thing to remember is that being VAT registered, you must add VAT to every bill, so every bill will be 20% higher. If the bill payer is a company, they don't care because they deduct the 20% VAT from their own VAT bill. If the bill payer is a private person, their cost of your services has just gone up by 20% and it is going to hurt your business. So the question is, what kind of customers do you have? But if your customers are companies, then the flat rate scheme mentioned above is very little work and puts a nice little amount of extra cash in your pocket (suitable if your bills are mostly for your work and not for parts that you buy for the customer and bill them for). |
Does a US LLC need to file taxes if owned by a foreign citizen? | An LLC does not pay taxes on profits. As regards tax a LLC is treated as a Partnership, but instead of partners they are called members. The LLC is a passthrough entity. As in Partnerships members can have a different percentage ownership to the share of profits. The LLC reports the share of the profits of the members. Then the members pay the tax as an individual. The profit of the LLC is deemed to have been transferred to the members regardless of any funds transferred. This is often the case as the LLC may need to retain the profits for use in the business. Late paying customers may mean there is less cash in the LLC than is available to distribute. The first answer is wrong, only a C corporation files a tax return. All other corporate structures are passthrough entities. The C corporation pays corporation tax and is not required to pass any funds to the shareholders. If the C corporation passes funds to the shareholders this is a dividend, and taxable to the shareholder, hence double taxation. |
Starting a new job. Help me with retirement/debt planning please! | I would go with your alternative idea: get rid of the debt as fast as possible. You have $32k of debt. It's a lot, but with your new $90k salary, do you think you could get rid of it all in 12 months? See if you can make that happen. Once the debt is gone, you'll be in a position to invest as much as you want and keep all your gains. You are worried about sacrificing future money in your investments, but if you eliminate the debt over the next year, this will be minimized. Just lose the debt. |
Dry cleaners lost $160 pants, what should I do? | Read the claim ticket or receipt for when you made the initial drop-off. Every dry cleaning business that I've used in the USA has had a warning about damages or in case of loss. They always agree to reimburse up to a certain amount, usually $50 or $100 per item. This is standard in California, Arizona, New York and Florida, as best I can recall. You won't get the full amount, and you may or may not get the maximum, but the dry cleaner should give you some kind of cash recompense as a result of losing your clothing while they had it in their possession. |
Why are some funds only recommended for investors starting out? | Most articles on investing recommend that investors that are just starting out to invest in index stock or bonds funds. This is the easiest way to get rolling and limit risk by investing in bonds and stocks, and not either one of the asset classes alone. When you start to look deeper into investing there are so many options: Small Cap, Large Cap, technical analysis, fundamental analysis, option strategies, and on and on. This can end up being a full time job or chewing into a lot of personal time. It is a great challenge to learn various investment strategies frankly for the average person that works full time it is a huge effort. I would recommend also reading "The Intelligent Asset Allocator" to get a wider perspective on how asset allocation can help grow a portfolio and reduce risk. This book covers a simple process. |
How to read a balance sheet to determine if a company has enough money to keep paying their employees? | I heard today while listening to an accounting podcast that a balance sheet... can be used to determine if a company has enough money to pay its employees. The "money" that you're looking at is specifically cash on the balance sheet. The cash flows document mentioned is just a more-finance-related document that explains how we ended at cash on the balance sheet. ...even looking for a job This is critical, that i don't believe many people look at when searching for a job. Using the ratios listed below can (and many others), one can determine if the business they are applying for will be around in the next five years. Can someone provide me a pair of examples (one good)? My favorite example of a high cash company is Nintendo. Rolling at 570 Billion USD IN CASH ALONE is astonishing. Using the ratios we can see how well they are doing. Can someone provide me a pair of examples (one bad)? Tesla is a good example of the later on being cash poor. Walk me though how to understand such a document? *Note: This question is highly complex and will take months of reading to fully comprehend the components that make up the financial statements. I would recommend that this question be posted completely separate. |
How to transfer personal auto lease to business auto lease? | I'd approach the lender that you're getting the lease from, but be prepared for them either saying 'no' to putting the lease into the name of an LLC without any proven track record (because it hasn't been around for a while) or require you to sign a personal guarantee, which partially defeats the purpose of putting the car lease into the LLC. I'd also talk to an accountant to see if you can't just charge the business the mileage on your vehicle as that might be the simplest solution, especially if the lender gets stroppy. Of course the mileage rate might not cover the expense for the lease as that one is designed to cover the steepest part of the depreciation curve. Does your LLC generate the revenue needed so it can take on the lease in the first place? If it's a new business you might not need or want the drain on your finances that a lease can be. |
What is the different between 2 :1 split and 1:1 split | There is no such thing as a "one for one" split. It's either N for 1, or 1 for N in a reverse split. And for either, N can't be 1. Yes a 3:2 can happen, but I still read it as 1.5 for 1. |
Should I include retirement funds in calculating my asset allocation? | I separate them out, simply because they're for different purposes, with different goals and time-frames, and combining them may mask hidden problems in either the retirement account or the regular account. Consider an example: A young investor has been working on their retirement planning for a few years now, and has a modest amount of retirement savings (say $15,000) allocated carefully according to one of the usually recommended schemes. A majority exposure to large cap U.S. stocks, with smaller exposures to small cap, international and bond markets. Years before however, they mad an essentially emotional investment in a struggling manufacturer of niche personal computers, which then enjoyed something of a renaissance and a staggering growth in shareholder value. Lets say their current holdings in this company now represent $50,000. Combining them, their portfolio is dominated by large cap U.S. equities to such an extent that the only way to rebalance their portfolio is to pour money into bonds and the international market for years on end. This utterly changes the risk profile of their retirement account. At the same time, if we switch the account balances, the investor might be reassured that their asset allocation is fine and diversified, even though the assets they have access to before retirement are entirely in a single risky stock. In neither case is the investor well served by combining their funds when figuring out their allocation - especially as the "goal" allocations may very well be different. |
