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Does Implied Volatilty factor in all known future events? | In short, yes. Implied volatility will capture any expected upcoming material announcements. There is also supply/demand impact bundled in which may inflate an option price, and by extension increase implied volatility. OTM and ITM options are particularly predisposed to this phenomenon -- which is of course at odds with the traditional BS model assumptions -- the result is referred to as the volatility smile. Implied volatility is quoted as an annualised measure but isn't necessarily an annual value -- it will correspond to the option time period. |
Dad paying for my new home in cash. How can I buy the house from him? | we have little money in cash for a down-payment This is a red flag to me. If you have little money in cash for a down-payment, how are you supposed to be a landlord too? You could try is to do a lease to own from your Dad. Get a renter into the other home for at least a year or more and then close on the house once your financial situation improves. You still have the same problem of being a landlord. Another option is to receive a gift letter from your Dad since he is gifting the money on the home. It might extend your closing a little bit so you can get an appraisal done and loan application. This to me is the most sane option. |
Is this Employee Stock Purchase Plan worth it when adding my student loan into the equation? | In many ESPP programs (i.e. every one I've had the opportunity to be a part of in my career), your purchase is at a discount from the lower of the stock prices at the start and end of the period. So a before-tax 5% return is the minimum you should expect; if the price of the stock appreciates between July 1 and December 31, you benefit from that gain as well. More concretely: Stock closes at $10/share on July 1, and $11/share on December 31. The plan buys for you at $9.50/share. If you sell immediately, you clear $1.50/share in profit, or a nearly 16% pre-tax gain. If the price declines instead of increases, though, you still see that 5% guaranteed profit. Combine that with the fact that you're contributing every paycheck, not all at once at the start, and your implied annual rate of return starts to look pretty good. So if it was me, I'd pay the minimum on the student loan and put the excess into the ESPP. |
Can LLC legally lend money to a friend? | Legally, I can't find any reason that the LLC could not lend money to an individual. However, I believe the simplest course of action is to first distribute money from your company to your personal account, and then make it a personal loan. Whether the loan is done through the business or personally, financially I don't think there is much difference as to which bucket the interest income goes into, since your business and personal income will all get lumped together anyway with a single person LLC. Even if your friend defaults on the loan, either the business or you personally will have the same burden of proof to meet that the loan was not a gift to begin with, and if that burden is met, the deduction can be taken from either side. If a debt goes bad the debtor may be required to report the debt as income. |
Tax benefits of recycling | If they charge a fee to accept an item, it's reasonable to assume the item has insignificant value, so the only tax-deductible bit would be the money you donated to their charity. What you describe sounds like a fee for service, not a charitable donation. The organization should provide a fee breakdown to show what percentage (if any) of the fee is a deductible contribution. There could be some additional PA-only tax benefit, but I didn't come across anything in my brief search. |
Will my current employer find out if I have a sole proprietarship/corporation? | Some governments offer business information search for corporations in their jurisdiction. The search results may show the director information for the company. If this information is made publicly available, keep in mind there are websites that make money from indexing publicly available information to show in Google search results. I don't mean to scare you as this is a likely a slim possibility. It really depends on the privacy practices in place at the jurisdiction you're in. But do keep in mind if you're planning on doing business on the side for a few years policies may change. I would call Service Ontario (or whichever province you're incorporating in) or Corporations Canada if federally incorporating and ask them if they offer a business search service and exactly what information they make public. You might be able to reach a Privacy Officer and find out what exactly their policy is. |
What should I do with my $10K windfall, given these options? | If you need a new roof because your house is full of buckets that fill up every rain :) then that's most likely the item at the top of the list. If you need a new roof because you don't like the color, I'd do something else with it. If you are in the US and the 'education loan' has the same caveats attached as your average student loan, I would eye that one with intent if the roof can soldier on for a few years as is. The simple reason for this is that a student loan would be the one debt that you list that you can never get rid off unless you actually pay it off, no matter what happens (IOW student loans aren't bankruptable). Disregard this if the caveats in the first sentence don't apply... |
New to options trading and need help understanding an options spread risk graph. What am I missing? | You haven't said why you think you will gain at $41, but the graph never lies. Take it one piece at a time: At $41, your stock will lose a big chunk of value. Your short calls will expire. Your puts will gain a bit of value. The stock's loss outweighs the option gains. |
Do I need to prove 'Garage Sale' items incurred a loss | This is what this sounds like to me: https://www.thebalance.com/having-a-garage-sale-or-yard-sale-what-to-do-first-399030 also: http://blogs.hrblock.com/2012/07/25/garage-sale-money-does-the-irs-need-to-know/ Selling a personal item at a loss is generally not a taxable event. You cannot report it as a loss, and the IRS can't tax a transaction like that. If you really want to include these as sales as part of your LLC, you'll probably have to pay tax if you list it as income. I'm just confused as to why you'd want to do that, if you know that you're selling these particular items at a loss, and you also know that you have no documentation for them. I just wouldn't report anything you sold at a loss and treat it as "garage sale items" separate from your business. |
Trying to understand Return on Capital (Joel Greenblatt's Magic Formula version) | Just to clarify things: The Net Working Capital is the funds, the capital that will finance the everyday, the short term, operations of a company like buying raw materials, paying wages erc. So, Net Working Capital doesn't have a negative impact. And you should not see the liabilities as beneficial per se. It's rather the fact that with smaller capital to finance the short term operations the company is able to make this EBIT. You can see it as the efficiency of the company, the smaller the net working capital the more efficient the company is (given the EBIT). I hope you find it helpful, it's my first amswer here. Edit: why do you say the net working capital has a negative impact? |
Will a credit card issuer cancel an account if it never incurs interest? | I've got a card that I've had for about 25 years now. The only time they charged me interest I showed it was their goof (the automatic payment failed because of their mistake) and they haven't cancelled it. No annual fee, a bit of cash back. The only cards I've ever had an issuer close are ones I didn't use. |
Does a stock really dip in price on the ex-dividend date? And why would it do this? | Suppose the price didn't drop on the ex-dividend date. Then people wanting to make a quick return on their money would buy shares the day before, collect the dividend, and then sell them on the ex-dividend date. But all those people trying to buy on the day before would push the price up, and they would push the price down trying to sell on the date. |
Are there any regulations regards end of loan payment procedures? | There are federal regulations that state that: As a result it can be assumed that when a loan is paid off, notification should be given to the borrower. There is not a penalty since schools are pretty good about recovering their money. It could be due to a simple human error or glitch in the system. I would email them again confirming that your Perkins Loan had been paid in full, just so you have documentation of it. |
Are Credit Cards a service to banks? | As i see it, with a debit card, they are taken kinda out of the game. They are not lending money, it seems really bad for them. Not exactly. It is true that they're not lending money, but they charge a hefty commission from the retailers for each swipe which is pure profit with almost no risk. One of the proposals considered (or maybe approved already, don't know) in Congress is to cap that hefty commission, which will really make the debit cards merely a service for the checking account holder, rather than a profit maker for the bank. On the other hand, it's definitely good for individuals. I disagree with that. Debit cards are easier to use than checks, but they provide much less protection than credit cards. Here's what I had to say on this a while ago, and seems like the community agrees. But, why do we really need a credit history to buy some of the more expensive stuff Because the system is broken. It rewards people in debt by giving them more opportunities to get into even more debts, while people who owe nothing to noone cannot get a credit when they do need one. With the current system the potential creditor can only asses the risk of someone who has debt already, they have no way of assessing risks of someone with no debts. To me, all this credit card system seems like an awfully nice way to make loads of money, backed by governments as well. Well, credit cards have nothing to do with it. It's the credit scores system that is broken. If we replace the "card" with "score" in your question - then yes, you're thinking correctly. That of course is true for the US, in other countries I have no knowledge on how the creditors assess the risks. |
How do you find reasonably priced, quality, long lasting clothing? | According to this http://shine.yahoo.com/event/financiallyfit/cheapest-days-to-shop-online-2301854/ Tuesday is the best day of the week to buy men's apparel. |
What is your effective tax rate if you work from home in Montreal for a company in Toronto? | For tax purposes, what matters is your province of residence at December 31st. Quebec Tax abatement therefore applies if you were living in Quebec, regardless of your employer, assuming you are an employee. As for effective tax, your question misses some data and does not quite make sense as effective tax is the result of dividing your total taxes paid after deductions and tax credits by your total income. As such, one cannot tell you your effective tax rate without knowing taxes paid after deductions and tax credits and total income. |
Why invest for the long-term rather than buy and sell for quick, big gains? | Another benefit of holding shares longer was just pointed out in another question: donating appreciated shares to a nonprofit may avoid the capital gains tax on those shares, which is a bigger savings the more those shares have gone up since purchase. |
Why do financial institutions charge so much to convert currency? | Why do these fees exist? From a Banks point of view, they are operating in Currency A; Currency B is a commodity [similar to Oil, Grains, Goods, etc]. So they will only buy if they can sell it at a margin. Currency Conversion have inherent risks, on small amount, the Bank generally does not hedge these risks as it is expensive; but balances the position end of day or if the exposure becomes large. The rate they may get then may be different and the margin covers it. Hence on highly traded currency pairs; the spread is less. Are there back-end processes and requirements that require financial institutions to pass off the loss to consumers as a fee? The processes are to ensure bank does not make loss. is it just to make money on the convenience of international transactions? Banks do make money on such transactions; however they also take some risks. The Forex market is not single market, but is a collective hybrid market place. There are costs a bank incurs to carry and square off positions and some of it is reflected in fees. If you see some of the remittance corridors, banks have optimized a remittance service; say USD to INR, there is a huge flow often in small amounts. The remittance service aggregates such amounts to make it a large amount to get a better deal for themselves and passes on the benefits to individuals. Such volume of scale is not available for other pairs / corridors. |
