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In today's low interest environment, is it generally more economical to buy or lease a new car in the US? | There are two reasons leases are generally a worse deal than buying. First, inherent in the lease is the concept of trading in the car at the end of the lease term. As we all know, cars depreciate the most in the first year or two. By repeatedly leasing cars on short time frames, you own the vehicles during those most expensive years. Of course there's nothing stopping you from doing the same thing when buying (be it via cash or loan), but leasing builds in a schedule and encourages you to stick to it. Second, it is easier for the dealer salesperson to hide things from the consumer in a lease contract. Most salespeople will try to get a car purchaser to focus on the monthly payment, or they'll four-box the purchaser, but even then there's only 4 numbers, and most consumers have a rough idea what they are and what they mean. But in a lease the numbers in question are renamed and obscured. "Price" becomes "capitalized cost". "Interest rate" becomes "money factor" and is divided by 2400, making it look really small and not easily translatable without a calculator or pencil and paper. "Down payment" becomes a capitalized cost reduction. There's a new concept "residual value." Neither of those reasons change when interest rate is lower. |
Estate taxes and the top 1 percent by net worth | There are two key reasons: Consider a family of four, two kids and two adults, that has a net worth of $20 million. Each of these four people live in a top 1% household. But any of those four people can die, and their estate will not pay any estate tax. Both kids and one spouse can die, and still no estate tax will be paid. Only when the last spouse dies would there be any estate tax. Also, consider a person who dies but whose assets do not flow into their estate. For example, their assets could be held in an inter-vivos trust. People with higher net worths are much more likely to use trusts to avoid or minimize estate taxes. |
Why Google Finance puts to two decimal places for the trading volumes? | Many brokerages offer automatic dividend reinvestment. It is very infrequent that these dividends are exactly a whole share. So, if you have signed up for automatic dividend reinvestment, many brokerages will reinvest your dividends and assign to you a fractional share. I can't speak for how these shares work with regards to voting, but I can say that the value of these fractional holdings does change with stock price as if one genuinely could hold a fraction of a share. |
What does “netting” mean in this passage? | netting means to combine cash inflows and outflows (e.g. debits/credits, payments/receipts, income/expense) by subtracting the sum of all outflows from the sum of all inflows, creating one transaction. For example, if you make two trades in one day with your broker - one to buy a security for $100 and one to sell it for $110 - rather then you sending your broker $100 and them sending you $110, the transactions are "netted" - meaning they will send you the "net" amount of $10 ($110 inflow - $100 outflow). In a more general sense ("netting of instructions") it would mean to combine all instructions and only apply the "net" effect - e.g. one step forward, two steps back would combine to a "net" one step back. Most likely it will apply to the exchange of money, but it could be applied more broadly. Note that there doesn't have to be both inflows and outflows. You can also "net" multiple inflows (or outflows) into one transaction by just adding them all up, but typical business usage is to reduce the number of transactions by combining inflows and outflows. |
What should I do with my paper financial documents? | Here's my approach: As for Google Docs, I think that its safe enough for most people. If you in a profession that was subject to heavy regulatory scrutiny, of if you are cheating on your taxes, I would probably not use a cloud provider. Many providers will provide documents to government agencies without a subpoena or notice to you. |
Will I get a tax form for sale of direct purchased stock (US)? | I think I found the answer, at least in my specific case. From the heading "Questar/Dominion Resources Merger" in this linked website: Q: When will I receive tax forms showing the stock and dividend payments? A: You can expect a Form 1099-B in early February 2017 showing the amount associated with payment of your shares. You also will receive a Form 1099-DIV by Jan. 31, 2017, with your 2016 dividends earned. |
What is this type of risk-free investment called? | This sounds a lot like an Equity-indexed Annuity. They date from about 1996 (there is a bit of skepticism about them, as they are tricky to understand for the typical investor). For instance, an equity indexed annuity pays a portion of the gain in an index (like S&P 500) when the stock market rises, and guarantees you won't lose if it falls. In an arbitrage sense, it is roughly equivalent to buying a mixture of bonds and index (call) options. There are a lot of complicated 'tweaks' on these, such as annual ratchet/annual reset, interest caps, etc. There is quite a bit of debate about whether they are too good to be true, so I'd read a few articles with pros and cons before buying one. These are also commonly called FIA (Fixed indexed annuities). |
Earnings Calendar Fiscal Quarter Ending | Why do stock markets allow these differences in reporting? The IRS allows businesses to use fiscal calendars that differ from the calendar year. There are a number of reasons a company would choose do this, from preferring to avoid an accounting rush at end of year during holiday season, to aligning with seasonality for their profits (some like to have Q4 as the strongest quarter). Smaller businesses may prefer to keep the extra stress of year end closeout to a traditionally slower time for the business, and some just start their fiscal calendar when the company starts up. You'll notice the report dates are a couple weeks after fiscal quarter end, you would read it as "three months ended...," so for Agilent, three months ended October 31, 2017, so August, September, October are their Q4 months. |
How can I avoid international wire fees or currency transfer fees? | I did some empirical research, comparing the exchange rates for wire transfers vs. the exchange rates for ATM withdrawals. With my bank, wire transfers typically take a 4% float off the exchange rate. ATM withdrawals seem to take just over 2%. And ATM withdrawals don't have a wire transfer fee, as long as I'm withdrawing from a branch of the same bank (overseas). The only problem with ATM withdrawals is the daily limit. As far as I can see, Tor's answer above has it completely backwards, at least with my bank, ATM withdrawals are a much better value. Do the research yourself...call the bank you're going to transfer from and find out what their current exchange rate is. Compare it to the current spot rate (e.g. XE.com) to determine how much of a cut the bank is taking. Then, if you can, withdraw some cash from the foreign location with your ATM card and see how much of the original currency is deducted from your account. In this way you can empirically discover for yourself the better rate. |
Tax On Unsold Mined Bitcoin | Based on my research, the answer is both. You would pay taxes on the bitcoin you mine as income, and then capital gains tax when you sell them for a profit (or capital loss if you lose value on the sale). You can write off a portion of your electricity bill and hardware purchased for the use of mining as a business expense, but it's recommended that you consult a tax professional for determining the proper amount that is eligible for a deduction. From Forbes: New Bitcoin are being issued by the system roughly every 10 minutes by a process called mining. In mining, computers running the Bitcoin software around the world attempt to solve math problems and the first computer to come up with the solution adds the most recent transactions to the ledger of all Bitcoin transactions, plus receives the new bitcoins created by the system, called the block reward. If you are a miner and win the block reward, you must record the fair market value of Bitcoin that day and mark that as an addition to your personal or business income. Also note the date and timestamp at which your coins were mined. Later, when you dispose of those Bitcoin, you will subtract the date of acquisition from the date of disposal, and you will be taxed a long-term capital gains rate on any Bitcoin you held for more than a year, and a short-term capital gains rate on any Bitcoin you held for a year or less. (The timestamp isn’t absolutely necessary, but is helpful to validate the order of multiple acquisitions or disposals within a day.) The amount you pay in taxes on a long-term capital gain will depend on your income-tax bracket, while short-term capital gains are taxed the same as ordinary income. From bitcoin.tax: Another clarification in the IRS's March notice was how mining should be treated. Mining is income, on the day of receipt of any coins and at the fair value of those coins. This means that if you mined any Bitcoins or alt-coins either solo, as part of a pool, or through a cloud provider, you need to report any coins you received as income. Where it is less clear, is what that dollar value might be, since the fair value is not always as easy to determine. Bitcoins, Litecoins, Dogecoins, are all examples of where there is a direct USD market and so you can easily find out their value of any given day. However, a newly created alt-coin that was mined in its early days has no direct market and so how do you determine its value? Or for any alt-coin, e.g. ABC coin, that has no direct USD market but does have a BTC market. Does it have a value? Do you have to make a conversion from ABC to BTC to USD? Since there is no clarification yet from the IRS on this issue you should discuss how to proceed with your own tax professional. BitcoinTaxes has taken a prudent approach and calculates value where a fiat or BTC market exists, converting an alt-coin to BTC to USD as necessary. And from Bitcoin magazine: The IRS also stated mined bitcoins are treated as immediate income at the market value of those mined coins on their date of mining. “Most don’t know they can write off any losses they have,” said Libra founder Jake Benson. “The IRS allows you to offset income by up to $3,000 per year on capital losses. If you have losses and you aren’t writing them off, then it’s like throwing money away. Nobody likes doing taxes, but if you can owe less or increase your return, then doing your Bitcoin taxes often results in a benefit. In fact, the majority of our users are filing a capital loss, which means they’ve actually saved money by using our tool.” Benson also gives insight for miners. “Mining is considered income, so know the price of Bitcoin at the time you mined it,” he said. “If you make money on Bitcoin trading, the IRS requires that you report gains with line level detail.” The appropriate form for that is 8949, a sub-form of schedule D. Gains and losses, as outlined above, are treated like every other capital asset. |
How many stocks will I own in n years if I reinvest my dividends? | This answer contains three assumptions: New Share Price: Old Share Price * 1.0125 Quarterly Dividend: (New Share Price*0.01) * # of Shares in Previous Quarter Number of Shares: Shares from Previous Quarter + Quarterly Dividend/New Share Price For example, starting from right after Quarter One: New share price: $20 * 1.0125 = 20.25 1000 shares @ $20.25 a share yields $20.25 * 0.01 * 1000 = $202.5 dividend New shares: $202.5/20.25 = 10 shares Quarter Two: New share price: $20.503 1010 shares @ 20.503 yields $20.503*0.01*1010 = $207.082 dividend New shares: $207.082/20.503 = 10.1 shares Repeat over many cycles: 8 Quarters (2 years): 1061.52 shares @ $21.548 a share 20 Quarters (5 years): 1196.15 shares @ $25.012 a share 40 Quarters (10 years): 1459.53 shares @ $32.066 a share Graphically this looks like this: It's late enough someone may want to check my math ;). But I'd also assert that a 5% growth rate and a 4% dividend rate is pretty optimistic. |
Am I understanding buying options on stock correctly | Options have legitimate uses as a way of hedging a bet, but in the hands of anyone but an expert they're gambling, not investing. They are EXTREMELY volatile compared to normal stocks, and are one of the best ways to lose your shirt in the stock market yet invented. How options actually work is that you're negotiating a promise that, at some future date or range of dates, they will let you purchase some specific number of shares (call), or they will let you sell them that number of shares (put), at a price specified in the option contract. The price you pay (or are paid) to obtain that contract depends on what the option's seller thinks the stock is likely to be worth when it reaches that date. (Note that if you don't already own the shares needed to back up a put option, you're promising to pay whatever it takes to buy those shares so you can sell them at the agreed upon price.) Note that by definition you're betting directly against experts, as opposed to a normal investment where you're usually trying to ride along with the experts. You are claiming that you can predict the future value of the stock better than they can, and that you will make a profit (on the difference between the value locked in by the option and the actual value at that time) which exceeds the cost of purchasing the option in the first place. Let me say that again: the option's price will have been set based on an expert's opinion of what the stock is likely to do in that time. If they think that it's really likely to be up $10 per share when the option comes due (really unlikely for a $20 stock!!!), they will try to charge you almost $10 per share to purchase the option at the current price. "Almost" because you're giving them a guaranteed profit now and assuming all the risk. If they're less sure it will go up that much, you'll pay less for the option -- but again, you're giving them hard money now and betting that you can predict the probabilities better than they can. Unless you have information that the experts don't have -- in which case you're probably committing insider trading -- this is a very hard bet to win. And it can be extremely misleading, since the price during the option period may cross back and forth over the "enough that you'll make a profit" line many times. Until you actually commit to exercising the option or not, that's all imaginary money which may vanish the next minute. Unless you are willing and able to invest pro-level resources in this, you'd probably get better odds in Atlantic City, and definitely get better odds in Las Vegas. If you don't see the sucker at the poker table, he's sitting in your seat. And betting against the guy who designed and is running the game is usually Not a Good Idea. |
