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Personal Banking using accrual method | You would add your daily earnings every day. For example, you work full time job (8 hours a day) at $20/hour. At the end of the 1st day of the month, you'd add $160 to your salary account. You've earned it, even though its still almost a month till you actually get paid. So its accrued. What if you don't get paid? You've accrued it already, its on your books, but not in your wallet. You might have paid taxes on it, etc. But you don't really have it. This is what is called "bad debt", and eventually, after you can show that the payee is not going to pay, you write it off - remove it from your books (and adjust your taxes etc that you paid on that income already). Generally, it is a very bad idea to use accrual method of accounting for an individual or a small business. For large volume business using accrual mode solves other accounting and revenue recognition problems. |
How can I deposit a check made out to my business into my personal account? | When a business asks me to make out a cheque to a person rather than the business name, I take that as a red flag. Frankly it usually means that the person doesn't want the money going through their business account for some reason - probably tax evasion. I'm not saying you are doing that, but it is a frequent issue. If the company makes the cheque out to a person they may run the risk of being party to fraud. Worse still they only have your word for it that you actually own the company, and aren't ripping off your employer by pocketing their payment. Even worse, when the company is audited and finds that cheque, the person who wrote it will have to justify and document why they made it out to you or risk being charged with embezzlement. It's very much in their interests to make the cheque out to the company they did business with. Given that, you should really have an account in the name of your business. It's going to make your life much simpler in the long run. |
Should I cancel an existing credit card so I can open another that has rewards? | Cancelled cards don't fall off the system for a long time, up to ten years. Card terms change, with notice of course, but it can happen at any time. I had a card with a crazy perk, 5% back in Apple Gift cards. This was pre-iPod days, but it was great to get a new computer every two years for free. But it was short lived. Three years into it, the cards were changed, a no-perk card from the bank. That is now my oldest account, and it goes unused. Instead of holding cards like this, I wish I had flipped it to a different card years ago. Ideally, your mix of cards should provide value to you, and if they all do, then when one perk goes away, it's time to refresh that card. This is a snapshot from my report at CreditKarma. (Disclosure, I like these guys, I've met their PR folk. I have no business relationship with them) Elsewhere on the page it's noted that average card age is a 'medium impact' item. I am 50, but I use the strategy above to keep the cards working for me. My current score is 784, so this B on the report isn't hurting too much. The tens of thousands I've saved in mortgage interest by being a serial refinancer was worth the hit on account age, as was the credit card with a 10% rebate for 90 days, the 'newest account' you see in the snapshot. In the end, the score manipulation is a bit of a game. And some of it is counter-intuitive. Your score can take a minor hit for actions that would seem responsible, but your goal should be to have the right mix of cards, and the lowest interest (long term) loans. |
Buying a multi-family home to rent part and live in the rest | There's nothing wrong with it. Living in a two-family house and renting the downstairs was a fairly standard path to the middle class and home ownership in the 20th century. Basically, if market conditions are good, you'll have someone else paying your mortgage. The disadvantage of the situation is that you're a landlord. So you have to deal with your tenant, who is also a neighbor. Most tenants are fine, but the occasional difficult person may come out of the woodwork. That model of achieving home ownership became less popular in the late 60's-early 70's when the law allowed two incomes to be used for mortgage underwriting. Also, as suburbanization became a national trend, absentee landlords became more common Sounds like you are in the right place at the right time, and have stumbled into a good deal. |
Is 401k as good as it sounds given the way it is taxed? | This is an excellent topic as it impacts so many in so many different ways. Here are some thoughts on how the accounts are used which is almost as important as the as calculating the income or tax. The Roth is the best bang for the buck, once you have taken full advantage of employer matched 401K. Yes, you pay taxes upfront. All income earned isn't taxed (under current tax rules). This money can be passed on to family and can continue forever. Contributions can be funded past age 70.5. Once account is active for over 5 years, contributions can be withdrawn and used (ie: house down payment, college, medical bills), without any penalties. All income earned must be left in the account to avoid penalties. For younger workers, without an employer match this is idea given the income tax savings over the longer term and they are most likely in the lowest tax bracket. The 401k is great for retirement, which is made better if employer matches contributions. This is like getting paid for retirement saving. These funds are "locked" up until age 59.5, with exceptions. All contributed funds and all earnings are "untaxed" until withdrawn. The idea here is that at the time contributions are added, you are at a higher tax rate then when you expect to withdrawn funds. Trade Accounts, investments, as stated before are the used of taxed dollars. The biggest advantage of these are the liquidity. |
How can I register a UK business without providing a business address? | You don't have to provide your personal home address per se. You can provide a legal address where Companies house can send across paper correspondence to. Companies house legally requires an address because directors are liable to their shareholders(even if you are the only shareholder) and to stop them from disappearing just like that with shareholder's money. Moreover your birth date will also be visible on websites which provide comapnies information. You can ask these websites to stop sharing your personal information. Every company must have a registered office within the UK which is the official legal address of the company. It must be a physical address (i.e. not a PO Box without a physical location) as Companies House will use this address to send correspondence to. To incorporate a private limited company you need at least one director, who has to be over 16 years of age. You may also have a secretary, but this is optional. The information you will need to supply for each officer includes: You may also have officers that are companies or firms, and for these you will need to supply the company or firm name, its registered office address, details of the legal form of the company, where it is registered and if applicable its registration number. |
Accepted indicators for stock market valuation | There are several camps for stock valuation, and much of it boils down to your investment style. A growth investor will not consider something with a 50x P/E ratio to be overvalued, but a value investor certainly would. I would recommend looking up the Fama-French n-factor model (it was 3-factor, I believe they have released newer papers which introduce other factors), and reading The Intelligent Investor by Benjamin Graham. Graham's methodology is practically canon for many investors, and the methodology focuses on value, while outlining quantitative factors for determining if a stock is under or over valued. |
Credit card expenses showing as Liabilities in QuickBooks | Is it normal in QuickBooks to have credit card expenses being shows as liabilities? Is there a way I can correct this? If they are expenses they shouldn't be negative liabilities unless you overpaid your credit card by that amount. It sounds like perhaps when you linked the account the credit/debit mapping may have been mixed up. I've not used QB Online, but it looks like you might have to un-link the account, move all the existing transactions to 'excluded' and then link the account again and flip-flop the debit/credit mapping from what it is now. Hopefully there's an easier way. This QB community thread seems to address the same issue. |
How do you determine “excess cash” for Enterprise Value calculations from a balance sheet? | 20% is almost certainly too high. I agree with 2%, as a very rough rule. It will vary significantly depending on the industry. I generally calculate an average of the previous 2-3 years working capital, and deduct that from cash. Working capital is Current Assets less Current Liabilities. Current Assets is comprised of cash, prepaid expenses, and significantly, accounts receivable. This means that CA is likely to be much higher than just cash, which leaves more excess cash after liabilities are deducted. Which reduces EV, which makes the EV/EBITDA ratio look even more pricey, as Dimitri noted. But a balance sheet is just a snapshot of the final day of the quarter. As such, and because of seasonal effects, it's critical to smooth this by averaging several periods. After calculating this for a few companies, compare to revenue. Is it close to 2%? |
Can I place a stock limit order to buy above the current price? Can I place a stock limit order to sell below the current price? | You are better off just placing a market order if you want to buy or sell straight away and avoid the queues. A market order will guarantee the purchase or sale of your shares, but it won't guarantee the price. |
What tax can I expect on US stocks in a UK ISA? | non-resident aliens to the US do not pay capital gains on US products. You pay tax in your home country if you have done a taxable event in your country. http://www.investopedia.com/ask/answers/06/nonusresidenttax.asp#axzz1mQDut9Ru but if you hold dividends, you are subject to US dividend tax. The UK-US treaty should touch on that though. |
Do I pay a zero % loan before another to clear both loans faster? | Aside from the calculations of "how much you save through reducing interest", you have two different types of loan here. The house that is mortgaged is not a wasting asset. You can reasonably expect that in 2045 it will have retained its worth measured in "houses", against the other houses in the same neighbourhood. In money terms, it is likely to be worth more than its current value, if only because of inflation. To judge the real cost or benefit of the mortgage, you need to consider those factors. You didn't say whether the 3.625% is a fixed or variable rate, but you also need to consider how the rate might compare with inflation in the long term. If you have a fixed rate mortgage and inflation rises above 3.625% in future, you are making money from the loan in the long term, not losing what you pay in interest. On the other hand, your car is a wasting asset, and your car loans are just a way of "paying by installments" over the life of the car. If there are no penalties for early repayment, the obvious choice there is to pay off the highest interest rates first. You might also want to consider what happens if you need to "get the $11,000 back" to use for some other (unplanned, or emergency) purpose. If you pay it into your mortgage now, there is no easy way to get it back before 2045. On the other hand, if you pay down your car loans, most likely you now have a car that is worth more than the loans on it. In an emergency, you could sell the car and recover at least some of the $11,000. Of course you should keep enough cash available to cover "normal emergencies" without having to take this sort of action, but "abnormal emergencies" do sometimes happen! |
What are the common moving averages used in a “Golden Cross” stock evaluation? | Technical analysis is insufficient. You're halfway to figuring it out if you start to question why a 50 day moving average vs 200 vs 173. Invest in companies that are attractively valued vs. their sales/growth/divends/anythingelsereal |
Insurance broker - Online vs. physical location? | Traditional insurance agent guy here. There is no right answer in my opinion because your individual needs cannot be generalized. There are a variety of factors that influence the price charged to you including but not limited to your past claims history, geographic location, credit profile, and the carrier's book of business itself. This is just a small sampling, in reality their pricing calculations may be far more complicated. The point is there is no one-size-fits all carrier. My agency works with 15 different carriers. Sometimes we can offer the best combination of coverage and cost to a prospective client that beats their existing coverage; other times we are nowhere close to being competitive. The most important thing you can do is find a person/site/company you can trust and one that does not take advantage of you. Insurance policies are complex and "getting the best deal" may oftentimes mean lessening coverage without realizing it. So I would recommend using whatever service channel (online, phone, local agent) that's most convenient and consultative for you. And otherwise, shop around once every year or two to make sure you're still getting the most for your money. |
selling apple stock limit order | Your order may or may not be executed. The price of stock can open anywhere. Often yesterday's close is a good indication of today's open, but with a big event overnight, the open may be somewhere quite different. You'll have to wait and see like the rest of us. Also, even if it doesn't execute at the open, the price could vary during the day and it might execute later. |
