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Why does short selling require borrowing? | Concerning the general problem of short selling and the need to borrow shares to complete the transaction : Selling short is a cash transaction. Unlike a futures contract, where a short seller is entering into a legal agreement to sell something in the future, in the case of short selling a share the buyer of the share is taking immediate delivery and is therefore entitled to all of the benefits and rights that come with share ownership. In particular, the buyer of the shares is entitled to any dividends payable and, where applicable, to vote on motions at AGMs. If the short seller has not borrowed the shares to sell, then buyer of non-existent shares will have none of the rights associated with ownership. The cash market is based on the idea of matching buyers and sellers. It does not accommodate people making promises. Consider that to allow short sellers to sell shares they have not borrowed opens up the possibility of the aggregate market selling more shares than actually exist. This would lead to all sorts of problematic consequences such as heavily distorting the price of the underlying share. If everyone is selling shares they have not borrowed willy-nilly, then it will drive the price of the share down, much to the disadvantage of existing share holders. In this case, short sellers who have sold shares they have not already borrowed would be paying out more in dividends to the buyers than the total dividends being paid out by the underlying company. There are instruments that allow for short selling of unowned shares on a futures basis. One example is a CFD = Contract for Difference. In the case of CFDs, sellers are obliged to pay dividends to buyers as well as other costs related to financing. EDIT Regarding your comment, note that borrowing shares is not a market transaction. Your account does not show you buying a share and then selling it. It simply shows you selling a share short. The borrowing is the result of an agreement between yourself and the lender and this agreement is off market. You do not actually pay the lender for the shares, but you do pay financing costs for the borrowing so long as you maintain your short position. EDIT I realise that I have not actually read your question correctly. You are not actually talking about "naked" short selling. You are talking about selling shares you already own in a hope of maintaining both a long and short position (gross). The problem with this approach is that you must deliver the shares to the buyer. Otherwise, ask yourself what shares is the buyer actually buying if you want the bought shares to remain in your account. If you are not going to deliver your long position shares, then you will need to borrow the shares you are selling short for the reasons I have outlined above. |
Looking to buy a house in 1-2 years. Does starting a Roth IRA now make sense? | With a Roth IRA, you can withdraw the contributions at any time without penalty as long as you don't withdraw the earnings/interest. There are some circumstances where you can withdraw the earnings such as disability (and maybe first home). Also, the Roth IRA doesn't need to go through your employer and I wouldn't do it through your employer. I have mine setup through Fidelity though I'm not sure if they have any guaranteed 3% return unless it was a CD. All of mine is in stocks. Your wife could also setup a Roth IRA so over 2 years, you could contribute $20,000. If I was you, I would just max out any 403-b matches (which you surely are at 25% of gross income) and then save my down payment money in a normal money market/savings account. You are doing good contributing almost 25% to the 403-b. There are also some income limitations on Roth IRAs. I believe for a married couple, it is $160k. |
Can't the account information on my checks be easily used for fraud? | That's accurate. Here is another risk with the current checking system, which many people are not aware of: Anyone who knows your checking account number can learn what your balance in that account is. (This is bank-specific, but it is possible at the major banks I've checked.) How does that work? Many banks have a phone line where you can dial up and interact with an automated voice response system, for various customer service tasks. One of the options is something like "merchant check verification". That option is intended to help a merchant who receives a check to verify whether the person writing the check has enough money in their account for the check to clear. If you select that option in the phone tree, it will prompt you to enter in the account number on the check and the amount of the check, and then it will respond by telling you either "there are currently sufficient funds in the account to cash this check" or "there are not sufficient funds; this check would bounce". Here's how you can abuse this system to learn how much someone has in their bank account, if you know their account number. You call up and check whether they've enough money to cash a $10,000 check (note that you don't actually have to have a check for $10,000 in your hands; you just need to know the account number). If the system says "nope, it'd bounce", then you call again and try $5,000. If the system says "yup, sufficient funds for a $5,000 check", then you try $7,500. If it says "nope, not enough for that", you try $6,250. Etcetera. At each step, you narrow the range of possible account balances by a factor of two. Consequently, after about a dozen or so steps, you will likely know their balance to within a few dollars. (Computer scientists know this procedure by the name "binary search". The rest of us may recognize it as akin to a game of "20 questions".) If this bothers you, you may be able to protect your self by calling up your bank and asking them how to prevent it. When I talked to my bank (Bank of America), they told me they could put a fraud alert flag on your account, which would disable the merchant check verification service for my account. It does mean that I have to provide a 3-digit PIN any time I phone up my bank, but that's fine with me. I realize many folks may terribly not be concerned about revealing their bank account balance, so in the grand scheme of things, this risk may be relatively minor. However, I thought I'd document it here for others to be aware of. |
Clarification on student expenses - To file the tax for the next year | Assuming here that you're talking about deducting your tuition as a below the line deduction as a business expense or similar, then it depends. Per 1.162-5, if the education: Then it qualifies as a legitimate business expense and is deductible. If not - if you're going to school for a different career, such as someone employed as a waiter but going to school to get a degree in nursing, or someone employed as a teacher getting a law degree - then it's not; you'd have to qualify under one of the other (simpler, but lesser) credits. Read more on this topic at Tax topic 513. Note that the other most commonly applicable deduction - the above the line Tuition and Fees deduction - expired in 2016 and is not applicable (yet?) in 2017, and further would not require most of what you describe as it only counts tuition and fees paid directly to the institution and required as a condition of attendance, so books, parking, etc. don't count. |
Can somebody give a brief comparison of TSP and IRAs? | The TSP is similar to a 401K. If you were hired as a federal employee on or after 1 January 1987 you are under the FERS retirement program. That means that you are eligible for matching. If they will match your deposits then the TSP, up to the matching limit, is a better choice. Skipping the TSP will mean that you you are leaving money on the table. |
3-year horizon before trading up to next home: put windfall in savings, or pay off mortgage? | A few points to consider - Welcome to Money.SE. This is not a discussion board, but rather, a site to ask and answer personal finance questions that are factual in nature. Your question is great, in my opinion, but it's a question that has no answer, it's opinion-based. So I'm slipping this in to help you, and suggest you visit the site to see the great Q&A we've accumulated over the years. |
When should I open a “Line of credit” at my bank? | The only really good reason to open a line of credit is that you want to buy something that you don't have money for. That's got its own risks - see plenty of other places to see warnings about not borrowing too much. The only other reason is that you might want to use a line of credit as your emergency fund. The usual way of doing this is to keep the money in an easily acccessible savings account - but such accounts usually pay rather now interest, and there is an argument for instead investing your emergency money in a higher-interest but less-accessible fund and using a line of credit to tide you over until you can extract the money. I'm worried about the comment that you can "deduct my interest on my tax returns". That is usually only possible if you are borrowing money to invest. It sounds as if your banker is going to persuade you to not only open a line of credit, but then invest that money in something. Be aware that this kind of 'leveraging' is much higher risk than investing money you already own. |
Can a wealthy investor invest in or make a deal with a company before it goes public / IPO? | IPO is "Initial Public Offering". Just so you know. The valuations are done based on the company business model, intellectual property, products, market shares, revenues and profits, assets, and future projections. You know, the usual stuff. Yes, it is. And very frequently done. In fact, I can't think of any company that is now publicly traded, that didn't start this way. The first investor, the one who founds the company, is the first one who invests in it after raising the capital (even if it is from his own bank account to pay the fees for filing the incorporation papers). What is the difference between "normal" investor and "angel"? What do you refer to as "angel"? How is it abnormal to you? Any investor can play a role, depending on the stake he/she has in the company. If the stake is large enough - the role will be significant. If the stake is the majority - the investor will in fact be able major decisions regarding the company. How he bought the stocks, whether through a closed offering, initial investment or on a stock exchange - doesn't matter at all. You may have heard of the term "angels" with regards to high-tech start up companies. These are private investors (not funds) that invest their own money in start ups at very early stages. They're called "angels" because they invest at stages at which it is very hard for entrepreneurs to raise money: there's no product, no real business, usually it is a stage of just an idea or a patent with maybe initial prototype and some preliminary business analysis. These people gamble, in a sense, and each investment is very small (relatively to their wealth) - tens of thousands of dollars, sometimes a hundred or two thousands, and they make a lot of these. Some may fail and they lose the money, but those that succeed - bring very high returns. Imagine investing 10K for 5% stake at Google 15 years ago. Those people are as investors as anyone else, and yes, depending on their stake in the company, they can influence its decisions. |
Can a company charge you for services never requested or received? | I have had a couple of businesses do this to me. I simply ask them to come over to talk about the bill. Sometimes this ends it. If they come over then I call the cops to file a report on fraud. A lot of times the police will do nothing unless they have had a load of complaints but it certainly gets the company off your back. And if they are truly unscrupulous it doesn't hurt to get a picture of them talking with the police and their van, and then post the whole situation online - you will see others come forward really quick after doing something like this. |
Why are typical 401(k) plan fund choices so awful? | To piggy back mbhunter's answer, the broker is going to find a way to make the amount of money they want, and either the employee or the company will foot that bill. But additionally, most small businesses want to compete and the market and offer benefits in the US. So they shop around, and maybe the boss doesn't have the best knowledge about effective investing, so they end up taking the offering from the broker who sells it the best. Give you company credit for offering something, but know they are as affected by a good salesperson as anybody else. Being a good sales person doesn't mean you are selling a good product. |