Changes in Capital Gains Tax in the US - Going to 20% in 2011? | Consider doing things that will allow for tax deductions, such as short selling. The IRS has regulations on this as well. And consider that Futures are taxed more favorably than other kinds of investments. (60% taxed as long term, 40% taxed as short term) |
Getting started in stock with one special field of activity | Investing only in one industry may be problematic as it is highly correlated. There are factor outside your (or anyones) knowledge which may affect all the industry: If you are familiar with the industry it may happen that you work in that (ignore rest of paragraph if this is not the case). In such case you are likely to have problems at work (frozen salary, no bonus, position terminated) and you need to liquidate the investments at that point (see many advice regarding ESPP). Depending on your field you may have some inside knowledge so even if you would took a position without it you may need to somehow prove it. On the other hand diversifying the investment might reduce the volatility of investment. Rise in oil will cause problems for air industry but will be a boom for oil industry etc. In this way you smooth the grow of the investments. Investing part of portfolio into specific industry may make more sense. It still possibly worth to avoid it at the beginning investor may have trouble to beat the market (for example according to behavioural economics you are exposed to various biases, or if markets are efficient then prices most likely already take into account any information you may have). (I'm still new to all this so it's mostly based on what I read rather then any personal experience. Also a standard disclaimer that this is not an investment, or any other, advice and I'm not licensed financial advisor in any jurisdiction) |
Helping girlfriend accelerate credit score improvement | In the short term what does it matter if she has poor credit? Just let it ride and focus on the important things. In the long term the most important part is "completing the divorce". That is separating all parts of her financial life from her ex-husband. This might mean she takes possession of the house and has him off the loan, or she gets off the loan and this may mean forcing a sale. If there are children or alimony involved she needs to build her income to the point that paying child support or alimony does not impact her budget. If she is on the receiving end, then she should budget so those items are bonus money and not counted on. She is flat broke and does not need to worry about borrowing money at this juncture. In this case a low credit score is a blessing. |
Why index funds have different prices? | To add on to the other answers, in asking why funds have different price points one might be asking why stocks aren't normalized so a unit price of $196 in one stock can be directly compared to the same price in another stock. While this might not make sense with AAPL vs. GOOG (it would be like comparing apples to oranges, pun intended, not to mention how would two different companies ever come to such an agreement) it does seem like it would make more sense when tracking an index. And in fact less agreement between different funds would be required as some "natural" price points exist such as dividing by 100 (like some S&P funds do). However, there are a couple of reasons why two different funds might price their shares of the same underlying index differently. Demand - If there are a lot of people wanting the issue, more shares might be issued at a lower price. Or, there might be a lot of demand centered on a certain price range. Pricing - shares that are priced higher will find fewer buyers, because it makes it harder to buy round lots (100 shares at $100/share is $10,000 while at $10/share it's only $1000). While not everyone buys stock in lots, it's important if you do anything with (standardized) options on the stock because they are always acting on lots. In addition, even if you don't buy round lots a higher price makes it harder to buy in for a specific amount because each unit share has a greater chance to be further away from your target amount. Conversely, shares that are priced too low will also find fewer buyers, because some holders have minimum price requirements due to low price (e.g. penny) stocks tending to be more speculative and volatile. So, different funds tracking the same index might pick different price points to satisfy demand that is not being filled by other funds selling at a different price point. |
Is there a good forum where I can discuss individual US stocks? | I've used Wikinvest before and think that's close to what you're looking for - but in Wiki-style rather than forums. Otherwise, I agree with CrimsonX that The Motley Fool is a good place to check out. |
How do I apply for a mortgage after a cash closing on a property? | Is she correct in that you generally can't even apply until the cash transaction is complete? Probably. How can you commit to mortgage something you do not own? Makes sense for them to wait not even until the transaction is complete - but until the transaction is recorded. Is 45 days reasonable to complete the financing? Yes. |
Does a bond etf drop by the amount of the dividend just like an equity etf | It may be true for a bond fund. But it is not true for bond etf. Bond etf will drop by the same amount when it distribute dividend on ex-dividend date. |
I'm thinking of getting a new car … why shouldn't I LEASE one? | I have an eight year old Kia Spectra that my wife is after me to replace -- but it hadn't been giving me any trouble at all. Soon after she started telling me I should replace it soon it started having problems; compressor, tires, and so on. How did she know? Anyway, so now I'm looking -- not ready to buy yet, but I'm looking. The reason I won't be leasing is mileage. I live 45 miles from where I work, so with incidental driving, I put at least 100 miles a day on a car. That's about 26,000 miles a year if I do nothing but drive back and forth to work. On a monthly basis the lease is advertised as being less than most payments, but that is with a mileage limitation. Since most leases I've looked at top out the mileage well below that mark I won't be leasing. I am looking at the new cars that are available now -- but I don't plan on buying until next year, and buying a lightly used car that is only a year to two old. So I'm looking at what I will be buying while I can still find information about them. So yeah, mileage is a strong reason why I'm not considering leasing. |
How can I help my friend change his saving habits? | If he's not used to cooking, recipes might not be enough. Maybe he needs cooking lessons. I used to think if you could read, you could cook -- but I grew up "helping" my mom in the kitchen and in the process learning what all the instructions in cookbooks meant. But it also might just be force of habit, in which case about all you could do would be to go over and cook for (or with) him. Maybe if you helped him get into a good habit, he would be more likely to continue with it. Otherwise, I don't see that there's much of anything you can do. If he isn't motivated to change his habits to save for his trip, you can't make him be. |
How to properly do background check for future tenant in my own house? | If you can find a tenant by networking -- co-worker, friend of a friend, etc. -- rather than openly advertising, that often gives you a better pool. Side advice: Check what local housing laws apply to renting a room rather than having a housemate. Once you start advertising this you may be subject to fair housing laws, additional code requirements, and so on. |
If something is coming into my account will it be debit or credit in my account? | The bank "credit's" your account for money coming into it. In double entry accounting, you always have a debit and a credit to balance the accounts. As an Example: for $500 that the bank credited to your checking account, you would post a debit to Cash and a Credit to Income Earned. The accounting equation is: Assets = Liabilities + Owner's Equity $500 = $500 Cash is the "Asset" side of the equation, Income is part of Owner's Equity, and so is the Credit side... to make the equation balanced. |
Choosing the limit when making a limit order? | There are a couple of things you could do, but it may depend partly on the type of orders your broker has available to you. Firstly, if you are putting your limit order the night before after close of market at the top of the bids, you may be risking missing out if bid & offer prices increase by the time the market opens the next day. On the other hand, if bid & offer prices fall at the open of the next day you should get your order filled at or below your limit price. Secondly, you could be available at the market open to see if prices are going up or down and then work out the price you want to buy at then and work out the quantity you can buy at that price. I personally don't like this method because you usually get too emotional, start chasing the market if prices start rising, or start regretting buying at a price and prices fall straight afterwards. My preferred method is this third option. If your broker provides stop orders you can use these to both get into and out of the market. How they work when trying to get into the market is that once you have done your analysis and picked a price that you would want to purchase at, you put a stop buy order in. For example, the price closed at $9.90 the previous day and there has been resistance at $10.00, so you would put a stop buy trigger if the price goes over $10, say $10.01. If your stop buy order gets triggered you can have either a buy market order or a limit order above $10.01 (say $10.02). The market order would go through immediately whilst the limit order would only go through if the price continues going to $10.02 or above. The advantage of this is that you don't get emotional trying to buy your securities whilst sitting in front of the screen, you do your analysis and set your prices whilst the market is closed, you only buy when the security is rising (not falling). As your aim is to be in long term you shouldn't be concerned about buying a little bit higher than the previous days close. On the other hand if you try and buy when the price is falling you don't know when it will stop falling. It is better to buy when the price shows signs of rising rather than falling (always follow the trend). |
Shouldn't a Roth IRA accumulate more than 1 cent of interest per month? | There are a couple of misconceptions I think are present here: Firstly, when people say "interest", usually that implies a lower-risk investment, like a government bond or a money market fund. Some interest-earning investments can be higher risk (like junk bonds offered by near-bankrupt companies), but for the most part, stocks are higher risk. With higher risk comes higher reward, but obviously also the chance for a bad year. A "bad year" can mean your fund actually goes down in value, because the companies you are invested in do poorly. So calling all value increases "interest" is not the correct way to think about things. Secondly, remember that "Roth IRA fund" doesn't really tell you what's "inside" it. You could set up your fund to include only low-risk interest earning investments, or higher risk foreign stocks. From what you've said, your fund is a "target retirement date"-type fund. This typically means that it is a mix of stocks and bonds, weighted higher to bonds if you are older (on the theory of minimizing risk near retirement), and higher to stocks if you are younger (on the theory of accepting risk for higher average returns when you have time to overcome losses). What this means is that assuming you're young and the fund you have is typical, you probably have ~50%+ of your money invested in stocks. Stocks don't pay interest, they give you value in two ways: they pay you dividends, and the companies that they are a share of increase in value (remember that a stock is literally a small % ownership of the company). So the value increase you see as the increase due to the increase in the mutual fund's share price, is part of the total "interest" amount you were expecting. Finally, if you are reading about "standard growth" of an account using a given amount of contributions, someone somewhere is making an assumption about how much "growth" actually happens. Either you entered a number in the calculator ("How much do you expect growth to be per year?") or it made an assumption by default (probably something like 7% growth per year - I haven't checked the math on your number to see what the growth rate they used was). These types of assumptions can be helpful for general retirement planning, but they are not "rules" that your investments are required by law to follow. If you invest in something with risk, your return may be less than expected. |