Looking to buy a property that's 12-14x my income. How can it be done? | You need a cosigner. Someone prepared to repay the mortgager if you should fail to. Needless to say this is going to have to be someone who knows you and trusts you very much. One way is to find someone prepared to share a house with you. Buy a bigger house than you would otherwise need. You would own half each, and the sharing agreement would specify that if one of you defaulted on their payments the other would get a larger share according to how much extra they end up paying. The other way is to find a silent partner, who doesn't live there. They put up no money unless you actually default. They would almost certainly have to be part owners, but you can structure the agreement so that you end up with the whole house if you succeed in paying off the mortgage, or miss no payments until you sell. Parents sometimes do this for their kids. |
Is CLM a stock or an ETF? | CLM is a Closed End Fund. It is a collection of other securities that trades as if it were stock issued by a single company. NASDAQ cares about how it trades, so that would be why they list it as you say they do. Here is a list of their top 25 holdings: http://portfolios.morningstar.com/fund/holdings?t=CLM®ion=usa&culture=en-US |
How much money should I lock up in my savings account? | Lets imagine two scenarios: 1) You make 10.4k (40% of total income) yearly contributions to a savings account that earns 1% interest for 10 years. In this scenario, you put in 104k and earned 5.89k in interest, for a total of 109.9k. 2) You make the same 10.4k yearly contribution to an index fund that earns 7% on average for 10 years. In this scenario you put in the same 104k, but earned 49.7k in interest*, for a total of 153.7k. The main advantage is option 1) has more liquidity -- you can get the money out faster. Option 2) requires time to divest any stocks / bonds. So you need enough savings to get you through that divestment period. Imagine another two scenarios where you stop earning income: 1-b) You stop working and have only your 109.9k principal amount in a 1% savings account. If you withdraw 15.6k yearly for your current cost of living, you will run through your savings in 7 years. 2-b) You stop working and have only 20k (2 years of savings) in savings that earns 1% with 153.7k in stocks that earns 7%. If you withdraw your cost of living currently at 15.6k, you will run through your investments in 15 years and your savings in 2 years, for a total of 17 years. The two years of income in savings is extremely generous for how long it starts the divestment process. In summary, invest your money. It wasn't specified what currency we are talking about, but you can easily find access to an investment company no matter where you are in the world. Keep a small amount for a rainy day. |
How to trade “exotic” currencies? | There are firms that let you do this. I believe that Saxo Bank is one such firm (note that I'm not endorsing the company at all, and have no experience with it) Keep in mind that the reason that these currencies are "exotic" is because the markets for trading are small. Small markets are generally really bad for retail/non-professional investors. (Also note: I'm not trying to insult Brazil or Thailand, which are major economies. In this context, I'm specifically concerned with currency trading volume.) |
Is 0% credit card utilization worse than 1-20% credit card utilization for any reason other than pure statistics? | The whole point of a credit report and, by extension, a credit score, is to demonstrate (and judge) your ability to repay borrowed funds. Everything stems from that goal; available credit, payment history, collections, etc all serve to demonstrate whether or not you personally are a good investment for lenders to pursue. Revolving credit balances are tricky because they are more complicated than fixed loans (for the rest of this answer, I'll just talk about credit cards, though it also applies to lines of credit such as overdraft protection for checking accounts, HELOCs, and other such products). Having a large available balance relative to your income means that at any time you could suddenly drown yourself in debt. Having no credit cards means you don't have experience managing them (and personal finances are governed largely by behavior, meaning experience is invaluable). Having credit cards but carrying a high balance means you know how to borrow money, but not pay it back. Having credit cards but carrying no balance means you don't know how to borrow money (or you don't trust yourself to pay it back). Ideally, lenders will see a pattern of you borrowing a portion of the available credit, and then paying it down. Generally that means utilizing up to 30% of your available credit. Even if you maintain the balance in that range without paying it off completely, it at least shows that you have restraint, and are able to stop spending at a limit you personally set, rather than the limit the bank sets for you. So, to answer your question, 0% balance on your credit cards is bad because you might as well not have them. Use it, pay it off, rinse and repeat, and it will demonstrate your ability to exercise self control as well as your ability to repay your debts. |
I have $12k in a Chase checking account, but want to start earning interest/saving/investing/etc to make more money. What should I do? | Aside from employer 401(k) matches (which may double your money immediately), paying off debts is almost always the best place to start. Paying off a debt early is a zero-risk operation and will earn you N% (where N is your interest rate). Is that a good deal for a zero-risk return? The closest equivalent today (Aug 24, 2012) is that you can earn about 2.68% on 10-year Treasury bonds. Unless you have a really, really good interest rate (or the interest is tax-deductible), paying off your loan will offer an excellent risk-adjusted return, so you should do that. The "really good" interest rate is typically a mortgage or student loans. (Mortgage interest is also tax-deductible, at least for now.) In those cases, you're not going to gain nearly as much by paying the loan early, and the loan is large - larger than the amount you want to have in risk-free investments. You want to invest for returns, as well! So you can save for retirement instead (in a 401(k) or similar account) and take on a little risk. |
If a stock doesn't pay dividends, then why is the stock worth anything? | Stephen's answer is the 100% correct one made with the common Economics assumption, that people are rational. A company that never has paid dividends, is still worth something to people because of its potential to start paying dividends later and it is often better to grow now and payoff later. However, the actual answer is much more disapointing, because people are not rational and the stock market is no longer about investing in companies or earning dividends. Most of the value of a stock is for the same reason that gold, stamps, coins and bitcoins, and Australian houses are worth anything, that is, because enough people say it is worth something*. Even stocks that pay dividends, very few people buy it for dividends. They buy it because they believe someone else will be willing to buy it for slightly more, shortly after. Different traders have different timeframes, ranging from seconds to months. *Houses and stock are of course partially valuable due to the fundamentals, but the major reason they are purchased is just to resell at a profit. |
