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What is a good size distribution for buying gold?
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Diversification is an important aspect of precious metals investing. Therefore I would suggest diversifying in a number of different ways:
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If something is coming into my account will it be debit or credit in my account?
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Most bank registers (where you write down entries) show deposits (+) to account as a CREDIT. Payments, fees, and withdrawals are DEBITs to your bank accounnt. On loans such as credit card accounts, a credit to your loan account is a payment or other reductions of the amount you owe. A charge to your account is a DEBIT to you loan account. They did this just to confuse us!
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How to minimise the risk of a reduction in purchase power in case of Brexit for money held in a bank account?
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GBP has already lost part of his value just because of the fear of Brexit. An actual Brexit may not change GBP as much as expected, but a no-Brexit could rise GBP really a lot.
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Why does quantitative easing negatively affect stocks?
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Can you isolate the market impact to just the Fed's quantitative easing? Can you rule out the future economic predictions of low growth and that there are reasons why the Fed has kept rates low and is trying its best to stimulate the economy? Just something to consider here. The key is to understand what is the greater picture here as well as the question of which stock market index are you looking at that has done so badly. Some stocks may be down and others may be up so it isn't necessarily bad for all equally.
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Options on the E-mini S&P 500 Futures at the CME: when were EW3, the weekly Monday options and the weekly Wednesday options introduced?
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Why do you care? In any case, you can easily Google the answer... Effective Sunday, April 2, 2017 for trade date Monday, April 3, 2017, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will list Monday Weekly Options on the E-mini Standard and Poor’s Stock Price Index Futures and Standard and Poor’s 500 Stock Price Index Futures contracts (collectively the “Contracts”) for trading on CME Globex and for submission for clearing via CME ClearPort as described in Appendix A below. Appendix B below provides the Exchange fee schedule for the Contracts. source
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In Australia, how to battle credit card debt?
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JoeTaxpayer mentioned a budget. Staying on top of your spending will be the result of getting out from under this debt. You may have Excel on your PC now, if not Open Office is free which has a program that handles finance applications. There is budgeting software for free out there. Youneedabudget.com is a lot better but cost a little. It keeps me from spending money I don't necessarily have as I can see a result month to month from having outflow of cash. As Joe mentioned - no more lattes in the near future which will help you pay off this debt which will be a bigger relief than a fashion statement. Having used budgeting software and attempted to stay in budget has been useful. I still over spend a little on food and can see the ramifications immediately. In short, try creating and sticking to a budget no matter the urge. As far as insolvency is concerned I'd struggle with paying it down before I do that. The thought passed my mind but I bit the bullet. DO NOT walk away from the debt however. That isn't a good idea Either. Budget and bite.
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Is Amazon's offer of a $50 gift card a scam?
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The 'store card' that Amazon offers gives 5% back on Amazon purchases. Some time ago, when I realized how much of my spending was going through Amazon, I chose that card over this one. If you want the card, that's fine, but if you are going to play the reward game, there are far higher bonuses available for card signups. No, it's not a scam. Many stores will offer a discount at the register the day you sign up for there card. In general, the store cards should also give a discount when used at that store, or airline for that matter.
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What are the reasons to get more than one credit card?
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Another good reason: if you have to replace a card due to damage, loss, or identity theft it's nice to have a backup you can use until the new card for your primary account arrives. I know folks who use a secondary card for online purchases specifically so they can kill it if necessary without impacting their other uses, online arguably being at more risk. If there's no yearly fee, and if you're already paying the bill in full every month, a second card/account is mostly harmless. If you have trouble restraining yourself with one card, a second could be dangerous.
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I can't understand candlestick shadows
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Each candlestick in a candlestick chart represents the open, close, high and low for a period of time. If you are looking at a daily chart it represents the open price, close price, high price and low price for that day. If you are looking at an hourly chart, then a single candlestick represents the open, close, high and low prices for an hour. If looking at a weekly chart, then a single candlestick will represent the opening price on Monday morning, the closing price on Friday afternoon, and the highest and lowest price for that week. The diagram below represents the two main types of candle sticks. When the price closes higher than they open for the period of the candlestick it is called a bullish candle and the main body is usually represented in green. When the price closes lower than they open for the period of the candlestick it is called a bearish candle and the main body is usually represented in red. In a bullish candle with a large real body and small shadows or wicks, where prices open near the low of the period and close near the top of the period, it represents a very bullish period (especially if volume is high). An example of this situation could be when good news is released to the market and most market participants want to buy the shares driving prices higher during the period. An example of a bullish candle with a small real body and a large upper shadow or wick could be when market participants start buying early during the period, then some negative news comes out or prices reach a major resistance level, then prices drop from their highs but still close higher than the open. The large upper shadow represents some indecision in prices moving higher. In a bearish candle with a large real body and small shadows or wicks, where prices open near the high of the period and close near the low of the period, it represents a very bearish period (especially if volume is high). An example of this situation could be when bad news is released to the market and most market participants want to sell the shares driving prices lower during the period. An example of a bearish candle with a small real body and a large lower shadow or wick could be when market participants start selling early during the period, then some positive news comes out or prices reach a major support level, then prices move up from their lows but still close lower than the open. The large lower shadow represents some indecision in prices moving lower. These are just some examples of what can be derived from looking at candlestick charts. There are plenty more and too much to include in this answer. Another type of candle is the Doji, represented in the diagram below. The Doji Candle represents indecision in the market. Prices open then move up to the high of the period then start falling past the open before reversing again and closing either at the open or very close to the open. The market participants can't decide whether the price should move up or down, so prices end up closing very close to where they opened. A doji Candle close to a market high or low could represent a turning point in the short term trend and could mean that over the next period or two prices could reverse and go in the opposite direction. There are many more definitions for candlestick charts, and I would recommend an introductory book on candlestick charting, like one from the "Dummies" series. The main things to keep in mind as a beginner it that a strong bullish candle with small shadows and large real body could represent further price movement upwards, a strong bearish candle with small shadows and large real body could represent further movement downwards, and any candle with large shadows could represent indecision and a reversal from the direction of the large shadow.
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Car dealer saying that they cannot see any credit information for my co-applicant. Could this be a scam?
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By law, your wife can get her full Equifax credit report (sans-FICO score) instantly (once every 12 months) via https://www.annualcreditreport.com She can even get her FICO score with a 7-day free trial of Equifax Complete Premier.
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Which is better when working as a contractor, 1099 or incorporating?
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There is some benefit to creating a corporation or LLC -- you theoretically have a liability shield. As Michael Pryor points out in his answer, though, there will probably be little difference if you get sued. Operating the corporation or LLC incurs some extra costs: you have to pay annual fees to the state, and there's a bit of extra administrative overhead (very little overhead for an LLC though).
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Get interest on $100K by spending only $2K using FOREX rollovers?
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I'm smart enough to know that the answer to your questions is 'no'. There is no arbitrage scenario where you can trade currencies and be guaranteed a return. If there were, the thousands of PhD's and quants at hedge funds like DEShaw and Bridgewater would have already figured it out. You're basically trying to come up with a scenario that is risk free yet yields you better than market interest rates. Impossible. I'm not smart enough to know why, but my guess is that your statement "I only need $2k margin" is incorrect. You only need $2k as capital, but you are 'borrowing' on margin the other 98k and you'll need to pay interest on that borrowed amount, every day. You also run the risk of your investment turning sour and the trading firm requiring a higher margin.
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Will there always be somebody selling/buying in every stock?
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Will there be a scenario in which I want to sell, but nobody wants to buy from me and I'm stuck at the brokerage website? Similarly, if nobody wants to sell their stocks, I will not be able to buy at all? You're thinking of this as a normal purchase, but that's not really how US stock markets operate. First, just because there are shares of stock purchased, it doesn't mean that there was real investor buyer and seller demand for that instrument (at that point in time). Markets have dedicated middlemen called Market Makers (NASDAQ) or Specialists (NYSE), who are responsible to make sure that there is always someone to buy or sell; this ensures that all instruments have sufficient liquidity. Market Makers and specialists may decide to lower their bid on a stock based on a high number of sellers, or raise their ask for a high number of buyers. During an investor rush to buy or sell an instrument (perhaps in response to a news release), it's possible for the Market Maker / specialist to accumulate or distribute a large number of shares, without end-investors like you or I being involved on both sides of the same transaction.
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How can I set up a recurring payment to an individual (avoiding fees)?
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A handful of well-known banks in the United States are part of the clearXchange network, which allows customers of those banks to move money amongst them. The clearXchange service is rebranded differently by each member bank. For example, Chase calls it QuickPay, while Wells Fargo calls it SurePay, and Capital One calls it P2P Payments. To use clearXchange, the sender's bank must be part of the network. The recipient isn't required to be in the network, though if they are it makes things easier, as no setup is required on the recipient's end in that case. Otherwise, they must sign up on the clearXchange site directly. From what I can tell, most payments are fee-free within the network. I have repeating payments set up with Chase's QuickPay, and they do not charge fees.
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Does an index have a currency?
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More importantly, index funds are denominated in specific currencies. You can't buy or sell an index, so it can be dimensionless. Anything you actually do to track the index involves real amounts of real money.