Gift card fraud: To whom to report? How to recover funds? Is the party which issued me the card liable? | Citibank just sent me a $100 check. Here's how I got it: |
Optimal way to use a credit card to build better credit? | Great question. First, my recommendation would be for you to get a card that does not have a yearly fee. There are many credit cards out there that provide cash back on your purchases or points to redeem for gift cards or other items. Be sure to cancel the credit card that you have now so you don't forget about that yearly fee. Canceling will have a temporary impact on your credit score if the credit card is your longest held line of credit. Second, it is recommended not to use more than 20% of all the available credit, staying above that line can affect your credit score. I think that is what you are hearing about running up large balances on your credit card. If you are worried about staying below the 20% line, you can always request a larger line of credit. Just keep paying it off each month though and you will be fine. You already have a history of credit if you have begun paying off your student loans. |
Buying my first car out of college | Read "Stop Acting Rich" by Dr Thomas Stanley. I'm concerned that even before you've earned your first paycheck you want a flashy car. $4800/yr on $63K/yr income is just about half what I'd recommend to someone who starts working. 10% is the minimum, if and only if, the employer matches 5, for a total 15% saved. Do it in a pretax account and when you go back to grad school convert to Roth. |
Ideal investments for a recent college grad with very high risk tolerance? | Congratulations on being in this position. Your problem - which I think that you identified - is that you don't know much about investing. My recommendation is that you start with three goals: The Motley Fool (www.fool.com) has a lot of good information on their site. Their approach may or may not align with what you want to do; I've subscribed to their newsletters for quite a while and have found them useful. I'm what is known as a value investor; I like to make investments and hold them for a long time. Others have different philosophies. For the second goal, it's very important to follow the money and ask how people get paid in the investment business. The real money in Wall Street is made not by investment, but by charging money to those who are in the investment business. There are numerous people in line for some of your money in return for service or advice; fees for buying/selling stocks, fees for telling you which stocks to buy/sell, fees for managing your money, etc. You can invest without spending too much on fees if you understand how the system works. For the third goal, I recommend choosing a few stocks, and creating a virtual portfolio. You can then then get used to watching and tracking your investments. If you want a place to put your money while you do this, I'd start with an S&P 500 index fund with a low expense ratio, and I'd buy it through a discount broker (I use Scottrade but there are a number of choices). Hope that helps. |
Online resource to get expense ratios for mutual funds, index funds & ETFs? | If you want the answer from the horse's mouth, go to the website of the ETF or mutual find, and the expense ratio will be listed there, both on the "Important Information" part of the front page, as well as in the .pdf file that you click on to download the Prospectus. Oh wait, you don't want to go the fund's website at all, just to a query site where you type in something like VFINX. hit SEARCH, and out pops the expense ratio for the Vanguard S&P 500 Index Fund? Well, have you considered MorningStar? |
I have a horrible 401k plan, with high expenses. Should I stay with it or move my money elsewhere? | 2%? I would put in just what it takes to share in the profit sharing, not a dime more. My S&P fund cost is .02% (edited, as it dropped to .02 since original post), 1/100 of the cost of most funds you list. Doesn't take too many years of this fee to negate the potential tax savings, and not many more to make this a real loser. |
What time period is used by yahoo finance to calculate beta | Citing the Yahoo Finance Help page, Beta: The Beta used is Beta of Equity. Beta is the monthly price change of a particular company relative to the monthly price change of the S&P500. The time period for Beta is 3 years (36 months) when available. Regarding customised time periods, I do not think so. |
Is there any reason to buy shares before/after a split? | Assuming you plan to buy a whole number of shares and have a maximum dollar value you intend to invest, it may be better to wait for the split if the figures don't quite work out nicely. For example, if you are going to invest $1,000 and the stock pre-split is $400 and the split is 2 for 1, then you'd buy 2 shares before the split unless you have an extra $200 to add. Meanwhile, after the split you could buy 5 shares at $200 so that you invest all that you intend. Aside from that case, it doesn't really make a difference since the split is similar to getting 2 nickels for a dime which in each case is still a total value of 10 cents. |
Optimal way to use a credit card to build better credit? | If you have self control and a good handle on your finances, which it sounds like - I suggest the following: Note: #3 is important - if you're not able to pay it off each month don't do this because it will cost you a lot in interest. Make sure to check how interest is calculated in case you don't pay it off in full or miss the due date for a month. If you can do this you'll earn some good benefits from the card using money that you're going to spend anyway, as well as build your credit profile. Regarding annual fees - |
Stocks given by company vest if I quit? | Vesting typically stops after you quit. So, if your plan vests 20% per year for 5 years, and you received a one-time stock grant as part of this plan (i.e., ignoring the fact that these often involve new grants each year that vest separately), and you were hired in 2014 and leave at the end of 2016, then you vested 20% in 2015 and 20% in 2016, so would have 40% of the stock vested when you quit, and would never have more than that. |
Can stock brokerage firms fail? | Yes, any company can go under. SIPC offers a level of protection. They don't guarantee against stocks dropping, but will replace stocks that you owned, but the broker stole from you. (overgeneralization). There's a $500K limit, with $250K max in cash. |
What to sell when your financial needs change, stocks or bonds? | The answer may be a compromise... if your goal is to make bonds a larger part of your portfolio, sell both stocks and bonds in a 4:1 ratio. or (3:1 or whatever works for you) Also, just as you dollar-cost-average purchases of securities, you can do the same thing on the way out. Plan your sales and spread them over a period of time, especially if you have mutual funds. |
Why do 10 year-old luxury cars lose so much value? | They are overpriced to begin with. One reason is the fact that they are luxury cars. A second, related reason, is that they tend to push the technology envelope. All cars depreciate drastically the minute they are driven off the lot. This a good argument for buying a car that is 1-2 years old. The higher you are, the more you can fall. Repairs and maintenance are typically still expensive on these cars, due to relative rarity and the lack of necessary expertise. Here is where that advanced technology bites you. This is a reason that a 5 year old Civic may be worth more than than a 10 year old Benz. It may simply not be worth the hassle of maintaining/repairing a luxury car. This is especially true for an aging luxury car. There are some people that only buy domestic, precisely because of the maintenance costs. Also, a 10 year old car is still a 10 year old car, regardless of the make. (There are a few notable exceptions, like the NSX.) Hondas and Toyotas have a great reputation for reliability and (long-term) total cost of ownership. "Better" is a subjective issue, that depends on a variety of variables. A Civic is certainly not better in terms of technology, comfort, etc. But, it is likely better in terms of maintenance, reliability, etc. Which "better" you focus on, is up to you. |
How do you find reasonably priced, quality, long lasting clothing? | On the quality angle a big part of it is experience, but the biggest thing is careful observation. You have to take a close, critical look at any article of clothing. (This holds true for just about any purchase.) As far as finding them for reasonable prices it's the usual thing: sales and buying them second-hand. Finally, regarding maintenance: |
How does giving to charity work? | I'll answer your second question: it depends what your charity is for. There are two types: i) Emergency (i.e. to respond to environmental or social disasters where it acts a bit like an insurance policy); ii) Development (i.e. where the intention is to subsidise something missing in the local economy); A lack of insurance is certainly a problem for people who lose their homes and livelihoods to disaster. Your donations can go far. As for development aid: "We find little evidence of a robust positive correlation between aid and growth," write two ex-IMF economists, Raghuram Rajan, who stepped down as IMF chief economist at the end of 2006, and Arvind Subramanian, who left the IMF this year. "One of the most enduring and important questions in economics is whether foreign aid helps countries grow ... There is a moral imperative to this question: it is a travesty for so many countries to remain poor if a relatively small transfer of resources from rich countries could set them on the path to growth ... But if there is no clear evidence that aid boosts growth, then handing out more money makes little sense," they conclude. I do somewhat further in declaring that charity is equivalent to trade dumping. By artificially lowering the real cost of a particular good it ensures that there will be no local investment in that good. Free clothes to Africa has destroyed the local textiles industry. Free doctors has resulted in more African doctors in New York than in the whole of Africa. So decide where your charity is going: emergencies or development? Then decide what you can afford. But your first investment should always be in yourself. If by making use of that investment you can benefit the economy and keep others around you employed and productive you will achieve far more. |
Will I be turned down for a car loan? | Considering I'm putting 30% down and having my father cosign is there any chance I would be turned down for a loan on a $100k car? According to BankRate, the average credit score needed to buy a new car is 714, but they also show average interest rates at 6.39% for new-car loans to people with credit scores in the 601-660 range. High income certainly helps offset credit score to some extent. Not every bank/dealership does things the same way. Being self-employed you'd most likely be required to show 2 years of tax returns, and they'd use those as a basis for your income rather than whatever you have made recently. If using a co-signer, their income matters. Another key factor is debt to income ratio, if too much of someone's income is already spoken for by other debts a lender will shy away. So, yes, there's a chance, given all the information we don't know and the variability with lender policies, that you could be turned down for a car loan. How should I go about this? If you're set on pursuing the car loan, just go talk to some lenders. You'll want to shop around for a good rate anyway, so no need to speculate just go find out. Include the dealership as a potential financing option, they can have great rates. Personally, I'd get a much cheaper car. Your insurance premium on a 100k car will be quite high due to your age. You might be rightly confident in your earning potential, but nothing is guaranteed, situations can change wildly in short order. A new car is not a good investment or a value-retaining asset, so why bother going into debt for one if you don't have to? If you buy something in cash now, you could upgrade in a few years without financing if your earning prediction holds and would save quite a bit in car insurance and interest over the years between. |
Can a US bank prevent you from making early payments to the principal on a home mortgage? | Many mortgages penalize early payment, and I assume it's possible to disallow it altogether. It makes sense why they don't want early payment. If you pay off the loan early, it is usually because you re-financed it to a loan with a lower rate. You would do this when the interest rate is low (lower than when you got your original loan). If you pay it off early, that means they will have to re-invest the money again, or they will lose money if they just have it sitting around. However, recall above that people pay it off early when the interest rate is low; that is the worst time for them to re-invest this into another mortgage, because the rate will not be as good for them as the one you were originally going to keep paying. |
