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Tax Form 1099 and hourly worker do i file a W-2 if my employer filed the 1099 for me? | Forms 1099 and W2 are mutually exclusive. Employers file both, not the employees. 1099 is filed for contractors, W2 is filed for employees. These terms are defined in the tax code, and you may very well be employee, even though your employer pays you as a contractor and issues 1099. You may complain to the IRS if this is the case, and have them explain the difference to the employer (at the employer's expense, through fines and penalties). Employers usually do this to avoid providing benefits (and by the way also avoid paying payroll taxes). If you're working as a contractor, lets check your follow-up questions: where do i pay my taxes on my hourly that means does the IRS have a payment center for the tax i pay. If you're an independent contractor (1099), you're supposed to pay your own taxes on a quarterly basis using the form 1040-ES. Check this page for more information on your quarterly payments and follow the links. If you're a salaried employee elsewhere (i.e.: receive W2, from a different employer), then instead of doing the quarterly estimates you can adjust your salary withholding at that other place of work to cover for your additional income. To do that you submit an updated form W4 there, check with the payroll department on details. Is this a hobby tax No such thing, hobby income is taxed as ordinary income. The difference is that hobby cannot be at loss, while regular business activity can. If you're a contractor, it is likely that you're not working at loss, so it is irrelevant. what tax do i pay the city? does this require a sole proprietor license? This really depends on your local laws and the type of work you're doing and where you're doing it. Most likely, if you're working from your employer's office, you don't need any business license from the city (unless you have to be licensed to do the job). If you're working from home, you might need a license, check with the local government. These are very general answers to very general questions. You should seek a proper advice from a licensed tax adviser (EA/CPA licensed in your state) for your specific case. |
Why is stock dilution legal? | Stock dilution is legal because, in theory, the issuance of new shares shouldn't affect actual shareholder value. The other answers have explained fairly well why this is so. In practice, however, the issuance of new shares can destroy shareholder value. This normally happens when the issuing company: In these cases, the issuance of more shares merely reduces each shareholder's stake in the company without building proportional shareholder value. |
Is U.S estate tax applicable to joint brokerage account of non-US citizens if one party dies? | If the brokerage account holds US assets, such as the stock of US companies, then it may be taxable under some conditions. The rules are complex and depend on the nationality of the individuals, because the results may be affected by tax treaties between the United States and whatever country the person is from. |
Can paying down a mortgage be considered an “investment”? | From what I've read, paying down your mortgage -- above and beyond what you'd normally pay -- is indeed an investment but a very poor form of investment. In other words, you could take that extra money you'd apply towards your mortgage and put it in something that has a much higher rate of return than a house. As an extreme example, consider: if I took $6k extra I would have paid toward my mortgage in a single year, and bought a nice performing stock, I could see returns of 2x or 3x. Now, that implies I know which stock to pick, etcetera.. I found a "mortgage or investment" calculator which could be of use as well: http://www.planningtips.com/cgi-bin/prepay_v_invest.pl (scroll to bottom to see the summary and whether or not prepay or invest wins for the numbers you plugged in) |
Lowest Interest Options for Short-Term Loan | Also talk to your bank(s) or credit union(s); first one of mine I looked at offers an unsecured loan at 7% variable, and a signature loan at 7.5% fixed, no hidden costs on either. You might do better. Also check store credit. Sears used to offer 1-year-0% financing on appliances if you signed up for the store's card at the time of purchase, and if you have the discipline to reliably pay it off before interest hits that's a hard deal to best. Other stores have offered something similar for major purchases of this sort; do some homework to find out who. (I bought my fridge that way, paying it in month 10.) The "catch" is that many people get distracted and do wind up paying interest, and the store hopes that having an account with them will encourage you to shop there more often.) |
P/E (or similar) for index funds? | The S&P 500 is a market index. The P/E data you're finding for the S&P 500 is data based on the constituent list of that market index and isn't necessarily the P/E ratio of a given fund, even one that aims to track the performance of the S&P 500. I'm sure similar metrics exist for other market indexes, but unless Vanguard is publishing it's specific holdings in it's target date funds there's no market index to look at. |
Does Technical Analysis work or is it just a pointless attempt to “time the market”? | The study of technical analysis is generally used (sometimes successfully) to time the markets. There are many aspects to technical analysis, but the simplest form is to look for uptrends and downtrends in the charts. Generally higher highs and higher lows is considered an uptrend. And lower lows and lower highs is considered a downtrend. A trend follower would go with the trend, for example see a dip to the trend-line and buy on the rebound. A simple strategy for this is shown in the chart below: I would be buying this stock when the price hits or gets very close to the trendline and then it bounces back above it. I would then have sold this stock once it has broken through below the trendline. This may also be an appropriate time if you were looking to short this stock. Other indicators could also be used in combination for additional confirmation of what is happening to the price. Another type of trader is called a bottom fisher. A bottom fisher would wait until a break above the downtrend line (second chart) and buy after confirmation of a higher high and possibly a higher low (as this could be the start of a new uptrend). There are many more strategies dealing with the study of technical analysis, and if you are interested you would need to find and learn about ones that suit your investment styles, whether you prefer short term trading or longer term investing, and your appetite for risk. You can develop strategies using various indicators and then paper trade or backtest these strategies. You can also manually backtest a strategy in most charting packages. You can go back in time on the chart so that the right side of the chart shows a date in the past (say one year ago or 10 years ago), then you can click forward one day at a time (or one week at a time if using weekly charts). With your indicators on the chart you can do virtual trades to buy or sell whenever a signal is given as you move forward in time. This way you may be able to check years of data in a day to see if your strategy works. Whatever you do, you need to document your strategies in writing in a written trading or investment plan together with a risk management strategy. You should always follow the rules in your written plan to avoid you making decisions based on emotions. By backtesting or paper trading your strategies it will give you confidence that they will work over the long term. There is a lot of work involved at the start, but once you have developed a documented strategy that has been thoroughly backtested, it will take you minimal time to successfully manage your investments. In my shorter term trading (positions held from a couple of days to a few weeks) I spend about half an hour per night to manage my trades and am up about 50% over the last 7 months. For my longer term investing (positions held from months to years) I spend about an hour per week and have been averaging over 25% over the last 4 years. Technical Analysis does work for those who have a documented plan, have approached it in a systematic way and use risk management to protect their existing and future capital. Most people who say that is doesn't work either have not used it themselves or have used it ad-hock without putting in the initial time and work to develop a documented and systematic approach to their trading or investing. |
How to save money for future expenses | You can't force a horse to eat carrots. You have to make him hungry... It's good that you're ready to start saving. The hardest part about building wealth is that most people live in denial. They think a bigger hat is wealth. That said, you need to get your husband excited about the idea of saving. If you're capable of sparking a little passion in him for saving then you'll see your wealth grow almost over night. So, how do you make someone excited about something as boring as saving? Great question. If you find a way, write a book. Honestly, I think it's different for everyone. For me it was like someone turned on a light. I was blind but then I saw. If he is a reader then I would suggest the following books in this order. If he makes it through those and has any argument at all against saving then write a book about him haha. Now I want to be clear, the other two answers above mine were also spot on. If you can't get him passionate about it then you need to take the initiative and start doing it yourself. I can't stress enough though that you both need to be engaged in order to do it quickly and efficiently. Good luck! |
Covered Call Writing - What affects the price of the options? | There are some excellent responses to this question at the time of this post. I have had the greatest success writing 1-month options. The 2 main reasons are as follows: With little time to expiration as stated in the question the implied volatility of the option is dictating the premium. Looking for the highest premiums is a mistake because you are taking a conservative strategy and re-creating it into a high-risk strategy. My sweet spot is a 2-4% monthly return for my initial profit and then mastering management techniques to protect that return and even enhancing it. |
What is this type of risk-free investment called? | The name of this type of investment is Capital Guaranteed Investment, and yes they do exist, some financial institutions do offer them from time to time and they can be better than putting money in the bank. Unlike what someone else said, your money is not is not locked for the five years. You can take out your investment at any time, but if you do take your money out before the term (5 years in your mother's case) the capital gurantee is void. So you would only withdrawal your money if the investment is currently in proffit, because if it is at a loss when you go to withdrawal, you get hit with the loss. In many cases you will get a third party, usually a large bank, being guarantor for the capital guarantee, and they in turn get paid for this obligation. |
What headaches will I have switching from Quicken to GnuCash? | It's been a long time since I've used MS Money and/or Quickbooks (never Quicken), but I've used GnuCash over the past year or so. It works, but it does suffer from some usability problems. Some of the UI is clunky. Data entry sequences are a little harder than they should be. Reports could be a little prettier. But overall it does work, and it's the best I've found on linux. (I would definitely appreciate pointers to something better.) |
Moving a personal business to a LLC accounting in California | You can move money in and out of the business at will, just keep track of every transaction. Ideally you'd use an accounting software like QuickBooks or similar. Create a Capital Contributions account and every time you put money into the business checking account record it as a Capital Contribution. Likewise, if you take money out of the business, it comes from your capital accounts. (You can create a separate Capital Distributions account in your accounting software, or just use a single account for contributions and distributions). Money coming in and out of those capital accounts is not taxable because you will pay taxes based on net earnings regardless of whether or not you have distributed any profits. So there's no need to make a loan to the company, which would have tax consequences. To reimburse yourself for purchases already made, submit an expense report to the company. If the company is unfunded right now, you can make a capital contribution to cover current expenses, submit the expense report, and wait until you have some profits before paying out the expense report or making any distributions. Welcome to entrepreneurship. |