What is a good rental yield? | The rule of thumb I have always heard and what we rent our rental house at is 1% per month at the minimum (in the US). The rent has to cover the mortgage, the property taxes, the homeowners insurance, your income taxes (on the rent), the maintenance of the property and the times when the property is vacant. Even at 1% per month that doesn't leave a whole lot of profit compared to what you put in. I have no idea why anybody would buy a rental property in Australia if all they could get is 5% per year before expenses. They couldn't possibly be making money in that investment, not to mention the aggravations of getting late night phone calls because something broke in the rental house. No way I would make that investment. |
Moving savings to Canada? | Yes, you can put assets in Canadian banks. Will it protect your wealth to a greater extent than the FDIC protection provided by the US Government? Probably not. If you do business or spend significant time in Canada, then having at least some money in Canada makes sense. Otherwise, you're trying to protect yourself against some outlying risk of a US banking collapse, while subjecting yourself to a very real currency exchange risk. |
How can one protect oneself from a dividend stock with decreasing price? | An alternative options strategy to minimize loss of investment capital is to buy a put, near the money around your original buy price, with a premium less than the total dividend. The value of the put will increase if the stock price falls quickly. Likely, a large portion of your dividend will go towards paying the option premium, this will however ensure that your capital doesn't drop much lower than your buy price. Continued dividend distributions will continue to pay to buy future put options. Risks here are if the stock does not have a very large up or down movement from your original buy price causing most of the dividend to be spent on insuring your position. It may take a few cycles, but once the stock has appreciated in value say 10% above buying price, you can consider either skipping the put insurance so you can pocket the dividend, or you can bu ythe put with a higher strike price for additional insurance against a loss of gains. Again, this sacrifices much of the dividend in favor of price loss, and still is open to a risk of neutral price movement over time. |
In the event of a corporate spin-off, how can I calculate the correct cost basis for each company's shares? | From my understanding: Original Holding: Siemens - 10,000 units at 80 Euros/unit Cost = 800,000 euros Spin-off: Every 10 Siemens get 1 OSRAM On July 5th, 2013: Siemens closing - 78 Euros On Monday, July 8th: Ex-date (opening) - 75 Euros Hence: Market value for:- 1. Siemens: 75 * 10,000 = 750,000 euros 2. OSRAM: (10,000 / 10) * (78 - 75) = 3,000 euros Total Market value = 780,000 + 3,000 = 753,000 euros Ratio for: 1. Siemens = 750,000 / 753,000 = 0.996015936 2. OSRAM = 3,000 / 753,000 = 0.003984063 Cost for: 1. Siemens = 800,000 * 0.996015936 = 796,812.75 2. OSRAM = 3,187.25 |
At what point do index funds become unreliable? | The argument you are making here is similar to the problem I have with the stronger forms of the efficient market hypothesis. That is if the market already has incorporated all of the information about the correct prices, then there's no reason to question any prices and then the prices never change. However, the mechanism through which the market incorporates this information is via the actors buying an selling based on what they see as the market being incorrect. The most basic concept of this problem (I think) starts with the idea that every investor is passive and they simply buy the market as one basket. So every paycheck, the index fund buys some more stock in the market in a completely static way. This means the demand for each stock is the same. No one is paying attention to the actual companies' performance so a poor performer's stock price never moves. The same for the high performer. The only thing moving prices is demand but that's always up at a more or less constant rate. This is a topic that has a lot of discussion lately in financial circles. Here are two articles about this topic but I'm not convinced the author is completely serious hence the "worst-case scenario" title. These are interesting reads but again, take this with a grain of salt. You should follow the links in the articles because they give a more nuanced understanding of each potential issue. One thing that's important is that the reality is nothing like what I outline above. One of the links in these articles that is interesting is the one that talks about how we now have more indexes than stocks on the US markets. The writer points to this as a problem in the first article, but think for a moment why that is. There are many different types of strategies that active managers follow in how they determine what goes in a fund based on different stock metrics. If a stocks P/E ratio drops below a critical level, for example, a number of indexes are going to sell it. Some might buy it. It's up to the investors (you and me) to pick which of these strategies we believe in. Another thing to consider is that active managers are losing their clients to the passive funds. They have a vested interest in attacking passive management. |
LLC Partnership Earned Income vs. Partnership Share | Why would you file four K-1s for each partner? You file one K-1 per partner, on which you report the total of income attributed to that partner. It shouldn't and cannot "vary". There's no variables here, the income you report is the income already earned and attributed to that partner. What's there to vary? How you decide the attribution of income is governed by your operating agreement, the IRS only needs the bottom line. |
Good habits pertaining to personal finance for someone just getting started? | nan |
How to buy stock on the Toronto Stock Exchange? | You probably bought the cross listed WestJet stock. If you wanted to buy shares on the TSE, I'd suspect you'd have to find a way to open a brokerage account within Canada and then you'd be able to buy the shares. However, this could get complicated to some extent as there could be requirements of Canadian tax stuff like a Social Insurance Number that may require some paperwork. In addition, you'd have to review tax law of both countries to determine how to appropriately report to each country your income as there are various rules around that. TD Waterhouse would be the Canadian subsidiary of TD Ameritrade though I haven't tried to create a Canadian brokerage account. |
How can I get a wholesaler ID number? | Seems like it's more dependent on who you want to be your supplier. The times I've been involved in requesting this, each company had its own application form. They usually need proof of business activity, which gets back to SpecKK's answer. |
LLC Partnership Earned Income vs. Partnership Share | It would appear that you are not actually "equal" partners. You have differently valued interests and those values fluctuate based on individual performance. The TurboTax advice is simplified for entities that don't track interests relative to partner inputs. IRC § 704(a), partner's distributive share is set by the partnership agreement, and § 704(b), failing an allocation by the agreement it is set by the partner's interest in the partnership. But note § 704(b)(2), which prevents blatant tax-rigging in the partnership agreement. |
Indian resident owning dividend-paying shares in company based in France: Can I save on withholding tax? | France taxes capital / dividend gains accrued in France. Hence you will not be able to reduce this liability. India does have a Double Tax Avoidance Treaty with France and you can claim relief for the tax paid in France. |
Why some things are traded in an exchange while others are traded OTC | All securities must be registered with the SEC. Securities are defined as (1) The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. thus currencies are not defined as securities. While OTC transactions of securities is not outright forbidden, there are numerous regulations issued by the SEC as a result of the 1943 Exchange Act and others that make this difficult and/or costly. Many other securities are exempted from registration thus trade in a way that could be called OTC. Different countries have variances upon US law but are very similar. Any security could be traded OTC, but law prohibits it expressly or in such a way to make it relatively expensive; further, stock options are so tightly regulated that expiration dates, expiration intervals, strike intervals, and minimum ticks are all set by the authorities. |
Was this bill forgotten by a medical provider, and do notices need to be sent before collections? | Sometimes I think a question like this is one of moral versus legal. The reality is that you know you owe the money because you received the services. You're right that the bill should have been sent to you, and the natural urge for many people is to just count it in the win column when things like this happen and there's the chance to avoid paying. I suppose my question for you is, are you comfortable with the notion that you are not paying something that your heart of hearts tells you should be paid? If roles were reversed and you, as a business owner, had forgotten to bill something for which you were rightfully due payment, wouldn't you hope they'd have the integrity to pay you anyway? The legal side of this can be a bit trickier, and much depends on the state you're in (assuming you're in the U.S.) because some have stiffer consumer collection and protection laws than others. The rehab center could, when doing an audit of its accounts, discover that you didn't pay for these. They could take the polite course of action and call you with a gentle reminder or send a bill, or they could be not so nice about it. Either way, they can't send anything to collections for which you haven't been presented a bill and demonstrated an unwillingness to pay. There's a process in place, regardless of the state, so they can't just automatically put it into collections. I will close with this question for you: did the rehab center help you with what you needed, and are you healthier and better because of their care? If so, pay the bill. That's my advice. Keep in mind that unpaid medical costs just raise the prices for everyone else, because these providers will make up for the loss somewhere. I hope this helps. Good luck! |
How does refinancing work? | Since there was no sale, where does the money actually come from? From the refinancing bank. It's a new loan. How does a bank profit from this, i.e. why would they willingly help someone lower their mortgage payments? Because they sell a new loan. Big banks usually sell the mortgage loans to the institutional investors and only service them. So by creating a new loan - they create another product they can sell. The one they previously sold already brought them profits, and they don't care about it. The investors won't get the interest they could have gotten had the loan been held the whole term, but they spread the investments so that each refi doesn't affect them significantly. Credit unions usually don't sell their mortgages, but they actually do have the interest to help you reduce your payments - you're their shareholder. In any case, the bank that doesn't sell the mortgages can continue making profits, because with the money released (the paid-off loan) they can service another borrower. |
What is the best way for me to invest my money into my own startup? | It will depend somewhat on the rules where the company is formed, and perhaps how much you're talking about investing. I don't know about Canada, but when I've formed businesses in the U.S., I've been advised to invest some of the money as an equity investment, and the bulk of the remainder as a loan. You say "more shares", so it sounds like you've already invested some money and need to inject another round. If you make a loan to the company, make sure everything is done at arm's length -- you'll need to wear the hat of the Company Management and sign a contract with yourself, use a market-based interest rate, and make sure the company is paying you back with interest. An alternative which may work if you expect cash flow soon is to pay for certain expenses personally and then submit an expense report to the company, which will pay you back. Overall, a quick consultation with your accountant should be a relatively inexpensive way to get the best answer for your specific circumstances. |
Can I claim a tax deduction for working from home as an employee? I work there 90% of the time | Talk to a tax professional. The IRS really doesn't like the deduction, and it's a concept (like independent contractors) that is often not done properly. You need to, at a minimum, have records, including timestamped photographs, proving that: Remember, documentation is key, and must be filed and accessible for a number of years. Poor record keeping will cost you dearly, and the cost of keeping those records is something that you need to weigh against the benefit. |
