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How does a change in market cap affect a company's operational decisions? | It basically only affects the company's dealings with its own stock, not with operational concerns. If the company were to offer more stock for sale, it would get less cash. If it had a stock buy-back program, it could buy more shares for the same money. If it was to offer to acquire another company in exchange for its own stock, the terms would be less attractive to the other company's owners. Employee stock remuneration, stock options, and so forth would be affected, so there might be considerations and tax consequences for the company. |
What should I be doing to protect myself from identity theft? | I've received letters notifying me of data breaches in the past. In the end, I've never signed up for the offered protection service, figuring if "they" can hack Target or ADP or the IRS, they can hack anybody, like... Equifax. And now Equifax has been hacked. My family's Social Security Numbers were stolen from a hospital database. I think that information, plus public information was used to gain further data from the IRS FAFSA tool. (we got a letter from the IRS). Ultimately, fraudsters used whatever data they had to file a tax return with the IRS and with the Cali FTB (we don't and never have lived in California). We got letters from both, and managed to stop the fraud before it really impacted us...other than having to file a paper tax form this past tax season. Anyway... in a world where Equifax gets hacked: the only solution is: I don't bother with the crazy password schemes you talk about... I have a few different passwords I use, but most my investment accounts use the same username and password. It's all about risk. Bruce Schneier says the same thing. The amount to spend on security should depend on what you're trying to protect. I don't care much if somebody gets into my google account, because I have a google account just because I have to. I barely use it at all. Similarly my yahoo account. My yahoo account uses my "insecure password", and my investment accounts use my "secure password". Credit Card info? Meh. Unless they get into the credit card company database, which undoubtedly has my Social Security Number, it's not that big of a deal. Yeah, they can make fraudulent charges, but there are legal protections, so in theory I can't be out any money. So think this way: what's the risk, and what's the appropriate level of effort to take to mitigate that risk. |
Who can truly afford luxury cars? | I must say, I can't completely agree with the tone of most of these answers. I think there may be a good reason to buy a new car, or a luxurious used car. For years I drove old, second hand cars that were really cheap. and unreliable. I can't count the number of times I was left stranded because my car didn't start, or the alternator burned out. I could have bought more recent models, but I was trying to save money. But in 2010 I found a very low mileage 2008 Smart Car for small money. It was a good deal at the time. It was almost new, having very low mileage, and about 60% of the price of a new, less well appointed Smart. I found out that I really like driving cars that won't break down and leave me stranded in sleet or ice storms. When my wife's Mazda hatchback finally rusted to the point that it wouldn't pass the safety inspection and couldn't be repaired, we bought a new 2013 Toyota Rav4. We are really happy with it. It's probably not a luxury car to you, but having reliable heat and air conditioning seems like luxury to us, and we are happy with our decision. I get the Smart serviced at the Mercedes shop. They have very nice coffee and pastries, and very fast free wifi. |
Can I trust the Motley Fool? | The Motley Fool is generally regarded as relatively legit, at least in that they're not likely to do anything outright fraudulent and they definitely have reasonably in-depth content to provide you. The Motley Fool makes a fair amount of money off the subscriptions, though, and they do hawk them quite violently. If I didn't have a generally good opinion of them to begin with, I'd have been completely put off as well. It's pretty shameful. I don't think it's worth hundreds of dollars a year, but then again, I don't look at investing as a second career like the Fool likes to suggest, either. |
ETFs mirroring consistently outperforming companies? | What you may be looking for are multi-manager ETFs; these invest in a basket of diversified funds to get the best out of all of the funds. The problem with multi-manager funds is, of course, that you pay fees twice; once to the fund itself and once to each of the funds in the fund. The low fees on ETFs mean that it is not very profitable to actively maintain one so there are not many around (Googling returns very few). Noting that historic success doesn't guarantee future success and that fees are being applied to fees these funds only really benefit from diversification of manager performance risk. partial source of information and an example of a (non-outperforming) Multi-manager ETF: http://www.etfstrategy.co.uk/advisorshares-sets-date-for-multi-manager-etf-with-charitable-twist-give-53126/ |
Is it a good idea to get an unsecured loan to pay off a credit card that won't lower a high rate? | Take the consolidation loan and pay it off. Don't close the card. Opening a new account will have no bearing on your mortgage a year or two down the road. Keep paying on time -- that will make a big difference! JohnFX's suggestion to open a new card and do a transfer is a great idea if you have good credit. Just read the fine print -- most cards charge a 3-5% transfer fee and some cards accrue interest if you don't pay within the promotional period. |
Net income correlation with Stock Price | Ideally, stock price reflects the value of the company, the dividends it is expected to pay, and what people expect the future value of the company to be. Only one of those (maybe one and a half) is related to current sales, and not always directly. Short-term motion of a stock is even less directly linked, since it also reflects previous expectations. A company can announce disappointing sales and see its stock go up, if the previous price was based on expecting worse news. |
Building financial independence | It's important to have both long term goals and milestones along the way. In an article I wrote about saving 15% of one's income, I offered the following table: This table shows savings starting at age 20 (young, I know, so shift 2 years out) and ending at 60 with 18-1/2 year's of income saved due to investment returns. The 18-1/2 results in 74% of one's income replaced at retirement if we follow the 4% rule. One can adjust this number, assuming Social Security will replace 30%, and that spending will go down in retirement, you might need to save less than this shows. What's important is that as a starting point, it shows 2X income saved by age 30. Perhaps 1X is more reasonable. You are at just over .5X and proposing to spend nearly half of that on a single purchase. Financial independence means to somehow create an income you can live on without the need to work. There are many ways to do it, but it usually starts with a high saving rate. Your numbers suggest a good income now, but maybe this is only recently, else you'd have over $200K in the bank. I suggest you read all you can about investments and the types of retirement accounts, including 401(k) (if you have that available to you), IRA, and Roth IRA. The details you offer don't allow me to get much more specific than this. |
Why does Yahoo Finance and Google Finance not match historical prices? | I work on a buy-side firm, so I know how these small data issues can drive us crazy. Hope my answer below can help you: Reason for price difference: 1. Vendor and data source Basically, data providers such as Google and Yahoo redistribute EOD data by aggregating data from their vendors. Although the raw data is taken from the same exchanges, different vendors tend to collect them through different trading platforms. For example, Yahoo, is getting stock data from Hemscott (which was acquired by Morningstar), which is not the most accurate source of EOD stocks. Google gets data from Deutsche Börse. To make the process more complicated, each vendor can choose to get EOD data from another EOD data provider or the exchange itself, or they can produce their own open, high, low, close and volume from the actual trade tick-data, and these data may come from any exchanges. 2. Price Adjustment For equities data, the re-distributor usually adjusts the raw data by applying certain customized procedures. This includes adjustment for corporate actions, such as dividends and splits. For futures data, rolling is required, and back-ward and for-warding rolling can be chosen. Different adjustment methods can lead to different price display. 3. Extended trading hours Along with the growth of electronic trading, many market tends to trade during extended hours, such as pre-open and post-close trading periods. Futures and FX markets even trade around the clock. This leads to another freedom in price reporting: whether to include the price movement during the extended trading hours. Conclusion To cross-verify the true price, we should always check the price from the Exchange where the asset is actually traded. Given the convenience of getting EOD data nowadays, this task should be easy to achieve. In fact, for professional traders and investors alike, they will never reply price on free providers such as Yahoo and Google, they will most likely choose Bloomberg, Reuters, etc. However, for personal use, Yahoo and Google should both be good choices, and the difference is small enough to ignore. |
Ballpark salary equivalent today of “healthcare benefits” in the US? | For the person being hired this is a tricky situation. Specially with the new laws. There is no real magic number that can be applied as a lot will depend on what benefits you want, and what is actually available. This will really shift the spectrum quite a bit. Under the affordibal care act, everyone has to have insurance or pay a ?fine? (were really not sure what to call this yet) but there are two provisions that really mess with the numbers you look at as an employee. First, the cost of heath care has skyrocketed. So the same benefits that you had 5 years ago now cost maybe 10-15 times as much as they used to. This gets swept under the rug a bit because the "main costs" of insurance has only increased a tiny amount. What this actually comes down to is does your new ACA approved heath plan cover exactly the benefits you need, or does it cut corners. Sorry this is complicated, and I don't mean it to come off as a speech against the ACA so I will give an example. My wife has RA, she really has it under control with the help of her RA doctor. This is not something she ever wants to change. Because she has had RA from the age of 15, and because it's degenerative, she doesn't want to spend 5 years working with a new doctor to get to the same place she is with her current doctor. In addition, the main drugs she takes for RA are not covered under any ACA plan, nor are the "substitutions" that her doctor makes (we are trying to have kids so she has to be off the main meds, and a couple of the things this doctor has tried has been meds that reduce inflammation, are pregnancy safe, but are not for the treatment of RA) You now have to take into effect rather the cost of health insurance + the cost of the things now not covered by the heath insurance + the out of pocket expenses is worth the insurance. Second the ACA has set up provisions to straight up trick those people that have lower income and are not paying close attention. When shopping for insurance, they get quotes like "$50 a month" or "$100 a month". The truth is that the remainder of the actual cost is deducted from their tax returns. This takes consideration, because if you thing your paying $50 a month for insurance but your really paying $650 then you need to make sure your doing your math right. Finally, you need to understand how messed up things are right now in the US with heath care. Largely this goes unreported. I'm not really sure why. But in order to do this I will have to give examples. For my wife to see a specialist (her RA doctor) the co-pay is $75. So she goes to the doctor, he charges her $75 and bills the insurance $200. The insurance pays the doctor $50. With out insurance, the visit costs $50. At first you want to blame the doctor for cheating the system, but the doctor has to pay for hours of labor to get the $50 back from the insurance company. From the doctors perspective it's cheaper to take the $50 then it is to charge the insurance company. And by charging the insurance company he has no control over the cost of the co pay. He essentially has to charge more to make the same money and the patient gets the shaft in the process. Another example, I got strep throat last year. I went to the walk in clinic, paid $75, saw the doctor got my Z-Pack for $15, went home crawled in bed and got better. My wife (who still had separate insurance from before the marriage) got strep throat (imagen that) went to the same clinic, they charged her $200 for the visit ($50 co-pay) and $250 for the z-pack ($3 co-pay). The insurance paid the clinic $90 for the visit and $3 for the drugs. Again the patient is left out in this scenario. In this case it worked better for my wife, unless you account for the fact that to get that coverage she had to pay $650/month. My point is that when comparing costs of heathcare with insurance, and without out insurance, its often times much cheaper for the practices to have you self pay then it is for them to go through the loops of trying to insurance to make them whole. This creates two rates. Self pay rates and Insured rates. When your trying to figure out the cost of not having insurance then you need to use the self pay rates. These can be vastly different. So as an employee you need to figure out your cost of heath care with insurance, and your cost of heath care without insurance. Then user those numbers when your trying to negotiate a salary. The problem is that there is no magic number to use for this because the cost will very a lot. For us, it was cheaper to not have insurance. Even with a pre-existing condition that takes constant attention, it's just better if we set aside $500 a month then it is to try to pay $750 a month. That might not hold true for everyone. For some people or conditions it may be better to pay the $750 then to try to handle it themselves. So for my negotiations I would go with x+$6,000 without insurance or x+$4,500 with insurance. Now as an employer it's a lot simpler. Usually you have a "group plan" that offers you a pretty straight $x per year per person or $y per year per family. So you can offer exactly that. Salary - $x or Salary - $y. AS a starting point. However this is where negotiations start. If your offering me $50,500 and insurance, I would rather just have $57,000 and no insurance. Of course your real cost is only $55,000 cause you don't care about my heath care costs only about insurance costs. So you try to negotiate down towards $55,000 and no insurance. But that's not good enough for me. So I either go else where and you loose talent, or I accept $50,500 and insurance (or somewhere in between). |