How to pay myself as a single person corporation in Ontario? Should I get an accountant? | Get an accountant. Now. There are many subtle things that you do not know especially if you are just starting with your own corporation. There is also an issue of corporate tax return that you will have to face pretty soon. You should be looking for accountant that does accounting for corporations, there are companies specializing in small business. I do not think you can "just" transfer money to your personal account. They have to be treated as dividends and treated as such for income tax purposes. Or, as you described, you may pay yourself a salary, but then you have to pay CPP and EI on top of that. When you pay yourself dividends your corporation will need to issue T5 slip for you (accountant will do that) that you will need to use when preparing personal tax return. If you pay yourself salary, corporation will need to give you T4 In terms of tax treatment, if we do not take RRSP contributions dividend tax treatment will leave little bit more money in your hands. I'd say if you have RRSP room and/or TFSA room, pay yourself dividends and then do contributions as you see fit, if you need RRSP room, pay yourself salary. TFSA room does not depend on the type of income, so if you have room there, consider filling it first. |
Should I stockpile nickels? | Trying to engage in arbitrage with the metal in nickels (which was actually worth more than a nickel already, last I checked) is cute but illegal, and would be more effective at an industrial scale anyway (I don't think you could make it cost-effective at an individual level). There are more effective inflation hedges than nickels and booze. Some of them even earn you interest. You could at least consider a more traditional commodities play - it's certainly a popular strategy these days. A lot of people shoot for gold, as it's a traditional hedge in a crisis, but there are concerns that particular market is overheated, so you might consider alternatives to that. Normal equities (i.e. the stock market) usually work out okay in an inflationary environment, and can earn you a return as they're doing so.... and it's not like commodities aren't volatile and subject to the whims of the world economy too. TIPs (inflation-indexed Treasury bonds) are another option with less risk, but also a weaker return (and still have interest rate risks involved, since those aren't directly tied to inflation either). |
How can I find a checking account that allows for automated transfers of dynamic amounts? | Almost any financial institution has the technical ability to do this (simply called sweeps, auto sweeps, or deposit sweeps); the issue you face is finding an institution that is willing to do it for you. I think you will have the most luck at your primary financial institution where you currently keep the majority of your banking relationship. You will have better luck at small-town banks and credit unions. The mega banks will likely not waver from their established policies. Deposit sweeps are common for business accounts. They are usually tied to a savings account, which is usually held within the same institution, however this is not a requirement. The sweep can send money to any US bank if you can provide the routing number and account number. The sweep will establish a peg balance, or floor balance, on the checking account. At the end of the day, any amount above the peg is swept into the savings account automatically. I doubt you will find what you’re asking for within an online banking system. You will likely have to go into a branch and speak with a personal banker. Explain to them you want to establish a sweep on your checking account and want to send the funds to another financial institution. You will have better luck asking for a peg of $100, or some other small amount. They may not take your request seriously if you want to completely empty the checking account to zero. |
How can we get a hold of our finances again, with much less time to spend on accounting and budgeting, due to the arrival of our child? | I have also tried Mvelopes in the past, and my experiences match yours. I currently use the desktop version of YNAB:You Need a Budget (YNAB 4), and I like it much better. Where we failed after a while with Mvelopes, we are succeeding with YNAB, and have been now for the last 3.5 years. I don't want this to sound like a commercial for YNAB (I will give important caveats about YNAB later), but here is why I believe we have done better now with YNAB than before with Mvelopes. I hope that these reasons will be useful to you when you are evaluating your next options. As you said, we also found Mvelopes' interface to be slow and glitchy. YNAB 4 is a desktop app (with synching capabilities) that we found to be much quicker and easier to work with than Mvelopes' Flash-based interface. (That was 4 years ago; hopefully Mvelopes has redone their interface since then.) We also struggled with Mvelopes' connection with our banks. With YNAB 4, there is no connection to the bank: everything has to be entered manually. I initially thought this might be worse, but for us it has been better. I can either enter transactions as they happen on the mobile app, or I can hold on to receipts and enter them every day or two in the evening, categorizing as I go. We always have an up-to-date picture of our finances, and we don't have to mess with trying to match up downloaded transactions that have been screwed up, duplicated, or are missing. We aren't really using YNAB much differently than we were using Mvelopes, but we have learned a few tricks that I think have contributed to our success. One of the things we do differently is that I don't obsess about the cash accounts too much. Cash accounts, for us, are the hardest to keep track of, because most of our cash transactions don't have a receipt: we are paying a friend or family member for something, or leaving a tip, or something like that which we forget about when it comes time to enter into the software. As a result, the cash account balances get off. I periodically enter a correcting transaction to get the balances right, and have a budget category specifically for this that we have to put money in for these unknown transactions. Fortunately for us, our cash spending is a small percent of our total spending (we usually pay with a credit card) so this bit of untracked spending isn't that big of a concern. With YNAB, the current month's budget is right in front of you as soon as you open up the app, which makes it easy to adjust your budget during the month, if necessary. With Mvelopes (at least how their app worked 4 years ago), the budget was somewhat hidden after you funded your budget categories, and it was a bit of a pain to move money around between categories. The ability to adjust your budget in the middle of the month is crucial; if you don't do that, you'll get frustrated the first time you find that you don't have enough money in a category for something you need. YNAB makes it very easy to move money around inside your budget. That having been said, you need to be aware that the current version of YNAB is not a desktop application but a web-based app. YNAB 4, the old desktop version which we have been using, is officially unsupported as of the end of 2016. However, I see that it is still available for sale, if you are interested in it, the YNAB4 help site is still up, and the mobile app you would need to work with it on your phone (called YNAB Classic) is still in the app store. As I said, the current YNAB is now a web app, complete with automatic downloading of transactions from your bank. I have no experience with it (other than playing around with it a little), and so I can't tell you how quick the interface is or how well the auto-downloading of transactions works. As an alternative, another web-based solution is EveryDollar, from Dave Ramsey's company. (I have never tried it.) The advantage of this one is that it is free if you choose not to link it to your banks; the automatic downloading of transactions is a paid feature. I wrote an answer a couple of years ago in which I describe two different approaches that budgeting software packages tend to take. I'm not familiar with Buxfer, so I don't know which approach it takes, but perhaps that answer will help you evaluate all of your software options. On the behavior side of things, besides the relaxing of the cash accounting I mentioned above, we also involve my wife a little less in the budgeting process than we used to. (This is by her choice!) I am the one who enters all the transactions into the software (she hands me all her receipts), I reconcile the accounts at the end of the month, and I set the budget for the next month. We have been doing this long enough now that she knows what the budget is, and we only need to discuss it if we want to do something different with the budget than we have been doing in the past. She has the YNAB app on her phone and can see where we are at with all of our budget categories. |
Boyfriend is coowner of a house with his sister, he wants to sell but she doesn't | It seems likely that the mortgage is not in your boyfriend's name because he never would have qualified if he can't even afford utilities after paying the mortgage. It also seems unfair that his sister continues to have a 50% share of the equity if your boyfriend has been making the entire payment on the mortgage every month. What would happen if your boyfriend stopped making the payments? His sister would have no choice if the property went into foreclosure. Your boyfriend has all the leverage he needs by simply refusing to continue making the payments. Why he won't push his sister to make a deal is the real question you need to ask him. In the meantime, if he wants out, all he has to do is decide not to keep paying whether his sister feels attached or not. |
High dividend stocks | You might want to look up Dividend Yield Trap. Many stocks with high dividend yields got that way not because they decided to increase their dividend, but because their prices have dropped. Usually the company is not in good shape and will reduce their dividend, and you're stuck with a low-yield stock which has also decreased in price. |
Are there any issues with registering an LLC in a foreign state? | No, there are no issues. When you form the corp in DE, you pick a business there to serve as your "agent" (essentially someone who knows to get in contact with you). The "agent" will notify you about taxes and any mail you get, but besides the fee they charge you for being the agent, you should file all the taxes directly with DE (franchise tax is easy to file on the web) instead of going through the agent and paying a surcharge. When your LLC files taxes, you'll do so in DE and then the LLC will issue you a federal and state K1. You'll file taxes where you reside and use the federal K1, but I think you might have to file DE state taxes (unsure about this part, feel free to edit or comment and I'll correct). |
Money transfer to the U.K | I've been using xetrade for quite awhile, also used nzforex (associated with ozforex / canadian forex, probably ukforex as well) -- xetrade has slightly better rates than I've gotten at nzforex, so I've been using them primarily. That said, I am in the process of opening an account at CurrencyFair, because it appears that I'll be able to exchange money at better rates there. (XETrade charges me 1.5% off the rate you see at xe.com -- which is the FX conversion fee I believe -- there are no fees other than the spread charged). I think the reason CurrencyFair may be able to do better is because the exchange is based on the peer-to-peer trade, so you could theoretically get a deal better than xe.com. I'll update my answer here after I've been using CurrencyFair for awhile, and let you know. They theoretically guarantee no worse than 0.5% though (+ $4.00 / withdrawal) -- so I think it'll save me quite a bit of money. |
Buying shares in a company after you quit | Insider trading is when you buy or sell an investment based on material, non-public information that gives you an unfair advantage over the rest of traders in that market. Working for a company is one way that you might have such information, but whether it is insider trading is not contingent on you working there. You could use that information a long time after leaving the company. You don't even need to have worked there. If a friend/relative gave you non-public information because THEY work there, it is still insider trading. |