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Digital envelope system: a modern take
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My wife and I use a digital form of the envelope system. We call it a budget; we record how much we want to allocate each month to spend--for each category of expense--in a spread sheet. Why use prepaid cards? Why not open a bunch of bank accounts and use debit cards from each if you want to separate the money? You could also keep a ledger for each account that you spend from on a smart phone or even in a physical ledger. The reason for the envelope method is that it psychologically hurts some people to physically part with cash. Once you digitize it in some factor, you lose what is the primary touted benefit, and it's no longer the envelope system. The secondary benefit that--once the budget for one category is gone, it's gone--is only as good as the discipline you have to not rob cash from another envelope; why is this any easier than the discipline of not debiting beyond the bottom of the ledger? So a budget IS a digital version of the envelope system; once the physical cash is removed from the equation, it's definitely not the envelope system. Sorry for the contrarian take on this question, but I've never been a fan of the envelope system for many of the reasons you have described. I guess I'm too young for the cash psychology to work for me.
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I'm in Australia. What should I look for in an online stock broker, for trading mostly on the ASX?
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If you want the cheapest online broker in Australia, you can't go past CMC Markets, they charge $9.90 upto a $10,000 trade and 0.1% above that. There is no ongoing fees unless you choose to have dynamic data (stock prices get updated automatically as they change). However, the dynamic data fee does get waived if you have about 10 or more trades per month. You don't really need the dynamic data unless you are a regular trader anyway. They also provide some good research tools and some basic charting. Your funds with them are kept segragated in a Bankwest Account, so are resonably safe. They don't provide the best interest on funds kept in the account, so it is best to just deposit the funds when you are looking to buy, and move your funds elswhere (earning higher interest) when selling. Hopes this helps, regards Victor. Update They have now increased their basic brokerage to a minimum of $11 per trade unless you are a frequent trader.
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How should minor children be listed as IRA beneficiaries?
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First - for anyone else reading - An IRA that has no beneficiary listed on the account itself passes through the will, and this eliminates the opportunity to take withdrawals over the beneficiaries' lifetimes. There's a five year distribution requirement. Also, with a proper beneficiary set up on the IRA account the will does not apply to the IRA. An IRA with me as sole beneficiary regardless of the will saying "all my assets I leave to the ASPCA." This is also a warning to keep that beneficiary current. It's possible that one's ex-spouse is still on IRA or 401(k) accounts as beneficiary and new spouse is in for a surprise when hubby/wife passes. Sorry for the tangent, but this is all important to know. The funneling of a beneficiary IRA through a trust is not for amateurs. If set up incorrectly, the trust will not allow the stretch/lifetime withdrawals, but will result in a broken IRA. Trusts are not cheap, nor would I have any faith in any attorney setting it up. I would only use an attorney who specializes in Trusts and Estate planning. As littleadv suggested, they don't have to be minors. It turns out that the expense to set up the trust ($1K-2K depending on location) can help keep your adult child from blowing through a huge IRA quickly. I'd suggest that the trust distribute the RMDs in early years, and a higher amount, say 10% in years to follow, unless you want it to go just RMD for its entire life. Or greater flexibility releasing larger amounts based on life events. The tough part of that is you need a trustee who is willing to handle this and will do it at a low cost. If you go with Child's name only, I don't know many 18/21 year old kids who would either understand the RMD rules on IRAs or be willing to use the money over decades instead of blowing it. Edit - A WSJ article Inherited IRAs: a Sweet Deal and my own On my Death, Please, Take a Breath, an article that suggests for even an adult, education on how RMDs work is a great idea.
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How to spend more? (AKA, how to avoid being a miser)
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Maybe minimalism is an option for you. Make your self clear what you really want You only buy what you really need and for that you spend the money. Then there is no point of saving money, i.e. I for example like to invite friends and cook them some fancy diner with expensive products, but the value I get from that exceeds any money I spend. On the other hand most present are the opposite, they have less value to recipient than what they originally have costs.
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How do top investors pull out 20% ROI?
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First of all, the annual returns are an average, there are probably some years where their return was several thousand percent, this can make a decade of 2% a year become an average of 20% . Second of all, accredited investors are allowed to do many things that the majority of the population cannot do. Although this is mostly tied to net worth, less than 3% of the US population is registered as accredited investors. Accredited Investors are allowed to participate in private offerings of securities that do not have to be registered with the SEC, although theoretically riskier, these can have greater returns. Indeed a lot of companies that go public these days only do so after the majority of the growth potential is done. For example, a company like Facebook in the 90s would have gone public when it was a million dollar company, instead Facebook went public when it was already a 100 billion dollar company. The people that were privileged enough to be ALLOWED to invest in Facebook while it was private, experienced 10000% returns, public stock market investors from Facebook's IPO have experienced a nearly 100% return, in comparison. Third, there are even more rules that are simply different between the "underclass" and the "upperclass". Especially when it comes to leverage, the rules on margin in the stock market and options markets are simply different between classes of investors. The more capital you have, the less you actually have to use to open a trade. Imagine a situation where a retail investor can invest in a stock by only putting down 25% of the value of the stock's shares. Someone with the net worth of an accredited investor could put down 5% of the value of the shares. So if the stock goes up, the person that already has money would earn a greater percentage than the peon thats actually investing to earn money at all. Fourth, Warren Buffett's fund and George Soros' funds aren't just in stocks. George Soros' claim to fame was taking big bets in the foreign exchange market. The leverage in that market is much greater than one can experience in the stock market. Fifth, Options. Anyone can open an options contract, but getting someone else to be on the other side of it is harder. Someone with clout can negotiate a 10 year options contract for pretty cheap and gain greatly if their stock or other asset appreciates in value much greater. There are cultural limitations that prompt some people to make a distinction between investing and gambling, but others are not bound by those limitations and can take any kind of bet they like.
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I have an extra 1000€ per month, what should I do with it?
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If I were you, I would save 200 euros for retirement each month and another 800 I would stash away with the hope to start investing soon. I think you have to invest a bigger lump sum, then 1000 euros. It makes sense to invest at least 30K to see any tangible results. My acquaintances started from 50K and now see pretty handsome returns. Investing is profitable, as long as you approach it smartly. Also, do not ever hire an overly expensive financial consultant - this expenses will never pay off. Of course, check their credentials and reputation... But never pay much to these guys. Not worth it.
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Should I invest in the world's strongest currency instead of my home currency?
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First, currencies are not an investment; they are a medium of exchange; that is, you use currency to buy goods and services and/or investments. The goods and services you intend to buy in your retirement are presumably going to be bought in your country; to buy these you will need your country's currency. The investments you intend to buy now require the currency of whatever country they are located in. If you want to buy shares in Microsoft you need USD; if you want shares in BHP-Billiton you need AUD or GBP (It is traded on two exchanges), if you want property in Kuwait you need KWD and if you want bonds in your country you need IDR. When you sell these later to buy the goods and services you were saving for you need to convert from whatever currency you get for selling them into whatever currency you need to buy. When you invest you are taking on risk for which you expect to be compensated for - the higher the risk you take the better the returns had better be because there is always the chance that they will be negative, right down to losing it all if you are unlucky. There is no 100% safe investment; if you want to make sure you get full value for your money spend it all right now! If you invest overseas then, in addition to all the other investment risks, you are adding currency risk as well. That is, the risk that when you redeem your investments the overseas currency will have fallen relative you your currency. One of the best ways of mitigating risk is diversification; which allows the same return at a lower risk (or a higher return at the same risk). A pure equity portfolio is not diversified across asset classes (hopefully it is diversified across the equities). Equities are a high risk-high yield class; particularly in a developing economy like Indonesia. If you are very young with a decades long investment horizon this may be OK but even then, a diversified portfolio will probably offer better rewards at the same risk. Diversifying into local cash, bonds and property with a little foreign equities, bonds and property will serve you better than worrying about the strength of the IDR. Oh, and pay a professional for some real advice rather than listening to strangers on the internet.
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What assets does the term “security” encompass?
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A good reference to what encompasses "securities" are detailed in the Securities Act of 1933, which was enacted by the United States federal government. One main exception, which I would still consider securities for your purposes, would be "commercial paper". These are exempt from the securities act because they mature in 270 days of less, but they function much like bonds or promissory notes Therefore though, it would not encompass currencies and commodities. It really comes down to the structure of the agreement for transferring or holding the particular kind of underlying asset.
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What is your effective tax rate if you work from home in Montreal for a company in Toronto?
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For tax purposes, what matters is your province of residence at December 31st. Quebec Tax abatement therefore applies if you were living in Quebec, regardless of your employer, assuming you are an employee. As for effective tax, your question misses some data and does not quite make sense as effective tax is the result of dividing your total taxes paid after deductions and tax credits by your total income. As such, one cannot tell you your effective tax rate without knowing taxes paid after deductions and tax credits and total income.
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Why is there such disparity of max contribution limits between 401K accounts and regular IRA accounts?
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The investments offered in 401K are usually limited to a selection of mutual funds offered by a 401K provider. The 401K providers and the mutual funds charge fees. The mutual fund industry has a lobbying group that will push for increased 401K contributions to direct money into their mutual funds to collect fees. The top 401 K provider in 2005 was fidelity. It managed $337 billion in 401Ks of which $334 billion was directed into mutual funds. Although I would have to use some of the same providers to open an IRA, I would not have to invest in the providers' mutual funds when I open an IRA. I can buy a stock and hold onto it for 10, 20, 50 years inside of my IRA. Thus, the only fee the investment company would collect from me would be from when I purchased the stock and when I sold the stock. Not nearly as profitable as mutual fund fees.
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Why do people always talk about stocks that pay high dividends?