What mix of credit lines and loans is optimal for my credit score? | I think you are interpreting their recommended numbers incorrectly. They are not suggesting that you get 13-21 credit cards, they are saying that your score could get 13-21 points higher based on having a large number of credit cards and loans. Unfortunately, the exact formula for calculating your credit score is not known, so its hard to directly answer the question. But I wouldn't go opening 22+ credit cards just to get this part of the number higher! |
How much is an asset producing $X/month is worth? | The simplest way is just to compute how much money you'd have to have invested elsewhere to provide a comparable return. For example, if you assume a safe interest rate of 2.3% per year, you would need to have about $520,000 to get $1,000/month. |
Starting a side business slowly | This is a great question! I've been an entrepreneur and small business owner for 20+ years and have started small businesses in 3 states that grew into nice income streams for me. I've lived off these businesses for 20+ years, so I know it can be done! First let me start by saying that the rules, regulations, requirements and laws for operating a business (small or large) legally, for the most part, are local laws and regulations. Depending on what your business does, you may have some federal rules to follow, but for the most part, it will be your locality (state, county, city) that determines what you'll have to do to comply and be "legal". Also, though it might be better in some cases to incorporate (and even required in some circumstances), you don't always have to. There are many small businesses (think landscapers, housekeepers, babysitters, etc.) that get income from their "business operations" and do so as "individuals". Of course, everyone has to pay taxes - so as long as you property record your income (and expenses) and properly file your tax returns every year, you are "income tax legal". I won't try to answer the income tax question here, though, as that can be a big question. Also, though you certainly can start a business on your own without hiring lawyers or other professionals (more on that below), when it comes to taxes, I definitely recommend you indeed plan to hire a tax professional (even if it's something like H&R Block or Jackson Hewitt, etc). In some cities, there might even be "free" tax preparation services by certain organizations that want to help the community and these are often available even to small businesses. In general, income taxes can be complicated and the rules are always changing. I've found that most small business owners that try to file their own taxes generally end up paying a lot more taxes than they're required to, in essence, they are overpaying! Running a business (and making a profit) can be hard enough, so on to of that, you don't need to be paying more than you are required to! Also, I am going to assume that since it sounds like it would be a business of one (you), that you won't have a Payroll. That is another area that can be complicated for sure. Ok, with those generics out of the way, let me tackle your questions related to starting and operating a business, since you have the "idea for your business" pretty figured out. Will you have to pay any substantial amount of money to attorneys or advisors or accountants or to register with the government? Not necessarily. Since the rules for operating a business legally vary by your operating location (where you will be providing the service or performing your work), you can certainly research this on your own. It might take a little time, but it's doable if you stick with it. Some resources: The state of Florida (where I live) has an excellent page at: http://www.myflorida.com/taxonomy/business/starting%20a%20business%20in%20florida/ You might not be in Florida, but almost every state will have something similar. What all do I need to do to remain on the right side of the law and the smart side of business? All of the answers above still apply to this question, but here are a few more items to consider: You will want to keep good records of all expenses directly related to the business. If you license some content (stock images) for example, you'll want to document receipts. These are easy usually as you know "directly". If you subscribe to the Apple Developer program (which you'll need to if you intend to sell Apps in the Apple App Stores), the subscription is an expense against your business income, etc. You will want to keep good records of indirect costs. These are not so easy to "figure out" (and where a good accountant will help you when this becomes significant) but these are important and a lot of business owners hurt themselves by not considering these. What do I mean? Well, you need an "office" in order to produce your work, right? You might need a computer, a phone, internet, electricity, heat, etc. all of which allow you to create a "working environment" that allows you to "produce your product". The IRS (and state tax authorities) all provide ways for you to quantify these and "count them" as legitimate business expenses. No, you can't use 100% of your electric bill (since your office might be inside your home, and the entire bill is not "just" for your business) but you are certainly entitled to some part of that bill to count as a business expense. Again, I don't want to get too far down the INCOME TAX rabbit hole, but you still need to keep track of what you spend! You must keep good record of ALL your income. This is especially important when you have money coming in from various sources (a payroll, gifts from friends, business income from clients and/or the App Stores, etc.) Do not just assume that copies of your bank deposits tell the whole story. Bank statements might tell you the amount and date of a deposit, but you don't really know "where" that money came from unless you are tracking it! The good news is that the above record keeping can be quite easy with something like Quicken or QuickBooks (or many many other such popular programs.) You will want to ensure you have the needed licenses (not necessarily required at all for a lot of small businesses, especially home based businesses.) Depending on your business activity, you might want to consider business liability insurance. Again, this will depend on your clients and/or other business entities you'll be dealing with. Some might require you to have some insurance. Will be efforts even be considered a business initially until some amount of money actually starts coming in? This might be a legal / accountant question as to the very specific answer from the POV of the law and taxing authorities. However, consider that not all businesses make any money at all, for a long time, and they definitely "are a business". For instance, Twitter was losing money for a long time (years) and no one would argue they were not a business. Again, deferring to the attorneys/cpas here for the legal answer, the practical answer is that you're performing "some" business activity when you start creating a product and working hard to make it happen! I would consider "acting as" a business regardless! What things do I need to do up-front and what things can I defer to later, especially in light of the fact that it might be several months to a couple years before any substantial income starts coming in? This question's answer could be quite long. There are potentially many items you can defer. However, one I can say is that you might consider deferring incorporation. An individual can perform a business activity and draw income from it legally in a lot of situations. (For tax purposes, this is sometimes referred to as "Schedule-C" income.) I'm not saying incorporation is a bad thing (it can shield you from a lot of issues), but I am saying that it's not necessary on day 1 for a lot of small businesses. Having said that, this too can be easy to do on your own. Many companies offer services so you can incorporate for a few hundred dollars. If you do incorporate, as a small business of one person, I would definitely consider a tax concept called an "S-Corp" to avoid paying double taxes.) But here too, we've gone down the tax rabbit hole again. :-) |