$200k in an IRA, unallocated. What's the safest investment? | if you don't intent to touch the money for 10 years or longer, then dumping 100% into a low-expense-ratio index fund seems like a perfectly reasonable thing to do. it is simple, low maintenance and fairly mindless. just remember to reinvest the dividends occasionally (e.g. every 6 months). however, if you are the kind of person who is going to lose their nerve when the market goes down 30%, then putting some of your money into a bond index fund or even a treasury note fund would be better than selling stock in a down market. just figure out how much of your portfolio you are comfortable losing, and put that in stocks. then put the rest in some stable value fund and watch it's value get slowly washed away by inflation while your stock investments rise through violent swings. |
Should I finance a new home theater at 0% even though I have the cash for it? | You should look at the opportunity cost for your money (i.e. what kind of return it could generate otherwise). We took advantage of these types of offer (zero interest for x months) in the past with the goal to redirect the money to the mortgage (it was 7.5% back then) and we made sure we don't get hosed by the surprisingly high interest rate by having a big reminder in the bulletin board in the kitchen to make sure we pay off the money before the interest rate kicks in. So we basically reduced our interest on the mortgage during that period. Oh - we use an all-in-one account (Manulife One) so that was real nice. I would stay away from those "interest-deferred" offers - it's totally not worth it. |
I want to invest in a U.S.-based company with unquoted stocks, but I am a foreigner. How to do this? | The recommendation is not to make the investment. In general, a company does not have to sell their shares to you or allow you to become an investor, because, as you have stated, it is a private company not quoted on the stock market. If everyone were trustworthy, you could buy the tools for $11000 -- so that you own the tools -- and sign a lease of the tools to the company whereby they pay you $X/month. The lease should be reviewed by a lawyer before it is signed, and perhaps give the buyer the right to demand back the tools at any time. However, even this arrangement is very risky, because the "company" could simply steal or damage the tools and disappear. It is not an investment that I would make, because it sounds too good to be true. $2800/mo steady cash flow for $11,000 invested. No, I don't think so. The following information may also be useful, either to you, or future readers: If you still want to make this investment, then you should know that: The offering for sale of shares by companies located in the USA is subject to a wild array of complex laws. This is true in many other countries as well. These laws, called securities laws or regulations, can require certain disclosures, require that investors have a high net worth so that they can afford to lose the money or conduct their own investigations and legal actions, or require that the investors know the company founders personally, and can prohibit or limit resale by the buyer/investor. Promoters who say you can still invest and are ignoring or disobeying the securities laws are being at least negligent, but more likely are dishonest and probably criminal. Even if you trust in the investment, can you trust negligent managers to do a good job executing that investment? What about dishonest managers? What about criminals and thieves? |
NYSE vs. Nasdaq - can I tell what exchange a ticker traded on, based solely on the ticker? | Things are in fact more complicated. It really depends what you mean by "ticker" and who gave you this ticker. There is several codes to identify a security: The Bloomberg code contains a code to identify the exchange as in ALU:FP the FP part refers to Euronext Paris. The RIC code works the same way but with a different convention. Exchanges are identified by the MIC code.(they are in fact divided in market segments with each market segment having a main market segment) ISIN and SEDOL codes do not provide informations about the exchange so they are usually given with a MIC. There is no guarantee that Reuters and Bloomberg won't use the same company code to refer to different company. But they usually use the exchange ticker. This ticker is requested by each company and can be anything. They are accepted most of the time. But sometimes to avoid confusion some requests are rejected. (For instance FBI ticker was refused) For more info read: The evolution of ticker symbols Financial providers like Bloomberg provides services to be informed when a security is added/removed from a market. |
When do I sell a stock that I hold as a long-term position? | The psychology of investing is fascinating. I buy a stock that's out of favor at $10, and sell half at a 400% profit, $50/share. Then another half at $100, figuring you don't ever lose taking a profit. Now my Apple shares are over $500, but I only have 100. The $10 purchase was risky as Apple pre-iPod wasn't a company that was guaranteed to survive. The only intelligent advice I can offer is to look at your holdings frequently, and ask, "would I buy this stock today given its fundamentals and price?" If you wouldn't buy it, you shouldn't hold it. (This is in contrast to the company ratings you see of buy, hold, sell. If I should hold it, but you shouldn't buy it to hold, that makes no sense to me.) Disclaimer - I am old and have decided stock picking is tough. Most of our retirement accounts are indexed to the S&P. Maybe 10% is in individual stocks. The amount my stocks lag the index is less than my friends spend going to Vegas, so I'm happy with the results. Most people would be far better off indexing than picking stocks. |
Does an option trading below parity always indicate an arbitrage opportunity? | Probably but not necessarily. Your question could also be posed regarding cash & carry for commodities in contango: If I can take delivery on the gold now, short the gold next year and make delivery then, paying the storage fees, is this an arbitrage opportunity? It is in the sense that you know your delivery and the money you will make, but it's not in the sense that until delivery (or execution in the options case) you are still on the hook for the margins due from price fluctuations. Additionally you need to consider what ROI you will make from the trade. Even though it's "guaranteed" it may be less than what you can earn from other "zero risk" opportunities. |
Should I charge my children interest when they borrow money? | If they have borrowed money without paying it back, what makes you think you could get interest paid? The problem that you face first is to make clear to them that a loan is a loan. As long as they can get free money off you, they will keep borrowing. |
Monthly payment on a compounded daily car loan? [duplicate] | I would like to know how they calculated such monthly payment The formula is: Your values would come out to be: r = (1+3.06/(100*365))^31-1=0.002602 (converting your annual percentage to a monthly rate equivalent of daily compounded interest) PV = 12865.57 n = 48 Inserting your values into the formula: P = [r*(PV)]/[1-(1+r)^(-n)] P = [0.002602*(12865.57)]/[1-(1.002602)^(-48)] P = 285.47 |
Can I withdraw cash from selling investments before the settlement date? | Depends on your account. If you have a margin account, then you can "withdraw" the margin, and it will get paid off/settled on T+3. However if it's a cash account then you will most likely need to wait. Call your broker and ask, each broker has different rules. |
When filing for an NOL, do you have to file the amended previous years' returns after the NOL return? | Your CPA doesn't need to file anything, so don't worry about him being sidetracked. You are the one doing the filing. Since the amended returns have to be filed on paper, you'll actually go and mail a package to the IRS (each return in a separate envelope). The reason the CPA suggests to file the amended returns after the current one, is to ensure the NOL is registered in the system before the amended returns are processed. The IRS doesn't have to automatically accept the amended returns, and if there's no NOL on the current year they may just bounce the amended returns back to you. Keep in mind that since you haven't filed your return by the due date (including extensions), you're now unable to forego the carry-back. I don't know if you discussed this with your CPA, but you're allowed, if you chose so, to not apply the NOL to prior years, and instead to apply it forward for the next 20 years (or until it runs out). Depending on your income pattern, that might have been something you could have considered, but you can only chose this if you file a statement before the due date (with extensions), which is now passed. |
Is it correct to call an exchange-traded note a type of ETF? | They're exchange traded debt, basically, not funds. E.g. from the NYSE: An exchange-traded note (ETN) is a senior unsecured debt obligation designed to track the total return of an underlying market index or other benchmark, minus investor fees. Whereas an ETF, in some way or another, is an equity product - which doesn't mean that they can only expose you to equity, but that they themselves are a company that you buy shares in. FCOR for example is a bond ETF, basically a company whose sole purpose is to own a basket of bonds. Contrast that to DTYS, a bear Treasury ETN, which is described as The ETNs are unsecured debt obligations of the issuer, Barclays Bank PLC, and are not, either directly or indirectly, an obligation of or guaranteed by any third party. Also from Barclays site: Because the iPath ETNs are debt securities, they do not have any voting rights. FCOR on the other hand is some sort of company owned/managed by a Fidelity trust, though my EDGAR skills are rusty. AGREEMENT made this 18th day of September, 2014, by and between Fidelity Merrimack Street Trust, a Massachusetts business trust which may issue one or more series of shares of beneficial interest (hereinafter called the Trust), on behalf of Fidelity Corporate Bond ETF (hereinafter called the Fund), and Fidelity Investments Money Management, Inc., a New Hampshire corporation (hereinafter called the Adviser) as set forth in its entirety below. |
How much does it cost to build a subdivision of houses on a large plot of land? | A bank may not like loaning money to you for this. That is one snag. You listed 500,000-600,000$ for a monster of a house (3000 sqft is over three times the average size of homes a hundred years ago). Add in the price of the land at 60K (600K divided ten ways). Where I live, there is a 15% VAT tax on new homes. I can't find out if California imposes a VAT tax on new homes. Anyway, returning back to the topic, because of the risk of loaning you 660K for a piece of land and construction, the bank may only let you borrow half or less of the final expected cost (not value). Another huge snag is that you say in a comment to quid "I came up with this conclusion after talking to someone who had his property built in early 2000s in bay area for that average price". Let's apply 3% inflation over 15 years to that number of 200$/sqft. That brings the range for construction costs to 780K-930K. Even at 2% inflation 670K-810K. Edit: OP later expanded the question making it an inquiry on why people don't collaborate to buy a plot of land and build their homes. "Back in the day" this wasn't all that atypical! For example, my pastor's parents did just this when he was a young lad. Apart from the individual issues mentioned above, there are sociological challenges that arrive. Examples: These are the easy questions. |
Does dollar cost averaging really work? | Here is a deliberately simple example of Dollar Cost averaging: Day 1: Buy 100 shares at $10. Total value = $1,000. Average cost per share = $10.00/share (easy). Day 2: Buy 100 more shares at $9. Total value = $1,900. Average cost per share = $9.50/share (1,900/200). Notice how your average cost per share went from $10.00 to $9.50. Now instead of hoping the stock rises above $10.00 a share to make a profit, you only need it to go to $9.50 a share (assuming no commissions or transaction fees). It's easy to see how this could work to your advantage. The only catch is that you need buy more of a stock that is dropping (people might think you're crazy). This could easily backfire if the stock continues to drop. |
Can't the account information on my checks be easily used for fraud? | Yes this is a huge security loophole and many banks will do nothing to refund if you are scammed. For example for business accounts some Wells Fargo branches say you must notify within 24 hours of any check withdrawal or the loss is yours. Basically banks don't care - they are a monopoly system and you are stuck with them. When the losses and complaints get too great they will eventually implement the European system of electronic transfers - but the banks don't want to be bothered with that expense yet. Sure you can use paypal - another overpriced monopoly - or much better try Dwolla or bitcoin. |