Thrift Saving Plan (TSP) Share Price Charts | If you're looking to generate your own charts, you can get up-to-date TSP fund share prices in a Google Docs spreadsheet by "scraping" the data from the HTML of certain TSP webpages. You'll need to do this because the GoogleFinance function does not recognize "private" funds or collective trusts like those of the TSP. See this thread for tips: Bogleheads • View topic - GoogleFinance price quotes for TSP Funds |
Beginner dividend investor - first steps | How do I start? (What broker do I use?) We don't make specific recommendations because in a few years that might not be the best recommendation any more. You are willing to do your own research, so here are some things to look for when choosing a broker: What criticism do you have for my plan? Seeking dividend paying stock is a sensible way to generate income, but share prices can still be very volatile for a conservative investor. A good strategy might be to invest in several broad market index and bond funds in a specific allocation (for example you might choose 50% stocks and 50% bonds). Then as the market moves, your stocks might increase by 15% one year while bonds stay relatively flat, so at the beginning of the next year you can sell some of your stocks and buy bonds so that you are back to a 50-50 allocation. The next year there might be a stock market correction, so you sell some of your bonds and buy stock until you are back to a 50-50 allocation. This is called rebalancing, and it doesn't require you to look at the market daily, just on a regular interval (every 3 months, 6 months, or 1 year, whatever interval you are comfortable with). Rebalancing will give you greater gains than a static portfolio, and it can insulate you from losses when the stock market panics occasionally if you choose a conservative allocation. |
Investing in low cost index fund — does the timing matter? | A much less verbose answer is. Don't worry about buying low. You have a whole lifetime to dollar cost average your retirement dollars. |
What evidence exists for claiming that you cannot beat the market? | There seems to be a common sentiment that no investor can consistently beat the market on returns. What evidence exists for or against this? First off, even if the markets were entirely random there would be individual investors that would consistently beat the market throughout their lifetime entirely by luck. There are just so many people this is a statistical certainty. So let's talk about evidence of beating the market due to persistent skill. I should hedge by saying there isn't a lot of good data here as most understandably most individual investors don't give out their investment information but there are some ok datasets. There is weak evidence, for instance, that the best individual investors keep outperforming and interestingly that the trading of individual investors can predict future market movements. Though the evidence is more clear that individual investors make a lot of mistakes and that these winning portfolios are not from commonly available strategies and involve portfolios that are much riskier than most would recommend. Is there really no investment strategy that would make it likely for this investor to consistently outperform her benchmark? There are so, many, papers (many reasonable even) out there about how to outperform benchmarks (especially risk-adjusted basis). Not too mention some advisers with great track records and a sea of questionable websites. You can even copy most of what Buffet does if you want. Remember though that the average investor by definition makes the average "market" return and then pays fees on top of that. If there is a strategy out there that is obviously better than the market and a bunch of people start doing it, it quickly becomes expensive to do and becomes part the market. If there was a proven, easy to implement way to beat the market everyone would do it and it would be the market. So why is it that on this site or elsewhere, whenever an active trading strategy is discussed that potentially beats the market, there is always a claim that it probably won't work? To start with there are a large number of clearly bad ideas posed here and elsewhere. Sometimes though the ideas might be good and may even have a good chance to beat the market. Like so many of the portfolios that beat the market though and they add a lot of uncertainty and in particular, for this personal finance site, risk that the person will not be able to live comfortably in retirement. There is so much uncertainty in the market and that is why there will always be people that consistently outperform the market but at the same time why there will be few, if any, strategies that will outperform consistently with any certainty. |
Taxing GoFundMe Donations | I'm going to post this as an answer because it's from the GoFundMe website, but ultimately even they say to speak with a tax professional about it. Am I responsible for taxes? (US Only) While this is by no means a guarantee, donations on GoFundMe are simply considered to be "personal gifts" which are not, for the most part, taxed as income in the US. However, there may be particular, case-specific instances where the income is taxable (dependent on amounts received and use of the monies, etc.). We're unable to provide specific tax advice since everyone's situation is different and tax rules can change on a yearly basis. We advise that you maintain adequate records of donations received, and consult with your personal tax adviser. Additionally, WePay will not report the funds you collect as earned income. It is up to you (and a tax professional) to determine whether your proceeds represent taxable income. The person who's listed on the WePay account and ultimately receives the funds may be responsible for taxes. Again, every situation is different, so please consult with a tax professional in your area. https://support.gofundme.com/hc/en-us/articles/204295498-Am-I-responsible-for-taxes-US-Only- And here's a blurb from LibertyTax.com which adds to the confusion, but enforces the "speak with a professional" idea: Crowdfunding services have to report to the IRS campaigns that total at least $20,000 and 200 transactions. Money collected from crowdfunding is considered either income or a gift. This is where things get a little tricky. If money donated is not a gift or investment, it is considered taxable income. Even a gift could be subject to the gift tax, but that tax applies only to the gift giver. Non-Taxable Gifts These are donations made without the expectation of getting something in return. Think of all those Patriots’ fans who gave money to GoFundMe to help defray the cost of quarterback Tom Brady’s NFL fine for Deflategate. Those fans aren’t expecting anything in return – except maybe some satisfaction -- so their donations are considered gifts. Under IRS rules, an individual can give another individual a gift of up to $14,000 without tax implications. So, unless a Brady fan is particularly generous, his or her GoFundMe gift won’t be taxed. Taxable Income Now consider that same Brady fan donating $300 to a Patriots’ business venture. If the fan receives stock or equity in the company in return for the donation, this is considered an investment and is not taxable . However, if the business owner does not offer stock or equity in the company, the money donated could be considered business income and the recipient would need to report it on a tax return. https://www.libertytax.com/tax-lounge/two-tax-rules-to-know-before-you-try-kickstarter-or-gofundme/ |
Paying off a loan with a loan to get a better interest rate | Your current loan is for a new car. Your refinanced loan would probably be for a used car. They have different underwriting standards and used car loan rates are usually higher because of the higher risks associated with the loans. (People with better credit will tend to buy new cars.) This doesn't mean that you can't come out ahead after refinancing but you'll probably have to do a bit of searching. I think you should take a step back though. 5% isn't that much money and five years is a long time. Nobody can predict the future but my experience tells me that the **** is going to hit the fan at least once over any five year period, and it's going to be a really big dump at least once over any ten year period. Do you have savings to cover it or would you have to take a credit card advance at a much higher interest rate? Are you even sure that's an option - a lot of people who planned to use their credit card advances as emergency savings found their credit limits slashed before they could act. I understand the desire to reduce what you pay in interest but BTDT and now I don't hesitate to give savings priority when I have some excess cash. There's no one size fits all answer but should have at least one or two months of income saved up before you start considering anything like loan prepayments. |
What is the tax levied against stock portion cashed out of 401k? | You pay tax on the entire amount, not just the capital gains. When cashing out such a plan you would pay the top marginal tax rate on the full amount plus another 10% in penalties. It is very likely that the additional income, of the balance withdrawal, will increase your top marginal rate. It is impossible to come up with a precise answer as we don't know the following: However, you can take a concept away from this that is important: You will be taxed and penalized on the entire 401K balance, not just the capital gain. In the "best case" scenario, that is you had little or no income in a given year. Under current tax law you would owe about 31% of your 401K balance in taxes. As this is such an inefficient use of money most authors recommend against it except in the case of extreme circumstances. |
Can a trade happen “in between” the bid and ask price? | All the time. For high volume stocks, it may be tough to see exactly what's going on, e.g. the bid/ask may be moving faster than your connection to the broker can show you. What I've observed is with options. The volume on some options is measured in the 10's or 100's of contracts in a day. I'll see a case where it's $1.80/$2.00 bid/ask, and by offering $1.90 will often see a fill at that price. Since I may be the only trade on that option in the 15 minute period and note that the stock wasn't moving more than a penny during that time, I know that it was my order that managed to fill between the bid/ask. |
Ideal investments for a recent college grad with very high risk tolerance? | Sorry to be boring but you have the luxury of time and do not need high-risk investments. Just put the surplus cash into a diversified blue-chip fund, sit back, and enjoy it supporting you in 50 years time. Your post makes me think you're implicitly assuming that since you have a very high risk tolerance you ought to be able to earn spectacular returns. Unfortunately the risks involved are extremely difficult to quantify and there's no guarantee they're fairly discounted. Most people would intuitively realise betting on 100-1 horses is a losing proposition but not realise just how bad it is. In reality far fewer than one in a thousand 100-1 shots actually win. |
Strategies for paying off my Student loans | My advice is that if you've got the money now to pay off your student loans, do so. You've saved up all of that money in one year's time. If you pay it off now, you'll eliminate all of those monthly payments, you'll be done paying interest, and you should be able to save even more toward your business over the next year. Over the next year, you can get started on your business part time, while still working full time to pile up cash toward your business. Neither you nor your business will be paying interest on anything, and you'll start out in a very strong position. The interest on your student loans might be tax deductible, depending on your situation. However, this doesn't really matter a whole lot, in my opinion. You've got about $22k in debt, and the interest will cost you roughly $1k over the next year. Why pay $1k to the bank to gain maybe $250 in tax savings? Starting a business is stressful. There will be good times and bad. How long will it take you to pay off your debt at $250 a month? 5 or 6 years, probably. By eliminating the debt now, you'll be able to save up capital for your business even faster. And when you experience some slow times in your business, your monthly expenses will be less. |
Financial implications of purchasing a first home? | Congrats! Make sure you nail down NOW what happens to the house should you eventually separate. I know lots of unmarried couples who have stayed together for decades and look likely to do so for life; I've also seen some marriages break up that I wouldn't have expected to. Better to have this discussion NOW. Beyond that: Main immediate implications are that you have new costs (taxes, utilities, maintenance) and new tax issues (mortgage interest and property tax deductability) and you're going to have to figure out how to allocate those between you (if there is a between; not sure whether unmarried couples can file jointly these days). |