Are stocks suitable for mid term money storage? | The volatility of an index fund should usually be a lot lower than that of an individual stock. However even with a broad index fund you should consider the fact that being down by 10% in the time frame you refer to is quite possible! So is being up by 10% of course. A corporate bond might be a better choice if you can find one you trust. |
Smart to buy a house in college? | I've heard success stories but personally, I was considering it and I'm so glad I didn't. I ended up hating the atmosphere; left after one semester. To take care of that house I rent out, I'd need to hire someone, or drive 2.5h each way for anything that needed my attention. If you plan to stay in the area, I'd consider the housing prices, the rental market, considering the responsibility of maintenance, your expected margin (trust me, it will be lower. I've never heard a landlord say he didn't encounter significant unintended expenses.) It's such a unique situation, it really requires more detail. After all, you'd be saving rent, have control over the house and who lives there, but you have a whole hell of a lot of responsibility. I met one guy who had basically became the house's mom because he had a vested interest and was always cleaning up spills, preventing staining or damage to the paint, facing awkward social situations as they tried to chase down rent. With the right people I've seen it go very well. Oh, one more caveat. With a live-in super', they can provide notice of any necessary repairs instantly and from there, the clock starts. They can legally withhold rent until the repairs are completed and if you're not too liquid after that down payment and the mortgage payments, plus school, etc.. this could put you between a rock and some hard ass creditors. |
Is it possible to improve stock purchase with limit orders accounting for volatility? | There is no such thing as buying at the best price. That only exists in hindsight. If you could consistently predict the lower bound, then you would have no reason to waste your time investing. Quit your job and bet with all leverage in. What if the price never reaches your lower bound and the market keeps rallying? What if today is crash day and you catch a falling knife? I'd say the best strategy would be just buy at whatever the market price is the moment your investment money hits your account with the smallest possible commission. |
Sanity check on choosing the term for a mortgage refinance | So I will attempt to answer the other half of the question since people have given good feedback on the mortgage costs of your various options. Assumptions: It is certain that I am off on some (or all) of these assumptions, but they are still useful for drawing a comparison. If you were to make your mortgage payment, then contribute whatever you have left over to savings, this is where you would be at the end of 30 years. Wait, so the 30 year mortgage has me contributing $40k less to savings over the life of the loan, but comes out with a $20k higher balance? Yes, because of the way compounding interest works getting more money in there faster plays in your favor, but only as long as your savings venue is earning at a higher rate than the cost of the debt your are contrasting it with. If we were to drop the yield on your savings to 3%, then the 30yr would net you $264593, while the 15yr ends up with $283309 in the bank. Similarly, if we were to increase the savings yield to 10% (not unheard of for a strong mutual fund), the 30yr nets $993418, while the 15yr comes out at $684448. Yes in all cases, you pay more to the bank on a 30yr mortgage, but as long as you have a decent investment portfolio, and are making the associated contributions, your end savings come out ahead over the time period. Which sounds like it is the more important item in your overall picture. However, just to reiterate, the key to making this work is that you have an investment portfolio that out performs the interest on the loan. Rule of thumb is if the debt is costing you more than the investment will reliably earn, pay the debt off first. In reality, you need your investments to out perform the interest on your debt + inflation to stay ahead overall. Personally, I would be looking for at least an 8% annual return on your investments, and go with the 30 year option. DISCLAIMER: All investments involve risk and there is no guarantee of making any given earnings target. |
Mortgage interest income tax deduction during year with a principal residence change | http://www.irs.gov/publications/p936/ar02.html#en_US_2010_publink1000229891 If you still own it, you get to deduct all of it. In my taxes I did online with TaxAct, it asked if I lived there or not and it just mattered which form it filed for me. With having tenants it was a 'business' form and I assume it would be a standard schedule A for personal. Either way the deductions are still mine to take. |
Are lottery tickets ever a wise investment provided the jackpot is large enough? | The other answers here do an excellent job of laying out the mathematics of the expected value. Here is a different take on the question of whether lottery tickets are a sensible investment. I used to have the snobbish attitude that many mathematically literate people have towards lotteries: that they are "a tax on the mathematically illiterate", and so on. As I've gotten older I've realized that though, yes, it is certainly true that humans are staggeringly bad at estimating risks, that people actually are surprisingly rational when they spend their money. What then is the rational basis for buying lottery tickets, beyond the standard explanation of "it's cheap entertainment"? Suppose you are a deeply poor person in America. Your substandard education prepared you for a job in manufacturing which no longer exists, you're working several minimum wage jobs just to keep food on the table, and you're one fall off a ladder from medical-expense-induced total financial disaster. Now suppose you have things that you would like to spend truly enormous amounts of money on, like, say, sending your children to schools with ever-increasing tuitions, or a home in a safe neighbourhood. Buying lottery tickets is a bad investment, sure. Name another legal investment strategy that has a million-dollar payout that is accessible to the poor in America. Even if you could invest 10% of your minimum-wage salary without missing the electricity bill, that's still not going to add up to a million bucks in your lifetime. Probably not even $100K. When given a choice between no chance whatsoever at achieving your goals and a cheap chance that is literally a one-in-a-million chance at achieving your goals the rational choice is to take the bad investment option over no investment at all. |
Do mutual fund companies deliberately “censor” their portfolios/funds? | Do mutual funds edit/censor underperforming investments to make their returns look better, and if so, is there any way one can figure out if they are doing it? No, that's not what the quote says. What the quote says is that the funds routinely drop investments that do not bring the expected return, which is true. That's their job, that is what is called "active management". Obviously, if you're measuring the fund by their success/failure to beat the market, to beat the market the funds must consistently select over-performers. No-one claims that they only select over-performers, but they select enough of them (or not...) for the average returns to be appealing (or not...) for the investors. |
How can I determine if a FHA loan refinance offer is from a reputable lender | Start with the list of mortgage companies approved to work in your area. There are 80 within 10 miles of my house, and more than 100 in my county. Pick ones you know because they are established businesses in your area, region, or even nationally. A good place to start might be with your current lender. The risk you seem to be worried about is a scam or a trick. In the recent past the scams were ones where the home owner didn't understand teaser rates, and the risk of interest only and pick-your-payment loans. The simpler the bells and whistles, the less likely you are to be embarking on a risky transaction. It can't hurt to ask an organization like the BBB or neighbors, but realize that many people loved their exotic mortgage until the moment it blew up in their face. So for 5 years your neighbor would have raved about their new mortgage until they discovered how underwater they were. Regarding how smoothy the transaction is accomplished, is hard to predict. There is great variation in the quality of the loan officers, so a great company can have rookie employees. Unless you can get a recommendation for a specific employee it is hard know if your loan officer is going to give great service. When getting a mortgage for a purchase, the biggest risk is getting a mortgage that results in a payment you can't afford. This is less of a risk with a refinance because you already have a mortgage and monthly payment. But keep in mind some of the monthly savings is due to stretching out the payments for another 30 years. Know what you are trying to do with the refinance because the streamlined ones cant be used for cash out. |
Online tutorials for calculating DCF (Discounted Cash Flow)? | Check out Professor Damodaran's website: http://pages.stern.nyu.edu/~adamodar/ . Tons of good stuff there to get you started. If you want more depth, he's written what is widely considered the bible on the subject of valuation: "Investment Valuation". DCF is very well suited to stock analysis. One doesn't need to know, or forecast the future stock price to use it. In fact, it's the opposite. Business fundamentals are forecasted to estimate the sum total of future cash flows from the company, discounted back to the present. Divide that by shares outstanding, and you have the value of the stock. The key is to remember that DCF calculations are very sensitive to inputs. Be conservative in your estimates of future revenue growth, earnings margins, and capital investment. I usually develop three forecasts: pessimistic, neutral, optimistic. This delivers a range of value instead of a false-precision single number. This may seem odd: I find the DCF invaluable, but for the process, not so much the result. The input sensitivity requires careful work, and while a range of value is useful, the real benefit comes from being required to answer the questions to build the forecast. It provides a framework to analyze a business. You're just trying to properly fill in the boxes, estimate the unguessable. To do so, you pore through the financials. Skimming, reading with a purpose. In the end you come away with a fairly deep understanding of the business, how they make money, why they'll continue to make money, etc. |