My bank wants to lower my credit limit on my credit card. Will this impact me negatively? | No, it will have no negative impact on getting a mortgage. You are building up a history with regular payments and are not carrying a balance on the card each month. Your ability to get a mortgage will ultimately be based on other things. Money Saving Expert has a good guide on what will affect your credit score. A further discussion on the topic that backs up that what a mortgage company is interested in is affordability and a stable history. They really don't care about utilisation ratios. (Though might be spooked by almost maxed out cards - sign of poor spending control, or large unused limits - too easy to go into bad debt.) |
Is 6% too high to trade stocks on margin? | 6% isn't "too high" in terms of market rates at the moment, however it's a very subjective question whether it's too high for you. The real question to determine is if paying 6%, can you make more than 6% return (to cover the costs plus your profit)? As for a rule of thumb, there's none I know of, however your best bet is to take the time to model it in Excel (not difficult). It's different for each portfolio or investment. Something with a high standard deviation of returns is already high risk, adding margin to it only makes it worse. So, long story short is that, "it depends". |
I spend too much money. How can I get on the path to a frugal lifestyle? | Use software that calculates your net worth and track it over time. I track my personal finances in Mint, and I love checking my net worth every week. It's turned into a kind of competition with myself... It's like keeping track of how fast you run a 5k, or how many pounds of weight you've lost. It helps you determine if you are making progress, and if you, it's positive reinforcement that you are doing the right things. |
Family suggests my first real estate. Advice? | You say My work is steady; even if I lost my job it'd be easy to get another. Location has been static for a few years now, but I'm not sure that'll extrapolate to the future; I'm lazy, so I don't want to move, but for a significantly better job opportunity I wouldn't mind. The general rule of thumb is that you'll come out ahead if you buy a house (with a mortgage) and live there for five years. What you lose in interest, you make up in rent. And living there for five years, you make back your closing costs in equity. If you're there less than five years though, you don't make back the closing costs. You'd have been better off renting. Historically (up to about twenty years ago), your mortgage payment and rent payment for the same basic property would be about the same. I.e. if your current landlord sold you what you are renting, your mortgage payment would be roughly the same as your rent. Maybe a little lower or a little higher but about the same. More recently, it hasn't been strange to see a divergence in those. Now it is not uncommon for a mortgage payment to be 50% higher than rent on the same property. This has some consequences. First, your $1000 rent probably won't stretch as far as a $1000 mortgage payment. So you'll be buying something that you'd only pay $650 or $700 rent. Second, if you move and can't sell immediately, you'll get less in rent than you'd pay in mortgage. Rather than contributing to your income, the property will require subsidy just to maintain the mortgage. And in the early years of the mortgage, this means that you're paying all of the principal (equity) and some of the interest. Buying a duplex makes this worse. You have your side and their side. You can substitute your $1000 rent for half of the mortgage payment. Meanwhile, they are paying $700 in rent. You have to subsidize the mortgage by $300. Plus, you are talking about hiring a property management company to do things like lawn maintenance. There goes another $100 a month. So you are subsidizing the mortgage by $400. I don't know real estate prices in Utah, but a quick search finds a median house price over $200,000. So it seems unlikely that you are buying new construction with new appliances. More likely you are buying an existing duplex with existing appliances. What happens when they fail? The renter doesn't pay for that. The property management company doesn't pay for that (although they'll likely arrange for it to happen). You pay for it. Also, it often takes a bit of time to clean up the apartment after one tenant leaves before the new tenant starts paying rent. That's a dead weight loss. If this happens during a local recession, you could be carrying the mortgage on a property with no offsetting rental income for months. There are some countervailing forces. For example, if house prices in your area are increasing, the rent will increase with them (not necessarily at the same pace). But your mortgage payment stays the same. So eventually the rent may catch up with the mortgage payment. If you wait long enough in a strong enough market, the rent on the other half of the duplex may cover the entire mortgage payment. If you currently have an urban apartment within walking distance of work and switch to a suburban apartment with a commute, you have a better chance of finding a duplex where the entire mortgage payment is only the $1000 that you pay in rent. Your half of the duplex won't be as nice as your apartment is, and you'll have a half hour or hour long commute every morning (and the same to get home in the evening). But on strictly fiscal terms you'll be doing about as well. Plus you have the income from the other half. So even if your mortgage payment is more than your rent payment, you can still break even if the rent covers it. Consider a $1400 mortgage and $400 in rent from the other half (after property management fees). So long as nothing goes wrong, you break even. Perhaps the agreement is that your parents take care of things going wrong (broken appliances, troublesome tenants, time between tenants). Or perhaps you drain your emergency fund and adjust your 401(k) payment down to the minimum when that happens. Once your emergency fund is replenished, restore the 401(k). If you're willing to live in what's essentially a $500 apartment, you can do better this way. Of course, you can also do better by living in a $500 apartment and banking the other $500 that you spend on rent. Plus you now have the expenses of a commute and five hours less free time a week. You describe yourself as essentially living paycheck to paycheck. You have adequate savings but no building excess. Whatever you get paid, you immediately turn around and spend. Your parents may view you as profligate. Your apartment is nicer than their early apartments were. You go out more often. You're not putting anything aside for later (except retirement). It didn't use to be at all strange for people to move out of the city because they needed more space. For the same rent they were paying in the city, they could buy a house in the suburbs. Then they'd build up equity. So long as they stayed in roughly the same work location, they didn't need to move until they were ready to upgrade their house. The duplex plan leads to one of two things. Either you sell the duplex and use the equity to buy a nicer regular house, or you move out of the duplex and rent your half. Now you have a rental property providing income. And if you saved enough for a down payment, you can still buy a regular house. From your parents' perspective, encouraging you to buy a duplex may be the equivalent of asking you to cut back on spending. Rather than reducing your 401(k) deposits, they may be envisioning you trading in your car for a cheaper one and trading in your nice but expensive apartment for something more reasonable in a cheaper neighborhood. Rather than working with a property management company, you'll be out doing yardwork rather than cavorting with your friends. And maybe the new place would have more space to share when you meet someone--you aren't going to provide many grandkids alone. If you get a mortgage on a duplex, you are responsible for paying the mortgage. You are responsible even if something happens to the house. For example, if a fire burns it down or a tornado takes it away. Or you just find that the house isn't solid enough to support that party where all of your friends are jumping up and down to the latest pop sensation. So beyond losing whatever you invest in the property, you may also lose what you borrowed. Now consider what happens if you invest the same amount of money in General Motors as in the house. Let's call that $10,000 and give the house a value of $200,000. With General Motors, even if they go bankrupt tomorrow, you're only out $10,000. With the house, you're out $200,000. Admittedly it's much hard to lose the entire $200,000 value of the house. But even if the house loses $80,000 in value, you are still $70,000 in the hole. You don't need a disaster for the house to lose $80,000 in value. That's pretty much what happened in the 2006-2010 period. People were losing all of what they invested in houses plus having to declare bankruptcy to get out of the excess debt. Of course, if they had been able to hold on until 2015 markets mostly recovered. But if you lost your job in 2008, they wouldn't let you not make mortgage payments until you got a new one in 2012. When you declare bankruptcy, you don't just lose the house. You also lose all your emergency savings and may lose some of your belongings. There are some pretty prosaic disasters too. For example, you and your tenant both go away for a weekend. It rains heavily and your roof starts to leak due to weak maintenance (so not covered by insurance). The house floods, destroying all the electronics and damaging various other things. Bad enough if it's just you, but you're also responsible for the tenant's belongings. They sue you for $20,000 and they move out. So no rent and big expenses. To get the house livable again is going to take $160,000. Plus you have a $190,000 mortgage on a property that is only worth about $40,000. That's at the extreme end. |
How can I raise finance to build a home for my family | As I see it, there are 2 potential solutions - Joining with another person or 2, and buying a house with multiple bedrooms. I am in the US, and I've seen immigrants living in tight accommodations that would seem unacceptable to most of us. But, with the combined incomes, they were able to buy the house and quickly pay for it, and then buy another. $800/mo is about $5/hr. Below US minimum wage. Use your skills to take on additional work on line. A virtual assistant position can increase your income quite a bit. Keep in mind, as someone on the other side of the world, my advice may not be practical for you, these are just my thoughts. |
What could be the harm in sharing my American Express statements online? | If someone gains access to these data, he could use social engineering approach to impersonate you - i.e. call the American Express and ask tell he he is you and he lost the access to the account and he needs the access to be reset and sent to certain email, and if they doubt it's you he would send them the statement data, even on company letterhead (which he would be able to fake since he has the data from the statements, and AE has no idea how the authentic letterhead looks like). He could also do the opposite trick - like calling your assistant or even yourself and saying something like "I'm from American Express, calling about the transaction at this-and-this date and this-and-this time, this amount, please confirm you are {your name} and your address is {your address}, I need to confirm something" - which would make it appear as he is really from AE since he knows all these details - and then ask you some detail he's missing "for security" - like your birth date or last digits of SSID or anything like that - and then use these details to impersonate you to AE. So putting all this info together where it can be accessed by strangers does have risks. It may not work out if both you and AE personnel are vigilant and follow instructions to the letter, but we know it not always so. |
Is 401k as good as it sounds given the way it is taxed? | If you pay 20% tax now and none later or if you pay no tax now and 20% later, it doesn't make a difference. Mathematically, it's the same. You have to guess about which tax rate (now vs later) will be higher for you in order for you to make the best choice. Predicting tax rates 40 years in advance is hard. Everybody pretends like they can do this accurately. I would suggest going half and half. If you have 20k and put half in pre-tax (10k in) and half in post-tax (only 8k in) you end up with 18k total in which is right in the middle of where you would be if you went with the whole 20k in either extreme. It would also leave you owing 2k in tax rather than the possible 4k in tax if you had gone with all pre-tax. When you split down the middle, you are guaranteed to have 50% in the "right" side, the side with the best outcome. Being guaranteed to be 50% on the right side is pretty good compared to maybe being 100% on the wrong side. |