How to calculate stock price (value) based on given values for equity and debt? | I'll give you my quick and dirty way to value a company: A quick and dirty valuation could be: equity + 10 times profit. This quick way protects you from investing in companies in debt, or losing money. To go more in-depth you need to assess future profit, etc. I recommend the book from Mary Buffett about Warren Buffett's investing style. |
Is there a term for the risk of investing in an asset with a positive but inferior return? | I'm sorry for adding another answer @MatthewFlaschen but it is too long for a comment. It depends on the situation. Say you buy shares of the Apple Inc. and want to know what is the lost opportunity cost. You need to find out what other opportunities are. In other words what are the other possible types of investments you consider. For example in theory you could try to invest in any company from S&P 500, but is it really possible (I don’t mean investing directly in index) . Are you really capable of researching each company. So in your case you would consider only a few companies as alternative solutions. Also after different time period each choice may be your lost opportunity cost. To measure the risk you have to: In conclusion I want to say that my goal was to picture in general how the process looks. Also this is just an exemplary answer. All is about in what finance field you are interested. For example in one field you use Internal Rate of Return and in other Value at Risk. Opportunity cost is to vague to exactly tell how measure its risk of wrong anticipation. It connects in every finance field and in every field you have different ways do deal with it. If you specify your question more, maybe someone will provide a better answer. |
How to avoid getting back into debt? | Draw up a budget and see where most of you expenses go to. See if you can cut any not essential expenses. If this doesn't help much you will need to increase your income. Ways to do this without going into debt may be to get a job, ask your parents for money, sell some of your non essential things, tutor fellow students or students in earlier years, just to name a few. Basically, if you want to stay out of debt you income needs to be higher than your expenses. So you either need to reduce your expenses, increase your income, or both. Without further information from yourself it would be quite hard to direct you in the right direction. |
Hedging against an acquisition of a stock | Firstly, going short on a stock and worrying if the price suddenly gaps up a lot due to good news is the same as being long on a stock and worrying that the price will suddenly collapse due to bad news. Secondly, an out of the money call option would be cheaper than an in the money call option, in fact the further out of the money the cheaper the premium will be, all other things being equal. So a good risk management strategy would be to set your stop orders as per your trading plan and if you wish to have added protection in case of a large gap is to buy a far out of the money call option. The premium should not be too expensive. Something you should also consider is the time until expiry for the option, if your time frame for trading is days to weeks you make consider a cheaper option that expires in about a month, but if you are planning on holding the position for more than a month you might need a longer expiry period on the option, which will increase the premium. Another option to consider, if your broker offers it, is to use a guaranteed stop loss order. You will pay a little premium for this type of order and not all brokers offer it, but if it is offered you will be protected against any price gaps past your guaranteed stop loss price. |
Can I invest in gold through Vanguard (Or another instrument that should perform well in financial crisis)? | In 2008, 10 year treasuries were up 20.1%, to gold's 4.96%. Respectfully, if I were certain if a market drop, I'd just short the market, easily done by shorting SPY or other index ETFs. If you wish to buy gold, the easiest and least expensive way is to buy an ETF, GLD to be specific. It trades like a stock, for what that's worth. There are those who would suggest this is not like buying gold, it's just 'paper'. I believe otherwise. It's a non leveraged, fully backed ETF. I try not to question other's political or religious beliefs or as it pertains to this ETF, their conspiracy theories. |
Find out the difference between two stocks of the same company (how to identify ADRs, etc) | Generally, when I run across this kind of situation, I look for the Investor Relations section of the corporate website for a 'Stock Information' (or similar) tab or link. This usually contains information explaining the different shares classes, how they relate (if at all), voting and/or dividend rights, and taxation differences for the different classes. However, I have trouble finding such a page on a central BYD corporate investor relations page. I did find this page detailing the HK1211 shares: http://www.byd.com/investor/base_information.html. I don't know what or why, but something tells me this is an older page. Searching on, I also found this page which looks newer and clarifies that the difference you are seeing is between 'A' and 'H' shares. http://www.byd.cn/BYDEnglish/basic/article.jsp?articleId=1524676. (I'm guessing but I'd think somewhere in the announcements on this byd.cn site, you may find more details of any structural differences between share classes -- I just didn't want to page through them all.) |
