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What are the reasons to get more than one credit card? | There is almost no reason to get a second credit card - this is a very good arrangement for your creditor but not for you. Credit cards have high rates of interest which you have to pay unless you pay the credit off every month. Therefore, increasing your total credit capacity should not be your concern. Since internet technology lets you pay off your balance in minutes online, there is no reason to have multiple cards in order to avoid running out of a balance. If, on the other hand, you do not pay your existing card off every month, than getting another card can be even more dangerous, since you're increasing the amount of debt you take on. I'd say at most it would make sense for you to grab a basic VISA, since most places do not accept AMEX. I would also considering cancelling the AMEX if you get the VISA, for reasons above. |
Dividend Yield | Hart's answer regarding the difference between an index and a stock aside, remember that dividend yield is a passive measure. It takes the announced dividend (which is a $/share amount) and divides it by the current market price. So you can't assume that if you buy a stock that had a dividend yield of 4% for $100 that you're guaranteed 4% of the stock price in dividends. If the price of the stock doubles, you'd still get $4, but the yield would drop to 2%. Or the company could reduce (or even suspend) its dividends, which would reduce the yield if the stock price stayed flat. For an index like the S&P, it's easier to measure dividends on % yield terms rather then $/share terms since you'd have to own shares in every single company to get that amount, but on average the stocks in the S&P 500 pay X% in dividends (which are typically quarterly) - some pay more than that, some less, and some none at all. |
I have around 60K $. Thinking about investing in Oil, how to proceed? | Royalty trusts track oil prices (they're a pure play on ownership of a portfolio of mineral rights and do not otherwise have the operations that the oil companies themselves have). Many publicly traded ones listed at the embedded wikipedia link. Oil tankers are having a bang up business right now as described in the article, but that's because of the low prices and flood of product from the middle east. The article notes that inventories are near capacity, so terminals and pipelines may be in for a few good years, though these do not directly track oil price. However, as a way to bet on oil or oil services, many terminals and pipelines are organized as publicly traded master limited partnerships or MLPs, often spun out of a major oil company for tax reasons, allowing fine-grained investment in specific assets. |
Identifying “Dividend Stocks” | How to find good divided stocks? Research and read. Google, Yahoo, and most likely your broker offer some sort of stock screener tool where you can look for stocks with given P/E ratios, dividend payouts, pricing, and any of a number of other filters. When you've found some that appeal to you, read what others are saying on stock talk websites like Vantagewire and Stockhouse. Read what each company is putting out as news and look at their quarterly reports. In Canada you can find a company's reports for free on Sedar. I'm afraid I don't know the U.S. equivalent. Reuters will be of help. Finding a good dividend-paying stock is the same as finding a good growth or value stock; research the company and the sector as if you were buying it to take the company over. |
Should I Pay Off my Student Loan Debts First or Invest in an Index Fund? | Pay off the debt first. Life circumstances change without notice, and starting any stage of life with a debt puts you at a disadvantage. Luckily, your debt is small. Please also consider accumulating a 6 month emergency fund before making investments. This will further protect you when life hands you a curveball. |
Vanguard Target Retirement Fund vs. Similar ETF Distribution (w/ REIT) | Your approach sounds solid to me. Alternatively, if (as appears to be the case) then you might want to consider devoting your tax-advantaged accounts to tax-inefficient investments, such as REITs and high-yield bond funds. That way your investments that generate non-capital-gain (i.e. tax-expensive) income are safe from the IRS until retirement (or forever). And your investments that generate only capital gains income are safe until you sell them (and then they're tax-cheap anyway). Of course, since there aren't really that many tax-expensive investment vehicles (especially not for a young person), you may still have room in your retirement accounts after allocating all the money you feel comfortable putting into REITs and junk bonds. In that case, the article I linked above ranks investment types by tax-efficiency so you can figure out the next best thing to put into your IRA, then the next, etc. |
Does an index have a currency? | More importantly, index funds are denominated in specific currencies. You can't buy or sell an index, so it can be dimensionless. Anything you actually do to track the index involves real amounts of real money. |
Do I need to pay Income Tax if i am running a escrow service in India | As JoeTaxpayer has mentioned, please consult a lawyer and CA. In general you would have to pay tax on the profit you make, in the example on this 10% you make less of any expenses to run the business. depending on how you are incorporating the business, there would be an element of service tax apart from corporate tax or income tax. |
Is Cost of Living overstated? | after 30 years, you'd have a million dollar house vs a quarter million dollar house. You've captured three quarters of a million dollars in rent, given my napkin math hypothetical. As I figure the math, a 250,000 house appreciating to a million dollar house in 30 years requires a sustained ~4.9% appreciation every year--seems unrealistic. The historical rate of inflation, on average, has been closer to 3-3.5%; a 3% appreciation would give a final value of $589k. This also doesn't taken into account the idea that you may have bought a property during a housing bubble, and so then you wouldn't get 3% year-over-year returns. But also, in terms of "capturing rent", you are not factoring in necessary or possible costs that renting doesn't have: mortgage interest and insurance, maintenance, property tax, insurance, buying and selling associated fees, and, importantly, opportunity costs (in that the money not tied up in the house could be invested elsewhere). So it is not such a slam dunk as you make it out. Many use the NY Times buy/rent calculator to compare renting vs. buying. |
Meaning of “readily transferable”? | Securities or quite a few negotiable instruments can change title of ownership without any issue. Many at times the owner ship in implicit if you are holding a certain instrument. So for example in Stock its a fractional ownership in a company, this ownership transfers to the buyer from the seller without requiring any permission from the company. In case of say Loans, One cannot transfer the loan to some one else without the Banks permission. |
Dividend yield for multiple years? | I've recently discovered that Morningstar provides 5yr avgs of a few numbers, including dividend yield, for free. For example, see the right-hand column in the 'Current Valuation' section, 5th row down for the 5yr avg dividend yield for PG: http://financials.morningstar.com/valuation/price-ratio.html?t=PG®ion=usa&culture=en-US Another site that probably has this, and alot more, is YCharts. But that is a membership site so you'll need to join (and pay a membership fee I believe.) YCharts is supposedly pretty good for long-term statistical information and trend graphs for comparing and tracking stocks. |
ACH debit blocks/filters on consumer account | The technical feature exists to (1)block all ACH activity, (2)block all ACH credits, or (3)block all ACH debits attempting to post to the deposit account. The large financial institutions will not deviate from their company policies and won't offer something like this for a personal account. The smaller institutions and credit unions are much more willing to discuss options. Especially if you maintain a large deposit balance or have many products with the institution, you might convince them this feature is very important and insist they block all ACH activity on your account. This feature is used frequently on controlled asset accounts where the balance must be frozen for a variety of reasons. |
Cash flow implications of converting primary mortgaged residence to rental | You are assuming 100% occupancy and 100% rent collection. This is unrealistic. You could get lucky and find that long term tenant with great credit that always pays their bills... but in reality that person usually buys a home they do not rent long term. So you will need to be prepared for periods of no renters and periods of non payment. The expenses here I would expect could wipe out more than you can make in "profit" based on your numbers. Have you checked to find out what the insurance on a rental property is? I am guessing it will go up probably 200-500 a year possibly more depending on coverage. You will need a different type of insurance for rental property. Have you checked with your mortgage provider to make sure that you can convert to a rental property? Some mortgages (mine is one) restrict the use of the home from being a rental property. You may be required to refinance your home which could cost you more, in addition if you are under water it will be hard to find a new financier willing to write that mortgage with anything like reasonable terms. You are correct you would be taking on a new expense in rental. It is non deductible, and the IRS knows this well. As Littleadv's answer stated you can deduct some expenses from your rental property. I am not sure that you will have a net wash or loss when you add those expenses. If you do then you have a problem since you have a business losing money. This does not even address the headaches that come with being a landlord. By my quick calculations if you want to break even your rental property should be about 2175/Month. This accounts for 80% occupancy and 80% rental payment. If you get better than that you should make a bit of a profit... dont worry im sure the house will find a way to reclaim it. |
