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Preferred vs Common Shares in Private Corporation | Preferred dividends and common dividends are completely separate transactions. There's not a single "dividend" payment that is split between preferred and common shares. Dividends on preferred shares are generally MUCH higher than common dividends, and are generally required by the terms of the preferred shares, again unlike common dividends, which are discretionary. |
What can I replace Microsoft Money with, now that MS has abandoned it? | hledger is a free software, cross-platform double-entry accounting tool I've been working on for a while. It has command-line and web-based interfaces to your local data, and some other interesting features. There's also ledger (http://wiki.github.com/jwiegley/ledger/) which is command-line only. These are.. different, but worth a look for some folks. |
Can a dividend reinvestment plan (DRIP) and share purchase plan (SPP) be used with a TFSA? | You can hold a wide variety of investments in your TFSA account, including stocks such as SLF. But if the stocks are being purchased via a company stock purchase plan, they are typically deposited in a regular margin account with a brokerage firm (a few companies may issue physical stock certificates but that is very rare these days). That account would not be a TFSA but you can perform what's called an "in-kind" transfer to move them into a TFSA that you open with either the same brokerage firm, or a different one. There will be a fee for the transfer - check with the brokerage that currently holds the stock to find out how costly that will be. Assuming the stock gained in value while you held it outside the TFSA, this transfer will result in capital gains tax that you'll have to pay when you file your taxes for the year in which the transfer occurs. The tax would be calculated by taking the value at time of transfer, minus the purchase price (or the market value at time of purchase, if your plan allowed you to buy it at a discounted price; the discounted amount will be automatically taxed by your employer). 50% of the capital gain is added to your annual income when calculating taxes owed. Normally when you sell a stock that has lost value, you can actually get a "capital loss" deduction that is used to offset gains that you made in other stocks, or redeemed against capital gains tax paid in previous years, or carried forward to apply against gains in future years. However, if the stock decreased in value and you transfer it, you are not eligible to claim a capital loss. I'm not sure why you said "TFSA for a family member", as you cannot directly contribute to someone else's TFSA account. You can give them a gift of money or stocks, which they can deposit in their TFSA account, but that involves that extra step of gifting, and the money/stocks become their property to do with as they please. Now that I've (hopefully) answered all your questions, let me offer you some advice, as someone who also participates in an employee stock purchase plan. Holding stock in the company that you work for is a bad idea. The reason is simple: if something terrible happens to the company, their stock will plummet and at the same time they may be forced to lay off many employees. So just at the time when you lose your job and might want to sell your stock, suddenly the value of your stocks has gone way down! So you really should sell your company shares at least once a year, and then use that money to invest in your TFSA account. You also don't want to put all your eggs in one basket - you should be spreading your investment among many companies, or better yet, buy index mutual funds or ETFs which hold all the companies in a certain index. There's lots of good info about index investing available at Canadian Couch Potato. The types of investments recommended there are all possible to purchase inside a TFSA account, to shelter the growth from being taxed. EDIT: Here is an article from MoneySense that talks about transferring stocks into a TFSA. It also mentions the importance of having a diversified portfolio! |
Advantages of paying more of your mortgage while you know you won't continue to live there your whole life | In the Netherlands specifically, there are several reasons to pay extra off on your mortgage. First, house prices have dropped significantly in the last several years. They are rising slowly now, but it's region specific and you can still borrow more than 100% of the price of the house. Under these conditions, if you choose to sell your house and the outstanding mortgage amount is greater than the value of your house, you are left with a gap (restschuld) to finance. I think the rules have changed recently around this, allowing you to finance this gap with a new mortgage, but this is not a good idea. The tax implications of this are likely to be complicated in the long run and your new house may not cover this gap for some time. Second, the less you owe on your house, the lower mortgage rates you can get. Mortgages in the Netherlands usually fall into categories based on percentage of the auction price at a foreclosure sale (executiewaarde). If you pay more of your mortgage off, you may qualify for a lower interest rate, possibly making refinancing interesting. This is especially important if interest rates continue to drop but the value of your house does not increase or even decreases. Third, if you choose to keep your house and rent it out, the banks in the Netherlands have very strict rules on this if you want to do it above board. I've read that some banks require the mortgage amount (NB not the value you may have built up in a linked savings or insurance account) to be less than 50% of the foreclosure auction price (executiewaarde). Also, related to point 2, if you have something other than a linear or annuity mortgage, you will need to refinance to do this as the tax advantages around savings mortgages ([bank]spaarhypotheken) do not apply if it is not used as your own residence. Finally, if you choose to sell and you are in the happy position of having the value of your house be greater than the value of your mortgage (you have an overwaarde), there may still be some obstacles. Any value you have accumulated in a linked savings or life insurance account is not available until after you sell your house. Extra value derived purely from the difference between mortgage value and sale price may be easier to deal with. EDIT: As a final note, I've made extra payments on both a "Spaarhypotheek" (linked life insurance) and a "Bankspaarhypotheek" (linked savings account). In one, the principal paid each month reduced and the mortgage lifetime stayed the same. In the other, the principal paid each month stayed the same and the lifetime reduced. In both cases, interest payments were less each month. I would contact your mortgage provider to understand what the expected impact of extra payments will be. |
Why would you elect to apply a refund to next year's tax bill? | Not a financially sound decision in my humble opinion. Basically, you are prepaying your taxes and the only reason you want to do that is if you don't have the discipine to save that money for when it is time to pay next year (assuming you will have to). |
How much is inflation? | There is a thing called the consumer price index (CPI) There is a basket of goods that the people who keep the index basically shop for. It is much more detailed for the sake of accuracy, but bottom line is they shop for the same stuff each year. They measure the difference from year to year and that gives you a pretty good idea of inflation from a regular person point of view. http://www.inflationdata.com/Inflation/Consumer_Price_Index/HistoricalCPI.aspx But it isn't without its faults, people bicker about the methodology and what constitutes the index. http://www.investopedia.com/articles/07/consumerpriceindex.asp?viewed=1 |
How does giving to charity work? | If I donate $10,000 to charity then I can deduct that $10,000 from my income and not pay income taxes on it. So if I make $50,000 a year then I will only pay income taxes on $40,000 instead of $50,000 since I donated $10,000 to charity. This is what is meant when charity contributions are said to be tax deductible. Don't feel like you have to donate to charity. You owe no one anything. You do more for others by working (assuming you work in the private sector). If you know of someone personally that is in need of aid then you could give them some help directly. I find this more effective then blindly dumping money in a bureaucratic, inefficient charity. I also find there are very few people in need of charity. Personally, I think charity donations are a way for people to feel good about themselves. They rarely care if their donations are effective. |
How does the currency between countries relate | Firstly currency prices, like any asset, depend on supply and demand. Meaning how many people want to exchange a currency to another one vs. wanting to buy that currency using another currency. Secondly, it really depends on which country and economy you are talking about. In emerging economies, currencies are very often influenced by the politics of that country. In cases like the US, there are a myriad reasons. The USD is mostly governed by psychology (flight to safety) and asset purchases/sales. In theory, currencies balance, given the inflation of a country and its trade with other countries. e.g. Germany, which was always exporting more than it was importing, had the problem of a rising currency. (Which would make its exports more expensive on foreign markets. This is the balancing act.) |
Why are stocks having less institutional investors a “good thing”? | Because someone smarter than you by 50 IQ points (a quant) will depart their larger position long before you have a chance to see it coming. Your stop losses are useless as the market will open with the issue below your sell price. Your trade even if place at the same mine would settle after theirs. don't piss in the tall grass with the big dogs. If they are wrong or right does not matter you will be haircut or whipsawed. |
Why do I get a much better price for options with a limit order than the ask price? | Sounds to me like you're describing just how it should work. Ask is at 30, Bid is at 20; you offer a new bid at 25. Either: Depending on liquidity, one or the other may be more likely. This Investorplace article on the subject describes what you're seeing, and recommends the strategy you're describing precisely. Instead of a market order, take advantage of the fact that the options world truly is a marketplace — one where you can possibly get a better price just by asking. How does that work? If you use a limit order (instead of a market order) when opening a position, you can tell your broker how much you are willing to pay to enter a trade. For example, if you enter a limit price of $1.15, you can see whether the market-maker will bite. You will be surprised at how many times you will get your price (i.e., $1.15) instead of the ask price of $1.30. If your order at $1.15 is not filled after a few minutes, you can modify your order and pay the ask price by entering a market order or limit order at the ask price (that is, you can tell your broker to pay no more than $1.30). |
When a stock price rises, does the company get more money? | No. Not directly. A company issues stock in order to raise capital for building its business. Once the initial shares are sold to the public, the company doesn't receive additional funds from future transactions of those shares of stock between the public. However, the company could issue more shares at the new higher price to raise more capital. |