Short term investing vs Leaving money alone? | There are three basic concepts finance (as far as I'm concerned). Liquidity is basically an asset's spendability. Assets range in liquidity from cash (very liquid) to real estate (not very liquid). You can spend cash immediately, while real estate must first be converted to cash. Another important concept is your time horizon. When do you need your money. Money you need in the near term should be kept in very liquid assets, while money you won't need for a significantly long time can be tied in to something much less liquid. Volatility is the degree to which an assets value is predictable from day to day. Cash and guaranteed savings accounts have very low volatility, while a stock portfolio will fluctuate in value from day to day, sometimes a lot and sometimes you can lose your initial investment. So really, you need to determine what you need or want this money for, and depending on when you'll need it you can make decisions about whether or not to invest it, or keep it in a savings account, or keep it in literal actual cash. Your TFSA is maxed for the year, so that's out. Do you have an emergency fund? Do you want to travel or have other more near term desires that cost money? If you have a solid financial foundation and already have an emergency fund, you may want to set up a brokerage account and invest in an index fund. You should not invest money in the stock market unless you are ready to leave it there for at least a few years. Stocks are volatile but over a long enough period the market generally goes up. In your search for the right index fund, watch out for fees. Most big brokers will have a list of funds you can invest in with no up front fees and no commission. The fund itself will charge an expense ratio, look for an index fund with an expense ratio around 0.10%. This means you'll pay 0.10% of your holdings each year to the fund manager. No matter how much money we're talking about, I wouldn't put more than half in the market. Dip your toe in, get used to the value fluctuating. Don't start reading about technical analysis and derivative trading. Just put your money in a very low fee big market index and let it ride. |
How to realize capital gains before going from non-resident alien to resident alien in USA | Is this possible and will it have the intended effect? From the US tax perspective, it most definitely is and will. Is my plan not very similar to Wash Sale? Yes, except that wash sale rules apply for losses, not gains. In any case, since you're not a US tax resident, the US wash sale rules won't apply to you. |
Why does selling and then rebuying stock not lead to free money? | The main thing you're missing is that while you bear all the costs of manipulating the market, you have no special ability to capture the profits yourself. You make money by buying low and selling high. But if you want to push the price up, you have to keep buying even though the price is getting high. So you are buying high. This gives everyone, including you, the opportunity to sell high and make money. But you will have no special ability to capture that -- others will see the price going up and will start selling within a tiny fraction of a second. You will have to keep buying all the shares they keep selling at the artificially inflated price. So as you keep trying to buy more and more to push the price up enough to make money, everyone else is selling their shares to you. You have to buy more and more shares at an inflated price as everyone else is selling while you are still buying. When you switch to selling, the price will drop instantly, since there's nobody to buy from you at the inflated price. The opportunity you created has already been taken -- by the very people you were trading with. Billions have been lost by people who thought this strategy would work. |
How can OTC scams affect you? | Am I being absurd? No. Should I be worrying? Yes. If I sell in the morning, I've only lost a couple hundred dollars, and learned a valuable lesson. Is there any reason to believe it won't be that simple? If you're lucky, you'll be able to dump your stocks to someone like you who'll be punching himself in the face tomorrow night. If not - you're stuck. You may end up selling them to your broker as worthless. You might have become a victim of a "pump and dump" fraud. Those are hard to identify in real-time, but after been burned like that myself (for much lesser amounts than you though), I avoid any "penny" stocks that go up for no apparent (and verifiable) reason. In fact, I avoid them altogether. |
Limited Liability Partnership capital calculation | Retained earnings is different from partner capital accounts. You can draw the money however the partners agree. Unless money is specifically transferred to the capital funds, earnings will not show up there. |
Prices go up and salary doesn't: where goes delta? | Salaries normally shouldn't fluctuate with inflation and deflation... Inflation prevents consumers from spending (prices get too high), ultimately taking money out of circulation. This causes the market to go in to deflation (or at least deflate back to normal). That's when people begin to spend again, and start the cycle all over again. Now... Imagine if salaries increased with inflation... Inflation would never end. Everyone could keep affording the high prices. A Starbucks coffee would eventually cost $150, but the "middle-class" would all be millionaires. Your "small-change" would consist of a wad of useless bills, and the government would have to continually print out more money just to keep up. NOTE: This is not a direct answer to "where goes delta?", but would more be directed to the part "Prices go up and salary doesn't". |
Do my 401k/Roth accounts benefit from compounding? | Sure, stocks don't pay interest. I just looked up the word "compound" in a couple of dictionaries and the relevant definition in all of them just mentioned interest and not growth in the value of stock. So it may be technically inaccurate to talk about "compound growth" of a stock. I'll yield to someone more knowledgeable about the technical language of finance to answer that part. But regardless of whether the word strictly applies, the concept certainly does. Suppose you put $1000 into a mutual fund and the fund grows by 10%. You now have $1100. The next year the fund grows by 15%. So you gain 15% of what? Of your original $1000? No, of your present balance, $1100. The effect is the same as compound interest. There is the fundamental difference that interest is normally a fixed rate: you get such-and-such percent a year as spelled out in a contract. But change in the value of a stock depends on many factors, none of them guaranteed. |
Is www.onetwotrade.com a scam? | OneTwoTrade is a binary option seller, and they are officially licensed by the Malta Gaming Authority. They are not in any way licensed or regulated as an investment, because they don't do actual investing. Is your money safe? If you mean will they take your money and run off with it, then no they probably won't just take your deposit and refuse to return any money to you for nothing - that would be a terrible way to make money for the long-term. If you mean "will I lose my money?" - oh yeah, you probably will! Binary options - outside of special sophisticate financial applications - are for people who think day trading has too little risk, or who would prefer online poker with a thin veneer of "it's an investment!" In the words of Forbes, Don't Gamble On Binary Options: If people want to gamble, that’s their choice. But let’s not confuse that with investing. Binary options are a crapshoot, pure and simple. These kinds of businesses run like a casino - there's a built-in house advantage, you are playing odds (which are against you), and the fundamental product is trying to bet on short-term volatility in financial markets. This is often ridiculously short-terms, measured in minutes. It's often called "all or nothing options", because if you bet wrong you lose almost everything - they give you a little bit of the money you bet back (so you will bet again, preferably with more of your own money). If you bet correctly you get a pay-out, just like in craps or roulette. If you are looking to gamble online, this is one method to do it. But this isn't investing, you are as mathematically likely to lose your money and/or become addicted as any other form of money-based gambling, and absolutely treat it the same way you would a casino: decide how much money you are willing to spend on the adventure before you start, and expect you'll likely not get much or any of that money back. However, I will moralize on this point - I really hate being lied to. Casinos, sports betting, and poker all generally have the common decency to call it what it is - a game where you are playing/betting. These sorts of "investment" providers are woefully dishonest: they say it's an exciting financial market, a new type of investment, investors are moving to this to secure their futures, etc. It's utterly deceptive and vile, and it's all about as up-front and honest as penny auction websites. If you are going to gamble, I'd urge you to do it with people who have the decency to to call it gambling and not lie to you and ask for a "minimum investment". |
How to invest Rs.10k in India | Rs 10,000 is a small but good amount to begin with. I would suggest you start by investing in some good mutual funds. Do some research, a balance mutual fund is less risky less returns compared to a equity mutual fund. The other option is directly investing in stock market, however this needs some experience and you would need to open demat and trading accounts that would cost money to open and maintain. |
Is dividend taxation priced in derivatives? | While derivative pricing models are better modeling reality as academia invests more into the subject, none sufficiently do. If, for example, one assumes that stock returns are lognormal for the purposes of pricing options like Black Scholes does, the only true dependent variable becomes log-standard deviation otherwise known as "volatility", producing the infamous "volatility smile" which disappears in the cases of models with more factors accounting for other mathematical moments such as mean, skew, and kurtosis, etc. Still, these more advanced models are flawed, and suffer the same extreme time mispricing as Black Scholes. In other words, one can model anything however one wants, but the worse the model, the stranger the results since volatility for a given expiration should be constant across all strikes and is with better models. In the case of pricing dividends, these can be adjusted for the many complexities of taxation, but the model becomes ever more complex and extremely computationally expensive for each eventuality. Furthermore, with more complexity in any model, the likelihood of discovering a closed form in the short run is less. For equities in a low interest rate, not high dividend yield, not low volatility, low dividend tax environment, the standard swap pricing models will not provide results much different from one where a single low tax rate on dividends is assumed. If one is pricing a swap on equity outside of the bounds above, the dividend tax rate could have more of an effect, but for computational efficiency, applying a single assumed dividend tax rate would be optimal with D*(1-x), instead of D in a formula, where D is the dividend paid and x is the tax rate. In short, a closed form model is only as good as its assumptions, so if anomalies appear between the actual prices of swaps in the market and a swap model then that model is less correct than the one with smaller anomalies of the same type. In other words, if pricing equity swaps without a dividend tax rate factored more closely matches the actual prices than pricing with dividend taxes factored then it could be assumed that pricing without a dividend tax factored is superior. This all depends upon the data, and there doesn't seem to be much in academia to assist with a conclusion. If equity swaps do truly provide a tax advantage and both parties to a swap transaction are aware of this fact then it seems unlikely swap sellers wouldn't demand some of the tax advantage back in the form of a higher price. A model is no defense since volatility curves persist despite what Black Scholes says they should be. |
Double entry for mortgage | For the purpose of personal finance, treating $500 as Interest Expense is sufficient. For business accounting, it involves making the $500 a contra-liability and amortizing it as interest expense over the course of life of the loan. |
Best starting options to invest for retirement without a 401k | Being from the UK, I'd not heard of a Roth IRA, but it sounds very similar to our own ISA (Individual Savings Account). Having just looked it up, I couldn't believe the annual limit was so low: $5500! Still, you have to work within your jurisdiction's legal framework (or agitate for change?). I would definitely agree with Ben Miller's answer: you need different savings buckets for the different savings objectives you'll have throughout the different periods of your life. I, for instance, am now a parent of two young children. I am fortunate to be able to provide for them on multiple levels: I hope that's of some help. |
Bank of the Sierra: Are they legit? How can the checking interest APY be so high? | The FDIC is pretty confident about them being legit. http://www2.fdic.gov/idasp/main_bankfind.asp (type in Bank Of The Sierra in the name field and search on that) You got to realize how much money they will make if you use them per the agreement. Every credit card / debit transaction gets them some cash. Businesses get between 1 and 5% of each transaction even on debit cards. Then there is a flat fee the merchant pays for accepting the credit card between .25 and .50 per transaction. Even at 12 transactions a month, the bank is looking at making around $6/month. Probably more because who uses a debit card just 12 times a month. It would be convenient for most people to juse use it all the time. Does 4.09% APY beat $6/month? You would have to keep a balance of $2000 plus to cost more than you earn. And if you keep more than $2k in the account, they have other ways to make money off of you. I would also assume they make money on the bill pay and direct deposit side of things, but I can't speak for certain about that. Bottom line is this seems like a good deal to attract customers, they would rather make a bit less profit then BofA to grow their business. They are betting their offer restrictions will change your habits and make you more profitable to them. |