Investing Superannuation Australia | You can make a start to learn how to make better investing decisions by learning and understanding what your current super funds are invested in. Does the super fund give you choices of where you can invest your funds, and how often does it allow you to change your investment choices each year? If you are interested in one area of investing over others, eg property or shares, then you should learn more on this subject, as you can also start investing outside of superannuation. Your funds in superannuation are taxed less but you are unable to touch them for another 30 to 35 years. You also need to consider investing outside super to help meet your more medium term goals and grow your wealth outside of super as well. If you are interested in shares then I believe you should learn about both fundamental and technical analysis, they can help you to make wiser decisions about what to invest in and when to invest. Above is a chart of the ASX200 over the last 20 years until January 2015. It shows the Rate Of Change (ROC) indicator below the chart. This can be used to make medium to long term decisions in the stock market by investing when the ROC is above zero and getting out of the market when the ROC is below zero. Regarding your aggressiveness in your investments, most would say that yes because you are still young you should be aggressive because you have time on your side, so if there is a downturn in your investments then you still have plenty of time for them to recover. I have a different view, and I will use the stock market as an example. Refer back to the chart above, I would be more aggressive when the ROC is above zero and less aggressive when the ROC is below zero. How can you relate this to your super fund? If it does provide you to change your investment choices, then I would be invested in more aggressive investments like shares when the ROC crosses above zero, and then when the ROC moves below zero take a less aggressive approach by moving your investments in the super fund to a more balanced or capital guaranteed strategy where less of your funds are invested in shares and more are invested in bonds and cash. You can also have a similar approach with property. Learn about the property cycles (remember super funds usually invest in commercial and industrial property rather than houses, so you would need to learn about the commercial and industrial property cycles which would be different to the residential property cycle). Regarding your question about SMSFs, if you can increase your knowledge and skills in investing, then yes switching to a SMSF will give you more control and possibly better returns. However, I would avoid switching your funds to a SMSF right now. Two reasons, firstly you would want to increase your knowledge as mentioned above, and secondly you would want to have at least $300,000 in funds before switching to a SMSF or else the setup and compliance costs would be too high as a percentage of your funds at the moment ($70,000). You do have time on your side, so whilst you are increasing your funds you can use that time to educate yourself in your areas of interest. And remember a SMSF is not only an investment vehicle whilst you are building your funds during your working life, but it is also an investment vehicle when you are retired and it becomes totally tax free during this phase, where any investment returns are tax free and any income you take out is also tax free. |
Does an industry 'standard' have any affect on when a stock might split? | You ask if Tesla being a car company should feel a pressure to split their stock because their share price is much higher than the other car companies. But is Tesla a car company? It was founded by Elon Musk who founded PayPal and SpaceX. He sees him self as the next generation of entrepreneurs that came after Jobs and Gates. So he compares Tesla ($142) companies to Google ($856), Amazon ($284) and eBay ($52). But even if you see Tesla as a car company, Musk sees it more like Audi ($828) or BMW ($100) then he does Ford ($16.30) just because the base price of their models ($80,000+) is much greater than Ford or GM. The theory is that keeping the share price in a lower range helps investors. But since 40% of the company is owned by mutual funds is that really a concern? Therefore most small investors get the company though a mutual fund. |
Who can truly afford luxury cars? | There's an aspect to this question that I really love. In general, it's a question about consumer behavior that can be expanded to inquire about the purchasing profile of any luxury good. Who buys $500 pocketbooks, $1000 wristwatches, etc? I can offer one observation regarding the car. Two close neighbors, both couples drive cars valued well above what my wife and I drive. Both families moved, and shared with us that they failed to save for their kid's college tuition. My response was to feel that this was a choice they made. As I commented to my daughter, "We can afford anything, we just can't afford everything." Our budget started with saving both for retirement and college. Very little eating out, and modest vacations, cars, and clothing. This story is getting more common for us as our peers have high school age children. As others have mentioned, the millionaire next door does not drive a Ferrari or wear a Rolex. To some extent, if you were able to peek at the budgets of these car buyers, you'll find what members here would consider at best, an interesting set of priorities. |
If stock price drops by the amount of dividend paid, what is the use of a dividend | Best as i can tell, the simple answer is: the smartest approach to investing for dividends is to pick a company that is, has, and will continue to make a solid profits. there are lots of them out there. specifically, companies with no debt, a history of long-term and steady growth and a stable market share will, almost always recoup any drop in stock valuation due to a dividend payout...and usually in short order. this is why dividends were created...as a mechanism for distributing profits back to investor without diminishing thier stake in the company. the trick then, is to find such companies with the best ratio between stock price and dividend payout. and again, there are a lot of good options out there. All the trepidation is justified however, as many unscrupulous companies will try to pull investors in with high dividends as a means to simply generate capital. these companies have few of the quality attributes mentioned above. instead, High debt, fluctuating or negative profits, minimal market share or diminishing growth present a very risky long term play and will be avoided by this conservative investor. |
Generally Accepted Accounting Principles question | You recognize expense when you sell the hot dog. When you pay for the buns you have inventory, which is an asset. When you sell the hot dog - you have cost of goods sold, which is the expense. Expense principle says that you recognize expense when you use the product. You use the buns when you actually sell the hot dog, not before. The matching principle is also honored because you recognize expense of the buns at the time of recognizing revenue of the hot dog. |
How can I make $250,000.00 from trading/investing/business within 5 years? | Deposit $3,500 each month in a brokerage account and invest that money across a handful of diversified index funds. Rebalance those investments every quarter. The hard part is coming up with $3,500 each month; this is where your budget comes in. |
Pros / cons of being more involved with IRA investments [duplicate] | diversifying; but isn't that what mutual funds already do? They diversify and reduce stock-specific risk by moving from individual stocks to many stocks, but you can diversify even further by selecting different fund types (e.g. large-cal, small-cap, fixed- income (bond) funds, international, etc.). Your target-date fund probably includes a few different types already, and will automatically reallocate to less risky investments as you get close to the target date. I would look at the fees of different types of funds, and compare them to the historical returns of those funds. You can also use things like morningstar and other ratings as guides, but they are generally very large buckets and may not be much help distinguishing between individual funds. So to answer the question, yes you can diversify further - and probably get better returns (and lower fees) that a target-date fund. The question is - is it worth your time and effort to do so? You're obviously comfortable investing for the long-term, so you might get some benefit by spending a little time looking for different funds to increase your diversification. Note that ETFs don't really diversify any differently than mutual funds, they are just a different mechanism to invest in funds, and allow different trading strategies (trading during the day, derivatives, selling short, etc.). |
What percent of a company are you buying when you purchase stock? | As you can see at https://www.google.com/finance?q=NASDAQ%3AAAPL the number of apple shares at this very moment is 5.25B, so if you have 1 share you own 1 / 5.25B of the company. |
What emergencies could justify a highly liquid emergency fund? | I tend to agree that the need for liquidity is overplayed in this day and age. We live in a world of electronic transfers that take only a couple days at most. With my brokerage account I can go from stock to gas in my tank via debit card in about 3 days. We're a long way away from the days when it took weeks, phone calls, and physical checks in the mail to go from stock to cash in your hand. We've also moved a long way away from limited credit/debit card acceptance. It was not long ago that my mechanic didn't accept credit cards. Locksmiths didn't carry a square reader on their iPhone 10 years ago. However, don't expect debt to always be available. Many many many people with strong income and stellar credit histories had their credit/HELOC limits slashed from 2008-2010 while banks pared back risk. A cash position of a size that makes sense gives you a high level of short term control; you aren't reliant on someone else's money. Liquidity isn't the main issue with emergency funds. The main issue is psychological. Build a foundation rather than overly optimistically chasing yield. |
How to share income after marriage and kids? | My own personal point of view. I earn about twice what my wife to be earns. We are planning on getting married next year. I ultimately do all the finances (basically because she hates that kind of thing) not because I'm in charge or whatever. To work out how we do this I wrote a spreadsheet: At the top it has my monthly pay in one column and her's in another. I add all our bills (against me initally). At the bottom I have a total of both of our "spending money". Spending money is wage - bills - savings I then move money out of my column into her column. My goal is that we pay all the bills and save a decent amount and have roughly the same amount to spend each month. So each persons spending money should be roughly equal. I then fine tune this as things change (if we get a pay rise we alter it, if a bill goes up or down we alter it) To manage this we have 4 accounts, a joint account to pay bills (both give a set amount to each mont), a savings acount (both give a set amount to each month) and our own accounts (where we get paid and where our spending money lives). Like everyone else says, this seems fair to me. I don't earn more, we both earn "an amount" and this should be split equally. |
Is it practical to take actual delivery on a futures contract, and what is the process? | Here's a good link that can answer your question: How to take delivery of a futures contract The relevant part states: Prior to delivery day, they inform customers who have open long positions that they must either close out the position or prepare to take delivery and pay the full value of the underlying contract. By the same token traders with short positions are informed that they must close out their trades or prepare to deliver the underlying commodity. In this case, they must have the required quantity and quality of the deliverable commodity on hand. On the few occasions that a buyer accepts delivery against his futures contract, he is usually not given the underlying commodity itself (except in the case of financials), but rather a receipt entitling him to fetch the hogs, wheat, or corn from warehouses or distribution points. I hope this helps. Good luck! |
