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Can a US bank prevent you from making early payments to the principal on a home mortgage? | Many mortgages penalize early payment, and I assume it's possible to disallow it altogether. It makes sense why they don't want early payment. If you pay off the loan early, it is usually because you re-financed it to a loan with a lower rate. You would do this when the interest rate is low (lower than when you got your original loan). If you pay it off early, that means they will have to re-invest the money again, or they will lose money if they just have it sitting around. However, recall above that people pay it off early when the interest rate is low; that is the worst time for them to re-invest this into another mortgage, because the rate will not be as good for them as the one you were originally going to keep paying. |
Why does the biotechnology industry have such a high PE ratio? | If you look at the biotech breakdown, you'll find a lot of NAs when it comes to P/E since there are many young biotech companies that have yet to make a profit. Thus, there may be something to be said for how is the entire industry stat computed. Biotechnology can include pharmaceutical companies that can have big profits due to patents on drugs. As an example, look at Shire PLC which has a P/E of 1243 which is pretty high with a Market Capitalization of over a billion dollars, so this isn't a small company. I wonder what dot-com companies would have looked like in 1998/1999 that could well be similar as some industries will have bubbles you do realize, right? The reason for pointing out the Market Capitalization is that this a way to measure the size of a company, as this is merely the sum of all the stock of the company. There could be small companies that have low market capitalizations that could have high P/Es as they are relatively young and could be believed to have enough hype that there is a great deal of confidence in the stock. For example, Amazon.com was public for years before turning a profit. In being without profits, there is no P/E and thus it is worth understanding the limitations of a P/E as the computation just takes the previous year's earnings for a company divided by the current stock price. If the expected growth rate is high enough this can be a way to justify a high P/E for a stock. The question you asked about an industry having this is the derivation from a set of stocks. If most of the stocks are high enough, then whatever mean or median one wants to use as the "industry average" will come from that. |
Why does short selling require borrowing? | You can't make money on the way down if it was your money that bought the shares when the market was up. When you sell short, borrowing lets you tap into the value without paying for it. That way, when the price (hopefully) drops you profit from the difference. In your example, if you hadn't paid the £20 in the first place, then you would actually be up £5. But since you started with £20, you still show loss. As others said, borrowing is the definition of selling short. It is also simply the only way the math works. Of course, there is a large risk you must assume to enjoy benefiting from something you do not own! |
What things are important to consider when investing in one's company stock? | You really have asked two different questions here: I'm interested in putting away some money for my family Then I urge you to read up on investing. Improving your knowledge in investing is an investment that will very likely pay off in the long-term - this can't be answered here in full length, pointers to where to start are asset allocation and low-cost index funds. Read serious books, read stackexchange posts, and try avoid the Wall Street marketing machine. Also, before considering any long term investments, build an emergency fund (e.g. 6 months worth of your expenses) in case you need some liquid money (loss of job etc.), and also helps you sleep better at night. What things are important to consider before making this kind of investment? Mainly the risk (other answers already elaborate on the details). Investing in a single stock is quite risky, even more so when your income also depends on that company. Framed another way: which percentage of your portfolio should you put into a single stock? (which has been answered in this post). If after considering all things you think it's a good deal, take the offer, but don't put a too great percentage of you overall savings into it, limit it to say 10% (maybe even less). |
Upward Spike in US Treasuries despite S&P Downgrade in August 2011 | The only resources or references you need are a chart showing you what happened in those months. The exuberance for US treasuries comes from the fact that there are no better options than them for putting cash. There are better sovereign debt instruments around the world depending on your goals, but they do not offer the same liquidity. US dollars and US Treasuries are equivalents in this context, so no matter if the wealthy speculator removed their cash from the stock market and put it in a bank or directly bought US treasuries (or their futures), this would increase the demand for treasuries. S&P Downgraded US treasures due to political instability in the United States, since inefficiencies in the country's political structure can prevent the Treasury from paying treasury holders (aka a default). Speculators know that this doesn't effect the United States resources and revenue collection schemes, as there is ample wealth public and private available to back the treasury bonds. |
New to investing — I have $20,000 cash saved, what should I do with it? | Another thought: Higher education in the US is frightfully expensive with the sticker price for a 4-year undergraduate degree at a decent private college us sitting at around $250,000 and rising fast. Consider starting a 529 savings plan especially if you planning on more kids. |
CEO entitlement from share ownership? | You can apply for a position with any company you like, whether or not you are a shareholder. However, owning shares in a company, even lots of shares in a company, does not entitle you to having them even look at your resume for any job, let alone the CEO position. You generally cannot buy your way into a job. The hiring team, if they are doing their job correctly, will only hire you if you are qualified for the job, not based on what your investments are. Stockholders get a vote at the shareholders' meeting and a portion of the profits (dividend), and that's about it. They usually don't even get a discount on products, let alone a job. Of course, if you own a significant percentage of the stock, you can influence the selections to the board of directors. With enough friends on the board, you could theoretically get yourself in the CEO position that way. |
Reason for “qualified” buyer requirements to exercise stock options/rights spun off from parent company? | The fact that your shares are of a Canadian-listed corporation (as indicated in your comment reply) and that you are located in the United States (as indicated in your bio) is highly relevant to answering the question. The restriction for needing to be a "qualified institutional buyer" (QIB) arises from the parent company not having registered the spin-off company rights [options] or shares (yet?) for sale in the United States. Shares sold in the U.S. must either be registered with the SEC or qualify for some exemption. See SEC Fast Answers - Securities Act Rule 144. Quoting: Selling restricted or control securities in the marketplace can be a complicated process. This is because the sales are so close to the interests of the issuing company that the law might require them to be registered. Under Section 5 of the Securities Act of 1933, all offers and sales of securities must be registered with the SEC or qualify for some exemption from the registration requirements. [...] There are regulations to follow and costs involved in such registration. Perhaps the rights [options] themselves won't ever be registered (as they have a very limited lifetime), while the listed shares might be? You could contact investor relations at the parent company for more detail. (If I guessed the company correctly, there's detail in this press release. Search the text for "United States".) |
Withholding for unexpected Short-Term Capital Gains and Penalties | My understanding (I've never filed one myself) is that the 1040ES is intended to allow you to file quarterly and report unpredictable income, and to pay estimated taxes on that income. I was in the same sort of boat for 2016 -- I had a big unexpected income source in 2015, and this took away my Safe Harbor for 2016. I adjusted my w-2 to zero exemptions (eventually) and will be getting a refund of about 1% of our income. So lets say you make 10000 in STG in March, and another 15000 in STG in April. File a quarterly 1040-ES between March 31 and April 15. Report the income, and pay some tax. You should be able to calculate the STCG Tax for 10k pretty easily. Just assume that it comes off the top and doesn't add at all to your deductions. Then for April, do the same by June 15. Just like your W-2 is used to estimate how much your employer should withhold, the 1040ES is designed to estimate how much extra you need to pay to the IRS to avoid penalties. It'll all get resolved after you file your final 1040 for the 2017 calendar year. |
How much does it cost to build a subdivision of houses on a large plot of land? | Let's think like a real estate developer. First you need to check with the zoning commission the restrictions for the area. Let's say that the plot is actually suitable for 10 homes. You buy the land. You also need to finance the build itself. If you don't have enough cash you need to acquire financing from banks and perhaps from other sources as well, because banks won't loan you the entire amount. Next you need to divide the plot into 10 pieces, making sure that each piece has driveway access to the street and plan access to utilities (water/sewer/electricity/broadband/phone lines). Plan the size and position of each house. Get building approval. This is a process that can take some time, especially if they have follow-up questions. Get a builder to build the houses, including ground work and preparation for utilities. Get approval for the finished houses. A building inspector will check that the houses follow the permission and all laws and regulations that apply. This step can entail time and added cost. Get a real estate agent to sell the new homes. Often, the selling process starts in the planning phase and early buyers are able to influence both the layout of the house and the finish. Your cost estimate included a profit of 140k for each house. From that a builder needs to subtract financing costs, real estate agent costs, any costs that you forgot to factor in, budget overdrafts, contingency costs, and salaries for your staff and yourself. I estimate the project time to 1.5-2 years. So, we have an $8M project with a gross profit of $1.4M (not including all costs). Net profit probably just a few hundred thousand. Or less. Real estate developers with local knowledge would be able to make a much more accurate estimate on both time and cost. My guess is that they have, and since the plot hasn't sold in a while, either the price is at the upper end of what makes a profitable project or there are other restrictions that limit the number/size of homes that can be built on it. |
How to fill the IRS Offer In Compromise with an underwater asset? | You're supposed to be filling form 433-A. Vehicles are on line 18. You will fill there the current fair value of the car and the current balance on the loans. The last column is "equity", which in your case will indeed be a negative number. The "value" is what the car is worth. The "equity" is what the car is worth to you. IRS uses the "equity" value to calculate your solvency. Any time you fill a form to the IRS - read the instructions carefully, for each line and line. If in doubt - talk to a professional licensed in your state. I'm not a professional, and this is not a tax advice. |