Rent or buy with 0 down | In the situation you describe, I would strongly consider purchasing. Before purchasing, I would do the following: Think about your goals. Work with good people. Set a budget. Be able to handle surprises. If buying a home makes sense, you can do the following after buying: |
What are the advantages of doing accounting on your personal finances? | I recently made the switch to keeping track of my finance (Because I found an app that does almost everything for me). Before, my situation was fairly simple: I was unable to come up with a clear picture of how much I was spending vs saving (altho I had a rough idea). Now I here is what it changes: What I can do now: Is it useful ? Since I don't actually need to save more than I do (I am already saving 60-75% of my income), 1) isn't important. Since I don't have any visibility on my personal situation within a few years, 2) and 3) are not important. Conclusion: Since I don't actually spend any time building theses informations I am happy to use this app. It's kind of fun. If I did'nt had that tool... It would be a waste of time for me. Depends on your situation ? Nb: the app is Moneytree. Works only in Japan. |
Rules for Broker Behavior with Covered Calls | Number 2 cannot occur. You can buy the call back and sell the stock, but the broker won't force that #2 choice. To trade options, you must have a margin account. No matter how high the stock goes, once "in the money" the option isn't going to rise faster, so your margin % is not an issue. And your example is a bit troublesome to me. Why would a $120 strike call spike to $22 with only a month left? You've made the full $20 on the stock rise and given up any gain after that. That's all. The call owner may exercise at any time. Edit: @jaydles is right, there are circumstances where an option price can increase faster than the stock price. Options pricing generally follows the Black-Scholes model. Since the OP gave us the current stock price, option strike price, and time to expiration, and we know the risk free rate is <1%, you can use the calculator to change volatility. The number two scenario won't occur, however, because a covered call has no risk to the broker, they won't force you to buy the option back, and the option buyer has no motive to exercise it as the entire option value is time premium. |
Should we buy a house, or wait? | You are very young, you make a huge amount of money, and you have (from what information you provide) very little debt. If you simply want to buy a house for whatever reason, sure, but be honest with yourself about why you want to buy it. I see a lot of people who think they're doing it for smart financial reasons, but then when I ask them about their pension savings and credit card debts and so on, there is no evidence that they are actually the kind of person who makes decisions for smart financial reasons. If you want a house because that seems like the thing that people do, maybe you could think more about what you actually want. If your concern is putting your money to work for you (you seem to dislike that you pay rent each month and after that month you don't have anything to show for your money, except of course that you didn't spent the last month living on the streets), you can do a lot better than getting a mortgage. For example, living frugally you should be able to dump 50k a year into investments; if you did that for a few years, you could reasonably expect the return to cover your rent and bills in a surprisingly small number of years (a lot less than a 25 year mortgage). Your question seems to be starting from the position that you should buy a house. You're asking if you should buy it now, or wait. You are rich enough now (and if your earnings keep going up, will be even more rich in a few years) that you should perhaps question your need to buy a house. With your kind of money, at this stage of your life, you can do a lot better. |
How to categorize credit card payments? | Using the Transfer category is the best place to put these categories, as that accurately reflects what the transaction is. If you have your credit card and bank account linked in Mint, the debit and credit to both accounts will net to $0 in the category. I would not recommend using "Hide from budget and trends" as sometimes multiple (erroneous) transactions pop up and having a category that should but, in error, does not net to $0 will raise your attention to possibly duplicate transactions. You can ask Mint to always categorize certain transactions in certain ways. On any of your payments, if you click "Edit Details" and then select the Transfer category, you can ask Mint to always make that classification: |
Buying a home without a Real Estate Agent - Who should I get to do the paperwork? | For a real estate transaction there are multiple stages: From the sellers viewpoint: From the buyers viewpoint: If both parties are comfortable skipping some of the steps the role of the agent can be minimized. How will a fair price be determined? Some realism might be needed, to make sure that the loan appraisal will not be a problem. Will an inspection still be needed? What warranty will exist if the A/C dies this summer? If you still want help from an agent one should be able to help for far less than the normal commission. The seller normally interviews three agents before selecting one, do the same in this situation. Ask how much they would charge for a sale between friends. They can complete their task in just a couple of hours. If the home inspection comes back relatively clean, the transaction should be very easy. The paperwork is the biggest hurdle. You should jointly identify a local settlement company. They will be the ones actually filing the paperwork. They have lawyers. They will check the county records office for existing liens, plats, mortgages and address all the issues. They can send the proper paperwork to the existing mortgage companies and arrange for mortgage insurance. The cost will be the same regardless of the presence of real estate agents and other lawyers. When they say a lawyer is required, it is only because of the paperwork. |
Can I register for VAT to claim back VAT without selling VAT applicable goods? (UK) | IANAL, I have not been VAT registered myself but this is what I have picked up from various sources. You might want to confirm things with your solicitor or accountant. As I understand it there is a critical difference between supplying zero-rated goods/services and supplying exempt goods/services. If the goods/services are zero-rated then the normal VAT rules apply, you charge VAT on your outputs (at a rate of 0%) and can claim back VAT on your inputs (at whatever rate it was charged at, depending on the type of goods.. If the goods/services are exempt you don't charge and VAT on your outputs and can't claim back any VAT on your inputs. (Things get complicated if you have a mixture of exempt and non-exempt outputs) According to http://oko.uk/blog/adsense-vat-explained adsense income is a buisness to buisness transaction with a company in another EU country and so from a supplier point of view (you are the supplier, google is the customer) it counts as a zero-rated transaction. |
What should I do with the change in my change-jar? | I don't know if those machines work this way in the UK too, but here in the US you can often avoid the coin-counting fee if you opt to convert the money into a gift certificate instead of cash. I routinely convert my coins to Amazon gift certificate money with no charge. Individual machines differ in which particular gift cards they use, but at the least, almost all of them offer the option for a no-fee conversion to a voucher/gift certificate to the store where the machine is. So it's likely you'd be able to use the machine to convert the cash to "money" you can use to buy groceries. |
Why do stock prices of retailers not surge during the holidays? | That's a pretty good question for a six-year-old! In addition to the good answers which point out that expectations are priced in, let's deny the premises of the question: Sales do not increase the value of a company; a company could be, for example, losing money on every sale. Share prices are (at least in theory) correlated with profits. So let's suppose that company X is unprofitable 320 days a year and is relying upon sales in late November and December to be in the black for the year. (Hence "black Friday".) Carefully examine the supposition of this scenario: we have a company that is so unprofitable that it must gamble everything on successfully convincing bargain hunting consumers in a weak economy to buy stuff they don't actually need from them and not a competitor. Why would this inspire investor confidence? There are plenty of companies that fail to meet their sales targets at Christmas, for plenty of reasons. |
How to properly do background check for future tenant in my own house? | I am a realtor. For our rental business, we use a service that offers a background check. It costs us about $25, and it is passed along in the form of an application fee. I suggest you contact a local real estate agent who you know does rentals. Have a conversation about what you are doing, and see if they will help process the application for you, for a fee of course. If you are truly concerned about your safety (The text you wrote can either read as true concern or sarcasm. Maybe we are really in a wild country?) It's worth even a couple hundred bucks to screen out a potential bad roommate. |
How to trade large number of shares? | If you really did have a large share size, a market order would move the price more so in your desired direction. Although your cost basis would be less ideal. Just use limit orders and scale in to a position. You can also exercise puts to be short stock |
What investments are positively related to the housing market decline? | During the actual decline, there's very little money to be made and a lot to lose. When housing prices tank, everybody loses; the banks are exposed to higher risk of mortgage defaults, insurers start having to pay out more for "gas leaks" claiming over-leveraged homes, realtors starve because their commissions go down (even as foreclosures put more homes on the market) and people faced with financial uncertainty will stay put in their current homes instead of moving elsewhere. And homebuilders and contractors go broke because nobody wants to spend cash on a new home or major reno that looks like a losing investment. There can be some bright spots. Smaller hardware stores will make money as people do relatively small DIY projects to improve the condition of their current home. The larger stores get this business too, but it tends to be more than offset by the loss of contractor business (FAR more lucrative, and something the ACEs and True-Values don't really get in on). Of course the "grave-robbers" do well; gold buyers, auctioneers, pawn shops, repo firms; these guys eat well when other people are defaulting on loans or have to sell their stuff for fast cash. Most of these businesses are not publicly traded. One thing that was seen was increased revenues at discount retailers like Wal-Mart, Dollar General etc. When things are bad, people in the middle class who had avoided these stores for image or morality reasons learn to swallow their pride and buy discount store brands for half the price of national brand names. That lessens the blow felt by the discount retailers as overall consumer spending decreases; the pie shrinks, but the discount retailers get a bigger slice of the mandatory spending on food, clothing, etc (and the higher-level retailers get it in the shorts). When the pie starts to grow again as consumer spending picks back up, the discount retailers retain their percentage for a while, as the fickle middle class can afford to buy more from the discount retailer but can't yet afford to take their business back to the shopping mall stores. This produces a flatter, "offset" price graph for discount retailers through the business cycle; they don't lose as early or as much as everyone else in a major downturn, and they turn it around sooner while everyone else may still be on the way down, but as everything gets better for everyone on the upswing it's less great for the discount guys, as they start losing customers and their dollars to competitors with better stuff, even as the ones they keep spend more. This doesn't generally manifest as a true negative correlation, but it can be a good hedge. The number one money-making investment in a tanking economy is gold. When things go down the crapper, everyone wants gold, so if you see the train wreck coming far enough in advance, you can make a big move to gold and really make some money off that investment. For instance, when the first whispers about ARM adjustments and mass defaults reached the public consciousness in mid-2005, gold bullion jumped from about $400 to over $700 in a nine-month period. It cooled off again in 06-07 but only to about $600/oz, and then in late 07 it steadily climbed to peak at $1000/oz; even if you got in late, an investment of $1000 in July '07 in "bulk" gold would have netted you $650 in one year; that's a 65% APY. Then the economy hit bottom and a lot of investors ditched gold for investments they thought would pull back out of their holes quickly; For just a little while in '08 gold was down to $700 again. Then came all the government reports; unemployment not budging, home prices still declining, a lot of banks still hiding just how bad their position was. If you had seen that it was going to be bad, bad, bad, like a lot of now-billionaire hedge fund investors did, a $1000 investment in gold in July 05, and then cashing out at the tops of the peaks and buying back in at the major troughs, would be worth almost $4000 today. That's a 400% return over 7 years, or an annual average yield of 57%. There simply hasn't been anything like that in the last 7 years. |