Better to rent condo to daughter or put her on title? | Obviously you have done well financially in order to be able to purchase a condo for cash, presumably, without risk of your other obligations. To put things in perspective, we are probably talking about less than $5,000 in tax savings. If she is on the title then she is a co-owner. Are you okay with that? You would essentially be giving this child a 50% stake in a property without compensation. Will your other children be okay with it? As your question stated you would prefer to not have her as an owner. However, is it better to not have her as an owner, So I would buy the condo without her on the title and just pay the extra $100 per month in property tax. It is probably "small potatoes" in comparison to your net worth. I would also only charge her at most your cost of carrying the property as rent. While you will create income all of it (and probably more) could be written off as costs. There should be no income tax burden created from this situation. Your accountant can help with any paperwork that needs to be filed. |
Price graphs: why not percent change? | The actual price is represented on charts and not the change in price as a percentage, because it is the actual price which is used in all other parts of analysis (both technical and fundamental), and it is the actual figure the security is bought and sold at. A change in price has to be relative to a previous price at a previous time, and we can easily work out the change in price over any given time period. I think what you are concerned about is how to compare a certain actual price change in low priced securities to the same actual price change in a higher priced securities. For example: $1.00 rise in a $2.00 stock representing a 50% increase in price; $1.00 rise in a $10.00 stock representing a 10% increase in price. On a standard chart both of these look the same, as they both show a $1.00 increase in price. So what can we do to show the true representation of the percentage increase in price? It is actually quite simple. You view the chart using a log scale instead of a standard scale (most charting packages should have this option). What may look like a bubble on a standard scale chart, looks like a healthy uptrend on a log scale chart and represents a true picture of the percentage change in price. Example of Standard Price Scale VS LOG Price Scale on a Chart Standard Price Scale On the standard scale the price seems to have very little movement from Mar09 to Jan12 and then the price seems to zoom up after Jan12 to Mar13. This is because a 4% increase (for example) of $0.50 is only $0.02, whilst a 4% increase of $7.00 $0.28, so the increases seem much bigger at the end of the chart. LOG Price Scale On the LOG chart however, these price changes seem to be more evenly displayed no matter at what price level the price change has occurred at. This thus give a better representation of how fast or slow the price is rising or falling, or the size of the change in price. |
What is the meaning of Equal Housing Lender? Do non-banks need to display it? | At the top result of the Google search, on the Google results page it's sumarized as applicable to every lender participating in FDIC: The terms equal housing lender and equal opportunity lender are synonymous and refer to all banks insured by the Federal Deposit Insurance Corporation in the United States. Such banks are prohibited from discriminating on the basis of race, color, religion, national origin, sex, handicap, or familial status. |
Can I trust the Motley Fool? | Hmm.. hey bro, not personal, but is what comes to mind: I guess my answer will be highly down voted... =P |
How does the importance of a cash emergency fund change when you live in a country with nationalized healthcare? | Unanticipated unemployment is usually the triggering factor for drawing on an emergency fund. Ask yourself: what happens if I lose my job tomorrow? Or my spouse becomes unemployed? What happens if I become disabled and can't work for x amount of time? Sure, you can discount your chances of needing such a fund if you have free health care. But having health insurance doesn't change the fact that an emergency fund is a good idea. There are many ways to go broke! |
Super-generic mutual fund type | If you are looking for an index index fund, I know vanguard offers their Star fund which invests in 11 other funds of theirs and is diversified across stocks, bonds, and short term investments. |
How to take advantage of home appreciation | Even selling isn't riskless. Sure, your house has gained value-- but unless that's due to improvements you made to it, every other house in the neighborhood you might buy has gained value too, so moving might not result in extracting any net value. This is one of the reasons I keep reminding folks that a house is not an investment. It can be a business, if you're renting it out. But if you're occupying it, it is simply housing. If you are lucky you'll make a profit if and when you sell it, but don't count on that. It does store value, but except for taking loans against that it's had to access that value. And lower loan rates than you'd otherwise pay are not a huge value when you'd save more if you don't borrow at all. The only use I'm making of my house's value is that by taking a very-low-rate mortgage when I could have paid cash I was able to leave more money in my investments -- arguably the safest leveraged investment possible. |
Are marijuana based investments promising, or just another scam? | Is there any truth to this, or is this another niche scam that's been brewing the last few years? While it may not be an outright scam, such schemes do tend to be on borderline of scams. Technically most of what is being said claimed can be true, however in reality such windfall gains never happen to the investors. Whatever gains are there will be cornered by the growers, trades, other entities in supply chain leaving very little to the investors. It is best to stay away from such investments. |
Google Finance: Input Parameters For Simple Moving Averages | I looked at this a little more closely but the answer Victor provided is essentially correct. The key to look at in the google finance graph is the red labled SMA(###d) would indicate the period units are d=days. If you change the time axis of the graph it will shift to SMA(###m) for period in minutes or SMA(###w) for period in weeks. Hope this clears things up! |
Paid credit card bill, but money didn't leave my checking account [duplicate] | The fact that your credit card has seen the payment is strong evidence that the transaction did in fact take place. But it's not unusual for there to be a delay of one or two business days before transactions show up in your online banking records. Saturday and Sunday are not business days. I bet you will see it on Monday. If it's not there by Tuesday, you could call the bank. |
How many days does Bank of America need to clear a bill pay check | This is based on my experience with Chase and may not be applicable to other banks. As you mentioned Chase as one of the banks you do business with hopefully this will be helpful to you. The money does come out of your account immediately. If the check isn't cashed in a certain amount of time, the check expires and you get the money credited back to your account. Once you have made a bill payment online you can check on the status of your check by looking at your payment activity, finding the payment in question, and following the "proof of payment" link. There is will provide you with information on your payment which you can submit to your payee to prove when you submitted the payment, and which they can use to verify with the bank that you really did send the payment as you claimed. Once the check is cashed, this page will also contain images of the front and back of the cashed check, so you can prove that the recipient really did cash it. You can see from this info that the check is being funded from a different account number than your own, which is good for security purposes since (per Knuth, 2008) giving someone else your bank routing number and account number as found on your personal checks basically provides them with all they need to (fraudulently, of course) clean out your account. |
Why is it that stock prices for a company seem to go up after a layoff? | AMD is doing more than just laying off staff. Their earnings report also includes sales of real estate and other turn around strategies that could be reflected in the stock coming up on hope from investors. At the same time, consider how much of an up is a definite sign of positive news and how much may just be random noise as even a broken clock will be right twice a day. Often there will be more than just an announcement of x% of staff being laid off. There will be plans to improve future profits and this is what shareholders would want to know. What is the management doing to move the company forward to better profits down the road. |
Why would I pick a specific ETF over an equivalent Mutual Fund? | In the case of VFIAX versus VOO, if you're a buy-and-hold investor, you're probably better off with the mutual fund because you can buy fractional shares. However, in general the expense ratio for ETFs will be lower than equivalent mutual funds (even passive index funds). They are the same in this case because the mutual fund is Admiral Class, which has a $10,000 minimum investment that not all people may be able to meet. Additionally, ETFs are useful when you don't have an account with the mutual fund company (i.e. Vanguard), and buying the mutual fund would incur heavy transaction fees. |
How does one typically exit (close out) a large, in-the-money long put option position? | While open interest usually correlates to volume, the mark of liquidity is the bid ask spread. Even when trading options with spreads as large as an ask 2x the bid, a more realistic price that traders are willing to accept lies somewhere in the middle. Any option can easily be exited at intrinsic value: underlying price - exercise price for calls, exercise price - underlying price for puts. For illiquid options, this will be the best price obtained. For longer term options, something closer to the theoretical price is still possible. If an underlying is extremely liquid, yet the options aren't quite then options traders will be much more ready to trade at the theoretical price. For exiting illiquid options, small, < 4 contracts, and infrequent, > 30 minute intervals, orders are more likely to be filled closer to the theoretical price; however, if one's sells are the only trades, traders on the other side will take note and accept ever lowering implied volatilities. With knowledge of what traders will accept, it is always more optimal to trade out of options rather than exercise because of the added costs and uncertainty involved with exercising and liquidating. |
Does freedom to provide services allow me contracting in Germany without paying taxes there (but in my home EU country)? | You're free to provide services, but if you stay in one country for more than half a year - you're generally considered to be its resident for tax purposes. Germany is no exception to the rule, in fact - this is true to almost any country in the world. If you provide the services from Poland, and never set foot in Germany - they won't say a word. |
New car price was negotiated as a “cash deal”. Will the price change if I finance instead? | as a used dealer in subprime sales, finance has to be higher than cash because every finance deal has a lender that takes a percentage "discount" on every deal financed. if you notice a dealer is hesitant to give a price before knowing if cash or finance, because every bit of a cash deal's profit will be taken by a finance company in order to finance the deal and then there's no deal. you might be approved but if you're not willing to pay more for a finance deal, the deal isn't happening if I have $5000 in a car, you want to buy it for $6000 and the finance lender wants to take $1200 as a "buy-fee" leaving me $4800 in the end. |