ETFs are a type of mutual fund, correct? | Your question is one of semantics. ETFs and mutual funds have many things in common and provide essentially the same service to investors with minimal differences. It's reasonably correct to say "An ETF is a mutual fund that..." and then follow up with some stuff that is not true of a typical mutual fund. You could do the same with, for example, a hedge fund. "A hedge fund is a mutual fund that doesn't comply with most SEC regulations and thus is limited to accredited investors." As a matter of practice, when people say "mutual fund" they are talking about traditional mutual funds and pretty much never including ETFs. So is an ETF a mutual fund as the word is commonly used? No. |
Is there any instrument with real-estate-like returns? | nan |
Auto Loan and Balance Transfer | This is what your car loan would look like if you paid it off in 14 months at the existing 2.94% rate: You'll pay a total of about $277 in interest. If you do a balance transfer of the $10,000 at 3% it'll cost you $300 up front, and your payment on the remaining $5,000 will be $363.74 to pay it off in the 14 month period. Your total monthly payment will be $1,099.45; $5,000 amortized at 2.94% for 14 months plus $10,300 divided by 14. ($363.74 + 735.71). Your interest will be about $392, $300 from the balance transfer and $92 from the remaining $5,000 on the car loan at 2.94%. Even if your lender doesn't credit your additional payment to principal and instead simply credits future payments, you'd still be done in 15 months with a total interest expense of about $447. So this additional administration and additional loan will save you maybe about $55 over 14 or 15 months. |
Should I purchase a whole life insurance policy? (I am close to retirement) | There's nothing new about Whole Life Insurance. The agent stands to earn a pretty hefty commission if he can sell it to you. I don't think your assets warrant using it for avoiding the taxes that would be due on a larger estate. I don't see a compelling reason to buy it. |
How to make money from a downward European market? | What you do is you create an infomercial where you sell a booklet about junk investments that you are absolutely certian may survive an end of the world scenerio. Then you sell that booklet to people who fear for their family. It is basically a tax on stupidity but works because it prays on the fears of the stupid. It requires moral bankruptcy, but you can end up with quite a bit of money... of course if the Euro does crash then you have a lot of worthless money. |
Does the IRS give some help or leniency to first-time taxpayers? | There's no such thing as "leniency" when enforcing the law. Not knowing the law, as you have probably heard, is not a valid legal defence. Tax law is a law like any other. That said, some penalties and fines can be abated if the error was done in good faith and due to a reasonable cause. First time penalties can be abated in many cases assuming you're compliant otherwise (for example - first time late filing penalty can be abated if you're compliant in the last 5 years. Not many people know about that.). Examples for a reasonable cause (from the IRS IRM 20.1.1): Reliance on the advice of a tax advisor generally relates to the reasonable cause exception in IRC 6664(c) for the accuracy-related penalty under IRC 6662. See IRM 20.1.5, Return Related Penalties, and If the taxpayer does not meet the criteria for penalty relief under IRC 6404(f), the taxpayer may qualify for other penalty relief. For instance, taxpayers who fail to meet all of the IRC 6404(f) criteria may still qualify for relief under reasonable cause if the IRS determines that the taxpayer exercised ordinary business care and prudence in relying on the IRS’s written advice. IRM 20.1.1.3.2.2.5 - Erroneous Advice or Reliance. Treas. Reg. 1.6664–4(c). There are more. IRM is the "Internal Revenue Manual" - the book of policies for the IRS agents. Of course, you should seek a professional advice when you're non-compliant and want to ask for abatement and become compliant again. Talk to a CPA/EA licensed in your state. |
United Kingdom: Where to save money for a property deposit | The chancellor announced an ISA in this week's budget intended for people saving to buy their first home. For every £200 put in the government will add £50 to the account so I would strongly encourage you to put the money into that as it is also tax free. |
Why invest for the long-term rather than buy and sell for quick, big gains? | The price of a shares reflects the expected future returns of that company. If it does not someone will notice and buy until it does. Look at this chart http://www.finanzen.net/chart/Arcandor (click on max), that's a former DAX company, so one of the largest german companys. Now it's bankrupt. Why do you think you are the only one who is going to notice? There are millions of people and even more computers, some a going to be smarter than you. Of course that does not happen to everyone but who knows. Is Volkswagen going to survive the current crisis? Probably. Is it coming back to former glory in the next half year? Who knows? Here comes the obvious solution: Don't buy single stocks, spread it out over many companies, some will shine, some will plument and you get the average. Oh that's an index, how convinent. Now if there were a way to save on all these transaction costs you're incurring... |
what does “private equity structures” mean? | Private equity firms have a unique structure: The general partners (GP's) of the firm create funds and manage the investments of those funds. Limited partners (LP's) contribute the capital to the funds, pay fees to the GP's, and then make money when the funds' assets grow. I believe the article is saying that ultra high net worth individuals participate in the real estate market by hiring someone to act as a general partner and manage the real estate assets. They and their friends contribute the cash and get shares in the resulting fund. Usually this GP/LP structure is used when the funds purchase or invest in private companies, which is why it is referred to as "private equity structure," but the same structure can be used to purchase and manage pools of real estate or any other investment asset. |
If you buy something and sell it later on the same day, how do you calculate 'investment'? | Another way to look at this is if we separate the owner's account from the business's account. At the start of the year, the owner puts $9 into the business account to get the business started. At the end of the first day, the business account has $10, and at the end of the second day, the business account has $11. The owner doesn't need to add any more of his own money into the business account. At the end of the 365th day, the business will have $374, which is $365 profit + $9 investment. Assuming the business has no other expenses, the business will calculate profit for the year like this: The author is making a strange point. The two numbers he is talking about are two different quantities. The business owner's return on investment is $365 / $9 = 4056%. But the business's profit margin is $365 / $3650 = 10%. Both are useful numbers when running the business. I disagree with the author's insinuation that a business is doing something tricky when calculating profit margin. Remember that, in addition to the business owner's monetary investment, he worked every day for a year to earn that $365. |
Why might it be a bad idea to invest 100% of your 401(k) into a stock index fund? | At your age, I don't think its a bad idea to invest entirely in stocks. The concern with stocks is their volatility, and at 40+ years from retirement, volatility does not concern you. Just remember that if you ever want to call upon your 401(k) for anything other than retirement, such as a down payment on a home (which is a qualified distribution that is not subject to early distribution penalties), then you should reconsider your retirement allocations. I would not invest 100% into stocks if I knew I were going to buy a house in five years and needed that money for a down payment. If your truly saving strictly for a retirement that could occur forty years in the future, first good for you, and second, put it all in an index fund. An S&P index has a ridiculously low expense ratio, and with so many years away from retirement, it gives you an immense amount of flexibility to choose what to do with those funds as your retirement date approaches closer every year. |
How does remittance work? How does it differ from direct money transfer? | If you are a citizen of India and working in Germany, then you are most likely an NRI (NonResident Indian). If so, you are not entitled to hold an ordinary Indian bank account, and all such existing accounts must be converted to NRO (NonResident Ordinary) accounts. If your Indian bank knows about NRO accounts, then it will be eager to assist you in the process of converting your existing accounts to NRO accounts most likely it also offers a money remittance scheme (names like Remit2India or Money2India) which will take Euros from your EU bank account and deposit INR into your NRO account. Or, you can create an NRE (NonResident External) account to receive remittances from outside India. The difference is that interest earned in an NRO account is taxable income to you in India (and subject to TDS, tax deduction at source) while interest earned in an NRE account is not taxable in India. The remittance process takes a while to set up, but once in place, most remittances take 5 to 6 business days to complete. |
Since many brokers disallow investors from shorting sub-$5 stocks, why don't all companies split their stock until it is sub-$5 | I do believe it comes down to listing requirements. That is getting very close to penny stock territory and typical delisting criteria. I found this answer on Ivestopedia that speaks directly the question of stock price. Another thought is that if everyone were to do it, the rules would change. The exchanges want to promote price appreciation. Otherwise, everything trades in a tight band and there is little point to the whole endeavor. Volatility is another issue that they are concerned about. At such low stock prices, small changes in stock prices are huge percentage changes. (As stated in that Ivestopedia answer, $0.10 swing in the price of a $1 stock is a 10% change.) Also, many fraudsters work in the area of penny stocks. No company wants to be associated with that. |
Calculating the Free Cash Flow (FCF) | First, don't use Yahoo's mangling of the XBRL data to do financial analysis. Get it from the horse's mouth: http://www.sec.gov/edgar/searchedgar/companysearch.html Search for Facebook, select the latest 10-Q, and look at the income statement on pg. 6 (helpfully linked in the table of contents). This is what humans do. When you do this, you see that Yahoo omitted FB's (admittedly trivial) interest expense. I've seen much worse errors. If you're trying to scrape Yahoo... well do what you must. You'll do better getting the XBRL data straight from EDGAR and mangling it yourself, but there's a learning curve, and if you're trying to compare lots of companies there's a problem of mapping everybody to a common chart of accounts. Second, assuming you're not using FCF as a valuation metric (which has got some problems)... you don't want to exclude interest expense from the calculation of free cash flow. This becomes significant for heavily indebted firms. You might as well just start from net income and adjust from there... which, as it happens, is exactly the approach taken by the normal "indirect" form of the statement of cash flows. That's what this statement is for. Essentially you want to take cash flow from operations and subtract capital expenditures (from the cash flow from investments section). It's not an encouraging sign that Yahoo's lines on the cash flow statement don't sum to the totals. As far as definitions go... working capital is not assets - liabilities, it is current assets - current liabilities. Furthermore, you want to calculate changes in working capital, i.e. the difference in net current assets from the previous quarter. What you're doing here is subtracting the company's accumulated equity capital from a single quarter's operating results, which is why you're getting an insane result that in no way resembles what appears in the statement of cash flows. Also you seem to be using the numbers for the wrong quarter - 2014q4 instead of 2015q3. I can't figure out where you're getting your depreciation number from, but the statement of cash flows shows they booked $486M in depreciation for 2015q3; your number is high. FB doesn't have negative FCF. |