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Dividends are one way to discriminate between companies to invest in. In the best of all worlds, your investment criteria is simple: "invest in whatever makes me the most money on the timeline I want to have it." If you just follow that one golden rule, your future financial needs will be taken care of! Oh... you're not 100% proof positive certain which investment is best for you? Good. You're mortal. None of us magically know the best investment for us. We wing it, based on what information we can glean. For instance, we know that bonds tend to be "safer" than stocks, but with a lower return, so if something calls itself a bond, we treat it differently than we treat a stock. So what sorts of information do we have? Well, think of the stock market linguistically. A dividend is one way for a company to communicate with their stockholders in the best way possible: their pocketbooks. There's some generally agreed upon behaviors dividends have (such as they don't go down without some good reason for it, like a global recession or a plan to acquire another company that is well-accepted by the stockholders). If a company starts to talk in this language, people expect them to behave a certain way. If they don't, the stock gets blacklisted fast. A dividend itself isn't a big deal, but a dividend which isn't shunned by a lot of smart investors... that can be a big deal. A dividend is a "promise" (which can be broken, of course) to cash out some of the company's profits to its shareholders. Its probably one of the older tools out there ("you give investors a share of the profits" is pretty tried and true). It worked for many types of companies. If you see a dividend, especially one which has been reliable for many years, you can presume something about the type of company they are. Other companies find dividend is a poor tool to accomplish their goals. That doesn't mean they're better or worse, simply different. They're approaching the problem differently. Is that kind of different the kind you want in your books? Maybe. Companies which aren't choosing to commit a portion of their profits to shareholders are typically playing a more aggressive game. Are you comfortable that you can keep up with how they're using your money and make sure its in your interests? It can be harder in these companies where you simply hold a piece of paper and never get anything from them again.
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The U.S. National Debt: What is it, where did it come from, and how does it work?
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For political reasons, almost all governments (including the US) spend more money than they get from taxes etc. There are a number of things a government can do to cover the difference: Most governments opt for selling bonds. The "National Debt" of a country can be thought of as being the sum of all the "Bonds" that are still paying interest, and that the Government hasn't Redeemed. It can all go horribly wrong. If the Government gets into a situation where it cannot pay the interest, or it cannot Redeem the Bonds it has promised to, then it may have to break its promise ("Default" on its payments). This makes the owners of the Bonds unhappy and means potential buyers of future Bond sales are less likely to want to buy the Governments new Bonds - effectively meaning the Government has to promise to pay more interest in the future. Recent examples of this include Argentina; and may include Greece soon. The US is in the fortunate position that not many people believe it will Default. Therefore the new Bonds it sells (which it does on a regular basis) are still in demand, even though its interest payments, and promises to Redeem Bonds are huge.
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Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building?
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Historically, Banks are mandated to take relatively safe risks with their money. In exchange, they gain a de-facto permission to invent new money. They have regulations about what mix of assets they are permitted to own. Real estate speculation will be in a different category than a mortgage to someone with good credit. Second, mortgages with a secured asset are pretty safe almost all of the time. That person might stop paying their mortgage, but it is secured; when that happens, the bank gets the secured asset (the right-to-apartment or house or what have you). In a sense, the bank loses only if both the person paying the mortgage is less creditworthy than they look, and the secured asset cannot recoup their losses. In comparison, the person paying the mortgage loses if the secured asset cannot recoup their losses. The bank is buffered from risk two fold. What more, the bank uses the customer to determine what to invest in. Deciding what to do with money is expensive and hard. By both having a customer willing to put their good credit on the line and doing due diligence on the apartment, the Bank in effect uses you as a consultant who decides this may be a solid investment. Much of the risk of failure is on you, so you have lots of incentive to make a good choice. If the Bank was instead deciding which apartment where worth buying, who would decide? A bank employee, whose bonus this year depends on finding a "great apartment to invest in?", but the consequence of a bad choice doesn't show up for many years? The people selling the bank the apartments? Such a business can exist. There are real estate companies that take money, and invest it in real estate. Often the borrow money from Banks secured against their existing real estate and use it to build more real estate. (Notice the bit about it being secured against existing real estate; things go south, Bank gets stuff). The Bank's indirect investment in that apartment in the current system is covered by appraisals, the seller, the mortgage holder, and the system deciding that the mortgage holder is creditworthy. Banks sell risk. They lend you money, you go off and do something risky with it, and they get a the low-risk return on investment of your loan. Multiple such low-risk investments provides them with a relatively dependable stream of money, which they give out to their bondholders, deposit account customers, shareholders or what have you. When you take a mortgage out for that, you are buying risk from the bank. You are more exposed to the failure of the investment than they are. They get less return if things go really well.
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How to exclude stock from mutual fund
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Chris - you realize that when you buy a stock, the seller gets the money, not the company itself, unless of course, you bought IPO shares. And the amount you'd own would be such a small portion of the company, they don't know you exist. As far as morals go, if you wish to avoid certain stocks for this reason, look at the Socially Responsible funds that are out there. There are also funds that are targeted to certain religions and avoid alcohol and tobacco. The other choice is to invest in individual stocks which for the small investor is very tough and expensive. You'll spend more money to avoid the shares than these very shares are worth. Your proposal is interesting but impractical. In a portfolio of say $100K in the S&P, the bottom 400 stocks are disproportionately smaller amounts of money in those shares than the top 100. So we're talking $100 or less. You'd need to short 2 or 3 shares. Even at $1M in that fund, 20-30 shares shorted is pretty silly, no offense. Why not 'do the math' and during the year you purchase the fund, donate the amount you own in the "bad" companies to charity. And what littleadv said - that too.
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Buying a building with two flats, can I rent one out and still get a residential mortgage?
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The simple answer is to get a residential mortgage first, and once you have secured the loan, do whatever you want. The bank only cares about what risk they are taking on the day of closing and won't care afterwards so long as you pay the mortgage on time. Residential mortgages are going to give you better rates than rentals, generally.
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Where to find site with earnings calendar?
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Google finance will allow you to import earnings report dates directly to your Google calendar. See screenshot with calendar import button circled in red below.
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Self-directed RRSP into mortgage investment
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The Globe and Mail has an interesting article on what you can do with your RRSPs. Be aware that the article is from early 2011 and rules change. They describe holding your own mortgage inside your RRSP. That is, if you have $100,000 inside your RRSP already and your remaining mortgage is $100,000, you can use that money to pay off your mortgage, then pay back the money at interest, generating a tax-deferred profit inside your RRSP. That approach may be viable, though you'd want to talk to your accountant first. I'd be very cautious about loaning money to someone else for a second mortgage using my RRSP, though. Second mortgages are inherently risky, so this is a very speculative investment. Once you make an RRSP contribution, that space is used up (barring a couple of exceptions such as the life-long learning plan). So, let's say you used $100,000 of your RRSP to loan to someone for a second mortgage. Any interest payments should be sheltered inside the RRSP (substantial benefit), but if the person defaults on the second mortgage (which you should expect to be a significant possibility), you've lost your entire $100,000 contribution room (as well as, obviously, the $100,000 that you loaned out). I can't tell you whether or not it makes sense to invest in risky second-mortgage loans and I can't tell you whether, if you choose to do so, it definitely should be done inside an RRSP. There are substantial risks in the loan and there are both costs and benefits to doing so inside an RRSP. Hopefully, though, I've helped you understand the questions you should be asking yourself.
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Can a custodian refuse prior-year IRA/HSA deposit postmarked April 15?
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The "must be postmarked" language might be just from the old bank itself, not from the IRS. The language I see in Publication 969 only says "You can make contributions to your HSA for 2014 until April 15, 2015." In this case, it is understandable that the credit union you have the new account with does not want to accept the contribution for tax year 2014. You didn't have an account with them in 2014. You didn't even send out the paperwork to them to open the account until last week, and they didn't open your account until this week, after the deadline. It is unfortunate, but I don't think you'll be able to force them to do anything differently here. It is just too late. I do know how that feels. I had a somewhat similar circumstance with my HSA, the first year I had the account. I contributed money to the HSA using my credit union's website, transferring money from my checking account into my HSA, as I was told to do. In January and February of the following year, I made more contributions this way, thinking that I was making them for the previous tax year. However, they never got coded correctly by the credit union, and I later found out that the credit union counted those as contributions for the current year. As a result, I was essentially denied the full contribution limit for that year, and had a bit of a paperwork nightmare. Now, if I have to make a prior year contribution, I only make it in person, and they have a form they have me fill out each time I do.
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Margin when entered into a derivative contract
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The most obvious use of a collateral is as a risk buffer. Just as when you borrow money to buy a house and the bank uses the house as a collateral, so when people borrow money to loan financial instruments (or as is more accurate, gain leverage) the lender keeps a percentage of that (or an equivalent instrument) as a collateral. In the event that the borrower falls short of margin requirements, brokers (in most cases) have the right to sell that collateral and mitigate the risk. Derivatives contracts, like any other financial instrument, come with their risks. And depending on their nature they may sometimes be much more riskier than their underlying instruments. For example, while a common stock's main risk comes from the movements in its price (which may itself result from many other macro/micro-economic factors), an option in that common stock faces risks from those factors plus the volatility of the stock's price. To cover this risk, lenders apply much higher haircuts when lending against these derivatives. In many cases, depending upon the notional exposure of the derivative, that actual dollar amount of the collateral may be more than the face value or the market value of the derivatives contract. Usually, this collateral is deposited not as the derivatives contract itself but rather as the underlying financial instrument (an equity in case of an option, a bond in case of a CDS, and so on). This allows the lender to offset the risk by executing a trade on that collateral itself.
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What part of buying a house would make my net worth go down?
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Cosigning a loan for someone else will make net worth decrease, whether backed by security or not.
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For a mortgage down-payment, what percentage is sensible?
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In Australia, you will typically be required to pay for mortgage insurance if you borrow more than 80% of the value of the property. Basically this means another ~1% on top of the regular interest rate. So it's in your interests to save until you can at least reach that point. If you can't rent and save at the same time, it suggests your finances may be too stretched for buying now to be a good idea.