What are the pros and cons of investing in a closed-end fund? | One advantage not pointed out yet is that closed-end funds typically trade on stock exchanges, whereas mutual funds do not. This makes closed-end funds more accessible to some investors. I'm a Canadian, and this particular distinction matters to me. With my regular brokerage account, I can buy U.S. closed-end funds that trade on a stock exchange, but I cannot buy U.S. mutual funds, at least not without the added difficulty of somehow opening a brokerage account outside of my country. |
Long(100%)-Short(-100%) investment explanation | There is no difference. When dealing with short positions, talking about percentages become very tricky since they no longer add up to 100%. What does the 50% in your example mean? Unless there's some base amount (like total amount of the portfolio, then the percentages are meaningless. What matters when dealing with long and short positions is the net total - meaning if you are long 100 shares on one stock trade and short 50 shares on another, then you are net long 50 shares. |
Is an RRSP always “self-directed”? What makes a “self-directed” RRSP special? | The term self-directed generally refers to RRSP accounts where the account holder has not only the ability to determine a basic investment asset mix (such as can be accomplished even with a limited selection of mutual funds) but, more specifically, the self-directed account holder has a much wider choice of financial instruments beyond mutual funds, GICs, and/or cash savings. A self-directed RRSP generally permits the account holder to also invest or trade directly in financial instruments such as: Those kinds of instruments are not typically available in a non-self-directed mutual fund or bank RRSP. Typical mutual fund or bank RRSPs offer you only their choice of products – often with higher fees attached. Related resources: |
Is there a standard or best practice way to handle money from an expiring UTMA account? | I'd first put it in CDs or other short term account. Get through school first, then see where you land. If you have income that allows you to start a Roth IRA, I'd go for that, but keep it safe in case you actually need it back soon. After school, if you don't land a decent job fast, this money might be needed to live on. How long will it last if you take a few months to find work? If you do find a good job, moving, and setting up an apartment has a cost. Once you're there, I'd refer you to the many "getting started" Q&As on this site. |
What implications does having the highest household debt to disposable income ratio have on Australia? | Stock market Tends to follow the DJIA and FTSE, so unlikely to see an Australia-only crash, especially while resources are doing so well. If China's growth slows before other ailing sectors improve, a downturn becomes more likely and the potential severity of the downturn increases. Economy A huge question to which I would refer you to Steve Keen: http://www.debtdeflation.com/blogs/ See A Fork in the Road. Housing Market It's a bubble, stupid! Seriously, it's as though the Aussies waited for the US to get done and then simply borrowed the copy book. There are a multitude of articles out there about likely outcomes from where the housing market is and where it's going. See this for a sample of what's out there: http://blogs.forbes.com/greatspeculations/2010/07/26/aussie-housing-bubble-gets-popped-with-chinese-credit-crash/ Note: All three of the areas you raise - economy, stock mkt, housing - are so intertwined that it's tricky separating them out. A lot of reading on Steve Keen's site can help. |
How do you translate a per year salary into a part-time per hour job? | Rule of thumb: Double your hourly rate to get a yearly salary (in thousands). Halve your yearly salary to get your hourly rate. (assuming a 40hr/week job). eg: $50k/year = $25/hr. |
Why naked call writing is risky compare to Covered call? | There is unlimited risk in taking a naked call option position. The only risk in taking a covered call position is that you will be required to sell your shares for less than the going market price. I don't entirely agree with the accepted answer given here. You would not lose the amount you paid to buy the shares. Naked Call Option Suppose take a naked call option position by selling a call option. Since there is no limit on how high the price of the underlying share can go, you can be forced to either buy back the option at a very high price, or, in the case that the option is exercised, you can be force. to buy the underlying shares at a very high price and then sell them to the option holder at a very low price. For example, suppose you sell an Apple call option with a strike price of $100 at a premium of $2.50, and for this you receive a payment of $250. Now, if the price of Apple skyrockets to, say, $1000, then you would either have to buy back the option for about $90,000 = 100 x ($1000-$100), or, if the holder exercised the option, then you would need to buy 100 Apple shares at the market price of $1000 per share, costing you $100,000, and then sell them to the option holder at the strike price of $100 for $10,000 = 100 x $100. In either case, you would show a loss of $90,000 on the share transaction, which would be slightly offset by a $250 credit for the premium you received selling the call. There is no limit on the potential loss since there is no limit on how high the underlying share price can go. Covered Call Option Consider now the case of a covered call option. Since you hold the underlying shares, any loss you make on the option position would be "covered" by the profit you make on the underlying shares. Again, suppose you own 100 Apple shares and sell a call option with a strike price of $100 at a premium of $2.50 to earn a payment of $250. If the price of Apple skyrockets to $1000, then there are again two possible scenarios. One, you buy back the option at a premium of about $900 costing you $90,000. In order to cover this cost you would then sell your 100 Apple shares at the market price of $1000 per share to realise $100,000 = 100 x $1000. On the other hand, if your option is exercised, then you would deliver your 100 Apple shares to the option holder at the contracted strike price of $100 per share, thus receiving just $10,000 = 100 x $100. The only "loss" is that you have had to sell your shares for much less than the market price. |
How many days does Bank of America need to clear a bill pay check | Firstly, it isn't so generous. It is a win-win, but the bank doesn't have to mail me a free box of checks with my new account, or offer free printing to compete for my business. They already have the infrastructure to send out checks, so the actual cost for my bank to mail a check on my behalf is pretty minimal. It might even save them some cost and reduce exposure. All the better if they don't actually mail a check at all. Per my bank Individuals and most companies you pay using Send Money will be mailed a paper check. Your check is guaranteed to arrive by the delivery date you choose when you create the payment. ... A select number of companies–very large corporations such as telecoms, utilities, and cable companies–are part of our electronic biller network and will be paid electronically. These payments arrive within two business days... So the answer to your question depend on what kind of bill pay you used. If it was an electronic payment, there isn't a realistic possibility the money isn't cashed. If your bank did mail a paper check, the same rules would apply as if you did it yourself. (I suppose it would be up to the bank. When I checked with my bank's support this was their answer.) Therefore per this answer: Do personal checks expire? [US] It is really up to your bank whether or not they allow the check to be cashed at a later date. If you feel the check isn't cashed quickly enough, you would have to stop payment and contact whoever you were trying to pay and perhaps start again. (Or ask them to hustle and cash the check before you stop it.) Finally, I would bet a dime that your bank doesn't "pre-fund" your checks. They are just putting a hold on the equivalent money in your account so you don't overdraw. That is the real favor they do for you. If you stopped the check, your money would be unfrozen and available. EDIT Please read the comment about me losing a dime; seems credible. |
New to options trading and need help understanding an options spread risk graph. What am I missing? | You haven't said why you think you will gain at $41, but the graph never lies. Take it one piece at a time: At $41, your stock will lose a big chunk of value. Your short calls will expire. Your puts will gain a bit of value. The stock's loss outweighs the option gains. |
Organizing Expenses/Income/Personal Finance Documents (Paperless Office) | If you're curious, here are my goals behind this silly madness You said it... The last two words, I mean...:-) If you're auditing your statements - why do you need to keep the info after the audit? You got the statement for last month, you verified that the Starbucks charge that appears there is the same as in your receipts - why keeping them further? Done, no $10 dripping, throw them away. Why do you need to keep your refrigerator owner's manual? What for? You don't know how to operate a refrigerator? You don't know who the manufacturer is to look it up online in case you do need later? Read it once, mark the maintenance details in your calendar (like: TODO: Change the water filter in 3 months), that's it. Done. Throw it away (to the paper recycle bin). You need the receipt as a proof of purchase for warranty? Make a "warranty" folder and put all of them there, why in expenses? You don't buy a refrigerator every months. That's it, this way you've eliminated the need to keep monthly expenses folders. Either throw stuff away after the audit or keep it filed where you really need it. You only need a folder for two months at most (last and current), not for 12 months in each of the previous 4 years. |
In today's low interest environment, is it generally more economical to buy or lease a new car in the US? | The most economical way is to save your money, and buy a 1+ year old used car with cash. |
Does a stock holder profit from a reverse-stock split? | These are not real gains. Wherever you're looking this up, the prices are not adjusted for corporate actions. In a reverse stock split the price of a single share multiplies by five, but as a shareholder you hold only one share after for every five that you did before. |
Is there a country that uses the term “dollar” for currency without also using “cents” as fractional monetary units? | Going through the list of economies that currently use the dollar, all of them list cents as a fractional unit. In Hong Kong and Taiwan, the 1/100 fractional unit is still called a cent, but it's no longer in circulation in coin form and only finds use in financial markets or electronic payments. In countries like Malaysia, the word "sen" is used as the translation of the word "cent", even though the word for the actual currency, "ringgit", isn't a translation of the word "dollar". A similar situation occurs in Panama. The local currency is called the balboa, and it's priced on par (1:1) with the US dollar. US banknotes are also accepted as legal tender, and Panamanians sometimes use the terms balboa/dollar interchangeably. The 1/100 subdivision of the balboa is the centésimo, which is merely a translation of cent. Like Malaysia, the fractional unit is called "cent" (or a translation) but the main unit isn't merely a translation of the word "dollar." On a historical note, the Spanish Dollar was subdivided into 8 reales in order to match the German thaler (the word that forms the basis for the English word "dollar"). |