New Pooled Registered Pension Plan details? | The general idea of the PRPP is so that small business who cannot afford to offer a plan alone will be able to pool resources with others along with self-employed to create voluntary, defined-contribution pension plans that would be managed by private sector financial institutions. The PRPP concept would offer more options to individuals as well as small and medium-sized businesses - Tax Rules for Pooled Registered Pension Plans You can also find an overview here THE NEW PRPP – A Pension for the Pension-Less |
What to do with your savings in Japan | The reason for these low interests is that the Japanese central bank is giving away money at negative interests to banks. Yes, negative. So, short of opening your own bank, you'll have to either choose less liquid investments or more risky ones. Get Japanese government bonds. Not a great interest, band not that liquid, but for a 5 years bond you'll do better than the bank can. Get Japanese corporate bonds. Still not great, and a bit more risky, it's better than nothing. Get a Japanese mutual fund. I can't recommend any though. Buy Japanese stock. Many Japanese stock have interesting kickbacks. For example if you buy enough stock of Book-Off you'll get some free books every month. it's risky though because I believe the next NIKKEI index crash is imminent. |
What does Chapter 11 Bankruptcy mean to an investor holding shares of a Chapter 11 Company? | If you've got shares in a company that's filed for U.S. Chapter 11 bankruptcy, that sucks, it really does. I've been there before and you may lose your entire investment. If there's still a market for your shares and you can sell them, you may want to just accept the loss and get out with what you can. However, shares of bankrupt companies are often delisted once bankrupt, since the company no longer meets minimum exchange listing requirements. If you're stuck holding shares with no market, you could lose everything – but that's not always the case: Chapter 11 isn't total and final bankruptcy where the company ceases to exist after liquidation of its assets to pay off its debts. Rather, Chapter 11 is a section of the U.S. Bankruptcy Code that permits a company to attempt to reorganize (or renegotiate) its debt obligations. During Chapter 11 reorganization, a company can negotiate with its creditors for a better arrangement. They typically need to demonstrate to creditors that without the burden of the heavy debt, they could achieve profitability. Such reorganization often involves creditors taking complete or majority ownership of the company when it emerges from Chapter 11 through a debt-for-equity swap. That's why you, as an investor before the bankruptcy, are very likely to get nothing or just pennies on the dollar. Any equity you may be left holding will be considerably diluted in value. It's rare that shareholders before a Chapter 11 bankruptcy still retain any equity after the company emerges from Chapter 11, but it is possible. But it varies from bankruptcy to bankruptcy and it can be complex as montyloree pointed out. Investopedia has a great article: An Overview of Corporate Bankruptcy. Here's an excerpt: If a company you've got a stake in files for bankruptcy, chances are you'll get back pennies to the dollar. Different bankruptcy proceedings or filings generally give some idea as to whether the average investor will get back all or a portion of his investment, but even that is determined on a case-by-case basis. There is also a pecking order of creditors and investors of who get paid back first, second and last. In this article, we'll explain what happens when a public company files for protection under U.S. bankruptcy laws and how it affects investors. [...] How It Affects Investors [...] When your company goes bankrupt, there is a very good chance you will not get back the full value of your investment. In fact, there is a chance you won't get anything back. [...] Wikipedia has a good article on Chapter 11 bankruptcy at Chapter 11, Title 11, United States Code. |
Definition of gross income (Arizona state tax filing requirements) | Many states have a simple method for assessing income tax on nonresidents. If you have $X income in State A where you claim nonresident status and $Y income overall, then you owe State A a fraction (X/Y) of the income tax that would have been due on $Y income had you been a resident of State A. In other words, compute the state income tax on $Y as per State A rules, and send us (X/Y) of that amount. If you are a resident of State B, then State B will tax you on $Y but give you some credit for taxes paid to State A. Thus, you might be required to file a State A income tax return regardless of how small $X is. As a practical matter, many commercial real-estate investments are set up as limited partnerships in which most of the annual taxable income is a small amount of portfolio income (usually interest income that you report on Schedule B of Form 1040), and the annual bottom line is lots of passive losses which the limited partners report (but do not get to deduct) on the Federal return. As a result, State A is unlikely to come after you for the tax on, say, $100 of interest income each year because it will cost them more to go after you than they will recover from you. But, when the real estate is sold, there will (hopefully) be a big capital gain, most of which will be sheltered from Federal tax since the passive losses finally get to be deducted. At this point, State A is not only owed a lot of money (it knows nothing of your passive losses etc) but, after it processes the income tax return that you filed for that year, it will likely demand that you file income tax returns for previous years as well. |
Why buy stock of a company instead of the holding company who has more than 99% of the stocks | In a situation like this, I presume you'd invest in the child company if you thought that the child company would increase in value at a higher rate than the parent. You'd invest in the parent company if you thought the parent company would perform well as a whole, but you did not want to assume the risk of an individual company underneath it. Say the child company is worth 100 million, and the parent company is worth 500 million. You've invested a sum of money in the child company. The child company performs very well, and increases in value by, say, 20 million. As the parent company owns the child, we could say it also increases in value by roughly 20 million. The difference is proportional - Your investment in the child sees a 20% gain in value, whereas your investment in the parent sees a 4% gain in total value, as in this example the parent company, which owns nearly 100% of the child company, is worth 5x more and thus proportionally sees 1/5 the increase in value, due to it being worth more as a whole. Think of it similarly to a mutual fund or ETF that invests in many different stocks on the market. As the market does well, that mutual fund or ETF does well, too. As the mutual fund is made up of many individual stocks, one stock performing very well, say at a 10-20% increase in value, does not raise the value of the ETF or mutual fund by 10-20%. The etf / mutual fund will perform slightly better (Assuming all other components remain equal for this example), but only proportionally to the fraction of it that's made up of the stock that's performing well. |
Relation between interest rates and currency for a nation | What you are asking about is called Interest Rate Parity. Or for a longer explanation the article Interest Rate Parity at Wikipedia. If the US has a rate of say zero, and the rate in Elbonia is 10%, one believes that in a year the exchange rate will be shifted by 10%, i.e. it will take 1.1 unit of their currency to get the dollars one unit did prior. Else, you'd always profit from such FOREX trades. (Disclaimer - I am not claiming this to be true or false, just offering one theory that explains the rate difference effect on future exchange rates. |
Executor of will | The creditors will not be able to go after his father's estate (assuming the father had nothing to do with the business), but at some point, the estate will be divided up. At that point, any money or assets that your husband inherits will be fair game, as they are now your husband's money or assets. I want to be clear; it's nothing to do with your husband being executor (or co-executor) of the estate. This does not contradict zeta-band's earlier answer; Zeta-band is talking about the estate before it is divided up, I'm just pointing out that there may be issues after it is divided up. |
How should I interpret this industry research? | As BobbyScon said in the comments, invest in a company that is developing in that field. Or invest in a company which supplies that field. The people who got rich in the California gold rush were those selling shovels and other miners' supplies. Or bet against whatever you think this will displace. If automobiles are the hot new thing, it might be a bad time to invest in harness leather. Or ... figure out how else it might impact the economy and invest appropriately. But you have to do that evaluation yourself. Or ignore it and stick with your existing strategy, which should have been diversified enough to deliver reasonable results whether this sector takes off or not. Remember that if someone gives you a free tip, they are probably just hoping to pump up the value of their own stock rather than help you. |
Why is the price of my investment only updated once per day? | Mutual funds are collections of investments that other people pay to join. It would be simpler to calculate the value of all these investments at one time each day, and then to deem that any purchases or sales happen at that price. The fund diversifies rather than magnifies risk, looking to hold rather than enjoy a quick turnaround. Nobody really needs hourly updated price information for an investment they intend to hold for decades. They quote their prices on a daily basis and you take the daily price. This makes sense for a vehicle that is a balanced collection of many different assets, most of which will have varying prices over the course a day. That makes pricing complicated. This primer explains mutual fund pricing and the requirements of the Investment Company Act of 1940, which mandates daily price reporting. It also illustrates the complexity: How does the fund pricing process work? Mutual fund pricing is an intensive process that takes place in a short time frame at the end of the day. Generally, a fund’s pricing process begins at the close of the New York Stock Exchange, normally 4 p.m. Eastern time. The fund’s accounting agent, which may be an affiliated entity such as the fund’s adviser, or a third-party servicer such as the fund’s administrator or custodian bank, is usually responsible for calculating the share price. The accounting agent obtains prices for the fund’s securities from pricing services and directly from brokers. Pricing services collect securities prices from exchanges, brokers, and other sources and then transmit them to the fund’s accounting agent. Fund accounting agents internally validate the prices received by subjecting them to various control procedures. For example, depending on the nature and extent of its holdings, a fund may use one or more pricing services to ensure accuracy. Note that under Rule 22c-1 forward pricing, fund shareholders receive the next daily price, not the last daily price. Forward pricing makes sense if you want shareholders to get the most accurate sale or purchase price, but not if you want purchasers and sellers to be able to make precise calculations about gains and losses (how can you be precise if the price won't be known until after you buy or sell?). |
What gives non-dividend stocks value to purchasers? [duplicate] | Most companies are taken over. One can reasonably guess that company X will be taken over for a price P, at some future point in time. Then the company has a value today, that is less than price P, by a large enough margin so that the investor will likely "make out" when the company finally is taken over at some unknown point in time. The exception is a company like Microsoft or Apple that basically grow too large to be taken over. But then they eventually start paying dividends when they become "mature." Again, the trick, during the non-dividend paying period (e.g. ten or fifteen years ago) is to guess what dividends will be paid in some future time, and price the stock low enough today so that it will be worthwhile for the buyer. |
Can I prove having savings without giving out the account number? | Ask your bank to write a letter asserting that you have $xxxxx on deposit with them, on their letterhead? Though realistically, the chance of your getting hit with identity theft In this situation, when you presumably know exactly who you're dealing with, are vanishingly small. |
When are investments taxed? | An investment is sold when you sell that particular stock or fund. It doesn't wait until you withdraw cash from the brokerage account. Whether an investment is subject to long term or short term taxes depends on how long you held that particular stock. Sorry, you can't get around the higher short term tax by leaving the money in a brokerage account or re-investing in something else. If you are invested in a mutual fund, whether it's long or short term depends on when you buy and sell the fund. The fact that the fund managers are buying and selling behind your back doesn't affect this. (I don't know what taxes they have to pay, maybe you really are paying for it in the form of management fees or lower returns, but you don't explicitly pay the tax on these "inner" transactions.) Your broker should send you a tax statement every year giving the numbers that you need to fill in to the various boxes of your income tax form. You don't have to figure it out. Of course it helps to know the rules. If you've held a stock for 11 1/2 months and are planning to sell, you might want to consider waiting a couple of weeks so it becomes a long term capital gain rather than short term and thus subject to lower tax. |