What is the equation for an inflation adjusted annuity held in perpetuity? | The question lacks specificity, i.e. when does the initial investment occur, now or one period from now? If now then it is a perpetuity due. I will consider under 2 scenarios, A and B, relating to the size of the initial investment. A. Assuming that the initial investment (C_0) occurs now and each payment thereafter has the relationship (1+g) with this investment then the relevant base equation is that for the present value of a growing perpetuity due, expressed in terms of C_0, i.e. PVGPD= [C_0*(1+g)*(1+i)]/(i-g). Now, to suit the question asked, we can see that i=fixed rate of return (f) and g = expected inflation rate (e) such that we can rewrite the equation as PVGPD = [C_0*(1+e)*(1+i)]/(i-e]. We know that f = is a fixed nominal rate and must be adjusted for e to calculate the real rate (r) according to the equation f=(1+r)*(1+e)-1. Therefore PVGPD = [C_0*(1+e)(1+(1+r)(1+e)-1)]/((1+r)*(1+e)-1-e] Tidying up PVGPD = {C_0*(1+r)(1+e)^2}/[r(1+e)] PVGPD = [C_0*(1+r)*(1+e)]/r B. Assuming that the initial investment (X) is not equal to each subsequent perpetual payment (C_1) then the relevant base equation is that for the the initial investment plus the present value of a growing perpetuity, i.e. PVGP= X + [C_1/(i-g)] Rewriting PVGP = X + [C_1/(f-e)] Substituting PVGPD = X + {C_1/[(1+r)*(1+e)-1-e]} Tidying up PVGPD = X + C_1/[r*(1+e)] |
Are parking spaces and garage boxes a good investment? | In Italy (even with taxes that are more than 50% on income) owning garages is generally a good business, as you said: "making money while you sleep", because of no maintainance. Moreover garages made by real concrete (and not wood like in US) are still new after 50 years, you just repaint them once every 20 years and you change the metal door gate once every 30 years. After 20 years you can be sure the price of the garage will be higher than what you paied it (at least for the effect of the inflation, after 20 years concrete and labour work will cost more than today). The only important thing before buying it is to make sure it is in an area where people are eager to rent it. This is very common in Italian cities' downtown because they were built in dark ages when cars did not exists, hence there are really few available parkings. |
What does it mean for a company to have its market cap larger than the market size? | You are comparing two things that are not comparable. The "market size" would be the total annual revenue in one market, in this year. The "market caps" of a company is the number of shares multiplied by the share price. This should be equal to the total profit that the company is going to make through its life time, taking into account that you would get interest on an investment, so future profits have to be counted less accordingly. So if the "market size" is ten million dollars, and a company has four million revenue in that market with one million profit, and everyone thinks that company will continue making that profit for the next fifty years, then surely one million a year for the next 50 years is worth more than ten million. That's if the market stands still. If the "market size" is ten million, and we expect that market size to double for the next three years, then the market size is still ten million, but a company having a 40% share of a market growing at that speed is going to be worth a lot more! |
How to transfer money to yourself internationally? | It really depends on the amount of money - I currently have to pay my mortgage in the UK from the US until my house there is sold and my wife sends money from her (US) Paypal account to my UK Paypal account. As personal payments these don't attract the sort of fees you see for ebay payments et al. Compared to the fee-o-rama that a wire transfer turns into (I tried once from BofA to HSBC UK), it is noticeably cheaper for the amount of money we're sending. That said, a lot of the currency transfer services have support for monthly payments and you might get a decent exchange rate and fewer (or no) fees that way. |
Income tax exemptions for small business? | Yes, you should be able to deduct at least some of these expenses. For expense incurred before you started the business: What Are Deductible Startup Costs? The IRS defines “startup costs” as deductible capital expenses that are used to pay for: 1) The cost of “investigating the creation or acquisition of an active trade or business.” This includes costs incurred for surveying markets, product analysis, labor supply, visiting potential business locations and similar expenditures. 2) The cost of getting a business ready to operate (before you open your doors or start generating income). These include employee training and wages, consultant fees, advertising, and travel costs associated with finding suppliers, distributors, and customers. These expenses can only be claimed if your research and preparation ends with the formation of a successful business. The IRS has more information on how to claim the expenses if you don’t go into business. https://www.sba.gov/blogs/startup-cost-tax-deductions-how-write-expense-starting-your-business Once your business is underway, you can deduct expenses, but the exact details depend on how you organized. If you're a sole proprietor for tax purposes, then you'll deduct them on Schedule C of your Form 1040 on your personal tax. If you are a partnership, C-Corp, or S-Corp, they will be accounted at the business level and either passed on to you on a Schedule K (partnership and S-Corp) or deducted directly by the company (C-Corp). In any case, you will need good records that justify your expenses as business related. It might be well worth at least an initial meeting with a CPA to make sure that you get started on the right foot. |
If throwing good money after bad is generally a bad idea, is throwing more money after good Ok? | The principle behind the advice to not throw good money after bad is better restated in economics terms: sunk costs are sunk and irrelevant to today's decisions. Money lost on a stock is sunk and should not affect our decisions today, one way or the other. Similarly, the stock going up should not affect our decisions today, one way or the other. Any advice other than this is assuming some kind of mispricing or predictability in the market. Mispricings in general cannot be reliably identified and stock returns are not normally predictable. The only valid (efficient markets) reason I know of to allow money you have lost or made on a stock to affect your decision today is the tax implications (you may want to lock in gains if your tax rate is temporarily low or vice versa). |
The best credit card for people who pay their balance off every month | BillShrink.com lets you compare credit cards based on all your specifics (miles vs. cash, where you shop the most, etc) and tells you what the best card is for your specific habits. MOD EDIT Looks like billshrink.com is shut down. From their site: Dear BillShrink customer, As you may have heard, BillShrink.com was shut down on July 31, 2013. While we’re sad to say goodbye, we hope we’ve been able to help you be better informed and save some money along the way! The good news is that much of the innovative award-winning BillShrink technology will still be available via our StatementRewards platform (made available to customers by our partnering financial institutions). Moreover, we expect to re-launch a new money-saving service in the future. To see more of what we’re up to, visit Truaxis.com. We have deleted your personal information as of July 31. We will retain your email address only to announce a preview of the new tool. If you do not want us to retain your email address, you can opt out in the form below. This opt out feature will be available until September 31, 2013. If you have already opted out previously, you do not need to opt out again. If you have any further questions, contact us at info@billshrink.com. Thanks, The BillShrink/Truaxis Team |
Assessed value of my house | You said the tax assessor gave you an appraised value, but I think you mean assessed value. This article YOUR HOME; Market vs. Appraisal: What's the Real Value? explains the differences pretty well. |
Please explain: What exactly is a CDS or “Credit Default Swap”? | A Credit Default Swap is a derivative, a financial contract with a value dependent upon another asset. A CDS, in essence, is exactly what it sounds like a swap upon default. The typical arrangement is that a holder of non-risk free credit enters into an arrangement with a counterparty to pay the counterparty a portion of the income received from the non-risk free credit in exchange for being able to force the counterparty to deliver risk free credit if the non-risk free credit defaults. Banks use this mechanism to reduce the risk of the loans they produce while packaging them to be resold to investors. Banks will typically buy CDSes on mortgages and corporate bonds, paying part of the income from interest payments received, to have the right to force counterparties, typically hedge funds and insurance companies, to swap national Treasuries upon the event that the mortgages or corporates default. The banks receive less income yet are able to take on more inventory to sell to investors so that more loans can be made to borrowers, households and corporations. Hedge funds typically take on more complex arrangements while insurance companies sell CDSes because they are usually overflowing with risk-free assets yet are starved for income. |
Buying from an aggressive salesperson | He sounds like a very bad salesman and I should know, because I was a sales manager at a bike shop which sold bikes from $200 to $10k. Now I had a clear goal, which is to sell as many bikes at the highest price possible, but I didn't do that by making customers uncomfortable. Each customer received different treatment depending on what they were looking for. For example, the $200 beach cruiser buyer was going to be told "You look great on that bike... can I ring you up?", whereas the racer interested in saving grams will receive a detailed discussion about his bike options. The $200 bike customer won't have very sophisticated questions (although I could give a lecture on cruisers), so giving out too much info complicates a likely quick impulse buy. On the other hand, we are building a relationship with the racer which will include detailed fitting sessions and time-consuming mechanical service. While I also want to close a high priced sale, it will take several visits to prove both I have the right bike and this is the best shop. But no matter what you were buying, I was always pleasant and unhurried, and my customers left happy. Specifically with this situation of high pressure tactics, the problem is the competition with internet sales. Often customers will have only 2 criteria, the model and the price, and if a shop does not meet both, the customer walks right out. Possibly this sales guy is a bit cynical with his tactics, but the reality is that if you have no relationship with that shop, you fall into the category of internet buyer. One thing the sales guy could have done was not tell you we wasn't going to honor this price if you came back. Occasionally there would be an internet buyer, and I showed no unpleasantness even though internet sellers could crush our brick and mortar shop. I would mention a competitive price and if he bought it, great, and if not, that's just business. As for the buyer, I would treat these tactics with a certain detachment. I would personally chuckle at his treatment and ask if I could kick the tires, an user car saying. I suppose the bottom line is if you are ready to buy this specific model, and if the price is right (and the shop is ethical so you won't get ripped off with garbage), then you have to be ready to buy on the spot. I will point out one horrible experience I had at a car dealership. I came in 15 minutes before closing and a sales person gave me a price almost a third cheaper than list. I wasn't ready to buy on my first visit ever to a dealership and of course, buying a car has all kinds of hidden fees. I asked will this be the price tomorrow, and he said absolutely not. I told him, "so if I come in tomorrow morning, your dealer clock has only gone 15 minutes" but that logic did not register with him. Maybe he thought I was going to spend 15k on the spot and pressure tactics would work on me. I never came back, but I did go another dealership and bought a car after a reasonable negotiation. |
When a stock price goes down, does the money just disappears into thin air? | Cash changes hands when you buy or sell the stock. While you own the stock, you own it, not cash, so there is no cash to go anywhere. You spent your money when you bought. The seller got that money. It's gone. You hope that when you sell the stock, someone will give you more money for it than you spent. But they may give you less. Money doesn't magically appear either way, it comes from the buyer. After selling, you have the money -- however much you sold for -- and no longer have the stock. NOTE that this means the current value of a share of stock is interesting, but not really very relevant, unless you are actively buying or selling. What your portfolio is worth on paper is nothing more than an approximate snapshot at the moment you retrieve the data. It is not a promise of what will actually happen when you do sell. |