Value of credit score if you never plan to borrow again? | There's many concrete answers, but there's something circular about your question. The only thing I can think of is that phone service providers ask for credit report when you want to start a new account but I am sure that could be worked around if you just put down a cash deposit in some cases. So now the situation is flipped - you are relying on your phone company's credit! Who is to say they don't just walk away from their end of the deal now that you have paid in full? The amount of credit in this situation is conserved. You just have to eat the risk and rely on their credit, because you have no credit. It doesn't matter how much money you have - $10 or $10000 can be extorted out of you equally well if you must always pay for future goods up front. You also can't use that money month-by-month now, even in low-risk investments. Although, they will do exactly that and keep the interest. And I challenge your assumption that you will never default. You are not a seraphic being. You live on planet earth. Ever had to pay $125,000 for a chemo treatment because you got a rare form of cancer? Well, you won't be able to default on your phone plan and pay for your drug (or food, if you bankrupt yourself on the drug) because your money is already gone. I know you asked a simpler question but I can't write a good answer without pointing out that "no default" is a bad model, it's like doing math without a zero element. By the way, this is realistic. It applies to renting in, say, New York City. It's better to be a tenant with credit who can withhold rent in issue of neglected maintenance or gross unfair treatment, than a tenant who has already paid full rent and has left the landlord with little market incentive to do their part. |
US Citizen Buying Rental Property in Canada | You've asked a number of questions. I can answer a few. I've quoted your question before each answer. What are the ins and outs of a foreigner like myself buying rental property in Canada? This is a pretty broad question which can address location, finances, basic suggestions etc. Here's some things to consider: Provincial considerations: Some ins and outs will depend on what province you are considering and what area in that Province. If you plan on owning in Montreal, for example, that's in the province of Quebec and that means you (or someone) will need to be able to operate in the French language. There are other things that might be different from province to province. See stat info below. Canadian vs. US Dollar: Now might be a great time to buy property in Canada since the Canada dollar is weak right now. To give you an idea, at a non-cash rate of 1.2846, a little over $76,000 US will get you over $100k Canadian. That's using the currency converter at rbcroyalbank.com. Taxes for non-resident rental property owners: According to the T4144 Income Tax Guide for Electing Under Section 216 – 2015: "When you receive rental income from real or immovable property in Canada, the payer, such as the tenant or a property manager, has to withhold non-resident tax at the rate of 25% on the gross rental income paid or credited to you. The payer has to pay us the tax on or before the 15th day of the month following the month the rental income is paid or credited to you." If you prefer to send a separate Canadian tax return, you can choose to elect under section 216 of the Income Tax Act. A benefit of this way is that "electing under section 216 allows you to pay tax on your net Canadian-source rental income instead of on the gross amount. If the non-resident tax withheld by the payer is more than the amount of tax payable calculated on your section 216 return, [they] will refund the excess to you." You can find this guide at Canada Revenue's site: http://www.cra-arc.gc.ca/E/pub/tg/t4144/README.html Stats: A good place for stats is the Canada Mortgage and Housing Corporation (CMHC). So, if you are interesting in vacancy rates for example, you can see a table that will show you that the vacancy rate in Ontario is 2.3% and in British Columbia it's 1.5%. However, in New Brunswick it's 8%. The rate for metropolitan areas across Canada is 2.8%. If you want to see or download this table showing the vacancy rates by province and also by metropolitan areas, go to the Canada Mortgage and Housing Corporation site http://www.cmhc.ca/housingmarketinformation/. You can get all sorts of housing information, reports and market information there. I've done well with Condos/Town-homes and would be interested in the same thing over there. Is it pretty much all the same? See the stat site mentioned above to get market info about condos, etc. What are the down payment requirements? For non-owner occupied properties, the down payment is at least 20%. Update in response to comments about being double taxed: Regarding being taxed on income received from the property, if you claim the foreign tax credit you will not be double taxed. According to the IRS, "The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived." (from IRS Topic 856 - Foreign Tax Credit) About property taxes: From my understanding, these would not be claimed for the foreign tax credit but can be deducted as business expenses. There are various exceptions and stipulations based on your circumstance, so you need to read Publication 856 - Foreign Tax Credit for Individuals. Here's an excerpt: "In most cases, only foreign income taxes qualify for the foreign tax credit. Other taxes, such as foreign real and personal property taxes, do not qualify. But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040)." Disclaimers: Sources: IRS Topic 514 Foreign Tax Credit and Publication 856 Foreign Tax Credit for Individuals |
I have more than $250,000 in a US Bank account… mistake? | Many brokerage accounts for trading stocks are covered under SIPC insurance, which is up to $500,000 You can also have multiple checking and savings accounts with the $250,000 balance split up. You can also check your bank's capital ratio on the FDIC website, somewhere. The FDIC won't move on them unless it falls under 3% and even then FDIC will force them into receivership and sell them to a bigger bank before they go bust and experience losses of customer deposits. This is what mostly happened when hundreds of banks failed during the crisis from 2008-2010. There were very isolated events where customers actually lost their cash balances, and that was mostly because those customers had completely uninsured accounts. As that was the most extreme moment in US and global financial history, you should be able to judge risk with the aforementioned information in mind. You can stay in a cash balance easily and be fully insured. |
As a contractor, TurboTax Business-and-Home or Basic? | Assuming you file state tax returns, you shouldn't buy Basic. Ever. Your choice is probably between the "Premier" version and the "Business and Home" version. Price difference is insignificant (I have a comparison on my blog, including short descriptions as to who might find each version useful the most). The prices have gone down significantly, since when I wrote the article, its cheaper now. |
Why should a company go public? | The reason to go public is to get money. Not to be snarky, but your question is like asking, "Why should a company try to sell its products, when if they just piled them up in a warehouse they wouldn't have to worry about shipping and customer complaints and collecting sales tax?" The answer, of course, is because they want the money. Sure, there are disadvantages to going public, like more regulation, required financial disclosures, and having to answer to stockholders. That's the price you pay for accepting money from people. They're not going to give you money for nothing. |
Capital losses on early-purchased stock? | Yes When exercising a stock option you will be buying the stock at the strike price so you will be putting up your money, if you lose that money you can declare it as a loss like any other transaction. So if the stock is worth $1 and you have 10 options with a strike at $0.50 you will spend $500 when you exercise your options. If you hold those shares and the company is then worth $0 you lost $500. I have not verified my answer so this is solely from my understanding of accounting and finance. Please verify with your accountant to be sure. |
What market conditions favor small cap stocks over medium cap stocks? | Small companies are generally able to adapt quickly to take advantage of changing conditions to enter new markets when the economy is growing. This gives them a lot of growth potential under those circumstances. However, in times of crisis, there may not be a lot of new markets to enter, and financing to expand any operations may be impossible to get. Under these conditions, small-caps will suffer relative to large-caps. |
Net income correlation with Stock Price | A company's stock price will reflect the general sentiment about a company's value now and in the future. Net income is only one figure. You need to crack open the net summary and see what's inside it. In the financials you reference in your question (http://www.marketwatch.com/investing/stock/FTNT/financials), you'll also notice that Ultimately, the stock price is just a reflection on what the market feels its (current) future is worth (you, me, other investors with future value calculators and strong opinions on what would provide value for them). |
If a stock doesn't pay dividends, then why is the stock worth anything? | Securities change in prices. You can buy ten 10'000 share of a stock for $1 each one day on release and sell it for $40 each if you're lucky in the future for a gross profit of 40*10000 = 400'0000 |
Why is stock dilution legal? | Alot of these answers have focused on the dilution aspect, but from a purely legal aspect, there are usually corporate bylaws that spell out what kind of vote and percentage of votes is needed to take this type of action. If all other holders of stock voted to do this, so 90% for, and you didn't, so 10% against, it's still legal if that vote meets the threshold for taking the action. As an example of this, I known of a startup where employees got $0/share for their vested shares when the company was sold because the voting stock holders agreed to it. Effectively the purchase amount was just enough to cover debts and preferred stock. |
Best way to invest money as a 22 year old? | Most important: Any gains you make from risking this sum of money over the next few years will not be life changing, but if you can't afford to lose it, then losses can be. Rhetorical question: How can you trust what I say you should do with your money? Answer: You can't. I'm happy to hear you're reading about the stock market, so please allow me to encourage you to keep learning. And broaden your target to investing, or even further, to financial planning. You may decide to pay down debt first. You may decide to hold cash since you need it within a couple years. Least important: I suggest a Roth IRA at any online discount brokerage whose fees to open an account plus 1 transaction fee are the lowest to get you into a broad-market index ETF or mutual fund. |