Which US market indexes (Dow/DJIA, S&P500, NASDAQ) include reinvested dividends? | .INX (the S&P 500 index itself) does not include reinvested dividens. You can figure total return by going to Yahoo finance, historical data. Choose the start year, and end year. You should find that data for SPY (going back to 1993) will show an adjusted close, and takes dividends into account. This isn't perfect as SPY has a .09% expense ratio, but it's better than just the S&P index. One of the more popular Dow ETF is DIA, this will let you similarly track the Dow while accounting for dividends. |
How Is the Price of a Stock Determined? [duplicate] | The market price of a stock is based on nothing at all more than what two parties were last willing to transact for it. The stock has a "bid" and an "ask" each is the value placed by a counterparty. For the sale to occur, one party must meet the other. The stock transacts and that is the price. For a stock to "go up" people must be willing to pay more for it. Likewise, for it to "go down" people must be willing to accept less for it. |
Confirming that stocks are listed under my name | Street name is not what you think it is in the question. The broker is the owner in street name. There is no external secondary owner information. I don't know if there is available independent verification, but if the broker is in the US and they go out of business suddenly, you can make a claim to the SIPC. |
Why are real-term bond yields systematically declining, and what does it mean for investors? | Keep in mind there are a couple of points to ponder here: Rates are really low. With rates being so low, unless there is deflation, it is pretty easy to see even moderate inflation of 1-2% being enough to eat the yield completely which would be why the returns are negative. Inflation is still relatively contained. With inflation low, there is no reason for the central banks to raise rates which would give new bonds a better rate. Thus, this changes in CPI are still in the range where central banks want to be stimulative with their policy which means rates are low which if lower than inflation rates would give a negative real return which would be seen as a way to trigger more spending since putting the money into treasury debt will lose money to inflation in terms of purchasing power. A good question to ponder is has this happened before in the history of the world and what could we learn from that point in time. The idea for investors would be to find alternative holdings for their cash and bonds if they want to beat inflation though there are some inflation-indexed bonds that aren't likely appearing in the chart that could also be something to add to the picture here. |
Why would you ever turn down a raise in salary? | One "economic reason" to turn down a raise is if your company gives bonuses based on performance reviews. When you get a raise in salary, your boss usually expects a better performance from you. That being said, if you get the raise, and your performance review is worse, you might get a smaller annual income. |
Buying a home - brokerage fee | Every situation is possible, it depends on what the contract states. According to Nolo: Your ability to withdraw from a home purchase depends on two things: 1) the exact point at which you are "in contract" to buy the house, and 2) after you're in contract, what the contract says about terminating the transaction. Therefore, you need to be 100% ready for anything to happen. After you sign the contract, it is binding and you must adhere to what the contract states. Buying a home is a big purchase - arguably the biggest of your life - you need to be comfortable with every aspect of this experience. |
At what damage amount should I pursue a homeowner's insurance claim? | Some builders -- if given the first chance to deal with the problem, instead of being presented with a bill after the fact -- will fix the problem at no charge to the homeowner. Good faith matters. My house was built by such a builder. If I have a problem that I am competent enough to diagnose and fix, I fix it myself, at my cost. If I have a problem that that I cannot diagnose and fix myself, but that I think the builder (or his subcontractor) is competent enough to diagnose and/or fix, I contact the builder (or subcontractor directly). I am willing to pay for the diagnosis and/or fix, especially if it is an aging or wear-and-tear issue, or the logical consequence of a cost-saving measure that I voluntarily chose when the house was being designed. If the problem is a plumbing problem, I contact my preferred plumber for a diagnosis and/or repair. I pay for my preferred plumber's work. On two occasions, my preferred plumber was unable to fix the problem. Both problems turned out to be installation (or testing) errors related to work done specifically for building inspections. In both cases, I paid for my preferred plumber's diagnosis, and the builder (and/or his subcontractor) fixed the problem at no additional cost to me. The diagnosis and repair work that you describe seems like a similar situation to me. (In fact, I had my builder's subcontractor replace a few prematurely damaged shingles on my roof. This repair prevented a roof leak. I noticed the problem while trimming a tree back from the roof. The shingles were damaged because the building permit implied that the tree could not be trimmed back. I'm spotting a pattern with these problems…) In my opinion, the alleged problem with the roof pitch seems like a design flaw that should have been obvious at the time you chose the house design. I expect that any corrections of this design flaw will need to come out of your remodelling budget. In the absence of further details, I doubt that either the builder or the homeowners' insurance company is responsible for it. Some builders make a point of minimizing the warranty work they pay for, regardless of its effect on the builder's reputation. I do not know which kind of builder you have. The lawyer has probably told you whether the relevant statutes of limitations have lapsed. (The statutes of limitations vary from state-to-state, and vary depending on the alleged tort.) Starting a lawsuit is likely to further damage your relationship with your builder. Homeowners' insurance companies now share the number of claims that have been made historically at each property address. Most insurance companies now use this cumulative number of claims when setting rates, even if the claim(s) were made against a different insurance company, or by a different homeowner. I do not know whether any insurance companies ignore claims older than a certain number of years, or ignore the first claim. |
How to approach building credit without a credit card | Apply for a secured credit card (several financial institutions provide these, including most banks. WalletHub gives you a way to search/filter for these cards quite easily). You will need to deposit funds to cover your credit limit. Deposit as much as they allow, I believe it is 500.00. Pay for EVERYTHING with the card. Monitor your balance due and keep paying it off, to bring the balance due down so you can continue using your card. I know you mentioned your area requires you to be 19, not sure if that still applies if you are applying online, in another state. Also, there's no real reason to get a card with an annual fee in this case. The main reason for an annual fee would be a lower interest charge - simply don't get charged interest, and you'll be better off with not having to pay for a card annually. Good luck. |
Money Saved on finance charges | Avoiding a cost (interest) isn't quite the same as income. There is no entry, nothing for you to consider for this avoided interest. What you do have is an expense that's no longer there, and you can decide to use that money elsewhere each month. |
Can one be non-resident alien in the US without being a resident anywhere else? | You'll need to read carefully the German laws on tax residency, in many European (and other) tax laws the loss of residency due to absence is conditioned on acquiring residency elsewhere. But in general, it is possible to use treaties and statuses so that you end up not being resident anywhere, but it doesn't mean that the income is no longer taxed. Generally every country taxes income sourced to it unless an exclusion applies, so if you can no longer apply the treaty due to not being a resident - you'll need to look for general exclusions in the tax law. I don't know how Germany taxes scholarships under the general rules, you'll have to check it. It is possible that they're not taxed. Many people try to raise the argument of "I'm not a resident" to avoid income taxes altogether on earnings on their work - this would not work. But with a special kind of income like scholarship, which may be exempt under the law, it may. Keep in mind, that the treaty has "who is or was immediately before visiting a Contracting State a resident of the other Contracting State" language in some relevant cases, so you may still apply it in the US even if no longer resident in Germany. |
How smart is it really to take out a loan right now? | Are things getting better yet or are things still a mess? I have heard people say that right now is a 'good' time to take out a loan, and that it is a buyer's market in real estate. Something to consider here is what intentions do you have for the real estate you'd buy. If you intend to sell quickly, then selling into a buyer's market doesn't sound like a great idea. While real estate may be cheap, there can be the question of how long do you think this will last? How much of a burden on time and energy are you expecting to take if you do switch residences or buy an investment property? But more specifically, are there any hidden details that come with taking a loan out when interest rates are low that I should be aware of? I'd be careful to note if the rate is fixed for the entire length of the loan or does it adjust over time. If it can adjust then there is the possibility of those adjustments going up. |
How to stress test an investment plan? | Here are a few things I've already done, and others reading this for their own use may want to try. It is very easy to find a pattern in any set of data. It is difficult to find a pattern that holds true in different data pulled from the same population. Using similar logic, don't look for a pattern in the data from the entire population. If you do, you won't have anything to test it against. If you don't have anything to test it against, it is difficult to tell the difference between a pattern that has a cause (and will likely continue) and a pattern that comes from random noise (which has no reason to continue). If you lose money in bad years, that's okay. Just make sure that the gains in good years are collectively greater than the losses in bad years. If you put $10 in and lose 50%, you then need a 100% gain just to get back up to $10. A Black Swan event (popularized by Nassim Taleb, if memory serves) is something that is unpredictable but will almost certainly happen at some point. For example, a significant natural disaster will almost certainly impact the United States (or any other large country) in the next year or two. However, at the moment we have very little idea what that disaster will be or where it will hit. By the same token, there will be Black Swan events in the financial market. I do not know what they will be or when they will happen, but I do know that they will happen. When building a system, make sure that it can survive those Black Swan events (stay above the death line, for any fellow Jim Collins fans). Recreate your work from scratch. Going through your work again will make you reevaluate your initial assumptions in the context of the final system. If you can recreate it with a different medium (i.e. paper and pen instead of a computer), this will also help you catch mistakes. |