What is the best use of “spare” money? | With 40% of your take-home available, you have a golden opportunity here. Actually two, and the second builds out easily from the first. Golden Opportunity # 1: Layoff Immunity Ok, not really immunity. Most people don't think of themselves getting laid off, and don't prepare. Of course it may not happen to you, but it can. It's happened to me twice. The layoff itself is an emotional burden (getting rejected is hard), but then you're suddenly faced with a gut-wrenching, "how am I gonna pay the rent????" If you have no savings, it's terrifying. Put yourself in that spot. Imagine that tomorrow, you're out of a job. For how many months could you pay your expenses with the money you have? Three months? One? Not even that? How about shooting for 12 months? It's really, really comforting to be able to say: "I don't have to worry about it for a year". 12 months saved up gives you emotional and financial stability, and it gives you options -- you don't have to take the first job that comes along. Now, saving 12 months of expenses is huge. But, you're in the wonderful spot where you can save 40% of your income. It would only take 2.5 years to save up a year's worth of income! But, actually, it's better than that. Because your 12-month Layoff Immunity fund doesn't have to include the amount for retirement, or taxes, or that 40% we're talking about. Your expenses are less than 60% of take-home -- you'd only need 12 months of that. So, you could have a fully funded 12-Month Layoff Immunity Fund only in a year and a half! Golden Opportunity #2: Freedom Fund Do you like your Job? Would you still do it, if you didn't need the money? If so, great. But if not, why not get yourself into a position where you don't need it? That is, build up enough money from saving and investing to where you can pay your expenses - forever - from your investments. The number to keep in mind is 25. Figure out your annual expenses, and multiply it by 25. That's the amount you'd need to never need a job again. (That works out to a 4% withdrawal rate, adjusting for inflation every year, with a low risk of running out of money. It's a rule of thumb, but smart people doing a lot of math worked it out.) Here you keep saving and investing that 40% in solid mutual funds in a regular, taxable account. Between your savings and the compounding returns off the investments, you could easily have a fully funded "Freedom Fund" by the time you're 50. In fact, by 45 isn't unreasonable. It could be even better. If you live in that high-rent area because of the job, and wouldn't mind living were the rents are lower once you quit, your target amount would be lower. Between that, working dedicatedly toward this goal, and maybe a little luck, you might even be able to do this by age 40. Final Thoughts There are other things you could put that money toward, like a house, of course. The key take-away here, is to save it, and invest it. You're in a unique position of being able to do that with 40% of your income. That's fabulous! But don't think it's the norm. Most people can't save that much, and, once you lose the ability to save that much, it's very difficult to get it back. Expenses creep in, lifestyle "wants" become "needs", and so on. If you get into the habit of spending it, it's very difficult to shrink your lifestyle back down - down to what right now you're perfectly comfortable with. So, spend some time figuring out what you want out of life -- and in the mean time, sock that 40% away. |
What ETF best tracks the price of gasoline, or else crude oil? | There is no ETF that closely tracks oil or gasoline. This is because all existing oil and gasoline ETFs hold futures contracts or other derivatives. Storing the oil and gasoline would be prohibitively costly. Futures contracts are prone to contango and backwardation, sometimes resulting in large deviations from the price of the physical commodity. Contrast oil ETFs with metal ETFs, which track nicely. EDIT: See this article about contango. The UNG chart is particularly ugly. |
How do disputed debts work on credit reports? | If you tell the collector that the claim isn't valid, they're obliged to go back to the creditor to verify it. Sometimes that gets a real person, instead of their automatic billing system, to look at the claim, and if you're right, they'll drop it. |
What will happen when a bid price is higher than an ask price? | The situation you're proposing is an over-simplification that wouldn't occur in practice. Orders occur in a sequence over time. Time is an important part of the order matching process. Orders are not processed in parallel; otherwise, the problem of fairness, already heavily regulated, would become even more complex. First, crossed and locked markets are forbidden by regulators. Crossed orders are where one exchange has a higher bid than another's ask, or a lower ask than another's bid. A locked market is where a bid on one exchange is equal to the ask on another. HFTs would be able to make these markets because of the gap between exchange fees. Since these are forbidden, and handling orders in parallel would ensure that a crossed or locked market would occur, orders are serialized (queued up), processed in order of price-time priority. So, the first to cross the market will be filled with the best oldest opposing order. Regulators believe crossed or locked markets are unfair. They would however eliminate the bid ask spread for many large securities thus the bid-ask cost to the holder. |
How does Robinhood stock broker make money? | Yes, there is a lot they are leaving out, and I would be extremely skeptical of them because of the "reasons" they give for being able to charge $0 commissions. Their reasons are that they don't have physical locations and high overhead costs, the reality is that they are burning venture capital on exchange fees until they actually start charging everyone they suckered into opening accounts. They also get paid by exchanges when users provide liquidity. These are called trade rebates in the maker-taker model. They will start offering margin accounts and charging interest. They are [likely] selling trade data to high frequency trading firms that then fill your stock trades at worse prices (Robinhood users are notorious for complaining about the fills). They may well be able to keep commissions low, as that has been a race to the bottom for a long time. But if they were doing their users any actual favors, then they would be also paying users the rebates that exchanges pay them for liquidity. Robinhood isn't doing anything unique as all brokers do what I mentioned along with charging commissions, and it is actually amazing their sales pitch "$0 commissions because we are just a mobile app lol" was enough for their customers. They are just being disingenuous. |
When I ask a broker to buy stock, what does the broker do? | My answer isn't a full one, but that's because I think the answer depends on, at minimum, the country your broker is in, the type of order you place (limit, market, algo, etc.,) and the size of your order. For example, I can tell from watching live rates on regular lot limit orders I place with my UK-based broker that they hold limit orders internally until they see a crossing rate on the exchange my requested stock is trading on, then they submit a limit order to that exchange. I only get filled from that one exchange and this happens noticeably after I see my limit price print, and my fills are always better than my limit price. Whereas with my US-based broker, I can see my regular lotsize limit order in the order book (depth of book data) prior to any fills. I will routinely be notified of a fill before I see the limit price print. And my fills come from any number of US exchanges (NYSE, ARCA, BATS, etc.) even for the same stock. I should point out that the "NBBO" rule in the US, under SEC regulation NMS, probably causes more complications in handling of market and limit orders than you're likely to find in most countries. |
Will my Indian debit card work in the U.S.? | I recommend that you first try to use your card at a store in your home country, just to make sure that the point-of-sale features are enabled. After you've verified that, you need to contact your bank and ask them if the card will work in both ATMs and in stores in the U.S. They may need to enable it to work in another country. If you are going to be living in the U.S. for a while, you should consider opening an American bank account after you get there. If you don't want a credit card, you should be able to get a debit card here. |
Corporate Coverdell ESA Tax Liability | Not sure how authoritative it is, but according to this site, yes: Can a corporation, partnership or other non-living entity make the contribution to an ESA? Yes. The tax law does not restrict the ability to make contributions to living individuals. Corporations and other entities may make contributions without regard for the usual donor income limit. However, the same site indicates that you can just give the child the $2K and have them contribute to their own ESA, so yes, the income limit is pretty easy to get around. |
What is the best strategy for after hours trading? | First you will need a plan stating three main points: You will have to decide what criteria you will use to answer these points. You might use Fundamental Analysis to find what to buy and Technical Analysis to decide when to buy and when to sell (your buy and sell triggers). Once you have a Trading Plan in place you would need to find a broker with conditional orders. You can place conditional buy orders to get in a trade (for example if the price moves above or below a target price). You can place conditional stop loss orders if your trade goes against you, and you can also place conditional profit target stops to automatically get out if rises to your desired profit target. You can place one, two or many conditional orders after hours which will enable you to trade without being in front of your screen all day long. |
Why do car rental companies prefer/require credit over debit cards? | I have looked at the conditions of a car rental company, and I believe it provides the answers: Upon pick up of your vehicle, you must present a valid credit card (*) used to make the booking and which must be in the driver´s name. If you do not have a valid credit card we will accept your debit card when you pick up your vehicle. However, as we cannot reserve credit to cover the potential damage or refueling costs, you will need to take SuperCover and a fuel tank of fuel at the start of the rental. We will refund the value of the unused fuel at the end of the rental unless otherwise agreed with you. (*) VISA, MasterCard and American Express are accepted. Credit card or Third Party Insurance IMPORTANT: In case of damage, we will charge you the incurred amount up to the excess. You will then need to reclaim this amount from the provider of the credit card or third party insurer. We strongly recommend that you fully read and understand the terms and conditions of any cover provided by your chosen provider before you decline any of our optional services. Without our SuperCover, should you damage the vehicle during your rental period, we will charge you the corresponding amount up to the excess, regardless of whether you can subsequently reclaim this amount from the provider of the credit card or the third party insurer. In the event you would like to dispute any of the above mentioned charges you should send your request by mail or email to the Firefly location state on your rental agreement. https://global.fireflycarrental.com/qualifications-ES.html From that, we can conclude that : It's likely that disputes with customers in case of damage cost a lot to car rental companies, and for the 2 above reasons, demanding a credit card may alleviate it. |
When should I walk away from my mortgage? | The worth of a credit score (CS) is variable. If you buy your stuff outright with 100% down then your CS is worthless. If you take a loan to buy stuff then it is worth exactly what you save in interest versus a poor score. But there is also the "access" benefit of CS where loans will no longer be available to you, forcing you to rent. If you consider rent as money down teh tiolet then this could factor in. The formula for CS worth is different for everyone. Bill Gates CS is worth zero to him. Walking away from a mortage is not the same as walking away from a loan. A mortage has collateral. There are 2 objects: the money, and the house. If you walk away the bank gets the house as a fair trade. They keep all money you put against the house to boot! Sometimes the bank PROFITS when you walk away. So in a good market you could consider walking away to be the Moral Michael thing to do. :) |
Can saving/investing 15% of your income starting age 25, likely make you a millionaire? | I see a lot of answers calculcating with incomes that are much higher than yours, here is something for your situation: If you would keep your current income for the rest of your life, here is approximately how things would turn out after 40 years: All interest is calculated relative to the amount in your portfolio. Therefore, lets start with 1 dollar for 40 years: With your current income, 15% would be 82.5 dollar. At 12% this would over 40 years get you almost 1 million dollar. I would call a required return of more than 12% not 'likely'. The good news, is that your income will likely increase, and especially if this happens fast things will start to look up. The bad news is, that your current salary is quite low. So, it basically means that you need to make some big jumps in the next few years in order to make this scenario likely. If you can quickly move your salary towards ranges that are more common in the US, then 15% of your income can build up to a million before you retire. However, if you just follow gradual growth, you would need to get quite lucky to reach a million. Note that even if reaching a million appears unlikely, it is probably still a good idea to save! |
Buying shares- Stocks & Shares ISA, or Fund & Share account? | The main difference is that the ISA account like a Cash ISA shelters you from TAX - you don't have to worry about Capital Gains TAX. The other account is normal taxable account. With only £500 to invest you will be paying a high % in charges so... To start out I would look at some of the Investment Trust savings schemes where you can save a small amount monthly very cost-effectively - save £50 a month for a year to see how you get on. Some Trusts to look at include Wittan, City Of London and Lowland |