Why does shorting a call option have potential for unlimited loss? | You are likely making an assumption that the "Short call" part of the article you refer to isn't making: that you own the underlying stock in the first place. Rather, selling short a call has two primary cases with considerably different risk profiles. When you short-sell (or "write") a call option on a stock, your position can either be: covered, which means you already own the underlying stock and will simply need to deliver it if you are assigned, or else uncovered (or naked), which means you do not own the underlying stock. Writing a covered call can be a relatively conservative trade, while writing a naked call (if your broker were to permit such) can be extremely risky. Consider: With an uncovered position, should you be assigned you will be required to buy the underlying at the prevailing price. This is a very real cost — certainly not an opportunity cost. Look a little further in the article you linked, to the Option strategies section, and you will see the covered call mentioned there. That's the kind of trade you describe in your example. |
Distribution rules LLC vs. S-Corp | It's actually the other way around. Distributions in an LLC are usually based on each member's equity share, although the operating agreement can specify how often such distributions are made. Shareholders in a corporation can receive dividends, but those are determined by the corporation's board and can vary depending on the class of stock each shareholder owns. Preferred-class shareholders, who may hold a smaller overall fraction of the company's outstanding shares than the common stock shareholders, may receive disproportionately larger dividends per share than common stock shareholders, which is one of the (many) reasons that preferred stock is a better choice when it is available. Take, for instance, what Berkshire Class "A" shareholders receive in dividends per year compared to Class "B" shareholders. Here's a good link from LegalZoom that can explain what you're asking about: Explanation of LLC distributions I hope this helps. Good luck! |
What argument(s) support the claim that long-term housing prices trend upward? | It is supported by inflation and historical values. if you look at real estate as well as the stock market they have consistently increased over a long period of history even with short term drops. It is also based on inflation and the fact that the price of land and building material has increased over time. |
Effect of company issued options on share price | The answer to your question as asked is no. Call options, even those issued by the company, cannot create new shares unless they are employee stock options. Company-issued warrants, on the other hand, can create new shares. |
Purchasing first car out of college | The .9% looks great, but it's not as relevant as the cost of the car itself. There are those who believe that one should never own a new car, that the first X years/miles of a car's life are the most expensive. The real question is how your budget is allocated. Is the car payment a small sliver or a large slice? How big is the housing wedge? |
Margin Calculations Question | The setup is a purchase of 200 shares at $40 with a cash deposit of $4000 and margin loan of $4000 which a year later grew to $4240. With a margin requirement of 30%, the loan can be 70% or a total stock value of $6057. 1) $30.29 2) -24.3% (The stock fell to $30.29 from $40) 3) -54.6% (Your $4000 fell to $1817) |
Why do shareholders participate in shorting stocks? | In short (pun intended), the shareholder lending the shares does not believe that the shares will fall, even though the potential investor does. The shareholder believes that the shares will rise. Because the two individuals believe that a different outcome will occur, they are able to make a trade. By using the available data in the market, they have arrived at a particular conclusion of the fair price for the trade, but each individual wants to be on the other side of it. Consider a simpler form of your question: Why would a shareholder agree to sell his/her shares? Why don't they just wait to sell, when the price is higher? After all, that is why the buyer wants to purchase the shares. On review, I realize I've only stated here why the original shareholder wouldn't simply sell and rebuy the share themselves (because they have a different view of the market). As to why they would actually allow the trade to occur - Zak (and other answers) point out that the shares being lent are compensated for by an initial fee on the transaction + the chance for interest during the period that the shares are owed for. |
What is the opposite of a hedge? | I guess the opposite of being hedged is being unhedged. Typically, a hedge is an additional position that you would take on in order to mitigate the potential for losses on another position. I'll give an example: Say that I purchase 100 shares of stock XYZ at $10 per share because I believe its price will increase in the future. At that point, my full investment of $1000 is at risk, so the position is not hedged. If the price of XYZ decreases to $8, then I've lost $200. If the price of XYZ increases to $12, then I've gained $200; the profit/loss curve has a linear relationship to the future stock price. Suppose that I decide to hedge my XYZ position by purchasing a put option. I purchase a single option contract (corresponding to my 100 shares) with a strike price of $10 and an expiration date in January 2013 for a price of $0.50/share. This means that until the contract expires, I can always sell my XYZ shares for a minimum of $10. Therefore, if the price of XYZ decreases to $8, then I've only lost $50 (the price of the option contract), compared to the $200 that I would have lost if the position was unhedged. Likewise, however, if the price increases to $12, then I've only gained a net total of $150 due to the money I spent on the hedge. (the details of how much money you would actually lose in the hedged scenario are simplified out above; even out-of-the-money options retain some value before expiration, but pricing of options is outside of the scope of this post) So, as a more pointed answer to your question, I would say that the hedged/unhedged status of a position can be characterized by its potential for loss. If you don't have any other assets that will increase in value to offset losses on your position of interest, I would call it unhedged. |
Why have candlestick charts overlaps? | The market is simply gapping at these times, some news may have come out that makes the market gap on the open from its previous close. Being FX, the market in one country might be trading and then at the start of the hour trading in a different country may commence, causing a small gap in price. Generally many things could cause the price to gap up or down, and these gaps sometime can occur at the start of a new hour or other timeframe you are using. They do tend to happen more often at the start of a new day's trading on a daily chart, especially with stocks. |
What is the best asset allocation for a retirement portfolio, and why? | The best asset allocation is one that lets you sleep well at night. Can you stomach a loss of 50% and hold on to that asset for 3 years, 5 years, or however long it will take to bounce back while everyone is telling you to sell it at a loss? All these calculations will be thrown out the window at the next market panic. You've probably been in situations where everyone's panicking and the market seems upside down and there are no rules. Most people think they'll stay rational, but unless you've been through a market panic, you don't really know how you'll react. |
Who Can I Hire To Calculate the Value of An Estate? | Generally, it would be an accountant. Specifically in the case of very "private" (or unorganized, which is even worse) person - forensic accountant. Since there's no will - it will probably require a lawyer as well to gain access to all the accounts the accountant discovers. I would start with a good estate attorney, who in turn will hire a forensic accountant to trace the accounts. |
Is it normal for brokers to ask whether I am a beginner? | Yes, this is common and in some cases may be required. They may use it for marketing at some level, but they also use it for risk management in deciding, for example, how much margin to offer and whether to approve access to "riskier" products like stock options. |
Is it possible to eliminate PMI (Personal/Private Mortgage Insurance) on a mortgage before reaching 20% down on principal? | On a 5% mortgage, after 24 months of payments on a 30 yr amortization, you will have paid 3% of the principal, so all else being equal, you have 15% equity. If the value is up, even a bit, the first step is to call the bank. If you are pretty sure it's up enough, ask them to remove PMI in exchange for you paying the appraisal fee. If they hesitate, ask them if you prepay the remaining missing 5%, if they'll pull the fee. 8% of principal is paid by the end of year 5, at which time they have no choice but to remove it. Doing so any sooner is their call. If they agree to the pre-pay deal, I'd find a way to raise the funds. It will save you over $5000 in a short period. Last, while 5% really is great, especially NPNC, shop around, you may find another no cost deal at the same or lower rate, no harm to look, and they may appraise you at 80% LTV. |
One of my stocks dropped 40% in 2 days, how should I mentally approach this? | Did you read Soichiro Honda's biography? He is the founder of Honda Motor. His plant was destroyed by an earthquake, and then he proceeded to build another factory which, as World War II broke out, was lost again with his money, and many of his friends', but he started again. |
What's the fuss about Credit Score / History? | I justed rented a new house, and they ran my credit to see if I am a reliable person. |
Are social media accounts (e.g. YouTube, Twitter, Instagram, etc.) considered assets? | Assets with zero value, perhaps. Unless you can prove that they have resale value. Good luck with that. In other words, not worth spending time on. |
Foreign Earned Income Exclusion - Service vs. Product? | As the name says, its for income earned in a Foreign country. If you have been paying US income tax on this while living in the US, nothing is going to change here. You should be informing yourself on how to avoid double taxation in your new country of residence. Passive income earned abroad (dividends, interest) also do not fall under this exemption. The purpose of the Foreign Earned Income Exclusion is to make it easy for expats who work abroad to avoid double income taxation without going through the complicated process of applying for tax credits. The US is the only industrial country that taxes its residents regardless of where they reside. That is also why it only goes to about $100,000 a year. If you are a high earner, they want to make it more difficult. Also as a side note, since you are going to be abroad for a year. I will point out that if you have more than $10,000 in foreign accounts at any point in the year you need to declare this in an FBAR form. This is not advertised as well as it should be and carries ridiculous penalties for non-compliance. I can't count the number of times I have heard a US expat say that they were unaware of this. |
