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Is insurance worth it if you can afford to replace the item? If not, when is it? | In regards to purchasing full coverage on your car even if you can afford to replace it, consider the hassle you have to deal with an accident that is not just the cost. As an example, my sister's car was stolen and wrecked. It was her problem to go recover the car on the other side of the state such that she would not be paying the storage "fees" imposed by the sheriff of the other county. Had she had insurance they would have taken care of it call. Another story is that I rented a car and side swiped in the parking lot by a hit and run. I was responsible for the minor damage. I started down the path of paying out of pocket because it was small enough that I did not want to submit a claim. The rental car agency started to pile on extra fees such that it was worth it to turn in a claim. My insurance company was savvy enough to be able to dispute the extra charges. After I submitted it to the insurance company I basically did nothing. They took care of everything. So, in summary, when you buy full coverage on your car, it is not just a financial decision. It is also about not having to deal with a hassle. |
Do I have to pay a capital gains tax if I rebuy the same stock within 30 days? | Yes. Wash rules are only for losses. |
What's the best way to make money from a market correction? | There are a few ways to make money from a market correction: |
(Almost) no credit unions in New York City, why? | There are 2 credit unions in the Metro NY area that are open to everyone: You might also want to check out aSmarterChoice.org to see if there are other credit union options based on where you live, work, worship & more. |
Table of how many years it takes to make a specified return on the stock market? | It depends on what stocks you invest in or whether you invest in an index, as all stocks are not created equally. If you prefer to invest directly into individual stocks and you choose ones that are financially health and trending upwards, you should be able to easily outperform any indexes and get your 30% return much quicker. But you always need to make sure that you have a stop loss placed on all of your stocks, because even the best performing companies can go through bad patches. The stop loss prevents you from losing all your capital if the share price suddenly starts going south and turns into a downtrend. |
Is it possible for the average person to profit on the stock market? | Of course. "Best" is a subjective term. However relying on the resources of the larger institutions by pooling with them will definitely reduce your own burden with regards to the research and keeping track. So yes, investing in mutual funds and ETFs is a very sound strategy. It would be better to diversify, and not to invest all your money in one fund, or in one industry/area. That said, there are more than enough individuals who do their own research and stock picking and invest, with various degrees of success, in individual securities. Some also employe more advanced strategies such as leveraging, options, futures, margins, etc. These advance strategies come at a greater risk, but may bring a greater rewards as well. So the answer to the question in the subject line is YES. For all the rest - there's no one right or wrong answer, it depends greatly on your abilities, time, risk tolerance, cash available to invest, etc etc. |
What happens to an options contract during an all stock acquisition? | According to this article: With an all-stock merger, the number of shares covered by a call option is changed to adjust for the value of the buyout. The options on the bought-out company will change to options on the buyer stock at the same strike price, but for a different number of shares. Normally, one option is for 100 shares of the underlying stock. For example, company A buys company B, exchanging 1/2 share of A for each share of B. Options purchased on company B stock would change to options on company A, with 50 shares of stock delivered if the option is exercised. This outcome strongly suggests that, in general, holders of options should cash out once the takeover is announced, before the transactions takes place. Since the acquiring company will typically offer a significant premium, this will offer an opportunity for instant profits for call option holders while at the same time being a big negative for put option holders. However, it is possible in some cases where the nominal price of the two companies favours the SML company (ie. the share prices of SML is lower than that of BIG), the holder of a call option may wish to hold onto their options. (And, possibly, conversely for put option holders.) |
Google Finance: Input Parameters For Simple Moving Averages | The difference is that for the one year time frame the data is represented based on daily data and the SMA is 20 days, whilst for the 5 year timeframe the data is automatically represented as weekly data with the SMA represented by 20 weeks not 20 days anymore. This happens due to daily data on this chart being too much data to represent over a 5 year period so the data defaults to weekly data over such a long period. If the chart is represented as weekly data then any indicators will also have to be represented in weekly data. If you use a more sophisticated charting program you can actually select to see daily or weekly data over longer periods such as 5 years or more. |