What are the tax benefits of dividends vs selling stock | In the US, dividends are presently taxed at the same rates as capital gains, however selling stock could lead to less tax owed for the same amount of cash raised, because you are getting a return of basis or can elect to engage in a "loss harvesting" strategy. So to reply to the title question specifically, there are more tax "benefits" to selling stock to raise income versus receiving dividends. You have precise control of the realization of gains. However, the reason dividends (or dividend funds) are used for retirement income is for matching cash flow to expenses and preventing a liquidity crunch. One feature of retirement is that you're not working to earn a salary, yet you still have daily living expenses. Dividends are stable and more predictable than capital gains, and generate cash generally quarterly. While companies can reduce or suspend their dividend, you can generally budget for your portfolio to put a reliable amount of cash in your pocket on schedule. If you rely on selling shares quarterly for retirement living expenses, what would you have done (or how much of the total position would you have needed to sell) in order to eat during a decline in the market such as in 2007-2008? |
For very high-net worth individuals, does it make sense to not have insurance? | The point of insurance is to trade high variable costs for much lower fixed costs. The question isn't whether you can afford what would be a catastrophic event for anyone else, but whether it would be better to pay a small amount regularly vs. a possibly larger amount occasionally. One of the reasons to buy insurance is to avoid costly litigation (rich people are more frequently targeted for litigation). By purchasing liability insurance, the insurance company pays for the litigation and/or settlement. If you are wealthy enough to keep an experienced litigation firm on retainer, you may not need that benefit, but it might be worth giving that stress to a third party. Life insurance is also an important part of estate planning because of the tax treatment of insurance payouts compared to the tax treatment of a large estate. There are certainly classes of insurance that make less sense for those with great cash flow, but money doesn't obviate all the benefits of insurance. |
how does one see the CBOE VIX index on Google Finance? | You can pull up the VIX index on Google Finance by entering INDEXCBOE:VIX |
Can saving/investing 15% of your income starting age 25, likely make you a millionaire? | Other people have already demonstrated the effect of compound interest to the question. I'd like to add a totally different perspective. Note that the article says if you can follow this simple recipe throughout your working career, you will almost certainly beat out most professional investors [...] you'll likely accumulate enough savings to retire comfortably. (the latter point may be the more practical mark than the somewhat arbitrary million (rupees? dollars?) My point here is that the group of people who do put away a substantial fraction of their (lower) early wages and keep them invested for decades show (at least) two traits that will make a very substantial difference to the average (western) person. They may be correlated, though: people who are not tempted or able to resist the temptation to spend (almost) their whole income may be more likely to not touch their savings or investments. (In my country, people like to see themselves as "world champions in savings", but if you talk to people you find that many people talk about saving for the next holidays [as opposed to saving for retirement].) Also, if you get going this way long before you are able to retire you reach a relative level of independence that can give you a much better position in wage negotiations as you do not need to take the first badly paid job that comes along in order to survive but can afford to wait and look and negotiate for a better job. Psychologically, it also seems to be easier to consistently keep the increase in your spending below the increase of your income than to reduce spending once you overspent. There are studies around that find homeowners on average substantially more wealthy than people who keep living in rental appartments (I'm mostly talking Germany, were renting is normal and does not imply poverty - but similar findings have also been described for the US) even though someone who'd take the additional money the homeowner put into their home over the rent and invested in other ways would have yielded more value than the home. The difference is largely attributed to the fact that buying and downpaying a home enforces low spending and saving, and it is found that after some decades of downpayment homeowners often go on to spend less than their socio-economic peers who rent. The group that is described in this question is one that does not even need the mental help of enforcing the savings. In addition, if this is not about the fixed million but about reaching a level of wealth that allows you to retire: people who have practised moderate spending habits as adults for decades are typically also much better able to get along with less in retirement than others who did went with a high consumption lifestyle instead (e.g. the homeowners again). My estimate is that these effects compound in a way that is much more important than the "usual" compounding effect of interest - and even more if you look at interest vs. inflation, i.e. the buying power of your investment for everyday life. Note that they also cause the group in question to be more resilient in case of a market crash than the average person with about no savings (note that market crashes lead to increased risk of job loss). Slightly off topic: I do not know enough how difficult saving 50 USD out of 50 USD in Pakistan is - and thus cannot comment whether the savings effort called for in the paper is equivalent/higher/lower than what you achieve. I find that trying to keep to student life (i.e. spending that is within the means of a student) for the first professional years can help kick-starting a nest egg (European experience - again, not sure whether applicable in Pakistan). |
Are stories of turning a few thousands into millions by trading stocks real? | I did once read a book titled "How I made a million dollars on the stock market". It sounded realistic enough to be a true story. The author made it clear on the first page that (a) this was due to some exceptional circumstances, (b) that he would never again be able to pull off something like this, and (c) you would never be able to pull of something like this, except with extreme luck. (The situation was small company A with a majority shareholder, other small company B tries to gain control by buying all the shares, the majority shareholder of A trying to prevent this by buying as many shares as possible, share price shooting up ridiculously, "smart" traders selling uncovered shorts to benefit when the price inevitably drops, the book author buying $5,000 worth of shares because they were going up, and then one enormous short squeeze catching out the traders. And he claimed having sold his shares for over a million - before the price dropped back to normal). Clearly not a matter of "playing your cards right", but of having an enormous amount of luck. |
How good is Wall Street Survivor for learning about investing? | To be honest, wall street survivor is good but when it comes to learning the stock markets from Europe, Beat wall street is the game to be playing. You can try it out for your self here on http://beatwallstreet.equitygameonline.com/ It is easy to use and there are monthly prizes available to winners, such as Ipads, Iphones and students who play it the game can win internships at top investment banks and brokers |
From Facebook's perspective, was the fall in price after IPO actually an indication that it went well? | There could be an impact on Facebook because just before the IPO, Morgan Stanley apparently sent information to selected clients that their analysts had just lowered their valuation of the company. There were also reports yesterday that the lowered valuation came about because Facebook sent some revised preliminary estimates of second quarter earnings (showing lower than expected earnings) to Morgan Stanley, and least one talking head said that Facebook might also face charges depending on what the cover letters and the e-mails back and forth between Facebook and Morgan Stanley said. Investigations have already been opened. Yes, a company wants to sell the stock being offered at the IPO at the highest price possible, but if it misled the public when offering the stock for sale (through its underwriters), it can also be liable, possibly even criminally liable. Material added in Edit: In fact, a lawsuit has already been filed in the US District Court in Manhattan in this matter. Whether the SEC ever does anything about the matter remains to be seen. |
Selling a stock for gain to offset other stock loss | Long term gains are taxed at 15% maximum. Losses, up to the $3K/yr you cited, can offset ordinary income, so 25% or higher, depending on your income. Better to take the loss that way. With my usual disclaimer: Do not let the tax tail wag the investing dog. |
Which Benjamin Graham book should I read first: Security Analysis or Intelligent Investor? | I would recommend reading Intelligent Investor first. It was written slightly more recently (1949) than Security Analysis (1934). More important is that a recently revised edition* of Intelligent Investor was published. The preface and appendix were written by Warren Buffett. Intelligent Investor is more practical as an introduction for a novice. You may decide not to read Security Analysis at all, as it seems more like an academic text or professional's guide i.e. for accounting. Benjamin Graham's Intelligent Investor remains relevant. It is used, successfully, as a guide for value investing, despite the hysteria of market sentiment and day-to-day variations, even extreme volatility. For example, I just read a nice article about applying the value investing principles extolled in Intelligent Investor a few weeks ago. It was written in the context of current markets, which is amazing, to be so applicable, despite the passage of decades. For reference, you might want to glance at this book review (published in March 2010!) of the original 1934 edition of Security Analysis. * The URL links to a one-paragraph summary by U.S. News & World Report. It does not link to a book sales website! |
Is the return on investment better with high or low dividends? | Let's say two companies make 5% profit every year. Company A pays 5% dividend every year, but company B pays no dividend but grows its business by 5%. (And both spend the money needed to keep the business up-to-date, that's before profits are calculated). You are right that with company B, the company will grow. So if you had $1000 shares in each company, after 20 years company A has given you $1000 in dividends and is worth $1000, while company B has given you no dividends, but is worth a lot more than $2000, $2653 if my calculation is right. Which looks a lot better than company A. However, company A has paid $50 every year, and if you put that money into a savings account giving 5% interest, you would make exactly the same money either way. |