Can my rent to own equity be used as a downpayment? | I think you need to go to a local bank and ask. The key thing is paper trail. For any mortgage I've gotten on a new purchase, the bank needs to see where the down payment came from and how it got to the seller. In this case, it can go either way. If the value is truly 100% to the 80% you are looking to finance, and the paper trail is legit, this may work just fine. The issue others seem to have is that simply buying at a 20% discount is not a legit way to finance the 80%. Here, it appears to me that the 20% came from you in installments, via the rent. |
How can I save money on a gym / fitness membership? New Year's Resolution is to get in shape - but on the cheap! | Try a gym for a month before you sign up on any contracts. This will also give you time to figure out if you are the type who can stick with a schedule to workout on regular basis. Community centres are cost effective and offer pretty good facilities. They have monthly plans as well so no long term committments. |
Does buying and selling a stock OR holding onto it make a company look better? | Not sure I fully understand your question but my take on it is this: There a lot of people out there that admire companies and own the stock just because they like the company. For example, I know some kids who own Disney stock. They only have a share or two but they keep it because they want to say "I own a part of Disney." Realistically speaking, if they hold or sell the stock it is so minuscule to have any realizable affect on the overall value of the stock which does not really make the company look better from an investor perspective. However, if a company has people that just want to own the stock just like your uncle are indeed "better" because they must have provided a product or service that is valued intrinsically. |
How does owning a home and paying on a mortgage fit into family savings and investment? | Your home (the one you live in) is not an investment. Its an expense/liability/asset, but its something you pay for to use, not invest to grow. |
Am I liable for an auto accident if I'm a cosigner but not on the title, registration, or insurance policy? | You can be sued if some random stranger that you never had any interaction with gets in an accident. There is really no barrier to people suing you if they get it in their head that they want to. Winning that lawsuit is another matter entirely. Whether you would be held liable and lose the lawsuit depends on whether someone can convince a court that you are partially responsible for a financial loss. Not sure how anyone could possibly successfully argue that in this situation. |
Car dealer saying that they cannot see any credit information for my co-applicant. Could this be a scam? | I actually had a similar situation when I tried to buy my house. I paid off all my loans and was proud of my "debt free" status. I had no car note, no student loans... absolutely no debt, but I did have a bank-issued credit card. (USAA, not Chase, but I assume the same may apply). When I tried to get a home loan they told me I had "absolutely no information on my credit report." AKA I had no credit. The mortgage lender had no idea what was going on, nor did I or anybody else. It took a lot of research before I realized that the credit bureaus use a formula for the credit rating that involves a lot of things, but if you haven't had a current line of credit reported to the agency in over a year (maybe it was longer, I didn't have anything for 3 years) you aren't going to have a credit score. Because I was "debt free" I was also credit report free and eventually the credit bureaus had nothing to go on, and my score disappeared. The bank-issued credit card was on my credit report, but they didn't report monthly balances so the bureaus couldn't use it to determine if I was paying off the card or if I even had a balance on it. It was essentially not doing my credit any favors, despite what I had thought. In short, based on the fact that you have no debt in her name, and you have taken on all debt in your own name, its very plausible that she has no credit rating anymore. It won't take long to get it back. Once you have ANYTHING on your credit that's actually reported the formula can kick back in and look at credit history as well as current credit and she'll be fine. |
Are those “auto-pilot” programs a scam or waste of time? | Genuine (nearly) passive income can be had from some kinds of investing. Index funds are an example of a mostly self-managing investment. Of course investment involves some risk (the income is essentially paying you for taking that risk) and returns are reasonable but proportional to the risk -- IE, not spectacular unless the risk is high. If someone is claiming they can get you better than market rate of return, look carefully at what they are getting out of it and what the risks are. Fees subtract directly from your gains, and if they claim there is no additional risk, they need to prove that. You are giving someone your money. Be very sure you are going to get it back. If it isn't self-evident where the income comes from, it's probably a scam. If someone is using the term "auto-pilot", it is almost certainly a scam. If they are talking about website advertising and the like, it is far from autopilot if you want to make any noticable amount of money (though you may make money for them). |
I received $1000 and was asked to send it back. How was this scam meant to work? | This is a very trivial scam. Flow is like this: Send money to Mr. X (you, in this case). Call Mr. X and ask for the money back, because mistake. Usually they ask for a wire transfer/cash/gift cards/prepaid cards or something else irreversible/untraceable. Mr. X initiates transfer back to Scammer. Accept the transfer from Mr. X Dispute the original transfer or otherwise cancel it through the netbank Mr. X cannot dispute his transfer to the Scammer, since it was genuinely and intentionally initiated by Mr. X. End up with twice the money, at the expense of Mr. X In other countries this is usually done with forged checks, but transfers can work just as well. As long as the transfer can be retroactively canceled or reversed - the scam works. You mentioned money laundering - this is definitely a possibility as well. They transfer dirty money to you from unidentified sources, and you send a "gift" to them with a clear paper trail. When the audit comes - the only proof is that you actually sent them the gift, and no-one will believe your story. You'll have to explain why the Mr. Z who's now in jail sent you a $1K of his drug money. However, in this case I think it is more likely a scam, and the scammer didn't really know what he was doing... |
If early exercise is a bad idea, why American option is more expensive than European [duplicate] | There are a few situations in which it may be advantageous to exercise early. Wikipedia actually has a good explanation: Option Style, Difference in value To account for the American's higher value there must be some situations in which it is optimal to exercise the American option before the expiration date. This can arise in several ways, such as: An in the money (ITM) call option on a stock is often exercised just before the stock pays a dividend that would lower its value by more than the option's remaining time value. A put option will usually be exercised early if the underlying asset files for bankruptcy.[3] A deep ITM currency option (FX option) where the strike currency has a lower interest rate than the currency to be received will often be exercised early because the time value sacrificed is less valuable than the expected depreciation of the received currency against the strike. An American bond option on the dirty price of a bond (such as some convertible bonds) may be exercised immediately if ITM and a coupon is due. A put option on gold will be exercised early when deep ITM, because gold tends to hold its value whereas the currency used as the strike is often expected to lose value through inflation if the holder waits until final maturity to exercise the option (they will almost certainly exercise a contract deep ITM, minimizing its time value).[citation needed] |
For very high-net worth individuals, does it make sense to not have insurance? | Let's face it: most people pay more in insurance premiums than they "get back" in claims. I put "get back" in quotes because, with very few exceptions, the money paid out in claims does not go to the insured, but to others, such as doctors and hospitals. But even if you ignore the question who does the money actually go to, it's a losing proposition for most people. The exceptions are those who have a major loss, greater than what they put in over the years. But never forget: these are exceptions. The return on your money, on the average, is only a little better than playing the lottery. The usual counter-argument to the above is, but what if you are one of the exceptions? I for one refuse to let my life be dictated by worries of unlikely events that might happen. If you're the sort who obsesses on what could (but probably won't) happen, then maybe you should have insurance. Just don't tell me I need to do the same. When I lived in California, they had a program where you could deposit $25,000 with the State, and then you could drive, legally, without insurance. I did this for a while, didn't have any accidents, and exited the system (when I moved out of state) a few years later with more money (interest) than I put in. You don't accomplish that with insurance. But let's get back to rich people. Unless you get into an accident with you at fault and the other guy needing a head transplant as a result (joke), you could probably absorb the cost of an accident without blinking an eye. Those in the upper-middle-class might do well with high-deductible insurance that only pays out if there's an extreme accident. Then again if you have to borrow to buy something expensive (making monthly payments), they will usually demand you buy insurance with it. This is a way for the lender to protect himself at your expense, and if you refuse, good luck getting a loan somewhere else. I hate the idea of insurance so much I would make an act of insurance punishable by law. |
Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? | You can't roll it over to a Roth IRA without tax penalties. The best thing to do is roll it to an IRA that isn't tied to work at all. Second best is to roll it into your new employer's 401k. The reason that an IRA makes sense is that it gives you the same tax savings as a 401k, but it allows you to remain in control of the money regardless of your employment status. |
How are bonds affected by the Federal Funds Rate? | The federal funds rate is one of the risk-free short-term rates in the economy. We often think of fixed income securities as paying this rate plus some premia associated with risk. For a treasury security, we can think this way: (interest rate) = (fed funds rate) + (term premium) The term premium is a bit extra the bond pays because if you hold a long term bond, you are exposed to interest rate risk, which is the risk that rates will generally rise after you buy, making your bond worth less. The relation is more complex if people have expectations of future rate moves, but this is the general idea. Anyway, generally speaking, longer term bonds are exposed to more interest rate risk, so they pay more, on average. For a corporate bond, we think this way: (interest rate) = (fed funds rate) + (term premium) + (default premium) where the default premium is some extra that the bond must pay to compensate the holder for default risk, which is the risk that the bond defaults or loses value as the company's prospects fall. You can see that corporate and government bonds are affected the same way (approximately, this is all hand-waving) by changes in the fed funds rate. Now, that all refers to the rates on new bonds. After a bond is issued, its value falls if rates rise because new bonds are relatively more attractive. Its value rises if rates on new bonds falls. So if there is an unexpected rise in the fed funds rate and you are holding a bond, you will be sad, especially if it is a long term bond (doesn't matter if it's corporate or government). Ask yourself, though, whether an increase in fed funds will be unexpected at this point. If the increase was expected, it will already be priced in. Are you more of an expert than the folks on wall-street at predicting interest rate changes? If not, it might not make sense to make decisions based on your belief about where rates are going. Just saying. Brick points out that treasuries are tax advantaged. That is, you don't have to pay state income tax on them (but you do pay federal). If you live in a state where this is true, this may matter to you a little bit. They also pay unnaturally little because they are convenient for use as a cash substitute in transactions and margining ("convenience yield"). In general, treasuries just don't pay much. Young folk like you tend to buy corporate bonds instead, so they can make money on the default and term premia. |