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What are some good books for learning stocks, bonds, derivatives e.t.c for beginner with a math background?
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My personal favorites are Options, Futures, and Other Derivatives by John C Hull Thinking Fast and Slow - Daniel Kahneman Expected Returns - Antti Ilmanen [check out the video : How to Think About Expected Returns] It is a 600 page book … A summary of it: Without a rational expectation of expected returns, investing can lead to severe disappointment and disillusionment. Making a good model to forecast expected returns is so difficult. Near-term expectation is almost impossible. The key is very very much about focusing on the long-term, and on getting returns that are feasible, not outlandish. There are three pillars that are central: Practically, the work of an investment manager today involves finding many different sources of returns, and diversifying effectively between them, and finally being humble about what returns we can expect today.
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Why do stores and manufacturers use mail in rebates? A scam, or is there a way to use them effectively?
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Some notable percentage of buyers won't even try to do the rebate, or will forget - so it's a [relatively] cheap incentive to the consumer than most will miss out on.
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Are there contracts for fixed pay vs. fixed pay rates?
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In general the other party will expect you to keep your promises. If you promise to do something for a fixed amount of money, you take on a risk and it is no longer their problem if you work slower than you planned. In principle it could even be the case that you take on a project and fail, after which the company may not have to pay at all. So regardless of how things should be written in your books (For example a theoretical pay above minimum wage but a loss for your private company): An important thing to note is that if you are worried about ending up below minimum wage, you are definitely asking a fee that is too low. You should keep in mind that your fee should include a fair compensation for the expected work, and a fair compensation for the risk that you have taken on.
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Is inflation a good or bad thing? Why do governments want some inflation?
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Inflation is an increase in the money supply. Increases in consumer prices follow from inflation. It's not the same as inflation. Some inflation is necessary for a growing economy. If your gross national product is only $1,000, then you can get away with having less money than if your gross national product is $1 trillion. Inflation beyond this, though, is used to allow governments to live beyond their means. If there is more money chasing the same amount of goods, prices will rise. There is truth in what azcoastal says about this kind of inflation. It's theft. Governments like inflation because it allows them to pay off their debts with cheaper money.
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Stock valuation - Volkswagen
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The primary reason a scandal like this hurts the company is the "bottom line." Any legal action means defense costs. In this case the potential of massive fines became reality. And a buyback program. So, if any publicly traded company stacked up $10B in assets, doused it in diesel and set it on fire, their stock would take a dip too. Billions in revenue directed to the expense side of the ledger instead of the profit side. That money should have gone to building the company and dividends.
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Online tutorials for calculating DCF (Discounted Cash Flow)?
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Here's a link to an online calculator employing the Discounted Cash Flow method: Discounted Cash Flows Calculator. Description: This calculator finds the fair value of a stock investment the theoretically correct way, as the present value of future earnings. You can find company earnings via the box below. [...] They also provide a link to the following relevant article: Investment Valuation: A Little Theory. Excerpt: A company is valuable to stockholders for the same reason that a bond is valuable to bondholders: both are expected to generate cash for years into the future. Company profits are more volatile than bond coupons, but as an investor your task is the same in both cases: make a reasonable prediction about future earnings, and then "discount" them by calculating how much they are worth today. (And then you don't buy unless you can get a purchase price that's less than the sum of these present values, to make sure ownership will be worth the headache.) [...]
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Comparing the present value of total payment today and partial payments over 3 months
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What's the present value of using the payment plan? In all common sense the present value of a loan is the value that you can pay in the present to avoid taking a loan, which in this case is the lump sum payment of $2495. That rather supposes the question is a trick, providing irrelevant information about the stock market. However, if some strange interpretation is required which ignores the lump sum and wants to know how much you need in the present to pay the loan while being able to make 8% on the stock market that can be done. I will initially assume that since the lender's APR works out about 9.6% per month that the 8% from the stock market is also per month, but will also calculate for 8% annual effective and an 8% annual nominal rate. The calculation If you have $x in hand (present value) and it is exactly enough to take the loan while investing in the stock market, the value in successive months is $x plus the market return less the loan payment. In the third month the loan is paid down so the balance is zero. I.e. So the present value of using the payment plan while investing is $2569.37. You would need $2569.37 to cover the loan while investing, which is more than the $2495 lump sum payment requires. Therefore, it would be advisable to make the lump sum payment because it is less expensive: If you have $2569.37 in hand it would be best to pay the lump sum and invest the remaining $74.37 in the stock market. Otherwise you invest $2569.37 (initially), pay the loan and end up with $0 in three months. One might ask, what rate of return would the stock market need to yield to make it worth taking the loan? The APR proposed by the loan can be calculated. The present value of a loan is equal to the sum of the payments discounted to present value. I.e. with ∴ by induction So by comparing the $2495 lump sum payment with $997 over 3 x monthly instalments the interest rate implied by the loan can be found. Solving for r If you could obtain 9.64431% per month on the stock market the $x cash in hand required would be calculated by This is equal to the lump sum payment, so the calculated interest is comparable to the stock market rate of return. If you could gain more than 9.64431% per month on the stock market it would be better to invest and take the loan. Recurrence Form Solving the recurrence form shows the calculation is equivalent to the loan formula, e.g. becomes v[m + 1] = (1 + y) v[m] - p where v[0] = pv where In the final month v[final] = 0, i.e. when m = 3 Compare with the earlier loan formula: s = (d - d (1 + r)^-n) / r They are exactly equivalent, which is quite interesting, (because it wasn't immediately obvious to me that what the lender charges is the mirror opposite of what you gain by investing). The present value can be now be calculated using the formula. Still assuming the 8% stock market return is per month. If the stock market yield is 8% per annum effective rate and if it is given as a nominal annual yield, 8% compounded monthly
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3-year horizon before trading up to next home: put windfall in savings, or pay off mortgage?
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First, I would want cash around the time I made the move. I would like enough for a 20% down payment, moving expenses, and enough for 6 months of mortgage payments on the existing house. This way if the house does not sell quickly, you are safe. As you approach the time it comes to move, you can work backwards on how much time you would need to accumulate that kind of money. Second, this does not have to be an all or nothing kind of thing. Perhaps you use some of the proceeds to beef up your retirement, some to pay down the mortgage, and some for savings. You could be very wrong about the market, even so it is a wonderful opportunity to add to your nest egg at such a young age. My own self prefers to do things in ratios. In your case I might do 10% of the proceeds in for retirement, 10% for savings, and 80% for mortgage reduction. (You may want to also add some charitable giving.) I really like paying down the mortgage. Not only is it a risk less investment, it reduces your personal risk.
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Can saving/investing 15% of your income starting age 25, likely make you a millionaire?
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Yes, quite easily, in fact. You left a lot of numbers out, so lets start with some assumptions. If you are at the median of middle income families in the US that might mean $70,000/year. 15% of that is an investment of $875 per month. If you invest that amount monthly and assume a 6% return, then you will have a million dollars at approximately 57 years old. 6% is a very conservative number, and as Ben Miller points out, the S&P 500 has historically returned closer to 11%. If you assumed an aggressive 9% return, and continued with that $875/month for 40 years until you turn 65, that becomes $4 million. Start with a much more conservative $9/hr for $18,720 per year (40 hours * 52 weeks, no overtime). If that person saved 14% of his/her income or about $219 per month from 25 to 65 years old with the same 9%, they would still achieve $1 million for retirement. Is it much harder for a poor person? Certainly, but hopefully these numbers illustrate that it is better to save and invest even a small amount if that's all that can be done. High income earners have the most to gain if they save and the most to lose if they don't. Let's just assume an even $100,000/year salary and modest 401(k) match of 3%. Even married filing jointly a good portion of that salary is going to be taxed at the 25% rate. If single you'll be hitting the 28% income tax rate. If you can max out the $18,000 (2017) contribution limit and get an additional $3,000 from an employer match (for a total monthly contribution of $1750) 40 years of contributions would become $8.2 million with the 9% rate of return. If you withdrew that money at 4% per year you would have a residual income of $300k throughout your retirement.
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Pay off entire mortgage or put into investments
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At the moment the interest rate... implies a variable rate mortgage. I believe rates are only going to go up from here. So, if I were in your position, I would pay off the mortgage first. If you don't have 3-6 months in savings for an emergency, I would invest that much money in low risk investments. Anything remaining I would invest in a balanced portfolio of mutual funds. The biggest benefit to this is the flexibility it gives you. Not being burdened by a monthly mortgage frees you up to invest. This may be in your stock portfolio each month or it may be in your community or charitable causes. You have financial margin.
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Why would anyone buy a government bond?