Should I collect receipts after paying with a card? | Keeping a receipt does allow you to verify that the expected amount was charged/debited it also can help when you need to return an item. Regarding double charging, the credit card companies look for that. If the same card is used at the same vendor for the same exact amount in a short period of time the credit card company will flag the transaction. They assume either a mistake was made, or fraud is being attempted. The most likely result is that the transaction is denied. A dishonest vendor can write down the card number, expiration date and CVV number. Then after you leave make up a new transaction for any amount they want. You of course wouldn't have a paper receipt for this fraudulent transaction. The key is reviewing your transaction history every few days: looking for unexpected amounts, locations, or number of transactions. |
I've tracked my spending and have created a budget, now what do I do with it? | I think the answers you're going to receive are all going to be a bit subjective. Looking at it from a high-level point of view, having this budget nailed down lets you analyze: Now you've got your budget, stick to it! This is really the most important part. You've done your homework, now make sure you don't exceed it without a good reason. If you're under budget in any given month, have a plan on what to do with the excess funds. If you go over budget on a certain area, you can react accordingly. I, personally, recommend hiring a financial planner. Ours has been a huge help with looking further down the line than we had been originally. If you show up to your first meeting with an FP and have this budgetary breakdown ready to go, you'll probably get a high-five. Well done, you! |
What market conditions favor small cap stocks over medium cap stocks? | Small cap companies are just smaller, so the risk for them to fail is higher but the potential for higher returns is also higher. |
Is there a way to monitor when executives or leaders in a company sell off large holdings? | Exec Insiders have to file with the SEC and some sites like secform4.com track it. But many insiders have selling programs where the sell the same amount every month or quarter so you would have to do your homework to determine if there are real signals in the activity. |
Would you withdraw your money from your bank if you thought it was going under? | To the average consumer, the financial health of a bank is completely irrelevant. The FDIC's job is to make it that way. Even if a bank does go under, the FDIC is very good at making sure there is little/no interruption in service. Usually, another bank just takes over the asset of the failing bank, and you don't even notice the difference. You might have a ~24 hour window where your local ATM doesn't work. I also really question the "FDIC is broke" statement. The FDIC has access to additional funding beyond the Deposit Insurance Fund mentioned in your link. It also has the ability to borrow from the Treasury. If you look into the FDIC's report a bit closer, the amount in the "Provision for Insurance Losses" is not just money spent on failing banks. It also includes money that has been set aside to cover anticipated failures and litigation. Saying the FDIC is "broke" is like saying I am "broke" because my checking account balance went down after I moved some money into a rainy-day fund. Failure of the FDIC would signal a failure of our financial system and the government that backs it. If the FDIC fails, your petty checking account would be meaningless anyway. The important things would be non-perishable food, clean water, and guns/ammo. That said, it will be interesting to see the latest quarterly report for the FDIC when it is released next week. The article implies things will look a little better for the FDIC, but we'll see. |
Why could rental costs for apartments/houses rise while buying prices can go up and down? | Economically, you would say that purchased and rented real estate are not perfect substitutes--they are largely separate markets. Only a few people are able to easily switch from one to the other and that choice is sticky--for example, once you buy a house, prices would have to rise a lot for it to be worth it to sell it and move into an apartment. In both markets there is a supply and demand curve, but the slope of the demand curve for houses to purchase is much steeper than the demand curve for rentals. The market for new housing fluctuates rapidly because it requires a large change in housing prices to change the number of people looking to buy a house. Most decisions to buy a house are not driven by the state of the housing market. This describes a supply/demand graph with a very steep demand curve. Additionally, because of the leverage provided by mortgages, the demand for houses depends critically on relatively small changes in the interest rate and availability of loans. Thus the steep demand curve shifts all over the place as borrowing conditions change. On the other hand, apartment prices are more stable because people easily move from one apartment to another and people living in their parent's basements easily move into apartments if prices change. A small change in the price or quantity of rentals brings about reasonable response in quantity demanded. This is the situation where the demand curve is shallow. In addition, rentals are not tied to interest rates tightly, nor are they as strongly tied to economic conditions (in a recession, people avoid buying but renters continue to rent). |