What is an accounting term that factors growth as a function of time and discount rate? | Since you are trying to compare corporate bonds that have a defined coupon over the specified time of the bond. Why not use a simple Net Present Value (NPV) calculation. Refer: Net Present Value (NPV) You could use the discounting factor as the current repo rate of your central bank. As I said, this would be a simple fast measure (not considering risk rating of the bonds, inflation and other considerations). Take a notional 1000 as invetment in each instrument and calculate the NPV, higher it is better the investment. Another method, in terms of percentage return would be Internal rate of Return (IRR). Though the calcualtionis a bit more complicated, it would give you a percentage figure. Note, the above 2 measures are used when the cashflow over the time period is known. It will not work for instruments where the cashflow/value over different time are not known. Like stocks. |
In a competitive market, why is movie theater popcorn expensive? | The cost of the popcorn is simply the hidden extension of the price the consumer pays for the movie ticket. Similar to the tips in the restaurant. And movie theaters do not compete by lowering the unit price. Instead to maintain the revenue per customer they try to offer more value - bigger screen, better sound, more comfortable seats, etc. That is why the price of the popcorn just like the price of the ticket itself does not go down in the competitive market. |
What assets would be valuable in a post-apocalyptic scenario? | Barton Biggs's book Wealth, War and Wisdom aims to answer the question of what investments are best-suited to preserving value despite large-scale catastrophes by looking at how various investments and assets performed in countries affected by WWII. In Japan, stocks and urban land turned out to be good investments; in France, farm land and gold did better. Stocks outperformed bonds in nearly every country. Phil Greenspun recently wrote a review of the book. |
What's my risk of buying a house for a friend and sell back to him? | Also you would need to consider any taxation issues. As he will be paying you rent you will need to include this as income, plus any capital gains tax on the re-sale of the property may need to be paid. |
Fundamentals of creating a diversified portfolio based on numbers? | Most of the “recommendations” are just total market allocations. Within domestic stocks, the performance rotates. Sometimes large cap outperform, sometimes small cap outperform. You can see the chart here (examine year by year): https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1428692400000&chddm=99646&chls=IntervalBasedLine&cmpto=NYSEARCA:VO;NYSEARCA:VB&cmptdms=0;0&q=NYSEARCA:VV&ntsp=0&ei=_sIqVbHYB4HDrgGA-oGoDA Conventional wisdom is to buy the entire market. If large cap currently make up 80% of the market, you would allocate 80% of domestic stocks to large cap. Same case with International Stocks (Developed). If Japan and UK make up the largest market internationally, then so be it. Similar case with domestic bonds, it is usually total bond market allocation in the beginning. Then there is the question of when you want to withdraw the money. If you are withdrawing in a couple years, you do not want to expose too much to currency risks, thus you would allocate less to international markets. If you are investing for retirement, you will get the total world market. Then there is the question of risk tolerance. Bonds are somewhat negatively correlated with Stocks. When stock dips by 5% in a month, bonds might go up by 2%. Under normal circumstances they both go upward. Bond/Stock allocation ratio is by age I’m sure you knew that already. Then there is the case of Modern portfolio theory. There will be slight adjustments to the ETF weights if it is found that adjusting them would give a smaller portfolio variance, while sacrificing small gains. You can try it yourself using Excel solver. There is a strategy called Sector Rotation. Google it and you will find examples of overweighting the winners periodically. It is difficult to time the rotation, but Healthcare has somehow consistently outperformed. Nonetheless, those “recommendations” you mentioned are likely to be market allocations again. The “Robo-advisors” list out every asset allocation in detail to make you feel overwhelmed and resort to using their service. In extreme cases, they can even break down the holdings to 2/3/4 digit Standard Industrial Classification codes, or break down the bond duration etc. Some “Robo-advisors” would suggest you as many ETF as possible to increase trade commissions (if it isn’t commission free). For example, suggesting you to buy VB, VO, VV instead a VTI. |
In Canada, how bad must your credit be for a denial of a Secured Credit Card? | A bank or credit card agency can deny your application for pretty much any reason. That said, it's extremely unlikely they'd do so for a secured credit card. This is because the credit is secured. If your sister is to get a card with, say, a $1000 limit, she will have to provide $1000 in security. This means the banks risk practically nothing. That said, I have found one reference that claims you need a score of above 600 to qualify for a secured credit card, though this is hard to believe. Secured credit cards are a reasonable way of building your credit back up. Just about the only other way for her credit rating to improve is for her history of bad debt to fall off the credit report, but that's going to take quite some time. She should be working hard to provide positive credit history to replace the old negative history, assuming her credit rating is important to her. It may not be; it's only important if she plans on taking on debt in the future. Honestly, a credit rating of around 500 is so bad that I wouldn't even worry much about lowering it. It's already low enough as to make it all but impossible to qualify for (unsecured) credit or loans. A single denial is unlikely to significantly affect the score, except in the very short term. With two bankruptcies, I encourage credit counselling for your sister. There are a number of good books available, too. Credit counselling should go into detail on credit scores, unsecured credit, proper budgeting, and all that sort of useful information. |
How does a portfolio of long stocks and short futures generate profits | I know some derivative markets work like this, so maybe similar with futures. A futures contract commits two parties to a buy/sell of the underlying securities, but with a futures contract you also create leverage because generally the margin you post on your futures contract is not sufficient to pay for the collateral in the underlying contract. The person buying the future is essentially "borrowing" money while the person selling the future is essentially "lending" money. The future you enter into is generally a short term contract, so a perfectly hedged lender of funds should expect to receive something that approaches the fed funds rate in the US. Today that would be essentially nothing. |
What options exist to make money in the US on a work-restricted visa? | Income generated from online sales is not considered "passive income", so you need to be authorized to work in the U.S. Those without work authorization can acquire passive income (through investments, lending, competition/contest earnings, etc.) In order to sell products on eBay (the description you've given leads me to believe that this is operated as a business), you need to be authorized to work in the U.S., and register a business. See: |
Against what income are broker fees deducted? | You don't "deduct" transaction fees, but they are included in your cost basis and proceeds, which will affect the amount of gain/loss you report. So in your example, the cost basis for each of the two lots is $15 (10$ share price plus $5 broker fee). Your proceeds for each lot are $27.50 (($30*2 - $5 )/2). Your gain on each lot is therefore $12.50, and you will report $12.50 in STCG and $12.50 in LTCG in the year you sold the stock (year 3). As to the other fees, in general yes they are deductible, but there are limits and exceptions, so you would need to consult a tax professional to get a correct answer in your specific situation. |
Calculating profits for a private fund | Thanks for the answer/comments! The time-based method was something we mooted and something I almost went with. But just to wrap this up, the method we settled on was this: Every time there is an entry or exit into the fund, we divvy out any unrealised market profits/losses according to each person's profit share (based on % of the asset purchased at buy-in) JUST BEFORE the entry/exit. These realised profits are then locked in for those particpants, and then the unrealised profits/loss counter starts at zero, we do a fresh recalculation of shareholding after the entry/exit, and then we start again. Hope this helps anyone with the same issue! |
200K 10-Year Investment Safest 5% Annual Return? | Invest in a high quality dividend paying group of stocks. Look up "stock aristocrats" to find longterm quality stocks that have regularly increased their dividends for over 20'years. 10'years is a safe period of time to invest in stocks. If you had bought stocks at their hight in 2007 and kept them through the 40% decline thru 2008 and 2009 and held on to them for 10 years until 2017, you would have earned a 40 % increase from when you purchased them. That is pretty much a worst case scenerio. If you had invested in dividend paying stocks and had earned an additional 2.5% per year, you would have exceeded your 5% goal. The lifetime yearly return of the stock market is 10%. Time is the only downside, but with ten years, you are almost certainly immune. |
Transferring money from One business checking to another business checking | You should have separate files for each of the two businesses. The business that transfers money out should "write check" in its QB file. The business that receives money should "make deposit" in its QB file. (In QB you "write check" even when you make the payment by some other means like ACH.) Neither business should have the bank accounts of the other explicitly represented. On each side, you will also need to classify the payment as having originated from / gone to some other account - To know what's correct there, we'd need to know why your transferring the money in the first place and how you otherwise have your books established. I think that's probably beyond the scope of what's on-topic / feasible here. Money into your business from your personal account is probably owner's equity, unless you have something else going on. For example, on the S Corp you should be paying yourself a salary. If you overpay by accident, then you might write a check back to the company from your personal account to correct the mistake. That's not equity - It's probably a "negative expense" in some other account that tracks the salary payments. |
Is a stock's trade size history publicly available? | My Broker and probably many Brokers provide this information in a table format under "Course of Sale". It provides the time, price and volume of each trade on that day. You could also view this data on a chart in some charting programs. Just set the interval to "Tick by Tick" and look at the volume. "Tick by Tick" will basically place a mark for every trade that is taken and then the volume will tell you the size of that trade. |