How should I handle student loans when leaving University and trying to buy a house? | Concise answers to your questions: Depends on the loan and the bank; when you "accelerate" repayment of a loan by applying a pre-payment balance to the principal, your monthly payment may be reduced. However, standard practice for most loan types is that the repayment schedule will be accelerated; you'll pay no less each month, but you'll pay it off sooner. I can neither confirm nor deny that an internship counts as job experience in the field for the purpose of mortgage lending. It sounds logical, especially if it were a paid internship (in which case you'd just call it a "job"), but I can't be sure as I don't know of anyone who got a mortgage without accruing the necessary job experience post-graduation. A loan officer will be happy to talk to you and answer specific questions, but if you go in today, with no credit history (the student loan probably hasn't even entered repayment) and a lot of unknowns (an offer can be rescinded, for instance), you are virtually certain to be denied a mortgage. The bank is going to want evidence that you will make good on the debt you have over time. One $10,000 payment on the loan, though significant, is just one payment as far as your credit history (and credit score) is concerned. Now, a few more reality checks: $70k/yr is not what you'll be bringing home. As a single person without dependents, you'll be taxed at the highest possible withholdings rate. Your effective tax rate on $70k, depending on the state in which you live, can be as high as 30% (including all payroll/SS taxes, for a 1099 earner and/or an employee in a state with an income tax), so you're actually only bringing home 42k/yr, or about $1,600/paycheck if you're paid biweekly. To that, add a decent chunk for your group healthcare plan (which, as of 2014, you will be required to buy, or else pay another $2500 - effectively another 3% of gross earnings - in taxes). And even now with your first job, you should be at least trying to save up a decent chunk o' change in a 401k or IRA as a retirement nest egg. That student loan, beginning about 6 months after you leave school, will cost you about $555/mo in monthly payments for the next 10 years (if it's all Stafford loans with a 50/50 split between sub/unsub; that could be as much as $600/mo for all-unsub Stafford, or $700 or more for private loans). If you were going to pay all that back in two years, you're looking at paying a ballpark of $2500/mo leaving just $700 to pay all your bills and expenses each month. With a 3-year payoff plan, you're turning around one of your two paychecks every month to the student loan servicer, which for a bachelor is doable but still rather tight. Your mortgage payment isn't the only payment you will make on your house. If you get an FHA loan with 3.5% down, the lender will demand PMI. The city/county will likely levy a property tax on the assessed value of land and building. The lender may require that you purchase home insurance with minimum acceptable coverage limits and deductibles. All of these will be paid into escrow accounts, managed by your lending bank, from a single check you send them monthly. I pay all of these, in a state (Texas) that gets its primary income from sales and property tax instead of income, and my monthly payment isn't quite double the simple P&I. Once you have the house, you'll want to fill the house. Nice bed: probably $1500 between mattress and frame for a nice big queen you can stretch out on (and have lady friends over). Nice couch: $1000. TV: call it $500. That's probably the bare minimum you'll want to buy to replace what you lived through college with (you'll have somewhere to eat and sleep other than the floor of your new home), and we're already talking almost a month's salary, or payments of up to 10% of your monthly take-home pay over a year on a couple of store credit cards. Plates, cookware, etc just keeps bumping this up. Yes, they're (theoretically) all one-time costs, but they're things you need, and things you may not have if you've been living in dorms and eating in dining halls all through college. The house you buy now is likely to be a "starter", maybe 3bed/2bath and 1600 sqft at the upper end (they sell em as small as 2bd/1bt 1100sqft). It will support a spouse and 2 kids, but by that point you'll be bursting at the seams. What happens if your future spouse had the same idea of buying a house early while rates were low? The cost of buying a house may be as little as 3.5% down and a few hundred more in advance escrow and a couple other fees the seller can't pay for you. The cost of selling the same house is likely to include all the costs you made the seller pay when you bought it, because you'll be selling to someone in the same position you're in now. I didn't know it at the time I bought my house, but I paid about $5,000 to get into it (3.5% down and 6 months' escrow up front), while the sellers paid over $10,000 to get out (the owner got married to another homeowner, and they ended up selling both houses to move out of town; I don't even know what kind of bath they took on the house we weren't involved with). I graduated in 2005. I didn't buy my first house until I was married and pretty much well-settled, in 2011 (and yes, we were looking because mortgage rates were at rock bottom). We really lucked out in terms of a home that, if we want to or have to, we can live in for the rest of our lives (only 1700sqft, but it's officially a 4/2 with a spare room, and a downstairs master suite and nursery/office, so when we're old and decrepit we can pretty much live downstairs). I would seriously recommend that you do the same, even if by doing so you miss out on the absolute best interest rates. Last example: let's say, hypothetically, that you bite at current interest rates, and lock in a rate just above prime at 4%, 3.5% down, seller pays closing, but then in two years you get married, change jobs and have to move. Let's further suppose an alternate reality in which, after two years of living in an apartment, all the same life changes happen and you are now shopping for your first house having been pre-approved at 5%. That one percentage point savings by buying now, on a house in the $200k range, is worth about $120/mo or about $1440/yr off of your P&I payment ($921.42 on a $200,000 home with a 30-year term). Not chump change (over 30 years if you had been that lucky, it's $43000), but it's less than 5% of your take-home pay (month-to-month or annually). However, when you move in two years, the buyer's probably going to want the same deal you got - seller pays closing - because that's the market level you bought in to (low-priced starters for first-time homebuyers). That's a 3% commission for both agents, 1% origination, 0.5%-1% guarantor, and various fixed fees (title etc). Assuming the value of the house hasn't changed, let's call total selling costs 8% of the house value of $200k (which is probably low); that's $16,000 in seller's costs. Again, assuming home value didn't change and that you got an FHA loan requiring only 3.5% down, your down payment ($7k) plus principal paid (about another $7k; 6936.27 to be exact) only covers $14k of those costs. You're now in the hole $2,000, and you still have to come up with your next home's down payment. With all other things being equal, in order to get back to where you were in net worth terms before you bought the house (meaning $7,000 cash in the bank after selling it), you would need to stay in the house for 4 and a half years to accumulate the $16,000 in equity through principal payments. That leaves you with your original $7,000 down payment returned to you in cash, and you're even in accounting terms (which means in finance terms you're behind; that $7,000 invested at 3% historical average rate of inflation would have earned you about $800 in those four years, meaning you need to stick around about 5.5 years before you "break even" in TVM terms). For this reason, I would say that you should be very cautious when buying your first home; it may very well be the last one you'll ever buy. Whether that's because you made good choices or bad is up to you. |