Why do they call them “financial products”? | They are called "financial products" because they are contracts that are "produced" by the financial industry. For example, you could also say that a car manufacturer does not sell you a car, but a contract that will gives you ownership of a car. And, if a contract is a service and not product, in that case a car manufacturer is only selling services. It seems like it is more about the definition of "product" than "financial product". I think that as long as something is produced by the effort of labor, it could be called a product, and since financial contracts are produced by the people working in the finance industry, they can be qualified as products too. Maybe this page of wikipedia could explain things better than I just did: http://en.wikipedia.org/wiki/Product_%28business%29 |
What should I look at before investing in a start-up? | Turukawa's answer is quite good, and for your own specific situation, you might begin by being sceptical about what you are getting for investing a few thousand dollars. With the exception of Paul Graham's Y-Combinator, there are very few opportunities to invest at that type of level, and Y-Combinator provides a lot of other assistance besides their modest initial investment. I can tell from your post that you think like an investor. It is highly unlikely that the entrepreneurial programmers that you will be backing will be wired that way. From the modest amount that you are investing, you are unlikely to be the lead investor in this opportunity. If you are interested in proceeding, simply stick along for the ride, examining the terms and documents that more significant investors will be demanding. Remain positive and supportive, but simply wait to sign on the dotted line until others have done the heavy lifting. For more insights into startups themselves, see Paul Graham's essays at www.paulgraham.com. He's the real deal, and his recent essays will provide you with current insights about software startups. Good luck. |
Is business the only way to become a millionaire? | Not at all. The Millionaire Next Door offers a book full of anecdotes on couples that earned money and saved their way to being millionaires. I believe about 1/3 or so had businesses, but the rest were employed and simply saved wisely. $3860/yr saved for 40 years at 8% will return $1M. Adjust the numbers to hit a million sooner or reach a higher goal. The Author might be accused of survey bias. This is the phenomenon of studying the final results without looking at the pool of people years prior. Little Adv' is correct that while 1/3 of millionaires may have gotten that way by starting a business, that says nothing about how many businesses need to start to find the one millionaire that resulted. I view the book more as a lesson of "spend beneath your means" and focus on his anecdotes of the dual income couples who saved their way to this status. If you are in no rush, get this book from your library and spend the few hours to read it. In response to my Friend Dilip's comment, MoneyChimp offers a good look at compound growth (for the S&P) over time. The 40 years ending 2012, which obviously include the 'lost decade,' returned a CAGR of 9.78%. Not to be confused with the average 11.43%. When I pull the numbers for each year's return and apply an annual $3860 deposit, the 40 years ends with $2.2M. A 1% fee, or 1% lower return resulted in $1.6M. If 8% isn't conservative, of course you can run the numbers you wish. The 40 years contained both a lost decade and two great ones. Will the 3 decades post-lost average to get the Quad-Decade period to 8%+? I don't know. |
What is a trust? What are the different types of trusts? | A trust is a financial arrangement to put aside money over a period of time (typically years), for a specific purpose to benefit someone. Two purposes of trusts are 1) providing for retirement and 2) providing for a child or minor. There are three parties to a trust: 1) A grantor, the person who establishes and funds a trust. 2) A beneficiary, a person who receives the benefits. 3) a trustee, someone who acts in a fiduciary capacity between the grantor and beneficiary. No one person can be all three parties. A single person can be two of out those three parties. A RETIREMENT trust is something like an IRA (individual retirement account). Here, a person can be both the grantor (contributor) to the IRA, and the beneficiary (a withdrawer after retirement). But you need a bank or a broker to act as a fiduciary, and to handle the reporting to the IRS (Internal Revenue Service). Pension plans have employers as grantors, employees as beneficiaries, and (usually) a third party as trustee. A MINORS' trust can be established under a Gift to the Minors' Act, or other trust mechanisms, such as a Generation Skipping Trust. Here, a parent may be both grantor and trustee (although usually a third party is a trustee). A sum of money is put aside over a period of years for the benefit of a minor, for a college education, or for the minor's attaining a certain age: a minimum of 18, sometimes 21, possibly 25 or even older, depending on when the grantor feels that the minor is responsible enough to handle the money. |
Determine share price from S-1 for company that was bought before going public | The value of a share depends on the value of the company, which involves a lot more than the value of its assets -- it requires making decisions about what you think will happen to the company in the future. That's inherently not something that can be reduced to a single formula, at least not unless you can figure out how to represent your guesses and your confidence in them in the formula ... and even if you could do all that it would only say what you think the stock is worth; others will be using different numbers and legitimately get different results. Disagreement over value is what the stock market is all about, I'm afraid. |
Magazine subscription leads to unauthorized recurring payment | You have a subscription that costs $25 They have the capabilities to get that $25 from the card on file if you had stopped paying for it, you re-upping the cost of the subscription was more of a courtesy. They would have considered pulling the $25 themselves or it may have gone to collections (or they could courteously ask if you wanted to resubscribe, what a concept) The credit card processing agreements (with the credit card companies) and the FTC would handle such business practices, but "illegal" wouldn't be the word I would use. The FTC or Congress may have mandated that an easy "opt-out" number be associated with that kind of business practice, and left it at that. |
Is buying a home a good idea? | The New York Times offer a remarkably detailed Buy vs Rent calculator. You enter - From all of this, it advises the break-even rent, when monetarily, it's equal. I'd suggest you keep a few things in mind when using such a tool. Logic, common sense, and a Nobel prize winner named Robert Shiller all indicate that housing will follow inflation over the long term. Short term, even 20 years, the graphs will hint at something else, but the real long term, the cost of housing can't exceed inflation. The other major point I'd add is that I see you wrote "We rent a nice house." Most often, people are looking to buy what they feel they can't easily rent. Whether it's the yard, room number or sizes, etc. This also leads to the purchase of too big a house. You can find that you can afford the extra bedroom, family room in addition to living room, etc, and then buy a house 50% bigger than what you need or planned on. In my opinion, getting the smallest house you can imagine living in, no bigger than what you live in now, and plan to get on a faster than 30 year repayment. Even with transaction costs, in 10 years, you'll have saved enough to make the bump up to a larger house if you wish. |
Why is “cheque cashing” a legitimate business? | How does this get any business? You'd be surprised on how much profit these type of businesses can bring in and the number of people who cash their checks this way. They make profit off people who want their checks cashed ASAP. Usually cheques written to "cash" or something can just be cashed for free at the bank right? Yes, most banks cash your check for free. Some may not cash it right away and may require a few days to process. Some charge a small fee if the check is not from the same bank. Some personal checks may not even be processed the same day as well. Wouldn't the only cheques that people would cash at these places be bad cheques? Yes and no. Yes because it may be "easier" to try to cash a fraudulent check at these type of check cashing places. However, some places may only cash business checks and require your ID in which they write down the information in order to possibly track you down in the future. Also some places only cash a check to a certain amount. And wouldn't this mean that the business will lose a lot of money since it pays out cash but then has the cheque bounce? Of course the business loses money if the check bounces or is fake. That is why they try to minimize their losses with certain requirements that needs to met before the check can be cashed. Who uses these services exactly? Just about anyone who needs their check cashed ASAP or like ChrisW stated in his answer is trying to keep their money on the low. There is a demand for this service even though it may seem shady to you. |
What is a good way to save money on car expenses? | Ride a bicycle or walk for short trips (< 5mi–10mi, depending on your level of comfort). Nothing saves as much on car expenses as simply driving less. |
How can I legally and efficiently help my girlfriend build equity by helping with a mortgage? | A 30-yr mortgage IS a committment. So, you are willing to commit to a place, but not your long-term girlfriend??? Either you don't do this "cheap" scheme idea, or you set up as a business arrangement, or you get married. This is quite a laissez-faire statement you make... "Maybe we will eventually get married, maybe we will eventually break up, who knows." Anything or anyone that is a "who knows" is not what you make a 30-yr committment on. I mean, unless you just want to risk throwing your money away. Now, man up, hire the lawyer to do official paperwork or else get a legal certificate of civil union or marriage or whatever you want to call it. If you try to do your cockamamie scheme "on the cheap" now, it will most surely cost you dearly in the future! Mixing money (particulary huge sums of 200,000 $!) when there is no legal obligation like marriage or a business contract, is a fool's errand! Now, grow up and do it the right way if you want to help her - and yourself too. |
Why don't banks allow more control over credit/debit card charges? | This is a question with a flawed premise. Credit cards do have two-factor authentication on transactions they consider more at risk to be fraudulent. I've had several times when I bought something relatively expensive and unusual for me, where the CC either initially declined and sent me a text asking to confirm immediately (after which they would approve the charges), or approved but sent me a text right away asking to confirm (after which they'd automatically dispute if I told them to). The first is legitimately what you are asking for; the second is presumably for less risky but still some risk transactions). Ultimately, the reason they don't allow it for every transaction is that not enough people would make use of it to be worth their time to implement it. Particularly given it slows down the transaction significantly (and look at the complaints at the ~10-15 seconds extra EMV authentication takes, imagine that as a minute or more), I think you'd get a single digit percentage of people using that service. |
Currently sole owner of a property. My girlfriend is looking to move in with me and is offering to pay 'rent'. Am I at risk here? | The rent payment is in principle taxable. However, you should be able to take advantage of the "rent a room" scheme, and the proposed rent falls well under the £7,500/year tax threshold for that. So no tax will be actually payable and you don't have to formally declare it as long as you stay below that threshold. You should also be fairly well legally protected in case you do split up in future and you want to remove her. As you would be living there too, she would just be a lodger, not a tenant (technically, an "excluded occupier"). If you did want her to leave you would only need to give reasonable notice and wouldn't need a formal court order if you needed to force her to go. As JBentley points out, there have been court cases where domestic partners contributing to household expenses while the other partner paid the mortgage have later been able to claim that this implied joint ownership. This was on the basis of a "constructive trust" being implicitly setup by the way they arranged their finances. In your case, if there's a clear intention, formalised in writing, for the money to be treated as rent rather than a contribution towards purchasing the property, I think it should make it very hard to claim the contrary later. I would also suggest you be clear about whether the rent includes a share of the utility bills, and that things like groceries would be handled separately and split 50:50 or whatever. As pointed out in a comment, there are template agreements for lodgers you could use a starting point (e.g. this one), but it's likely you'd need to customise it to your circumstances. Another point made in another answer is that there's potential upcoming legislation to give some rights to cohabiting partners. In the current draft, those would kick in after three years or having children. If the bill does come into effect, you'd also be able to sign an opt out, but only after getting legal advice, and it would still be possible (though presumably hard) to persuade a court to overturn an opt out. Overall that does create a small risk to you, but not one that comes directly from your girlfriend paying rent. It's likely that if you are both on an equal financial footing and had always kept your finances separate, that there wouldn't be any award made anyway. And you can't run your entire life on hypothetical risks. |