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Great question. There are several reasons; I'm going to list the few that I can think of off the top of my head right now. First, even if institutional bank holdings in such a term account are covered by deposit insurance (this, as well as the amount covered, varies geographically), the amount covered is generally trivial when seen in the context of bank holdings. An individual might have on the order of $1,000 - $10,000 in such an account; for a bank, that's basically chump change, and you are looking more at numbers in the millions of dollars range. Sometimes a lot more than that. For a large bank, even hundreds of millions of dollars might be a relatively small portion of their holdings. The 2011 Goldman Sachs annual report (I just pulled a big bank out of thin air, here; no affiliation with them that I know of) states that as of December 2011, their excess liquidity was 171,581 million US dollars (over 170 billion dollars), with a bottom line total assets of $923,225 million (a shade under a trillion dollars) book value. Good luck finding a bank that will pay you 4% interest on even a fraction of such an amount. GS' income before tax in 2011 was a shade under 6.2 billion dollars; 4% on 170 billion dollars is 6.8 billion dollars. That is, the interest payments at such a rate on their excess liquidity alone would have cost more than they themselves made in the entire year, which is completely unsustainable. Government bonds are as guaranteed as deposit-insurance-covered bank accounts (it'll be the government that steps in and pays the guaranteed amount, quite possibly issuing bonds to cover the cost), but (assuming the country does not default on its debt, which happens from time to time) you will get back the entire amount plus interest. For a deposit-insured bank account of any kind, you are only guaranteed (to the extent that one can guarantee anything) the maximum amount in the country's bank deposit insurance; I believe in most countries, this is at best on the order of $100,000. If the bank where the money is kept goes bankrupt, for holdings on the order of what banks deal with, you would be extremely lucky to recover even a few percent of the principal. Government bonds are also generally accepted as collateral for the bank's own loans, which can make a difference when you need to raise more money in short order because a large customer decided to withdraw a big pile of cash from their account, maybe to buy stocks or bonds themselves. Government bonds are generally liquid. That is, they aren't just issued by the government, held to maturity while paying interest, and then returned (electronically, these days) in return for their face value in cash. Government bonds are bought and sold on the "secondary market" as well, where they are traded in very much the same way as public company stocks. If banks started simply depositing money with each other, all else aside, then what would happen? Keep in mind that the interest rate is basically the price of money. Supply-and-demand would dictate that if you get a huge inflow of capital, you can lower the interest rate paid on that capital. Banks don't pay high interest (and certainly wouldn't do so to each other) because of their intristic good will; they pay high interest because they cannot secure capital funding at lower rates. This is a large reason why the large banks will generally pay much lower interest rates than smaller niche banks; the larger banks are seen as more reliable in the bond market, so are able to get funding more cheaply by issuing bonds. Individuals will often buy bonds for the perceived safety. Depending on how much money you are dealing with (sold a large house recently?) it is quite possible even for individuals to hit the ceiling on deposit insurance, and for any of a number of reasons they might not feel comfortable putting the money in the stock market. Buying government bonds then becomes a relatively attractive option -- you get a slightly lower return than you might be able to get in a high-interest savings account, but you are virtually guaranteed return of the entire principal if the bond is held to maturity. On the other hand, it might not be the case that you will get the entire principal back if the bank paying the high interest gets into financial trouble or even bankruptcy. Some people have personal or systemic objections toward banks, limiting their willingness to deposit large amounts of money with them. And of course in some cases, such as for example retirement savings, it might not even be possible to simply stash the money in a savings account, in which case bonds of some kind is your only option if you want a purely interest-bearing investment.
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If a employers supposed to calulate drive time pay with your weekly gross pay
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You're getting paid by the job, not by the hour, so I don't see why you think the employer is obligated to pay you for the drive time. The only way that might be true, as far as I can see, is if he were avoiding paying you minimum wage by structuring your employment this way. It looks like to me you're over the minimum wage based on what you wrote. At maximum "unpaid" drive time (59 min each way) and maximum length of job (4 hours as you stated it), gives your minimum hourly rate of $8.83/hr. The federal minimum wage is currently $7.25/hr, so you're over that. A quick search online suggests that NV does have a higher minimum at $8.25/hr under some conditions, but you're still over that too. The fact that you're required to pick-up the helpers and that you have a company car at home probably does mean that you're "on the clock" from the moment that you leave your house, but, again, you're not actually being paid by the clock. As long as no other law is being broken (and it appears from your telling that there isn't), then the employer can set any policy for how to compute the compensation that he wants. Regarding taxes, the employer probably has no discretion there. You're making what you're making, and the employer needs to tax it in total. Since you're driving a company vehicle from home, I don't think that you're entitled to any reimbursement (vs. wages) that would not be taxed unless maybe you pay for gas yourself. The gas money, if applicable, should be reimbursable as a business expense and that generally would not be taxed.
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Invest in low cost small cap index funds when saving towards retirement?
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I think you're on the right track with that strategy. If you want to learn more about this strategy, I'd recommend "The Intelligent Asset Allocator" by William Bernstein. As for the Über–Tuber portfolio you linked to, my only concern would be that it is diversified in everything except for the short-term bond component, which is 40%. It might be worth looking at some portfolios that have more than one bond allocation -- possibly diversifying more across corporate vs government, and intermediate vs short term. Even the Cheapskate's portfolio located immediately above the Über–Tuber has 20% Corporate and 20% Government. Also note that they mention: Because it includes so many funds, it would be expensive and unwieldy for an account less than $100,000. Regarding your question about the disadvantages of an index-fund-based asset allocation strategy:
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Is there an investment account where I can owe taxes only if the net of capital gain and dividend payment is positive?
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Income and Capital are taxed separately in the uk. You probably can't get dividends paid gross even in ISA's you pay the basic rate of tax on dividends only higher rate tax payers get tax benefit from dividends. What you could do is invest in splits (Spilt capital investment trusts ) in the share class where all the return comes as capital and use up some of your yearly CGT allowance that way.
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Good book-keeping software?
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You should consider Turbocash. It's a mature open-source project, installed locally (thick client).
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Generally Accepted Accounting Principles question
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You recognize expense when you sell the hot dog. When you pay for the buns you have inventory, which is an asset. When you sell the hot dog - you have cost of goods sold, which is the expense. Expense principle says that you recognize expense when you use the product. You use the buns when you actually sell the hot dog, not before. The matching principle is also honored because you recognize expense of the buns at the time of recognizing revenue of the hot dog.
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Recommendation for learning fundamental analysis?
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Below is just a little information on this topic from my small unique book "The small stock trader": The most significant non-company-specific factor affecting stock price is the market sentiment, while the most significant company-specific factor is the earning power of the company. Perhaps it would be safe to say that technical analysis is more related to psychology/emotions, while fundamental analysis is more related to reason – that is why it is said that fundamental analysis tells you what to trade and technical analysis tells you when to trade. Thus, many stock traders use technical analysis as a timing tool for their entry and exit points. Technical analysis is more suitable for short-term trading and works best with large caps, for stock prices of large caps are more correlated with the general market, while small caps are more affected by company-specific news and speculation…: Perhaps small stock traders should not waste a lot of time on fundamental analysis; avoid overanalyzing the financial position, market position, and management of the focus companies. It is difficult to make wise trading decisions based only on fundamental analysis (company-specific news accounts for only about 25 percent of stock price fluctuations). There are only a few important figures and ratios to look at, such as: perhaps also: Furthermore, single ratios and figures do not tell much, so it is wise to use a few ratios and figures in combination. You should look at their trends and also compare them with the company’s main competitors and the industry average. Preferably, you want to see trend improvements in these above-mentioned figures and ratios, or at least some stability when the times are tough. Despite all the exotic names found in technical analysis, simply put, it is the study of supply and demand for the stock, in order to predict and follow the trend. Many stock traders claim stock price just represents the current supply and demand for that stock and moves to the greater side of the forces of supply and demand. If you focus on a few simple small caps, perhaps you should just use the basic principles of technical analysis, such as: I have no doubt that there are different ways to make money in the stock market. Some may succeed purely on the basis of technical analysis, some purely due to fundamental analysis, and others from a combination of these two like most of the great stock traders have done (Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, William O’Neil, and Steven Cohen). It is just a matter of finding out what best fits your personality. I hope the above little information from my small unique book was a little helpful! Mika (author of "The small stock trader")
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Compute average price even if I do not have the prices before
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What I do have is this (sample only): Stock X: Average Price of all I purchased before = 80 Total Shares = 200 So if Stock X's price today is 100 how do I know how much my average price will be? Using your sample if you buy 100 new shares and the price is 85 for the purpose of this example your previous total cost is $16,000 ($80 average cost * 200 shares). With the new example you are adding $8500 to your total cost (100 new shares * $85 example cost per share) that gives us a total cost of $24,500 and 300 shares. $24,500/300 gives us an average cost of $81.67 per share. As long as you have the average cost and the number of shares you can calculate a new average without knowing what the price was for each transaction. It may still become important to find the price information for tax purposes if you do not sell all of those shares at once and use FIFO for your taxes.
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What are the best software tools for personal finance?
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For iPhone: iExpenseIt
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Should I invest my money in an ISA or Government bonds? (Or any other suggestion)
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There are a number of UK banks that offer what passes for reasonable interest on an amount of cash held in their current accounts. I would suggest that you look into these. In the UK the first £1000 of bank or building society interest is paid tax-free for basic rate taxpayers (£500 for higher rate tax-payers) so if your interest income is below these levels then there is no point in investing in a cash ISA as the interest rate is often lower. At the moment Santander-123 bank account pays 1.5% on up to £20000 and Nationwide do 5% on up to £2500. A good source if information on the latest deals is Martin Lewis' Moneysaving Expert Website
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Peer to Peer Lending Small notes Vs Large Notes
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I started with lending club about a year ago. I love it. It has been insightful. Off topic, but I am in a loan to a guy who make 120K a year and is regularly late and has a pretty high interest rate. Crazy. You gain some economies of scale by going with a bigger note. I have $100 notes that I get hit for 2 or 3 cents for a fee, where $25 notes are always a penny. However, I don't think that should be your deciding factor. I scale my note purchases based on how much I like the status of the borrower. For example, I did $100 (which is currently my max) for a guy with a reasonable loan amount 16K, a stable work history (15+ years), a great credit history, and a great interest rate (16.9%). If one of those things were a bit out of "whack". I might go $50, two $25. I prefer 36 month notes, really 5 years to get out of debt? It is unlikely to happen IMHO. Keep in mind that if you invest $100 in a loan, then you get one $100 note. You can't break them up into 4 $25 notes. For that reason, if you are likely to want to sell the note prematurely, keep it at $25. The market is greater. I've had a lot of success using the trading account, buying further discounted notes for people who want out of lending club, or get spooked by a couple of late payments and a change in billing date. Another advantage of using the trading account is you start earning interest day 1. I've had new notes take a couple of weeks to go through. To summarize: There are some other things, but that is the main stuff I look at.