On paper I have 1 share in my company. How can I sell a smaller percentage of my company to another party? | There are 2 basic ways to have someone buy partial ownership of your company: OR If they buy shares that you already own, then their shares will have the same rights as yours (same voting rights, same dividend rights, etc.). If they buy shares newly created from the company, they could be either identical shares to what you already own, or they could be a new class of shares [you may need to adjust the articles of incorporation if you did not plan ahead with multiple share classes]. You really need to talk to a lawyer & tax accountant about this. There are a lot of questions you need to consider here. For example: do you want to use the money in the business, or would you rather have it personally? Are you concerned about losing some control of how the business is run? What are the short term and long-term tax consequences of each method? What does your new partner want in terms of their share class? The answers to these questions will be highly valuable, and likely worth much more than the fees you will need to pay. At the very least, you will likely need a lawyer and accountant anyway to ensure the filings & taxes are done correctly, so better to involve them now, rather than later. There are many other situations to consider here, and an online forum is not the best place to get advice that might put you in a sticky legal situation later on. |
Possible replacement for Quicken | I would investigate mint.com further. Plenty of people have written off using them because Intuit purchased them, but that seems like cutting of your nose to spite your face. I think mint.com is worth it for its Trends functionality alone, not to mention its automatic categorization of your purchases, reminders when bills are due, notifications of increased credit card interest rates, and overdraft notices. I don't think mint.com schedules bills & deposits, but it tracks stocks & mutual fund investments and compares your portfolio returns against Dow Jones, S&P 500, or NASDAQ if you wish. I'm not sure I see the advantage of manual transaction entry, but you can add cash or check transactions manually. As I mentioned earlier, automated categorization is a great feature. In addition, you can tag certain transactions as reimbursable or tax-related. If the primary feature you're interested in is stock quotes, maybe something like Yahoo Finance or Google Finance will be enough. |
How do you invest in real estate without using money? | I know this is broad, but this isn't a scam -- it's a workshop/educational thing about teaching people of investing in the real estate market, and how to profit The scam is that the free or cheap class doesn't give you enough info to make money; so they sell you a more advanced and expensive class that gets you almost enough info; but the goal of the 2nd class is to get you to pay for the specialized seminar and coaching sessions that either fail to materialize or are so basic they aren't worth the money. |
Why would analysts recommend buying companies with negative net income? | The biotechnology sector as a whole is a popular buy recommendation among some analysts these days for a few reasons. Some analysts feel that the high costs in R&D, even without much profit, are a positive sign for growth because it means a company is working towards finding the next "blockbuster drug" or the next class of such drugs. There haven't been many new classes of blockbuster drugs since the development of SSRI's and statins, and many of the new drugs that have been developed have been tweaks to existing classes of drugs. Some analysts feel that "it's about time" for a new class of blockbuster drugs to hit the market. A new blockbuster drug means significant profits for the company that develops it; a new class of blockbuster drugs means significant profits for the whole industry. Since about 2009, the Food and Drug Administration has been more lenient in its approval of new drugs. This wave of new approvals has reduced R&D costs for companies because they don't need to go back to the lab or earlier phases of clinical trials and continually tweak their drugs in order to gain approval. This has also made some analysts optimistic. Genetic engineering is considered an up-and-coming field with potentially significant applications to the pharmaceutical industry. Advances in this field may increase profits for the pharm industry, but since biotech companies are often the ones producing the engineering equipment, research, etc. such advances could be a major source of revenue for the entire biotech industry. In the US and in the developed world as a whole, the elderly population is growing, and since people consume more medicine as they grow older, this could lead to higher profits for companies involved in the production of pharmaceuticals (which includes biotech companies, of course) in the long run. In the US, the passage of the Patient Protection and Affordable Care Act expanded insurance coverage, which gives more people the means to afford pharmaceuticals. Also, in general, people consume more healthcare services when they have insurance (this is called moral hazard), so some analysts expect that the expansion of insurance coverage will only lead to more profits for the pharmaceutical industry and biotechnology firms in general. The global food crisis. As the climate changes, companies like Monsanto, which use various forms of genetic engineering to produce crop strains that can survive in increasingly hostile environments, look more and more appealing to places that need crops designed to grow in such environments. Any methods that could increase yields look increasingly popular, and biotechnology companies often market such methods. (As a side note, I know Monsanto is a contentious example, and there are a lot of misconceptions about "genetically modified food" and the genetic engineering methods they do, so I won't get into a debate about that). In general, technology is a popular subject right now. I've read analyst reports (from analysts that clearly don't follow the biotech sector) that base their forecasts for the biotech sector on the activities of companies like Dell, Zynga, HP, LinkedIn, Facebook, etc. Clearly, it's problematic when an analyst sees the word "technology" and automatically assumes that the biotech sector is responsive to the same factors as social media firms, hardware manufacturers, etc. This isn't to say that the biotech sector is completely isolated from this, but when I read a report that talks about Facebook's IPO being bad news for companies like Gilead Sciences without mentioning upcoming FDA decisions about Gilead's products or any biotech-specific factors, I'm not convinced the analyst has performed due diligence. I keep using the phrase "some analysts" because I want to stress that the opinions stated above aren't universal. Although they're popular, not everyone is so optimistic. Also, I don't want you to see these reasons and think that I'm making a buy recommendation, because I'm not. I'm not making a recommendation one way or another. I'm happy to clarify my answer too; I follow the biotechnology sector extensively. If you want to get a rough feel for the daily movements of the sector as a whole, a good place to start is IBB, the iShares Nasdaq Biotechnology Index Fund. The four largest holdings are Regeneron, Gilead Sciences, Amgen, and Celgene, which are all big players in the industry (obviously). These are a little different from the big name pharma companies like Pfizer, Merck, Novartis, etc. but they're still considered pharma companies. It's also worthwhile to follow the FDA press announcements. By the time the news is published there, it's probably already leaked or known to people in the industry (the biotech/pharm sectors are rife with accusations of insider trading), so you might not find trading opportunities, but it's important to get familiar with the information the releases contain if you want to know more about the industry. Volatility trades are always popular trades around FDA drug approvals. |
1040 or 1040NR this time? | 1040 or 1040NR depends on whether you are a resident alien or nonresident alien -- 1040/1040A/1040EZ for resident aliens, and 1040NR/1040NR-EZ for nonresident aliens. Determining whether you are a resident is somewhat complex, and there is not enough information in your question to determine it. Publication 519 is the guide for taxes for aliens. (It hasn't been updated for 2014 yet, so mentally shift all the years in the publication up by one year when you read it.) Since you don't have a green card, whether you are a resident is determined by the Substantial Presence Test. The test says that if (the number of days you were in the U.S. in 2014) + 1/3 of (the number of days you were in the U.S. in 2013) + 1/6 of (the number of days you were in the U.S. in 2012) >= 183 days (half a year), then you are a resident alien for 2014. However, there are exceptions to the test. Days that you are an "exempt individual" are not counted toward the Substantial Presence Test. And "exempt individuals" include international students, trainees, teachers, etc. However, there are exceptions to the exceptions. Students are not "exempt individuals" for a year if they have been exempt individuals for any part of 5 previous calendar years. (Different exceptions apply for teachers and trainees.) So whether you are an "exempt individual" for one year inductively depends on whether you have been an "exempt individual" in previous years. Long story short, if before you came to the U.S. as an F-1 student, you haven't been in the U.S. on F-1 or J-1 status, then you will be a nonresident alien for the first 5 calendar years (calendar year = year with a number, not 365 days) that you've been on F-1. We will assume this is the case below. So if you started your F-1 in 2009 (any time during that year) or before, then you would have already been an exempt individual for 5 calendar years (e.g. if you came in 2009, then 2009, 2010, 2011, 2012, 2013 are your 5 years), so you would not be an exempt individual for any part of 2014. Since you were present in the U.S. for most of 2014, you meet the Substantial Presence Test for 2014, and you are a resident alien for all of 2014. If, on the other hand, you started your F-1 in 2010 (any time during that year) or after, then you would still be an exempt individual for the part of 2014 that you were on F-1 status (i.e. prior to October 2014. OPT is F-1.). Days in 2014 in H1b status (3 months) are not enough for you to satisfy the Substantial Presence Test for 2014, so you would be a nonresident alien for all of 2014. If you fall into the latter case (nonresident alien), there are some alternative choices you have. If you were in the U.S. for most of those last 3 months, then you are eligible to choose to use the "First-Year Choice". I will not go into the steps to use this choice, but the result is that it makes you dual-status for 2014 -- nonresident until October, and resident since October. If you are single, then making this choice pretty much gives you no benefit. However, if you are married, then making this choice allows you to subsequently make another choice to become a resident for all of 2014. Being resident gives you some benefits, like being able to file as Married Filing Jointly (nonresidents can only file separately), being able to use the Standard Deduction, being able to use many other deductions and credits, etc. Though, depending on what country you're from, it may affect your treaty benefits, so check that before you consider it. |
For a mortgage down-payment, what percentage is sensible? | A bigger down payment is good, because it insulates you from the swings in the real estate market. If you get FHA loan with 3% down and end up being forced to move during a down market, you'll be in a real bind, as you'll need to scrape up some cash or borrow funds to get out of your mortgage. |
Beginner dividend investor - first steps | This has been answered countless times before: One example you may want to look at is DGRO. It is an iShares ETF that many discount brokers trade for free. This ETF: offers "exposure to U.S. stocks focused on dividend growth". |
Simultaneous long/short India | I know its not legal to have open long and short position on specific security (on two stock exchanges - NSE/BSE) There is nothing illegal about it. There are prescribed ways on how this is addressed. In Cash Segment / Intra Day trades: One can short sell a security. If by end of day he does not buy the security; it goes into Auction. The said security is purchased on your behalf. Any profit or loss arising out of this is charged to you. Similarly one can buy a security; if one does not pay the amount by end of day; it would go into auction and sold. Any profit or loss arising out of this is charged to you. If you short sell a security on one exchange; you have to buy it on same exchange. If you buy on other exchange; it will not be adjusted against this short position. Also is it legal to have long position on stock and short its derivative (future/option)? There are no restrictions. Edit: @yety Party A shorts 10 shares of HDFC today in Intra-Day Cash Segment purchased by Party B. Rather than buying back 10 shares or allowing it to go into auction... Party A borrows 10 HDFC Shares from "X" via SLB for a period of say 6 months [1 month to 1 year]. This is recorded as Party A obligation to "X". These 10 borrowed shares are transferred to Party B. So Party "X" doesn't have any HDFC shares at this point in time. However in exchange, Party X receives fees for borrowing from Party A. If there is dividend, are declared, Company pays Party B. However SLB recovers identical amount from Party A and pays Party X. If there is 1:1 split, now party A owes Party X 20 HDFC Shares. On maturity [after 6 months], Party A has to buy these from market and given back the borrowed shares to Party X. If there are some other corporate actions, i.e. mergers / amalgamations ... the obligation of Party A to Party X is closed immediately and position settled. Of course there are provisions whereby party A can pay back the shares earlier or party X can ask for shares earlier and there are rules/trades/mechanisms to facilitate this. |