Capital Gains in an S Corp | These are all factually correct claims. S-Corporation is a pass-through entity, so whatever gain you have on the corporate level - is passed to the shareholders. If your S-Corp has capital gains - you'll get your pro-rata share of the capital gains. Interest? The same. Dividends? You get it on your K-1. Earned income? Taxed as such to you. I.e.: whether you earn income as a S-Corp or as a sole proprietor - matters not. That's the answer to your bottom line question. The big issue, however, is this: you cannot have more than 25% passive income in your S-Corp. You pass that limit (three consecutive years, one-off is ok) - your S-Corp automatically converts to C-Corp, and you're taxed at the corporate level at the corporate rates (you then lose the capital gains rates, personal brackets, etc). This means that an S-Corp cannot be an investment company. Most (75%+) of its income has to be earned, not passive. Another problem with S-Corp is that people who work as self-proprietors incorporated as S-Corp try to abuse it and claim that the income they earned by the virtue of their own personal performance shouldn't be taxed as self-employed income. IRS frowns upon such a position, and if considerable amounts are at stake will take you all the way up to the Tax Court to prove you wrong. This has happened before, numerously. You should talk to a licensed tax adviser (EA/CPA/Attorney licensed in your state) to educate you about what S-Corp is and how it is taxed, and whether or not it is appropriate for you. |
How can I get a mortgage I can't afford? | Save up a bigger downpayment. The lender's requirement is going to be based on how much you finance, not the price of the house. |
IRA contributions in a bear (bad) market: Should I build up cash savings instead? | You should consider dollar cost averaging your investments. Retirement account is perfect for that - it's long term with periodic deposits. Overall, by investing in stocks now for a long term, you'll benefit more because the stocks are at their low(er) point. |
Cheapest way to “wire” money in an Australian bank account to a person in England, while I'm in Laos? | I've used OFX quite a lot for international transfers. They are much faster than a normal international transfer from your bank. Instead it ends up being a local transfer on either end which just works a heck of a lot quicker. They also claim lower exchange rates. In the past we have compared and sometimes found them lower and sometimes found them a little higher. Their fees certainly are lower though. Only thing is I think there was a lag setting up the account initially (they need to contact you by phone), so if you're in a hurry this may be problematic. And yes, you will need internet banking to do this. Since the question is specifically about how to do this in the cheapest way possible, I think the answer is to use internet banking. |
What risks are there acting as a broker between PayPal and electronic bank transfers? | There are several red flags here. can they get my bank account info in any way from me transferring money to them? Probably yes. Almost all bank transactions are auditable, and intentionally cause a money track. This track can be followed from both sides. If they can use your bank account as if they were you, that is a bit deeper than what you are asking, but yes they (and the polish cops) can find you through that transfer. I did look up the company and didn't find any scam or complaints concerning them. Not finding scams or complains is good, but what did you find? Did you find good reviews, the company website, its register, etc, etc? How far back does the website goes (try the wayback machine) Making a cardboard front company is very easy, and if they are into identity theft the company is under some guy in guam that never heard of poland or paypal. As @Andrew said above, it is probably a scam. I'd add that this scam leverages on the how easier is to get a PayPal refund compared to a regular bank transfer. It is almost impossible to get the money back on an international transaction. Usually reverting a bank transfer requires the agreement in writing of the receiver and of both banks. As for paypal, just a dispute from the other user: You are responsible for all Reversals, Chargebacks, fees, fines, penalties and other liability incurred by PayPal, a PayPal User, or a third party caused by your use of the Services and/or arising from your breach of this Agreement. You agree to reimburse PayPal, a User, or a third party for any and all such liability. (source) Also, you might be violating the TOS: Allow your use of the Service to present to PayPal a risk of non-compliance with PayPal’s anti-money laundering, counter terrorist financing and similar regulatory obligations (including, without limitation, where we cannot verify your identity or you fail to complete the steps to lift your sending, receiving or withdrawal limit in accordance with sections 3.3, 4.1 and 6.3 or where you expose PayPal to the risk of any regulatory fines by European, US or other authorities for processing your transactions); (emphasis mine, source) So even if the PayPal transfer is not disputed, how can you be sure you are not laundering money? Are you being paid well enough to assume that risk? |
Checking the math on a Truth-in-Lending Disclosure | As your question is written now, it looks like you have a typo. Your stated APR is 5.542% = 0.05542, not 0.005542 as you've written. I ran the numbers that you gave (accounting for the typo) through the formula at Wikipedia and got $849.2528 / month, which will round to $849.25 for most payments. That doesn't match the number that you computed or the number on your TIL. (Maybe you also miskeyed the result of your calculation?) I agree that it's unlikely that this is just a calculation error by the mortgage company, although I wouldn't completely rule it out. Are you paying anything else like a property tax escrow? I didn't pull a blank TIL form to see what might go into the monthly payment line that you showed, but in many cases you do pay more than just principle and interest each month. (Not sure if that gets reflected at that point on the form though.) |
Why can't I short a stock that sells for less than $5? Is there another way to “go short” on them? | A bit of poking around brought me to this thread on the Motley Fool, asking the same basic question: I think the problem is the stock price. For a stock to be sold short, it has to be marginable which means it has to trade over $ 5.00. The broker, therefore, can't borrow the stock for you to sell short because it isn't held in their clients' margin accounts. My guess is that Etrade, along with other brokers, simply exclude these stocks for short selling. Ivestopedia has an explanation of non-marginable securities. Specific to stocks under $5: Other securities, such as stocks with share prices under $5 or with extremely high betas, may be excluded at the discretion of the broker itself. |
Do banks give us interest even for the money that we only had briefly in our account? | Ditto @MichaelBorgwardt Just to get concrete: I just checked one bank in India and they say they are paying 4% on savings accounts. I don't know what you're getting or if 4% is typical in India, but it's at least an example. So if the bank pays interest based on average daily balance, and you left the money in the bank for a week, you'd get 4%/52 = .077%. So on Rs 95,000 that would be Rs 73. I live in the US where typical interest on a savings account today is about 1%. So an equivalent amount of money -- I think that would be about $1,500 -- would get 1/52 of 1%, or 29 cents. Don't leave the lights turned on while you do the calculations -- you'll spend more on the electricity than you make on the interest. :-) ** Addendum ** This suddenly reminds me ... I read a news story a few years ago about a man who was expecting a tax refund check from the IRS of a few hundred dollars, and when the check arrived it was for several million. Well obviously it was a mistake. But he came up with the clever idea: Deposit the check in an interest-bearing account. Promptly contact the IRS, inform them of the mistake, and ask how and where to go about returning the money. Hope that it takes at least a few days for them to figure everything out. Then keep the interest accumulated on the several-million dollars for the time that he had the money. And as he contacted them immediately about the error, they can't say he was trying to hide anything. It was a nice try, but it didn't work. They demanded he send them the interest as well as the principle. |
Why do people buy new cars they can not afford? | I had a 2000 Chevy Cavalier until late 2011. It worked well, but was very definitely at the end of its life. This was a low-end car, certainly, but I dispute your claim that cars last 20 - 25 years. Consumer Reports apparently says the average life expectancy of a new vehicle is around 8 years or 150,000 miles. When it came time to replace my Cavalier, I was significantly concerned about car safety and about the ability to handle Canadian winters (-40 temperatures, lots of snow). I chose a Subaru Forester as a good match for me. I could have bought one second-hand, but I wasn't willing to get one as old as five years. Car manufacturers constantly improve safety and features over that time period. The Forester is massively more capable of handling Canadian winters than the Cavalier was. If I was buying a Forester now, I'd want the EyeSight Driver Assist System which Subaru added a couple of years after my model year. The newer models score slightly higher in crash tests, too. That would limit me to 2014 or later models, and I'd be concerned someone selling a 2014 or 2015 knew something I didn't, knew they had purchased a lemon. I didn't need financing for my vehicle. On the other hand, I could have invested the money I saved, so if all I wanted was something to get me from point A to point B, my choice does not make much financial sense. But Canadian winters are brutal and car safety is massively important to me. I'm well aware that I paid considerably for this, and I'm comfortable with my decision. |
ESPP: Share vs Payroll withholding | Note that you're asking about withholding, not about taxing. Withholding doesn't mean this is exactly the tax you'll pay: it means they're withholding a certain amount to make sure you pay taxes on it, but the tax bill at the end of the year is the same regardless of how you choose to do the withholding. Your tax bill may be higher or lower than the withholding amount. As far as tax rate, that will be the same regardless - you're just moving the money from one place to the other. The only difference would be that your tax is based on total shares under the plan - meaning that if you buy 1k shares, for example, at $10, so $1,500 discounted income, if you go the payroll route you get (say) $375 withheld. If you go the share route, you either get $375 worth of stock (so 38 shares) withheld (and then you would lose out on selling that stock, meaning you don't get quite as much out of it at the end) or you would ask them to actually buy rather more shares to make up for it, meaning you'd have a slightly higher total gain. That would involve a slightly higher tax at the end of it, of course. Option 1: Buy and then sell $10000 worth, share-based withholding. Assuming 15% profit, and $10/share at both points, then buy/sell 1000 shares, $1500 in profit to take into account, 38 shares' worth (=$380) withheld. You put in $8500, you get back $9620, net $1120. Option 2: Buy and then sell $13500 worth, share based withholding. Same assumptions. You make about $2000 in pre-tax profit, meaning you owe about $500 in tax withholding. Put in $11475, get back $13000, net $1525. Owe 35% more tax at the end of the year, but you have the full $1500 to spend on whatever you are doing with it. Option 3: Buy and then sell $1000 worth, paycheck withholding. You get the full $10000-$8500 = $1500 up front, but your next paycheck is $375 lighter. Same taxes as Option 1 at the end of the year. |
Understanding the phrase “afford to lose” better | I think it's a silly statement. If you are prepared from the start that you might lose it then you shouldn't invest. You invest to earn not to lose. Most often losses are a result of fear. Remember you only lose when you sell lower than you bought for. So if you have the patience you will probably regain. I ask my clients many times how much do they want to earn and they all say "as much as possible". Last time I checked, that's not an objective and therefore a strategy can't be built for that. If there is a strategy then exiting a stock is easy, without a strategy you never know when to exit and then you are exposed to bottomless losses. I've successfully traded for many years with large amounts of money. I made money in the FC and in the bubble, both times it wasn't because I was prepared to lose but because I had an entry and exit strategy. If you have both the idea of investing what u are prepared to lose has little value. |