Multi-user, non-US personal finance and budget software | I know exactly what you are talking about. You may like |
Foreign currency conversion for international visitors to ecommerce web site? | You probably can get away with only updating the exchange rates once a day and specify that any prices quoted in units other than your home currency are estimates only. If you're planning to accept more than one currency as payment, I'd (a) see about whatever regulations there are for doing so, and (b) build in a nice spread for yourself if you're allowed to, since it is a service you're providing to your customers. If you Google currency converter the first result is just that: a currency converter. |
Is it better to buy US stocks on US stock exchanges as a European? | No, there are neither advantages nor disadvantages. I'll take on this question from an accounting standpoint. Financial statements, the tools at which the market determines (amongst other things) the value of a stock, are converted at year end to the home currency (see 1.1.3).If Company A has revenue of 100,000 USD and the conversion to EUR is .89, revenue in the European market will be reported as 89,000 EUR. These valuations, along with ratios, analysis, and "expert" opinions determine if a person should own shares in Company A. Now, if we're talking about comparing markets this is a entirely different question. Example: Should I buy stock of Company A, who is in the American market (as an European)? Should I buy stock of Company B, who is in the European market (as an American)? I would recommend this as additional level of diversification of your portfolio to inlcude possible large inflation of either the currency. The possible gains of this foreign exchange may be greater if one or the other currency becomes weak. |
Does a market maker sell (buy) at a bid or ask price? | Market Makers are essentially just there to process the buys and sells of traders, so just like you and I buy and sell at the ask and bid prices they do to. They are just completing the process of making our orders a reality. Market makers are just representative of brokers, meaning that when you place your order at ask or bid, you are placing that particular brokers order at ask or bid. People often say that certain brokers have too many shares and claim that they are games when really that just means that there happen to be a lot of people using a particular broker all at once, or more troubling, perhaps even company execs using a broker, to sell a large amount of shares. |
Making an offer on a property - go in at market price? | First piece of advice: fire your agent. A pushy agent is a bad agent. From what you've told us, he's actually given you poor advice regarding mortgage interest rates. Rates are already at historic lows. That and the precarious state of the world economy mean that further rate cuts are more likely in the near term. Second piece of advice: While more information on the real estate market you're in would help, going in at asking price is rarely a good idea. Sale prices from "the last few years" are not relevant to what you should pay, because the last few years include a financial crisis caused in large part by the bursting of a housing bubble. They could be even less relevant depending on your location because of a spike in foreclosures in certain areas of the U.S. There was already a ton of housing inventory before, so an increase due to foreclosures is going to depress prices further. Now that banks are finally practicing the due diligence they should have been all along, your ability to be pre-approved for large mortgage amount puts you in a strong position. Use a tool like Zillow or Redfin to see what properties in that area have sold for over the past six months. You should also be able to see a history of what prices the particular property you're interested in has been offered and/or sold at in the past. Also check and see how long the particular property you're interested in has been on the market. If it's been on the market more than 60-90 days, it's priced too high. |
Selling on eBay without PayPal? | I've definitely seen a similar conversation about this, I personally don't buy from eBay (Amazon for me). So I turned to the internet to see what I could find to offer you any additional information (albeit not my personal experience). I first read this article: CodeNerdz Article and was pretty horrified by the scamming that can happen by buyers. Then, this article by another regular user of eBay, Selling on eBay without PayPal : eBay Guides confirmed the trouble people have with PayPal & eBay. Payment Services permitted on eBay: Allpay.net, Canadian Tire Money, cash2india, CertaPay, Checkfree.com, hyperwallet.com, Moneybookers.com, Nochex.com, Ozpay.biz, Paymate.com.au, Propay.com, XOOM Have you looked into any or all of these? |
Is housing provided by a university as employer reported on 1040? | Since you worked as an RA, the university should send you a W2 form. The taxable wages line in that form would be the sum of both the direct salary and employer paid benefits that are taxable. As such you should not need to do anything than enter the numbers that they provide you. |
Where should I park my rainy-day / emergency fund? | This is probably a good time to note that credit is not a liquid asset, and not an emergency fund. Credit can be revoked or denied at any time, and Murphy's law states that you may have issues with credit when everything else goes wrong too. |
Is it sensible to keep savings in a foreign currency? | I don't think that it's a good idea to have cash savings in different currencies, unless you know which will be the direction of the wind for that currency. You can suffer a lot of volatility and losses if you just convert your savings to another currency without knowing anything about which direction that pair will take. Today we can see Brexit, but this is a fact that has been discounted by the market, so the currencies are already adjusted to that fact, but we don't know what will happen in the future, maybe Trump will collapse the US economy, or some other economies in Asia will raise to gain more leadership. If you want to invest in an economy, I think that it's a best idea to invest on companies that are working in that country. This is a way of moving your money to other currencies, and at least you can see how is the company performing. |
How to calculate P/E ratio for S&P500 sectors | To calculate a sector (or index) P/E ratio you need to sum the market caps of the constituent stocks and divide it by the sum of the total earnings of the constituent stocks (including stocks that have negative earnings). There are no "per share" figures used in the calculation. Beware when you include an individual stock that there may be multiple issues associated with the company that are not in the index.... eg. Berkshire Hathaway BRK.B is in the S&P 500 but BRK.A is not. In contrast, Google has both GOOGL and GOOG included in the S&P 500 index but not its unlisted Class B shares. All such shares need to be included in the market cap and figuring out the different share class ratios can be tricky. |
Why are earning credit card rewards often tied to groceries and gas? | There absolutely is a specific model that makes this so popular with so many credit card companies, and that model is "per transaction fees". Card companies also receive cost-sharing incentives from certain merchants. There is also a psychological reasoning as an additional incentive. When you want to accept credit cards as a source of payment as a business, you generally have three kinds of fees to pay: monthly/yearly subscription fees, percentage of transaction fee, and per transaction fee. The subscription fees can be waived and sometimes are expressed as a "minimum cost", so the business pays a certain amount whether you actually have people use credit cards or not. Many of these fees don't actually make it to the credit card companies, as they just pay the service providers and middle-men processing companies. The percentage of transaction fee means that the business accepting payment via credit card must pay a percentage usually ranging from 1-3% of the total transactions they accept. So if they get paid $10,000 a month by customers in the form of credit cards, the business pays out $100-300 a month to the credit card processor - a good portion of which will make it back to the credit card issuing company, and is a major source of income for them. The per transaction fee means that every time a transaction is run involving a card, a set fee is incurred by the business (which is commonly anywhere from $0.05 to $0.30 per transaction). If that $10,000 a month business mentioned previously had 10 customers paying $1,000 each at $0.10 a transaction, that's only $1 in fees to the credit card processors/companies. But if instead that business was a grocery store with an average transaction of $40, that's $25 in fees. This system means that if you are a credit card company and want to encourage people to make a specific kind of purchase, you should encourage purchases that people make many times for relatively small amounts of money. In a perfect world you'd want them to buy $1 bottles of water 5 times a day with their credit card. If the card company had 50,000 card holders doing this, at the end of 1 year the company would have $91,250,000 spread across 91,250,000 transactions. The card company might reasonably make $0.05 per transaction and %1 of the purchase total. The Get Rewarded For Drinking More campaign might earn the card company $912,500 in percentage fees and over $4.5 million in transaction fees. Yet the company would only have to pay 3% in rewards from the percentage fees, or $2.7 million, back to customers. If the card company had encouraged using your credit card for large once-yearly purchases, they would actually pay out more money in rewards than they collect in card-use fees. Yet by encouraging people to make small transactions very often the card company earns a nice net-income even if absolutely every customer pays their balance in full, on time, and pays no annual/monthly fees for their card - which obviously does not happen in the real world. No wonder companies try so hard to encourage you to use your card all the time! For card companies to make real money they need you to use your credit card. As discussed above, the more often you use the card the better (for them), and there can be a built-in preference for small repeated transactions. But no matter what the size of transaction, they can't make the big bucks if you don't use the card at all! Selling your personal information isn't as profitable if they don't have in-depth info on you to sell, either. So how do they get you to make that plastic sing? Gas and groceries are a habit. Most people buy one or the other at least once a weak, and a very large number of us make such purchases multiple times a week. Some people even make such purchases multiple times a day! So how do people pay for such transactions? The goal of the card companies is to have you use their product to pay as much as possible. If you pay for something regularly you'll keep that card in your wallet with you, rather than it getting lost in a drawer at home. So the card companies want you to use your card as a matter of habit, too. If you use a card to buy for gas and groceries, why wouldn't you use it for other things too? Lunch, dinner, buying online? If the card company pays out more and makes less for large, less-regular purchases, then the ideal for them is to have you use the card for small regular purchase and yet still have you use the card for larger infrequent purchases even if you get reduced/no rewards. What better way to achieve all these goals than to offer special rewards on gas and groceries? And because it's not a one-time purchase, you aren't so likely to game the system; no getting that special 5% cash-back card, booking your once-per-decade dream vacation, then paying it off and cancelling it soon after - which would actually make the card company lose money on the deal. In the end, credit card companies as a whole have a business model that almost universally prefers customers who use their products regularly and preferably for small amounts a maximum number of times. They want to reduce their expenses (like rewards paid out) while maximizing their revenue. They haven't figured out a better way to do all of this so well as to encourage people to use their cards for gas and groceries - everything else seems like a losing proposition in comparison. The only time this preference differs is when they can avoid paying some or all of the cost of rewards, such as when the merchants themselves honor the rewards in exchange for reduced or zero payment from the card companies. So if you use an airline card that seems to give you 10% back in airline rewards? Well, that's probably a great deal for the card company if the airline provides that reward at their own expense to try to boost business. The card company keeps the transaction-related fees and pays out almost nothing in rewards - the perfect offer (for them)! And this assumes no shenanigans like black-out periods, "not valid with any other offers" rewards like on cars where only a fool pays full MSRP (and sometimes the rewards are tagged in this sort of way, like not valid on sale/clearance items, etc), expiring rewards, the fact that they know not everyone uses their rewards, annual fees that are greater than the rewards you'll actually be obtaining after accounting for all the other issues, etc. And credit card industries are known for their shenanigans! |