Clear example of credit card balance 55 days interest-free “trick”? | Well, I answered a very similar question "Credit card payment date" where I showed that for a normal cycle, the average charge isn't due for 40 days. The range is 35-55, so if you want to feel good about the float just charge everything the day after the cycle closes, and nothing else the rest of the month. Why is this so interesting? It's no trick, and no secret. By the way, this isn't likely to be of any use when you're buying gas, groceries, or normal purchases. But, I suppose if you have a large purchase, say a big TV, $3000, this will buy you extra time to pay. It would be remiss of me to not clearly state that anyone who needs to take advantage of this "trick" is the same person who probably shouldn't use credit cards at all. Those who use cards are best served by charging what they can afford to pay at that moment and not base today's charges on what paychecks will come in by the due date of the credit card bill. |
Figuring out an ideal balance to carry on credit cards [duplicate] | One factor you may be missing is that, even if you pay your balance in full each month, the utilization probably won't be zero, since the reporting period isn't usually lined up perfectly with the due date on your payment. In short: Your utilization is not the same thing as how much balance you carry over. My advice would be: don't try carry a balance just to get a minuscule benefit on your credit score (if there is one at all). It is certainly not worth the interest charges you will pay to do so. I think the advice you quoted is a mangled explanation of something that can benefit your credit. Specifically, don't let your cards go unused for long periods of time, which would make your utilization show as zero. At least a few times a year you should actually use those cards, even just a small amount, to make the accounts show that you are utilizing your credit. |
How do I add my income to my personal finance balance? | I don't think you need double-entry bookkeeping. To quote Robert Kiyosaki (roughly): Income is when money enters you pocket, and expenses are when money leaves your pocket. Income is an addition; expenses are subtractions. But if you want double-entry accounting, I'm not qualified to answer that. :) |
What options do I have at 26 years old, with 1.2 million USD? | You should invest your money. To figure out what rate of return you need, use this equation: (How Much Money You Want Per Year) / (Total Amount of Cash You Have) = (Annualized Interest Rate) If we plug in the amount of annualized interest you can expect to safely get while not managing your money personally, 2% by my estimate, we get X / 1.2m = 0.02%; X=24K/year A measly $24,000 / year. Many people say that you can get 10, 12, even 30% return on your investment. I won't speculate on if this is true, but I will guarantee that you cannot get those returns simply by handing your money over to a money manager. So your options are, 1) Earn a guaranteed $24,000 and earn the rest you need to live by working 2) Learn to invest your money (and then do so intelligently) and earn enough to live off the interest To learn how to invest your money, read Beating the Street, by Peter Lynch. https://www.amazon.ca/Beating-Street-Peter-Lynch/dp/0671891634 Good luck! |
What happens when a non-U.S. citizen who's been making money from the U.S. moves to the U.S.? | Its not for US citizens - its for US residents. If the US considers you as a tax resident - you'll be treated the same as a US citizen, regardless of your immigration status. The question is very unclear, since it is not mentioned whether your US sourced income "from the Internet" is sales in the US, sales on-line, services you provide, investments, or what else. All these are treated differently. For some kinds of US-sourced income you should have paid taxes in the US already, regardless of where you physically reside. For others - not. In any case, if you become US tax resident, you'll be taxed on your worldwide income, not only the $10K deposited in the US bank account. ALL of your income, everywhere in the world, must be declared to the US government and will be taxed. You should seek professional advice, before you move to the US, in order to understand your responsibilities, liabilities and rights. I suggest looking for a EA/CPA licensed in California and experienced with taxation of foreigners (look for someone in the SF or LA metropolitan areas). Keep in mind that there may be a tax treaty between the US and your home country that may affect your Federal (but not California) taxes. |
How should I decide whether to buy more shares of a stock when its price drops? | A key principle of economics is: Sunk costs are irrelevant. You bought the stock at 147 and it has now fallen to 144. That's too bad. This has nothing to do with whether it is wise or foolish to buy shares at 144. The only relevant thing to consider is: Do I expect the stock to go up or down from 144? You have lost $3 per share on the original buy. Buying more shares will not "reduce your loss" in any way. Suppose you bought 100 shares at 147. The price then drops to 144. You have lost $3 per share, or $300 total. You buy another 50 more shares at 144. The price stays at 144. So your average purchase price is now (147 x 100 + 144 x 50) / 150 = 146. So I guess you could say that your "average loss per share" is now only $2. But it's $2 x 150 shares instead of $3 x 100 shares. You still lost $300. You didn't reduce your loss by a penny. Maybe it made you feel better that you reduced your average loss per share, but this is just an arithmetic game. If you believe that the stock will continue to drop, than buying more shares just means you will lose even more money. Your average loss per share may go down, but you're just multiplying that average by more and more shares. Of course if you believe that the stock is now at an unjustifiably low price and it will likely go back up, then sure, buy. If you buy at 144 and it goes back up to 147, then you'll be making $3 per share on the new shares you purchased. But I repeat, whether or not you buy more shares should have nothing to do with your previous buy. Buy more shares if you think the price will go up from the present price; don't buy more shares if you don't think it will go up. The decision should be exactly the same as if you had never previously bought shares. (I'm assuming here that you are a typical small investor, that you not buying enough shares to have any significant effect on the market, nor that you are in a position to buy enough shares to take control of the company.) |
What evidence exists for claiming that you cannot beat the market? | Will the investor beat the benchmark for a given period will follow a Bernoulli distribution -- each period is a coin toss, and heads mean the investor beat the market for that period. I can't prove the negative that there is no investor ever whose probability function p = 1, but you can statistically expect a number of individual investors with p ~ 0.5 to have a sequence of many heads in a row, as a function of the total population. By example, my father explained investment scams and hot-hand theory to me this way when I was younger: Imagine an investor newsletter which mails out to a mailing list of 1024 prospects (or alternately, a field of 1024 amateur investor bloggers in a challenge). Half the letters or bloggers state AAPL will go up this week, half that AAPL will go down this week. In the newsletter case, next week ignore the people we got wrong. In the blogger case, they're losers, so we don't pay attention to them. Next week, similar split: half newsletters or bloggers claim GOOG go up, half GOOG go down. This continues for a 10 week cycle. Now, in week 10: the newsletter has a prospect they have hit correct 10x in a row: how much will he pay for a subscription? Or, one amateur investor blogger has been on a 10 week winning streak and wins the challenge, so of course let's give her a CNBC show after Jim Cramer. No matter what, next week, this newsletter or investor is shooting 50-50. How do you know this person is not the statistically expected instance backed up by a pyramid of 1023 Bernoulli distribution losers? Alternately, if you think you're going to be the winner, you've got a 1/1024 shot. |
Where to find turnover / average amount of time investors & mutual funds held stocks they purchased? | You can make a rough calculation of the annual turnover rate of stocks by calculating the institutional investors holding of that stock. Institutional investors are the only firms that are required to provide such data. The good this is they usually make the lion share of trading activity. On the other hand, this task might proof arduous A different ratio that could be used as a substitute Share Turnover which is calculated as: Share Turnover gives the number of shares traded as a fraction of the number of shares outstanding. For example, if you compare the results of stock turnover for three companies and the results came as follows: Company A-share turnover: 1.5 Times Company B share turnover: 3 times Company C share turnover: 0.3 times From the results, we can conclude that for a particular period, company C had the least activity and the number of shares traded for that period was only a small fraction of the shares outstanding while other traders of company C hold most shares and never trade them. If you make a cross sectional analysis of a list of businesses you intend to invest in, you could figure which one has the least number of rapidity in the shares traded. |
Any advantage to exercising ISO's in company that is not yet public? | As far as I know, the AMT implications are the same for a privately held company as for one that is publicly traded. When I was given my ISO package, it came with a big package of articles on AMT to encourage me to exercise as close to the strike price as possible. Remember that the further the actual price at the time of purchase is from the strike price, the more the likely liability for AMT. That is an argument for buying early. Your company should have a common metric for determining the price of the stock that is vetted by outside sources and stable from year to year that is used in a similar way to the publicly traded value when determining AMT liability. During acquisitions stock options often, from what I know of my industry, at least, become options in the new company's stock. This won't always happen, but its possible that your options will simply translate. This can be valuable, because the price of stock during acquisition may triple or quadruple (unless the acquisition is helping out a very troubled company). As long as you are confident that the company will one day be acquired rather than fold and you are able to hold the stock until that one day comes, or you'll be able to sell it back at a likely gain, other than tying up the money I don't see much of a downside to investing now. |
Record retention requirements for individuals in the U.S.? | Indeed the IRS publication references the 3-6 year time span. And no limit for fraud. But. I get a notice that some stock I owned 10 years ago has a settlement pending, and the records of this stock purchase and sale would potentially get me back some money. I get my Social Security statement (the one they stopped sending, but this was before then) and I see the 1995 income shows zero. Both of these were easily resolved with my returns going all the way back, and my brokerage statement as well. For the brokerage, I recently started downloading all statements as PDFs, and storing a copy away from home. Less concerned about the bank statements as I've never had an issue where I'd need them. |
How do share buybacks work? | Something to note is that when a company announces a share buyback program there is usually a time frame and amount of shares that are important details as it isn't like the company will make one big buy back of stock generally. Rather it may take months or even years as noted in the Wikipedia article about share repurchases. Wikipedia covers some of the technical details here but to give a specific set of answers: When a company announces a share buyback program, who do they actually buy back the shares from? From the Wikipedia link: "Under US corporate law there are five primary methods of stock repurchase: open market, private negotiations, repurchase 'put' rights, and two variants of self-tender repurchase: a fixed price tender offer and a Dutch auction." Thus, there are open market and a couple of other possibilities. Openly traded shares on a stock exchange? Possibly, though there are other options. Is there a fixed price that they buy back at? Sometimes. I'd think a "fixed price tender offer" would imply a fixed price though the open market way may take various prices. If I own shares in that company, can I get them to buy back my shares? Selective Buy-Backs is noted in Wikipedia as: "In broad terms, a selective buy-back is one in which identical offers are not made to every shareholder, for example, if offers are made to only some of the shareholders in the company. In the US, no special shareholder approval of a selective buy-back is required. In the UK, the scheme must first be approved by all shareholders, or by a special resolution (requiring a 75% majority) of the members in which no vote is cast by selling shareholders or their associates. Selling shareholders may not vote in favor of a special resolution to approve a selective buy-back. The notice to shareholders convening the meeting to vote on a selective buy-back must include a statement setting out all material information that is relevant to the proposal, although it is not necessary for the company to provide information already disclosed to the shareholders, if that would be unreasonable." Thus it is possible, though how probable is another question. While not in the question, something to consider is how the buybacks can be done as a result of offsetting the dilution of employees who have stock options that may exercise them and spread the earnings over more shares, but this is more on understanding the employee stock option scenario that various big companies use when it comes to giving employees an incentive to help the stock price. |