Is dividend included in EPS | Not quite. The EPS is noted as ttm, which means trailing twelve months --- so the earnings are taken from known values over the previous year. The number you quote as the dividend is actually the Forward Annual Dividend Rate, which is an estimate of the future year's dividends. This means that PFE is paying out more in the coming year (per share) than it made in the previous year (per share). |
Are banks really making less profit when interest rates are low? | I've read this claim many times in the news: banks are making less profit from the lending business when interest rates are historically low. The issue with most loans is they can be satisfied at any time. When you have falling interest rates it means most of the banks loans are refinanced from nice high rates to current market low interest rates which can significantly reduce the expected return on past loans. The bank gets the money back when it wants it the least because it can only re-lend the money at the current market (lower) interest rates. When interest rates are increasing refinance and early repayment activity reduces significantly. It's important to look at the loan from the point of view of the bank, a bank must first issue out the entire principal amount. On a 60 month loan the lender has not received payments sufficient to satisfy the principal until around 50th or 55th month depending on the interest rate. If the bank receives payment of the outstanding amount on month 30 the expected return on that loan is reduced significantly. Consider a $10,000, 60 month loan at 5% apr. The bank is expected to receive $11,322 in total for interest income of $1,322. If the loan is repaid on month 30, the total interest is about $972. That's a 26% reduction of expected interest income, and the money received can only be re-lent for yet a lower interest rate. Add to this the tricky accounting of holding a loan, which is really a discounted bond, which is an asset, on the books and profitability of lending while interest rates are falling gets really funky. And this doesn't even examine default risk/cost. |
How can my dad (grandpa) transfer shares to my 2 year old son? | The most common way to handle this in the US is with a UTMA account. UTMA is the Uniform Transfers / Gifts to Minors Act ("UTMA" or "UGMA") which is a standard model law that most states have passed for special kinds of accounts. Once you open an account, anyone can contribute. Usually parents and grandparents will contribute $13,000 or less per year to make it a tax free transfer, but you can transfer more. The account itself would just be a standard brokerage account of any sort, but the title of the account would include your son's name, the applicable law depending on your state, and the name of the custodian who would control the account until your son turned 18. When your son does turn 18, the money is his. Until then, the money is his, but you control how it's invested. I'm a huge fan of Vanguard for UTMA/UGMAs. You may prefer to diversify a bit away from one company by selling the GE shares and buying an index mutual fund so that your child's education is not jeopardized by a rogue trader bringing down General Electric sometime in the next decade... |
How to rescue my money from negative interest? | I'd prefer having it (more or less) fluent at any time, if possible... And the Swiss National Bank (SNB) will do their darndest to make this a costly option. That's exactly the point of negative interest rates. They don't want to help you saving money. So you will have to choose what to give up: liquidity, or profitability. But for now, you still have alternatives. The way you described it one could think that all banks will soon start to charge all their clients. That's just a distortion of facts. If you are happy with a (close to) 0 income, you might consider opening multiple bank accounts. Many banks charge the negative interest only from certain thresholds (i.e. CHF 100k). Since you're clearly a Swiss resident, that's easy to do for you. If you don't want to give up making an income, then you have to sacrifice liquidity. There simply aren't any short term (less than 2-3 years) instruments in Swiss Franc that are both safe and yielding a positive income. Which means that you will have to take much more risk then you had with a savings account. Ask your advisor for an investment proposal, but also consider bank independent advisors. |