Relationship between liquidity and an efficient market | Liquidity is highly correlated to efficiency primarily because if an asset's price is not sampled during the time of a trade, it's price is unknown therefore inefficient. Past prices can be referenced, but they are not the price of the present. Prices of substitutes are even worse. SPY is extremely efficient for an equity. If permitted, it could easily trade with much lower ticks and still have potential for a locked market. Ideal exchange An ideal exchange has no public restrictions on trade. This is not to say that private restrictions would need to be put in place for various reasons, but one would only do that if it were responsible for its own survival instead of being too big to fail. In this market, trades would be approximately continuous for the largest securities and almost always locked because of continuous exchange fee competition with ever dropping minimum ticks. A market that can provide continuous locked orders with infinite precision is perfectly efficient from the point of view of the investor because the value of one's holdings are always known. EMH In terms of the theory the Efficient Market Hypothesis this is irrelevant to the rational investor. The rational investor will invest in the market at large of a given asset class, only increasing risk as wealth increases thus moving to more volatile asset classes when the volatility can be absorbed by excess wealth. Here, liquidity is also helpful, the "two heads are better than one" way of thinking. The more invested in an asset class, the lower the class's variance and vice versa. Bonds, the least variant, dwarf equities which dwarf options, all in order of the least variance. Believe it or not, there was a day when bonds were almost as risky as equities. For those concerned with EMH, liquidity is also believed to increase efficiency in some forms because liquidity is proportional to the number of individuals invested thus reducing the likelihood of an insufficient number of participants. External inefficiency In the case of ETFs that do not perfectly track their underlying index less costs at all times between index changes, this is because they are forbidden from directly trading in the market on their own behalf. If they were allowed and honest, the price would always be perfect and much more liquid than it otherwise should be since the combined frequency of all index members is much higher than any one alone. If one was dishonest, it would try to defraud with higher or lower numbers; however, if insider trading were permitted, both would fail due to the prisoner's dilemma that there is no honor among thieves. Here, the market would detect the problem much sooner because the insiders would arbitrage the false price away. Indirect internal efficiency Taking emerging market ETFs as an example, the markets that those are invested into are heavily restricted, so their ETF to underlying price inefficiencies are more pronounced even though the ETFs are actually working to make those underlying markets more efficient because a price for them altogether is known. |
Retirement formula for annual compound interest with changing principal | I've found the systems that seem to work. Firstly, you need to find how much money is required to pay for the withdrawals after retirement, while still accruing interest. I couldn't seem to do this with an equation, but this bit of javascript worked: yearsToLast: Number of years of yearly withdrawals yearlyWithdrawal: Amount to withdraw each year interest: Decimal form of yearly compounding interest Now that we have how much is required at the beginning of the retirement, to figure out how much to add yearly to hit this mark, you'd use: amount: Previously found required amount to reach interest: Decimal form of yearly compounding interest yearsSaving: Number of years saving till amount needs to be hit I hope this helps some other poor soul, because I could find squat on how to do this. Max |
Bonus issue - Increasing share capital | This is what is called "stock dividend". In essence the company is doing a split, the difference is in financial accounting and shouldn't concern you much as an individual investor. "Fully paid up", in this context, probably means "unconditioned", aka fully vested. |
Making $100,000 USD per month, no idea what to do with it | I would be more than happy to find a good use for your money. ;-) Well, you have a bunch of money far in excess of your regular expenses. The standard things are usually: If you are very confused, it's probably worth spending some of your windfall to hire professional help. It beats you groping in the dark and possibly doing something stupid. But as you've seen, not all "professionals" are equal, and finding a good one is another can of worms. If you can find a good one, it's probably worth it. Even better would be for you to take the time and thoroughly educate yourself about investment (by reading books), and then make a knowledgeable decision. Being a casual investor (ie. not full time trader) you will likely arrive, like many do, at a portfolio that is mostly a mix of S&P ETFs and high grade (eg. govt and AAA corporate) bonds, with a small part (5% or so) in individual stock and other more complicated securities. A good financial advisor will likely recommend something similar (I've had good luck with the one at my credit union), and can guide you through the details and technicalities of it all. A word of caution: Since you remark about your car and house, be careful about upgrading your lifestyle. Business is good now and you can afford nicer things, but maybe next year it's not so good. What if you are by then too used to the high life to give it up, and end up under mountains of debt? Humans are naturally optimistic, but be wary of this tendency when making assumptions about what you will be able to afford in the future. That said, if you really have no idea, hey, take a nice vacation, get an art tutor for the kids, spend it (well, ideally not all of it) on something you won't regret. Investments are fickle, any asset can crash tomorrow and ruin your day. But often experiences are easier to judge, and less likely to lose value over time. |
Who can truly afford luxury cars? | Approximately 25% of all cars sold last year were leased, which is the highest on record. When you are leasing you don't own the car, instead you are basically renting it for a fixed term, and turning it back to the dealership. It is very cost effective, because the manufacturers have a keen interest in making lots of cars. They are often subsidizing the lease by giving incentives to the dealer. They are gambling on the future value of their cars. They can lose on that gamble. The car business has turned into a financial nightmare for the car companies; they have huge development costs as the cars become more like mobile computing platforms loaded with sensors, and software that is constantly changing. They can't hold a model for 20 years like Mercedes was able to do in the past. Now they have to constantly update their products. The only way to survive as a car maker is to pump out volume, and the leasing programs, which are quietly being underwritten by the manufacturers help them increase the production quantities, which helps lower the fixed development costs. If only the defense contractors could do this! they are stuck spending billions to build 20 planes, and so each one has a staggering price tag. In the future, the car companies that will survive are those that have terrific credit, and low borrowing costs. That means Japanese and Germans will own the car business entirely in the end, and countries with higher borrowing costs (like America and Brasil) will not be competitive. Luckily Ford is so frugal, due to the lingering spirit of its founder, that they can hold out. One thing strongly in favor of leasing is that you have zero maintenance costs typically. The repair risk is significant in luxury cars. When you buy a 10 year old BMW, and when the tranny goes, it costs a fortune. Having a superb car for 30 months for a few hundred bucks a month is something a lot of people enjoy doing. Who can blame them? you spend an hour or 2 a day in your car, and why not live in a nice place? |
Why are American-style options worth more than European-style options? | The value of an option has 2 components, the extrinsic or time value element and the intrinsic value from the difference in the strike price and the underlying asset price. With either an American or European option the intrinsic value of a call option can be 'locked in' any time by selling the same amount of the underlying asset (whether that be a stock, a future etc). Further, the time value of any option can be monitised by delta hedging the option, i.e. buying or selling an amount of the underlying asset weighted by the measure of certainty (delta) of the option being in the money at expiry. Instead, the extra value of the American option comes from the financial benefit of being able to realise the value of the underlying asset early. For a dividend paying stock this will predominantly be the dividend. But for non-dividend paying stocks or futures, the buyer of an in-the-money option can realise their intrinsic gains on the option early and earn interest on the profits today. But what they sacrifice is the timevalue of the option. However when an option becomes very in the money and the delta approaches 1 or -1, the discounting of the intrinsic value (i.e. the extra amount a future cash flow is worth each day as we draw closer to payment) becomes larger than the 'theta' or time value decay of the option. Then it becomes optimal to early exercise, abandon the optionality and realise the monetary gains upfront. For a non-dividend paying stock, the value of the American call option is actually the same as the European. The spot price of the stock will be lower than the forward price at expiry discounted by the risk free rate (or your cost of funding). This will exactly offset the monetary gain by exercising early and banking the proceeds. However for an option on a future, the value today of the underlying asset (the future) is the same as at expiry and its possible to fully realise the interest earned on the money received today. Hence the American call option is worth more. For both examples the American put option is worth more, slightly more so for the stock. As the stock's spot price is lower than the forward price, the owner of the put option realises a higher (undiscounted) intrinsic profit from selling the stock at the higher strike price today than waiting till expiry, as well as realising the interest earned. Liquidity may influence the perceived value of being able to exercise early but its not a tangible factor that is added to the commonly used maths of the option valuation, and isn't really a consideration for most of the assets that have tradeable option markets. It's also important to remember at any point in the life of the option, you don't know the future price path. You're only modelling the distribution of probable outcomes. What subsequently happens after you early exercise an American option no longer has any bearing on its value; this is now zero! Whether the stock subsequently crashes in price is irrelevent. What is relevant is that when you early exercise a call you 'give up' all potential upside protected by the limit to your downside from the strike price. |
Is it possible to influence a company's actions by buying stock? | Energy Transfer Partners, LP (stock symbol ETP) is the parent company of Dakota Access LLC, the developer of the Dakota Access Pipeline. Since ETP is a publicly traded company, it is certainly possible to purchase the stock. To answer your questions: Would it not be possible to buy their stocks, bring down the price of the stocks and keep it there until investors pull out because it is financially unwise to these investors? You cannot artificially bring the price of a stock down by buying the stock. Purchasing large enough amounts would theoretically cause the price to go up, not down. You could theoretically cause the stock to go down by shorting the stock (borrowing shares and then selling them), but it would take a lot of shares to do this, and may not be successful. If not successful, your losses are potentially unlimited. Would it alternatively be possible to buy enough stock to have a voice in the operations of the company? Yes, you could theoretically purchase enough of the stock to control the company. The market capitalization of ETP is currently $17.9 Billion; if you owned half of the stock, you would have complete control of the company. But buying that much stock would certainly influence the price of the stock, so it would cost you more than half of that amount to buy that much stock. You could get yourself a voice at the table for less without owning a full half of the stock, but you would not have full control, and would need support from others to get the outcome you want. Alternatively, someone determined to exert their influence could theoretically make an offer to purchase the Dakota Access subsidiary from ETP, which might be less costly than purchasing half of the entire corporation. Even if an extremely wealthy person were to try one of these options and destroy this company, it wouldn't necessarily stop another company from building something similar. The investors you purchased the company from would have billions of dollars to do so with. |
Does the profit of a company directly affect its stock or indirectly by causing people to buy or sell? | The short answer to your question is yes. Company performance affects stock price only through investors' views. But note that selling for higher and lower prices when the company is doing well or poorly is not an arbitrary choice. A stock is a claim on the future cash flows of the firm, which ultimately come from its future profits. If the company is doing well, investors will likely expect that there will large cash flows (dividends) in the future and be willing to pay more to hold it (or require more to sell it). The price of a stock is equal what people think the future dividends are worth. If market participants started behaving irrationally, like not reacting to changes in the expected future cash flows, then arbitrageurs would make a ton of money trading against them until the situation was rectified. |