What threshold to move from SEP to Solo401k? | I think this article explains it pretty well: Contributions to a SEP are limited to 20% of your business income (which is business income minus half of your self-employment tax), up to a maximum of $45,000. With a solo 401(k), on the other hand, you can contribute up to $15,500 plus 20% of your business income (defined the same way as above), with a maximum contribution of $45,000 in 2007. You can make an extra $5,000 catch-up contribution if you're 50 or older |
Principal 401(k) managed fund fees, wow. What can I do? | I would even say 1% is not even reasonable in this age. The short answer is there probably isn't much you can do directly. However, there are a few things to consider: |
Is investing in housing considered an adequate hedge against inflation? | Becoming a landlord is a pretty roundabout way to hedge against inflation. Why don't you research TIPs (Treasury Inflation Protected Securities (?)) Over the very long term, a house will just about match inflation, but no more. I observe that it (median home price) has remarkably tight correlation to the mortgage one can buy with a week's worth of median income based on the 30 year rate. In other words, strip out inflation, wage gains, and the effect of the 30 year rate peaking at 18%, then dropping to 4%, and home prices have flatlined for a century. I agree with mhoran. My answer is for the median, theoretical home. As they say, YMMV, your mileage may vary. As in, you can't have one. |
Where to find turnover / average amount of time investors & mutual funds held stocks they purchased? | You can make a rough calculation of the annual turnover rate of stocks by calculating the institutional investors holding of that stock. Institutional investors are the only firms that are required to provide such data. The good this is they usually make the lion share of trading activity. On the other hand, this task might proof arduous A different ratio that could be used as a substitute Share Turnover which is calculated as: Share Turnover gives the number of shares traded as a fraction of the number of shares outstanding. For example, if you compare the results of stock turnover for three companies and the results came as follows: Company A-share turnover: 1.5 Times Company B share turnover: 3 times Company C share turnover: 0.3 times From the results, we can conclude that for a particular period, company C had the least activity and the number of shares traded for that period was only a small fraction of the shares outstanding while other traders of company C hold most shares and never trade them. If you make a cross sectional analysis of a list of businesses you intend to invest in, you could figure which one has the least number of rapidity in the shares traded. |
Interaction between health exchange and under-65 Medicare coverage | First off, you should contact your health plan administrator as soon as possible. Different plans may interact differently with Medicare; any advice we could provide here would be tentative at best. Some of the issues you may face: A person with both Medicare and a QHP would potentially have primary coverage from 2 sources: Medicare and the QHP. No federal law addresses this situation. Under state insurance law an individual generally cannot collect full benefits from each of 2 policies that together pay more than an insured event costs. State law usually specifies how insurance companies will coordinate health benefits when a person has primary coverage from more than one source. In that situation, insurance companies determine which coverage is primary and which is secondary. It’s important to understand that a QHP is not structured to pay secondary benefits, nor are the premiums calculated or adjusted for secondary payment. In addition, a person with Medicare would no longer receive any premium assistance or subsidies under the federal law. While previous federal law makes it illegal for insurance companies to knowingly sell coverage that duplicates Medicare’s coverage when someone is entitled to or enrolled in Medicare Part A or Part B, there has been no guidance on the issue of someone who already has individual health insurance and then also enrolls in Medicare. We and other consumer organizations have asked state and federal officials for clarification on this complicated situation. As such, it likely is up to the plan how they choose to pay - and I wouldn't expect them to pay much if they think they can avoid it. You may also want to talk to someone at your local Medicare branch office - they may know more about your state specifically; or someone in your state's department of health/human services, or whomever administers the Exchanges (if it's not federal) in your state. Secondly, as far as enrolling for Part B, you should be aware that if she opts not to enroll in Part B at this time, if your wife later chooses to enroll before she turns 65 she will be required to pay a penalty of 10% per 12 month period she was not enrolled. This will revert to 0 when she turns 65 and is then eligible under normal rules, but it will apply every year until then. If she's enrolling during the normal General Enrollment period (Jan-March) then if she fails to enroll then she'll be required to pay that penalty if she later enrolls; if this is a Special Enrollment Period and extends beyond March, she may have the choice of enrolling next year without penalty. |
Investment Newbie - Options in India - For $10K - for 10 years | I would suggest you to put your money in an FD for a year, and as soon as you get paid the interest, start investing that interest in a SIP(Systematic investment plan). This is your safest option but it will not give you a lot of returns. But I can guarantee that you will not lose your capital(Unless the economy fails as a whole, which is unlikely). For example: - you have 500000 rupees. If you put it in a fixed deposit for 1 year, you earn 46500 in interest(At 9% compounded quarterly). With this interest you can invest Rs.3875(46500/12) every month in an SIP for 12 months and also renew your FD, so that you can keep earning that interest.So at the end of 10 years, you will have 5 lacs in your FD and Rs. 4,18,500 in your SIP(Good funds usually make 13-16 % a year). Assuming your fund gives you 14%, you make: - 1.) 46500 at 14% for 9 years - 1,51,215 2.)8 years - 1,32,645 3.) 7 years - 1,16,355 4.) 6 years - 1,02,066 5.) 5 years - 89,531 6.) 4 years - 78,536 7.) 3 years - 68891 8.) 2 years 60,431 9.) 1 year - 53010 Total Maturity Value on SIP = Rs, 8,52,680 Principal on FD = Rs 5,00,000 Interest earned on 10th year = Rs. 46,500 Total = Rs. 13,99,180(14 lacs). Please note: - Interest rates and rate of return on funds may vary. This figure can only be assumed if these rates stay the same.:). Cheers! |
Payroll taxes on exercised stock options | To explain the capital gains part of the question, non qualified stock options (NSOs) are always treated like earned income and have payroll taxes withheld. It's advantageous for the company to issue these because they can deduct them as expenses just as they do your salary. Articles talking about capital gains would probably be referring to incentive stock options (ISOs) or possibly even restricted stock units (RSUs). If you were granted the option to buy the stock and/or hold it for a period of time, then the stock options could be treated as capital gains, short-term gains if you held them for less than a year, and long-term gains if you held them for more than a year. This payment for your NSOs is exactly like a cash bonus. The withholding follows the same guidelines. You may wish to look at what this will mean for your annual salary and adjust your W-4 withholding up or down as appropriate depending on whether the 25% federal withholding rate is more or less than what you think your final marginal rate will be with this bonus included in your annual salary. |