Why does it look like my 401k loan default was not paid by my 401k account balance? | There are multiple reasons why this may have happened: 1.) I couldn't tell in your question whether or not you had already paid off the loan before requesting the rollover. But if the loan was defaulted - then the $9k left in your account is not distributable, but is there to pay back the remaining balance on your loan. The $9k will be treated as income, and will be taxed - you will receive a 1099-R detailing the taxes you'll owe. I don't know why this wasn't done when they did your rollover distribution. Typically it all happens at the same time - but it can vary depending on the administrator. 2.) Do you get some type of safe harbor discretionary match, or profit sharing contribution? If so - perhaps this contribution was made after your account was liquidated. So now there is residual money in your account and it is treated as a new distribution, which incurs a new $60 distribution fee. 3.) Stock - if some of your investments were in stock - these take a few extra days to liquidate. Typically a TPA/Recordkeeper would wait until ALL of the funds are liquidated before issuing the rollover. But some companies may be shady and do it separately - incurring an additional $60 distribution fee. If this was the case - I would go to your former employer's HR and tell them whats happening and to start looking for a new 401(k) administrator! I hope this helps :-) Good luck! |
Does the currency exchange rate contain any additional information at all? | No. An exchange rate tells you the exchange rate, that's all. Changes in exchange rates are a little more interesting because they suggest economic changes (or anticipation of such), but since the exchange rate is the composite of many economic forces, determining what changes may be in action from an exchange rate change is not really possible. |
Why so much noise about USA's credit rating being lowered? | Pension- and many "low-risk" investment funds may only invest in AAA-rated stocks and bonds. While the S&P rating alone doesn't imply that such funds must immediately disinvest in US bonds (Fitch and Moody's are holding), it does create the risk that the other rating agencies will follow suite and also lower the US rating. As the largest issuer of bonds, controller of the world's reserve currency, and with many emerging markets placing almost all their current account surpluses in US bonds, this risk change has implications everywhere. Some companies will already start disinvestment while some investors will start demanding higher interest returns in order to buy US bonds. It isn't yet a stampede, but the gates are now open. That said, S&P is simply reflecting the opinions of bond traders. Markets were already unstable long before the downrating. However, from the US perspective, it is a timely reminder to politicians that the global balance is shifting and that the US cannot count on incumbency to protect it from the disapproval of financial analysts. |
What's the best application, software or tool that can be used to track time? | I've been using Tick at work now for several months and have really enjoyed it. It's got a nice, simple interface with good time-budgeting and multi-user/project features. It can be used on several platforms, too (website, desktop widgets, and phone apps). |
Is investing exlusively in a small-cap index fund a wise investment? | Stock portfolios have diversifiable risk and undiversifiable risk. The market rewards investors for taking undiversifiable risk (e.g. owning an index of oil producing companies) and does not reward investors for assuming diversifiable risk (e.g. owning a single oil producing company). The market will not provide investors with any extra return for owning a single oil company when they can buy an oil index fund at no additional cost. Similarly, the market will not reward you for owning a small-cap index fund when you can purchase a globally diversified / capitalization diversified index fund at no additional cost. This article provides a more detailed description. The Vanguard Total World Stock Index Fund is a much better staring point for an equity portfolio. You will need to make sure that the asset allocation of your overall portfolio (e.g. stocks, bonds, P2P lending, cash) is consistent with your time horizon (5-10 years). |
offshoring work and tax dilemma | Generally for tax questions you should talk to a tax adviser. Don't consider anything I write here as a tax advice, and the answer was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. Does IRS like one payment method over other or they simply don't care as long as she can show the receipts? They don't care as long as she withholds the taxes (30%, unless specific arrangements are made for otherwise). She should withhold 30% of the payment and send it to the IRS. The recipient should claim refund, if the actual tax liability is lower. It's only consulting work at the moment, so most of the communication is done over phone. Should they start engaging in written communication to keep records of the work done? Yes, if she wants it to be a business expense. Is it okay to pay in one go to save money-transferring fees? Can she pay in advance? Again, she can do whatever she wants, but if she wants to account for it on her tax returns she should do it the same way she would pay any other vendor in her business. She cannot use different accounting methods for different vendors. Basically, she has not outsourced work in previous years, and she wants to avoid any red flags. Then she should start by calling on her tax adviser, and not an anonymous Internet forum. |
What happens to options after a stock split? | It will be similar to what you have said -- the options price will adjust accordingly following a stock split - Here's a good reference on different scenarios - Splits, Mergers, Spinoffs & Bankruptcies also if you have time to read Characteristics & Risks of Standardized Options |
S&P is consistently beating inflation? | Inflation and stock returns are completely different things The CPI tracks the changes in the prices of a basket of goods a consumer might buy, the S&P 500 tracks the returns earned by investors in the equity of large companies. The two are very different things, and not closely linked. Example: A world without inflation Consider a world in which there was no inflation. Prices are fixed. Should stocks return zero? Certainly not. Companies take raw materials and produce goods and services that have value greater than that of the raw materials. They create new wealth. This wealth becomes profit for the company, which then is passed on to the owners of the company (equityholders) either in the form of dividends or, more commonly, price increases. Example: A world with no inflation and no economic growth Note that I have not implied above that companies have to grow in order for returns to outperform inflation. Total stock returns depend on the current and expected profit of the firm. Firms can remain the same size and continually kick out profits. Total returns will be positive in this environment even if there is no growth and no inflation. If the firms pay the money out as dividends, investors get a cash flow. If they retain these earnings, the value of the firm's equity increases. Total returns take both types of income into account. Technically the S&P 500 is not a total return index, but in our current legal and corporate culture environment, there is a preference for retaining profits rather than paying them out. This causes price increases. Risk bearing In principle, if profit was assured, then investors would bid up stock prices so high that profit would have to compete with the risk-free rate, which often is close to inflation (like, right now). However, profit is not assured. Firm profit swings around over time and constitutes a significant source of risk. We can think of the owners of the firm as being the bondholders and equityholders. These assets are structured such that almost all the profit risk is born by equityholders. We can therefore think of equityholders as being compensated for bearing the risk that would otherwise be born by bondholders. Because equityholders are bearing risk, stock prices must be low enough that stocks have a positive expected return (above the risk-free rate, which is presumably not significantly below inflation). This is true for the same reason that insurance premiums are positive--people have to be compensated for bearing risk. See my answer to this question for a discussion of why risk means we should expect stock prices to increase indefinitely (even if inflation halts). The S&P is not a measure of firm size or value The S&P measures the return earned by investors, not the size of US companies. True, if constituent companies grow and nothing else changes, the index goes up, but if a company shrinks a lot, it gets dropped out, rather than dragging the index down. By the way, please note that dollars "put into" equities are not stuck somewhere. They are passed on to the seller, who then uses it to buy something (even if this is a new equity issuance and the seller is the firm itself). The logic that growth of firms somehow sucks money out of usage is incorrect. |
Optimal way to use a credit card to build better credit? | In addition to the already good answers: I am assuming you are playing a long game and have no specific need for a high credit score in the next couple of years. This list is just good practice that will raise you score. |
How much time would I have to spend trading to turn a profit? | The high frequency trading you reference has no adverse impact on individual investors - at least not in the "going to take advantage of you" way that many articles imply. If anything, high-frequency trading is generally more helpful than harmful, adding liquidity to the system, although it can cause some volatility and "noise" in volume and other data, and the sudden entrance or exit of this type of trading can drive some abnormal market movements. As to research and time needed for trading, most data suggests that the less you try to "beat the market", the better you'll do. Trade activity tends to be inversely related to returns, particularly for individuals. Your best bet is likely to learn enough about investment risks to ensure you're comfortable with them, and invest in broadly diversified asset classes, regions, and sectors, and then mostly leave them alone, or rebalance annually. You'll almost surely do a lot better that way than you will if you spend countless hours researching the "right" stocks to buy. |
How to share income after marriage and kids? | I won't answer in a detailed manner because most people at this site like answers with certain bias' on these questions, like pool resources always relative to which partner is asking. If you follow the above advice, you are hoping things work out. Great! What if they don't? It will be very messy. Unlike most of my peers, I did NOT follow the above advice and had a very clean exit with both of us feeling very good (and no lawyers got involved either; win-win for both of us with all the money we saved). One assumption people make is the person with the lowest income has the strictest limits. This is not always true; I grew up in poverty, but have a very high income and detest financial waste. I can live on about €12,000 a year and even though my partner made a little less, my partner liked to spend. Counter intuitive, right? I was supposed to be the spender because I had a large income, but I wasn't. Also, think about an example with food - sharing expenses. Is it fair for one partner to split whey protein if one partner consumes it, but the other doesn't (answer: in my view, no)? My advice based on your questions: Balance the frugal vs. spendthrift mentality rather than income ratios. If you're both frugal, then focus on income ratios - but one may be more frugal than the other and the thought of spending €300 a month on housing is just insane to a person like me, whereas to most it's too little. Are you both exactly the same with this mentality - and be honest? Common costs that you both agree on can be easily split 50-50 and you can often benefit from economies of scale (like internet, cell phone). Both of us feel very strongly about being financially independent and if possible we both don't want to take money from each other. This is so healthy for a relationship. My partner and I split and we both still really love each other. We're headed in different directions, but we did not want to end bitterly. What you wrote is part of why we ended so well; we both were very independent financially. Kids are going to be a challenge because they come with expenses that partners don't always agree on. What do you and her think of childcare, for instance? You really want to know all this upfront; again a frugal vs. spendthrift mindset could cause some big tensions. |
The doctor didn't charge the health insurance in time, am I liable? | Here's my thought - call the insurance company back. Ask them to just tell you what the "reasonable and customary" approved payment would be. Offer that exact amount to the hospital, it's what they would have gotten anyway, and you learned a cheap lesson. |
Are you preparing for a possible dollar (USD) collapse? (How?) | I'd like to provide ideas other than gold, stocks, property, bonds on how to prepare for a severe crisis. My suggestions below may even make your life more happy now. |