What are the marks of poor investment advice? | Bad signs: |
What determines price fluctuation of groceries | No. Some grocery stores may discount specific products based on inventory to drive sales using "loss leaders" where the product is intentionally priced as a loss for the business. While commodity futures may impact some prices, I'm not sure one can easily extract the changes solely due to futures shifts. |
How does a bank make money on an interest free secured loan? | In addition to all the points made in other answers, in some jurisdictions (including the UK where I live) the consumer credit laws require the lender to allow the borrower to pay off the loan at any time. If the lender charges interest and the borrower pays off the loan early then the lender loses the interest that would have been paid during the rest of the loan period. However if the actual interest is baked into the sale price of an item and the loan to pay for it is nominally "0%" then the borrower still pays all the interest even if they pay off the loan immediately. If you think this game is being played then you can ask for a "cash discount" (or similar wording: I once had problems with a car salesman who thought I meant a suitcase full of used £20s), meaning you want to avoid paying the interest as you are not taking a loan. |
Is there a register that shows the companies with notifiable interest in a stock? | There are multiple places where you can see this. Company house website On any financial news website, if you have access e.g. TESCO on FT On any 3rd party website which supply information on companies e.g. TESCO on Companycheck An observation though, FT lists down more shareholders for me than Companycheck as I pay for FT. |
Health insurance lapsed due to employer fraud. How to get medications while in transition? | Check with the manufacturer of the name brand medication. Most of them have programs to help people who need their medication but can not afford it. They may be able to send you coupons for discounted or free medication. You can go to a free clinic. If your income is low enough the free clinic will provide medicine until you can get back on insurance. You can do what alot of people who work hard and do not have insurance do and pay for it outof pocket. You can talk to your doctor and see if there is an alternative to the expensive medicine that your insurance used to pay for. It may not be as effective or may have other side affects but many people are forced to go with these alternatives. You situation is certianly unfortunate but also not terribly uncommon. You probably also have recourse against the former employer but if they commited fraud, and faked your insurance there probably is not alot of money to recoup. If it was a person who commited fraud then you may be able to get a judgement against them that would survive bankruptcy and the business but it will probably be at least 5 years before you can recoup anything possibly much longer and your attorney will probably not take it on contingency. |
Where to find detailed information about stock? | 1. Most of the information you want can be found in the annual report of the company. Go to their official website, look for shareholders information and then download the annual report. This will answer: "number of issued stock, voting rights, if there is more than one kind of stock, etc. In summary all the legal and formal details of a given stock. 2. After reading the annual report, check on investors websites to see if you can find analyst reports written on this company. You can sometimes find them in some free newsletters. These reports will complete the information you have found in the annual report like "if the dividends are always paid, etc." |
What is a good open source Windows finance software | Have you tried others on Wikipedia's list? |
Any Tips on How to Get the Highest Returns Within 4 Months by Investing in Stocks? | Invest in an etf called SPXS and hope for a market correction in the next month. Or if you know a lot about markets and trends, select from this list of leveraged etfs available from Direxion. |
How is someone tax exempt at Walmart in Canada? | The short answer is you're tax exempt if the tax laws say you are. There are a bunch of specific exemptions based on who you are, what you're buying and why. Taking British Columbia as an example. One exemption is supplies for business use: Some exemptions are only available to certain purchasers in certain circumstances. These exemptions include: You can also claim an exemption if you are buying "adult size" clothing for a child under 15 years. Farmers are exempt from sales tax on various goods and services. First Nations individuals are exempt in some circumstances. And so on and so on. |
Employer options when setting up 401k for employees | If you were looking to maximize your ability to save in a qualified plan, why not setup a 401K plan in Company A and keep the SEP in B? Setup the 401K in A such that any employee can contribute 100% of their salary. Then take a salary for around 19K/year (assuming under age 50), so you can contribute and have enough to cover SS taxes. Then continue to move dividends to Company A, and continue the SEP in B. This way if you are below age 50, you can contribute 54K (SEP limit) + 18K (IRA limit) + 5500 (ROTH income dependent) to a qualified plan. |
Why can't you just have someone invest for you and split the profits (and losses) with him? | Written with some mild snark , but no insult intended, because financial stuff can be ridiculously confusing... Looked at another way, you're basically asking if the Biblical "Parable of the Talents" can be implemented as a business model. You as the investor wish to be the "master", with the entity doing the investing playing the part of the "servant". Since the law prohibits actual servitude as described in scripture, the model must substitute a contractual profit- and loss-sharing scheme. OK, based on what you've proposed, and by way of example, let's say you invested a thousand dollars. You give the investment service your money. At the end of a year, they give you back - Your capital ($1000) - Plus 1/2 of any profits OR - Less 1/2 of any losses So let's say the worst happens and they lose ALL of it. According to your proposal, they have to cover 1/2 of the loss. You end up with $500...but they end up with LESS than nothing. They will be in a deficit situation because all the expense was theirs. They don't just fail to make a profit. They go in the hole. It doesn't matter what percentages you use. Regardless of how the loss is shared, you've only guaranteed YOU can't lose all your money. The company CAN. Given a large enough investment, or enough market fluctuation, a big shared loss could shut down a smaller firm. To summarize: - You want a service that charges you nothing - Does all the work of expertly managing and investing your capital - Takes on part of the risk you would normally bear - (on top of their usual risk and liability) - Agrees to do so solely for a percentage of any return (where higher returns will likely involve a higher degree of risk) - AND that guarantees, after just 1 year, you'll get X% of your capital back, no matter what. Win or lose. - Even if the market crashes and all your capital, and theirs, is wiped out Superbest, um, to be serious briefly: what you're proposing is, if nothing else, inherently unfair and inequitable. I believe you intended it as a mutually beneficial scenario, but the real-world imbalance in risk and reward prevents it being so. Any financial service that would accept those terms along with the extra degree of risk would be fiscally irresponsible. From a business standpoint it's an untenable model, and no company would build on it. It would be tantamount to corporate suicide. The requirement that a service promise to give you back X% of your money, no matter how great the loss, makes your proposal impossible. You need to think about how much all this costs, realistically, as well what kind of returns you can actually expect. And that more risk for higher return is exactly what a service could NOT take a chance on if it had to "share" investors' losses. Besides, it's not really sharing, now is it? They will always lose more than you, always end up in a negative situation, unable even to recoup costs. Circumstances beyond their control could result in a drop in the value that not only wipes out any profit, but requires them to pay YOU for work performed and expenses incurred on your behalf. Why would they let anyon double-dip like that? Yeah, we all prefer getting something for nothing...but you want valuable services and for them to pay you money for the privilege of providing them? I totally agree that would be fantastic, but in this world even "free" doesn't come cheap anymore. And getting back to costs: Without consistent income the service would have nowhere to work and no resources to work with. No office, computer, phone, electricity, Internet, insurance, payroll, licensing, training, maintenance, security, lobbying, etc., etc., etc. Why do people always forget overhead? There's a reason these services operate the way they do. Even the best are working with fairly slim margins in a volatile sector. They're not into 1-year gambles unlikely to cover their cost of doing business, or having to pay for a negative return out of their own pocket. Look, if you're the Biblical master asking your servant to manage things, overhead is built-in. You're taking all the risk as well. You're paying for all three servants' food, home, clothing, etc, plus you had to buy the servants themselves. So its reasonable that you reap the reward of their labor. You paid for it, and you didn't even punish the servant who buried your money in a hole. The two good servants may have done the legwork, but you took on the burden of everything else. In your proposed service, however, contrary to the servant's usual role, the servant - i.e., the company - would be assuming a portion of your risk on top of their own, yet without any guarantee of profit, income, or even coverage of costs. They're also subject to regulations, fees, liability, legal stuff, etc. that you're not, against most of which you are indemnified and held harmless. If they agree to cover a share of your loss, it exposes to greater liability and more related risk. It robs them of resources they need to invest in their own business, while at the same time forcing them to do all the work. As a result, your model doesn't give such a service a fighting chance. Getting it off the ground and lasting past the first-year payouts would require more luck than skill. They'd be better off heading to Vegas and the blackjack table, where the only overhead is a cheap flight and room, where the odds and rules don't change overnight, and they at least get free drinks. If none of the equivalents satisfies, then the Biblical parable appears to describe your only option for obtaining exactly what you want: Move to a country where slavery is legal and buy an investor :-) Cheers, c |
Are Index Funds really as good as “experts” claim? | The point of buying an index fund is that you don't have to pick winners. As long as the winners are included in the index fund (which can include far more than 500 stocks), you benefit on average because of overall upward historical market performance. Picking only the top 50 capitalized stocks in the S&P 500 does not guarantee you will successfully track the S&P 500 index because the stocks in the tail can account for an outsized amount of overall growth; the top 50 stocks by market capitalization change over time, and these stocks are not necessarily the stocks that perform better. As direct example, the 10 year average annual return for the S&P top 50 is 4.52%, while the 10 year average annual return for the S&P 500 is 5.10%. Issues of trading and balancing to maintain these aside, these indices are not the same. |
Which is better when working as a contractor, 1099 or incorporating? | If you start an LLC with you as the sole member it will be considered a disregarded entity. This basically means that you have the protection of being a company, but all your revenues will go on your personal tax return and be taxed at whatever rate your personal rate calculates to based on your situation. Now here is the good stuff. If you file Form 2553 you can change your sole member LLC to file as an S Corp. Once you have done this it changes the game on how you can pay out what your company makes. You will need to employ yourself and give a "reasonable" salary. This will be reported to the IRS and you will file your normal tax returns and they will be taxed based on your situation. Now as the sole member you can then pay yourself "distribution to share holders" from your account and this money is not subject to normal fica and social security tax (check with your tax guy) and MAKE SURE to document correctly. The other thing is that on that same form you can elect to have a different fiscal year than the standard calendar IRS tax year. This means that you could then take part of profits in one tax year and part in another so that you don't bump yourself into another tax bracket. Example: You cut a deal and the company makes 100,000 in profit that you want to take as a distribution. If you wrote yourself a check for all of it then it could put you into another tax bracket. If your fiscal year were to end say on sept 30 and you cut the deal before that date then you could write say 50,000 this year and then on jan 1 write the other check. |
Investing in commodities, pros and cons? | Another disadvantage is the inability to value commodities in an accounting sense. In contrast with stocks, bonds and real estate, commodities don't generate cash flows and so any valuation methodology is by definition speculative. But as rhaskett notes, there are diversification advantages. The returns for gold, for instance, tend to exhibit low/negative correlation with the performance of stocks. The question is whether the diversification advantage, which is the primary reason to hold commodities in a multi-asset class portfolio through time, overcomes the disadvantages? The answer... maybe. |