What is the meaning of “writing put options”? | Writing a put for a stock means you are selling the right to sell you stock. Simply put (er no pun intended), "writing put options" means you are selling somebody else the right (a contract) to sell YOU a specific stock at a specific price before a specific date. I imagine the word "write" to refer to the physical act of creating a contract. The specific price is called the STRIKE and the specific date is the EXPIRATION. By "writing a put", you are agreeing to purchase the stock at a particular price (the STRIKE price) before the expiration. You get paid a fee, the "premium", for agreeing to purchase the stock at the strike price if asked to. If the holder of the contract decides to make you buy the stock at the strike price, you have to do it. If the stock never dips below the strike price, then the holder of the put contract (a contract you wrote), will never exercise their right because they'd lose money. But if the stock drops to zero, you could potentially lose up to your strike price (times the number of shares at stake), if the holder of the contract decides to exercise. Therefore, "writing puts" is a LONG position, meaning you stand to gain if the stock goes up. FYI - "LONG" refers direction (UP!), not duration. |
Does a 1045 exchange require any filing prior to that years tax return? | When you get into reading Revenue Rulings and Treasury Regulations - I'd suggest hiring a professional to do that for you. Especially since you also need to assure that the new stock does indeed qualify as QSBS. However, from the revenue ruling you quoted it doesn't sound like there's any other requirement other than reporting the subsequent purchase as a loss on your schedule D. I wouldn't know, however, if there are subsequent/superseding revenue rulings on the matter since 1998. Professional tax adviser (EA/CPA licensed in your State) would have the means and the ability to research this and give you a proper advice. |
How can I stop wasting food? | Most basic tip: Don't go to the grocery store hungry. What we do to minimize food waste: On Sunday when my wife and I go grocery shopping, we figure out what meals we are going to have for dinner that week, and we only buy what we need for those meals. We also try to decide in advance what night(s) we are going out for dinner. For example, we know we have to take the in-laws out for dinner on Wednesday, so we don't buy a dinner for that night. As part of our weekly planning, we figure out the lunches we will take to work based on our dinners. For example, if we plan to make a big pot of pasta for dinner one night, we know we'll have leftovers for lunch, so we won't buy a lunch for the following day. Basically, we try to match our food purchasing to our food consumption. During the week, we generally try to cook the dinner that uses the most perishable items first. If we buy seafood, that will be Monday night's dinner. The frozen pizza can wait until the end of the week. My wife an I both have to deal with the occasional unexpected late night at work, which can mess up our cooking plans. As a result, it is not uncommon for us to be too tired to cook, so we skip a dinner. It is less wasteful to do that with something frozen/preserved. Also, we try to consider cooking time vs our work schedule. We don't pick a complex dinner for a night that we know in advance will be a long work day. |
Is there any truth to the saying '99% of the world's millionaires have become rich by doing real estate'? | This quote has it almost backwards. Thomas J. Stanley's recent book (he's one of the duo who researched and wrote about The Millionaire Next Door) claims that the top occupation of millionaires is "business owner / self-employed" (28%). "Real estate investor" is lumped in with "other" (9%), and if the ordering is correct in the list, it's no more than 2% of the total. (source) |
Where I can find S&P 500 stock data history? | I assume you're after a price time series and not a list of S&P 500 constituents? Yahoo Finance is always a reasonable starting point. Code you're after is ^GSPC: https://finance.yahoo.com/quote/%5EGSPC/history?p=^GSPC There's a download data button on the right side. |
How can I improve my credit score if I am not paying bills or rent? | So you work, and give a small irregular amount to you parents. You live with very low expenses. Assuming you make a bit below the average salary in the UK, you should be able to save around £1000. If you found a part time job could you save double? I bet you could. So why do you need credit? Why do you need a credit score? Having poor or no credit can be remedied by having a large down payment. Essentially the bank asks, if this person could afford the payment of this loan why have they not been saving the money? You could save the money and either buy the thing(s) you desire with cash (the smartest), or put 50% down. Putting 50% or more down turns you into a good credit risk despite having no credit history. In case you missed it: why not just save the money and buy it for cash? Why have compounding interest working against you? Why do you want to work for the bank? Making the interest payments on loans in order to build a credit score is just silly. It is an instance of a "tail wagging the dog". |
What is an effective way to invest in electric car industry? | You could have googled this question. I did so and found a link to this article. YMMV taking investment advice from thestreet.com is very likely to lose you money. However, there do not seem to be any sector funds that specifically focus on the electric vehicle market. Along similar, but not exactly the same lines, there are sector funds that focus on renewable energy. This article reviews some of them. |
Working out if I should be registered as self-employed in the UK | As 'anonymous' already mentioned, I think the correct answer is to go see an accountant. That said, if you are already have to fill in a tax return anyway (ie, you're already a high rate taxpayer) then I don't see why it should be an issue if you just told HMRC of your additional profit via your tax return. I never was in the situation of being employed with a side business in the UK, only either/or, but my understanding is that registering as self employed is probably more suitable for someone who doesn't PAYE already. I might be wrong on this as I haven't lived in the UK for a couple of years but an accountant would know the answer. Of course in either case, make sure that you keep each an every scrap of paper to do with your side business. |
what is the best way of investment which gives returns forever? | What is the best way that I can invest money so that I can always get returns? If you want something that doesn't require any work on your end, consider having a fee-only financial planner make a plan so that your investments can be automated to generate a cash flow for you or get an annuity as the other classic choices here as most other choices will require some time commitment in one form or other. Note that for stock investments there could be rare instances like what happened for a week in September in 2001 where the markets were closed for 5 days straight that can be the hiccup in having stocks. Bonds can carry a risk of default where there have been municipalities that defaulted on debt as well as federal governments like Russia in the 1990s. Real estate may be subject to natural disasters or other market forces that may prevent there always being a monthly payment coming as if you own a rental property then what happens if there aren't tenants because there was an evacuation of the area? There may be some insurance products to cover some of these cases though what if there are exceptionally high claims all at once that may have an insurance company go under? Would it be to set up an FD in a bank, to buy land, to buy a rental house, to buy a field, or maybe to purchase gold? What investment of your own time do you plan on making here? Both in terms of understanding what your long-term strategy is and then the maintenance of the plan. If you put the money in the bank, are you expecting that the interest rate will always be high enough to give you sufficient cash to live as well as having no financial crisis with the bank or currency you are using? Are there any better investments? You may want to reconsider what assumptions you want to make and what risks you want to accept as there isn't likely to be a single solution here that would be perfect. |
Intrinsic value of non-voting shares which don't pay dividends | Even with non-voting shares, you own a portion of the company including all of its assets and its future profits. If the company is sold, goes out of business and liquidates, etc., those with non-voting shares still stand collect their share of the funds generated. There's also the possibility, as one of the comments notes, that a company will pay dividends in the future and distribute its assets to shareholders that way. The example of Google (also mentioned in the comments) is interesting because when they went to voting and non-voting stock, there was some theoretical debate about whether the two types of shares (GOOG and GOOGL) would track each other in value. It turned out that they did not - People did put a premium on voting, so that is worth something. Even without the voting rights, however, Google has massive assets and each share (GOOG and GOOGL) represented ownership of a fraction of those assets and that kept them highly correlated in value. (Google had to pay restitution to some shareholders of the non-voting stock as a result of the deviation in value. I won't get into the details here since it's a bit of tangent, but you could easily find details on the web.) |
As director, can I invoice my self-owned company? | No, as a director normally you can't. As a director of a Limited company, all those payments should be accounted for as directors' remuneration and have been subject to PAYE and NIC, even if you are self-employed. Currently there is no legislation which prevents a director from receiving self-employment income from a company in which he is a director, however the default position of HMRC's is that all the payments derived from the directorship are subject to PAYE. In other words, it's possible only invoice from an unconnected business or in a consultancy role that's not directly related to the trade of business. But it really depends on the circumstances and the contracts in place. Sources: Monsoon at AAT forum, David Griffiths at UKBF, Paula Sparrow and Abutalib at AW More sources: If a person does other work that’s not related to being a director, they may have an employment contract and get employment rights. Source: Employment status as director at Gov.uk In principle, it is possible for an employee or office holder to tender for work with their employer outside their normal duties, in circumstances where that individual will not be providing service as an employee or office holder but as a self-employed contractor. Where there is any doubt about whether service is provided constitutes employment or self-employment, see the Employment Status Manual (ESM). Source: Section 62 ITEPA 2003 at HMRC |
Execute or trade an options contract? | Your math shows that you bought an 'at the money' option for .35 and when the stock is $1 above the strike, your $35 (options trade as a contract for 100 shares) is now worth $100. You knew this, just spelling it out for future readers. 1 - Yes 2 - An execute/sell may not be nesesary, the ooption will have time value right until expiration, and most ofter the bid/ask will favor selling the option. You should ask the broker what the margin requirement is for an execute/sell. Keep in mind this usually cannot be done on line, if I recall, when I wanted to execute, it was a (n expensive) manual order. 3 - I think I answered in (2), but in general they are not identical, the bid/ask on options can get crazy. Just look at some thinly traded strikes and you'll see what I mean. |
What is down -34% in stock terms? | The sentence is mathematically wrong and verbally unclear. Mathematically, you calculate the downwards percentage by So, it should be Verbally, the reporter should have written "The stock is down by 25%", not "down by -25%". |