investing - where to trade online? (Greek citizen) | The Greek Piraeus Bank offers such services for trading stocks in Athens Stock Exchange (ASE) and in addition 26 other markets including NASDAQ, NYSE and largest European ones (full list, in Greek). Same goes for Eurobank with a list of 17 international markets and the ability to trade bonds. BETA Securities has also an online platform, but I think it's only for ASE. Some other banks (like National Bank of Greece) do have similar online services, but are usually restricted to ASE. |
Why is it rational to pay out a dividend? | The main reason, as far as I can see, is that the dividends are payments with which the shareholders may do what they want. Capital that the company has no use for does not make a significant positive return on investment, as you pointed out, yes the company could accrue interest, but that is not going to make the company large sums of cash. While the company may be great at making shoes - maybe even the best in the world - doesn't mean they are good investors. Sure they could dabble at using their capital to invest in other equities, but they don't, because they just want to focus on making shoes. If the dividend goes to the investors, they can do what they wish, be it reinvest in the company, or invest elsewhere. Other companies that may make good use of the capital, and create significant returns on it are one such example. That is the rational answer, beyond that, one of the main reasons is that people like the feeling of receiving dividends - it might not be the answer you are looking for, but many people prefer companies that pay dividends for no rational reason over companies which grow their asset value. |
How do I enter Canadian tax info from US form 1042-S and record captial gains from cashing in stock options? | Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit. |
Why are estimated taxes due “early” for the 2nd and 3rd quarters only? | I suspect that the payments were originally due near the end of each quarter (March 15, June 15, September 15, and December 15) but then the December payment was extended to January 15 to allow for end-of-year totals to be calculated, and then the March payment was extended to April 15 to coincide with Income Tax Return filing. |
What are some good books for learning stocks, bonds, derivatives e.t.c for beginner with a math background? | Those are the three books that were considered fundamental at my university: Investments - Zvi Bodie (Author), Alex Kane (Author), Alan Marcus (Author), Stylianos Perrakis (Author), Peter Ryan (Author) This book covers the basics of financial markets. It explains how markets work, general investing principles, basic risk notions, various types of financial instruments and their characteristics and portfolio management principles. Futures and Options markets - John C. Hull This book goes more in depth into derivatives valuation and the less common / more complex instruments. The Handbook of Fixed Income Securities This books covers fixed income securities. In all cases, they are not specifically math-oriented but they do not shy away from it when it is called for. I have read the first and the other two were recommended by professors / friends now working in financial markets. |
It is worth using a discount stock broker? I heard they might not get the best price on a trade? | Always use limit orders never market orders. Period. Do that and you will always pay what you said you would when the transaction goes through. Whichever broker you use is not going to "negotiate" for the best price on your trade if you choose a market order. Their job is to fill that order so they will always buy it for more than market and sell it for less to ensure the order goes through. It is not even a factor when choosing between TradeKing and Scottrade. I use Trade King and my friend uses ScottTrade. Besides the transaction fee (TK is a few $$ cheaper), the only other things to consider are the tools and research (and customer service if you need it) that each site offers. I went with TK and the lower transaction fee since tools and research can be had from other sources. I basically only use it when I want to make a trade since I don't find the tools particularly useful and I never take an analyst's opinion of a stock at face value anyway since everybody always has their own agenda. |
Resources to begin trading from home? | Since then I had gotten a job at a supermarket stocking shelves, but recently got fired because I kept zoning out at work This is not a good sign for day trading, where you spend all day monitoring investments. If you start focusing on the interesting math problem and ignoring your portfolio, you can easily lose money. Not so big a problem for missed buy opportunities, but this could be fatal for missed sale opportunities. Realize that in day trading, if you miss the uptick, you can get caught in a stock that is now going down. And I agree with those who say that you aren't capitalized well enough to get started. You need significantly more capital so that you can buy a diversified portfolio (diversification is your limitation, not hedging). Let's say that you make money on two out of three stocks on average. What are the chances that you will lose money on three stocks in a row? One in twenty-seven. What if that happens on your first three stocks? What if your odds at starting are really one in three to make money? Then you'll lose money more than half the time on each of your first three stocks. The odds don't favor you. If you really think that finance would interest you, consider signing up for an internship at an investment management firm or hedge fund. Rather than being the person who monitors stocks for changes, you would be the person doing mathematical analysis on stock information. Focusing on the math problem over other things is then what you are supposed to be doing. If you are good at that, you should be able to turn that into a permanent job. If not, then go back to school somewhere. You may not like your schooling options, but they may be better than your work options at this time. Note that most internships will be easier to get if you imply that you are only taking a break from schooling. Avoid outright lying, but saying things like needing to find the right fit should work. You may even want to start applying to schools now. Then you can truthfully say that you are involved in the application process. Be open about your interest in the mathematics of finance. Serious math minds can be difficult to find at those firms. Given your finances, it is not practical to become a day trader. If you want proof, pick a stock that is less than $100. Found it? Write down its current price and the date and time. You just bought that stock. Now sell it for a profit. Ignore historical data. Just monitor the current price. Missed the uptick? Too bad. That's reality. Once you've sold it, pick another stock that you can afford. Don't forget to mark your price down for the trading commission. A quick search suggests that $7 a trade is a cheap price. Realize that you make two trades on each stock (buy and sell), so that's $14 that you need to make on every stock. Keep doing that until you've run out of money. Realize that that is what you are proposing to do. If you can make enough money doing that to replace a minimum wage job, then we're all wrong. Borrow a $100 from your mom and go to town. But as others have said, it is far more realistic to do this with a starting stake of $100,000 where you can invest in multiple stocks at once and spread your $7 trading fee over a hundred shares. Starting with $100, you are more likely to run out of money within ten stocks. |
Why can't I short a stock that sells for less than $5? Is there another way to “go short” on them? | If this is the initial transaction, the rules of a short margin account say that if you shorted 1000 share of ABC at $5/share your credit balance would be $5000 from the short plus you would have to put up yourself $5000 cash or $10,000 of marginal securities. So this is not really leveraging using margin. You have to put in just as much as the short generates. Is that what this relates to? Once the initial purchase has been made the minimum maintenance for a stock trading under $5 per share is 100% of the short market value in the margin account or $2.50 per share whichever is greater. For stock trading at $5/share or greater the minimum maintenance requirement is $5/share or 30% of the short market value, whichever is greater. The minimum maintenance requirements can be tighter. |
In a competitive market, why is movie theater popcorn expensive? | A better question would be to ask "Why don't movie theaters charge to use the bathroom?", or "Why don't movie theaters charge for parking?". In America, either government regulation or the mall itself forbids charging for parking, or limits the amount that can be charged for parking. This tends to be more true in suburban areas where land is cheap, but less true downtown in cities. The nearest theater to me is in a mall that is also on a metro line. Those who arrive by metro to see the movie are effectively subsidizing those who arrive via automobile and park. I don't know of any place in America that charges to use the bathroom, but the practice is still common in Europe. I saw the second The Matrix film in Brussels, and had to pay to pee. I'm not sure why this isn't the case in the U.S. Maybe there are widespread regulations against this. Or maybe it's a cultural thing, that we would be so offended by this that we would never go back to the theater. |
Income Tax form in India for freelancing | Since you are living in India and earning income not from salary, you must file your tax return under ITR4(Profits or Gains of Business or Profession). You can do it online on IncomeTax India eFiling website, step by step guide available here. |
How does a bank make money on an interest free secured loan? | Other answers didn't seem to cover it, but most "0%" bank loans (often offered to credit card holders in the form of balance transfer checks), aside from less-obvious fees like already-mentioned late fees, also charge an actual loan fee, typically 2-3% (or a minimum floor amount) - that was the deal with every single transfer 0% offer I ever saw from a bank. So, effectively, even if you pay off the loan perfectly, on time, and within 0% period, you STILL got a 3% loan and not 0% (assuming 0% period lasts 12 months which is often the case). |
Interest on security deposits paid to landlords, in Michigan? | NO. The legislation requires the landlord to deposit it in a bank. Check out pages 7-10 of the linked document. There is no mention of interest. The second clause, I believe, is probably for large landlords who hold hundreds of thousands of dollars of security. http://www.legislature.mi.gov/documents/publications/tenantlandlord.pdf Q4 Once collected, what must the landlord do with the security deposit? The landlord must either: a) Deposit the money with a regulated financial institution (e.g., bank), OR b) Deposit a cash bond or surety bond, to secure the entire deposit, with the Secretary of State. ( Note: If the landlord does this, he or she may use the money at any time, for any purpose.) The bond ensures that there is money available to repay the tenant’s security deposit |
Why diversify stocks/investments? | Diversification is used by many to hopefully reduce the risk when bad investments are made. Diversification does not help you make more profits but instead averages down your profits. There is no way one can tell whether a stock or portfolio of stocks will go up or down once they are purchased. In order to try to provide some protection against total loss of the portfolio, a lazy so called long term investor will use diversification as a way of risk management. But the best outcome for them will be an averaging down of their profits. A better method is to let the market tell you when your purchased investment is a bad one and get out of that investment early and thus limiting your losses, whilst letting your good investments (as determined by the market) run and make larger profits. |
Could an ex-employee of a company find themself stranded with shares they cannot sell (and a tax bill)? | they are entirely free to do whatever they want with the shares. In particular, they can sell them to whomever they choose No. Restrictions on who can sell when and to whom are a common thing with startups. "Publicly traded" companies are regulated in a much stricter way than private companies, so until the IPO the sales are limited to the OTC markets. But even that can be restricted by bylaws - for example ownership can only be limited to a group of investors approved by the board. As an employee - your grant was approved by the board, but when you come to sell, the buyer was not and the company may not agree to vet them. Bottom line is that it is not illegal to impose all kinds of restrictions on what the employees can do with their shares, as long as the shares are not listed on a public stock exchange (even after the company goes IPO with one class, other classes may remain restricted). |
Double-entry accounting: how to keep track of mortgage installments as expenses? | Because a paying down a liability and thus gaining asset equity is not technically an expense, GnuCash will not include it in any expense reports. However, you can abuse the system a bit to do what you want. The mortgage payment should be divided into principle, interest, and escrow / tax / insurance accounts. For example: A mortgage payment will then be a split transaction that puts money into these accounts from your bank account: For completeness, the escrow account will periodically be used to pay actual expenses, which just moves the expense from escrow into insurance or tax. This is nice so that expenses for a month aren't inflated due to a tax payment being made: Now, this is all fairly typical and results in all but the principle part of the mortgage payment being included in expense reports. The trick then is to duplicate the principle portion in a way that it makes its way into your expenses. One way to do this is to create a principle expense account and also a fictional equity account that provides the funds to pay it: Every time you record a mortgage payment, add a transfer from this equity account into the Principle Payments expense account. This will mess things up at some level, since you're inventing an expense that does not truly exist, but if you're using GnuCash more to monitor monthly cash flow, it causes the Income/Expense report to finally make sense. Example transaction split: |