Are there any Social Responsibility Index funds or ETFs? | Index funds: Some of the funds listed by US SIF are index funds. ETFs: ETFdb has a list, though it's pretty short at the moment. |
Economics Books | Economics without math is a tall order, since it seems that one of the things economists love to do is try and reduce everything down to mathematical formulas. OTOH you are asking about a lot of topics besides economics. A few books I might suggest would be those three should do a good job of introductory info and helping you understand the basics and vocabulary. If you want more, one of the better 'recommended reading lists' for things financial that I've ever found is here |
If accepting more than $10K in cash for a used boat, should I worry about counterfeiting? | The only issue I can see is that the stranger is looking to undervalue their purchase to save money on taxes/registration (if applicable in your state). Buying items with cash such as cars, boats, etc in the used market isn't all that uncommon* - I've done it several times (though not at the 10k mark, more along about half of that). As to the counterfeit issue, there are a couple avenues you can pursue to verify the money is real: *it's the preferred means of payment advocated by some prominent personal financial folks, including Dave Ramsey |
How to save criteria in Google Finance Stock Screener? | There is probably a better way, but you can do the following: (1) Right click on the right pointing arrow next to the "1-20 of xx rows" message at the bottom right of the table, and select "Copy link location" (2) Paste that into the location (3) At the end of the pasted text there is a "&output=json", delete that and everything after it. (4) hit enter What you get is a page that displays the set of securities returned by and in a very similar display to the "stock screener" without the UI elements to change your selections. You can bookmark this page. |
How is Discover different from a Visa or a MasterCard? | From the business side of credit cards, Discover and American Express carry their own risk. AmEx has lent their logo to banks such as Bank of America (BofA) to use the AmEx transaction network, but the financial risk and customer service is provided by BofA. Visa and MasterCard let banks use their logo and process through their respective networks for a fee. The financial risk of fraud, non-payment from merchants, etc is the risk that the individual banks carry. |
What is the field “Folio” in an accounting book for? | It's used as a reference column: In journals folio coloumn is used to mention the reference or “address” of ledger in which the journal entry has been posted thus giving an easy access and also easily understanding whether all the entries has been posted in the relevant accounts or not. |
I am an American citizen but have never lived in the US. Do I need to fill a W8-BEN or a W-9? | Yes, you do. You also need to file a tax return every year, and if you have more than $50k of total savings you need to declare this every year. |
How to withdraw money from currency account without having to lose so much to currency conversion? | In answer to the "how I can perform withdrawal with the lower rate (having GBP)?" part of your question, as Joe stated you need to use another bank or currency exchange company to convert the GBP to PLN. Most of the UK banks charge similar amounts, and it's usually not possible to transfer the GBP to a foreign bank unless you have a GBP account with them. Some currency exchange firms are Transferwise, FairFX, CaxtonFX, a web search will show a fuller range. You could also use Paypal to do the transfer (if you have a paypal account) by transferring the GBP from Barclays to your paypal account and then from there to your PLN account. |
If a bank has a transfer limit, what happens if another bank pushes/pulls more than that? | If bank B has a transfer limit set, you bet that there is a nice reason for that. Either risk of fraud, liability, client preferences, profiling, credit scoring, etc, etc. For a bank, the cost of denying something [1] is way lower than the potential damages and liabilities of allowing something to go through. Regarding your concerns for the ACH, here is the summarized transaction walkthrough source: An Originator– whether that’s an individual, a corporation or another entity– initiates either a Direct Deposit or Direct Payment transaction using the ACH Network. ACH transactions can be either debit or credit payments and commonly include Direct Deposit of payroll, government and Social Security benefits, mortgage and bill payments, online banking payments, person-to-person (P2P) and business-to-business (B2B) payments, to name a few. Instead of using paper checks, ACH entries are entered and transmitted electronically, making transactions quicker, safer and easier. The Originating Depository Financial institution (ODFI) enters the ACH entry at the request of the Originator. The ODFI aggregates payments from customers and transmits them in batches at regular, predetermined intervals to an ACH Operator. ACH Operators (two central clearing facilities: The Federal Reserve or The Clearing House) receive batches of ACH entries from the ODFI. The ACH transactions are sorted and made available by the ACH Operator to the Receiving Depository Financial Institution (RDFI). The Receiver’s account is debited or credited by the RDFI, according to the type of ACH entry. Individuals, businesses and other entities can all be Receivers. Each ACH credit transaction settles in one to two business days, and each debit transaction settles in just one business day, as per the Rules. Take heed of this like: The Originator initiates a direct deposit/payment transaction. In your scenario, the originator would be B. But since the transaction amount is higher than the limit, B would not even initiate the ACH transaction. The request would be denied. So the transaction would look like this: [1] Usually this cost comes down to just the processing costs of the denied transaction (and it is rather fail-fast like). For the other parties involved it may have additional costs (missed deadlines, penalties for not fulfilling an obligation, fines, etc), but for the bank that is irrelevant. |
Tax rules for United States citizens living in the US but being paid from outside the US | You can and are supposed to report self-employment income on Schedule C (or C-EZ if eligible, which a programmer likely is) even when the payer isn't required to give you 1099-MISC (or 1099-K for a payment network now). From there, after deducting permitted expenses, it flows to 1040 (for income tax) and Schedule SE (for self-employment tax). See https://www.irs.gov/individuals/self-employed for some basics and lots of useful links. If this income is large enough your tax on it will be more than $1000, you may need to make quarterly estimated payments (OR if you also have a 'day job' have that employer increase your withholding) to avoid an underpayment penalty. But if this is the first year you have significant self-employment income (or other taxable but unwithheld income like realized capital gains) and your economic/tax situation is otherwise unchanged -- i.e. you have the same (or more) payroll income with the same (or more) withholding -- then there is a 'safe harbor': if your withholding plus estimated payments this year is too low to pay this year's tax but it is enough to pay last year's tax you escape the penalty. (You still need to pay the tax due, of course, so keep the funds available for that.) At the end of the first year when you prepare your return you will see how the numbers work out and can more easily do a good estimate for the following year(s). A single-member LLC or 'S' corp is usually disregarded for tax purposes, although you can elect otherwise, while a (traditional) 'C' corp is more complicated and AIUI out-of-scope for this Stack; see https://www.irs.gov/businesses/small-businesses-self-employed/business-structures for more. |