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Will there always be somebody selling/buying in every stock?
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When there are no buyers, you can't sell your shares, and you'll be stuck with them until there is some interest from other investors. In this link describes clearly: http://www.investopedia.com/ask/answers/03/053003.asp
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How do you find reasonably priced, quality, long lasting clothing?
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Use resources like Consumer Reports and recommendations from like-minded friends to figure out brands which have a reputation for making quality clothes. Then trust, but verify. Ideally have a friend who sews a lot go with you on a clothing expedition if you don't know how to determine quality in clothing. People who sew knew their fabrics, and this could be very helpful to you. Start at places that are known for quality clothing, but make sure the reputation hasn't outlived reality. I'd look for: Once you've identified places that you can trust, wait for sales at those stores. I've found that shopping sales at department stores (or better, places like L. L. Bean) is cheaper than a discount retailer and much easier. Even cheaper, go to a thrift store and look for those brands in timeless styles. Your mileage will vary in terms of the what people throw out in your area. Thrift stores work extremely well in high cost of living areas where people give away nearly new items.
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How common are stock/scrip dividends (as opposed to cash dividends) in US equity markets?
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Check out the NASDAQ and NYSE websites(the exchange in which the stock is listed) for detailed information. Most of the websites which collate dividend payments generally have cash payments history only e.g. Dividata. And because a company has given stock dividends in the past doesn't guarantee such in the future, I believe you already know that.
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Is there a country that uses the term “dollar” for currency without also using “cents” as fractional monetary units?
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Going through the list of economies that currently use the dollar, all of them list cents as a fractional unit. In Hong Kong and Taiwan, the 1/100 fractional unit is still called a cent, but it's no longer in circulation in coin form and only finds use in financial markets or electronic payments. In countries like Malaysia, the word "sen" is used as the translation of the word "cent", even though the word for the actual currency, "ringgit", isn't a translation of the word "dollar". A similar situation occurs in Panama. The local currency is called the balboa, and it's priced on par (1:1) with the US dollar. US banknotes are also accepted as legal tender, and Panamanians sometimes use the terms balboa/dollar interchangeably. The 1/100 subdivision of the balboa is the centésimo, which is merely a translation of cent. Like Malaysia, the fractional unit is called "cent" (or a translation) but the main unit isn't merely a translation of the word "dollar." On a historical note, the Spanish Dollar was subdivided into 8 reales in order to match the German thaler (the word that forms the basis for the English word "dollar").
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Should one only pursue a growth investing approach for Roth IRAs
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If you are inside of a ROTH IRA you are not getting taxed on any gain. Dividends, distributions, interest payment, or capital gains are never taxed. This, of course, assumes you wait until age 59.5 to do ROTH withdrawals on your gains.
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gift is taxable but is “loan” or “debt” taxable?
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If you are looking to transfer money to another person in the US, you can do do with no tax consequence. The current annual gift limit is $14k per year per person, so for example, my wife and I can gift $56k to another couple with no tax and no forms. For larger amounts, there is a lifetime exclusion that taps into your $5M+ estate tax. It requires submitting a form 709, but just paperwork, no tax would be due. This is the simplest way to gift a large sum and not have any convoluted tracking or structured loan with annual forgiveness. One form and done. (If the sum is well over $5M you should consider a professional to guide you, not a Q&A board)
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How risky are penny stocks?
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Consider firstly that they're penny stocks for a reason - the company just isn't worth much. Yes, it could take off but this happenstance is rarer than you think. Next, there is the problem of how you'd find out what the good stocks to invest in are. Here in the UK, reliable news about stocks outside the FTSE indexes (AIM) is hard to come by. Also consider than there isn't the supply and demand for these stocks in the same way as there is in the main indexes. Even if you were to make a tidy profit over time, you might lose what you made in the delay selling the stock. Start-ups also have the problem of poor cash reserves so new employees are often given stock options in lieu of cash which further depresses the share price. I read a report once that said that only 1 in 10 penny shares yields a worthwhile return. I just don't like these odds so I tend to avoid.
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How to acquire assets without buying them?
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Assets can be acquired in different ways and for different purposes. I will only address common legal ways of acquiring assets. You can trade one asset for another asset. This usually takes place in the form of trading cash or a cash equivalent for an asset. The asset received should be of equal or greater value than the asset given in the eyes of the purchaser in order for the trade to be rational. Take this example: I am selling a bike that has been sitting on my porch for a few months. It's worth about $25 to me. My friend, Andy, comes by and offers $90 for it. I happily accept. Andy valued the bike at $110. This transaction produced value for both parties. I had a value benefit of $65 (90 - 25) and Andy had a value benefit of $20 (110 - 90). You can receive an asset as a gift or an inheritance. Less common, but still frequent. Someone gives you a gift or a family member dies and you receive an asset you did not own previously. You can receive an asset in exchange for a liability. When you take out a loan, you receive an asset (cash) which is financed by a liability (loan payable). In your case: Why would I buy a mall if having assets worth the same amount as the mall? I must value the mall more than the assets I currently have. This may stem from the possibility of greater future returns than I am currently making on my asset, or, if I financed the purchase with a liability, greater future returns than the cost associated with payment on the principal and interest of the liability.
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What are some sources of information on dividend schedules and amounts?
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I second the Yahoo! Finance key stats suggestion, but I like Morningstar even better: http://quote.morningstar.com/stock/s.aspx?t=roic They show projected yield, based on the most recent dividend; the declared and ex-dividend dates, and the declared amount; and a table of the last handful of dividend payments. Back to Yahoo, if you want to see the whole dividend history, select Historical Prices, and from there, select Dividends Only. http://finance.yahoo.com/q/hp?s=ROIC&a=10&b=3&c=2009&d=00&e=4&f=2012&g=v
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Can I buy only 4 shares of a company?
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Open an account with a US discount online broker, or with a European broker with access to the US market. I think ETRADE allow non-resident accounts, for instance, amongst others. The brokerage will be about $10, and there is no annual fee. (So you're ~1% down out of the gate, but that's not so much.) Brokers may have a minimum transaction value but very few exchanges care about the number of shares anymore, and there is no per-share fee. As lecrank notes, putting all your savings into a single company is not prudent, but having a flutter with fun money on Apple is harmless. Paul is correct that dividend cheques may be a slight problem for non-residents. Apple don't pay dividends so there's no problem in this specific case. More generally your broker will give you a cash account into which the dividends can go. You may have to deal with US tax which is more of an annoyance than a cost.
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What is the P/E ratio for a company with negative earnings?
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When presenting negative P/E values, most brokers and equity analysts show them as "n.m.", which stands for not meaningful. I have never seen a P/E ratio of 0.
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Why are options created?
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The main reason is that you move from the linear payoff structure to a non-linear one. This is called convexity in finance. With options you can design a payoff structure in almost any way to want it to be. For example you can say that you only want the upside but not the downside, so you buy a call option. It is obvious that this comes at a price, the option premium. Or equivalently you buy the underlying and for risk management reasons buy a put option on top of it as an insurance. The price of the put could be seen as the insurance premium. You can of course combine options in more complicated ways so that you e.g. profit as long as the underlying moves strongly enough in either direction. This is called a straddle.
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What to do with $50,000?
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Considered a down payment on a house? Some illiquid assets? Otherwise you are doing 'responsible' get rich slow (read: get rich old) type things. And this question only invites opinion based answer. You tried futures and don't want to take that kind of risk again with your $50,000, so thats that
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Previous owner of my home wants to buy it back but the property's value is less than my loan… what to do?
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I would not trust Zillow for an appraisal. The numbers I see on there vary a lot from real prices. I'm not sure I'd get a full appraisal either, as that means you "know" the value of the house and may be obliged to reveal it. I'd ask for the loan amount and see what the previous owner says.
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Total gain of portfolio including sold stocks?
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You could create your own spreadsheet of Cash Flows and use the XIRR function in Excel: The formula is:
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Loan to S-Corp cannot be paid back, how to deduct from personal taxes?
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Once the business is shut down, you'll need to show that the corporation is in bankruptcy and the amounts are unrecoverable. You can then report it as investment loss. I suggest talking to a tax adviser (EA/CPA licensed in your State), and maybe an attorney, on what the specific technical details are.
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Making a big purchase over $2500. I have the money to cover it. Should I get a loan or just place it on credit?
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It is going to save you more money in the long run to pay at once with cash. If you take out a loan, you will pay interest on the balance, costing you money. If you pay off the balance immediately, there is no difference between the options and your question becomes irrelevant. There is no credit rating benefit to placing large purchases on your cards, especially since your credit is fine. My advice is to pay in cash in this case, mostly because it makes you 'feel' the purchase. This is what you are describing in your question. This instinct helps you recognize potential problems, instead of masking them with debt. Questions like: "Do I need this?" "Am I overextending myself financially with this purchase?" "Am I holding enough cash-on-hand for emergencies?" You may be fine in these areas, but I would still argue that cash makes you a better buyer because the expense feels much more significant, making you more cautious and discerning. You are right to feel these things before dropping a large sum of money. Let it inform you and help you make better decisions. Don't mask it or be paralyzed by it!
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When does it make sense for the money paid for equity to go to the corporation?