How to make money from a downward European market? | What you do is you create an infomercial where you sell a booklet about junk investments that you are absolutely certian may survive an end of the world scenerio. Then you sell that booklet to people who fear for their family. It is basically a tax on stupidity but works because it prays on the fears of the stupid. It requires moral bankruptcy, but you can end up with quite a bit of money... of course if the Euro does crash then you have a lot of worthless money. |
How can one get their FICO/credit scores for free? (really free) | Credit Sesame monitors your credit score for free. My understanding is that they make their money off of credit card referrals. |
What types of receipts do I need to keep for itemized tax deductions? | I would say to only bother keeping the ones you know you'll use for itemized deductions. This includes any unreimbursed business expenses and vehicle licensing fees. There are a lot of other itemized tax deductions possible, but those are two common ones. Also, keep track of your business mileage (mileage before and after the trip, and commuting doesn't count as "business mileage"). You may also want to keep receipts of all out-of-state purchases if your state is one of those that tries to collect state tax on out-of-state purchases. Ensure your supported charities are 501(c)(3), and they'll give you a receipt at the end of the year. Don't bother keeping fast food or gas receipts (unless they're business expenses). |
How to measure a currencies valuation or devaluation in relevance to itself | It's very hard to measure the worth of an abstract concept like money, particularly over long periods of time. In the modern era we have things like the Consumer Price Index (CPI) in the United States, where the Bureau of Labor Statistics literally sends "shoppers" out to find prices of things and surveys people to find out what they buy. This results in a variety of "indexes" which variously get reported by media outlets as "inflation" (or "deflation" if the change in value goes the other way). There are also other measurements available like the MIT Billion Prices Project which attempt to make their own reading of the "worth" of currencies. Those kinds of things are about the only ways to measure a currency's change in "value to itself" because a currency is basically only worth what one can buy with it. While it isn't "all the world's currencies combined", there is a concept of the International Monetary Fund's "Special Drawing Rights (SDR)", which is a basket of five currencies used by world central banks to help "back" each other's currencies, and is (very) occasionally used as a unit of currency for international contracts. One might be able to compare the price of one currency to that of the SDR, or even to any other weighted average of world currencies that one wanted, but I don't think it's done nearly as often as comparing currencies to the basket of goods one can buy to find "inflation". Even though one might think what would be important to measure would be overall Money Supply Inflation, much more often people care more about measuring Price Inflation. (Occasionally people worry about Wage Inflation, but generally that's considered a result of high Price Inflation.) In order to try to keep this on topic as a "personal finance" thing rather than an "economics" thing, I guess the question is: Why do you want to know? If you have some assets in a particular currency, you probably care most about what you'll be able to buy with them in the future when you want or need to spend them. In that sense, it's inflation that you're likely caring about the most. If you're trying to figure out which currency to keep your assets in, it largely depends on what currency your future expenses are likely to be in, though I can imagine that one might want to move out of a particular currency if there's a lot of political instability that you're expecting to lead to high inflation in a currency for a time. |
15 year mortgage vs 30 year paid off in 15 | Why would anyone ever get a 15 year instead of just paying off a 30 year in 15 years? Because the rate is not the same. Never that I've seen in my 30 years of following rates. I've seen the rate difference range from .25% to .75%. (In March '15, the average rate in my area is 30yr 3.75% / 15yr 3.00%) For a $150K loan, this puts the 15yr payment at $1036, with the 30 (at higher rate) paid in 15 years at $1091. This $55 difference can be considered a flexibility premium," as it offers the option to pay the actual $695 in any period the money is needed elsewhere. If the rate were the same, I'd grab the 30, and since I can't say "invest the difference," I'd say to pay at a pace to go 15, unless you had a cash flow situation. A spouse out of work. An emergency that you funded with a high interest rate loan, etc. The advice to have an emergency fund is great until for whatever reason, there's just not enough. On a personal note, I did go with the 15 year mortgage for our last refinance. I was nearing 50 at the time, and it seemed prudent to aim for a mortgage free retirement. |
Saving tax for long term stock investment capital gain by quiting my current job? | The capital gain is counted as part of your income. So with a million capital gain you will be in a high tax bracket, and have to pay the corresponding capital gains tax rate on the million. |
Optimize return of dividends based on payout per share | What you're referring to is the yield. The issue with these sorts of calculations is that the dividend isn't guaranteed until it's declared. It may have paid the quarterly dividend like clockwork for the last decade, that does not guarantee it will pay this quarter. Regarding question number 2. Yield is generally an after the fact calculation. Dividends are paid out of current or retained earnings. If the company becomes hot and the stock price doubles, but earnings are relatively similar, the dividend will not be doubled to maintain the prior yield; the yield will instead be halved because the dividend per share was made more expensive to attain due to the increased share price. As for the calculation, obviously your yield will likely vary from the yield published on services like Google and Yahoo finance. The variation is strictly based on the price you paid for the share. Dividend per share is a declared amount. Assuming a $10 share paying a quarterly dividend of $0.25 your yield is: Now figure that you paid $8.75 for the share. Now the way dividends are allocated to shareholders depends on dates published when the dividend is declared. The day you purchase the share, the day your transaction clears etc are all vital to being paid a particular dividend. Here's a link to the SEC with related information: https://www.sec.gov/answers/dividen.htm I suppose it goes without saying but, historical dividend payments should not be your sole evaluation criteria. Personally, I would be extremely wary of a company paying a 40% dividend ($1 quarterly dividend on a $10 stock), it's very possible that in your example bar corp is a more sound investment. Additionally, this has really nothing to do with P/E (price/earnings) ratios. |
Is it better to buy put options or buy an inverse leveraged ETF? | The only use of options that I will endorse is selling them. If you believe the market is going down then sell covered, out of the money, calls. Buying calls or buying puts usually wastes money. That is because of a quality called Theta. If the underlying security stays the same the going price of an option will decrease, every day, by the Theta amount. Think of options as insurance. A person only makes money by selling insurance, not by buying it. |
How to evaluate stocks? e.g. Whether some stock is cheap or expensive? | nan |
Should I switch to this high rate checking account for my emergency fund? | If you're relatively certain that you're going to meet the requirements, it sounds like a good move for you. The #1 priority with emergency funds should be easy access to the money when you need it. Before the current economic situation, money market funds were great for this since they preserved the value of the dollars you put in. Now the rates on money market accounts are barely better than the 0.2% you're currently getting. |
What expenses do most people not prepare for that turn into “emergencies” but are not covered by an Emergency Fund? | Here's a few. Is this what you're looking for? Also this should probably be a community wiki. |
What are some good, easy to use personal finance software? [UK] | CashBase has a web app, an iPhone app and an Android app, all sync'ed up. It doesn't integrate with banks automatically, but you can import bank statements as CSV. Disclaimer: I'm CashBase's founder. |
What does it mean to be “offset against taxable gains”? | Offset against taxable gains means that the amount - $25 million in this case - can be used to reduce another sum that the company would otherwise have to pay tax on. Suppose the company had made a profit of $100 million on some other investments. At some point, they are likely to have to pay corporation tax on that amount before being able to distribute it as a cash dividend to shareholders. However if they can offset the $25 million, then they will only have to pay tax on $75 million. This is quite normal as you usually only pay tax on the aggregate of your gains and losses. If corporation tax is about 32% that would explain the claimed saving of approximately $8 million. It sounds like the Plaintiffs want the stock to be sold on the market to get that tax saving. Presumably they believe that distributing it directly would not have the same effect because of the way the tax rules work. I don't know if the Plaintiffs are right or not, but if they are the difference would probably come about due to the stock being treated as a "realized loss" in the case where they sell it but not in the case where they distribute it. It's also possible - though this is all very speculative - that if the loss isn't realised when they distribute it directly, then the "cost basis" of the shareholders would be the price the company originally paid for the stock, rather than the value at the time they receive it. That in turn could mean a tax advantage for the shareholders. |
How risky is it to keep my emergency fund in stocks? | I know this is heresy but if you have funds for significantly more than 6 months of expenses (let's say 12 months), how risky would it be to put it all into stock index funds? Quite risky as if you do need to dip into it, how fast could you get the cash? Also, do you realize the tax implications when you do sell the shares should you have an emergency? In the worst-case scenario, let's say you have a financial emergency at the same time the stock market crashes and loses half its value. You could still liquidate the rest and have sufficient funds for 6 months. Am I underestimating the risks of this strategy? That's not worst case scenario though. Worst case scenario would be another 9/11 where the markets are closed for nearly a week and you need the money but can't get the funds converted to cash in the bank that you can use. This is in addition to the potential wait for a settlement in the case of using ETFs if you choose to go that way. In the case of money market funds, CDs and other near cash equivalents these can be accessed relatively easily which is part of the point. A staggered approach where some cash is kept in house, some in accounts that can easily accessed and some in other investments may make sense though the breakdown would differ depending on how much risk people are willing to take. If it truly is an emergency fund then the odds of needing it should be very slim, so why live with near zero return on that money? Something to consider is what is called an emergency here? For some people a sudden $1,000 bill to fix their car that just broke down is an emergency. For others, there could be emergency trips to visit family that may have gotten into accidents or gotten a diagnosis that they may pass away soon. Consider what do you want to call an emergency here as chances are you may not be considering all that people would think is an emergency. There is the question of what other sources of money do you have to cover should issues arise. |