Stock options value | What you will probably get is an option to buy, for £10,000, £10,000 worth of stock. If the stock price on the day your option is granted is £2.50, then that's 4,000 shares. Companies rarely grant discounted options, as there are tax disincentives. The benefit of the stock option is that when you exercise it, you still only pay £10,000, no matter what the 4,000 shares are now worth. This is supposed to be an incentive for you to work harder to increase the value of the company. You should also check the vesting schedule. You will typically not be able to exercise all your options for some years, although some portion of it may vest each year. |
No trading data other than close for a stock on a given date | The last column in the source data is volume (the number of stocks that was exchanged during the day), and it also has a value of zero for that day, meaning that nobody bought or sold the stocks on that day. And since the prices are prices of transactions (the first and the last one on a particular day, and the ones with the highest/lowest price), the prices cannot be established, and are irrelevant as there was not a single transaction on that day. Only the close price is assumed equal to its previous day counterpart because this is the most important value serving as a basis to determine the daily price change (and we assume no change in this case). Continuous-line charts also use this single value. Bar and candle charts usually display a blank space for a day where no trade occurred. |
How to make money from a downward European market? | Not a day goes by that someone isn't forecasting a collapse or meteoric rise. Have you read Ravi Batra's The Great Depression of 1990? The '90s went on to return an amazing 18.3%/yr compound growth rate for the decade. (The book sells for just over $3 with free Amazon shipping.) In 1987, Elaine Garzarelli predicted the crash. But went years after to produce unremarkable results. Me? I saw that 1987 was up 5% or so year on year (in hindsight , of course), and by just staying invested, I added deposits throughout the year, and saw that 5% return. What crash? Looking back now, it was a tiny blip. You need to be diversified in a way that one segment of the market falling won't ruin you. If you think the world is ending, you should make peace with your loved ones and your God, no investment advice will be of any value. (Nor will gold for that matter.) |
How can I investigate historical effect of Rebalancing on Return and Standard Deviation? | From Vanguard's Best practices for portfolio rebalancing: |
Good yield vs. safer route (Checking vs. Savings) | In the US bank or credit union checking, savings, CD's are insured through FDIC or NCUA. The coverage is for $250,000. This limit can be increased by having multiple accounts. You, your spouse, and a Joint account with your spouse, are considered 3 different accounts, so you could have $750K coverage. IRA funds are considered a separate pot of money for insurance coverage. Here is an explanation from NCUA and FDIC. There is no safety difference between savings and checking. There are differences regarding minimum balances, maximum number of transactions per month, and fees. But they are equally safe. |
Why index funds have different prices? | Price, whether related to a stock or ETF, has little to do with anything. The fund or company has a total value and the value is distributed among the number of units or shares. Vanguard's S&P ETF has a unit price of $196 and Schwab's S&P mutual fund has a unit price of $35, it's essentially just a matter of the fund's total assets divided by number of units outstanding. Vanguard's VOO has assets of about $250 billion and Schwab's SWPPX has assets of about $25 billion. Additionally, Apple has a share price of $100, Google has a share price of $800, that doesn't mean Google is more valuable than Apple. Apple's market capitalization is about $630 billion while Google's is about $560 billion. Or on the extreme a single share of Berkshire's Class A stock is $216,000, and Berkshire's market cap is just $360 billion. It's all just a matter of value divided by shares/units. |
Can zero-coupon bonds go down in price? | Certainly, yes, a zero coupon bond can go down in price. If interest rates rise before your bond matures, the price of the bond will go down – and the longer to maturity, the more it will tend to drop. Depending on when you bought and how much interest rates rise, you can incur a capital loss. The bond is guaranteed to be worth a certain amount at maturity as long as the issuer hasn't defaulted, but before maturity the market price of the bond will fluctuate, primarily based on interest rate movements. In fact, zero coupon bonds are even more interest-rate-sensitive than regular bonds (which have periodic coupon interest payments.) |
How can I live outside of the rat race of American life with 300k? | Consider buying a legal "mother daughter" property, rent out the top part, and live in the "mother" component. |
If I put in a limit order for the same price and size as someone else, which order goes through? | While littleadv's answer is true for many exchanges (in particular the stock market, it's called FIFO matching) you should also know that some markets trade pro rata. That is, for a match at some price level everyone at that level gets a chunk of the deal proportional to their input (i.e. order size). E.g. match for quantity X at a price level and passive side orders y1, y2; the order y1 would get y1 / (y1 + y2) of X and y2 would get y2 / (y1 + y2) (for X = min(X, y1 + y2)). |
Does gold's value decrease over time due to the fact that it is being continuously mined? | As one can see here, the world population is growing. Assuming worldwide demand for gold is a function of population, the question you have to ask is whether gold mining outpaces population growth. Just eyeballing it, I'd say they're about even although annual production is far noisier. Keep in mind that gold extraction is not an easy process though. At the end of the day, gold is only worth what you can trade it for, just like any other store of value. |
Can unclear or deceptive company news and updates affect the stock price in the opposite direction of where the company is actually headed? | Yes, but only in a relatively short term. False news or speculations can definitely change the stock price, sometimes even significantly. However, the stock price will eventually (in the long-term) correct itself and head to the right direction. |
When (if) I should consider cashing in (selling) shares to realize capital gains? | How about this rule? Sell 10% of your shares every time they double in price. (of course, only buy stocks that repeatedly double in price) |
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