Simple loan with a mortage as collateral | Obligatory "Don't do it" remarks: If the guy isn't trusted enough to even show up to work, and can't get a personal loan directly from a bank (Home Equity Line of Credit would suffice), this is really setting things up for failure. What if he quits? What if you need to fire him (you know, for not showing up for weeks)? </rant> In order to be able to place a lien on his home should he default on the loan, you'll need to draft up a loan agreement or promissory note stating specifically that you have the right to do so. Get a lawyer involved. Here's an article that talks about setting up a Private Home Loan, which is geared more at helping someone buy a home, but may prove useful in this case as well: https://www.nolo.com/legal-encyclopedia/borrowing-from-family-friends-buy-29649.html It's pretty lengthy, so I won't quote it out here, but the gist of it is: Get everything in writing in a legally binding contract. |
Selling Stock - All or Nothing? | Set a good till cancel GTC order, and partial fills will just roll over to the market session if it doesn't fill completely during the first market session It is a very low probability that each share will only be taken one at a time. It isn't a low probability that it will fill in two or three orders, but this is all a factor of how liquid the stocks you bought are. Also your limit order price is also a factor in this |
How to increase my credit score | It's probably important to understand what a credit score is. A credit score is your history of accruing debt and paying it back. It is supplemented by your age, time at current residence, time at previous residences, time at your job, etc. A person with zero debt history can still have a decent score - provided they are well established, a little older and have a good job. The top scores are reserved for those that manage what creditors consider an "appropriate" amount of debt and are well established. In other words, you're good with money and likely have long term roots in the community. After all, creditors don't normally like being the first one you try out... Being young and having recently moved you are basically a "flight risk". Meaning someone who is more likely to just pick up and move when the debt becomes too much. So, you have a couple options. The first is to simply wait. Keep going to work, keep living where you are, etc. As you establish yourself you become less of a risk. The second is to start incurring debt. Personally, I am not a fan of this one. Some people do well by getting a small credit card, using some portion of it each month and paying it off immediately. Others don't know how to control that very well and end up having a few months where they roll balances over etc which becomes a trap that costs them far more than before. If I were in your position, I'd likely do one of two things. Either buy the phone outright and sign up for a regular mobile plan OR take the cheaper phone for a couple years. |
When and how should I pay taxes on ForEx trades? | I guess Bitcoin are not that popular yet and hence there are no specific regulations. If currently it gets debated, it would be treated more like a Pre-Paid card or your Paypal account. As you have already paid taxes on the $$ you used to buy the Bitcoins there is no tax obligation as long as you keep using it to buy something else. The other way to look at it is as a commodity. If you have purchased a commodity and it has appreciated in value in future you may be liable to pay tax on the appreciated value. Think of it as a if you bought a house with the $$ and sold it later. Once more serious trade starts happening, the governments around the world would bring in regulations. Till then there is nothing to worry about. |
2 401k's and a SEP-IRA | question #2 - yes, 25% of your 1099 income. Good idea. It adds up quickly and is a good way to reduce taxable income. |
Transfer money from a real estate sale in India to the US | If you are using the money to invest in a property (even abroad) then you can claim tax exemption. while some people will tell you that the reinvestment should be in India only, it have been ruled that the property can be purchased abroad too.. |
How can I invest in an index fund but screen out (remove) certain categories of socially irresponsible investments? | I think the answer to your question is no, in theory. By screening out funds, you must actively manage the investments. To then try to ensure you track the index closely enough, you have to do further management. Either you spend your own time to do this or you pay someone else. This is ok, but it seems contrary to the primary reasons most people choose an index fund and why the product exists. You want a specific type of ethical investment(s) that has lower fees and performs well. I think you can get close, it just won't be like an "index fund". Don't expect equal results. |
How much should I be contributing to my 401k given my employer's contribution? | Contribute as much as you can. When do you want to retire and how much income do you think you'll need? A $1M portfolio yielding 5% will yield $50,000/year. Do some research about how to build a portfolio... this site is a good start, but check out books on retirement planning and magazines like Money and Kiplinger. If you don't speak "money" or are intimidated by investing, look for a fee-based financial advisor whom you are comfortable with. |
should the Market Capitalization be equal to the Equity of the firm | Lots of questions: In general, no. Market Capitalization and Equity represent 2 different things. Equity first, the equity of a firm is the value of the assets (what it owns) less its liabilities (what it owes) and consists (broadly) of two components - share capital (what the firm gets when it sells to investors as part of an IPO or subsequent share issue) and retained earnings (what the firm has as a result of making profits and not paying them out as dividends). This is the theoretical liquidation value of the firm - what it is worth if it stops trading, sells all its assets and pays all its debts. Market Capitalization is the current value of the future cash flow of the firm as perceived by the market - the value today of all the dividends that the firm will pay in the future for as long as it exists. This is the theoretical going concern value of the firm - what it is worth as a functioning business. In general, Market Capitalization is bigger than Equity - if it isn't the firm is worth more as scrap than as an operating business. Um ... no. If you don't have any shares then you are by definition not an owner. Having shares is what makes you an owner. What I think you mean is, is it possible for the owner(s) of a private company to sell all of its shares when it goes public? The answer is yes. It is uncommon for a start-up owner to do this but it is standard practice for "corporate raiders" who buy failing companies, take them private, restructure them and then take them public again - they have done their job and they are not interested in maintaining an ownership stake. Nope. See above and below. Not at all, equity is an accounting construct and market capitalization is about market sentiment. Consider the following hypothetical firm: It has $1m in equity, it makes $4m in profit and will do for the foreseeable future, it pays all of that $4m out as dividends - if we work on a simple ROI of 10% then this firm is worth $40m dollars - way more than its equity. |
How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? | You really don't know how credit scoring works. Let's think about the purpose of a credit score: to assess whether you're a high default risk. A lender wants to know, in this order: Utilization factors into the solvency assessment. If you are at 100% utilization of your unsecured credit, you're insolvent -- you can't pay your bills. If you are at 0%, you're as solvent as you can be. Most people who use credit cards are somewhere in the middle. When a bank underwrites a large loan like a mortgage or car loan, they use your credit score an application information like income and employment history to figure out what kind of loan you qualify for. Credit cards are called "revolving" accounts for a reason -- you're supposed to use them to buy crap and pay your bill in full at the end of the month. My advice to you: |
Is it true that 90% of investors lose their money? | The article "Best Stock Fund of the Decade: CGM Focus" from the Wall Street Journal in 2009 describe the highest performing mutual fund in the USA between 2000 and 2009. The investor return in the fund (what the shareholders actually earned) was abysmal. Why? Because the fund was so volatile that investors panicked and bailed out, locking in losses instead of waiting them out. The reality is that almost any strategy will lead to success in investing, so long as it is actually followed. A strategy keeps you from making emotional or knee-jerk decisions. (BTW, beware of anyone selling you a strategy by telling you that everyone in the world is a failure except for the few special people who have the privilege of knowing their "secrets.") (Link removed, as it's gone dead) |
Why do people always talk about stocks that pay high dividends? | Someone who buys a stock is fundamentally buying a share of all future dividends, plus the future liquidation value of the company in the event that it is liquidated. While some investors may buy stocks in the hope that they will be able to find other people willing to pay more for the stock than they did, that's a zero sum game. The only way investors can make money in the aggregate is if either stocks pay dividends or if the money paid for company assets at liquidation exceeds total net price for which the company sold shares. One advantage of dividends from a market-rationality perspective is that dividend payments are easy to evaluate than company value. Ideally, the share price of a company should match the present per-share cash value of all future dividends and liquidation, but it's generally impossible to know in advance what that value will be. Stock prices may sometimes rise because of factors which increase the expected per-share cash value of future dividends and liquidations. In a sane market, rising prices on an item will reduce people's eagerness to buy and increase people's eagerness to sell. Unfortunately, in a marketplace where steady price appreciation is expected the feedback mechanisms responsible for stability get reversed. Rapidly rising prices act as a red flag to buyers--unfortunately, bulls don't see red flags as signal to stop, but rather as a signal to charge ahead. For a variety of reasons including the disparate treatment of dividends and capital gains, it's often not practical for a company to try to stabilize stock prices through dividends and stock sales. Nonetheless, dividends are in a sense far more "real" than stock price appreciation, since paying dividends generally requires that companies actually have sources of revenues and profits. By contrast, it's possible for stock prices to go through the roof for companies which have relatively few assets of value and no real expectation of becoming profitable businesses, simply because investors see rising stock prices as a "buy" signal independent of any real worth. |
How does a defined contribution plan work | It is comparing apples to oranges. From govt or institution point of view defined contribution is better than defined benefits as they don't have to carry obligations. Although defined benefit sounds good, one can't guarantee it will be enough when you retire compared to inflation. It often becomes political issue. Defined contribution puts you in charge. |
Is there an advantage to a traditional but non-deductable IRA over a taxable account? [duplicate] | This is ideal placement for your allocation to income investments or those with nonqualified dividends: bonds, REITS, MLPS, other partnerships, and so forth. These are all taxed at income rate, generally throw off more income than capital gains, so you get the deferment without losing the cap gains rate. |
Is it better to pay an insurance deductible, or get an upgrade? | I'm going to guess you're on Verizon and your wife has an iPhone. I just went through this exact same situation with my mom's phone last week. When you're off contract with Verizon you're saving $25/month on your plan (at least, I am), so staying off contract is big. If you do the monthly payment you're paying full retail over 2 years, without interest, so you do stay off contract at least. Here's the thing, as long as it's a 16GB iPhone 5 or better, you're going to be able to Craigslist it for the cost of the deductible, no problems. To me that makes the decision pretty easy to make. As long as you can Craigslist it for more than the deductible, get the insurance replacement. Then when you want a new phone you can sell your old one. Since you can sell the phone, I think that makes the comparison between the deductible and deciding to pay off the $100 now and start payments on the new phone less relevant. The real comparison I'd suggest looking at is the value of the phone and the deductible. |