Capital improvement and depreciation in restaurant LLC | First, you should probably have a proper consultation with a licensed tax adviser (EA/CPA licensed in your State). In fact you should have had it before you started, but that ship has sailed. You're talking about start-up expenses. You can generally deduct up to $5000 in the year your business starts, and the expenses in excess will be amortized over 180 months (15 years). This is per the IRC Sec. 195. The amortization starts when your business is active (i.e.: you can buy the property, but not actually open the restaurant - you cannot start the depreciation). I have a couple questions about accounting - should all the money I spent be a part of capital spending? Or is it just a part of it? If it qualifies as start-up/organizational expenses - it should be capitalized. If it is spent on capital assets - then it should also be capitalized, but for different reasons and differently. For example, costs of filing paperwork for permits is a start-up expense. Buying a commercial oven is a capital asset purchase which should be depreciated separately, as buying the tables and silverware. If it is a salary expense to your employees - then it is a current expense and shouldn't be capitalized. Our company is LLC if this matters. It matters to how it affects your personal tax return. |
Long-term capital gain taxes on ETFs? | Generally speaking, each year, mutual funds distribute to their shareholders the dividends that are earned by the stocks that they hold and also the net capital gains that they make when they sell stocks that they hold. If they did not do so, the money would be income to the fund and the fund would have to pay taxes on the amount not distributed. (On the other hand, net capital losses are held by the fund and carried forward to later years to offset future capital gains). You pay taxes on the amounts of the distributions declared by the fund. Whether the fund sold a particular stock for a loss or a gain (and if so, how much) is not the issue; what the fund declares as its distribution is. This is why it is not a good idea to buy a mutual fund just before it makes a distribution; your share price drops by the per-share amount of the distribution, and you have to pay taxes on the distribution. |
Principal 401(k) managed fund fees, wow. What can I do? | When you look at managed funds the expense ratios are always high. They have the expense of analyzing the market, deciding where to invest, and then tracking the new investments. The lowest expenses are with the passive investments. What you have noticed is exactly what you expect. Now if you want to invest in active funds that throw off dividends and capital gains, the 401K is the perfect place to do it, because that income will not be immediately taxable. If the money is in a Roth 401K it is even better because that income will never be taxed. |
Does wash sale apply if I buy stock on 2 two different dates and sell it later | Wash sale applies. If you purchase shares within 30 days of that Feb 3 sell date, the wash sale kicks in, preventing the loss on that sale, and deferring it into the new shares. |
Does my net paycheck decrease as the year goes on due to tax brackets filling up? | In general no, if you just have one employer and work there with the same salary for the whole year. Typically an employer does tax withholding by extrapolating your monthly income to the entire year and withholding the right amount so that at the end, what is withheld is what you owe. It's not a surprise to them when your income crosses a tax bracket threshold, because they knew how much they were paying you and knew when you would cross into another bracket, so they factored that in. If you have multiple jobs or only worked for part of the year, or if your income varied from month to month (e.g., you got a raise) there could be a discrepancy between what is withheld and what you owe, because each employer only knows about what it's paying you, not what money you may have earned from other sources. (Even here, though, the discrepancy wouldn't be due to the tax brackets per se.) You can adjust your withholdings on form W-4 if needed, to tell the employer to withhold more or less than they otherwise would. |
Why are the banks and their customers in the United States still using checks? [duplicate] | Because it makes money for all parties, and because the general public is reluctant to any change. Who should have an interest to change that? People. And they have no say in it. You can actually do a lot without paper checks nowadays (I only use one per year for car taxes, as they do not accept anything else), but many people shake their heads about even online banking and would never trust it. |
Advantages of paying more of your mortgage while you know you won't continue to live there your whole life | Another factor: When you sell this house and buy the next one, the more equity you have the easier the loan process tends to be. We rolled prior equity into this house and had a downpayment over 50%--and the lender actually apologized for a technicality I had to deal with--they perfectly well knew it was a basically zero-risk loan. |
Why would a company care about the price of its own shares in the stock market? | The other answer has some good points, to which I'll add this: I believe you're only considering a company's Initial Public Offering (IPO), when shares are first offered to the public. An IPO is the way most companies get a public listing on the stock market. However, companies often go to market again and again to issue/sell more shares, after their IPO. These secondary offerings don't make as many headlines as an IPO, but they are typical-enough occurrences in markets. When a company goes back to the market to raise additional funds (perhaps to fund expansion), the value of the company's existing shares that are being traded is a good indicator of what they may expect to get for a secondary offering of shares. A company about to raise money desires a higher share price, because that will permit them to issue less shares for the amount of money they need. If the share price drops, they would need to issue more shares for the same amount of money – and dilute existing owners' share of the overall equity further. Also, consider corporate acquisitions: When one company wants to buy another, instead of the transaction being entirely in cash (maybe they don't have that much in the bank!), there's often an equity component, which involves swapping shares of the company being acquired for new shares in the acquiring company or merged company. In that case, the values of the shares in the public marketplace also matter, to provide relative valuations for the companies, etc. |
Section 179 vs depreciation of laptop | I'm not a tax expert, but I think you mean Form 4562, right? If you acquire the laptop in the year for which you're filing taxes, then it is just that simple. (At least according to my reading of 4562 instructions, and my history of accepted tax returns where I've done this for my own business.) If, however, you acquired the laptop in a previous year and have already depreciated it previously (with the plan to spread over several years), there is more complexity I believe -- you may limited in how you could accelerate the remaining depreciation. |
Are buyouts always for higher than the market value of a stock? | Buyouts are usually for more than the ORIGINAL value of a stock. That's because the price "premium" represents an incentive for holders to "tender" their shares to the would-be buyer. Sometimes in these situations, the stock price rises above the proposed buyout price, in anticipation of a higher takeover bid from a SECOND party (that may or may not materialize). To answer the other part of the question, does a bidder have a chance of taking over a dying company for less than the market price? That is a strategy sometimes referred to as a "take under," and it has not been a notably successful strategy. That's because it goes against "human nature" (of the seller). "Where there is life, there is hope." They would seldom accept a lower price for "sure" survival, when the market is telling them that they are worth a higher price. Very few people realize that the market may disappear tomorrow. Think of all the homeowners who won't cut their price, but insist on bids that meet recent "comps." And if the company is really dying, the prospective buyer may be best served by waiting until it does, and then pick up the individual pieces at auction. |
How to increase my credit score | You need to get yourself a credit card, and use it regularly and also repay on time. This will help increase your credit score. Hope you have a regular job which is bringing in money every month, but having just this isnt enough, get a credit card. |
For what dates are the NYSE and U.S. stock exchanges typically closed? | All public US equity exchanges are closed on the 9 US trading holidays (see below) and open on all other days. Exchanges also close early (13:00 ET) on the Friday after Thanksgiving and on the day before Independence Day if Independence Day is being observed on a Tuesday, Wednesday, Thursday, or Friday. (Some venues have extended trading hours as a matter of course; for them an "early close" might be later than 13:00 ET.) To answer the second question, yes, if you know NASDAQ's or AMEX's holiday schedule, then you know NYSE's (modulo the timing of their early close). I'm not sure about the options exchanges; they're not regulated the same way and are a good example of exchanges with extended trading hours in the first place. The US trading holidays are as follows. Note that trading holidays are not the same as federal or bank holidays, which include Columbus Day and Veterans Day but do not include Good Friday. |
What are the advantages and disadvantages of leasing out a property or part of a property (such as a basement apartment)? | It doesn't make a lot of sense to buy a house/condo and rent it out now. On the other hand, I think finishing your basement and then renting it out is an excellent idea. The ROR is excellent as long as you can deal with the "strangers" in the basement, have the extra driveway space and negative association with renting out your basement. HTH |
What one bit of financial advice do you wish you could've given yourself five years ago? | 2 things: |
Ethics and investment | There are a number of mutual funds which claim to be 'ethical'. Note that your definition of 'ethical' may not match theirs. This should be made clear in the prospectus of whichever mutual fund you are looking at. You will likely pay for the privilege of investing this way, in higher expenses on the mutual fund. If I may suggest another option, you may want to consider investing in low-fee mutual funds or ETFs and donating some of the profit to offset the moral issues you see. |
Full-time work + running small side business: Best business structure for taxes? | I have a very similar situation doing side IT projects. I set up an LLC for the business, created a separate bank account, and track things separately. I then pay myself from the LLC bank account based on my hours for the consulting job. (I keep a percentage in the LLC account to pay for expenses.) I used to do my taxes myself, but when I created this arrangement, I started having an accountant do them. An LLC will not affect your tax status, but it will protect you from liability and make things more accountable come tax time. |