How should I handle student loans when leaving University and trying to buy a house? | Concise answers to your questions: Depends on the loan and the bank; when you "accelerate" repayment of a loan by applying a pre-payment balance to the principal, your monthly payment may be reduced. However, standard practice for most loan types is that the repayment schedule will be accelerated; you'll pay no less each month, but you'll pay it off sooner. I can neither confirm nor deny that an internship counts as job experience in the field for the purpose of mortgage lending. It sounds logical, especially if it were a paid internship (in which case you'd just call it a "job"), but I can't be sure as I don't know of anyone who got a mortgage without accruing the necessary job experience post-graduation. A loan officer will be happy to talk to you and answer specific questions, but if you go in today, with no credit history (the student loan probably hasn't even entered repayment) and a lot of unknowns (an offer can be rescinded, for instance), you are virtually certain to be denied a mortgage. The bank is going to want evidence that you will make good on the debt you have over time. One $10,000 payment on the loan, though significant, is just one payment as far as your credit history (and credit score) is concerned. Now, a few more reality checks: $70k/yr is not what you'll be bringing home. As a single person without dependents, you'll be taxed at the highest possible withholdings rate. Your effective tax rate on $70k, depending on the state in which you live, can be as high as 30% (including all payroll/SS taxes, for a 1099 earner and/or an employee in a state with an income tax), so you're actually only bringing home 42k/yr, or about $1,600/paycheck if you're paid biweekly. To that, add a decent chunk for your group healthcare plan (which, as of 2014, you will be required to buy, or else pay another $2500 - effectively another 3% of gross earnings - in taxes). And even now with your first job, you should be at least trying to save up a decent chunk o' change in a 401k or IRA as a retirement nest egg. That student loan, beginning about 6 months after you leave school, will cost you about $555/mo in monthly payments for the next 10 years (if it's all Stafford loans with a 50/50 split between sub/unsub; that could be as much as $600/mo for all-unsub Stafford, or $700 or more for private loans). If you were going to pay all that back in two years, you're looking at paying a ballpark of $2500/mo leaving just $700 to pay all your bills and expenses each month. With a 3-year payoff plan, you're turning around one of your two paychecks every month to the student loan servicer, which for a bachelor is doable but still rather tight. Your mortgage payment isn't the only payment you will make on your house. If you get an FHA loan with 3.5% down, the lender will demand PMI. The city/county will likely levy a property tax on the assessed value of land and building. The lender may require that you purchase home insurance with minimum acceptable coverage limits and deductibles. All of these will be paid into escrow accounts, managed by your lending bank, from a single check you send them monthly. I pay all of these, in a state (Texas) that gets its primary income from sales and property tax instead of income, and my monthly payment isn't quite double the simple P&I. Once you have the house, you'll want to fill the house. Nice bed: probably $1500 between mattress and frame for a nice big queen you can stretch out on (and have lady friends over). Nice couch: $1000. TV: call it $500. That's probably the bare minimum you'll want to buy to replace what you lived through college with (you'll have somewhere to eat and sleep other than the floor of your new home), and we're already talking almost a month's salary, or payments of up to 10% of your monthly take-home pay over a year on a couple of store credit cards. Plates, cookware, etc just keeps bumping this up. Yes, they're (theoretically) all one-time costs, but they're things you need, and things you may not have if you've been living in dorms and eating in dining halls all through college. The house you buy now is likely to be a "starter", maybe 3bed/2bath and 1600 sqft at the upper end (they sell em as small as 2bd/1bt 1100sqft). It will support a spouse and 2 kids, but by that point you'll be bursting at the seams. What happens if your future spouse had the same idea of buying a house early while rates were low? The cost of buying a house may be as little as 3.5% down and a few hundred more in advance escrow and a couple other fees the seller can't pay for you. The cost of selling the same house is likely to include all the costs you made the seller pay when you bought it, because you'll be selling to someone in the same position you're in now. I didn't know it at the time I bought my house, but I paid about $5,000 to get into it (3.5% down and 6 months' escrow up front), while the sellers paid over $10,000 to get out (the owner got married to another homeowner, and they ended up selling both houses to move out of town; I don't even know what kind of bath they took on the house we weren't involved with). I graduated in 2005. I didn't buy my first house until I was married and pretty much well-settled, in 2011 (and yes, we were looking because mortgage rates were at rock bottom). We really lucked out in terms of a home that, if we want to or have to, we can live in for the rest of our lives (only 1700sqft, but it's officially a 4/2 with a spare room, and a downstairs master suite and nursery/office, so when we're old and decrepit we can pretty much live downstairs). I would seriously recommend that you do the same, even if by doing so you miss out on the absolute best interest rates. Last example: let's say, hypothetically, that you bite at current interest rates, and lock in a rate just above prime at 4%, 3.5% down, seller pays closing, but then in two years you get married, change jobs and have to move. Let's further suppose an alternate reality in which, after two years of living in an apartment, all the same life changes happen and you are now shopping for your first house having been pre-approved at 5%. That one percentage point savings by buying now, on a house in the $200k range, is worth about $120/mo or about $1440/yr off of your P&I payment ($921.42 on a $200,000 home with a 30-year term). Not chump change (over 30 years if you had been that lucky, it's $43000), but it's less than 5% of your take-home pay (month-to-month or annually). However, when you move in two years, the buyer's probably going to want the same deal you got - seller pays closing - because that's the market level you bought in to (low-priced starters for first-time homebuyers). That's a 3% commission for both agents, 1% origination, 0.5%-1% guarantor, and various fixed fees (title etc). Assuming the value of the house hasn't changed, let's call total selling costs 8% of the house value of $200k (which is probably low); that's $16,000 in seller's costs. Again, assuming home value didn't change and that you got an FHA loan requiring only 3.5% down, your down payment ($7k) plus principal paid (about another $7k; 6936.27 to be exact) only covers $14k of those costs. You're now in the hole $2,000, and you still have to come up with your next home's down payment. With all other things being equal, in order to get back to where you were in net worth terms before you bought the house (meaning $7,000 cash in the bank after selling it), you would need to stay in the house for 4 and a half years to accumulate the $16,000 in equity through principal payments. That leaves you with your original $7,000 down payment returned to you in cash, and you're even in accounting terms (which means in finance terms you're behind; that $7,000 invested at 3% historical average rate of inflation would have earned you about $800 in those four years, meaning you need to stick around about 5.5 years before you "break even" in TVM terms). For this reason, I would say that you should be very cautious when buying your first home; it may very well be the last one you'll ever buy. Whether that's because you made good choices or bad is up to you. |
Is it possible, anywhere in the US for a funding firm to not have a license number showing somewhere? | Well, these can range from loan broker to outright scams. It is pretty typical that loan broker just take some fee in the middle for their service of filling your applications for a bunch of real loan provider companies. Because making a web page costs nothing, a single loan broker could easily have many web pages with a bit different marketing so that they can get as many customers as possible. But of course some of the web pages can be actual scams. As soon as you provide enough information for taking out a loan, they can go to a real financial institution, take out the loan and run with the money. In most countries consumer protection laws do not apply to business-to-business transactions, so you have to be even more wary of scams than usual. |
How did this day trader lose so much? | He didn't sell in the "normal" way that most people think of when they hear the term "sell." He engaged in a (perfectly legitimate) technique known as short selling, in which he borrows shares from his broker and sells them immediately. He's betting that the price of the stock will drop so he can buy them back at a lower price to return the borrowed shares back to his broker. He gets to pocket the difference. He had about $37,000 of cash in his account. Since he borrowed ~8400 shares and sold them immediately at $2/share, he got $16,800 in cash and owed his broker 8400 shares. So, his net purchasing power at the time of the short sale was $37,000 + $16,800 - 4800 shares * $2/share. As the price of the stock changes, his purchasing power will change according to this equation. He's allowed to continue to borrow these 8400 shares as long as his purchasing power remains above 0. That is, the broker requires him to have enough cash on hand to buy back all of his borrowed shares at any given moment. If his purchasing power ever goes negative, he'll be subject to a margin call: the broker will make him either deposit cash into his account or close his positions (sell long positions or buy back short positions) until it's positive again. The stock jumped up to $13.85 the next morning before the market opened (during "before-hours" trading). His purchasing power at that time was $37,000 + $16,800 - 8400 shares * $13.85/share = -$62,540. Since his purchasing power was negative, he was subject to a margin call. By the time he got out, he had to pay $17.50/share to buy back the 8400 shares that he borrowed, making his purchasing power -$101,600. This $101,600 was money that he borrowed from his broker to buy back the shares to fulfill his margin call. His huge loss was from borrowing shares from his broker. Note that his maximum potential loss is unlimited, since there is no limit to how much a stock can grow. Evidently, he failed to grasp the most important concept of short selling, which is that he's borrowing stock from his broker and he's obligated to give that stock back whenever his broker wants, no matter what it costs him to fulfill that obligation. |
Idea for getting rich using computers to track stocks | The main reason I'm aware of that very few individuals do this sort of trading is that you're not taking into account the transaction costs, which can and will be considerable for a small-time investor. Say your transaction costs you $12, that means in order to come out ahead you'll have to have a fairly large position in a given instrument to make that fee back and some money. Most smaller investors wouldn't really want to tie up 5-6 figures for a day on the chance that you'll get $100 back. The economics change for investment firms, especially market makers that get special low fees for being a market maker (ie, offering liquidity by quoting all the time). |
USA H1B Employee - Capital gains in India from selling selling stocks | My tax preparing agent is suggesting that since the stock brokers in India does not have any US state ITINS, it becomes complicated to file that income along with US taxes Why? Nothing to do with each other. You need to have ITIN (or, SSN more likely, since you're on H1b). What brokers have have nothing to do with you. You must report these gains on your US tax return, and beware of the PFIC rules when you do it. He says, I can file those taxes separately in India. You file Indian tax return in India, but it has nothing to do with the US. You'll have to deal with the tax treaty/foreign tax credits to co-ordinate. How complicated is it to include Indian capital gains along with US taxes? "How complicated" is really irrelevant. But in any case - there's no difference between Indian capital gains and American capital gains, unless PFIC/Trusts/Mutual funds are involved. Then it becomes complicated, but being complicated is not enough to not report it. If PIFC/Trusts/Mutual funds aren't involved, you just report this on Schedule D as usual. Did anybody face similar situation More or less every American living abroad. Also the financial years are different in India and US Irrelevant. |