Is it impossible to get a home loan with a poor credit history after a divorce? | I am sorry for your troubles, but impressed with your problem solving skills. Keep going, things will get better. Your best hope is to find a place that does manual underwriting. If they do computer generated stuff, then you will be kicked for sure. If you can show 20% down, and have some savings, and have some history of paying bills, then you might be approved. Here in Florida, RP Funding still does manual underwriting. Another one that is mentioned is Church Hill mortgage. Also you might check with local credit unions. Of course your best bet to be approved is to be open and state upfront the challenges. You have to find someone that has the ability to think, has the ability to see passed the challenges, and has the authority to do so. |
Why is property investment good if properties de-valuate over time? | There are many different reasons to buy property and it's important to make a distinction between commercial and residential property. Historically owning property has been part of the American dream, for multiple reasons. But to answer your questions, value is not based on the age of the building (however it can be in a historic district). In addition the price of something and it's value may or may not be directly related for each individual buyer/owner (because that becomes subjective). Some buildings can lose there value as time passes, but the depends on multiple factors (area, condition of the building, overall economy, etc.) so it's not that easy to give a specific answer to a general question. Before you buy property amongst many things it's important to determine why you want to buy this property (what will be it's principal use for you). That will help you determine if you should buy an old or new property, but that pales in comparison to if the property will maintain and gain in value. Also if your looking for an investment look into REIT (Real Estate Investment Trust). These can be great. Why? Because you don't actually have to carry the mortgage. Which makes that ideal for people who want to own property but not have to deal with the everyday ins-and-outs of the responsibility of ownership....like rising cost. It's important to note that the cost of purchase and cost of ownership are two different things but invariably linked when buying anything in the material strata of our world. You can find publicly traded REITs on the major stock exchanges. Hope that helps. |
How long can a company keep the money raised from IPO of its stocks? | Is it correct that there is no limit on the length of the time that the company can keep the money raised from IPO of its stocks, unlike for the debt of the company where there is a limit? Yes that is correct, there is no limit. But a company can buy back its shares any time it wants. Anyone else can also buy shares on the market whenever they want. |
Why do shareholders participate in shorting stocks? | When I have stock at my brokerage account, the title is in street name - the brokerage's name and the quantity I own is on the books of the brokerage (insured by SIPC, etc). The brokerage loans "my" shares to a short seller and is happy to facilitate trades in both directions for commissions (it's a nice trick to get other parties to hold the inventory while you reap income from the churn); by selecting the account I have I don't get to choose to not loan out the shares. |
My previous and current employers both use Fidelity for 401(k). Does it make sense to rollover? | I would always suggest rolling over 401(k) plans to traditional IRAs when possible. Particularly, assuming there is enough money in them that you can get a fee-free account at somewhere like Fidelity or Vanguard. This is for a couple of reasons. First off, it opens up your investment choices significantly and can allow you significantly reduced expenses related to the account. You may be able to find a superior offering from Vanguard or Fidelity to what your employer's 401(k) plan allows; typically they only allow a small selection of funds to choose from. You also may be able to reduce the overhead fees, as many 401(k) plans charge you an administrative fee for being in the plan separate from the funds' costs. Second, it allows you to condense 401(k)s over time; each time you change employers, you can rollover your 401(k) to your regular IRA and not have to deal with a bunch of different accounts with different passwords and such. Even if they're all at the same provider, odds are you will have to use separate accounts. Third, it avoids issues if your employer goes out of business. While 401(k) plans are generally fully funded (particularly for former employers who you don't have match or vesting concerns with), it can be a pain sometimes when the plan is terminated to access your funds - they may be locked for months while the bankruptcy court works things out. Finally, employers sometimes make it expensive for you to stay in - particularly if you do have a very small amount. Don't assume you're allowed to stay in the former employer's 401(k) plan fee-free; the plan will have specific instructions for what to do if you change employers, and it may include being required to leave the plan - or more often, it could increase the fees associated with the plan if you stay in. Getting out sometimes will save you significantly, even with a low-cost plan. |
Snowball debt or pay off a large amount? | I want to know if I cut the citi card in half for example, how much would the min payment go down? If you goal is to become debt-free, the minimum payment shouldn't matter. Even if the minimum payment goes down, continue your current payment amount (or more, if you can afford it) until the balance is paid off. Paying the minimum will just keep you in debt longer. |
Does renting a room on AirBnB make all interest taxable? | It says that you are exempt "as long as such interest income is not effectively connected with a United States trade or business". So the interest is from money earned from doing business with/through AirBnb, a US company. So you will have to report it. Even if your bank doesn't send you a 1099-INT, you have to report it, unless it is under $0.49 because the IRS allows rounding. |
Can a credit card company raise my rates for making a large payment? | No. Credit card companies will typically not care about your individual credit card account. Instead they look either at a "package" of card accounts opened at roughly the same time, or of "slices" of cardholder accounts by credit rating. If an entire package's or slice's balance drops significantly, they'll take a look, and will adjust rates accordingly (often they may actually decrease rates as an incentive to increase you use of the card). Because credit card debt is unstructured debt, the bank cannot impose an "early payment penalty" of any kind (there's no schedule for paying it off, so there's no way to prove that they're missing out on $X in interest because you paid early). Generally, banks don't like CC debt anyway; it's very risky debt, and they often end up writing large balances off for pennies on the dollar. So, when you pay down your balance by a significant amount, the banks breathe a sigh of relief. The real money, the stable money, is in the usage fees; every time you swipe your card, the business who accepted it owes the credit card company 3% of your purchase, and sometimes more. |
Opening a bank account with cash: How should bills be presented? | Banks have electronic money counters so the order really doesn't matter. When I make a cash deposit that's large, I usually just put it in an envelope and hand it over. |
What are the differences between an investment mortgage and a personal mortgage? | According to my wife who used to work in the industry, since an investment mortgage is more likely to fail (they are just riskier) there are higher loan to value requirements and higher interest rates. They are just different products for different situations. |
Pay off car or use money for down payment | To focus on your question.. pay it off then trade in. The reason is because say you just have 14k laying around and buy a car for 14k, you must pay 14k plus tax. If you are in one of the states that allows the tax break, then trading the 14k valued vehicle in for a 14k vehicle will nullify your sales tax. As per your question, if you traded the car in at 7k, you would then owe 7k plus tax. You only have 7k..so how would you pay for the tax and why would you want to? Pay off the car and you'll have 14k of tax free off any car. |
Lump sum annuity distribution — do I owe estate tax? | The page you linked shows "Federal changes eliminated Florida's estate tax after December 31, 2004" but no, estates are settled by the decedent's executor in the decedent's state. You receive an inheritance net of estate tax if any was due. |
Is there a way to claim a car purchase in the tax return? | IRS Publication 463 is a great resource to help you understand what you can and can't deduct. It's not a yes/no question, it depends on the exact company use, other use, and contemporaneous record keeping. |
buying a stock while the price is going down, and buy it at a lower price | In the US, it is perfectly legal to execute what you've described. However, since you seem to be bullish on the stock, why sell? How do you KNOW the price will continue downwards? Aside from the philosophical reasoning, there can be significant downside to selling shares when you're expecting to repurchase them in the near future, i.e. you will lose your cost basis date which determines whether or not your trade is short-term (less than 1 year) or long-term. This cost basis term will begin anew once you repurchase the shares. IF you are trying to tax harvest and match against some short-term gains, tax loss harvesting prior to long-term treatment may be suitable. Otherwise, reexamine your reasoning and reconsider the sale at all, since you are bullish. Remember: if you could pick where stock prices are headed in the short term with any degree of certainty you are literally one of a kind on this planet ;-). In addition, do remember that in a tax deferred account (e.g. IRA) the term of your trade is typically meaningless but your philosophical reasoning for selling should still be examined. |