Retired, want to buy a mobile home; how to finance? | Do you think your 403b will earn more than the mortgage interest rate? If so, then mortgage seems the way to go. Conservative investment strategies might not earn much more than a 3-4% mortgage, and if you're paying 5-6% it's more likely you'll be earning less than the mortgage. From another point of view, though, I would probably take a loan anyway just from a security standpoint - you have more risk if you put a third of your retirement savings into one purchase directly, whereas if you do a 10-15 year loan, you'll have more of a cushion. Also, if you don't outlive the mortgage, you'll have had use of more of your retirement income than otherwise - though I do wonder if it puts you at some risk if you have significant medical bills (which might require you to liquidate your 403b but wouldn't require you to sell your house, so paying it off has some upside). Also, as @chili555 notes in comments, you should consider the taxation of your 403(b) income. If you pull it out in one lump sum, some of it may be taxed at a higher rate than if you pulled it out more slowly over time, which will easily overwhelm any interest rate differences. This assumes it's not a Roth 403(b) account; if it is Roth then it doesn't matter. |
What are the downsides that prevent more people from working in high-income countries, and then retiring in low-income (and cost of living) ones? | Political instability and general inability of the government to control crime, economomy, or even remain in existence, would be my greatest worry. I wouldn't want my bank account to randomly disappear, criminals to come take my stuff and/or life by force because nobody is going to stop them, or a hoarde of revolutionaries appearing at my door telling me "get lost, the times they are a-changin". On a whim, I tried to compare instability to cost of living. I used lowest monthly disposable income as my correlation to cost of living and the Fragile State index to measure instability. I picked the 55 lowest to get the countries with $500.00 (usd) and lower in monthly income. Those countries average out to 83.42 on the Fragile State index, which would be in the "Very High Warning" range and includes 18 countries in the "Alert", "High Alert", or "Very High Alert" status. Obviously, there is some subjectivity in an attempt to measure something in as broad a term as "fragile state", but it illustrates it's point well enough. Sources: http://en.wikipedia.org/wiki/List_of_countries_by_Fragile_States_Index http://www.nationmaster.com/country-info/stats/Cost-of-living/Average-monthly-disposable-salary/After-tax |
Are there any countries where citizens are free to use any currency? | Wikipedia has a list of countries which ban foreign exchange use by its citizens. It's actually quite short but does include India and China. Sometimes economic collapse limits enforcement. For example, after the collapse of the Zimbabwean dollar (and its government running out of sufficient foreign exchange to buy the paper necessary to print more), the state turned a blind eye as the US dollar and South African rand became de facto exchange. Practicality will limit the availability of foreign exchange even in free-market economies. The average business can't afford to have a wide range of alternative currencies sitting around. Businesses which cater to large numbers of addled tourists sometimes offer one or two alternative currencies in the hopes of charging usurous rates of exchange. Even bureaux de change sometimes require you to order your "rarer" foreign exchange in advance. So, while it may be legal, it isn't always feasible. |
Is the best ask price the ask at the “top” of the order book? What is the “top” of the book? | You're confusing a specific visual representation of the top bid & ask orders selected from the order book with the actual "top of the book". "Top" in the sense of the "top of the book" is a ranking (by order of "best", different for bids vs. asks) and not meant to be strictly a visual positioning on a page or screen. The data in the visual representation comes from the top of the order book (the best bids, and the best asks), but that visual representation is choosing to present it in a specific way. Think of the "book" as the model, the abstract collection of outstanding bid and ask order data. When people talk about the "top of the book", they're talking about the best bids (higher being better), and the best asks (lower being better). The visual representation above is but one possible way to render a tip-of-the-iceberg view of the best orders in the "book". The advantage of that particular visual representation is that one can see the asks & bids converging towards the center. The spread is visible as the difference between the two middle elements – being the lowest row in the blue "Asks" area, and the highest row in the green "Bids" area. The up-arrow they had included in the "Asks" area was perhaps meant to provide a clue about how the data was sorted contrary to expectations of descending order of "bestness", and/or to imply there is further depth to the book data in the indicated direction. If the bids & asks had been oriented side-by-side instead, they might have chosen to represent it as below, re-arranging the rows in the "Asks" in the opposite order (i.e. in the order you had expected) so that the "bests" are both in the top row: |
How to find a public company's balance sheet and income statement? | Filter by the filings when you look at the search results. The 10-K will include the annual report, which included fiscal year-end financial statements. Quarterly reports and statements are in the 10-Q filing. The filing will include a LOT of other information, but there should be a section called "Financial Statements" or something similar that will include all pertinent financials statements. You can also find "normalized" balance sheets and income statements on the "finance" pages of the main web search sites (Google, Yahoo, MSN) and other sites that provide stock quotes. If you're looking to do basic comparisons versus in-depth statement analysis those may be sufficient for you. |
How much should I be contributing to my 401k given my employer's contribution? | You can only contribute up to 5% of your salary? Odd. Usually 401(k) contributions are limited to some dollar amount in the vicinity of $15,000 or so a year. Normal retirement guidelines suggest that putting away 10-15% of your salary is enough that you probably won't need to worry much when you retire. 5% isn't likely to be enough, employer match or no. I'd try to contribute 10-15% of my salary. I think you're reading the rules wrong. I'm almost certain. It's definitely worth checking. If you're not, you should seriously consider supplementing this saving with a Roth IRA or just an after-tax account. So. If you're with Fidelity and don't know what to do, look for a target date fund with a date near your retirement (e.g. Target Retirement 2040) and put 100% in there until you have a better idea of what going on. All Fidelity funds have pretty miserable expense ratios, even their token S&P500 index fund from another provider, so you might as let them do some leg work and pick your asset allocation for you. Alternatively, look for the Fidelity retirement planner tools on their website to suggest an asset allocation. As a (very rough) rule of thumb, as you're saving for retirement you'll want to have N% of your portfolio in bonds and the rest in stocks, where N is your age in years. Your stocks should probably be split about 70% US and 30% rest-of-world, give or take, and your US stocks should be split about 64% large-cap, 28% mid-cap and 8% small-cap (that's basically how the US stock market is split). |
What's a good personal finance management web app that I can use in Canada? | Now, if you're still intrested, Mint.com works also for Canadian banks. Mint Canada |
How to mitigate the risk of Euro Stoxx 50 ETF? | You could go with either of: Choosing this you'd pretty much have minimized your risk by using the whole world asa market. |
Stock market vs. baseball card trading analogy | Actually, this is a pretty good analogy to certain types of stocks, specifically tech and other "fad" stocks. Around the turn of the century, there were a lot of "Bobs" buying tech stocks (like they would baseball cards), for tech stocks' sakes. That's what drove the internet and tech stock bubbles of high valuations. At other times, the tech stocks are bought and sold mainly by "Steve's" for business reasons such as likely (not merely possible) future appreciation, and command a much lower valuation. |
Is This A Scam? Woman added me on LinkedIn first, then e-mailed offering me millions of dollars [duplicate] | It is absolutely a scam. Anyone who tells you they can give you a large amount of money for free is trying to scam you. Additional warning signs include: |
How do I determine ownership split on a franchise model? | There is no one solution to every project finance problem. Two models might make sense in this situation, however. In this case, you would count all the money that you give to your friend as a loan which he will pay back with interest. The interest rate and loan amounts will have to be agreed on by both of you. One one hand, the interest should be high enough to reward you in a successful outcome for the amount of risk that you take on if things don't work out. On the other, the interest rate needs to be low enough where his earnings after loan repayment justify your friend's effort, in addition to being competitive to ant rate your friend could secure from a bank. The downside to this plan is you don't directly benefit from the franchise's profits. In this model, you will record the cash that each of you invests. Since your friend is also adding "sweat equity" by setting up and operating the franchise, you will need to quantify the work that your friend and you invest into the franchise. Then you can determine how much each of you has invested in terms of dollars and split any franchise profits based on those proportions. The downside of this plan is that it is difficult to estimate how much time each of you invests and how much that time is worth. |
What can cause rent prices to fall? | In the US, the government effectively sets a price floor for rents with a concept called "prevailing rent" for government subsidy. Even the crappiest, minimally compliant hovel is ultimately worth whatever the government will issue housing vouchers for. Rent can and does fluctuate for the higher end of the market. Basically in most places the available, cheap credit has a negative impact on rent prices, and tighter, costlier credit increases demand and rents. Local economic events have an impact too. If the company closes in a company town, people leave. |
Why do most banks in Canada charge monthly fee? | The other answers in this thread do a fine job of explaining the economic situation that banks are in. In addition to that information, I would like to point out that it is not hard to avoid a monthly fee for Canadian bank accounts. Usually this involves keeping a minimum balance of a few thousand dollars at all times. Actual examples (as of Dec 2016) for the lowest tier chequing accounts. Includes information on the minimum balance to waive the monthly fee, and the monthly fee otherwise: |
What are the risks of Dividend-yielding stocks? | Dividend Stocks like any stock carry risk and go both up and down. It is important to choose a stock based on the company's potential and performance. And, if they pay a dividend it does help. -RobF |
Are buying and selling futures based on objective data? | If you hold a future plus enough cash collateral it is economically equivalent to owning the underlying asset or shorting the underlying asset. In general financial assets such as stock indices have a positive expected return - that's the main difference between investing and gambling. There's nothing that special about futures, they are just another contractual form of asset ownership. Well, one difference is that regulations or brokerages allow individual investors more leverage with options and futures than with straight borrowing. But this is more a regulatory issue than a conceptual issue with the securities themselves. In theory regulators or brokers could require you to hold enough collateral to make a future equivalent to buying the underlying. |