What is the smartest thing to do in case of a stock market crash | I suggest to just invest in index funds, these are low risk with high reward stocks that can survive even the worst of stock crashes but are still extremely profitable when the stock market is booming |
Why do US retirement funds typically have way more US assets than international assets? | There are a few main economic reasons given why investors show a strong home bias: Interestingly, though if you ask investors about the future of their home country compared with other countries they will generally (though not always) significantly overestimate the future of their own country. It is difficult to definitively say what drives investors but this psychological home bias could be one of the larger factors. Edit in response to the bounty: Maybe this Vanguard article on their recommended international exposure is what you are looking for though they only briefly speculate about why people so consistently show a home bias in investing. The Wikipedia article mentioned above has some very good references and while there may be no complete answer with the certainty that you seek (as there are as many reasons as there are investors) a combination of the above list seems to capture much of what is going on across different countries. |
Would it make sense to buy a rental property as an LLC and not in my own name? | You need to first visit the website of whatever state you're looking to rent the property in and you're going to want to form the LLC in that particular state. Find the Department of Licensing link and inquire about forming a standard LLC to register as the owner of the property and you should easily see how much it costs. If the LLC has no income history, it would be difficult for the bank to allow this without requiring you to personally guarantee the loan. The obvious benefit of protecting yourself with the LLC is that you protect any other personal assets you have in your name. Your liability would stop at the loan. The LLC would file its own taxes and be able to record the income against the losses (i.e. interest payments and other operating expenses.). This is can be beneficial depening on your current tax situation. I would definitely recommend the use of a tax accountant at that point. You need to be sure you can really afford this property in the worst case scenario and think about market leasing assumption, property taxes, maintenance and management (especially if you've moved to another state.) |
What are the gains from more liquidity in ETF for small investors? | In my opinion, if you are doing long-term investing, this is a non-issue. The difference of hours in being able to trade an ETF during the day vs. only being able to trade a traditional mutual fund at day-end is irrelevant if you are holding the investment for a long time. If you are engaging in day trading, market timing, or other advanced/controversial trading practices, then I suppose it could make a difference. For the way I invest (index funds, long-term, set-it-and-forget-it), ETFs have no advantage over traditional mutual funds. |
Do you know of any online monetary systems? | Congratulations! You see the problem. You can't get away from unstable currencies. The other problem is that the US will shut down anything that appears to be providing a replacement for the US Dollar. Once a token or medallion or gift certificate or whatever starts being used outside the confines of one business or one network of businesses, it will be shut down, quickly. It happened with Las Vegas gambling tokens. Another more recent attempt was with the Liberty Dollar, gold and silver coins and certificates that not only had precious metal backing, but whose proponents encouraged taking them to retailers and paying with them as if they were US Dollars. There were other problems with this idea, but it was the competitive stature of the Liberty dollar that got the headquarters raided and the main site shut down. Basically, all signs point toward dealing with currencies and their state of being systematically eroded over time. If you do find one that appears to exist, be wary, because the rules can change at any time, and the "money" will be nowhere near as liquid as a proper currency. |
Why are stop order called “stop” when it is in fact a “start” condition? | A stop order can be used to both enter or exit a position. A stop loss is used to set the price you want to get out if the price reaches that level. Whilst a stop buy or entry order is used to get into a position if the price reaches your desired level for entry. The stop order just means that you want to place your order at that level, you then need to specify if you are buying to open, selling to open, buying to close or selling to close your position at the stop level. |
Why buy bonds in a no-arbitrage market? | Rates are a complex field. I will assume that context wise you are talking about rates for a individual saver quantities. The two rates you are asking about are personal bank saving account and exchange traded bonds. The points you want to compare between them are. In general, a bond is what we called a fixed rate instrument. This means that for the life of the product, it will yield a fixed percentage of its face value at a regular period. Baring any extreme circumstances (such as bankruptcy), no external factors will change the payment schedule on a bond. Conversely, by placing your money into a bank, you will accrue interest rate at some value related to some published interest rate. For example, if tomorrow, the Treasury decided to try to stimulate the economy, they could slash the interest rate, this would directly affect the rate at which your savings account would accrue interest. In general, a bond has a maturity date, where the capital is finally released from the bond. Until such date, you cannot access the money directly (you can however sell the bond, but it would likely be at a discounted value). Therefore, in general, you cannot get access to the money whenever you want it. As for a saving account, normally one can access the funds instantly, if not within a few days. This seems to the reason people seem to be focusing on. For each bond, the issuer of the bond is obligated to pay you the holder of the bond fixed payments at an interval, plus the capital at the maturity. However, obligation does not mean guarantee. If the issuer, is unable to make the payments, they may go into bankruptcy to avoid paying you. There are companies setup to advise people on the likelihood of each bond issuer on their ability to honour their debts. For example Standard and Poor issues a rating which goes all the way up to AAA for bonds. Recently, many sovereign countries have lost their AAA rating from S&P. Meaning that S&P feel that the possibility of these countries going bankrupt is non-zero. Conversely, banks may also be unable to give you your money when requested. In the US, the reserve requirements means that at any one time it only holds 10% of the money it owes to its customers. This can mean that if every customer turns up to the bank to demand their money, that bank would be unable to pay. This situation is called a Bank Run. During such a situation, the bank would likely collapse and default. In many modern countries, the government put into place guarantees on the first xxx amount in saving accounts, but otherwise, your savings could be lost. There are many complex reasons to choose one instrument over another (including some I have avoided), even if at the outset, they could appear to have the same rates. |
Will there always be somebody selling/buying in every stock? | 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 |
Is inflation a good or bad thing? Why do governments want some inflation? | Although there are some good points made here as to the cause of inflation (mostly related to supply and demand), azcoastal does head in a different direction, one which I myself was going to take. Let me give a different angle, however. Another cause of inflation is the printing of money by the government (not simply replacing old money with new, but adding to the total money in circulation). If the government doubles the amount of currency in circulation (for the sake of argument and easy math), the value of all money decreases by a factor of 2. That's inflation, and the way G. Edward Griffin in The Creature From Jekyll Island puts it, it's really tantamount to a hidden tax. In a nutshell, the federal government wants to buy some cool stuff like new tanks or planes, or they want to give a bunch of food stamps to poor people, or they want to fly their private jets around, but they don't have enough money from taxes. So, they print money and spend it and buy their stuff. Because they've just increased the money in circulation, however, money loses its value. For example, your savings has dropped in value by half, despite the fact that the same number of dollars is in your savings account. This is just a way the government can tax you without taxing you. They buy stuff and you now have less money (i.e., your retirement is worth less) and you don't even know you just got taxed. Makes me sick that we let our "leaders" get away with this. |
Why doesn't change in accounts receivable on balance sheet match cash flow statement? | I'm not an expert, but here is my best hypothesis. On Microsoft's (and most other company's) cash flow statements, they use the so-called "indirect method" of accounting for cash flow from operations. How that works, is they start with net income at the top, and then adjust it with line items for the various non-cash activities that contributed to net income. The key phrase is that these are accounting for the non-cash activities that contribute to net income. If the accounts receivable amount changes from something other than operating activity (e.g., if they have to write off some receivables because they won't be paid), the change didn't contribute to net income in the first place, so doesn't need to be reconciled on the cash flow statement. |
Would it ever be a bad idea to convert a traditional IRA to a Roth IRA with the following assumptions? | Even if you're paying a lot of taxes now, you're talking marginal dollars when you look at current contribution, and average tax rate when making withdrawals. IE, if you currently pay 28% on your last dollar (and assuming your contribution is entirely in your marginal rate), then you're paying 28% on all of the Roth contributions, but probably paying a lower average tax rate, due to the lower tax rates on the first many dollars. Look at the overall average tax rate of your expected retirement income - if you're expecting to pull out $100k a year, you're probably paying less than 20% in average taxes, because the first third or so is taxed at a very low rate (0 or 15%), assuming things don't change in our tax code. Comparing that to your 28% and you have a net gain of 8% by paying the taxes later - nothing to shake a stick at. At minimum, have enough in your traditional IRA to max out the zero tax bucket (at least $12k). Realistically you probably should have enough to max out the 15% bucket, as you presumably are well above that bucket now. Any Roth savings will be more than eliminated by this difference: 28% tax now, 15% tax later? Yes please. A diversified combination is usually best for those expecting to have a lot of retirement savings - enough in Traditional to get at least $35k or so a year out, say, and then enough in Roth to keep your comfortable lifestyle after that. The one caveat here is in the case when you max out your contribution levels, you may gain by using money that is not in your IRA to pay the taxes on the conversion. Talk to your tax professional or accountant to verify this will be helpful in your particular instance. |
Why are options created? | At my soon to be legendary Stock Options Cafe, I recently wrote an article "Betting On Apple at 9 to 2." It described a trade in which a 35% move in a stock over a fixed time (2 years) would result in a 354% gain in one's bet. In this case, the options serve to create remarkable leverage for speculators. In general, option help provide liquidity and extend the nature of the risk/reward curve. There are option trades that range from conservative (e.g. a 'covered call') to wildly speculative, as the one I described above. |