What is the opposite of Economic Bubble? | The opposite of an economic bubble is a bubble burst :p! Jokes aside though, an economic bubble occurs when the economy is in bull market mode and asset prices are growing very fast. It's usually measured by ratio's like price to earnings and the levels of various market indices. So, the opposite would be when valuations are falling very fast or are very low, and price to earnings ratios are low. This condition is usually a recession. A recession is a market slowdown, generally after a bubble bursts, and severe recessions can become depressions if they last long enough (Great Depression, 1930s). A bubble is not necessarily negative - stock prices usually rise a lot so paper wealth is greatly magnified. If you can get out in time, you're golden. Similarly, a recession isn't bad for everyone. Some investors keep large amounts of cash waiting for recessions so they can "buy low, sell high". For most people, however, recessions are negative because unemployment increases and some people get fired, and the economy slows down. Asset prices have fallen so their investments are worth less than they used to be (on paper), and people mainly have to bide it out until the market starts growing again. |
Is buying a lottery ticket considered an investment? | Buying lotteries tickets makes you the fish not the fisher. Just like casinos or drugs. If you like, you can call buying tickets an "investment" or better yet, a donation in the lottery's owner wealth. No real investor is dumb enough to get into a business where 99.9999999% of the "investors" lose EVERYTHING they invested. Besides, a real investments means BIG money. You can call it so if you are ready to sell your house and buy tickets of all those money, but still, the risk is so high that it's not worth it. |
Should I pay off my 50K of student loans as quickly as possible, or steadily? Why? | The definitive answer is: It Depends. What are your goals? First and foremost, you need to have at least 3 months expenses in cash or equivalent. (i.e. an investment that you can withdraw from quickly, and without penalty). The good news is that you don't have to come up with it instantly. Set a time frame - one year - for creating this safety net, and pay towards that goal. This is the single most important piece of financial advice you will receive. Now determine what you need to do. For example, you may need a car. Compare interest rates on your student loan and the car loan. Put your cash towards whichever is higher. If you don't need a car or other big ticket item, then you may consider sticking your surplus into the student loans. 50k at $1650 a month will be paid down in about 3 years, which might be a bit long to live the monastic lifestyle. I'd look at paying down the smallest loan first (assuming relatively similar rates), and freeing up that payment for yourself. So if you can pay off 1650 a month, and free up $100 of that in six months, then you can reward yourself with half that surplus, and apply the other half to the next loan. (This is different than some would suggest because you're talking about entering severe spartan mode, which is not sustainable.) Remember that life happens. You'll meet someone. You'll have an accident, your brother will get sick and you'll give him some money to help out. You've got to be prepared for these events, and for these reasons, I don't recommend living that close to the edge. Remember, you're not in default, and you do have the option of continuing to pay the minimum for a long time. |
Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | I politely decline. Insurance is there to protect me against catastrophic financial loss (huge medical bills, owing a mortgage on a house that burned down, etc.) not a way to game the system and pay for routine expenses or repairs. |
Why is it rational to pay out a dividend? | The main reason, as far as I can see, is that the dividends are payments with which the shareholders may do what they want. Capital that the company has no use for does not make a significant positive return on investment, as you pointed out, yes the company could accrue interest, but that is not going to make the company large sums of cash. While the company may be great at making shoes - maybe even the best in the world - doesn't mean they are good investors. Sure they could dabble at using their capital to invest in other equities, but they don't, because they just want to focus on making shoes. If the dividend goes to the investors, they can do what they wish, be it reinvest in the company, or invest elsewhere. Other companies that may make good use of the capital, and create significant returns on it are one such example. That is the rational answer, beyond that, one of the main reasons is that people like the feeling of receiving dividends - it might not be the answer you are looking for, but many people prefer companies that pay dividends for no rational reason over companies which grow their asset value. |
The cost of cleaning the house that we rented far exceeds the security deposit. Should we bother? | I am surprised at the amount of work this contract wants done. I'd question if it's even legal given the high costs. I suspect it's only there to remind abusive tenants of responsibilities they already have in law for extraordinary abuse beyond ordinary wear-and-tear: they are already on the hook to repaint if they trash the paint (think: child writing on walls, happens a lot), and already need to fumigate (and a lot more) if they are a filth-type hoarder who brings in a serious infestation (happens a lot). The landlord can already go after these people for additional money beyond the deposit. But that's not you. So don't freak out about those clauses, until you talk to the landlord and see what he's really after. Almost certainly, he really wants a "fit and ready to rent" unit upon your departure, so he doesn't have to take the unit off the market for months fixing it. As long as that's done, there's no reasonable reason for further work -- a decent landlord wouldn't require that. Nor would a court, IMO. The trouble with living in a place for awhile is you become blind to its deficiencies. What's more, it's rather difficult to "size up" a unit as ready when it's still occupied by your stuff. A unit will look rather different when reduced to a bare room, without furniture and whatnot distracting you. Add to it a dose of vanity and it becomes hard to convince yourself of defects others will easily see. So, tread carefully here. If push comes to shove, first stop is whether it's even legal. Cities and states with heavy tenant populations tend to have much more detailed laws, and as a rule, they favor the tenant. Right off the bat, in most states the tenant is not responsible for ordinary wear-and-tear. In my opinion, 6 years of ordinary, exempt wear would justify a repaint, so that shouldn't be on the tenant at all. As for the fumigation, I'm not in Florida so I don't know the deal, maybe there's some special environmental issue there which somehow makes that reasonable, it sure wouldn't fly in CA. Again that assumes you're a reasonable prudent tenant, not a slob or hoarder. As for the pro carpet cleaning, that's par for the course in any of the tough rent control areas I've seen, so that's gotten a pass from the legislators. Though $600 seems awfully high. Other than that, you can argue the terms are "unconscionable" -- too much of a raw deal to even be fair. However, this will depend on the opinion of a judge. Hit or miss. I'm hoping your landlord will be happy to negotiate based on the good condition of the unit (which he may not know; landlords rarely visit tenant units unless they really need to.) You certainly should make the case that you make here; that the work is not really needed and it's prohibitive. Your best defense against unconscionable deals is don't sign them. Remember, you didn't know the guy when you initially signed... the now-objectionable language should have been a big red flag back then, saying this guy is epic evil, run screaming. (even if that turned out not to be true, you should't have hung around to find out.) You may have gotten lucky this time, but don't make that mistake again. Unless one of the above pans out, though... a deal is a deal. You gave your word. The powerful act here is to keep your word. Forgive me for getting ontological, but successful people say it creates success for them. And here's the thing. You have to read your contracts because you can't keep your word if you don't know what word you gave. It's a common mistake: thinking good business is trust, hope, faith, submission or giving your all. No. In business, you take the time to hammer out mutually beneficial (win-win) agreements, and you set them on paper to eliminate confusion, argument and stress in the future as memories fade and conditions change. That conflict resolution is how business partners remain friends, or at least professional colleagues. |
In 2015, why has the price of natural gas been plummeting? | Don't try to catch a falling knife. The fact that the prices were falling for this long means that the professional traders in this market expect gas prices to keep going down. This may be for many reasons, which they know much better than you do. So it's likely that gas will keep falling for a while longer. Wait until gas starts to recover, and then go long on gas as base64 suggests. |
How does a bank make money on an interest free secured loan? | Other answers didn't seem to cover it, but most "0%" bank loans (often offered to credit card holders in the form of balance transfer checks), aside from less-obvious fees like already-mentioned late fees, also charge an actual loan fee, typically 2-3% (or a minimum floor amount) - that was the deal with every single transfer 0% offer I ever saw from a bank. So, effectively, even if you pay off the loan perfectly, on time, and within 0% period, you STILL got a 3% loan and not 0% (assuming 0% period lasts 12 months which is often the case). |
Where can I lookup accurate current exchange rates for consumers? | What you see on XE, is the rate at which it is being traded in the market. What you receive from a broker is the rate minus a fee, for the service being provided. You can check what rates are available for visa and mastercard on the following websites. Visa rates Mastercard rates I want to shop in the currency that will be cheapest in CAD at any given time. This is a mirage and isn't going to help much. The prices you pay might be reflecting the exchange rates, difference in the product quality and other factors too. Rates are fixed for a day, so any FX movement you see in the market willn't be reflected in what you pay. |
Can a car company refuse to give me a copy of my contract or balance details? | The advice above is generally good, but the one catch I haven't seen addressed is which specific laws apply. You said that you are in Arkansas, but the dealer is in Texas. This means that the laws of at least two different states are in play, possibly three if the contract contains a clause stating that disputes will be handled in a certain jurisdiction, and you are going to have to do some research to figure out what actually applies. One thing that may significantly impact this issue is whether you were in TX or AR when you signed the contracts. If you borrowed the money in TX, and the lender is in TX, then it is almost certain that the laws of Texas will govern. However, if you were living in AR at the time you acquired the loan, particularly if you were in AR when you signed the papers, you have a decent case for claiming that the laws of Arkansas govern. I don't know enough about either state to know if one is more favorable to the consumer than the other, but it is a question you really want to have answered. That said, I would be shocked if any state did not have provisions requiring the lender to provide a copy of the terms and a detailed statement of the account and transaction history upon request. Spend some time on the web site of the Texas attorney general and/or legislator (because that is where the lender is, they are more likely to respect Texas law) to see if you can track down any specific laws or codes that you can reference. You might also look into the federal consumer protection laws, though I can't think of one off hand that would apply in the scenario you have described. Then work on putting together a letter asking them to provide a copy of the contract and a full history of the account. As others noted, make sure you send it certified/return receipt, or better yet use a private carrier such as fedex, and check the box about requiring a signature. Above all you need to get the dialog transferred to a written form. I can not stress this point enough. Everything you tell them or ask for from here out needs to be done in a written format. If they call you about anything, tell them you want to see their issue/offer in writing before you will consider it. You do not necessarily need a lawyer to do any of this, but you do need to know the applicable laws. Do the research to know what your legal standing is. Involve a lawyer if you feel you need to, but I have successfully battled several large utility companies and collection agencies into behaving without needing one. |