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. |
Lost credit card replaced with new card and new numbers. Credit score affected? | This will have no effect on your credit score. Even though your credit card account number is changing, it is still the same account, so your history of payments and age of accounts will remain unchanged. |
Personal finance app where I can mark transactions as “reviewed”? | Otto, I totally agree with you. That feature would be awesome addition to mint. Have you thought of adding Custom tag called "reviewed" and just mark that to the transaction. Ved |
Corporate Equity Draw vs Income | You tagged with S-Corp, so I assume that you have that tax status. Under that situation, you don't get taxed on distributions regardless of what you call them. You get taxed on the portion of the net income that is attributable to you through the Schedule K that the S-Corp should distribute to you when the S-Corp files its tax return. You get taxed on that income whether or not it's distributed. If you also work for the small business, then you need to pay yourself a reasonable wage. The amount that you distribute can be one factor in determining reasonableness. That doesn't seem to be what you asked, but it is something to consider. |
Trade? Buy and hold? Or both? | You don't seem to be a big fan of trading as you may think it may be too risky or too time consuming being in front of your computer all day long. You also don't seem to be a fan of buy and hold as you don't know what your investments will be worth when you need the funds. How about a combination of the two, sometimes called trend trading or active investing. With this type of trading/investing you may hold a stock from a couple of months to many years. Once you buy a stock that is up-trending or starting to up-trend you hold onto it until it stops up-trending. You can use a combination of fundamental analysis (to find out what to buy) and technical analysis (to tell you when to buy and when to sell). So these are some topics you can start reading up on. Using a technique like this will enable you to invest in healthy stocks when they are moving up in price and get out of them when they start moving down in price. There are many techniques you can use to get out of a stock, but the simplest has to be using stop losses. And once you learn and set up your system it should not take up much of your time when you actually do start trading/investing - 2 to 3 hours per week, and you can set yourself up that you analyse the market after the close and place any order so they get executed the next trading day without you being in front or the screen all day. Other areas you might want to read and learn about are writing up a Trading Plan, using Position Sizing and Money Management so you don't overtrade in any one single trade, and Risk Management. A good book I quite liked is "Trade Your Way to Financial Freedom" by Van Tharp. Good luck. |
How can I find stocks with very active options chains? | Just as a matter of research, apparently there is a way to find high option volumes such as a site here: https://www.barchart.com/options/volume-leaders/stocks However, that information is going to be heavily skewed by "underlying security that moved a lot more than expected and probably got a lot of positions filled incidentally today", but I think it is a good place to start building up a list of securities with a lot of option interest. There is also a tab there for ETFs. This will not tell you exactly that a particular stock always has high option volume, but most of the ones that show up there repeatedly and across multiple strike prices will meet your criteria. |
Why do people always talk about stocks that pay high dividends? | Isn't it true that on the ex-dividend date, the price of the stock goes down roughly the amount of the dividend? That is, what you gain in dividend, you lose in price drop. Yes and No. It Depends! Generally stocks move up and down during the market, and become more volatile on some news. So One can't truly measure if the stock has gone down by the extent of dividend as one cannot isolate other factors for what is a normal share movement. There are time when the prices infact moves up. Now would it have moved more if there was no dividend is speculative. Secondly the dividends are very small percentage compared to the shares trading price. Generally even if 100% dividend are announced, they are on the share capital. On share prices dividends would be less than 1%. Hence it becomes more difficult to measure the movement of stock. Note if the dividend is greater than a said percentage, there are rules that give guidelines to factor this in options and other area etc. Lets not mix these exceptions. Why is everyone making a big deal out of the amount that companies pay in dividends then? Why do some people call themselves "dividend investors"? It doesn't seem to make much sense. There are some set of investors who are passive. i.e. they want to invest in good stock, but don't want to sell it; i.e. more like keep it for long time. At the same time they want some cash potentially to spend; similar to interest received on Bank Deposits. This class of share holders, it makes sense to invest into companies that give dividends, as year on year they keep receiving some money. If they on the other hand has invested into a company that does not give dividends, they would have to sell some units to get the same money back. This is the catch. They have to sell in whole units, there is brokerage, fees, etc, there are tax events. Some countries have taxes that are more friendly to dividends than capital gains. Thus its an individual choice whether to invest into companies that give good dividends or into companies that don't give dividends. Giving or not giving dividends does not make a company good or bad. |
Is it common in the US not to pay medical bills? | In addition to the good answers already provided, I want to point out that many (most?) providers will handle filing your health insurance claim for you even though it's really your responsibility. So here's how medical bills "you don't have to pay" might come about: * It's possible that your balance is $4, or $20, or $65, or even still $100 depending on your particular insurance plan. Whatever is left at this step is what you pay. |
Stock market vs. baseball card trading analogy | Baseball cards don't pay dividends. But many profitable companies do just that, and those that don't could, some day. Profits & dividends is where your analogy falls apart. But let's take it further. Consider: If baseball cards could somehow yield a regular stream of income just for owning them, then there might be yet another group of people, call them the Daves. These Daves I know are the kind of people that would like to own baseball cards over the long term just for their income-producing capability. Daves would seek out the cards with the best chance of producing and growing a reliable income stream. They wouldn't necessarily care about being able to flip a card at an inflated price to a Bob, but they might take advantage of inflated prices once in a while. Heck, even some of the Steves would enjoy this income while they waited for the eventual capital gain made by selling to a Bob at a higher price. Plus, the Steves could also sell their cards to Daves, not just Bobs. Daves would be willing to pay more for a card based on its income stream: how reliable it is, how high it is, how fast it grows, and where it is relative to market interest rates. A card with a good income stream might even have more value to a Dave than to a Bob, because a Dave doesn't care as much about the popularity of the player. Addendum regarding your comment: I suppose I'm still struggling with the best way to present my question. I understand that companies differ in this aspect in that they produce value. But if stockholders cannot simply claim a percentage of a company's value equal to their share, then the fact that companies produce value seems irrelevant to the "Bobs". You're right – stockholders can't simply claim their percentage of a company's assets. Rather, shareholders vote in a board of directors. The board of directors can decide whether or not to issue dividends or buy back shares, each of which puts money back in your pocket. A board could even decide to dissolve the company and distribute the net assets (after paying debts and dissolution costs) to the shareholders – but this is seldom done because there's often more profit in remaining a going concern. I think perhaps what you are getting hung up on is the idea that a small shareholder can't command the company to give net assets in exchange for shares. Instead, generally speaking, a company runs somewhat like a democracy – but it's each share that gets a vote, not each shareholder. Since you can't redeem your shares back to the company on demand, there exists a secondary market – the stock market – where somebody else is willing to take over your investment based on what they perceive the value of your shares to be – and that market value is often different from the underlying "book value" per share. |
What is the difference between a stock and a bond? | WilliamKF explained it pretty well, but I want to put it in a more simplistic form: |
If one owns 75% of company shares, does that mean that he would have to take upon himself 75% of the company's expenses? | I think your question might be coming from a misunderstanding of how corporate structures work - specifically, that a corporation is a legal entity (sort of like a person) that can have its own assets and debts. To make it clear, let's look at your example. We have two founders, Albert and Brian, and they start a corporation called CorpTech. When they start the company, it has no assets - just like you would if you owned nothing and had no bank account. In order to do anything, CorpTech is going to need some money. So Albert and Brian give it some. They can give it as much as they want - they can give it property if they want, too. Usually, people don't just put money into a corporation without some sort of agreement in place, though. In most cases, the agreement says something like "Each member will own a fraction of the company that is in proportion to this initial investment." The way that is done varies depending on the type of corporation, but in general, if Albert ends up owning 75% and Brian ends up owning 25%, then they probably valued their contributions at 75% and 25% of the total value. These contributions don't have to be money or property, though. They could just be general "know-how," or "connections," or "an expectation that they will do some work." The important thing is that they agree on the value of these contributions and assign ownership of the company according to that agreement. If they don't have an agreement, then the laws of the state that the company is registered in will say how the ownership is assigned. Now, what "ownership" means can be different depending on the context. When it comes to decision-making, you could "own" one percentage of the company in terms of votes, but when it comes to shares of future profits, you could own a different amount. This is why you can have voting and non-voting versions of a company's stock, for example. So this is a critical point - the ownership of a company is independent of the individual contributions to the company. The next part of your question is related to this: what happens when CorpTech sees an opportunity to make an investment? If it has enough cash on hand (because of the initial investment, or through financing, or reinvested profits), then the decision to make the investment is made according to Albert and Brian's ownership agreement, and they spend it. The money doesn't belong to them individually anymore, it belongs to CorpTech, and so CorpTech is spending it. They are just making the decision for CorpTech to spend it. This is why people say the owners are not financially liable beyond their initial investment. If the deal is bad, and they lose the money, the most they can lose is what they initially put in. On the other hand, if CorpTech doesn't have the money, then they have to figure out a way to get it. They might decide to each put in an amount in proportion to their ownership, so that their stake doesn't change. Or, Albert might agree to finance the deal 100% in exchange for a larger share of ownership. Or, he could agree to fund all of it without a larger stake, because Brian is the one who set the deal up. Or, they might take out a loan, and not need to invest any new money. Or, they might find an investor who agrees to put in the needed money in exchange for a a 51% share, in which case Albert and Brian will have to figure out how to split the remaining 49% if they agree to the deal. The details of how all of this would work depend on the structure (LLC, LLP, C-corp, S-corp, etc), but in general, the idea is that the company has assets and debts, and the owners can have voting rights, equity rights, and rights to future profits in any type of split that they want, regardless of what the companies assets and debts are, or what their initial investment was. |