Do people tend to spend less when using cash than credit cards? | Psychology Today had an interesting article from July 11, 2016, in which they go through the psychological aspects of using cash vs. a credit card. This article cites a 2008 paper in the Journal of Experimental Psychology: Applied that found: “the more transparent the payment outflow, the greater the aversion to spending or higher the ‘pain of paying’ …leading to less transparent payment modes such as credit cards and gift cards (vs. cash) being more easily spent or treated as play or ‘monopoly money.’” The article cites a number of other studies that are of interest on this topic as well. |
Are Shiller real-estate futures and options catching on with investors? | The Case-Schiller macro derivatives market has seen very minimal activity. For example, in the three regional markets of San Diego (SDG), Boston (BOS) and Los Angeles (LAX) on 28 November 2011, there was zero trading volume, no trades settled, no open interest. * Source: CME Futures and options activity[PDF] for all 20 regional indices. Why haven't these real-estate futures caught on with investors? Keep in mind that the CME introduced these indices, with support from Professor Shiller and partner Standard & Poor's several years ago. The CME seems committed to wait this out, as they have shown no indication of dropping the Case-Shiller indices. There are alternative real-estate investment securities to the Case-Shiller indices. I don't think the market of investors is so small that Case-Shiller has been, in effect, "crowded out" by them. I think it is more likely a matter of known quantities. Also, I don't know how well these alternatives are doing! Additional reference: CME spec's for Case-Shiller index futures and options contracts. |
If I short-sell a dividend-paying stock, do I have to pay the dividend? | The answer provide by @mbhunter is correct, however there are contexts, shorting in spot market and carrying the position over settlement usually does not entail payment of dividend to the broker, one of the reason being post ex-date the price of the share downward adjusts to the extent of the dividend, so practically if you have shorted at 100 and post ex-date (assuming a dividend of 2 and no movement of the stock price), the price would slide to 98, the party who longed the stock @ 100 now is sitting on a price of 98 and received a dividend of 2 which equates to 100. The above is also contextual to the law of the country governing the exchange and the security exchange board regulations. |
How to donate to charity that will make a difference? | In the. US, i'd suggest hitting the Charity Navigator website for evaluation of how efficiently various charities will use your money. At this point I won't donate money to anything that gets less than three stars unless I know the organization very well indeed -- and I've been progressively swapping out 3-star groups for 4-star organizations in the same category. Many of the groups reviewed by CN are international, so you might find it useful even if you're donating from/to elsewhere. |
Wash Sales and Day Trading | You are correct. She cannot claim the initial loss of $1,000 on her taxes, she can only report the $500 profit. However, the IRS does allow her to add the $1,000 loss to the basis cost of her replacement shares. e.g. |
Value investing | The Investment Entertainment Pricing Theory (INEPT) has this bit to note: The returns of small growth stocks are ridiculously low—just 2.18 percent per year since 1927 (versus 17.47 percent for small value, 10.06 percent for large growth, and 13.99 percent for large value). Where the S & P 500 would be a blend of large-cap growth and value so does that meet your "beat the market over the long term" as 1927-1999 would be long for most people. |
Should I buy a house because Mortgage rates are low | There is a significant tie between housing prices and mortgage rates. As such, don't assume low mortgage rates mean you will be financially better off if you buy now, since housing prices are inversely correlated with mortgage rates. This isn't a huge correlation - it's R-squared is a bit under 20%, at a 1.5-2 year lag - but there is a significant connection there. Particularly in that 10%+ era (see chart at end of post for details) in 1979-1982, there was a dramatic drop in housing price growth that corresponded with high interest rates. There is a second major factor here, though, one that is likely much more important: why the interest rates are at 10%. Interest rates are largely set to follow the Federal Funds rate (the rate at which the Federal Reserve loans to banks). That rate is set higher for essentially one purpose: to combat inflation. Higher interest rates means less borrowing, slower economic growth, and most importantly, a slower increase in the money supply - all of which come together to prevent inflation. Those 10% (and higher!) rates you heard about? Those were in the 70's and early 80's. Anyone remember the Jimmy Carter years? Inflation in the period from 1979 to 1981 averaged over 10%. Inflation in the 70s from 1973 to 1982 averaged nearly 9% annually. That meant your dollar this year was worth only $0.90 next year - which means inevitably a higher cost of borrowing. In addition to simply keeping pace with inflation, the Fed also uses the rate as a carrot/stick to control US inflation. They weren't as good at that in the 70s - they misread economic indicators in the late 1970s significantly, lowering rates dramatically in 1975-1977 (from ~12% to ~5%). This led to the dramatic double-digit inflation of the 1979-1981 period, requiring them to raise rates to astronomic levels - nearly 20% at one point. Yeah, I hope nobody bought a house on a fixed-rate mortgage from 1979-1981. The Fed has gotten a lot more careful over the years - Alan Greenspan largely was responsible for the shift in policy which seems to have been quite effective from the mid 1980s to the present (though he's long gone from his spot on the Fed board). Despite significant economic changes in both directions, inflation has been kept largely under control since then, and since 1991 have been keeping pretty steady around 6% or less. The current rate (around 0%) is unlikely to stay around forever - that would lead to massive inflation, eventually - but it's reasonable to say that prolonged periods over 10% are unlikely in the medium term. Further, if inflation did spike (and with it, your interest rates), salaries tend to spike also. Not quite as fast as inflation - in fact, that's a major reason a small positive inflation around 2-3% is important, to allow for wages to grow more slowly for poorer performers - but still, at 10% inflation the average wage will climb at a fairly similar pace. Thus, you'd be able to buy more house - or, perhaps a better idea, save more money for a house that you can then buy a few years down the road when rates drop. Ultimately, the advice here is to not worry too much about interest rates. Buy a house when you're ready, and buy the house you're ready for. Interest rates may rise, but if so it's likely due to an increase in inflation and thus wage growth; and it would take a major shift in the economy for rates to rise to the 10-11% level. If that did happen, housing prices (or at least growth in prices) would likely drop significantly. Some further references: |
UK Tax - can I claim expenses against a different tax year? | In some circumstances losses from self-employment can be offset against total income and/or capital gains. If this applies to you may be able to claim back some of the tax taken by PAYE from your day job. You can also to some extent carry the loss backwards into previous tax years or forward into the next one if you can't use it fully this year. HMRC have some information available on the current rules: When you can claim losses You can claim: But You can’t claim: |
How do share dilution scams make money? | For this to work, those who control the dilution must also control their salaries because the only way for them to be paid off when it's the corporation itself selling is to gain access to the proceeds. When a corporation sells newly issued equity, the corporation itself owns the money. To at least have the appearance of propriety, the scammers must be paid those proceeds. Both actions imply that the board is captured by the scammers. There are many corporations that seem to do this even with persistently large market capitalizations. The key difference between this and pump-and-dump is that its a fraudulent group of investors selling in this case instead of the corporation itself. A detailed simple example Corporations are mandated by law to be little oligarchies; although, "republic" is now becoming more appropriate with all of the new shareholder rights. A corporation is controlled at root by the board of directors who are elected by the shareholders. The board has no direct operational control, as that is left to the "king", the CEO; however, the board does control what everyone wants access to: the money. Board members have all sorts of legal qualitative mandates on how to behave, and they've functioned fairly decently efficiently over the long run, but there are definitely some bad apples. Boards are somewhat intransigent since it's difficult to hold board elections, and usually only specific board members are put up for election by a shareholder vote, so a bad one has the potential to really get stuck in there. Once a bad one is in there, they don't care because they know it will be tough to get them out, so they run roughshod over the company's purse. Only the board can take action on major funding such as the CEO's operating budget, board compensation, financing, investment, etc, some with shareholder approval, some without. The corporation itself owns all of those assets, but the board controls them. In this example, they scheme with most likely the top executive, but a rubber stamp top executive could allow a lower rung to scheme with the board, but the board is always constant until the law is changed. Because there's no honor amongst thieves, the board votes which can require some combination of executive and shareholder approval are taken very close together: sell shares, increase salaries to key executive schemers, increase board compensation. The trusting shareholders believe this is in the best interests of the company at large so go along. So the money flows from existing & new shareholders to the corporation now controlled by a malicious board and then finally to the necessary malicious executive and the vital malicious board. |
Under what circumstance will the IRS charge you a late-payment penalty for taxes? | In practice the IRS seems to apply the late payment penalty when they issue a written paper notice. Those notices typically have a pay-by date where no additional penalty applies. The IRS will often waive penalties, but not interest or tax due, if the taxpayer presses the issue. |
Can I default on my private student loans if I was an international student? | What are the consequences if I ignore the emails? That would depend on how much efforts the collection agency is ready to put in. I got a social security number when I took up on campus jobs at the school and I do have a credit score. Can they get a hold of this and report to the credit bureaus even though I don't live in America? Possibly yes, they may already be doing it. Will they know when I come to America and arrest me at the border or can they take away my passport? For this, they would have to file a civil case in the court and get an injunction to arrest you. Edit: Generally it is unlikely that the court may grant an arrest warrant, unless in specific cases. A lawyer advise would be more appropriate. End Edits It is possible that the visa would also get rejected as you would have to declare previous visits and credit history is not good. |
At what point do index funds become unreliable? | The argument you are making here is similar to the problem I have with the stronger forms of the efficient market hypothesis. That is if the market already has incorporated all of the information about the correct prices, then there's no reason to question any prices and then the prices never change. However, the mechanism through which the market incorporates this information is via the actors buying an selling based on what they see as the market being incorrect. The most basic concept of this problem (I think) starts with the idea that every investor is passive and they simply buy the market as one basket. So every paycheck, the index fund buys some more stock in the market in a completely static way. This means the demand for each stock is the same. No one is paying attention to the actual companies' performance so a poor performer's stock price never moves. The same for the high performer. The only thing moving prices is demand but that's always up at a more or less constant rate. This is a topic that has a lot of discussion lately in financial circles. Here are two articles about this topic but I'm not convinced the author is completely serious hence the "worst-case scenario" title. These are interesting reads but again, take this with a grain of salt. You should follow the links in the articles because they give a more nuanced understanding of each potential issue. One thing that's important is that the reality is nothing like what I outline above. One of the links in these articles that is interesting is the one that talks about how we now have more indexes than stocks on the US markets. The writer points to this as a problem in the first article, but think for a moment why that is. There are many different types of strategies that active managers follow in how they determine what goes in a fund based on different stock metrics. If a stocks P/E ratio drops below a critical level, for example, a number of indexes are going to sell it. Some might buy it. It's up to the investors (you and me) to pick which of these strategies we believe in. Another thing to consider is that active managers are losing their clients to the passive funds. They have a vested interest in attacking passive management. |