How does a small worker co-op track/manage stocks/shares | What I know about small companies and companies who are not listed on the stock markets is this: If a small company has shares issued to different people either within an organization or outside the value of the shares is generally decided by the individual who wants to sell the share and the buyer who wants to buy it. Suppose my company issued 10 shares to you for your help in the organization. Now you need money and you want to sell it. You can offer it at any price you want to to the buyer. If the buyer accepts your offer thats the price you get. So the price of the share is determined by the price a buyer is willing to buy it at from you. Remember the Face value of the shares remains the same no matter what price you sell it for. Now annual profit distribution is again something called dividends. Suppose my company has 100 shares in total out of which I have given you 10. This means you are a 10% owner of the company and you will be entitled to 10% of the net profit the company makes. Now at the end of the year suppose my company makes a 12,000 USD net profit. Now a panel called board of directors which is appointed by share holders will decide on how much profit to keep within the company for future business and how much to distribute about share holders. Suppose they decide to keep 2000 and distribute 10,000 out of total profit. Since you own 10% shares of the company you get 1000. The softwares you are talking are accounting softwares. You can do everything with those softwares. After-all a company is only about profit and loss statements. |
Is there a law or regulation that governs the maximum allowable interest amount that can be charged on credit cards or in agreements where credit is extended? | What are those maximums, and do all countries have them? Usury, lending money for any interest at all, used to be anti-biblical: it wasn't a Christian thing to do, and so in Christian countries it was Jews who did it (Jews who were money-lenders). Asking for interest on loans is still anti-Koranic: so Islamic banks don't lend money for interest. Instead of your getting a mortgage from the bank to buy a house, the bank will buy the house, which you then buy from bank on a rent-to-own basis. Further details: |
Is this mortgage advice good, or is it hooey? | This doesn't say the whole story (like the length of the HELOC). if you have 15 years left on a mortgage and "refinance" into a 30 year HELOC then yes, your payments maybe 20% lower, but you add 15 years to pay it off. Just remember that interest occurs daily on what you owe. If you move 100K of debt from 5% mortgage to 6% HELOC you'll be paying more to the banks no matter how you slice it. |
What are the primary investment strategies people use and why do they use them? | There are two umbrellas in investing: active management and passive management. Passive management is based on the idea "you can't beat the market." Passive investors believe in the efficient markets hypothesis: "the market interprets all information about an asset, so price is equal to underlying value". Another idea in this field is that there's a minimum risk associated with any given return. You can't increase your expected return without assuming more risk. To see it graphically: As expected return goes up, so does risk. If we stat with a portfolio of 100 bonds, then remove 30 bonds and add 30 stocks, we'll have a portfolio that's 70% bonds/30% stocks. Turns out that this makes expected return increase and lower risk because of diversification. Markowitz showed that you could reduce the overall portfolio risk by adding a riskier, but uncorrelated, asset! Basically, if your entire portfolio is US stocks, then you'll lose money whenever US stocks fall. But, if you have half US stocks, quarter US bonds, and quarter European stocks, then even if the US market tanks, half your portfolio will be unaffected (theoretically). Adding different types of uncorrelated assets can reduce risk and increase returns. Let's tie this all together. We should get a variety of stocks to reduce our risk, and we can't beat the market by security selection. Ideally, we ought to buy nearly every stock in the market so that So what's our solution? Why, the exchange traded fund (ETF) of course! An ETF is basically a bunch of stocks that trade as a single ticker symbol. For example, consider the SPDR S&P 500 (SPY). You can purchase a unit of "SPY" and it will move up/down proportional to the S&P 500. This gives us diversification among stocks, to prevent any significant downside while limiting our upside. How do we diversify across asset classes? Luckily, we can purchase ETF's for almost anything: Gold ETF's (commodities), US bond ETF's (domestic bonds), International stock ETFs, Intl. bonds ETFs, etc. So, we can buy ETF's to give us exposure to various asset classes, thus diversifying among asset classes and within each asset class. Determining what % of our portfolio to put in any given asset class is known as asset allocation and some people say up to 90% of portfolio returns can be determined by asset allocation. That pretty much sums up passive management. The idea is to buy ETFs across asset classes and just leave them. You can readjust your portfolio holdings periodically, but otherwise there is no rapid trading. Now the other umbrella is active management. The unifying idea is that you can generate superior returns by stock selection. Active investors reject the idea of efficient markets. A classic and time proven strategy is value investing. After the collapse of 07/08, bank stocks greatly fell, but all the other stocks fell with them. Some stocks worth $100 were selling for $50. Value investors quickly snapped up these stocks because they had a margin of safety. Even if the stock didn't go back to 100, it could go up to $80 or $90 eventually, and investors profit. The main ideas in value investing are: have a big margin of safety, look at a company's fundamentals (earnings, book value, etc), and see if it promises adequate return. Coke has tremendous earnings and it's a great company, but it's so large that you're never going to make 20% profits on it annually, because it just can't grow that fast. Another field of active investing is technical analysis. As opposed to the "fundamental analysis" of value investing, technical analysis involves looking at charts for patterns, and looking at stock history to determine future paths. Things like resistance points and trend lines also play a role. Technical analysts believe that stocks are just ticker symbols and that you can use guidelines to predict where they're headed. Another type of active investing is day trading. This basically involves buying and selling stocks every hour or every minute or just at a rapid pace. Day traders don't hold onto investments for very long, and are always trying to predict the market in the short term and take advantage of it. Many individual investors are also day traders. The other question is, how do you choose a strategy? The short answer is: pick whatever works for you. The long answer is: Day trading and technical analysis is a lot of luck. If there are consistent systems for trading , then people are keeping them secret, because there is no book that you can read and become a consistent trader. High frequency trading (HFT) is an area where people basically mint money, but it s more technology and less actual investing, and would not be categorized as day trading. Benjamin Graham once said: In the short run, the market is a voting machine but in the long run it is a weighing machine. Value investing will work because there's evidence for it throughout history, but you need a certain temperament for it and most people don't have that. Furthermore, it takes a lot of time to adequately study stocks, and people with day jobs can't devote that kind of time. So there you have it. This is my opinion and by no means definitive, but I hope you have a starting point to continue your study. I included the theory in the beginning because there are too many monkeys on CNBC and the news who just don't understand fundamental economics and finance, and there's no sense in applying a theory until you can understand why it works and when it doesn't. |
My university has tranfered me money by mistake, and wants me to transfer it back | If you are convinced/sure its legit. Is doing a bank transfer to correct their mistake, actually the right way to do it in the first place? Best is to write to University and ask if this extra can be adjusted towards future payments. Not sure how much that is and would one or two future payments cover it off. The second best thing would be to ask if University can take it up with Bank and have this reversed? If the above don't work, then request for an address where you can send the check for the refund. |
What headaches will I have switching from Quicken to GnuCash? | I have not used Quicken; I've used GnuCash exclusively. It feels a bit rough with the UI: Balancing that, the data is stored in a gzip-compressed xml file. The compression is also optional, so you can save it as a plain xml file. This means that you have some hope of recovery if you wind up with a corrupted file. (And for programmer-types, you could keep it in source control for additional peace of mind.) My wife and I have been using it for several years now, and has worked well for us. LWN.net had a pair of Grumpy Editor reviews on personal finance software here and here which would be worth reading. |
Can a company donate to a non-profit to pay for services arranged for before hand? | Can a company say "StackExchange" donate to a non-profit company say $5,000 in agreement that they will spend that on paying a designer for a new website? And most importantly is this donation still tax deductible? A non-profit would have to typically create a bucket for IT Services or Website design. As long as "StackExchange" specify they employ a profession service to get it done, there would be no issue. If "StackExchange" were to specify an individula/company it would be an issue. |
Calculate a weekly payment on a loan when payment is a month away | Using the standard loan formula with 21% APR nominal, compounded weekly. Calculate an adjusted loan start value by adding 31 - 7 = 24 extra days of daily interest (by converting the nominal compounded weekly rate to a daily rate). For details see Converting between compounding frequencies Applying the standard formula r (pv)/(1 - (1 + r)^-n) = 189.80 So every weekly payment will be 189.80 Alternatively Directly arriving at the same result by using the loan formula described here, The extension x is 31 - 7 = 24 daily fractions of an average week (where 7 daily fractions of an average week equal one average week). As before, the weekly payment will be 189.80 Both methods are effectively the same calculation. |
Cheapest way to “wire” money in an Australian bank account to a person in England, while I'm in Laos? | You could use paypal to transfer money. You can pay with paypal and your UK contact could transfer the money to his bank account through paypal. I just received money this way from the US and paid 9 EUR for this. Receiving the funds is as quickly as clicking a button on the paypal site. Transfering it (without costs) took 1-3 days). It is by far the easiest way. If you are uncomfortable using paypal, the other option would be through your own bank account, where you would transfer using IBAN/SWIFT. The SWIFT bank account is usually the IBAN code plus a branch code. Often it is difficult to find the branch code, in that case you can use the IBAN+XXX. In the latter things might be delayed, but I actually haven't noticed the delay yet, since international transfer always seem to take between 1 and 10 days. The international transfering of money costs, except if it is within the EU region. The way to transfer money through Internet banking differs, from bank to bank. They keywords you need to look for are: SEPA, SWIFT, IBAN or international transfer. |