Taxation of shares | If you sell your shares for more than their value at the time you received them (i.e. you make a profit) then you will be liable for capital gains tax - but only if the profit exceeds your annual allowance (£11,100, in tax year 2015-16). This is unrelated to how you came by the shares in the first place. (Note that there are certain exemptions to this, which includes some employer share schemes.) |
What happens to dividends on stock held in TFSA or RRSP account? | For an RRSP, you do not have to pay taxes on money or investments until you withdraw the money. If you do not reinvest the dividends but instead, take them out as cash, that would be withdrawing the money. For mutual funds, you would normally reinvest the dividends if holding the investment inside an RRSP. For stocks, I believe the dividends would end up sitting in the cash part of your RRSP account (and you'd probably use the money to buy more stocks, though would not be required to do so). Either way, you do not pay tax on this investment income unless you withdraw it from your RRSP. For example, you invest $10,000 inside your RRSP. You get the tax benefit from doing so. You get dividends of $1,000 (hey, it was a good year), and use these to buy more stock. As the money never left your RRSP account, you are considered to have invested only your initial $10,000. If instead, you withdraw the $1,000 in dividends, you are taxed on $1000 income. TFSA are slightly more complicated. You don't get a tax benefit from your initial contribution, but then do not pay tax when you withdraw from the TFSA. Your investment income is still tax-free, and you are (generally) much more limited in how much you can contribute. For example, you invest $10,000 inside your TFSA. You get dividends of $1,000, and use these to buy more stock. Your total contributions to your TFSA remains at $10,000 as the money never left your account. You could instead withdraw the $1000 from your TFSA and would not pay tax on it. In the next calendar year (or later) after the withdrawal, you could "repay" the $1000 you took out without suffering an overcontribution penalty. This makes TFSA an excellent place to park emergency funds, as you can withdraw and subsequently replace the investment while continuing to get the tax benefits on your investment income. RRSPs are better for retirement or for the home buyers plan. In general, you should not be withdrawing money from either your TFSA or RRSP, except in emergencies, when retiring, or when purchasing a home. I prefer indexed mutual funds or money market accounts for both my RRSP and TFSA rather than individual stocks, but that's up to you. |
Can an unmarried couple buy a home together with only one person on the mortgage? | It's not typically possible for someone to jointly own the house, who is not also jointly liable for the mortgage. This doesn't matter however, because it is possible for two people to get a mortgage together, where only one person's income is assessed by the lender. If that person could get a mortgage of that amount on their own, then the couple should also be able to get the same mortgage. Source: My wife and I got a mortgage like this. She is self-employed, rather than meet the very high requirements for proving her self-employment income, we simply said that we only wanted my income to be taken into consideration. |
How do I know if a dividend stock is “safe” and not a “dividend yield trap”? | Let me provide a general answer, that might be helpful to others, without addressing those specific stocks. Dividends are simply corporate payouts made to the shareholders of the company. A company often decides to pay dividends because they have excess cash on hand and choose to return it to shareholders by quarterly payouts instead of stock buy backs or using the money to invest in new projects. I'm not exactly sure what you mean by "dividend yield traps." If a company has declared an dividend for the upcoming quarter they will almost always pay. There are exceptions, like what happened with BP, but these exceptions are rare. Just because a company promises to pay a dividend in the approaching quarter does not mean that it will continue to pay a dividend in the future. If the company continues to pay a dividend in the future, it may be at a (significantly) different amount. Some companies are structured where nearly all of there corporate profits flow through to shareholders via dividends. These companies may have "unusually" high dividends, but this is simply a result of the corporate structure. Let me provide a quick example: Certain ETFs that track bonds pay a dividend as a way to pass through interest payments from the underlying bonds back to the shareholder of the ETF. There is no company that will continue to pay their dividend at the present rate with 100% certainty. Even large companies like General Electric slashed its dividend during the most recent financial crisis. So, to evaluate whether a company will keep paying a dividend you should look at the following: Update: In regards to one the first stock you mentioned, this sentence from the companies of Yahoo! finance explains the "unusually" dividend: The company has elected to be treated as a REIT for federal income tax purposes and would not be subject to income tax, if it distributes at least 90% of its REIT taxable income to its share holders. |
Is there any circumstance in which it is necessary to mark extra payments on a loan as going to “principal and not interest”? | The mortgage I got last year through Wells Fargo explicitly indicates in its terms that excess payment will be considered against future payments (i.e., pay $500 extra in January and you owe $500 less in February) unless indicated otherwise. It goes on to state that with electronic payments you do not get to specify where excess payment goes, so excess payment made electronically always goes toward future payments. If you want to make excess payments toward principal, you must actually send them a check and your payment stub, with the appropriate box ticked. This won't be very different for other major banks, I wouldn't imagine. |
Does buying and selling a stock OR holding onto it make a company look better? | Not sure I fully understand your question but my take on it is this: There a lot of people out there that admire companies and own the stock just because they like the company. For example, I know some kids who own Disney stock. They only have a share or two but they keep it because they want to say "I own a part of Disney." Realistically speaking, if they hold or sell the stock it is so minuscule to have any realizable affect on the overall value of the stock which does not really make the company look better from an investor perspective. However, if a company has people that just want to own the stock just like your uncle are indeed "better" because they must have provided a product or service that is valued intrinsically. |
What is the economic explanation for the high cost of weddings? | There is the price they want and the price you pay. Everything is negotiable when its a service (always possible, but usually harder with actual "goods"). You should always haggle and price match your vendors. You can also try going to different vendors and not telling them its for a wedding and see if there really is a price difference. For example, call up a florist and say you need X, Y, and Z for a corporate banquet or for a special event for which you cannot give the details. If you then tell them its actually a wedding, and they blindly raise it without a good justification, move on. That said, they jack up the price because they know most people will says "it's my wedding", "it's once in a lifetime", "it's MY special day", etc.... The same is true about diamonds, their price does not reflect the actual supply and demand ratio, just the perception that has been created. However, as mentioned in some of the comments above, the service provided at a wedding may be different or more involved than just a normal dinner The more important issue is ensuring there are no back fees, no hidden fees, and you have well written, well reviewed contracts. For example, we know a couple whose caterer added a mandatory 20% gratuity, regardless of the service which was provided. Most venues or restaurants will not be making the bar a lose-leader, but they will charge for other things. You can also save money by buying used or looking on ebay for prices closer to wholesale for the product. I think a good analogy to this is the Recent Time Magazine article on the price of healthcare - it costs a lot because its a small market and its harder to navigate, and most are not experienced shoppers in the area or don't have control over the individual item costs. |
What is best investment which is full recession proof? | Can anyone suggest all type of investments in India which are recession proof? There are no such investments. Quite a few think bullions like Gold tend to go up during recession, which is true to an extent; however there are enough articles that show it is not necessarily true. There are no fool proof investments. The only fool proof way is to mitigate risks. Have a diversified portfolio that has Debt [Fixed Deposits, Bonds] and equity [Stocks], Bullion [Gold], etc. And stay invested for long as the effects tend to cancel out in the long run. |
How do I track 401k rollovers in Quicken? | You definitely should NOT do what you are doing now (#2) since this is not a reflection of what actually is going on. (Unless you actually did transfer the equities themselves and not the cash.) Your first option is correct solution. As noted by mpenrow you need to make sure that the target account is also tax deferred. If that still doesn't work and there is a bug you should still do it this way anyway. If it messes up your tax planner just make sure to include a comment so that everyone knows what is really going on. When I have had issues like this in the past I always try to stick to whatever is the closest indication of what actually occurred. |
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