Should I set a stop loss for long term investments? | This is the exactly wrong thing to do especially in the age of algorithmic trading. Consider this event from 2010: Chart Source Another similar event occurred in 2015 and there was also a currency flash crash in that year. As you can see the S&P 500 (and basically the entire market) dropped nearly 7% in a matter of minutes. It regained most of that value within 15 minutes. If you are tempted to think that 7% isn't that big of a deal, you need to understand that specific securities will have a much bigger drop during such events. For example the PowerShares S&P 500 Low Volatility ETF (SPLV) was down 45% at one point on Aug 24, 2015 but closed less than 6% down. Consider what effect a stop loss order would have on your portfolio in that circumstance. You would not be able to react fast enough to buy at the bottom. The advantage of long-term investing is that you are immune to such aberrations. Additionally, as asked by others, what do you do once you've pulled out your money. Do you wait for a big jump in the market and hop back in? The risk here is that you are on the sidelines for the gains. By missing out on just a small number of big days, you can really hurt your long-term returns. |
How can contractors recoup taxation-related expenses? | They are already indirectly paying these expenses. They should be built into your rates. The amount per job or per hour needs to cover what would have been your salary, plus the what would have been sick, vacation, holidays, health insurance, life insurance, disability, education, overhead for office expenses, cost of accountants...and all taxes. In many companies the general rule of thumb is that they need to charge a customer 2x the employees salary to cover all this plus make a profit. If this is a side job some of these benefits will come from your main job. Some self employed get some of these benefits from their spouse. The company has said we give you money for the work you perform, but you need to cover everything else including paying all taxes. Depending on where you live you might have to send money in more often then once a year. They are also telling you that they will be reporting the money they give you to the government so they can claim it as a business expense. So you better make sure you report it as income. |
Are credit cards not viewed as credit until you miss one payment? | First, a note of my personal experience: up until a year ago, my credit lines were composed exclusively of credit cards with perfect payment histories, and my credit score is fine. If you mean that credit cards have no impact on a person's credit score until they miss a payment, that is certainly not correct. FICO's website identifies "payment history" as 35% of your FICO score: The first thing any lender wants to know is whether you’ve paid past credit accounts on time. This is one of the most important factors in a FICO® Score. ... Credit payment history on many types of accounts Account types considered for payment history include: ... Details on late or missed payments ("delinquencies") and public record and collection items FICO® Scores consider: How many accounts show no late payment A good track record on most of your credit accounts will increase your FICO® Scores. Clearly, from the last item alone, we see that credit lines (a category which includes credit cards) with no late payments is a factor in computing your FICO score, and certainly other credit bureaus behave similarly. Possibly the banker was trying to explain some other point, like "If you're careful not to spend more on your card than you have in the bank, you can functionally treat your credit card as a debit line," but did so in a confusing way. |
Investing in stocks with gross income (not yet taxed) cash from contract work? | In most jurisdictions, you want to split the transactions. Why? Because you want to report capital gains on your investment income, and this will almost always be taxed at a lower rate than employment income. See Wikipedia's article for more information about capital gains. In Canada, you pay tax on 50% of your realized capital gains. There are also ways to shelter your gains from tax; in Canada, TFSA, in the US, I believe these are 'roth' accounts. I actually think you have to split the transactions, at least in Canada and the U.S., though I'm not absolutely sure. Regardless, you want to do so if you plan on making money with your investments. If you plan on making a loss, please contact me as I'm happy to accept the money you are planning on throwing away. |
What happens if I just don't pay my student loans? | Same thing as for any debt: bank sues you, you lose, you are in an even deeper hole because you now owe them for the cost of the court case, your credit rating goes into the toilet, you may even have trouble retaining/finding a job. Being stupid is always more expensive. |
Do options always expire on third Friday of every month | Traditionally options expired on the 3rd Wednesday of the months of Mar, Jun, Sep, Dec as this day was never a holiday. See IMM dates. However as option use exploded there were monthly and weekly options created on different schedules. The exchange will specify when its options expire in the contract. |
I spend too much money. How can I get on the path to a frugal lifestyle? | Lots of good answers here about budgeting and other ideas. Here's a couple more: Think about offense and defense. Offense is how much money you make. Are you making enough to survive on? Is there a way you could bring in more income? Defense is what you do with your money. Do you have expensive habits? Do you have problems with impulse spending? Do you live in an expensive area with a high cost-of-living? Think about some of these areas and pick one to attack first. If it is the defense side that is causing you problems (you did mention trying to live on less), consider reading Your Money or Your Life by Joe Dominguez and Vicki Robin. There's a really good summary of it on the authors' site. The basic idea of the mechanical part of the book is that you figure out how much you're truly making per hour, and then evaluate your expenses based on how many hours of your "life energy" you are using for that expense. Then you evaluate whether you think that's a fair trade or not. There's a lot more to it than that, but it's an interesting way to get a different perspective on your spending habits, and may be enough to entice you to change those habits. |
Debt collector has wrong person and is contacting my employer | Request verification in writing of the debt. They are required to provide this by law. Keep this for your records. Send them a notice by certified mail stating that this is not your debt and not to contact you again. Indicate that you will take legal action if they continue to try and collect. Keep a log of if/when they continue to call or harass you. Contact counsel about your rights under the fair debt collection laws, but if they keep harassing you after being provided proof of your identity, they are liable. You could win a judgement in court if you have proof of bad behavior. If your identity is stolen, you are not legally responsible for the charges. However it is a mess to clean up, so pull your credit reports and review your accounts to be sure. |
Oversimplify it for me: the correct order of investing | Money is a tool. Here is an "oversimplified" order of investments: |
How are exchange rates decided for each country? | Today the rates are arrived simply on the basis of demand and supply. Historically rates were pegged to Gold, when all currencies were printed depending on the Gold reserves. So if one country printed 100 units of currency of a 1gm of gold and other country 10 units of currency for 1 gm of gold, the rate would be 1:10. However In the seventies with shortages of Gold and other reasons, USD became the default standard, so the rate started being pegged to the USD reserves the countries started maintaining. However later in the early eighties, US backing out, the rate purely started getting pegged to market demand and supply. So for most currencies there was a default rate to begin with and today its changed ... Incase of USD/EUR, the initial rate was determined by the weighted average of the currencies that it sought to replace. After that its been market supply and demand. Since most of the trade in international market is US denominated, largest being Oil, each country has created a huge reserves of USD. So technically if China were to bank half its USD denominated treasury bills, the USD would come crashing down, but then China itself would be at disadvantage as its value of USD its holding would become less and it cannot buy the same items. Hence all countries keep hording USD and this means US if they print more money, the value will not come down, because it that happens, all countries holding USD would loose their value of reserve. In essence a country can print as much as currency it wants if all(majority) its debts and trades are denominated in local currencies. This is 100% true for US and hence it can get away by printing money. This is also true to a large extent for Japan as bulk of its Debts are denominated in JPY. |
OTC Stocks - HUGE gains? | Changing my answer based on clarification in comments. It appears that some of the securities you mentioned, including GEAPP, are traded on what is colloquially known as the Grey Market. Grey Sheets, and also known as the "Gray Market" is another category of OTC stocks that is completely separate from Pink Sheets and the OTCBB. From investopedia The grey market is an over-the-counter market where dealers may execute orders for preferred customers as well as provide support for a new issue before it is actually issued. This activity allows underwriters and the issuer to determine demand and price the securities accordingly before the IPO. Some additional information on this type of stocks. (Source) Unlike other financial markets... No recent bid or ask quotes are available because no market makers share data or quote such stocks. There is no quoting system available to record and settle trades. All Grey sheet trading is moderated by a broker and done between consenting individuals at a price they agree on. The only documentation that can be publicly found regarding the trades is when the last trade took place. No SEC registration and little SEC regulation. Regulation of Grey Sheet stocks takes place mainly on a state level. Unlike Pink Sheets, these stocks have no SEC registration to possess a stock symbol or to possess shares or trade shares of that stock. Such penny stocks, similar to Pink Sheets, are not required to file SEC (Securities and Exchange Commission) financial and business reports. These stocks may not be solicited or advertised to the public unless a certain number of shares are qualified to be traded publicly under 504 of Regulation D. Extremely Illiquid. Gray sheet trading is infrequent, and for good reason... Difficult to trade, not advertised, difficult to follow the price, the least regulation possible, hard to find any information on the stock, very small market cap, little history, and most such stocks do not yet offer public shares. The lack of information (bids, history, financial reports) alone causes most investors to be very skeptical of Gray Sheets and avoid them altogether. Gray Sheets are commonly associated with Initial public offering (IPO) stocks or start up companies or spin-off companies, even though not all are IPO's, start-ups or spin-offs. Grey Sheets is also Home to delisted stocks from other markets. Some stocks on this financial market were once traded on the NASDAQ, OTCBB, or the Pink Sheets but ran into serious misfortune - usually financial - and thus failed to meet the minimum requirements of the registered SEC filings and/or stock exchange regulations for a financial market. Such stocks were delisted or removed and may begin trading on the Grey Sheets. So to answer your question, I think the cause of the wild swings is that: Great question, BTW. |
Finding out actual items bought via credit card issuer and not the store receipt? | As a merchant I can tell you that the only thing the bank gets from me. Is the total amount and a category for my business. No detail, not ever. |
What are the benefits of opening an IRA in an unstable/uncertain economy? | Regarding investing in gold vs. stocks, I don't think I could say it better than Warren Buffett: You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value? |
What choices should I consider for investing money that I will need in two years? | If you ever need the money in three years, imagine that today is 2006 and you need the money in 2009. Keep it in savings accounts, money-markets, or CDs maturing at the right time. |
Any experience with maxing out 401(k)? | Everybody else has given great answers on what to do, but I just want to add some encouragement. Keep saving. Learn to live within your means while saving, and things like houses and cars and new electronics will come. You can always wait a year and save money up for that new TV, but when retirement hits you are out of time. (I sure wish I had). Keep that retirement money out of sight and (mostly) out of mind. Great job saving and keep up the good work. |