value of guaranteeing a business loan | The guarantee's value to you is whatever you have to pay to get the guarantee, assuming that you don't decide it's too expensive and look for another guarantor or another solution entirely. How much are you willing to pay for this loan, not counting interest and closing costs? That's what it's worth. See past answers about the risks of co-signing for a realistic view of how much risk your guarantor would be accepting and why they should hold out for a very substantial reimbursement for this service. |
Is Cash Value Life Insurance (“whole life” insurance) a good idea for my future? | Almost everyone needs an insurance, you should also probably buy it. If you are good at planning [which it seems from your question], you should stick to Pure "Term" insurance and avoid any other types / variants of CVLI. CVLI is only advisable if one cannot commit to investing or is not good at saving money, or one feels that one loses money in Term Insurance. Otherwise term insurance is best. |
Remote jobs and incidental wage costs: What do I have to consider? | In the US we have social security taxes, where for a full time employee the company pays half and the employee pays half. When you work as a business, what we call 1099 for the form that the wages are reported on, then the contractor pays the full amount of social security tax. There are times when a contractor can negotiate a higher rate because the company does not have to pay that tax. However, most of the time the company just prefers to negotiate the rate based on your value. If you are a 60K year guy, then that is what they will pay you. From the company's perspective it does not matter what your tax rate is, only the value you can bring to the company. If you can add about 180K to the bottom line, then they will be happy to pay you 60K, and you should be happy to get it. Here in the US a contractor can expect to make about 7.5% more of an equivalent employee because of the social security tax savings to the company. However, not all companies are willing to provide that in compensation. Some companies see the legal and administrative costs of employees as normal, and the same costs with contractors as extra so they don't perceive a cost savings. There are other things that would preclude employers from giving the bump although it is logical to do so. First you will really have to feel out your employer for the attitude on the subject. Then I would make a logical case if they are open to providing extra compensation in return for tax savings. If I am an employee at 60K, you would also have to pay the government 18K. How about you pay me 75K as a contractor instead? That would be a great deal for all in the US. |
Cannot get a mortgage because I work through a recruiter | I think you are running into multiple problems here: All these together look like a high risk to a bank, especially right now with companies being reluctant to hire full-time employees. Looking at it from their perspective, the last thing they need right now is another potential foreclosure on their books. BTW, if it is a consolation, I had to prove 2 years of continuous employment (used to be a freelancer) before the local credit union would consider giving me a mortgage. We missed out on a couple of good deals because of that, too. |
super confused about bid and ask size. help | In the stock market many participants enter orders that are not necessarily set at the current market price of the stock (i.e. they are not market orders, they are limit orders). They can be lower than the market price (if they want to buy) or they can be higher than the market price (if they want to sell). The set of orders at each point of time for a security is called the order book. The lowest selling price of the order book is the offer or ask, the higher buying price is the bid. The more liquid is a security, the more orders will be in the order book, and the narrower will be the bid-ask spread. The depth of the order book is the number of units that the order book can absorb in any direction (buy or sell). As an example: imagine I want to buy 100 units at the lowest offer, but the size of the lowest offer is only 50 units, and there is not any further order, that means the stock has little depth. |
Is there any way to buy a new car directly from Toyota without going through a dealership? | Any car manufacturer that undercuts their own dealer network would have that network fall apart quickly. Tesla is using a dealer-free distribution model from the start, so they don't have that problem. Toyota doesn't work that way, though. GM imposed a uniform no-haggling policy with their Saturn brand, but that policy was coupled with local monopolies for dealers to make it work. Lexus has also experimented with no-haggling and online ordering (with delivery still taking place at a dealership). The rest of Toyota doesn't work that way, though. Some car manufacturers, such as BMW and Audi, allow you to take delivery of your new car at the factory for a discount. But even then, the transaction still takes place through a dealer. Toyota doesn't work that way, though. For one thing, they work at a different scale. If you buy a Camry in the US, it might be produced in Kentucky, Indiana, or Aichi, depending on business conditions. You say that you want to cut out the middleman, but the fact is that you do require someone to deliver a Toyota to you, like it or not. If you're interested in saving money, consider trying various well documented tips, such as negotiating by e-mail before showing up, pitting dealerships against each other. If you don't want to negotiate, you might be able to take advantage of pre-negotiated dealer prices through Costco. You mentioned that the dealership offered you a 7.99% interest rate for your 710 FICO score. That sounds insanely high — I'd expect deals more like 2% advertised by buyatoyota.com. (Remember, Toyota Motor Credit Corporation exists to help Toyota Motor Corporation sell more cars cheaply.) You can also seek alternate financing online (example) or through your own bank. |
Question about car loan payment | This depends on what the alternative is. Your loan of .99% is very favorable rate. If you have the 15,000 right now but only hold it in your checking account or cash then you might as well just pay it all off(assuming you have an adequate emergency fund). Paying the debt off sooner will save you on interest. Currently if you pay the minimum you will pay a total of $15,230 by the end of the loan, a $230 premium to $15,000. - Math credit goes to Joe If you have an investment vehicle you feel can successfully yield more then .99%, you might want to consider investing that money instead, while paying the minimum on your car loan. Also be sure to check the .99% is not an introductory rate which increases later on. It comes down to whether you can get a better return then .99% investing that money or whether you rather just pay off the debt and not worry about it. If you don't want to bother investing the money, than just pay it off... I also assumed you have no other revolving debt with a higher APR. If you do, first pay off the higher APR debt. |
Basic questions about investing in stocks | For point two.. The norm for buying stock is to just register online with a major broker: Fidelity, Schwab,TD Ameritrade...etc, send them money to fund your purchase, make the stock purchase in your account, and then have a little faith. You could probably get them to physically transfer the stock certificates from them to you, but it is not the norm at all. I would plan on a fee being involved also. The 10$ is for one trade... regardless of if you buy one share or many. So you wouldn't buy 1 share of a five dollar stock as your cost would be absurd. You might buy a hundred shares. |
When a stock price rises, does the company get more money? | Not directly. But companies benefit in various ways from a higher stock price. One way a high stock price can hurt a company is that many companies do share buybacks when the price is too high. Economically speaking, a company should only buy back shares when those shares are undervalued. But, management may have incentives to do buybacks at irrationally high prices. |
Why is it possible to just take out a ton of credit cards, max them out and default in 7 years? | I should apply for everything I can on the same day, get approved for as many as I can First it may not sound as easy. You may hardly get 2-3 cards and not dozens. Even if you submit the applications the same day; If you still plan this and somehow get too many cards, and draw huge debt, then the Banks can take this seriously and file court case. If Banks are able to establish the intent; this can get constituted as fraud and liable for criminal proceedings. So in short if someone has the money and don't want to pay; the court can attach the wage or other assets and make the person pay. If the intent was fraud one can even be sent to jail. |
If I want to take cash from Portugal to the USA, should I exchange my money before leaving or after arriving? | in my experience no-cash transactions are the best deal. Take your Portuguese credit card, get some cash ($60) for emergencies. Only pay with your credit card. It's much cheaper because it's all virtual. The best would be to set up an American bank account and transfer the money there. You can also get Paypal account, they offer credit cards too. The virtual banks, credit unions are the best option because they don't charge you for transactions. They don't have expenses with keeping actual money. Find some credit Union that accepts foreigners and take it from there. You can exchange your money on the airport because it's in tax free zone. I recommend the country of the currency since they sell you their 'valuts' and you are buying dollars. Not selling Euros... Make sure to find out what is the best deal. |
Is This A Scam? Woman added me on LinkedIn first, then e-mailed offering me millions of dollars [duplicate] | Yes. If you reply back, they'll confirm that Uncle Alex did indeed leave you $7 million, and you just need to send them a few thousand dollars for taxes and estate fees and then they'll wire you the money. And then there'll be customs fees. And then more taxes. And of course, there will be separate import fees. And so on until you run out of money. |
What is the proper way to report additional income for taxes (specifically, Android development)? | If this is truly hobby income (you do not intend to operate as a business and don't have a profit motive) then report the income on Line 21 ("other income") of form 1040. If this is a business, then the income and expenses belong on a Schedule C to form 1040. The distinction is in the treatment of profits and losses - your net profits on a business are subject to self-employment tax, while hobby income is not. Net losses on a business are deductible against other income; net losses on a hobby are miscellaneous itemized deductions in the "2%" box on Schedule A. From a tax point of view, selling apps and accepting donations are different. Arguably, donations are gifts; gifts are not taxable income. The hobby/business and income/gift distinctions are tricky. If the dollar amounts are small, nobody (including the IRS) really cares. If you start making or losing a lot of money, you'll want to get a good tax person lined up who can help you decide how to characterize these items of income and expens, how to put them on your return, and how to defend the return on audit if necessary. |