Is it ever a good idea to close credit cards? | In my own case, my credit score went up drastically after I closed cards. It did go down a bit (like 10 points) in the short term. Within 6 months, however, I did see significant gains. This would include closing the American Express card that I had for like 10 years. According much of what I read, you should never close a AMEX card. I did and it did not hurt me. What helps all this is that my utilization is zero. |
Recommendation for learning fundamental analysis? | Below is just a little information on this topic from my small unique book "The small stock trader": The most significant non-company-specific factor affecting stock price is the market sentiment, while the most significant company-specific factor is the earning power of the company. Perhaps it would be safe to say that technical analysis is more related to psychology/emotions, while fundamental analysis is more related to reason – that is why it is said that fundamental analysis tells you what to trade and technical analysis tells you when to trade. Thus, many stock traders use technical analysis as a timing tool for their entry and exit points. Technical analysis is more suitable for short-term trading and works best with large caps, for stock prices of large caps are more correlated with the general market, while small caps are more affected by company-specific news and speculation…: Perhaps small stock traders should not waste a lot of time on fundamental analysis; avoid overanalyzing the financial position, market position, and management of the focus companies. It is difficult to make wise trading decisions based only on fundamental analysis (company-specific news accounts for only about 25 percent of stock price fluctuations). There are only a few important figures and ratios to look at, such as: perhaps also: Furthermore, single ratios and figures do not tell much, so it is wise to use a few ratios and figures in combination. You should look at their trends and also compare them with the company’s main competitors and the industry average. Preferably, you want to see trend improvements in these above-mentioned figures and ratios, or at least some stability when the times are tough. Despite all the exotic names found in technical analysis, simply put, it is the study of supply and demand for the stock, in order to predict and follow the trend. Many stock traders claim stock price just represents the current supply and demand for that stock and moves to the greater side of the forces of supply and demand. If you focus on a few simple small caps, perhaps you should just use the basic principles of technical analysis, such as: I have no doubt that there are different ways to make money in the stock market. Some may succeed purely on the basis of technical analysis, some purely due to fundamental analysis, and others from a combination of these two like most of the great stock traders have done (Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, William O’Neil, and Steven Cohen). It is just a matter of finding out what best fits your personality. I hope the above little information from my small unique book was a little helpful! Mika (author of "The small stock trader") |
Do tax-exempt bond fund earnings need to be reported on taxes? | At the end of the year, the mutual fund company sends you a statement like any other investment and it has a bunch of boxes that you copy into your tax return software. Then you just check the box that says 'tax-exempt' and you're done. |
How frequently should I request additional credit? | I do this all the time, my credit rating over time plotted on a graph looks like saw blades going upward on a slope I use a credit alert service to get my credit reports quarterly, and I know when the credit agencies update their files (every three months), so I never have a high balance at those particular times Basically, I use the negative hard pulls to propel my credit score upwards with a the consequentially lowered credit utilization ratio, and the credit history. So here is how it works for me, but I am not an impulse buyer and I wouldn't recommend it for most people as I have seen spending habits: Month 1: charge cards, pay minimum balance (raises score multiple points) Month 2: PAY OFF ALL CREDIT CARDS, massive deleveraging using actual money I already have (raises score multiple points) Month 3: get credit report showing low balance, charge cards, pay minimum balance ask for extensions of credit, AND followup on new credit line offers (lowers score several points per credit inquiry) Month 4: charge cards, pay minimum balance, discretionally approving hard pulls - always have room for one or two random hard pulls, such as for a new cell phone contract, or renting a car, or employment, etc Month 5: PAY OFF CREDIT CARDS using actual money you have. (the trick is to NEVER really go above a 15% credit utilization ratio, and to never overleverage. Tricky because very quickly you will get enough credit to go bankrupt) Month 6: get credit report showing low balances, a slight dip in score from last quarter, but still high continue. |
Is buying a home a good idea? | IF the price of the property (1) increases A LOT, you will just break even, on the huge expenses of home owning. IF the price of the property (2) increases A HUGE AMOUNT, you will make lots of money, due to the leverage. IF the price of the property (3) stays even, you will LOSE a tremendous amount of money. It's much like owning a car - constant expenses. That's all there is to it. It's well worth bearing in mind that property prices for your area / your property need to be constantly increasing for you to merely break even. Note that over long periods of time prices tend to go up (most anywhere - but not everywhere). Many people basically base their thinking on that. It will be OK "in the long run". Which is fair enough. I believe one huge factor is that it is enforced saving. That is the number one advantage for most. Note too that in most/all jurisdictions, there are tremendous tax advantages, even if it turns out to be situation (1) (i.e. a waste of time, you only break-even). Note finally that there are, indeed, tremendous social/financial advantages to having the equity: it gets incredibly easy to get other loans (for business or the like) once you own a house; this is undeniably an advantage (perhaps press your husband on that one). |
Where should my money go next: savings, investments, retirement, or my mortgage? | First, i think you're doing awesomely for your age. Here's what i'd do in your situation (disclaimer: These are just my personal opinions from experience with my own finances.): I'd do all those things and partition the money so that i ensure i do them all. That may mean not dollar cost averaging monthly but rather quarterly to keep fees-percentages down, but i think that's reasonable for your age. Something i don't think you should overlook with regard to your mortgage is the freedom afforded you by paying off a home. It provides you with the freedom to be out of work, between work, or take an extended leave without the fear of how to pay your bills, the mortgage tending to be a significant percentage of the monthly bills. If that's not something you've considered, not a concern, or not something you care about, then paying off your home probably isn't a priority so I'd drop that step and put more money into investments. |
I'm thinking of getting a new car … why shouldn't I LEASE one? | Also consider how cars fare under your ownership: Does your current car... If any of the answers to these questions are "Yes", you're probably going to get hosed with fees when you return the car. |
Why is auto insurance ridiculously overpriced for those who drive few miles? | Many services charge prices that do not scale linearly with usage. This is because the service provider has fixed costs that they must recoup by charging a rate with a fixed component. A 5-mile taxi ride is unlikely to cost half what a 10-mile taxi ride costs. Even a half sandwich at a sandwich place usually costs more than half of what a full sandwich costs. In this respect, insurance is no different from many other items you may purchase. |
Why are capital gains taxed at a lower rate than normal income? | Every economy wants growth and for growth to come you need investments. So, you must provide some motive for people to risk their money (every investment has inherently a degree of risk or if you want uncertainty about the outcome). As a result the tax on capital gains is lower than on other types of income (because the risk is almost zero). The tax is considered in the calculation of the net interest rate. And you can see this as the interest which the investors demand in order to invest their money. |
If I buy a share from myself at a higher price, will that drive the price up so I can sell all my shares the higher price? | The market maker will always compare the highest bid and the lowest ask. A trade will happen if the highest bid is at least as high as the lowest ask. Adding one share (or a million shares) at a higher asking price, here: $210 instead of $200, will not have any effect at all. Nobody will buy the share. Adding a bid for one share (or a million shares) at a higher bid price will trigger a sale. If you bid $210 for one share, you will pay $210 for one of the shares that were offered at $200. If you have $210 million in cash and add a bid for 1,000,000 AAPL at $210, you will pay $210 for all shares with an ask of $200.00, then $200.01, then $200.02 until you either bought all shares with an ask up to $210, or until you bought a million shares. With AAPL, you probably bid the price up to $201 with a million shares, so you made lots of people very happy while losing about 10 million dollars. So let's say this is a much smaller company. You have driven the share price up to $210, but there is nobody else bidding above $200. So nobody is going to buy your shares. Until some people think there is something going on and enter higher bids, but then some people will take advantage of this and ask lower than your $210. And there will be more people trying to make cash by selling their shares at a good price than people tricked into bidding over $200, so it is most likely that you lose out. (This completely ignores legality; attempting to do this would be market manipulation and in many countries illegal. I don't know if losing money in the process would protect you from criminal charges). |
Can I do periodic rollovers from my low-perfoming 401k to an IRA? | There are certain allowable reasons to withdraw money from a 401K. The desire to free your money from a "bad" plan is not one of them. A rollover is a special type of withdrawal that is only available after one leaves their current employer. So as long as you stay with your current company, you cannot rollover. [Exception: if you are over age 59.5] One option is to talk to HR, see if they can get a expansion of offerings. You might have some suggestions for mutual funds that you would like to see. The smaller the company the more likely you will have success here. That being said, there is some research to support having few choices. Too many choices intimidates people. It's quite popular to have "target funds" That is funds that target a certain retirement year. Being that I will be 50 in 2016, I should invest in either a 2030 or 2035 fund. These are a collection of funds that rebalances the investment as they age. The closer one gets to retirement the more goes into bonds and less into stocks. However, I think such rebalancing is not as smart as the experts say. IMHO is almost always better off heavily invested in equity funds. So this becomes a second option. Invest in a Target fund that is meant for younger people. In my case I would put into a 2060 or even 2065 target. As JoeTaxpayer pointed out, even in a plan that has high fees and poor choices one is often better off contributing up to the match. Then one would go outside and contribute to an individual ROTH or IRA (income restrictions may apply), then back into the 401K until the desired amount is invested. You could always move on to a different employer and ask some really good questions about their 401K. Which leads me back to talking with HR. With the current technology shortage, making a few tweaks to the 401K, is a very cheap way to make their employees happy. If you can score a 1099 contracting gig, you can do a SEP which allows up to a whopping 53K per year. No match but with typically higher pay, sometimes overtime, and a high contribution limit you can easily make up for it. |
Why do gas stations charge different amounts in the same local area? | When I ran a gas station, our price was largely set by our neighbors-- the other gas stations in the area. We couldn't go below the current cost of replacement gas, but other than that we wanted to be at .05 over the average. (We got away with charging more because we were the last station on a major road.) Everybody else did the same thing. Also, we only set prices once a day, early in the morning before the commuter rush. Changing prices while somebody is pumping gas Was Not Done, for fairly obvious reasons. So, you'd get these ripples of price-changing, as one station changed its price, and then all its neighbors would react to that the next day, and then THEIR neighbors would change the day after that, and so on. |