In US, is it a good idea to hire a tax consultant for doing taxes? | Good professional tax advice is expensive. If your situation is simple, then paying someone doesn't give you more than you could get from a simple software package. In this case, doing your own taxes will save you money this year, and also help you next year, as your situation grows steadily more complex. If you don't do your own taxes when you're single with a part time job, you'll never do it when you have a family, a full time job, a side business, and many deductions. Learning how to do your taxes over time, as your 'tax life' becomes complex, is a valuable skill. If your situation is complex, you will need pay a lot to get it done correctly. Sometimes, that cost is worthwhile. At bare minimum, I would say 'attempt to do your taxes yourself, first'. This will force you to organize your files, making the administrative cost of doing your return lower (ie: you aren't paying your tax firm to sort your receipts, because you've already ordered them nicely with your own subtotals, everything perfectly stapled together). If your situation is complex, and you find a place to get it done cheaply (think H&R Block), you will not be getting value for service. I am not saying a low-end tax firm will necessarily get things wrong, but if you don't have a qualified professional (read: university educated and designated) doing your return, the complexities can be ignored. Low-end tax firms typically hire seasonal staff, train them for 1-2 weeks, and mostly just show them how to enter tax slips into the same software you could buy yourself. If you underpay for professional services, you will pay the price, metaphorically speaking. For your specific situation, I strongly recommend you have a professional service look at your returns, because you are a non-resident, meaning you likely need to file in your home country as well. Follow what they do with your return, and next year, see how much of it you can do yourself. Before you hire someone, get a fee quote, and shop around until you find someone you are comfortable with. $1k spent now could save you many headaches in the future. |
Is there a “reverse wash sale” rule? | Yes, the newly bought shares will have a long-term holding period, regardless of when you sell them. In addition, it's only a wash sale if you sold the first shares for a loss; it's not a wash sale if you sold them for a gain. Wikipedia mentions this: When a wash sale occurs, the holding period for the replacement stock includes the period you held the stock you sold. Example: You've held shares of XYZ for 10 years. You sell it at a loss but then buy it back within the wash sale period. When you sell the replacement stock, your gain or loss will be long-term — no matter how soon you sell it. Charles Schwab also mentions this: Here's a quick example of a wash sale. On 9/30/XX, you buy 500 shares of ABC at $10 per share. One year later the stock price starts to drop, and you sell all your shares at $9 per share on 10/4/XY. Two days later, on 10/6, ABC bottoms out at $8 and you buy 500 shares again. This series of trades triggers a wash sale. The holding period of the original shares will be added to the holding period of the replacement shares, effectively leaving you with a long-term position. |
Should you always max out contributions to your 401k? | My observations is that this seems like hardly enough to kill inflation. Is he right? Or are there better ways to invest? The tax deferral part of the equation isn't what dominates regarding whether your 401k beats 30 years of inflation; it is the return on investment. If your 401k account tanks due to a prolonged market crash just as you retire, then you might have been better off stashing the money in the bank. Remember, 401k money at now + 30 years is not a guaranteed return (though many speak as though it were). There is also the question as to whether fees will eat up some of your return and whether the funds your 401k invests in are good ones. I'm uneasy with the autopilot nature of the typical 401k non-strategy; it's too much the standard thing to do in the U.S., it's too unconscious, and strikes me as Ponzi-like. It has been a winning strategy for some already, sure, and maybe it will work for the next 30-100 years or more. I just don't know. There are also changes in policy or other unknowns that 30 years will bring, so it takes faith I don't have to lock away a large chunk of my savings in something I can't touch without hassle and penalty until then. For that reason, I have contributed very little to my 403b previously, contribute nothing now (though employer does, automatically. I have no match.) and have built up a sizable cash savings, some of which may be used to start a business or buy a house with a small or no mortgage (thereby guaranteeing at least not paying mortgage interest). I am open to changing my mind about all this, but am glad I've been able to at least save a chunk to give me some options that I can exercise in the next 5-10 years if I want, instead of having to wait 25 or more. |
Why would this FHA refinance cause my mortgage insurance payment to increase so much? | The PMI premium you pay is dependent on a very large number of variables in the finance market. Mortgage insurance, at the higher inter-bank levels, is handled with credit default swaps (the ones you've been hearing about on the news for the past 4 years), where the lender bundles a block of mortgages, takes them to a guarantor like AIG or Freddie Mac, and says "We bet you that these mortgages will default this month, because the homeowners have little or no equity to deter them; if we win, you agree to swap these debts for their current face value". The lender examines the mortgages, calculates the odds of a default severe enough that the bank would come to collect, using complex environmental heuristics, multiplies by the value of the potential payout, adds a little for their trouble, and says "well, we'll take that bet if you pay us $X". The bank takes the deal, then divvies up that cost among the mortgages and bills the homeowner for their share. The amount you pay for PMI can therefore depend on pretty much anything in this entire process; the exact outstanding amount and equity status of your loan, the similar status of other mortgages your loan will be bundled with for assessment, who the guarantor is, what exact heuristic they use to come up with an amount, the weighting the bank uses to divvy it up, and how much they actually pass on to you. Most of these same variables are at play when you shop for actual insurance for your car or home, which is why your premiums will go up or down with the same insurer and why someone else always seems to have a better deal (pretty much every insurer can say that "drivers who switched saved an average of $X"; of course they did, otherwise they wouldn't have switched). Thinking of it in those terms, it's easy to see how this number can vary widely based on numbers you can't see. You're free to say no, and it will cost you nothing right up until you sign something that says you agree to be penalized for saying no. While the overall amount of the payments does decrease, the PMI has gone up, and that's money you'll never see again just like interest (except you can deduct interest; not PMI). I would do the tax math; find out how much you could deduct over the next year in interest on your current loan, then on their proposed terms, and what the resulting tax bills will be from both. You may save monthly only to pay more than you saved to Uncle Sam at the end of the year. You're also free to negotiate. The worst they can do is stay firm on their offer, but they may take a second look and say "you're right, that PMI is rather high, we'll try again and see if we can do better". They can either negotiate with their insurer, or they can eat some of the PMI cost that they're currently passing on to you. |
What caused this drop? | I do not fully understand the transactions involved, but it appears that there was a reverse stock split (20:1) and some legal status change as well on June 29th. This seems to be the cause for the change in valuation of the stock as the dates match the drop. https://www.otcmarkets.com/stock/RMSLD/filings |
Why would a bank need to accept deposits from private clients if it can just borrow from the Federal Reserve? | Let's just focus on the "why would a bank need to accept deposits from private clients part" and forget the central bank for a moment. I'm a guy. I have a wife and two kids. They have this pesky habit of wanting to buy stuff. When I get paid, I could just get a check, cash it, stuff it under a mattress, and pull it out when I need it. Hey that worked for a long time didn't it? But sometimes it's nice to write checks. (Just kidding, that's so gauche...) I use my debit card. I use my credit cards, but they need to be paid somehow. My light and phone bills need to be paid too. If only there were someone out there who could facilitate this transfer of money between me, the private client and the merchants I'm forced to spend my money at. Now some of those merchants have plans. Light bills I can pay at my grocer if I choose. But most of the other's don't. Luckily I have a bank that's willing to do this, for a fee. So basically they do it because there's a void in the market if they don't. I don't know if it's true what they say about supply creating its own demand, but it certainly is true that demand creates supply! |
What is a decent rate of return for investing in the markets? | Don't ever, ever, ever let someone else handle your money, unless you want somebody else have your money. Nobody can guarantee a return on stocks. That's utter bullshit. Stock go up and down according to market emotions. How can your guru predict the market's future emotions? Keep your head cool with stocks. Only buy when you are 'sure' you are not going to need the money in the next 10 years. Buy obligations before stocks, invest in 'defensive' stocks before investing in 'aggressive' stocks. Keep more money in obligations and defensive stock than in aggressive stocks. See how you can do by yourself. Before buying (or selling) anything, think about the risks, the market, the expert's opinion about this investment, etc. Set a target for selling (and adjust the target according to the performance of the stock). Before investing, try to learn about investing, really. I've made my mistakes, you'll make yours, let's hope they're not the same :) |
Can gold prices vary between two places or country at the same time? | Most of the gold prices at international markets are USD denominated. Hence the prices would be same in international markets where large players are buying and selling. However this does not mean that the prices to the individuals in local markets is same. The difference is due to multiple things like cost of physical delivery, warehousing, local taxation, conversion of Local currency to USD etc. So in essence the price of Gold is similar to price of Crude Oil. The price of Oil is more or less same on all the markets exchanges, though there is small difference this is because of the cost of delivery/shipment which is borne by the buyer. However the cost of Oil to retail individual varies from country to country. |
Mortgage sold to yet another servicer. What are my options? | You would need to check the original mortgage papers you signed with the originators. Chances are you agreed to allow the mortgage to be sold and serviced by other parties. Refinancing would also put you in the same boat unless you got them to take that clause out of the mortgage/refinance papers. Also, chances are most small banks and originators simply can not keep mortgages on their books. There are also third parties that service loans too that do not actually own the mortgages as well. This is another party that could be involved out of many in your mortgage. I would also not worry about 127/139 complaints out of 1,100,000 loans. Most probably were underwater on their mortgage but I am sure a few are legitimate complaints. Banks make mistakes (I know right!). Anyway, good luck and let me know if you find out anything different. |
What does an x% inflation rate actually mean? | Inflation is an attempt to measure how much less money is worth. It is a weighted average of some bundle of goods and services price's increase. Money's value is in what you can exchange it for, so higher prices means money is worth less. Monthly inflation is quoted either as "a year, ending on that month" or "since the previous month". As the values differ by more than a factor of 10, you can usually tell which one is being referred to when they say "inflation in August was 0.4%, a record high" or "inflation in August was 3.6%". You do need some context of the state of the economy, and how surprised the people talking about the numbers are. Sometimes they refer to inflation since the last month, and then annualize it, which adds to the confusion. "Consumer Inflation"'s value depends on what the basket of goods is, and what you define as the same "good". Is a computer this year the same as the last? If the computer is 10x faster, do you ignore that, or factor it in? What basket do you use? The typical monthly consumables purchased by a middle class citizen? By a poor citizen? By a rich citizen? A mixture, and if so which mixture? More detailed inflation figures can focus on inflation facing each quntile of the population by household income, split durable goods from non-durable goods from services, split wage from non-wage inflation, ignore volatile things like food and energy, etc. Inflation doesn't directly cause prices to raise; instead it is a measure of how much raise in prices happened. It can easily be a self-fullfilling prophesy, as inflation expectations can lead to everyone automatically increasing the price they charge for everything (wages, goods, etc). Inflation can be viewed as a measurement of the "cost of holding cash". At 10% inflation per year, holding a million dollars in cash for a year costs you 100,000$ in buying power. At 1% inflation it costs 10,000$. At 0.1% inflation, 1000$. Inflation of 10% in one year, followed by 10% the next, adds up to 1.1*1.1-1 = 21% inflation over the two years. For low inflation numbers this acts a lot like adding; the further from 0% you get the more the lower-order terms make the result larger. 1% inflation for two years adds up to 2.01%, 10% over two years 21%, 100% over two years 300%, 1000% over two years 12000%, etc. (and yes, some places suffer 1000% inflation) |