Why would anyone want to pay off their debts in a way other than “highest interest” first? | One reason to not do that is if you consider that one of the loans is at risk of being called in early. e.g. You have a line of credit which is close to its limit, and the bank decides to reduce that limit, forcing you to quickly come up with the money to pay it down below the new limit, which can really throw a wrench into your plans. |
How to make use of EUR/USD fluctuations in my specific case? | I would make this a comment but I am not allowed apparently. Unless your continent blows up, you'll never lost all your money. Google "EUR USD" if you want news stories or graphs on this topic. If you're rooting for your 10k USD (but not your neighbors), you want that graph to trend downward. |
What's a normal personal debt / equity ratio for a highly educated person? | Curious, are you asking about average, or the good numbers? The median family doesn't have $2500 to address an emergency. We are a nation of debtors, and spenders. A young couple at .8 is doing well. It means they saved 20% for a down payment, and just bought a house. Not too tough to buy with 5% down, have no other savings, and a student loan to put the debt to equity over 100%. Older people should be shooting for zero. I semi-retired at 50, and my mortgage is at about 8% of my net worth. 50% would be too high. Others 50+ should have at least 50% equity in their home and nearly half their "number," the amount needed to retire. So, a target is 25% maximum. These numbers shouldn't impact you at all. You should plan wisely, spend frugally, and prioritize your goals. There are 'zero debt' people out there who make me look reckless, and others who invest in rentals with a goal of keeping them highly leveraged. Neither group is wrong, what's right for you is what lets you sleep at night. |
How to account for personal baby sitter? | You should check several things: How your business can deduct your child care expenses is beyond me. If your mother-in-law starts a business as a neighborhood babysitter, she might get some deductions for her related expenses though. |
Purpose of having good credit when you are well-off? | Credit in general having no significant change between an income level or net worth is due to the economic reciprocity principle inherent in many societies. Although some areas of credit may be more admirable to those who aren't as well-off, such as car loans, the overall understanding of credit is a trust agreement between someone getting something (e.g., credit card user) and someone giving something (e.g., bank or company). Credit doesn't have to mean just money -- it can be anything of value, including tangible materials, services, etc. The fact is that a credit is a common element in most economical systems, and as such its use is not really variable between income levels/etc. Sure, there is variance in things like credit line amounts and rewards, but the overall gist is the same for everyone -- borrowing, paying back, benefits, etc. All of these exchanges form the same understanding we all know and follow. Credit brings along with it trust -- the form represented in a score. While not everyone may depend entirely on credit, and no one should use credit as a means of getting by entirely (money), everyone can understand and reap the benefits of a system whether they make 10K a year of 10M a year. This is the general idea behind credit in the broadest sense possible. Besides, just because one has or makes more money doesn't mean they don't prefer to get good deals. Nobody should like being taken advantage of, and if credit can help, anyone can establish trust. |
For a car, would you pay cash, finance for 0.9% or lease for 0.9%? | While this question is old and I generally agree with the answers given I think there's another angle that needs a little illuminating: insurance. If you go with an 84 month loan your car will likely be worth less than the amount owed for substantially all of the entire 84 month loan period; this will be exacerbated if you put zero down and include the taxes and fees in the amount borrowed. Your lender will require you to carry full comprehensive/collision/liability coverage likely with a low maximum deductible. While the car is underwater it will probably also be a good idea to carry gap insurance because the last thing you want to do is write a check to your lender to shore up the loan to value deficit if the thing is totaled. These long term car loans (I've seen as high as 96 months) are a bear when it comes to depreciation and related insurance costs. There is more to this decision than the interest calculation. Obviously, if you had the cash at the front of this decision presumably you'll have the cash later to pay off the loan at your convenience. But while the loan is outstanding there are costs beyond interest to consider. |
How do I find an ideal single fund to invest all my money in? | Not sure what your needs are or what NIS is: However here in the US a good choice for a single fund are "Life Cycle Funds". Here is a description from MS Money: http://www.msmoney.com/mm/investing/articles/life_cyclefunds.htm |
Can I Accept Gold? | Yes. But the question is do you want to have gold? If you are going to buy gold anyway, and if you can get a good conversion rate between USD:gold, then why not? If you are looking to use your earnings on things that you cannot buy using gold, then I'd recommend you take USD instead. Have fun! |
What's the catch in investing in real estate for rent? | The other thing to remember is seasonality. Just because monthly rent is $900/month doesn't guarantee that you'll bring in $900/month. Plenty of university towns have peak demand during the months of Aug/Sept when students are moving in, but you have to beg//plead//give discounted rent to keep units full during 'off-season' times. Assuming vacancy during 3 months/year, your average monthly rent is only $675. ($900 * 9 / 12) This may change the economics of your investment. |
Is gold subject to inflation? [duplicate] | Gold is a risky and volatile investment. If you want an investment that's inflation-proof, you should buy index-linked government bonds in the currency that you plan to be spending the money in, assuming that government controls its own currency and has a good credit rating. |
Why do companies award stock as opposed to cash? | There are a few reasons, dependent on the location of the company. The first, as you mentioned is that it means that the employee is invested in the companies success - in theory this should motivate the employee to work hard in order to increase the value of their holdings. Sometimes these have a vestment period which requires that they hold the stock for a certain amount of time before they are able to sell, and that they continue working at the company for a certain amount of time. The second, is that unlike cash, providing stocks doesn't come out of the companies liquid cash. While it is still an expense and does devalue the shares of other shareholders, it doesn't effect the daily working capital which is important to maintain to ensure business continuity. And the third, and this is for the employee, is tax reasons. In particular for substantial amounts. Of course this is dependent on jurisdiction but you can often achieve lower tax rates on receiving shares vs a cash equivalent sum, as you can draw out the money over time lowering your tax obligation each year, or other methods which aren't possible to look into now. Hope this helps. |
Trading: who takes the money from CAC 40 Or DAX | I am guessing that when you say "FRENCH40" and "GERMAN30" you are referring to the main French and German stock market indices. The main French index is the CAC-40 with its 40 constituent companies. The main German index is the DAX, which has 30 constituents. The US30 is presumably the Dow Jones Index which also has 30 constituents. These are stock market indices that are used to measure the value of a basket of shares (the index constituents). As the value of the constituents change, so does the value of the index. There are various financial instruments that allow investors to profit from movements in these indices. It is those people who invest in these instruments that profit from price movements. The constituent companies receive no direct benefit or profit from investor trading in these instruments, nor does the government. |
How can I estimate business taxes / filing fees for a business that has $0 income? | You need to hire a tax professional and have them sort it out for you properly and advise you on how to proceed next. Don't do it yourself, you're way past the stage when you could. You're out of compliance, and you're right - there are penalties that a professional might know how to mitigate, and maybe even negotiate a waiver with the IRS, depending on the circumstances of the case. Be careful of answers like "you don't need to pay anything" that are based on nothing of facts. Based on what you said in the question and in the comments, it actually sounds like you do have to pay something, and you're in trouble with the IRS already. It might be that you misunderstood something in the past (e.g.: you said the business had filed taxes before, but in fact that might never happened and you're confusing "business filed taxes" with "I filed schedule C") or it might be the actual factual representation of things (you did in fact filed a tax return for your business with the IRS, either form 1120 of some kind or 1065). In any case a good licensed (CPA or EA) professional will help you sort it out and educate you on what you need to do in the future. |
Should I charge my children interest when they borrow money? | Going from personal experience, my parents let my brother and me borrow money from them all the time. However there was always some noteworthy things to take into account. As an example, I borrowed a large sum of money on my student loan (we will just say it was $50,000). I had saved nearly $30,000 on my own and my parents lent me $10,000. I paid the remaining off over the course of about a year and a half. After this loan was paid off - I started paying my parents back. They dictated that I should not worry about paying them until my other interest loans were paid off. Once they were, my priority was to pay back my parents. Its supposed to help your children get ahead a little bit rather then sucking out interest from them. As long as the money was not needed elsewhere and is spent on something important I would not worry about it. Just make sure they are aware they are expected to pay it back in a reasonable amount of time or with specific requirements (such as after other loans are paid off). |
Borrowing money for a semi-urgent medical expense | I am a bit confused here as to how a 4K loan will negatively effect your credit score if payments are made on time. FICO scores are based upon how well you borrow. If you borrow, pay back on time, your score will not go down. Perhaps a bit in the short run when you first secure the loan, but that should come back quickly. In the long run it will help improve your score which seems like it would be more important to you. Having the provider finance your loan will probably not show up on your credit unless you fail to pay and they send to collections. If the score is so important to you, which I think is somewhat unwise, then use a credit card. With a 750 you should be able to get a pretty good rate, but assume it is 18%. In less then 9 months you will have it paid off, paying about $293 in interest. You could consider that a part of the cost of doing business for maintaining a high credit score. Again not what I would advise, but it might meet your needs. One alternative is go with lending club. With that kind of score, you are looking at 7% or so. At $500 a month, you are still looking at just over 8 months and paying about $100 in interest. Much less money for improving your credit score. Edit based upon the comment: "My understanding is that using a significant portion of your available credit balance is bad for your credit, even if you pay your bills on time." Define bad. As I said it might go down slightly in the short term. In three months you will have almost 33% of the loan paid off, which is significantly lower then the original balance. If you go the credit card route, you may be approved for quite a bit more then the 4000, which may not move the needle at all. Are you planning on buying a home in the next 90 days? If not, why does a small short term dip matter? Will your life really be effected if your score goes down to 720 for three months? Keep in mind this is exactly the kind of behavior that the banks want you to engage in. If you worship your FICO score, which gives no indication of wealth then you should do exactly what I am suggesting. |