Is real (physical) money traded during online trading? | When you buy a currency via FX market, really you are just exchanging one country's currency for another. So if it is permitted to hold one currency electronically, surely it must be permitted to hold a different country's currency electronically. |
Impact of EIN on taxation | Is it possible if (After getting EIN) I change my LLC type (disregarded entity or C type or S type or corporation or change in number of members) for tax saving ? You marked your question as "real-estate", so I'm guessing you're holding rental properties in your LLC. That means that you will not be able to qualify for S-Corp, only C-Corp treatment. That in turn means that you'll be subject to double taxation and corporate tax rate. I fail to see what tax savings you're expecting in this situation. But yes, you can do it, if you so wish. I suggest you talk to a licensed tax adviser (EA/CPA licensed in your State) before you make any changes, because it will be nearly impossible to reverse the check-the-box election once made (for at least 5 years). |
Periodicity in stock charts | If the period is consistent for company X, but occurs in a different month as Company Y, it might be linked to the release of their annual report, or the payment of their annual dividend. Companies don't have to end their fiscal year near the end of the Calendar year, therefore these end of year events could occur in any month. The annual report could cause investors to react to the hard numbers of the report compared to what wall street experts have been predicting. The payment of an annual dividend will also cause a direct drop in the price of the stock when the payment is made. There will also be some movement in prices as the payment date approaches. |
What extra information might be obtained from the next highest bids in an order book? | My broker collates the order book by price and marketplace, displaying the number of shares available at each level, sorted as in Victor's screencap. You can glean information from not just a snapshot of the order book but also by watching how it changes over time. Although it's not always a complete picture -- many brokers hold limit orders internally until the market is close, at which point they'll route to an exchange or trade internally. And of course skilled market participants know that there's people out there looking to glean information from the order book and will act to confuse the picture. The order book can show you: Combined with a list of trades (price & size, and whether it was a buy or sell), you can get a much more complete picture of what's going on with a stock than by looking at charts alone. |
Why do banks encourage me to use online bill payment? | It’s more convenient for both you and the bank; its much simpler to handle things electronically than it is to go through paperwork. Also, its eco-friendly and by saying that they care about the environment, banks earn brownie points with environmentally-conscious customers. |
How to record “short premium” in double-entry accounting? | You don't. No one uses vanilla double entry accounting software for "Held-For-Trading Security". Your broker or trading software is responsible for providing month-end statement of changes. You use "Mark To Market" valuation at the end of each month. For example, if your cash position is -$5000 and stock position is +$10000, all you do is write-up/down the account value to $5000. There should be no sub-accounts for your "Investment" account in GNUCash. So at the end of the month, there would be the following entries: |
Taxes due for hobbyist Group Buy | From the poster's description of this activity, it doesn't look like he is engaged in a business, so Schedule C would not be appropriate. The first paragraph of the IRS Instructions for Schedule C is as follows: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Form 1040, line 21, or Form 1040NR, line 21. What the poster is doing is acting as a nominee or agent for his members. For instance, if I give you $3.00 and ask you to go into Starbucks and buy me a pumpkin-spice latte, you do not have income or receipts of $3.00, and you are not engaged in a business. The amounts that the poster's members are forwarding him are like this. Money that the poster receives for his trouble should be reported as nonbusiness income on Line 21 of Form 1040, in accordance with the instructions quoted above and the instructions for Form 1040. Finally, it should be noted that the poster cannot take deductions or losses relating to this activity. So he can't deduct any expenses of organizing the group buy on his tax return. Of course, this would not be the case if the group buy really is the poster's business and not just a "hobby." Of course, it goes without saying that the poster should document all of this activity with receipts, contemporaneous emails (and if available, contracts) - as well as anything else that could possibly be relevant to proving the nature of this activity in the event of an audit. |
How does a “minimum number of items to be bought” factor into break even analysis? | A minimum purchase quantity just means that you need to round your result up to the nearest 100. In your example it comes out evenly. If we look at an example where it doesn't come out even, you'd round up: And round that up to 700 due to purchase quantities. For a slightly more complex and accurate approach, you'd then evaluate how many of the extras you had to buy due to the minimum purchase quantity would need to be sold: So you'd have to sell 694 of the 700 purchased to break even. |
I'm about to be offered equity by my employer. What should I expect? | The main thing is the percentage of the company represented by the shares. Number of shares is meaningless without total shares. If you compute percentage and total company value you can estimate the value of the grant. Or perhaps more useful for a startup is to multiple the percentage by some plausible "exit" value, such as how much the company might sell for or IPO for. Many grants expire when or soon after you leave the company if you don't "cash out" vested shares when you leave, this is standard, but do remember it when you leave. The other major thing is vesting. In the tech industry, vesting 1/4 after a year and then the rest quarterly over 3 more years is most common. |
When to trade in a relatively new car for maximum value | Cars depreciate the most their first year after introduction. So you could buy a "new" car in year 2 for the optimal price, and at year 4 (when you finish paying yours off) you could buy the next car in year 2 (this is surprisingly similar to rolling options in a buy-write strategy, an arguably more constructive use of your money) |
What happened to Home Depot's Stock in 1988? | So a major problem with looking at historical stock data on these graphs is that they set the stock price based off of current market volumn. If I was to say look at Majesco Entertainment (COOL) in june of 2016. It would say that the stock as trading between $5-6. In reality it was between .50-$1. But in august there was a 6:1 reverse split. So June's value based on todays current share count would be about $5-6 per one share. 1988 for home depot must have been a really bad year for them, and because of all the splits they've had over the years already screws that estimate of what one share is worth. There's a lot of variance in 1988, but you have to be looking at only 1988. 87 and 89 really screws the the chart's scale. |
Legitimate unclaimed property that doesn't appear in any state directory? | Most states have a "cap" on the amount a "heir finder" can charge for retrieving the property. It is generally around 10%. Even if the state does not have a particular statute you can usually negotiate the rate with the company. Thirty-percent is extortion, if they won't do it for less, someone else will. |
Better rate for investment between CD or savings | Excel has two functions you can use: Your question has the CD with a APR and the savings account that mentions both APR and APY. So convert them both to APY to compare them. The savings account (2.27 APY) will return more money based on the numbers in your question (2.27% vs 1.56%) The previous part was the math part of the answer. The following takes into other considerations. For this case the Savings account will return a larger amount of money if the conditions don't change. The CD rate is guaranteed, but the savings account could change every business day. The savings rate could go up, or down. If you expect the savings account rate to rain higher than the CD you might not want to lock into the CD. If you expect the savings rate will drop then get the CD. Of course there are penalties if you cash in the CD early. |
If I pay someone else's property taxes, can I use it as a deduction on my income tax return? | To make matters worse, if you pay the property tax your mother in law can't take the deduction either. You may be better off paying rent and having her handle the property correctly, as a rental. |
What can cause rent prices to fall? | The buy-to-rent investment bubble created (in some markets) a large number of new housing starts often exceeding the available demand. Since people were investing in the capital gain, they didn't mind whether a place was rented or not. Many places stood empty at the prices investors wished to charge. In the UK where building restrictions are so dire that few new houses can be built, new house production is less than market demand which keeps up rental prices. There just isn't any stock. In the US, where construction is more liberal, rental prices can fall as new stock enters the market. A driver will be where the sales market dries up and owners must rent to cover at least some of their mortgage losses. Or, as Joel points out, if a major employer which dominates a small town, leaves. Many old industrial towns feature both low rentals and plenty of empty, low-priced property. Liverpool, in the UK, features entire empty neighbourhoods all boarded up. If you're looking to track metrics on this simply look at migration patterns. Where large numbers of people are moving "towards" prices (and rentals) will rise. Where people are moving "away" all prices fall. |
If I want a Credit Card offered through a different Credit Union should I slowly transition my banking to that CU? | I don't have an account with either of those CUs, but I do have membership at 2 different CUs. If they accept credit card payments online via transfer from another institution, there's no reason to move your money, unless there are other benefits (higher interest rates). All the CUs would likely require is membership ($5 deposit minimum?). If you were to get a card through Chase or Capital One, you wouldn't be expected to open a checking/savings account with them and transition over to those accounts. |
Why do governments borrow money instead of printing it? | My answer is that when confronted with the obvious, the most common human reaction is to seek reasons for it, because things have to be right. They have to have a reason. We don't like it when things suck. So when finding out that you are being ripped off every day of your life, your reaction is "There must be a logical reason that perfectly explain why this is. After all, the world is fair, governments are working in our best interest and if they do it this way, they must have a very good reason for it." Sorry, but that not the case. You have the facts. You are just not looking at them. Economics, as a subject, is the proper management of resources and production. Now, forget the fancy theories, the elaborate nonsense about stocks and bonds and currencies and pay attention to the actual situation. On our planet, most people earn $2,000 per year. Clean water is not available for a very sizable percent of the world's population. Admittedly, 90% of the world's wealth is concentrated in the hands of the most wealthy 10%. A Chinese engineer earns a fraction of what a similarly qualified engineer earns in the States. Most people, even in rich countries, have a negative net value. They have mortgages that run for a third of their lifetimes, credit card debts, loans... do the balance. Most people are broke. Does this strike you as the logical result of a fair and balanced economic system? Does this look like a random happenstance? The dominant theory is "It just happened, it's nobody's fault and nobody designed it that way and to think otherwise is very bad because it makes you a conspiracy theorist, and conspiracy theorists are nuts. You are not nuts are you?" Look at the facts already in your possession. It didn't just happen. The system is rigged. When a suit typing a few numbers in a computer can make more money in 5 minutes than an average Joe can make in 100 lifetimes of honest, productive work, you don't have a fair economic system, you have a scam machine. When you look at a system as broken as the one we have, you shouldn't be asking yourself "what makes this system right?" What you should be asking yourself is more along the lines of "Why is it broken? Who benefits? Why did congress turn its monetary policy over to the Federal reserve (a group of unelected and unaccountable individuals with strong ties in the banking industry) and does not even bother to conduct audits to know how your money is actually managed? This brilliant movie, Money as debt, points to a number of outrageous bugs in our economic system. Now, you can dream up reasons why the system should be the way it is and why it is an acceptable system. Or you can look at the fact and realize that there is NO JUSTIFICATION for an economic system that perform as badly as it does. Back to basics. Money is supposed to represent production. It's in every basic textbook on the subject of economics. So, what should money creation be based on? Debt? No. Gold? No. Randomly printed by the government when they feel like it? No (although this could actually be better than the 2 previous suggestions) Money is supposed to represent production. Index money on production and you have a sound system. Why isn't it done that way? Why do you think that is? |