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If Jack owns all of the one million founding shares (which I assume you meant), and wants to transfer 250,000 shares to Venturo, then he is just personally selling shares to Venturo and the corporation gains nothing. If Jack does not own all of the founding shares, and the corporation had retained some, then the corporate shares could be sold to raise cash for the corporation. Usually in situations like this, the corporation will create more shares, diluting existing shareholders, and then sell the new shares on the open market to raise cash.
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How can I buy government bonds from foreign countries?
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Significantly less effort to buy into any of several international bond index funds. Off the top of my head, VTIBX.
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Most Efficient Way to Transfer Money from Israel to the USA?
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Check with stock brokers. Some of them will offer ILS->USD conversion at a very beneficial rate (very close to the official), without any commission, and flat-priced wire transfers. For large amounts this is perfect. I know for a fact that Gaon Trade used to do that ($15 for a wire transfer of any amount), but they are now defunct... Check with Meitav (their successor) and others if they still do these things. If you're talking about relatively small amounts (up to several thousands $$$) - you may be better off withdrawing cash or using your credit card in the US. For mid range (up to $50K give or take, depending on your shopping and bargaining skills) banks may be cheaper. A quick note about what jamesqf has mentioned in his answer... You probably don't want to tell your banker that you're moving to the US. Some people reported banks freezing their accounts and demanding US tax info to unfreeze, something that you're not required to provide according to the Israeli law. So just don't tell them. In the US you'll need to report your Israeli bank/trading/pension/educational/savings/insurance accounts on FBAR and FATCA forms when you're doing your taxes.
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Stock exchanges open on Saturday
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According to Wikipedia as well as this stock market trading-hours website, the Tehran Stock Exchange is open Saturday through Wednesday.
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Couch Potato Portfolio for Europeans?
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The question is asking for a European equivalent of the so-called "Couch Potato" portfolio. "Couch Potato" portfolio is defined by the two URLs provided in question as, Criteria for fund composition Fixed-income: Regardless of country or supra-national market, the fixed-income fund should have holdings throughout the entire length of the yield curve (most available maturities), as well as being a mix of government, municipal (general obligation), corporate and high-yield bonds. Equity: The common equity position should be in one equity market index fund. It shouldn't be a DAX-30 or CAC-40 or DJIA type fund. Instead, you want a combination of growth and value companies. The fund should have as many holdings as possible, while avoiding too much expense due to transaction costs. You can determine how much is too much by comparing candidate funds with those that are only investing in highly liquid, large company stocks. Why it is easier for U.S. and Canadian couch potatoes It will be easier to find two good funds, at lower cost, if one is investing in a country with sizable markets and its own currency. That's why the Couch Potato strategy lends itself most naturally to the U.S.A, Canada, Japan and probably Australia, Brazil, South Korea and possibly Mexico too. In Europe, pre-EU, any of Germany, France, Spain, Italy or the Scandinavian countries would probably have worked well. The only concern would be (possibly) higher equity transactions costs and certainly larger fixed-income buy-sell spreads, due to smaller and less liquid markets other than Germany. These costs would be experienced by the portfolio manager, and passed on to you, as the investor. For the EU couch potato Remember the criteria, especially part 2, and the intent as described by the Couch Potato name, implying extremely passive investing. You want to choose two funds offered by very stable, reputable fund management companies. You will be re-balancing every six months or a year, only. That is four transactions per year, maximum. You don't need a lot of interaction with anyone, but you DO need to have the means to quickly exit both sides of the trade, should you decide, for any reason, that you need the money or that the strategy isn't right for you. I would not choose an ETF from iShares just because it is easy to do online transactions. For many investors, that is important! Here, you don't need that convenience. Instead, you need stability and an index fund with a good reputation. You should try to choose an EU based fund manager, or one in your home country, as you'll be more likely to know who is good and who isn't. Don't use Vanguard's FTSE ETF or the equivalent, as there will probably be currency and foreign tax concerns, and possibly forex risk. The couch potato strategy requires an emphasis on low fees with high quality funds and brokers (if not buying directly from the fund). As for type of fund, it would be best to choose a fund that is invested in mostly or only EU or EEU (European Economic Union) stocks, and the same for bonds. That will help minimize your transaction costs and tax liability, while allowing for the sort of broad diversity that helps buy and hold index fund investors.
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Are there any issues with registering an LLC in a foreign state?
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No, there are no issues. When you form the corp in DE, you pick a business there to serve as your "agent" (essentially someone who knows to get in contact with you). The "agent" will notify you about taxes and any mail you get, but besides the fee they charge you for being the agent, you should file all the taxes directly with DE (franchise tax is easy to file on the web) instead of going through the agent and paying a surcharge. When your LLC files taxes, you'll do so in DE and then the LLC will issue you a federal and state K1. You'll file taxes where you reside and use the federal K1, but I think you might have to file DE state taxes (unsure about this part, feel free to edit or comment and I'll correct).
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Account that is debited and account that is credited
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Credited to your account means amount has been deposited to your account(this will be your income). Debited from your account means withdrawn from your account(This will be your expense). Hope this clarifies your question. Regards Jayanthi
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Keeping our current home (second property) as a rental. Will it interfere with purchasing a third home?
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There's a couple issues to consider: When you sell your primary home, the IRS gives you a $500k exemption (married, filing jointly) on gain. If you decide not to sell your current house now, and you subsequently fall outside the ownership/use tests, then you may owe taxes on any gains when you sell the house. Rather than being concerned about your net debt, you should be concerned about your monthly debt payments. Generally speaking, you cannot have debt payments of more than 36% of your monthly income. If you can secure a renter for your current property, then you may be able to reach this ratio for your next (third) property. Also, only 75% of your expected monthly rental income is considered for calculating your 36% number. (This is not an exhaustive list of risks you expose yourself to). The largest risk is if you or your spouse find yourself without income (e.g. lost job, accident/injury, no renter), then you may be hurting to make your monthly debt payments. You will need to be confident that you can pay all your debts. A good rule that I hear is having the ability to pay 6 months worth of debt. This may not necessarily mean having 6 months worth of cash on hand, but access to that money through personal lines of credit, borrowing against assets, selling stocks/investments, etc. You also want to make sure that your insurance policies fully cover you in the event that a tenant sues you, damages property, etc. You also don't want to face a situation where you are sued because of discrimination. Hiring a property management company to take care of these things may be a good peace-of-mind.
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Why are auto leases stubbornly strict about visa status and how to work around that?
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When getting a car always start with your bank or credit union. They are very likely to offer better loan rate than the dealer. Because you start there you have a data point so you can tell if the dealer is giving you a good rate. Having the loan approved before going to the dealer allows you to negotiate the best deal for the purchase price for the car. When you are negotiating price, length of loan, down payment, and trade in it can get very confusing to determine if the deal is a good one. Sometimes you can also get a bigger rebate or discount because to the dealer you are paying cash. The general advice is that a lease for the average consumer is a bad deal. You are paying for the most expensive months, and at the end of the lease you don't have a car. With a loan you keep the car after you are done paying for it. Another reason to avoid the lease. It allows you to purchase a car that is two or three years old. These are the ones that just came off lease. I am not a car dealer, and I have never needed a work visa, but I think their concern is that there is a greater risk of you not being in the country for the entire period of the lease.
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Has anyone compared an in-person Tax Advisor to software like Turbo Tax?
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A CPA or Enrolled Agent can be helpful, especially if you have a complicated situation such as owning your own business. The people at a lot of tax-prep places don't have many qualifications (they are not accountants or enrolled agents or certified financial planners or anything else). They are just trained to enter stuff into the computer. In that case, you can measure their value according to how much you prefer talking to typing. But don't expect them to get it right if your taxes involve any judgment calls or tricky stuff. I think a good strategy is to try TurboTax (or whatever program) and if you get stuck on any of the questions, find a pro to help.
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Financially Shielded Entity Separating Individuals Behind It From Risks
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You are describing a corporation. You can set up a corporation to perform business, but if you were using the money for any personal reasons the courts could Pierce the corporate veil and hold you personally liable. Also, setting up a corporation for purely personal reasons is fraud.
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Historical company performance data
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The S&P report (aka STARS report) for each company has 10 years of financial data. These reports are available free at several online brokers (like E-Trade) if you have an account with the brokerage.
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Where I am I liable for taxes?
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You will have to pay your taxes in the UK not USA. For tax purposes it is the company's tax residency not where the server is located. You are just hiring a server in USA. Take for example a CDN being used for your same service then would you pay taxes in 300 different countries if you use Akamai? Does not work that way.
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Should I replace bonds in a passive investment strategy
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No. That's the point of a passive strategy: you maintain a more or less constant mix of assets and don't try to figure out what's going to move where.
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What do brokers do with bad stock?
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You have to consider a case where you just cannot sell it. Think of it as a bad piece of real estate in Detroit. If there are absolutely no buyers, you cannot sell it (until a buyer shows up)
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Where do I invest my Roth IRA besides stock market and mutual funds?
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In general, investors with a long period of time until they would need to withdraw the cash are best off holding mostly equities. While the dividends that equities would return are less than the interest you would get in peer-to-peer lending, over long periods of time not only do you get the dividends from equity investment but the value of the stock will grow faster than interest on loans. The higher returns from stocks, however, comes with more risk of big downturns. Many people pull their investments out of stocks right after crashes which really hurts their long term returns. So, in order to get the benefit of investing in stocks you need to be strong enough to continue to hold the stocks through the crash and into the recovery. As for which stocks to invest in, generally it is best to invest in low-fee index funds/etfs where you own a broad collection of stocks so that if (when) any one stock goes bust that your portfolio does not take much damage. Try to own both international and domestic stocks to get good diversification. The consensus recommends adding just a little bit of REITs and bonds to your investments, but for someone at 25 it might not be worth it yet. Warren Buffett had some good thoughts on index investing.