Investing in income stocks for dividends - worth it? | To answer your question: yes, it's often "worth it" to have investments that produce income. Do a Google search for "income vs growth investing" and you'll get a sense for two different approaches to investing in equities. In a nutshell: "growth" stocks (think Netflix, etc) don't pay dividends but are poised to appreciate in price more than "income" stocks (think banks, utilities, etc) that tend to have less volatile prices but pay a consistent dividend. In the long run (decades), growth stocks tend to outperform income stocks. That's why younger investors tend to pick growth stocks while those closer to retirement tend to stick with more stable income-producing portfolio. But there's nothing wrong with a mixed approach, either. I agree with Pete's answer, too. |
What to do with old company's 401k? [duplicate] | Your best bets are a Roth IRA or traditional IRA. If you roll it to a Roth, you will have to pay taxes on the amount you roll over (unless it was a Roth 401k), however what is in the Roth will grow tax free and it will be tax free when you withdraw. With a traditional IRA, you won't owe taxes on the money now but will pay taxes when you withdraw. You won't be able to withdraw this money until 59 1/2 years of age without paying a penalty, the same goes for your current 401k. If you take the money (for mortgage, other investment, etc.) and don't roll it over to a qualified account, you will owe taxes on it plus a 10% penalty. So you will only get between 60% and 70% of its value. |
How do rich people guarantee the safety of their money, when savings exceed the FDIC limit? | With a lot excess cash you eventually have two goals: Since interest on cash bank deposits does not exceed inflation and you have currency risk, you may want to get into other asset classes. Options that might be, but not limited to are: |
What's the appropriate way to signify an S-Corp? | Subchapter S Corporations are a special type of corporation; the difference is how they are taxed, not how they relate to their vendors or customers. As a result, they are named the same way as any other corporation. The rules on names of corporations vary by state. "Corporation" and "Incorporated" (and their abbreviations) are allowed by every state, but some states allow other names as well. The Wikipedia article "Types of business entity" lists an overview of corporation naming rules for each state. The S-Corp that I work for has "Inc." at the end of its name. |
What are some good books for learning stocks, bonds, derivatives e.t.c for beginner with a math background? | My personal favorites are Options, Futures, and Other Derivatives by John C Hull Thinking Fast and Slow - Daniel Kahneman Expected Returns - Antti Ilmanen [check out the video : How to Think About Expected Returns] It is a 600 page book … A summary of it: Without a rational expectation of expected returns, investing can lead to severe disappointment and disillusionment. Making a good model to forecast expected returns is so difficult. Near-term expectation is almost impossible. The key is very very much about focusing on the long-term, and on getting returns that are feasible, not outlandish. There are three pillars that are central: Practically, the work of an investment manager today involves finding many different sources of returns, and diversifying effectively between them, and finally being humble about what returns we can expect today. |
Why do stocks gap up after a buyout is announced? | The "random walk" that you describe reflects the nature of the information flow about the value of a stock. If the flow is just little bits of relatively unimportant information (including information about the broader market and the investor pool), you will get small and seemingly random moves, which may look like a meander. If an important bit of information comes out, like a merger, you will see a large and immediate move, which may not look as random. However, the idea that small moves are a meander of search and discovery and large moves are immediate agreements is incorrect. Both small moves and large moves are instantaneous agreements about the value of a stock in the form of a demand/supply equilibrium. As a rule, neither is predictable from the point of view of a single investor, but they are not actually random. They look different from each other only because of the size of the movement, not because of an underlying difference in how the consensus price is reached. |
Why buying an inverse ETF does not give same results as shorting the ETF | Suppose that the ETF is currently at a price of $100. Suppose that the next day it moves up 10% (to a price of $110) and the following day it moves down 5% (to a price of $104.5). Over these two days the ETF has had a net gain of 4.5% from its original price. The inverse ETF reverses the daily gains/losses of the base ETF. Suppose for simplicity that the inverse ETF also starts out at a price of $100. So on the first day it goes down 10% (to $90) and on the second day it goes up 5% (to $94.5). Thus over the two days the inverse ETF has had a net loss of 5.5%. The specific dollar amounts do not matter here. The result is that the ETF winds up at 110%*95% = 104.5% of its original price and the inverse ETF is at 90%*105% = 94.5% of its original price. A similar example is given here. As suggested by your quote, this is due to compounding. A gain of X% followed by a loss of Y% (compounded on the gain) is not in general the same as a loss of X% followed by a gain of Y% (compounded on the loss). Or, more simply put, if something loses 10% of its value and then gains 10% of its new value, it will not return to its original value, because the 10% it gained was 10% of its decreased value, so it's not enough to bring it all the way back up. Likewise if it gains 10% and then loses 10%, it will go slightly below its original value (since it lost 10% of its newly increased value). |
Does Joel Greenblatt's “Magic Formula Investing” really beat the market? | Probably not. Once the formula is out there, and if it actually seems to work, more and more investors chase the same stocks, drive the price up, and poof! The advantage is gone. This is the very reason why Warren Buffett doesn't announce his intentions when he's buying. If people know that BRK is buying, lots of others will follow. |
Start Investing - France | In france you have several options: A good place to starts with: 1% as of may 2015 interest is low, but's money is 100% liquid (you can withdraw antime). You got slightly superior interest rates, and have to wire at least 45€ a month on it. It gives you lots of advantages if you use it to buy a house. You cannot use the money unless you close the account, so it's not as flexible. You get 2% rates as of may 2015 which is quite good. [If you open this account now, it's only 1% making it not so attractive. Look at Life Insurance Instead.] This one is useless: interest rate is too low. I highly recommend this one. You can open it with 0 cost with several online banks (ing, boursorama, ...) Minimum deposit should be around 1000€. Rate is flexible, but usually higher than what you get with the others. You shouldn't withdraw the money before 8 years (because of taxes, but you can still do it if you need). You can add money on it later if you want. Because of the 8 year duration, it's better to open one as soon as you can, even with the minimum amount. Open an PEL + Livret A + Life insurance. Put the minimum on both PEL + life insurance. Put every thing else on Livret A. If you are 100% sure you don't need some of the livret A money, send it to PEL. [As of 2017, PEL is not so attractive anymore. Bet on the Life Insurance instead, unless your account was open prior to this]. |
Apartment lease renewal - is this rate increase normal? | Absolutely yes. Just because a lease provides an option for renewal does not mean that a tenant cannot try to re-negotiate for better terms. You should always negotiate the rent. And start this conversation as soon as possible. Offer to pay three months’ rent in advance (of course, if you have enough means). |
How to calculate average drawdown of a trading system? | First of all, I think I'll clear off some confusion in the topic. The Sterling Ratio is a very simple investment portfolio measurement that fits nicely to the topic of personal finance, although not so much to a foreign exchange trading system. The Sterling Ratio is mainly used in the context of hedge funds to measure its risk-reward ratio for long term investments. To do so, it has been adapted to the following in order to appear more like the Sharpe Ratio: I Suppose this is why you question the Average Largest Draw-down. I'll come back to that later. It's original definition, suggested by the company Deane Sterling Jones, is a little different and perhaps the one you should use if you want to measure your trading system's long term risk-reward ratio, which is as followed: Note: Average Annual Draw-down has to be negative on the above-mentioned formula. This one is very simple to calculate and the one to use if you want to measure any portfolio's long-term results, such an example of a 5 or 10 years period and calculate the average of each years largest drawdown. To answer @Dheer's comment, this specific measurement can also be used in personal investments portfolio, which is considered a topic related to personal finance. Back to the first one, which answers your question. It's used in most cases in investment strategies, such as hedging, not trading systems. By hedging I mean that in these cases long term investments are made in anti-correlated securities to obtain a diversified portfolio with a very stable growth. This one is calculated normally annually because you rely on the Annual Risk-Free Rate. Having that in mind I think you can guess that the Average Largest Drawdown is the average between the Largest/Maximum Drawdown from each security in the portfolio. And this doesn't make sense in a trading system. Example: If you have invested in 5 different securities where we calculated the Largest Draw-down for each, such as represented in the following array: MaxDD[5] = { 0.12, 0.23, 0.06, 0.36, 0.09 }, in this case your Average Largest Draw-down is the average(MaxDD) that equals 0.172 or 17,2% If your portfolio's annual return is 15% and the Risk-free Rate is 10%, your Sterling Ratio SR = (0.15 - 0.10)/0.172, which result to 0.29. The higher the rate better is the risk-reward ratio of your portfolio. I suggest in your case to only use the original Sterling Ratio to calculate your long-term risk-reward, in any other case I suggest looking at the Sharpe and Sortino ratios instead. |
Is it legal for a vendor to reuse credit details from a previous transaction | It is very much legal and in fact depending on the fine print of the purchase you make, you have now established a business relationship among which gives the business the right to hold on to your information (unless privacy policy states otherwise) and reuse it under certain circumstances (such as auto shipments) and when they called and asked you if you wanted it and you said OK, you acknowledged authorization. All legal even if pushy and less than pretty. |
Why is day trading considered riskier than long-term trading? | Well, let me take your question for baremetal, and aknowledge you did not asked about the difference between daytrading and investing which is obviously leverage. I would not consider daytrading more risky as long as you keep leverageout of the equation. Daytrading can be turbolent and confusing, where things unfold in a very short amount of time, (let trade nfp payroll or some breaking event, yay), eventually the risk is more overseeable in long term trading, as soon as you put leverage into the equation things look vary different, indeed. |
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