How often do typical investors really lose money? | Trading is NOT zero-sum game, it is negative sum actually. In fact all people's money is getting swept by commissions and fees. If you don't have The Plan (which includes minimizing commission losses), you win some (not a lot), then you get big positions, then market crashes, then all your money is gone. You will start noticing that commissions are real, only when you get market crash. Prey that you get heavy losses (-10% of portfolio) before some (giant) market crash. Getting good lesson by small price is better then high price (-30..50%). Piece of advice. There is small exchanges that do NOT charge you for operations, taking only market spread ($0.01) as commission. They do so because they do not have big population and they trade mostly by using automatic market-makers (which means there is no way to buy 10% of Apple there). |
What are some examples of unsecured loans | Auto loans are secured agains the car. "Signature" loans, from a bank that knows and trusts you, are typically unsecured. Unsecured loans other than informal ones or these are fairly rare. Most lenders don't want to take the additional risk, or balance that risk with a high enough interest rate to make the unsecured loan unattractive. |
Why do employers require you to spread your 401(k) contributions throughout the year to get the maximum match? | If one makes say, $10K/mo, and the company will match the first 5% dollar for dollar, a 10%/mo deposit of $1K/mo will see a $500/mo match. If the employee manages to request 90% get put into the 401(k), after 2 months, he's done. If the company wished, they could continue the $500/mo match, I agree. They typically don't and in fact, the 'true up' you mention isn't even required, one is fortunate to get it. Many companies that match are going the other way, matching only after the year is over. Why? Why does any company do anything? To save money. I used to make an attempt to divide my deposit over the year to max out the 401(k) in December and get the match real time, not a true up. |
How U.S. Depreciation works Explain in brief? | If a business tool has a limited lifespan, it's value decreases (depreciates) from year to year. The business can capture that loss of value on some things that it couldn't otherwise write off as expenses. A few tools can be either expenses or depreciated, but only one of those can be chosen for that particular object. This is generally not relevant for individual taxpayers, unless you can show that the item is being used for income-producing purposes. |
where to get stock price forecast | There's only one real list that states what people think stock prices should be, and that's the stocks order book. That lists the prices at which stock owners are willing to buy stocks now, and the price that buyers are willing to pay. A secondary measure is the corresponding options price. Anything else is just an opinion and not backed by money. |
what is a mortgage gift exchange? | I'm guessing since I don't know the term, but it sounds like you're asking about the technique whereby a loan is used to gather multiple years' gift allowance into a single up-front transfer. For the subsequent N years, the giver pays the installments on the loan for the recipient, at a yearly amount small enough to avoid triggering Gift Tax. You still have to pay income tax on the interest received (even though you're giving them the money to pay you), and you must charge a certain minimum interest (or more accurately, if you charge less than that they tax you as if the loan was earning that minimum). Historically this was used by relatively wealthy folks, since the cost of lawyers and filing the paperwork and bookkeeping was high enough that most folks never found out this workaround existed, and few were moving enough money to make those costs worthwhile. But between the "Great Recession" and the internet, this has become much more widely known, and there are services which will draw up standard paperwork, have a lawyer sanity-check it for your local laws, file the official mortgage lien (not actually needed unless you want the recipient to also be able to write off the interest on their taxes), and provide a payments-processing service if you do expect part or all of the loan to be paid by the recipient. Or whatever subset of those services you need. I've done this. In my case it cost me a bit under $1000 to set up the paperwork so I could loan a friend a sizable chunk of cash and have it clearly on record as a loan, not a gift. The amount in question was large enough, and the interpersonal issues tricky enough, that this was a good deal for us. Obviously, run the numbers. Websearching "family loan" will find much more detail about how this works and what it can and can't do, along with services specializing in these transactions. NOTE: If you are actually selling something, such as your share of a house, this dance may or may not make sense. Again, run the numbers, and if in doubt get expert advice rather than trusting strangers on the web. (Go not to the Internet for legal advice, for it shall say both mu and ni.) |
Why is a stock that pays a dividend preferrable to one that doesn't? | Dividend paying stocks are not "better" In particular shareholders will get taxed on the distribution while the company can most likely invest the money tax free in their operations. The shareholder then has the opportunity to decide when to pay the taxes when they sell their shares. Companies pay dividends for a couple of reasons.... 1.) To signal the strength of the company. 2.) To reward the shareholders (oftentimes the executives of the firm get rather large rewards without having to sell shares they control.) 3.) If they don't have suitable investment opportunities in their field. IE they don't have anything useful to do with the money. |
Purpose of having good credit when you are well-off? | I have never had a credit card and have been able to function perfectly well without one for 30 years. I borrowed money twice, once for a school loan that was countersigned, and once for my mortgage. In both cases my application was accepted. You only need to have "good credit" if you want to borrow money. Credit scores are usually only relevant for people with irregular income or a past history of delinquency. Assuming the debtor has no history of delinquency, the only thing the bank really cares about is the income level of the applicant. In the old days it could be difficult to rent a car without a credit car and this was the only major problem for me before about 2010. Usually I would have to make a cash deposit of $400 or something like that before a rental agency would rent me a car. This is no longer a problem and I never get asked for a deposit anymore to rent cars. Other than car rentals, I never had a problem not having a credit card. |
NYSE & NASDAQ: Mkt Cap: $1 billion+ | Try Google Finance Screener ; you will be able to filter for NASDAQ and NYSE exchanges. |
Can I open a Solo 401(k) if I am an independent contractor but also work part-time as an employee? | A Solo 401k plan requires self-employment income; you cannot put wages into it. |
Can I buy only 4 shares of a company? | One of my university professors suggested doing this systematically to get access to shareholder meetings where there is typically a nice dinner involved. As long as the stock price + commission is less than the price of a nice restaurant it's actually not a bad idea. |
Are there any banks with a command-line style user interface? | You should definitively check boobank. It's not a bank !, but a framework that helps people to create quick interface modules to any bank so you don't have to use your web browser anymore with them. Actually, there is already an honest list of modules to access a few banks (I guess these banks are all french banks for now), but contributing a module seems easy and reading other contributed modules should constitute a good start. So boobank can work with any bank provided the interface with the bank is written. |
What is “financial literacy” and how does one become “financially literate”? | Financial Literacy is about learning about finance and money and how to use and manage them to give you better outcomes in life. Just like the more books you read and the more writing you do will improve your literacy, the more financial books you read, the more questions you ask and the more you participate in this forum and others like it, the more you will improve your financial literacy. The more financial literate you are the more you will be able to make informed decisions regarding your finances and the more you will be able to avoid financial scams. |
Why don't banks print their own paper money / bank notes? | Any person at any time may produce their own currency, one can even do so on the back of a paper napkin, ripped beer coaster or whatever. This is NOT a banking privilege, it is within the lawful ability of anyone capable of engaging in commerce. It is called a 'negotiable instrument' ... it gives the holder rights to a sum of money. Notice that I say 'holder' ... this is what distinguishes it from a non-negotiable instrument, the fact that you don't need to redeem it from source, you can pass it to another who then becomes the 'holder in due course' and thus obtains the rights conferred. The conferable rights over a sum of money (or, indeed, other asset) are themselves 'value' Do banks do this ? Yes, all the time! ... one of the simplest examples are cheques drawn against the bank, which are considered 'as good as cash'. Usually they will be drawn out to the order of the person you wish to pay ... but can equally be drawn out to bearer. The only reasons they resist making out to bearer is : But you can write your own at 'any time' on 'any thing' ... See the apocryphal, yet deliciously entertaining, tale of the 'negotiable cow' |
Stock Certificate In two names | The common way to frame the "should I sell" question is ask yourself "would you buy it today at the current price". If you wouldn't, sell it. Is sounds like this may be a paper certificate. You will have to research how to present the certificate to a broker to trade it, or if the company has a direct shareholder program. I have periodically been offered to sell "odd lots" to shareholder programs which, if one exists, may be less hassle than other options. As a part of this, your mother's estate administrator should decide if the estate is selling it's interest, or giving it's interest to heirs before the sale. |
Should I be more aggressive in a Roth IRA, 401k, or taxable account? | I think you may be drawing the wrong conclusion about why you put what type of investment in a taxable vs. tax-advantaged account. It is not so much about risk, but type of return. If you're investing both tax-advantaged and taxable accounts, you can benefit by putting more tax-inefficient investments inside your tax-advantaged accounts. Some aggressive asset types, like real estate, can throw off a lot of taxable income. If your asset allocation calls for investing in real estate, holding it in a 401k or IRA can allow more of your money to remain invested, rather than having to use it to pay for taxes. And if you're holding in a Roth IRA, you get that tax free. But bonds, a decidedly non-aggressive asset, also throw off a lot of taxable income. You're able to hold them in a tax-advantaged account and not pay taxes on the income until you withdraw it from the account (or tax free in the case of a Roth account.) An aggressive stock fund that is primarily expected to provide returns via price appreciation would do well in a taxable account because there's likely little tax consequence to you until it is sold. |
I'm in Australia. What should I look for in an online stock broker, for trading mostly on the ASX? | OptionsXpress is good. I have used them for many years to trade stocks mainly (writing Covered calls and trading volatility). You set the account up through OptionsXpress Australia, and then fund the account from one of your accounts in Australia (I just use my Bank of Queensland account). The currency conversion will be something to watch (AUD to USD). The rates are low, but one of the best features is "virtual trading". It allows you to give yourself virtual funds to practice. You can then experiment with stop-losses and all other features. Perhaps other platforms have this, but I am yet to see it... anyway, if you want to trade in US stocks you are going to need to switch to USD anyway. ASX never moves enough for my interests. Regards, SB |
How much percent of my salary should I use to invest in company stock? | I would not hold any company stock for the company that provides your income. This is a too many eggs in one basket kind of problem. With a discounted stock purchase plan, I would buy the shares at a 10% discount and immediately resell for a profit. If the company prevents you from immediately reselling, I don't know if I would invest. The risk is too great that you'll see your job lost and your 401k/investments emptied due to a single cause. |
Ask for credit decrease | Aside from an annual fee, if any, the card issuer makes money 2 ways, the transaction fee, about 1.5%-2% charged to the merchant, and interest from you if you leave a balance month to month. Obviously, the bank has some cost in processing statements and maintaining your account. If up front you are saying you will not have any chance of providing a certain profit level, they may have no interest in your business. (As you updated.) Other card issuers (almost surely with fees) might. Put the cards on ice. A bag of water in freezer. Don't be so hasty that you ding your report this way. By trashing the history as well as utilization, you may impact your score enough to do some harm if you actually need credit in the near future. I know this is a game with the credit agencies, a "how good a borrower am I" game, but it can really impact your bottom line if you don't play along. In reply to Michael's comment 1/5/15, if I have one card and am budgeted for $1000/mo in spending, in order to keep utilization down to less than 20%, I'd need a line of more than $5000. Even if I ignore utilization, my January spending is $1000, but the bill is cut on the 31st and not due till Feb 25th. So a line of nearly $2000 is required unless you wish to make mid cycle payments on an ongoing basis. |
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