Under what circumstance will the IRS charge you a late-payment penalty for taxes? | I just got hit with the late payment penalty due to a bug in the H&R Block tax program. The underpayment was only $2 and the penalty was a whopping 1 cent. The letter that informed me of the error also said that they did not consider the $2.01 worth collecting, the amount owed had been zeroed. |
Should I try to negotiate a signing bonus? | You asked about a signing bonus and were told the conditions that would be required to get one. It does not appear that you will qualify, but you do have another option. Ask if you can start earlier. Some times they can't change the start date. They might have a contractual issue with the customer and the customer is setting the start date. Other times they are waiting for somebody else to retire or transfer. But ask. Tell them starting earlier speeds up the training process. For you it can make the transfer of insurance benefits sooner. Keep in mind it could be a few weeks before you get your first pay check. How were you planning on bridging the gap? |
Why I can't view my debit card pre-authorized amounts? | No money is stolen. They don't show you the hold for whatever reason (not so good a bank?), but the money is still yours. You just cannot use it, but it is still on your account. These holds usually go away after a week. In certain cases (like a security deposit) it may take up to 30 days. You can request from the merchant to cancel the hold if it is no longer necessary. They'll have to be proactive on that, and some merchants wouldn't want the hassle. It is however a known issue. When I was working in the banking industry, we would routinely receive these hold cancellation requests from merchants (hotels and car rentals). |
Standardized loan options to purchase employee stock options | What you want is a cashless transaction. It's part of the normal process. My employer gives me 1000 options at $1, I never need to come up with the money, the shares are bought and sold in one set of transactions, and if the stock is worth $10, I see $9000 less tax withholding, hit the account. No need for me to come up with that $1000. |
Does the IRS reprieve those who have to commute for work? | Short answer, yes. But this is not done through the deductions on Schedule A. This can happen if the employer creates a Flexible Spending Account (FSA) for its employees. This can be created for certain approved uses like medical and transportation expenses (a separate account for each category). You can contribute amounts within certain limits to these accounts (e.g. $255 a month for transportation), with pre-tax income, deduct the contributions, and then withdraw these funds to cover your transportation or medical expenses. They work like a (deductible) IRA, except that these are "spending" and not "retirement" accounts. Basically, the employer fulfills the role of "IRA" (FSA, actually) trustee, and does the supporting paperwork. |
What determines a tax resident in Florida | Plenty of retired people do stay in the US for longer than 60 days and don't pay taxes. In this IRS document 60 days stay appears to be the test for having a 'substantial presence' in the US, which is part of the test for determining residency. However the following is also written: Even if you meet the substantial presence test, you can be treated as a nonresident alien if you are present in the United States for fewer than 183 days during the current calendar year, you maintain a tax home in a foreign country during the year, and you have a closer connection to that country than to the United States. In other words, if your property in the US is not your main one, you pay tax in another country, and you stay there less than half the year, you should be treated as a non-resident (I am not a lawyer and this is not advice). This IRS webpage describes the tax situation of nonresident aliens. As I understand it, if you are not engaged in any kind of business in the US and have no income from US sources then you do not have to file a tax return. You should also look into the subject of double tax agreements. If your home country has one, and you pay taxes there, you probably won't need to pay extra tax to the US. But again, don't take my word for it. |
Funding an ira or roth ira | No, you don't have to have the money deducted from your paycheck. The IRS doesn't get a copy of your paycheck anyway. When you file your annual tax return (form 1040), there's a line there to write down the amount you contributed to the IRA. In fact, you can contribute to the IRA after the year ended, until the Tax Day of the next year, so that you can make sure your contribution will actually be deductible (not always they are). The IRA custodian (the brokerage firm/bank where you opened the IRA account) will provide you with a deposit confirmation and form 5498. A copy of form 5948 is also sent to the IRS. |
How can I register a UK business without providing a business address? | You don't have to provide your personal home address per se. You can provide a legal address where Companies house can send across paper correspondence to. Companies house legally requires an address because directors are liable to their shareholders(even if you are the only shareholder) and to stop them from disappearing just like that with shareholder's money. Moreover your birth date will also be visible on websites which provide comapnies information. You can ask these websites to stop sharing your personal information. Every company must have a registered office within the UK which is the official legal address of the company. It must be a physical address (i.e. not a PO Box without a physical location) as Companies House will use this address to send correspondence to. To incorporate a private limited company you need at least one director, who has to be over 16 years of age. You may also have a secretary, but this is optional. The information you will need to supply for each officer includes: You may also have officers that are companies or firms, and for these you will need to supply the company or firm name, its registered office address, details of the legal form of the company, where it is registered and if applicable its registration number. |
Why does money value normally decrease? | It is in circles. Today Money is fiat money. From economic stand point a moderate inflation is good. It there is near zero inflation or deflation, then economy would come to standstill and would stagnate. Hence everything has to becomes expensive. This keeps the economy in motion. House or Gold does increase in value otherwise one would not have purchased them. If you are saying on buying a house, you keep it with someone and after a period of time you get one extra room or keep an ounce of gold and after some years it becomes 2 ounce, well it does increase but differently. There reason there aren't many such schemes is because quantifying it is difficult. It would normally fetch more money than one had bought it for. |
What is the US Fair Tax? | You asked about the challenges. The transition itself is the biggest one. For people to get used to the tax at the register vs at their paycheck. For a great number of people to find new work. I don't know the numbers, but anyone involved with personal income taxes would be out of work. Sales tax is already part of the process in most states, bumping it to a federal tax wont add too much in overhead. I make no moral judgment, but consider, most prostitutes and drug dealers are avoiding income tax, but they still are buying the same goods in stores you and I are. This proposed tax reduces the collection noncompliance, and brings more people into "the system". Another factor some may not like is the ability to affect behavior by picking and choosing what to promote, via deductions, such as home buying or charity. |
How much more than my mortgage should I charge for rent? | As others have pointed out, you can't just pick a favorable number and rent for that amount. If you want to rent out your house, you must rent it for a value that a renter would agree to. For example there is a house on my street that has been looking for renters for 3 years. They want $2,500 a month. This covers their mortgage, and a little bit more for taxes and repairs. It has never been rented once. Other homes in my neighborhood rent for around $1,000 a month. There is no value to a renter in renting a house that is $1,500 more then a similar house 2 doors down. Now what you can look at is cost mitigation. So I am using data from my area. Houses in my part of Florida must have A/C running in the wet months to keep the moisture from ruining the house. This can easily be $100 a month (usually more). The city requires you to have water service, even when not occupied, though the cost is very small. Same with waste, which is a flat fee: $20 a month. Yard watering is a must during the dry months (if you want to keep grass). Let's say that comes out to $50 a month, year round. Pest control is a must, especially if your house has wooden parts (like floors or a roof). Even modest pest control is $25 a month. Property taxes around $240 a month. Let's say your mortgage is around $1,000 a month. That means to sit empty your house would cost $1,435. Now if you were to rent the house, a lot of those costs could "go away" by becoming the tenants' responsibility. Your cost of the house sitting full would be $1,240. Let's pad that with 10% for repairs and go with $1,364. Now let's assume you can rent for $1,000 a month. Keep in mind all these rates are about right for my area but will change based on size and amenities. Your choices are let the house sit empty for $1,435 a month or fill it and only "lose" $240 a month. Keep in mind that in both cases you will be gaining equity. So what a lot of people do around here is rent out their houses and pay the $240 as an investment. For every $240 they pay, they get $1,000 in equity (well, interest and fees aside, but you get the point). It's not a money maker for them right now, but as they get older two things happen. That $240 a month "payment" pays off their mortgage, so they end up owning the house outright. Then that $240 a month payment turns to extra income. And at some point, their rental can be sold for (let's guess) $400,000. SO they paid $86,400 and got back $400,000. All the while they are building equity in their rental and in the home they are living in. The important take away from this, is that it's not a source of income for the landlord as much as it is an investment. You will likely not be able to rent a house for more then a mortgage + costs + taxes, but it does make a good investment vehicle. |