Should I be claiming more than 1 exemption? | It's not possible to determine whether you can "expect a refund" or whether you are claiming the right number of exemptions from the information given. If your wife were not working and you did not do independent contracting, then the answer would be much simpler. However, in this case, we must also factor in how much your contracting brings in (since you must pay income tax on that, as well as Medicare and, probably, Social Security), whether you are filing jointly or separately, and your wife's income from her business. There are also other factors such as whether you'll be claiming certain child care expenses, and certain tax credits which may phase out depending on your income. If you can accurately estimate your total household income for the year, and separate that into income from wages, contracting, and your wife's business, as well as your expenses for things like state and local income and property taxes, then you can make a very reasonable estimate about your total tax burden (including the self-employment taxes on your non-wage income) and then determine whether you are having enough tax withheld from your paycheck. Some people may find that they should have additional tax withheld to compensate for these expenses (see IRS W-4 Line #6). |
How to gift money anonymously to an individual after collection thru a donation site? | Regarding the tax implications half of your question ... There seem to be a lot of articles that say there's not yet any established law concerning the tax treatment of crowdsourced funds. Since your objective is gift-giving rather than business purposes, it would seem that the gift tax rules would apply, and gift taxes are charged to the donor not the donee. (But I am not a tax attorney.) |
Where can I find open source portfolio management software? | I've just recently launched an open source wealth management platform - wealthbot.io ... "Webo" is mostly targeted at RIA's to help the manage multiple portfolios, etc. Take a look at the demo at demo.wealthbot.io, you'll also find links to github, etc. there. It's a rather involved project, but if you are looking for use cases of rebalancing, portfolio accounting, custodian integration, tax loss harvesting, and many other features available at some of the popular robo-advisors, you might find it interesting. |
Exercising an option without paying for the underlying | This is dependent on the broker according to The Options Industry Council. Your broker will specify what they would do upon expiry (or hours before last trade) if you did not indicate your preference. Most likely they will conduct a probabilistic simulation to see whether exercising the contracts may result in margin deficit even after selling the delivered shares under extreme circumstances. In most cases, brokers tend to liquidate the option for you (sell to close) before expiry. I've seen people complain about certain brokers forcing liquidation at terrible bid-ask spreads even though the options are still days to expiry. It is better for you to close the position on your own beforehand. The best brokers would allow margin deficit and let you deposit the required amount of money afterward. Please consult your broker's materials. If you can't find them, use live chat or email tickets. |
Is there a good forum where I can discuss individual US stocks? | I would recommend looking at The Motley Fool. |
Theoretically, if I bought more than 50% of a company's stocks, will I own the company? | I almost agree. I am not completely sure about the ownership of stock, but to have the majority ownership of any company you must own more than 50% of a company's outstanding shares. Although a board in majority, could out vote a majority shareholder in most cases depending on the company policy regarding shareholders and the general law of the country, and to how the company is managed. |
Receiving partial payment of overseas loan/company purchase? | Is it equity, or debt? Understanding the exact nature of one's investment (equity vs. debt) is critical. When one invests money in a company (presumably incorporated or limited) by buying some or all of it — as opposed to lending money to the company — then one ends up owning equity (shares or stock) in the company. In such a situation, one is a shareholder — not a creditor. As a shareholder, one is not generally owed a money debt just by having acquired an ownership stake in the company. Shareholders with company equity generally don't get to treat money received from the company as repayment of a loan — unless they also made a loan to the company and the payment is designated by the company as a loan repayment. Rather, shareholders can receive cash from a company through one of the following sources: "Loan repayment" isn't one of those options; it's only an option if one made a loan in the first place. Anyway, each of those ways of receiving money based on one's shares in a company has distinct tax implications, not just for the shareholder but for the company as well. You should consult with a tax professional about the most effective way for you to repatriate money from your investment. Considering the company is established overseas, you may want to find somebody with the appropriate expertise. |
How to prevent myself from buying things I don't want | To me, your question emphasizes something I've heard many times before: personal finance is as much or more about behavior than it is about mathematics or "head knowledge". Sure, you know you shouldn't be wasting a lot of money on something you will use very infrequently, but how do you make this behavior stick? Here are a few tricks that might help: The other aspects of your question really touch more on psychology than finance. But getting yourself into a discipline habit with money will help. And realizing the full cash price of items in relation to how much your disposable income is will help you get control of your impulses, as you review your budget monthly, and keep limit yourself using the envelope system. But honestly, everybody wants stuff they don't have, it's human nature. The key is finding ways to put physical limits and guards on yourself to keep you from obeying the self-destructive impulses. |
Why do card processing companies discourage “cash advance” activities | This is most likely protecting Square's relationship with Visa/Mastercard/AMEX/etc. Credit card companies typically charge their customers a much higher interest rate with no grace period on cash advances (withdrawals made from an ATM using a credit card). If you use Square to generate something that looks like a "merchandise transaction" but instead just hand over a wad of banknotes, you're forcing the credit card company to apply their cheaper "purchases" interest rate on the transaction, plus award any applicable cashback offers†, etc. Square would absolutely profit off of this, but since it would result in less revenue for the partner credit card companies, that would quickly sour the relationship and could even result in them terminating their agreements with Square altogether. † This is the kind of activity they are trying to prevent: 1. Bill yourself $5,000 for "merchandise", but instead give yourself cash. 2. Earn 1.5% cashback ($75). 3. Use $4,925 of the cash and a $75 statement credit to pay your credit card statement. 4. Pocket the difference. 5. Repeat. Note, the fees involved probably negate any potential gain shown in this example, but I'm sure with enough creative thinking someone would figure out a way to game the system if it wasn't expressly forbidden in the terms of service |
What is the best way to get a “rough” home appraisal prior to starting the refinance process? | It's extremely easy to get a rough valuation of your home. Just phone a real estate agent. Virtually any real estate agent will come and value your home free. Even if you say outright "I'm not considering selling, I just want a valuation" they will probably do it, because for them getting contacts of people who might one day want to sell their home is all-important. Even if a few turn you down, some will do it. You might say that an agent isn't going to be as accurate as an appraiser, and you are right. There is also an expectation that they will evaluate higher than the real value, to persuaade you to sell. That probably isn't a big issue, and it's something you can compensate for. And even an appraiser is going to be based somewhat on speculation. You might try to do this calculation yourself, but an agent has access to the actual sale prices of nearby houses - you can't get that information. You only have access to the asking prices. And did I mention they will do it for free? |
Why might it be advisable to keep student debt vs. paying it off quickly? | One of many things to consider is that in the United States student loan interest is tax deductible. That fact could change the math enough to make it worth putting A's money elsewhere depending on his interest rate and income bracket. |
Where are all those unsold vehicles? | When the 2016 models come out, the dealership marks down the 2015 model and then it sells pretty fast. The process doesn't take that long in the car market because the 2015 models are just as good as the 2016 so if they are just a little cheaper, they will sell quickly. If you want a 2008 Audi that has never sold, you are going to be looking for a long time. The same thing happens in every industry. Where are the older versions of digital cameras? Cell phones? Blenders? Digital pianos? Any item that changes from year to year sits on shelves for a little while after its replacement comes out until the retailer reduces its price by enough and it sells. The only exceptions are goods that depreciate very quickly or go bad, which are recycled or thrown away (like fresh produce, for example). It seems kind of crazy at first that essentially all goods that are produced by the economy are consumed, but that's the magic of capitalism: prices make markets clear. |
Does the profit of a company directly affect its stock or indirectly by causing people to buy or sell? | The short answer to your question is yes. Company performance affects stock price only through investors' views. But note that selling for higher and lower prices when the company is doing well or poorly is not an arbitrary choice. A stock is a claim on the future cash flows of the firm, which ultimately come from its future profits. If the company is doing well, investors will likely expect that there will large cash flows (dividends) in the future and be willing to pay more to hold it (or require more to sell it). The price of a stock is equal what people think the future dividends are worth. If market participants started behaving irrationally, like not reacting to changes in the expected future cash flows, then arbitrageurs would make a ton of money trading against them until the situation was rectified. |
Where can I find historic performance data on Barclays Aggregate Canadian Bond Index? | I couldn't find historical data either, so I contacted Vanguard Canada and Barclays; Vanguard replied that This index was developed for Vanguard, and thus historical information is available as of the inception of the fund. Unfortunately, that means that the only existing data on historical returns are in the link in your question. Vanguard also sent me a link to the methodology Barclay's uses when constructing this index, which you might find interesting as well. I haven't heard from Barclays, but I presume the story is the same; even if they've been collecting data on Canadian bonds since before the inception of this index, they probably didn't aggregate it into an index before their contract with Vanguard (and if they did, it might be proprietary and not available free of charge). |
Investment property refinance following a low appraisal? | Definitely don't borrow from your 401K. If you quit or get laid off, you have to repay the whole amount back immediately, plus you are borrowing from your opportunity cost. The stock market should be good at least through the end of this year. As one of the commentators already stated, have you calculated your net savings by reducing the interest rate? You will be paying closing costs and not all of these are deductible (only the points are). When calculating the savings, you have to ask yourself how long you will be hanging on the property? Are you likely to be long term landlords, or do you have any ideas on selling in the near future? You can reduce the cost and principal by throwing the equivalent of one to two extra mortgage payments a year to get the repayment period down significantly (by years). In this way, you are not married to a higher payment (as you would be if you refinanced to a 15 year term). I would tend to go with a) eat the appraisal cost, not refinance, and b) throw extra money towards principal to get the term of the loan to be reduced. |
Can you use external money to pay trading commissions in tax-free and tax-deferred accounts? | Nice idea. When I started my IRAs, I considered this as well, and the answer from the broker was that this was not permitted. And, aside from transfers from other IRAs or retirement accounts, you can't 'deposit' shares to the IRA, only cash. |
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