How does owning a home and paying on a mortgage fit into family savings and investment? | 1) How does owning a home fit into my financial portfolio? Most seem to agree that at best it is a hedge against rent or dollar inflation, and at worst it should be viewed as a liability, and has no place alongside other real investments. Periods of high inflation are generally accompanied with high(er) interest rates. Any home is a liability, as has been pointed out in other answers; it costs money to live in, it costs money to keep in good shape, and it offers you no return unless you sell it for more than you have paid for it in total (in fact, as long as you have an outstanding mortgage, it actually costs you money to own, even when not considering things like property taxes, utilities etc.). The only way to make a home an investment is to rent it out for more than it costs you in total to own, but then you can't live in it instead. 2) How should one view payments on a home mortgage? How are they similar or different to investing in low-risk low-reward investments? Like JoeTaxpayer said in a comment, paying off your mortgage should be considered the same as putting money into a certificate of deposit with a term and return equivalent to your mortgage interest cost (adjusting for tax effects). What is important to remember about paying off a mortgage, besides the simple and not so unimportant fact that it lowers your financial risk over time, is that over time it improves your cash flow. If interest rates don't change (unlikely), then as long as you keep paying the interest vigilantly but don't pay down the principal (assuming that the bank is happy with such an arrangement), your monthly cost remains the same and will do so in perpetuity. You currently have a cash flow that enables you to pay down the principal on the loan, and are putting some fairly significant amount of money towards that end. Now, suppose that you were to lose your job, which means a significant cut in the household income. If this cut means that you can't afford paying down the mortgage at the same rate as before, you can always call the bank and tell them to stop the extra payments until you get your ducks back in the proverbial row. It's also possible, with a long history of paying on time and a loan significantly smaller than what the house would bring in in a sale, that you could renegotiate the loan with an extended term, which depending on the exact terms may lower your monthly cost further. If the size of the loan is largely the same as or perhaps even exceeds the market value of the house, the bank would be a lot more unlikely to cooperate in such a scenario. It's also a good idea to at the very least aim to be free of debt by the time you retire. Even if one assumes that the pension systems will be the same by then as they are now (some don't, but that's a completely different question), you are likely to see a significant cut in cash flow on retirement day. Any fixed expenses which cannot easily be cut if needed are going to become a lot more of a liability when you are actually at least in part living off your savings rather than contributing to them. The earlier you get the mortgage paid off, the earlier you will have the freedom to put into other forms of savings the money which is now going not just to principal but to interest as well. What is important to consider is that paying off a mortgage is a very illiquid form of savings; on the other hand, money in stocks, bonds, various mutual funds, and savings accounts, tends to be highly liquid. It is always a good idea to have some savings in easily accessible form, some of it in very low-risk investments such as a simple interest-bearing savings account or government bonds (despite their low rate of return) before you start to aggressively pay down loans, because (particularly when you own a home) you never know when something might come up that ends up costing a fair chunk of money. |
Debit cards as bad as credit cards? | If it is one of those debit cards you use just like a credit card without a PIN, I'd cancel it regardless of whatever you are trying to do with your finances. They just seem too dangerous to me. Unlike a credit card, if someone makes fraudulent purchases on a debit card the money is gone from your bank account until you resolve the issue with the issue. With a credit card, the BANK is out the money until it gets worked out. My brother once had his credit card number (not the card) stolen and the criminals emptied his bank account. Eventually the bank put the money back after an investigation, but it had two really nasty side effects: 1) Dozens of checks bounced. The bank refunded the bounced check fees, but not all of the stores would. 2) He had no money in his account until it was resolved. Luckily in his case they resolved it in a few days, but he was already making preparations to borrow money to pay his rent/bills. |
What are the pros and cons of investing in a closed-end fund? | The pros and cons of investing in a closed end fund both stem from the fact that the price per share is likely to differ from the net asset value (NAV) of the underlying assets. That could work to your advantage if the fund is selling for LESS than NAV, or at a discount. Then you get the "benefit of the bargain" and hope to sell the shares in the future for "par" or even a premium (MORE than NAV). On the other hand, if you buy such a fund at a premium, you stand to have a RELATIVE loss if the value of the fund goes back to par (or a discount) compared to NAV. That's because a closed end fund has a FIXED number of shares, with the assets continually being reinvested. In essence, you are "buying out" an existing shareholder of the fund at a price determined by supply and demand. This differs from an OPEN end fund, in which your contribution creates NEW shares (all other things being equal). Then the fund, has to invest YOUR money (and charges you a fee for the service) on exactly a pro rata basis with other investors in the fund, meaning that you will enter and exit such a fund at "par." In either case, your return depends mainly on the performance of the underlying assets. But there are premium/discount issues for investing in a closed end fund. |
Are there index tracking funds that avoid the “buy high - sell low” problem? | There are some index funds out there like this - generally they are called "equal weight" funds. For example, the Rydex S&P Equal-Weight ETF. Rydex also has several other equal weight sector funds |
Two 1099B for same stock | It looks like what you're calling a name change was registered as a merger that resulted in an exchange of stock. If that's the case, then what you've been told is correct. You've got one long-term sale and one short-term sale. Based a quick read of the Form 8937 that was filed, it looks like there were multiple entities involved in this event, more than one of which existed prior to it. https://www.mylan.com/-/media/mylancom/files/form%208937%20for%20mylan%20n%20v.pdf |
How does an index rearrange its major holdings | S & P Index Announcements would have notes on when there are changes to the index. For example in the S & P Small-cap 600 there is a change that takes affect on Feb. 19, 2013. As for how index funds handle changes to the fund, this depends a bit on the nature of the fund as open-end mutual funds would be different than exchange-traded funds. The open-end fund would have to sell and purchase to keep tracking the index which can be interesting to see how well this is handled to keep the transaction costs down while the ETFs will just unload the shares in the redemption units of the stock leaving the index while taking in new shares with creation units of the newly added stock to the index. |
Why do Americans have to file taxes, even if their only source of income is from a regular job? | A couple things. First of all, most people's MAIN source of income is from their job, but they have others, such as bank interest, stock dividends, etc. So that income has to be reported with their wage income. The second thing is that most people have deductions NOT connected with their job. These deductions reduce income (and generate refunds). So it's in their interest to file. |
Should I finance a used car or pay cash? | One additional reason to pay with cash rather than financing is that you will be able to completely shut down the dealership from haggling over finance terms and get right to the point of haggling over the cost of the car (which you should always do). |
Back of Check Images are Blank and not Endorsed | In general, a lack of endorsement (meaning nothing written by the receiver on the back of the check) is equivalent to it being endorsed "as deposit only" to a bank that the depositor has an account with. (See Uniform Commercial Code §4-205.) That is, the bank that receives a deposit without any endorsement promises to the banks that process the check along the line all the way back to your bank, that they properly deposited the money into the account of the entity that the check was made out to. With checks being processed with more and more automation, it's getting fairly common for there to be little writing needed on the check itself, as the digital copy gets submitted to the banking system for clearing. If you're concerned about there being some sort of fraud, that perhaps the entity that you're sending money to isn't the ones that should be getting it, or that they're not actually getting the money, or something like that, that's really an entirely different concern. I would expect that if you were saying that you paid something, and the payee said that you hadn't, that you would dispute the transaction with your bank. They should be able to follow the electronic trail to where the money went, but I suspect they only do so as part of an investigation (and possibly only in an investigation that involved law enforcement of some type). If you're just curious about what bank account number your deposit went into, then it just looks like you're the one trying to commit some sort of fraud (even if you're just being curious), and they don't have much incentive to try to help you out there. |
Do options always expire on third Friday of every month | Prior to 2005, the only SPY options that existed were the monthly ones that expire on the third Friday of every month. But in 2005, the Chicago Board Options Exchange introduced SPY weekly options that expire every Friday (except that there is no weekly option that expires on the same day as a monthly option). These weekly options only exist for 8 days - they start trading on a Thursday and expire 8 days later on Friday. The SPY options that expire on Friday October 31 are weekly options, and they started trading on Thursday October 23. Sources: Investopedia |
What does “Net Depreciation in Fair Value” mean on a financial report? | First, the annual report is just that, a snapshot that shows value at the beginning and end of the period. Beginning = Aug 08 = $105B End = Aug 09 = $89B Newsletter date May 10 = $96B Odd they chose end of August as it's not even a calendar quarter end. The $16B was market loss during that period. Nearly half of that seemed to be recovered by the time this newsletter came out. The balance sheet also has to show deposits and payments made to existing retirees. I haven't looked at the S&P numbers for those dates, but my gut says this is right. The market tanked and the plan was down, but not too bad. Protect? The PBGC guarantees pensions up to a certain limit. I believe that in general, teachers are below the limit and are not at risk of a reduced benefit. You do need to check that your plan is covered. If not, I believe the state would take over directly. I hope this helps. |
Definition of “secular” in the context of markets? | According to Wikipedia: In the finance industry, something done on a secular basis is done on a long-term basis, not a temporary or cyclical one, with a time frame of "10–50 years or more" Source |
Is there any US bank that does not charge for incoming wire transfers? | Yes, a business account at Chase bank offers free incoming wire transfer fees when you keep a minimum balance of over 100k. It's the only one I have found. |
How safe is a checking account? | In addition to @mhoran_psprep answer, and inspired by @wayne's comment. If the bank won't let you block automatic transfers between accounts, drop the bank like a hot potato They've utterly failed basic account security principles, and shouldn't be trusted with anyone's money. It's not the bank's money, and you're the only one that can authorize any kind of transfer out. I limit possible losses through debit and credit cards very simply. I keep only a small amount on each (~$500), and manually transfer more on an as needed basis. Because there is no automatic transfers to these cards, I can't lose everything in the checking account, even temporarily. |
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