Why can't the government simply payoff everyone's mortgage to resolve the housing crisis? | Interestingly, ancient Judaism and Christianity held a Jubilee year every 50 years in which all debts were forgive, slaves were freed, etc. "The land must not be sold permanently, for the land belongs to me. You are only foreigners, my tenant farmers." -Leviticus 25:23 Jubilee would more resemble "the government declares all mortgages and credit card debts void" with FDIC caping the payouts when banks fell into receivership, not simply "the government pays off all mortgages". Yet, it still demonstrates that primitive societies employed tools similar to what you describe. There is surely all manor of interesting analysis of the economic impacts of Jubilee by Jewish religious historians. You might even find arguments that communism was invented because Western Judeo-Christian societies abandoned Jubilee. As an aside, I'm surprised that nobody here directly discussed the velocity of money. If you wipe out a mortgage, you might convert a spender into a saver, especially during a recession, meaning you've injected slow money. Conversely, anyone too poor for a mortgage probably spends all their money, meaning giving them a job injects faster money. In addition, it's much cheaper to hire tons of poor people to do useful things, like repairing bridges. |
Did an additional $32 billion necessarily get invested into Amazon.com stock on October 26th, 2017? | Stock A last traded at $100. Stock A has 1 million shares outstanding. No seller is willing to sell Stock A for less than $110 a share. One buyer is willing to buy 1 share for $110. The order executes. The buyer pays the seller $110. Stock A's new price is $110. An $110 investment increased the market cap by $10 million. Neat trick (for all who own Stock A). |
Are there any statistics that support the need for Title Insurance? | There seems to be no such information available. What is available is that number of claims are high and the Title Insurance companies have gone bankrupt as per the wikipedia article In 2003, according to ALTA, the industry paid out about $662 million in claims, about 4.3% percent of the $15.7 billion taken in as premiums. By comparison, the boiler insurance industry, which like title insurance requires an emphasis on inspections and risk analysis, pays 25% of its premiums in claims. However, no reference to the relationship between when claims are made and when policies are issued is found. As of 2008, the top three remaining title insurers all lost money, while LandAmerica went bankrupt and sold its title business to Fidelity http://en.wikipedia.org/wiki/Title_insurance#Industry_profitability The amount of premium received and claim made can be got from some of the companies balance sheet. For Fidelity its at http://www.investor.fnf.com/releasedetail.cfm?CompID=FNT&ReleaseID=363350 The article in here mentions the claims ratio as 5%. Refer http://www.federaltitle.com/blog/title-insuance-qaa |
What is the purpose of endorsing a check? | I believe the banks are protecting themselves when they "require" your endorsement. Years ago. they used to ask for your endorsement, and not require it. If you endorse the check, it legally authorizes them to debit your account, if the check is later returned for non-sufficient funds (NSF). It mostly protects the bank, and not the customer. |
Student loan payments and opportunity costs | As Mr. Money Money Mustache once said: IF YOU HAVE CREDIT CARD DEBT, YOU SHOULD FEEL LIKE YOUR HAIR IS ON FIRE Student loan debt is different than credit card debt. Rather than having spent the money on just about anything, it was invested in improving yourself and probably your financial future. This was probably a good decision. However, unlike most credit card debt, if you ever have to file for bankruptcy, your student loans will not be erased. They will follow you forever. Pay your debts off as quickly as you can. While it may be true that "long-term return on the stock market is about 7%", you cannot assume that this will always be the case, especially in the short term. What if you had made this assumption in 2007? To assume that your stocks will beat a 6.4% guaranteed return over the next few years is not really investing. It's gambling. |
Can I exchange rental property for REIT stock with 1031? | would buying the stock of a REIT qualify as a 'Like-Kind' exchange? Short answer, no. Long answer, a 1031 (Starker) exchange only applies to real estate. From the Wikipedia page on the topic: To qualify for Section 1031 of the Internal Revenue Code, the properties exchanged must be held for productive use in a trade or business, or for investment. Stocks, bonds, and other properties are listed as expressly excluded by Section 1031 of the Internal Revenue Code, although securitized properties are not excluded. A REIT, being stock in a real estate company, is excluded from Section 1031. |
What happens when a calendar spread is assigned in a non-margin account? | I can't speak for all brokerages but the one I use requires cash accounts to have cash available to purchase the stock in this situation. With the cash available you would be able to purchase the stock if the option was exercised. Hope this helps |
Who owns historical valuations about equity such as stocks and index funds? | I expect that data may be copyright. Data that's published (e.g. on a newsfeed or web site) is subject to terms of use. Standard & Poor's web site says, about the Shiller indexes, Who do I contact at S&P to license my use of these indices? Questions regarding licensing the S&P/Case-Shiller Home Price Indices can be addressed to: Bo Chung Managing Director bo_chung@standardandpoors.com, +1.212.438.3519 As for 'recording' the information yourself, that may depend on how and where (e.g. from what source) you're recording it. If for example you tried to record prices from the Canadian MLS (Realtor's) network, they too have their own terms of use on the data they publish. Copyright laws vary from country to country (and terms of use certainly vary): for example see http://en.wikipedia.org/wiki/Feist_v._Rural which is case law about copyrighting a phone directory in the USA, and contrast that with http://en.wikipedia.org/wiki/Database_right which is European legislation. So who owns data if it is determined by free market? I guess that "determined by free market" means that buyers and sellers are publishing their offers-to-buy and their offers-to-sell, and I guess that the publisher (e.g. the stock exchange) has 'terms of use' about the data (the offers) that they're publishing. |
Why do some people say a house “not an investment”? | When I purchased my house I struggled with this same idea. I felt sick to my stomach signing a contract stating how much money I now owe a bank. However, the lawyer I was using put it in terms that eased the nausea a little (I still hate owing that much money - but it's a little more palatable). His words, paraphrased: At the end of the day, you have to have a place to stay. Your mortgage payment is replacing your rent except in this case, you're paying yourself instead of someone else. You lose a little flexibility in being able to up and move with relative ease. However, you've lived in apartments, you know that rent almost only goes up. Your mortgage will not. He wrote out some numbers and basically showed that everything evened out except mortgage payments will give you property as opposed to paying for someone else's property. To answer your question though - others have already stated - you'll get a better return in the stock market (usually). But unless you're really really bad at real estate evaluation - you should make some money off your house when you decide to sell. |
I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment? | You should be worried. You have made the mistake of entering an investment on the recommendation of family/friend. The last think you should do is make another mistake of just leaving it and hoping it will go up again. Your stock has dropped 37.6% from its high of $74.50. That means it has to go up over 60% just to reach the high of $74.50. You are correct this may never happen or if it does it could take a long, long time to get up to its previous highs. What is the company doing to turn its fortunes around? Take a look at some other examples: QAN.AX - Qantas Airways This stock reached a high of around $6 in late 2007 after a nice uptrend over a year and a half, it then dropped drastically at the start of the GFC, and has since kept falling and is now priced at just $1.15. QAN reported its first ever loss earlier this year, but its problems were evident much earlier. AAPL - Apple Inc. AAPL reach a high of just over $700 in September 2013, then dropped to around $400 and has recovered a bit to about $525 (still 25% below its highs) and looks to be at the start of another downtrend. How long will it take AAPL to get back to $700, more than 33% from its current price? TEN.AX - Ten Network Holdings Limited TEN reached a high of $4.26 in late 2004 after a nice uptrend during 2004. It then started a steep journey downwards and is still going down. It is now priced at just $0.25, a whopping 94% below its high. It will have to increase by 1600% just to reach its high of $4.26 (which I think will never happen). Can a stock come back from a drastic downtrend? Yes it can. It doesn't always happen, but a company can turn around and can reach and even surpass it previous highs. The question is how and when will this happen? How long will you keep your capital tied up in a stock that is going nowhere and has every chance of going further down? The most important thing with any investment is to protect your current capital. If you lose all your capital you cannot make any new investments until you build up more capital. That is why it is so important to have a risk management strategy and decide what is your get out point if things go against you before you get into any new investment. Have a stop loss. I would get out of your investment before you lose more capital. If you had set a stop loss at 20% off the stock's last highs, you would have gotten out at about $59.60, 28% higher than the current share price of $46.50. If you do further analysis on this company and find that it is improving its prospects and the stock price breaks up through its current ranging band, then you can always buy back in. However, do you still want to be in the stock if it breaks the range band on the downside? In this case who knows how low it can continue to go. N.B. This is my opinion, as others would have theirs, and what I would do in your current situation with this stock. |
What is a 401(k) Loan Provision? | Basically, a 401(k) can have what is called a "loan", but is more properly a "structured withdrawal and repayment agreement". This allows you to access your nest egg to pay for unforeseen expenses, without having to actually cash it out and pay the 10% penalty plus taxes. You can get up to half of your current savings, with an absolute cap of $50k, minus the balance of any other loan outstanding. While there is a balance outstanding, you must make regular scheduled payments. The agreement does include an interest rate, but basically that interest money goes into your account. The downside of a 401(k) loan is the inflexibility; you must pay the scheduled amount, and you also have to keep the job for which you're paying into the 401(k); if you quit or are fired, the balance of the loan must usually be paid in 60 days, or else the financial institution will consider the unpaid balance a "withdrawal" and notify the IRS to that effect. Now, with a Roth account, it works a little differently. Basically, contributions to any Roth account (IRA or 401(k)) are post-tax. But, that means the money's now yours; there is no penalty or additional taxes levied on any amount you cash out. So, a loan basically just provides structure; you withdraw, then pay back under structured terms. But, if you need a little cash for a good reason, it's usually better just to cash out some of the principal of a Roth account and then be disciplined enough to pay back into it. |
What is a good investment vehicle for introducing kids to investing? | For "real" investing I would usually recommend mutual funds. But if you are trying to teach a kid about investing, I would recommend they choose individual stocks. That will give them a great opportunity to follow the companies they bought in the news. It also gives you an opportunity to sit down with them periodically and discuss their companies performance, economic news, etc. and how those things play into stock prices. |
Any advantage to exercising ISO's in company that is not yet public? | Exercising an option early if you can't sell the underlying stock being purchased is generally not advisable. You're basically locking in the worst price you can possibly pay, plus you're losing the time value on your money (which is, admittedly fairly low right now, but still). Let's say you have a strike price of $50. I get that you believe the stock to be worth more than $50. Let's assume that that's probably, but not certainly right. Whether it's worth $51, $151, or $5,100 when your options are going to expire, you still get the profit of $1, $101, or $5,050 if you wait until expiration and exercise then. By exercising now, you're giving up two things: The interest on the money you pay to exercise from now until expiration. The guarantee that you can't lose anything. If you buy it now, you get all the upside above your strike, but have all the downside below it. If you buy it later (at expiration), you still have all the upside above your strike, but no downside - in the (assumed to be unlikely) event that it's worth less than the strike you can simply do nothing, instead of having something you bought at the strike that's worth less now and taking that loss. By exercising early, you take on that loss risk, and give up the interest (or "carry" on the money you spend to exercise) for no additional updside. It's possible that there are tax benefits, as other posters mention, but the odds that "starting the clock" for LTCG is worth as much as the "optionality", or loss protection, plus the "carry", or interest that you're giving up is fairly unlikely. |