High expense ratio funds - are they worth it? | In almost every circumstance high expense ratios are a bad idea. I would say every circumstance, but I don't want backlash from anyone. There are many other investment companies out there that offer mutual funds for FAR less than 1.5% ratio. I couldn't even imagine paying a 1% expense ratio for a mutual fund. Vanguard offers mutual funds that are significantly lower, on average, than the industry. Certainly MUCH lower than 1.5%, but then again I'm not sure what mutual funds you have, stock, bonds, etc. Here is a list of all Vanguard's mutual funds. I honestly like the company a lot, many people haven't heard of them because they don't spend nearly as much money on advertisements or a flashy website - but they have extremely low expense ratios. You can buy into many of their mutual funds with a 0.10%-0.20% expense ratio. Some are higher, but certainly not even close to 1.5%. I don't believe any of them are even half of that. Also, if you were referring to ETF's when you mentioned Index Fund (assuming that since you have ETFs in your tag), then 0.20% for ETF's is steep, check out some identical ETFs on Vanguard. I am not a Vanguard employee soliciting their service to you. I'm just trying to pass on good information to another investor. I believe you can buy vanguard funds through other investment companies, like Fidelity, for a good price, but I prefer to go through them. |
How do day-traders or frequent traders handle their taxes? | Starting of 2011, your broker has to keep track of all the transactions and the cost basis, and it will be reported on your 1099-B. Also, some brokers allow downloading the data directly to your tax software or to excel charts (I use E*Trade, and last year TurboTax downloaded all the transaction directly from them). |
Ongoing things to do and read to improve knowledge of finance? | The best learning technique for me is not to dredge through books in order to gain a better understanding of finance. This is tedious and causes me to lose interest. I'm not sure of your tolerance for this type of learning. I tend to learn in small pieces. Something piques my interest and I go off reading about that particular topic. May I suggest some alternate methods: |
1099 Misc for taking care of foreign exchange students | In general, you are allowed to deduct up to $50/month per student (see page 4), but only if you aren't reimbursed. In your case, since you are receiving a stipend, the full $2000 will be treated as taxable income. But the question of "is it worth it" really depends on how much you will actually spend (and also what you'll get from the experience). Suppose you actually spend $1000/month to host them, and if your combined tax rate is 35%, you'll pay $700 in additional taxes each month, but you'll still profit $300 each month. If your primary motivation for hosting students is to make a profit, you could consider creating a business out of it. If you do that you will be able to deduct all of your legitimate business expenses which, in the above example, would be $1000/month. Keeping with that example, you would now pay taxes on $1000 instead of $2000, which would be $350, meaning your profit would now be $650/month. (Increasing your profit by $350/month.) You will only need to keep spending records if you plan to go the business route. My advice: assume you won't be going the business route, and then figure out what your break even point is based on your tax rate (Fed+state+FICA). The formula is: Max you can spend per month without losing money = 2000 - (2000 * T) e.g. if T = 35%, the break even point is $1300. Side note: My family hosted 5 students in 5 years and it was always a fantastic experience. But it is also a very big commitment. Teenagers eat a lot, and they drive cars, and go on dates, and play sports, and need help with their homework (especially English papers), and they don't seem to like bed times or curfews. IMHO it's totally worth it, even without the stipend... |
Why would a company issue a scrip dividend and how will this issue affect me? | Am I correct in understanding that a Scrip Dividend involves the issue of new shares instead of the purchase of existing shares? Yes. Instead of paying a cash dividend to shareholders, the company grants existing shareholders new shares at a previously determined price. This allows shareholders who join the program to obtain new shares without incurring transaction costs that would normally occur if they purchased these shares in the market. Does this mean that if I don't join this program, my existing shares will be diluted every time a Scrip Dividend is paid? Yes, because the number of shares has increased, so the relative percentage of shares in the company you hold will decrease if you opt-out of the program. The price of the existing shares will adjust so that the value of the company is essentially unchanged (similar to a stock split), but the number of outstanding shares has increased, so the relative weight of your shares declines if you opt out of the program. What is the benefit to the company of issuing Scrip Dividends? Companies may do this to conserve their cash reserves. Also, by issuing a scrip dividend, corporations could avoid the Advanced Corporation Tax (ACT) that they would normally pre-pay on their distributions. Since the abolition of the ACT in 1999, preserving cash reserves is the primary reason for a company to issue scrip dividends, as far as I know. Whether or not scrip dividends are actually a beneficial strategy for a company is debatable (this looks like a neat study, even though I've only skimmed it). The issue may be beneficial to you, however, because you might receive a tax benefit. You can sell the scrip dividend in the market; the capital gain from this sale may fall below the annual tax-free allowance for capital gains, in which case you don't pay any capital gains tax on that amount. For a cash dividend, however, there isn't a minimum taxable amount, so you would owe dividend tax on the entire dividend (and may therefore pay more taxes on a cash dividend). |
Is it a good idea to teach children that work is linearly related to income? | Get a copy of Capitalism for Kids - finally back in print (after being out of print for years). It's a great introduction to being an entrepreneur, aimed at young people. Six years old might be a bit early, though - but definitely before the teenage years. |
How can I verify that a broker I found online is legitimate? | (I answered a similar question before.) Essentially, you shouldn't trust a site you find on the Internet merely because it looks professional and real. Before signing up with any new service provider you found online, you should verify the authenticity of both the organization itself and their web site address. Even if the name displayed by a web site represents a legitimate brokerage firm, any site you happen to come across on the Internet could be an elaborate spoof of a real company, intended to capture your personal details (or worse). First, to check if a brokerage firm is in fact registered to trade securities – in the United States – you can consult FINRA's BrokerCheck online service. This might be the first of many checks you should undertake ... after you convince yourself that FINRA is legitimate. A meta-problem ;-) Then, if you want to know if the web site address is authentic, one way is to contact that broker offline using the contact information found from a trusted source, such as the FINRA BrokerCheck details. Unfortunately, those details do not currently appear to contain the broker's web site URL. (Else, that could be useful.) Another thing to look at is the site's login or sign-up page, for a valid SSL certificate that is both issued to the correct legal name of the brokerage firm as well as has been signed by a well-known certificate authority (e.g. VeriSign). For a financial services firm of any kind, you should look for and expect to see an Extended Validation Certificate. Any other kind of certificate might only assert that the certificate was issued to the domain-name owner, and not necessarily to an organization with the registered legal name. (Yes, anybody can register a domain with a similar name and then acquire a basic SSL certificate for that domain.) FWIW, Scottrade and ShareBuilder are both legitimate brokers (I was aware already of each, but I also just checked in the FINRA tool), and the URLs currently linked to by the question are legitimate web site addresses for each. Also, you can see their EV certificates in action on secured pages here and here. As to whether your investments with those brokers would be "safe" in the event of the broker failing (e.g. goes bankrupt), you'll want to know that they are members of the Securities Investor Protection Corporation (Wikipedia). (Of course, this kind of protection doesn't protect you if your investments simply go down in value.) But do your own due diligence – always. |
At what point should I begin paying off student loans? | Its almost always better to pay off loans sooner rather than later. Being debt free is amazingly liberating. However, in your case, I'd be reluctant to make significant headway on a loan repayment program. Here's why: The best investment you can make, right now, is in yourself. Completing your education should be the top priority. The next would be to meet the requirements of a job after received after school is complete. So what I would do is estimate the amount of money it would take to complete school. Add to that an estimate of an amount to move to a new city and setup a household. That amount should be held in reserve. Anything above that can used to pay down loans. Once you complete school and get settled into a job, you can then take that money and also throw it at your loans. |
Do I need to invest to become millionaire? | I get the sense that this is a "the world is unfair; there's no way I can succeed" question, so let's back up a few steps. Income is the starting point to all of this. That could be a job (or jobs), or running your own business. From there, you can do four things with your income: Obviously Spend and Give do not provide a monetary return - they give a return in other ways, such as quality of life, helping others, etc. Save gives you reserves for future expenses, but it does not provide growth. So that just leaves Invest. You seem to be focused on stock market investments, which you are right, take a very long time to grow, although you can get returns of up to 12% depending on how much volatility you're willing to absorb. But there are other ways to invest. You can invest in yourself by getting a degree or other training to improve your income. You can invest by starting a business, which can dramatically increase your income (in fact, this is the most common path to "millionaire" in the US, and probably in other free markets). You can invest by growing your own existing business. You can invest in someone else's business. You can invest in real estate, that can provide both value appreciation and rental income. So yes, "investment" is a key aspect of wealth building, but it is not limited to just stock market investment. You can also look at reducing expenses in order to have more money to invest. Also keep in mind that investment with higher returns come with higher risk (both in terms of volatility and risk of complete loss), and that borrowing money to invest is almost always unwise, since the interest paid directly reduces the return without reducing the risk. |
Settlement of Shares Underlying a Covered Call Option | It's a covered call. When I want to create a covered call position, I don't need to wait before the stock transaction settles. I enter it as one trade, and they settle at different times. |
How smart is it to really be 100% debt free? | A Simple Rule to discern between good and bad debt: Does this mean you should never buy a house or car? Of course not. But if you accrue bad debt, make sure that you can handle it and understand the costs and repercussions. |
what does “private equity structures” mean? | Private equity firms have a unique structure: The general partners (GP's) of the firm create funds and manage the investments of those funds. Limited partners (LP's) contribute the capital to the funds, pay fees to the GP's, and then make money when the funds' assets grow. I believe the article is saying that ultra high net worth individuals participate in the real estate market by hiring someone to act as a general partner and manage the real estate assets. They and their friends contribute the cash and get shares in the resulting fund. Usually this GP/LP structure is used when the funds purchase or invest in private companies, which is why it is referred to as "private equity structure," but the same structure can be used to purchase and manage pools of real estate or any other investment asset. |