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For very high-net worth individuals, does it make sense to not have insurance?
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I think that insurance is one of the best things ever created for this reasons:
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What should I do with the stock from my Employee Stock Purchase Plan?
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Split the difference. Max it out, sell half immediately and wait a year or more for the rest. Or keep a third... whatever works for your risk tolerance. A perfectly diversified portfolio with $0 in it is still worth $0.
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ISA trading account options for US citizens living in the UK
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I am a US citizen by birth only. I left the US aged 6 weeks old and have never lived there. I am also a UK citizen but TD Waterhouse have just followed their policy and asked me to close my account under FATCA. It is a complete nightmare for dual nationals who have little or no US connection. IG.com seem to allow me to transfer my holdings so long as I steer clear of US investments. Furious with the US and would love to renounce citizenship but will have to pay $2500 or thereabouts to follow the US process. So much for Land of the Free!
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How are the best way to make and save money at 22 years old
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Fantastic question to be asking at the age of 22! A very wise man suggested to me the following with regard to your net income I've purposely not included saving a sum of money for a house deposit, as this is very much cultural and lots of EU countries have a low rate of home ownership. On the education versus entrepreneur question. I don't think these are mutually exclusive. I am a big advocate of education (I have a B.Eng) but have following working in the real world for a number of years have started an IT business in data analytics. My business partner and I saw a gap in the market and have exploited it. I continue to educate myself now in short courses on running business, data analytics and investment. My business partner did things the otherway around, starting the company first, then getting an M.Sc. Other posters have suggested that investing your money personally is a bad idea. I think it is a very good idea to take control of your own destiny and choose how you will invest your money. I would say similarly that giving your money to someone else who will sometimes lose you money and will charge you for the privilege is a bad idea. Also putting your money in a box under your bed or in the bank and receive interest that is less than inflation are bad ideas. You need to choose where to invest your money otherwise you will gain no advantage from the savings and inflation will erode your buying power. I would suggest that you educate yourself in the investment options that are available to you and those that suit you personality and life circumstances. Here are some notes on learning about stock market trading/investing if you choose to take that direction along with some books for self learning.
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Sale of jointly owned stock
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It depends on when she became the shareholder of record. When your wife received the stock, was ownership clearly transferred to her? If it was, then she should have the right to sell it if she wants. The gross amount of the sale will be reported to the IRS, and then it will be up to you (and/or your tax advisers) to determine its tax basis so that you pay tax only on the appropriate gain. If she hasn't become the shareholder of record yet, then it can be a bit of a mess. Your wife's father saying "Merry Christmas; I'm giving you 500 shares of AAPL" doesn't transfer ownership to you. Him calling up the brokerage and transferring them into an account with her name (or her name and his name) does. Is your wife's father's estate settled yet? If not, then sorting all of this out is part of the fun. If it is, and this asset was left dangling out there, then that's beyond anything I know about.
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How to account for Capital Gains (Losses) in double-entry accounting?
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Capital is an Asset. Decreasing value of capital is the decreasing value of an asset. When you buy the forex asset * DR Forex Asset * CR Cash When you sell * DR Cash * CR Forex Asset The difference is now accounted for Here is how: Gains (and losses) are modifications to your financial position (Balance sheet). At the end of the period you take your financial performance (Profit and Loss) and put it into your balance sheet under equity. Meaning that afterwards your balance sheet is better or worse off (Because you made more money = more cash or lost it, whatever). You are wanting to make an income account to reflect the forex revaluation so at the end of the period it is reflected in profit then pushed into your balance sheet. Capital gains directly affect your balance sheet because they increase/decrease your cash and your asset in the journal entry itself (When you buy and sell it). If making money this way is actually how you make you make an income it is possible to make an account for it. If you do this you periodically revalue the asset and write off the changes to the revaluation account. You would do something like *DR Asset *CR Forex Revaluation account; depending on the method you take. Businesses mostly do this because if the capital gains are their line of business they will be taxed on it like it is income. For simplicity just account for it when you buy and sell the assets (Because you as an individual will only recognise a profit/loss when you enter and exit). Its easier to think about income and expenses are extensions of equity. Income increases your equity, expenses decrease it. This is how they relate to the accounting formula (Assets = Liabilities + Owners Equity)
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Why do credit cards require a minimum annual household income?
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While you're asking about a particular bank, I'll give my opinion of this in general. I think a $12,000 household income is pretty low to be given credit. The risk to the bank is certainly higher than if the income were at that $35,000 level. They can use this to differentiate what they offer for perks, and if they ever collateralize the debt of these cards, it's a clearly defined demographic.
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Will the stock market continue to grow forever?
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The answer to your question depends on what you mean when you say "growth". If you mean a literal increase in the aggregate market capitalization of companies, across the entire market, then, no, this sort of growth is not possible without concomitant economic growth. The reason why is that the market capitalization of each company is proportional to its gross revenue, and the sum of all revenue from selling "final goods" (i.e., things purchased and used by consumers) is, apart from a few technicalities, the definition of GDP. The exact multiplier might fluctuate up or down depending on investors' expectations about how sales will grow or decline going forward, but in a zero-growth economy this multiplier should be stable over the long run. It might, however, still fluctuate over the short term, but more about that in a minute. Note that all of this applies to aggregate growth across all firms. Individual firms can still grow, of course, but as they must do this by gaining market share from other companies such growth would be balanced by a decline for some other firm. Also, I've assumed zero net exports (that's one of the "technicalities" I mentioned above) because obviously you could have export-driven growth even if the domestic economy were stationary. However, often when people talk about "growth" in the market, what they really mean is "return". That is, how much does your investment earn for you. This isn't really the same thing as growth, but people often think of it that way, particularly in the saving phase of their investing career, when they are reinvesting their returns, and therefore their account balances are growing. It is possible to have a positive return, averaged across the market, even in a stationary economy. The reason why is that there are really only two things a firm can do with its net profits. One possibility is that it could invest it in growing the business. However, there is not much point in doing that in a stationary economy because by assumption no increase in aggregate consumption (and therefore, in the long run, aggregate production) are possible. Therefore, firms are left with only the second option, which is to pay them out to investors as dividends. Those dividends provide a return that is independent of economic growth. Would the stock market still be a good investment in such an economy? Yes. Well, sort of. The rate of return from firms' dividend payouts will depend on investors' demand (in aggregate) for returns on their investments. Stock prices will rise or fall, causing returns to respectively fall or rise, to find that level. If your personal desire for returns is lower than the average across the investing public, then the stock market would look like a good investment. If your desired return is higher than the average, then it will look like a poor investment. The marginal investor will, of course be indifferent. The practical upshot of this is that the people who invest in the stock market in this scenario will be precisely the ones for whom the stock market is a good investment, given their personal propensity to save and desire for returns, and so forth. Finally, you mentioned that in your scenario the GDP stagnation is due to declining population. I am less certain what this means for investment, but my first thought is that you would have a large retired population selling its investments to fund late-life consumption, and you would have a comparatively small (relative to history) working population buying those assets. This would lead to low asset prices, and therefore high rates of return. However, that's assuming that retirees need to sell assets to fund their retirement consumption. If the absolute returns on retirees' assets are large enough to fund their retirement consumption then you would wind up with relatively few sellers, resulting in high prices and therefore relatively low rates of return. It's not obvious to me which effect would dominate, and so it's hard to say whether or not the resulting returns would look attractive to the working-age population.
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Is there anything comparable to/resembling CNN's Fear and Greed Index?
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Lipper publishes data on the flow of funds in / out of stock and bond funds: http://www.lipperusfundflows.com Robert Shiller works on stock market confidence indices that are published by Yale: http://som.yale.edu/faculty-research/our-centers-initiatives/international-center-finance/data/stock-market-confidence
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Tax advantages of using 529 plans to save for child's education?
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There are several variables to consider. Taxes, fees, returns. Taxes come in two stages. While adding money to the account you can save on state taxes, if the account is linked to your state. If you use an out of state 529 plan there is no tax savings. Keep in mind that other people (such as grandparents) can set aside money in the 529 plan. $1500 a year with 6% state taxes, saves you $90 in state taxes a year. The second place it saves you taxes is that the earnings, if they are used for educational purposes are tax free. You don't pay taxes on the gains during the 10+ years the account exists. If those expenses meet the IRS guidelines they will never be taxed. It does get tricky because you can't double dip on expenses. A dollar from the 529 plan can't be used to pay for an expenses that will be claimed as part of the education tax credit. How those rules will change in the next 18 years is unknown. Fees: They are harder to guess what will happen over the decades. As a whole 401(k) programs have had to become more transparent regarding their fees. I hope the same will be true for the state run 529 programs. Returns: One option in many (all?) plans is an automatic change in risk as the child gets closer to college. A newborn will be all stock, a high school senior will be all bonds. Many (all?) also allow you to opt out of the automatic risk shift, though they will limit the number of times you can switch the option. Time horizon Making a decision that will impact numbers 18 years from now is hard to gauge. Laws and rules may change. The existence of tax breaks and their rules are hard to predict. But one area you can consider is that if you move states you can roll over the money into a new account, or create a second account in the new state. to take advantage of the tax breaks there. There are also rules regarding transferring of funds to another person, the impact of scholarships, and attending schools like the service academies. The tax breaks at deposit are important but the returns can be significant. And the ability shelter them in the 529 is very important.
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