Can ETF's change the weighting of the assets they track | They can rebalance and often times at a random manager's discretion. ETF's are just funds, and funds all have their own conditions, read the prospectus, thats the only source of truth. |
Should I get a personal loan to pay on my mortgage to go “above water” to qualify for a refinance? | It depends on how long it will take you to pay off the personal loan, the rate for the personal loan, the refi rate you think you can get, how much principal you will have to add to get the refi (may have gone up since then). Since you did not provide all the necessary details, the general answer is to sketch out your total payments (mortgage + personal loan) with and without the refi over the life of the mortgage and see if you end up with more money in your pocket with the refi. My overall impression based on the details you did provide is that you will probably find it worthwhile to do the refi. |
How can I save money on a gym / fitness membership? New Year's Resolution is to get in shape - but on the cheap! | The gym I used to use was around £35-40 a month, its quite a big whack but if you think about it; its pretty good value for money. That includes gym use, swimming pool use, and most classes Paying for a gym session is around £6 a go, so if you do that 3 times a week, then make use of the other facilities like swimming at the weekends, maybe a few classes on the nights your not at the gym it does work out ok As for deals, my one used to do family membership deals, and I think things like referring a friend gives you money off etc. They will probably also put on some deals in January since lots of people want to give it a go being new year and all |
Tax implications of ESPP shares when company is bought out | When the deal closes, will it be as if I sold all of my ESPP shares with regards to taxes? Probably. If the deal is for cash and not stock exchange, then once the deal is approved and closed all the existing shareholders will sell their shares to the buyer for cash. Is there any way to mitigate this? Unlikely. You need to understand that ESPP is just a specific way to purchase shares, it doesn't give you any special rights or protections that other shareholders don't have. |
I am looking for software to scan and read receipts | Scanning receipts is easy and any decent scanner will do a good job for you. The difficult part is the software that 'extracts' the data. Today there is no software that can do this really well because there is just too great a range of receipts (e.g. handwritten receipts, receipts in foreign languages, etc.). For this reason services like Shoeboxed (in the US) and Receipt Bank (in Europe) are very popular. (Added disclosure: Michael Wood's profile web site link indicates he is associated with Receipt Bank.) |
In Australia, how to battle credit card debt? | Short-term, getting a balance transfer will help. It'll reduce the interest you pay. You can also reduce the interest you pay on your cars if you are able to consolidate your debt into a personal loan. To your question about debt consolidation companies, as far as I know, that's all they do. However, long-term, there's only two ways to stay on top of debt: increase your income, or reduce your spending. Basically, if you can't or won't get a raise or a job that pays more (or a second job), you need to cut back on your spending. You might need to do something radical, like move somewhere with cheaper rent (as long as increased travel costs doesn't offset the saving). But you'll be much better off in the long run if you step back and take a look at your situation now, and make adjustments accordingly. |
What does a contract's worth mean? | $400M is the gross "check" the company will receive as payment for the project. The contract will specify payment schedule. And it can range from a payment per milestone achieved to a pay in full on completion. The profit will hopefully be positive, but it's not impossible for a bid to underestimate the full cost, resulting in no profit at all. In theory, if you knew the expected profit from the deal, you should be able to estimate the value it adds to the company's value. |
Auto insurance on new car | Auto insurance is a highly personalized item, so depending on your driving record and other factors, $600 a month for full coverage may be as good as you can get. Look at the premium for each category, and consider raising the deductible if you have some savings that could be used in the event that you have a claim. Also, you're not only buying insurance to cover the other person's damage and medical expenses, you're paying for insurance for your car. Brand-new cars are more expensive to replace (and thus insure) than used cars. Leasing is effectively renting a car for a long period of time. While the payments are less, when the lease expires you're going to have to decide whether to give up the car or buying it, usually at a price much higher than market value. I'm glad you discovered that the insurance would break your budget before it's too late. My suggestion would be to look for a 1-2 year old car that's less expensive to buy and to insure. |
Pay index fund expense ratios with cash instead of fund balance | Simply put, that's not allowed. Outside a retirement fund, they simply do not provide a mechanism to pay that expense ratio separately. Ergo, any effort to pay that expense ratio would be classified as a new/additional purchase of the fund. You now must deal with Inside a retirement fund, paying the expense ratio of the fund with cash would be treated as an additional contribution, which may then violate contribution rules (such as going over your contribution limit, or contributing past age 70-1/2). |
I have a 2008 HHR under finance it needs a new engine | I know, this isn't a direct answer to your question about unloading a used car-- I've always donated it to charity and written off the price it got at auction on my taxes -- but I think the following might be useful to anyone facing a big repair bill: You know your car's condition. (If in doubt, pay your mechanic to evaluate it "as if he was considering buying it for his daughter".) If you were shopping for a used car, and you found one exactly like yours, in exactly the same condition, treated exactly as well as you treat yours (and with all the records to prove that), but with the repairs already done... how much would you be willing to pay for it? If that number is more than the repair cost, repairing is a good deal. If it's less than the repair cost, is it enough less to justify the hassle of car shopping? If so, unload it and use the repair money to buy something better. If it's in the middle... flip a coin, or pick whichever makes you feel better. |
When and how should I pay taxes on ForEx trades? | Legally speaking, when you convert that bit-coin onto something else, the Israeli Tax Authority will look into the value of that something else, compare it to the original value of the previous something else you used to buy bit-coins (USD, in your example), and charge you capital gain taxes for the difference. According to the Israeli law you're supposed to pay taxes when selling (converting the bit-coin to something else), and since you're not using any formal bank or stock broker which will automatically deduct the taxes, you have to pay the taxes yourself. By not doing so you're committing a tax fraud. The real question you're asking is whether they'll come after you. Well, that depends on the amounts. They might. Pay attention: there's no statute of limitation for tax fraud in Israel. They may come after you in 50 years from now. Another thing to keep in mind: if you used bit-coins to buy something (services or products of any kind), you probably didn't pay the VAT (מע"מ) - which is another case of tax fraud on your behalf. PS: I'm not a lawyer or accountant, so get a professional advice, but I have been dealing with the Tax Authority in Israel, so I've got a pretty good idea of what the rules are. |
How can I legally and efficiently help my girlfriend build equity by helping with a mortgage? | I'm glad that you feel like being fair and equitable to your party. Other answerers are, of course, correct that being fair and equitable to your girlfriend is not in your best interests but that's not what you're trying to do here and I commend you for it. There is nothing that stops you drawing up a simple legal contract giving your girlfriend a share of the value of your house in return for her payments. Just get it signed and witnessed and checked over by a legal representative. You can include reasonable terms for the money to be paid back if you separate - perhaps when you sell the property or within two years of the breakup - that don't put you in immediate danger of losing the property. Just make clear that this contract is between you and her for a sum of money linked to the value of your house; it does not establish any legal claim on your house itself. A reasonable level for her to claim the property would be one half of the change in equity between when you start joint paying and when you separate - should that happen. |
Cheapest way to wire or withdraw money from US account while living in Europe | I prefer to use a Foreign Exchange transfer service. You will get a good exchange rate (better than from Paypal or from your bank) and it is possible to set it up with no transfer fees on both ends. You can use an ACH transfer from your US bank account to the FX's bank account and then a SEPA transfer in Europe to get the funds into your bank account. Transfers can also go in the opposite direction (Europe to USA). I've used XE's service (www.xe.com) and US Forex's service (www.usforex.com). Transferwise (www.transferwise.com) is another popular service. US Forex's service calls you to confirm each transfer. They also charge a $5 fee on transfers under $1000. XE's service is more convenient: they do not charge fees for small transfers and do not call you to confirm the tramsfer. However, they will not let you set up a free ACH transfer from US bank accounts if you set up your XE account outside the US. In both cases, the transfer takes a few business days to complete. EDIT: In my recent (Summer 2015) experience, US Forex has offered slightly better rates than XE. I've also checked out Transferwise, and for transfers from the US it seems to be a bit of a gimmick with a fee added late in the process. For reference, I just got quotes from the three sites for converting 5000 USD to EUR: |
Can I sell my ESPP in a different order than I acquired it, to avoid paying too much tax on profits? | That's up to you. If you instruct your broker to sell shares purchased in specific lots, they can do that -- but doing so requires that you and/or they track specific fractional lots forever afterwards so you know what is still there to be sold. FIFO simplifies the bookkeeping. And I am not convinced selecting specific lots makes much difference; the government gets its share of your profits sooner or later. |
What investment strategy would you deduce from the latest article from Charles Munger? | So, I've read the article in question, "Basically, It's Over". Here's my opinion: I respect Charlie Munger but I think his parable misses the mark. If he's trying to convince the average person (or at least the average Slate-reading person) that America is overspending and headed for trouble, the parable could have been told better. I wasn't sure how to follow some of the analogies he was making, and didn't experience the clear "aha" I was hoping for. Nevertheless, I agree with his point of view, which I see as: In the long run, the United States is going to have serious difficulty in supporting its debt habit, energy consumption habit, and its currency. In terms of an investment strategy to protect oneself, here are some thoughts. These don't constitute a complete strategy, but are some points to consider as part of an overall strategy: If the U.S. is going to continue amassing debt fast, it would stand to reason it will become a worse credit risk, requiring it to pay higher interest rates on its debt. Long-term treasury bonds would decline as rates increase, and so wouldn't be a great place to be invested today. In order to pay the mounting debt and debt servicing costs, the U.S. will continue to run the printing presses, to inflate itself out of debt. This increase in the money supply will put downward pressure on the U.S. dollar relative to the currencies of better-run economies. U.S. cash and short-term treasuries might not be a great place to be invested today. Hedge with inflation-indexed bonds (e.g. TIPS) or the bonds of stronger major economies – but diversify; don't just pick one. If you agree that energy prices are headed higher, especially relative to U.S. dollars, then a good sector to invest a portion of one's portfolio would be world energy producing companies. (Send some of your money over to Canada, we have lots of oil and we're right next door :-) Anybody who has already been practicing broad, global diversification is already reasonably protected. Clearly, "diversification" across just U.S. stocks and bonds is not enough. Finally: I don't underestimate the ability of the U.S. to get out of this rut. U.S. history has impressed upon me (as a Canadian) two things in particular: it is highly capable of both innovating and of overcoming challenges. I'm keeping a small part of my portfolio invested in strong U.S. companies that are proven innovators – not of the "financial"-innovation variety – and with global reach. |
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