First time home buyer. How to negotiate price? | Advice from a long-time flipper You negotiate price based on four factors and none of these are set in stone: How much you love the house. Is this house a 100 out of 100 for you or a 85 or a 75. How much have you compromised. What is the likelihood that you will find a house that will make you just as happy or at least close. You might have a house that is a 95 out of 100 but there are five other houses that you rated between 93-95. What is your timeframe. Know that playing hardball takes longer and can knock you out of the game sometimes and takes a little while to find a new game. What is the relative housing market. Zillow and other such sites are crap. Yes the give you a generalized feel for a community but their estimates are off sometimes by 30-40%. Other factors like street/noise/updates to house/ and so on are huge factors. You will have to really navigate the area and look for very comparable houses that have recently sold. Then use average housing movements to extrapolate your future houses cost. As a buyer you have two jobs. Buy the house you want and manage your agent. Your agent wants you to buy a house as soon as possible and to increase their reputation. Those are their only two factors of working. By you offering closer to the asking price they are able to get their sales as quick as possible. Also other agents will love working with them. In fact your agent is selling you on the home and the price. Agents hardly worry about you paying too much - as most buyers oversell the deal they get on their home. Admitting that you paid too much for your house is more of an admission of ignorance of yourself, compared to agent incompetency. If you decide to low-ball the owner, your agent spends more time with you and possibly reduces their reputation with the selling agent. So it is common for agents to tell you that you should not offer a low price as you will insult the owner. My advice. Unless the home is truly one of a kind for the market offering anything within 20% of the asking price is DEFINITELY within range. I have offered 40% less. If a house is asking too much and has been on the market for 8 months there is no way I am going in with an offer of even 15% lower. That leaves you no room. What you do? First think about how much you think this house could sell for in the next 3 months. In your example let's say 80K based on conservative comps. Then take the most you would actually pay for it. Let's say 75K. 70K is about as high of an opening offer I would go. Do NOT tell your agent your true breaking points. If you tell your agent that you would go to 75K on the house. Then that is what their negotiations will start at. Remember they want the sale to happen as soon as possible. Very likely the other agent - especially if they know each other - will ask if how flexible you are going to be. Then next thing you know your agent calls you back and says would you be willing to go 77K or the owner is firm at 80K. Do not give up your position. You should never forecast to your agent what your next bid or offer would be for the house. Never get into scenarios or future counters. So you offer 70K. If your agent asks you how firm that is? "Very firm". If your agent doesn't want to take the offer to them, "Thank you for being my agent, but I am going to be working with someone that represents what I want." If the owner says "You are done too me cheapskate." Well that's how it goes. If the owner stays firm at asking or lowers - then you can come up if you feel comfortable doing so. But understand what your goal is. Is it to get a house or to get a good deal on a house? Mine was always to get a good deal on a house. So I might offer 72K next. If they didn't budge, I am out. If they moved down I went from there. Easy Summary The fact is if they aren't willing to negotiate with you enough it always ends the same. You give them your take-it-or-leave-it offer. You tell your agent that if he/she comes back with one penny over it comes from their commission (god I have said this 100 times in my life and it is the best negotiation tactic you have with your agent). The owner says yes or no and it is over. |
Super-generic mutual fund type | Since you already have twice your target in that emergency fund, putting that overage to work is a good idea. The impression that I get is that you'd still like to stay on the safe side. What you're looking for is a Balanced Fund. In a balanced fund the managers invest in both stocks and bonds (and cash). Since you have that diversification between those two asset classes, their returns tend to be much less volatile than other funds. Also, because of their intended audience and the traditions from that class of funds' long history, they tend to invest somewhat more conservatively in both asset classes. There are two general types of balanced funds: Conservative Allocation funds and Moderate Allocation funds. Conservative allocation funds invest in more fixed income than equity (the classic mix is 60% bonds, 40% stocks). Moderate allocation funds invest in more equity than fixed income (classic mix: 40% bonds, 60% stocks). A good pair of funds that are similar but exemplify the difference between conservative allocation and moderate allocation are Vanguard's Wellesley Income Fund (VWINX) for the former and Vanguard's Wellington Fund (VWELX) for the latter. (Disclaimer: though both funds are broadly considered excellent, this is not a recommendation.) Good luck sorting this out! |
what if a former employer contributes to my 401k in the year following my exit? | According to the IRS, you can still put money in your IRA. Here (https://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits) they say: Can I contribute to an IRA if I participate in a retirement plan at work? You can contribute to a traditional or Roth IRA whether or not you participate in another retirement plan through your employer or business. However, you might not be able to deduct all of your traditional IRA contributions if you or your spouse participates in another retirement plan at work. Roth IRA contributions might be limited if your income exceeds a certain level. In addition, in this link (https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits), the IRS says: Retirement plan at work: Your deduction may be limited if you (or your spouse, if you are married) are covered by a retirement plan at work and your income exceeds certain levels. The word 'covered' should clarify that - you are not covered anymore in that year, you just got a contribution in that year which was triggered by work done in a previous year. You cannot legally be covered in a plan at an employer where you did not work in that year. |
Making your first million… is easy! (??) | I realize that "a million dollars" is a completely arbitrary figure, but it's one people fixate on. Perhaps folks just meant it's getting easier because inflation has made it a far less lofty sum than when the word "millionaire" was coined. Your point is correct - it' relatively easier as the 1 million dollar nowadays is no where as valuable as compared in the old days after the inflation adjustment. However the way to achieve that is easier said than done: The most possible way is to run your own business (assuming you will make profit). For most of the people running a job to earn a living - the job income is the biggest factor. Being extremely frugal wouldn't help much if you don't maximize your income potential. Earning a million dollar through investment? How much capitals are you able to invest in? 5k? 50k? 500k? I see no way to earn 1 million with 5k from investment, I wouldn't call it easy. This again depends on your income. With better income of course you could dedicate a larger portion to investment, without exposing too much risk and having to affect your way of life. (3) Invest some part of your income over a long period of time and let the stock market do the work I'd say this is more geared towards beating the inflation and earn a few extra bucks instead of getting very rich (this is being very relative). Just a word of cautions, the mindset of investment being the shortcut to wealth is very dangerous and often leads to speculative behavior. |
Paid cash for a car, but dealer wants to change price | As mhoran_psprep and others have already said, it sounds like the sale is concluded and your son has no obligation to return the car or pay a dime more. The only case in which your son should consider returning the car is if it works in his favor--for example, if he is able to secure a similar bargain on a different car and the current dealer buys the current car back from your son at a loss. If the dealer wants to buy the car back, your son should first get them to agree to cover any fees already incurred by your son. After that, he should negotiate that the dealer split the remaining difference with him. Suppose the dealership gave a $3000 discount, and your son paid $1000 in title transfer, registration, and any other fees such as a cashier's check or tax, if applicable. The remaining difference is $2000. Your son should get half that. In this scenario, the dealer only loses half as much money, and your son gains $1000 for his trouble. |
Saving up for an expensive car | If you can afford to put $1,333 towards saving for a new car each month, then there is nothing wrong with your logic You should be aware that your car will probably cost around $110,000 in 6.5 years, but other than that the logic is fine. However... |
What to do when a job offer is made but with a salary less than what was asked for? | If you take less than you think you are worth, you will hate that job with a purple passion in short order. Either make peace with the amount you settle on or move on. |
How do I calculate what percentage of my portfolio is large-, mid- or small- cap? | The portfolio manager at Value Research Online does this very nicely. It tracks the underlying holdings of each fund, yielding correct calculations for funds that invest across the board. Take a look at the screenshot from my account: If you have direct equity holdings (e.g., not through a mutual fund), that too gets integrated. Per stock details are also visible. |
Everyone got a raise to them same amount, lost my higher pay than the newer employees | The same thing happened to me when I worked retail during my college years. I agree that it is unfair however, it is what it is. With that being said, there may be several factors that you should consider: the new employees might have more experience or qualifications then you, your work performance based on your manager's perspective, and like in my situation when I worked retail, I started out as a cashier which get paid less than sales associates but when I moved to a sales associate position I still got paid less and when I got my raise I got the same pay a new sales associate would get. I suggest you suck it up and ride it through until you get a real job because in retail, in my opinion, you are expendable, if you don't like their pay they will find someone else. |
ETF vs Mutual Fund: How to decide which to use for investing in a popular index? | If you just want to track an index, then ETFs are, generally speaking, the better way. |
What is the smartest thing to do in case of a stock market crash | I suggest to just invest in index funds, these are low risk with high reward stocks that can survive even the worst of stock crashes but are still extremely profitable when the stock market is booming |
When's the best time to sell the stock of a company that is being acquired/sold? | What's your basis? If you have just made a 50% gain, maybe you should cash out a portion and hold the rest. Don't be greedy, but don't pass up an opportunity either. |
Making higher payments on primary residence mortgage or rental? | A lot depends on whether your mortgage payments are interest only or 'repayment' and what the remaining term is on each of the mortgages. Either way I suspect that the best value for the money you put in will be had by making payments to the larger, newer mortgage. This is because the quicker you reduce the capital owed the less interest you will pay over the whole term of the mortgage and you've already had the older mortgage for sometime (unless you remortgaged) so the benefit you can get from an arbitrary reduction in the capital is inevitably less than you will get from the same reduction in the capital of the newer mortgage. Even if the two mortgages are the same age then the benefit of putting money into the one on the new house is greater due to the greater interest charged on it. |
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