Paying off mortgage or invest in annuity | You can't pay your bills with equity in your house. Assuming you paid off the mortgage, where would the money come from that you plan to live off of? If that is your whole retirement savings I'd say do neither. Maybe an annuity (not variable) for SOME of the money, keep the rest invested in conservative investments some of it in cash for emergencies. |
What makes a Company's Stock prices go up or down? | Here are some significant factors affect the company stock price performance: Usually, profitability is known to the public through the financial statements; it won't be 100% accurate and people would also trade the stock with the price not matching to the true value of the firm. Still there are dozens of other various reasons exist. People are just not behaving as rational as what the textbook describes when they are trading and investing. |
Why use accounting software like Quickbooks instead of Excel spreadsheets? | Here are the few points: Hope that helps, |
Is person-person lending/borrowing protected by law? | Yes, it is, under some circumstances (basically, a piece of paper saying "John Doe borrowed Josh Shoe 100 USD" is not enough). Usually, the paper should include: This is the case for Czech Republic, I believe it's similar for other countries as well. Remember that without the repair date, you have very complicated position forcing the person to give you the money back. As well, there's a withdrawal of rights, i.e. after X years after the "repair date", you cannot force the person to give you the money. You have to send the case to the court in some period after the "repair date", if you don't have the money yet. |
What factors make someone buy or sell a stock? | why sell? Because the stock no longer fits your strategy. Or you've lost faith in the company. In our case, it's because we're taking our principal out and buying something else. Our strategy is, basically, to sell (or offer to sell) after the we can sell and get our principal out, after taxes. That includes dividends -- we reduce the sell price a little with every dividend collected. |
Are stores that offer military discounts compensated by the government? | Company X located outside a military base offer discounts to military as a form of marketing. They want to encourage a group of potential customers to use their store/service. In some cases they are competing with subsidized store on the base. In other cases their only competition is other stores outside the base. The smart ones also understand the pay structure of military pay to make it easier for enlisted to stretch their money for the entire month. The government doesn't offer compensation to the business near bases. The businesses see their offer and discount as advertising expenses, and are figured into the prices they have to charge all customers. You will also see these types of discounts offered by some businesses in college towns. They are competing with the services on the campus and with other off-campus businesses. Some also allow the use of campus dollars to make it easier for the student to spend money. |
Where to find free Thailand stock recommendations and research? | On what basis did you do your initial allocation of funds to each stock? If you are 're-balancing' that implies returning things to their initial allocation. You can do this without any research or recommendations. If you started out with say 10 stocks and 10% of the funds allocated to each stock, then re-balancing would simply be either buying/selling to return to that initial allocation. If you are contributing to the portfolio you could adjust where the new money goes to re-balance without selling. Or if you are drawing money from the portfolio, then you could adjust what you are selling. If on the other hand you are trying to decide if you want to alter the stocks the portfolio is HOLDING, then you have an entirely different question from 're-balancing' |
Why would people sell a stock below the current price? | People in this case, are large institutional investors. The "bid ask" spread is for "small traders" like yourself. It is put out by the so-called specialists (or "market makers") and is typically good for hundreds or thousands of shares at a time. Normally, 2 points on a 50 stock is a wide spread, and the market maker will make quite a bit of money on it trading with people like yourself. It's different if a large institution, say Fidelity, wants to sell, say 1 million shares of the stock. Depending on market conditions, it may have trouble finding buyers willing to buy in those amounts anywhere near 50. To "move" such a large block of stock, they may have to put the equivalent of K-Mart's old "Blue Light Special" on, several points below. |
Can capital loss in traditional IRA and Roth IRA be used to offset taxable income? | Edited in response to JoeTaxpayer's comment and OP Tim's additional question. To add to and clarify a little what littleadv has said, and to answer OP Tim's next question: As far as the IRS is concerned, you have at most one Individual Retirement Account of each type (Traditional, Roth) though the money in each IRA can be invested with as many different custodians (brokerages, banks, etc.) and different investments as you like. Thus, the maximum $5000 ($6000 for older folks) that you can contribute each year can be split up and invested any which way you like, and when in later years you take a Required Minimum Distribution (RMD) from a Traditional IRA, you can get the money by selling just one of the investments, or from several investments; all that the IRS cares is that the total amount that is distributed to you is at least as large as the RMD. An important corollary is that the balance in your IRA is the sum total of the value of all the investments that various custodians are holding for you in IRA accounts. There is no loss in an IRA until every penny has been withdrawn from every investment in your IRA and distributed to you, thus making your IRA balance zero. As long as you have a positive balance, there is no loss: everything has to come out. After the last distribution from your Roth IRA (the one that empties your entire Roth IRA, no matter where it is invested and reduces your Roth IRA balance (see definition above) to zero), total up all the amounts that you have received as distributions from your Roth IRA. If this is less than the total amount of money you contributed to your Roth IRA (this includes rollovers from a Traditional IRA or Roth 401k etc., but not the earnings within the Roth IRA that you re-invested inside the Roth IRA), you have a loss that can be deducted on Schedule A as a Miscellaneous Deduction subject to the 2% AGI limit. This 2% is not a cap (in the sense that no more than 2% of your AGI can be deducted in this category) but rather a threshold: you can only deduct whatever part of your total Miscellaneous Deductions exceeds 2% of your AGI. Not many people have Miscellaneous Deductions whose total exceeds 2% of their AGI, and so they end up not being able to deduct anything in this category. If you ever made nondeductible contributions to your Traditional IRA because you were ineligible to make a deductible contribution (income too high, pension plan coverage at work etc), then the sum of all these contributions is your basis in your Traditional IRA. Note that your deductible contributions, if any, are not part of the basis. The above rules apply to your basis in your Traditional IRA as well. After the last distribution from your Traditional IRA (the one that empties all your Traditional IRA accounts and reduces your Traditional IRA balance to zero), total up all the distributions that you received (don't forget to include the nontaxable part of each distribution that represents a return of the basis). If the sum total is less than your basis, you have a loss that can be deducted on Schedule A as a Miscellaneous Deduction subject to the 2% AGI threshold. You can only deposit cash into an IRA and take a distribution in cash from an IRA. Now, as JoeTaxpayer points out, if your IRA owns stock, you can take a distribution by having the shares transferred from your IRA account in your brokerage to your personal account in the brokerage. However, the amount of the distribution, as reported by the brokerage to the IRS, is the value of the shares transferred as of the time of the transfer, (more generally the fair market value of the property that is transferred out of the IRA) and this is the amount you report on your income tax return. Any capital gain or loss on those shares remains inside the IRA because your basis (in your personal account) in the shares that came out of the IRA is the amount of the distribution. If you sell these shares at a later date, you will have a (taxable) gain or loss depending on whether you sold the shares for more or less than your basis. In effect, the share transfer transaction is as if you sold the shares in the IRA, took the proceeds as a cash distribution and immediately bought the same shares in your personal account, but you saved the transaction fees for the sale and the purchase and avoided paying the difference between the buying and selling price of the shares as well as any changes in these in the microseconds that would have elapsed between the execution of the sell-shares-in-Tim's-IRA-account, distribute-cash-to-Tim, and buy-shares-in-Tim's-personal account transactions. Of course, your broker will likely charge a fee for transferring ownership of the shares from your IRA to you. But the important point is that any capital gain or loss within the IRA cannot be used to offset a gain or loss in your taxable accounts. What happens inside the IRA stays inside the IRA. |
Why liquidity implies tight spread and low slippage | Theoretically, it's a question of rate of return. If a desired or acceptable rate of return for market makers' capital is X, and X is determined by the product of margin & turnover then higher turnover means lower margin for a constant X. Margin, in the case of trading, is the bid/ask spread, and turnover, in the case of trading, is volume. Empirically, it has been noted in the last markets still offering such wide-varying evidence, equity options: http://faculty.baruch.cuny.edu/lwu/890/mayhew_jf2002.pdf |
Are there any Social Responsibility Index funds or ETFs? | At the other end of the spectrum is the VICEX fund. it invests in industries such as tobacco, gaming, defense/weapons, liquor and other companies whose products or services are widely considered not to be socially responsible |
Potential pitfalls of this volume trading strategy | I wouldn't be turned off due to the difficult of parsing English, for a few reasons. Firstly, you don't have to perfectly parse to find meaning. You can look for keywords and write some algorithms to approximate, and of course if you get enough of a statistical advantage (and can repeat it) you can make money. Second, it probably isn't long before third-party software is made available either to do something like this or to provide a framework for it. In fact, it probably already is available somewhere. (Note the influx of Silicon Valley types to New York as more machine intelligence is applied to trading and journalism.) Thirdly, as hinted by the mention above of journalism, there's already software using numerical data to write pretty human articles. Some are pretty robotic and you can catch them (I noticed one and searched for a key phrase to discover several very much like it, each having a different fake author name). This will mean not only a continued improvement of parsing but also more push for more data to be released in machine-readable formats, such that press releases will be increasingly parsible. Finally, to vindicate your idea, the keyword approach has been done with some success. Try this link and note the additional links on the same topic. If you have the time and processing resources, you might like to try your idea by training a neural network to find correlations of keywords (and phrases -- that's important, too) with trends in the market. |