Could an ex-employee of a company find themself stranded with shares they cannot sell (and a tax bill)? | It would take an unusual situation. They exercise certain types of option, which come in as regular income rather than capital gains, and are holding the stock "long" (perhaps they are not allowed to sell because of an insider-trading freeze window; like right before earnings announcements). And then the stock tanks. Their company is acquired. They get stock options in their unicorn at $1/share, which blows up to $1000/share right as HugeFirm buys it. Options are swapped dollar-for-dollar for HugeFirm stock (at $250/share) so 4 shares for 1. I heard this happened a lot in the 1999-2000 boom/bust. And the problem was, this type of stock-option had historically only been offered to $20-million salary CEOs and CFO's, who retained professional legal and financial counsel and knew how to deal with the pitfalls and traps of this type of option. During the dot-com boom, it was also offered to rank-and-file $50k salary tech employees who didn't even know the difference between a 401K and a Roth. And it exploded in their faces, making a big mess for everyone including the IRS -- now struggling to justify to Congressmen why they were collecting $400,000 in taxes on entirely phantom, never-realized income from a 24 year old tech guy earning $29k at a startup and eating ramen. When that poor guy never had a chance of understanding the financial rocks and shoals, and even if he did, couldn't have done anything about it (since he wasn't a high executive involved in the decisions). And even the company who gave him the package didn't intend to inflict this on him. It was a mistake. Even the IRS dislikes no-win situations. Some laws got changed, some practices got changed, etc. etc., and the problem isn't what it used to be. |
Clarifications On PFIC Rules | Answers: 1: No, Sections 1291-1298 of the IRC were passed in the Reagan adminstration. 2: Not only can a foreign company like a chocolate company fall afoul of the definition of PFIC because of the "asset test", which you cite, but it can also be called a PFIC because of the "income test". For example, I have shares in a development-stage Canadian biotech which is considered a PFIC because it has no income at all, except for a minor amount of bank interest on its working capital. This company is by no means "passive" (it has run 31 clinical trials in over 1100 human research subjects, burning $250M of investor's money in the process) nor is it an "investment company", but the stupid IRS considers it to be a "passive foreign investment company"! The IRS looks at it and sees only the bank account, and assumes it is a foreign shell corporation set up to shield the bank interest from them. 3: Yes, a foreign mutual fund is EXACTLY what congress intended to be a PFIC when passed IRC 1291-1298. (Biotechs, candy factories, ect got nailed as innocent bystanders.) Note that if you hold a US mutual fund then every year you'll get a form 1099 in the mail. The 1099 will report your share of the mutual fund's own income and capital gains, which you must report on your taxes. (You can also have capital gains from selling your shares of the mutual fund, but that's a different thing.) Now suppose that there was no PFIC law. Then the US investors in the mutual fund would do better if the mutual fund were in a foreign country, for two reasons: a) The fund would no longer distribute 1099's. That means the shareholders wouldn't have to pay tax every year on their proportions of the fund's own income/gains. The money that would have sooner gone to the IRS can sit around for years earning interest. b) The fund could return profits to shareholders exclusively through capital gains rather than dividends, thus ensuring that all of the investors' income on the fund would be taxed at <15%-20% rather than up to 39%. The fund could do this by returning cash to shareholders exclusively through buybacks. However, the US mutual fund industry doesn't want to move the industry to Canada, and it only takes a few newspaper articles about a foreign loophole to make congress spring to action. 4) It depends. If you have a PEDIGREED QEF election in place (as I do for my biotech shares) then form 8621 takes a few minutes by hand. However, this requires both the company and the investor to fully cooperate with congress's vision for PFICs. The company cooperates by providing a so-called "PFIC annual information sheet", which replaces the 1099 form for a US mutual fund. The investor cooperates by having a "QEF election" in place for EACH AND EVERY TAX YEAR in which he held the stock and by reporting the numbers from the PFIC annual information sheet on his return. (Note that the QEF election persists once made, until revoked. There are subtleties here that I am glossing over, since "deemed sale" elections and other means may be used to modify a share's holding period to come into compliance.) Note that there is software coming out to handle PFICs, and that the software makers will already run their software to make your form 8621 for $75 or so. I should also warn you that the blogs of tax accountants and tax lawyers all contradict each other on the basic issue of whether you can take capital losses on PFICs for which you have no form 8621 elections. (See section 2.3 of my notes http://tinyurl.com/mh9vlnr for commentary on this mess.) I do not know if the software people will tell you which elections are best made on form 8621, though, or advise you if it's time to simply dump your investment. The professional software is at 8621.com, and the individual 8621 preparation is at http://expattaxtools.com/?page_id=242. BTW, in case you're interested, I wrote up a very careful analysis of how to deal with the PFIC situation for the small biotech I invested in in certain cases. It is posted http://tinyurl.com/mh9vlnr. (For tax reasons it was quite fortunate that the share price dipped to near an all-time low on Jan 1, 2015, making the (next) 2015 tax year ripe for a so-called "deemed sale" election. This was only possible because the company provides the necessary "PFIC annual information statements", which your chocolate factory may or may not do.) |
Why would you ever turn down a raise in salary? | In the UK, the government has recently announced that Child Benefit will no longer be paid to those who earn over £44k. This means that if you currently earn £43,999, and your employer offers you a raise of £10 per annum to £44,009, then you could be over £1k worse off as a result. |
Emerging markets index fund (VDMIX) for an inexperienced investor | In this environment, I don't think that it is advisable to buy a broad emerging market fund. Why? "Emerging market" is too broad... Look at the top 10 holdings of the fund... You're exposed to Russia & Brazil (oil driven), Chinese and Latin American banks and Asian electronics manufacturing. Those are sectors that don't correlate, in economies that are unstable -- a recipie for trouble unless you think that the global economy is heading way up. I would recommend focusing on the sectors that you are interested in (ie oil, electronics, etc) via a low cost vehicle like an index ETF or invest using a actively managed emerging markets fund with a strategy that you understand. Don't invest a dime unless you understand what you are getting into. An index fund is just sorting companies by market cap. But... What does market cap mean when you are buying a Chinese bank? |
Can PayPal transfer money automatically from my bank account if I link it in PayPal? | Practically, as an ebay buyer I have never seen any way to keep a balance in paypal and top it off from my bank account under my own control. It is all automated, and as I seem to recall linking with a bank account or credit card was necessary to get some kind of "confirmed address" status out of Paypal so that eBay sellers would be more willing to trust me as a buyer and know that my shipping address was legitimate. As a seller, I can keep a balance at paypal from eBay sales and ask for it back in my checking account instead of keeping it in paypal to purchase items later. In terms of advice, in my opinion the paypal transfer limits or how to set them is not the answer needed to protect one's finances in this situation. In an error or cyberattack scenario, you have to consider the possibility that any limits are exceeded. When your online activity of any kind is linked to a bank account, any amount in that linked bank account is probably at risk. It doesn't really matter if it is paypal, or a server rental account, or amazon. If it can be abused, and it is linked to your bank account, then someone might abuse it and leave you with a bill. That you might be ultimately victorious is of little consequence if someone steals money you really needed right now and the devotion of time and energy to "work the bureaucracy" to get your money back will distract from performance at work or school. So the next step up in protection is to firewall the bank account you use for online purchases from your other bank accounts where your salary is received. The best way to do it is with different banks instead of merely different accounts, but that is also the most inconvenient for filling the account back up. Nowadays -- at least in the USA -- at several banks you can open a "free" checking account for a minimum deposit like $500 or $1000 that must stay in the account to be fee free at the end of each month. Whatever balance you keep in the account you use for your "risky" online transactions will be the maximum that can disappear in an incident, downside being you have to feed the account from time to time to keep it above the minimum as you make purchases. |
For net worth, should I value physical property at my cost to replace it, or the amount I could get for selling it? | Valuation by definition is what an item is worth, not what you paid for it. Net worth should be market value for fixed assets or "capital" goods. I would consider this cars, real property, furniture, jewelry, appliances, tools, etc. Everything else can be valued by liquidation value. You can use valuation guides for tax deductions as a way to guide your valuation. Insurance companies usually just pick a percentage of your home's value as a guesstimate for content value. I could see doing this as a way to guide purchase decisions for appliances, cars or the like. But if you are trying to figure out the market value of your socks and underwear, I would argue that you're doing something that's a little silly. |
Primary Residence to Investment Property - Changing PMI Terms | You could be in a bit of a bind. I wouldn't push it any more until you read your loan papers very carefully. Going back to the lender for a refinance after you converted it to a rental (presumably without their knowledge) is risky. I doubt they'd let you refinance anyway, as the house is underwater. If the loan is performing then I wouldn't think they'd look too hard for reasons to upset the flow of checks by calling the loan due, but if you brazenly advertise the change of property use to them they may reconsider. Read your loan papers carefully to see what they can do before you lean on them too much. As for managing the finances on that property, I'd build up a cushion to deal with the fact that your payment is going to shoot up considerably in year 8. Also consider building up a side business to get another income stream going to compensate as well. You have a little time before it shoots up. |
High credit utilization, some high interest - but credit score not overly bad. How to attack debt in this situation? | You need to pay off the entire balance of 7450 as soon as possible. This should be your primary financial goal at this point above anything else. A basic structure that you can follow is this: Is the £1500 balance with the 39.9% interest rate the obvious starting point here? Yes, that is fine. But all the cards and overdraft debts need to be treated with the same urgency! What are the prospects for improving my credit score in say the next 6-12 months enough to get a 0% balance transfer or loan for consolidation? This should not be a primary concern of yours if you want to move on with your financial life. Debt consolidation will not help you achieve the goals you have described (home ownership, financial stability). If you follow the advice here, by the time you get to the point of being eligible, you may not see enough savings in interest to make it worth the hassle. Focus on the hard stuff and pay off the balances. Is that realistic, or am I looking at a longer term struggle? You are looking at a significant struggle. If it was easy you would not be asking this question! The length of time will be determined by your choices: how aggressively you will cut your lifestyle, take on extra jobs, and place additional payments on your debt. By being that extreme, you will actually start to see progress, which will be encouraging. If you go in half-committed, your progress will show as much and it will be demotivating. Much of your success will hinge on your mental and emotional toughness to push through the hard work of delaying pleasure and paying off these balances. That is just my personal experience, so you can take it or leave it. :) The credit score will take care of itself if you follow this method, so don't worry about it. Good Luck! |
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