does interest payment on loan stay the same if I pay early | It depends on the type of loan. Fully amortized loans have a schedule of payments don't recalculate as you pay. If you want to make an additional payment you need to contact the lender to apply your payment toward principle and reamortize the loan. Otherwise all your additional payment will do is change the amount due on your next payment, or push out your next payment due date. Regarding interest calculation, you owe interest on the principle outstanding. Say you have a 10 year loan (120 Months), at 5% APR, and a $1,000 payment (this means you borrowed roughly $94,000) Each month the amount of interest owed reduces because there is less principle outstanding. The reason loans are amortized like this is so the borrower has a predictable, known, monthly amount due. |
When trading put options, is your total risk decreased if you are in a position to exercise the option? | You should also consider what the cost of the Put is, especially if the strike price is set at the current price, vs the average price delta of the security during the period between when you buy the put, and the expiration date. Also note the prices for puts on stocks with a lot of price volatility. There are a good number of situations where you may come out behind. If the stock stays the same price, you are out the premium you paid for the put. If the stock price rises less than the premium, you are out the difference between the two. If the stock price falls less than the premium, you are out the difference between the two. In order to be 'in the money' when writing a protective put, the stock has to either rise more than the premium you paid for the put (and you MUST sell, or hold and write off the expense of the put) or the stock price has to fall below the strike price to a level lower than the premium you paid, and you must SELL via the exercising the option. and you've protected yourself from a loss (presuming you were going to sell and not hold and see if the stock recovers. And since selling is required in both cases, if you've held the stock less than a year, then pay on any profits at short term rates (taxed as regular income) and if the price went down, you can't claim any loss (unless strike price was below your buy price), and would still need to pay if you had a net gain, and you likely can't deduct the price you paid for the put. |
Meanings of “price of the derivative” | No, it means what it says. Prices change, hence price of the derivative can go down even if the price of the underlying doesn't change (e.g. theta decay in options). |
Friend was brainwashed by MLM-/ponzi investment scam. What can I do? | Go to the police. This is fraud and is illegal. Sure, this will hurt your friend but better now then when he starts abusing of his position to fraud even more people... Original comment by Bakuriu sorry for not giving credit |
Borrowing 100k and paying it to someone then declaring bankruptcy | Note that in the UK at least this scam - not so dissimilar from what you propose - seems be perfectly legal behaviour: Evidence to date is that both of you can expect to walk away without much consequence. |
Corporate Finance | If it's raising $25 million with a debt to equity ratio of 50% then it's raising $8.33 million of debt and $16.67 million of equity. You've priced it as if it were raising $25 million of debt and $25 million of equity, which would be raising $50 million with a debt to equity ratio of 100%. |
Do personal checks expire? [US] | When I last asked a certain large bank in the US (in 2011 or 2012), they didn't offer expiring personal checks. (I think they did offer something like that for business customers.) They also told me that, even if the payee cashes the check a year later and the check bounces, even if it's because I have closed the respective account, he will be able to go to the police and file a report against me for non-payment. (This is what the customer service rep told me on the phone after a bit of prodding, but someone else feel free to improve this answer and fix details or disagree; it's hard to believe and quite outrageous if true.) |
What does “/” and “^” mean in ticker symbols? How to translate these symbols into yahoo? | There isn't a single universal way to reference a stock, there are 4 major identifiers with many different flavours of exchange ticker (see xkcd:Standards) I believe CUSIPs and ISINs represent a specific security rather than a specific listed instrument. This means you can have two listed instruments with one ISIN but different SEDOLs because they are listed in different places. The difference is subtle but causes problems with settlement Specifically on your question (sorry I got sidetracked) take a look at CQS Symbol convention to see what everything means |
Is an interest-only mortgage a bad idea? | Generally, interest-only mortgages are a bad idea, because a lot of people get them so that they can buy more house than they could otherwise afford (lower payment = affordable, in their minds). If the house continues to go up in value, they probably get away with it, because when the balance becomes due, they can refinance. However, the last few years has shown how risky that strategy can be, and this kind of things is what cost a lot of people their houses. In your case, if the house is something you could afford on a regular 15 or 30-year mortgage, and you really are as disciplined as you say you are, you might get away with it. But you have to take into account the risk, and consider what happens if there is a job loss or similar difficulty in the future. Another thing to consider is the term of the mortgage. How many years will you get this lower interest rate? Interest rates are at historic lows right now, and pretty much everyone thinks they're going up soon. You might be better off locking in a higher rate for 15 years. |
How to manage 20 residential apartments | I have no idea about India, but in many countries there are companies that specialize in property management. This means they will take on the business of maintaining the properties, finding tenants, doing paperwork and background checks, collecting rents and evicting tenants if necessary. Obviously for this they require a fee, but essentially the owner gets to sit back and do nothing except collect a cheque every month. In my country some real estate agents are in this business as well, though for 20 apartments I would be looking for a specialized firm. |
Is there a reliable way to find, if a stock or company is heading bankruptcy? | Research the company. Obtain and read their current and past financial statements. Find and read news stories about them. Look for patterns and draw conclusions. Or diversify to the point where one company failing doesn't hurt you significantly. Or both. |
Do I not have a credit score? | I'm the contrarian in the crowd. I think credit scores and debt are the closest thing to evil incarnate. You're in good company. The absence of a credit score simply means the agencies have insufficient data in their behavioral model to determine how profitable your business would be to the bank. The higher your score, the more likely the bank is to make a profit from your loan. IMHO, you're better off building up cash and investment reserves than a credit history. With sufficient reserves, you will be able to shop around for a bank that will give you a good rate, if you ever do need a loan. You'll be surprised at how quickly you get in a position where you don't need a loan if you save and invest wisely. I used to have a (high) credit score, and I was miserable about it because there were always bills due. I gave up debt 14 years ago, paid the last debt 7 years ago, and have never. been happier. Raising kids without debt (or credit score) is much more fun than with debt. |
Is there any sort of tax write off for unfulfilled pay checks? | If you don't receive a W2, there are 2 scenarios you should consider: If you have reason to believe that scenario 1 is accurate, then you could file your taxes based on the last valid paycheck you received. If you have reason to believe that scenario 2 is accurate, then you need to do some extra math, but fortunately it is straight forward. Simply treat your final paychecks as if the gross amount of your check was equal to the sum of your taxes paid, and the net amount of the check is $0. This way your income will increase by the proper amount, and you will still receive credit for the taxes paid. This should work out cleanly for federal and state taxes, but will likely result in an overpayment of FICA taxes. You can use form 843 to receive a refund of excess FICA taxes. As a side note, I'd recommend spot checking the YTD numbers on your last paychecks against previous paystubs to make sure there wasn't any fuzzy math going on when they realized they were going out of business. |
For very high-net worth individuals, does it make sense to not have insurance? | I'm going to take a very crude view of this: Suppose that you have an event that would cost $100,000 if it occurred. If there's a 10% chance that it'll happen to you and the insurance costs less than $10,000, you'll make a profit "on average." This is, of course, assuming that you could afford a $100,000 loss. If you can't, the actual loss could be much higher (or different). For example, if you couldn't afford surgery because you didn't have health insurance, it could be a lot more "costly" in a way that could be difficult to compare to the $100,000. Obviously, this is a very simplistic view of things. For example, making more than you paid on the premium typically isn't the only reason you'd buy insurance (even if you're high net worth). Just wanted to throw this out there for what it's worth though. |
How to report “foreign tax paid” from 1099-DIV? | You can always take deduction for foreign tax paid on Schedule A, or calculate foreign tax credit using form 1116. Credit is usually more beneficial, but in some cases you will be better of with a deduction. However, in very specific cases, you can claim the credit directly on your 1040 without using the form 1116. Look at the 1040 instructions for line 47: Exception. You do not have to complete Form 1116 to take this credit if all of the following apply. All of your foreign source gross income was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute statement). The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly). You held the stock or bonds on which the dividends or interest were paid for at least 16 days and were not obligated to pay these amounts to someone else. You are not filing Form 4563 or excluding income from sources within Puerto Rico. All of your foreign taxes were: Legally owed and not eligible for a refund or reduced tax rate under a tax treaty, and Paid to countries that are recognized by the United States and do not support terrorism. For more details on these requirements, see the Instructions for Form 1116. |
Split buying a house 3 ways. How do I approach this? | Get everything in writing. That includes ownership %, money in, money out, who is allowed to use the place, how much they need to pay the other partners, who pays for repairs, whether to provide 'friends and family' discounts, who is allowed to sell, what happens if someone dies, how is the mortgage set up, what to do if one of you becomes delinquent, etc. etc. etc. Money and friends don't mix. And that's mostly because people have different ideas in their head about what 'fair' means. Anything you don't have in writing, if it comes up in a disagreement, could cause a friendship-ending fight. Even if you are able to agree on every term and condition under the sun, there's still a problem - what if 5 years from now, someone decides that a certain clause isn't fair? Imagine one of you needs to move into the condo because your primary residence was pulled out from under you. They crash at the condo because they have no where else to go. You try to demand payment, but they lost their job. The agreement might say "you must pay the partnership if you use the condo personally, at the standard monthly rate * # of days". But what is the penalty clause - is everything under penalty of eviction, and forced sale of the condo and distribution of profits? Following through on such a penalty means the friendship would be over. You would feel guilty about doing it, and also about not doing it [at the same time, your other partner loses their job, and can't make 1/3rd of the mortgage payments anymore! They need the rent or the bank will foreclose on their house!] etc etc etc Even things like maintenance - are the 3 of you going to do it yourselves? Labour distributed how? Will anyone get a management fee? What about a referral fee for a new renter? Once you've thought of all possible circumstances and rules, and drafted it in writing, go talk to a lawyer, and maybe an accountant. There will be many things you won't have considered yet, and paying a few grand today will save you money and friends in the future. |
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