What investment strategy would you deduce from the latest article from Charles Munger? | So, I've read the article in question, "Basically, It's Over". Here's my opinion: I respect Charlie Munger but I think his parable misses the mark. If he's trying to convince the average person (or at least the average Slate-reading person) that America is overspending and headed for trouble, the parable could have been told better. I wasn't sure how to follow some of the analogies he was making, and didn't experience the clear "aha" I was hoping for. Nevertheless, I agree with his point of view, which I see as: In the long run, the United States is going to have serious difficulty in supporting its debt habit, energy consumption habit, and its currency. In terms of an investment strategy to protect oneself, here are some thoughts. These don't constitute a complete strategy, but are some points to consider as part of an overall strategy: If the U.S. is going to continue amassing debt fast, it would stand to reason it will become a worse credit risk, requiring it to pay higher interest rates on its debt. Long-term treasury bonds would decline as rates increase, and so wouldn't be a great place to be invested today. In order to pay the mounting debt and debt servicing costs, the U.S. will continue to run the printing presses, to inflate itself out of debt. This increase in the money supply will put downward pressure on the U.S. dollar relative to the currencies of better-run economies. U.S. cash and short-term treasuries might not be a great place to be invested today. Hedge with inflation-indexed bonds (e.g. TIPS) or the bonds of stronger major economies – but diversify; don't just pick one. If you agree that energy prices are headed higher, especially relative to U.S. dollars, then a good sector to invest a portion of one's portfolio would be world energy producing companies. (Send some of your money over to Canada, we have lots of oil and we're right next door :-) Anybody who has already been practicing broad, global diversification is already reasonably protected. Clearly, "diversification" across just U.S. stocks and bonds is not enough. Finally: I don't underestimate the ability of the U.S. to get out of this rut. U.S. history has impressed upon me (as a Canadian) two things in particular: it is highly capable of both innovating and of overcoming challenges. I'm keeping a small part of my portfolio invested in strong U.S. companies that are proven innovators – not of the "financial"-innovation variety – and with global reach. |
Where can you find dividends for Australian Stock Market Shares (ASX) for more than 2 years of data? | You can register with an online broker. You can usually join most online brokers for free and only have to fund your account if you decide to place a trade. You may also check out the website of the actual companies you are interested in. They will provide current and historic data of the company's financials. For BHP you can click on the link at the bottom of this webpage to get a PDF file of past dividends from 1984. |
Does gold's value decrease over time due to the fact that it is being continuously mined? | The previous answers have raised very good points, but I believe one facet of this has been neglected. While it's true that the total accessible supply of gold keeps growing(although rather slowly as was mentioned earlier) the fact remains that gold, like oil, is a non-renewable natural resource. So, at some point, we are going to run out of gold to mine. Due to this fact, I believe gold will always be highly valued. Of course it can certainly always fluctuate in value. In fact, I expect in the reasonably near future to see a decline in the price of gold due to investors selling it en masse to re-enter the stock market when the economy has recovered more substantially. |
Does wash sale apply if I buy stock on 2 two different dates and sell it later | Is wash rule applicable for this? No - because you made a gain on the sale. You paid $13,500 for the stock and sold it for $14,250. The wash rule prevents you from claiming a loss if you buy the same stock again within 30 days. You have no loss to claim, so the rule does not apply. |
What is the best credit card for someone with no credit history | You have what is called in the biz a "thin file". Check with a Credit Union. They will get you a secured card or maybe a straight credit card. They usually will graduate you from a secured card to a real credit card in 12-18 months. Then you are on your way. You should also sign up for Creditkarma to get your credit report updated every week. They make their money on referring people to credit card companies so you might be able to kill two birds with one stone. |
Why do 10 year-old luxury cars lose so much value? | I think this can be answered by answering the question "Who buys 10 year old cars?". Generally speaking those buyers are very price conscious. They are looking to save money on transportation rather than following the herd of people participating in the car payments merry-go-round. The cost of parts, repairs, and gasoline for those cars do not go down over time. Remember that many of those cars require the use of premium gasoline. This drastically reduces demand for those vehicles, thus lowers the price. Luckily I have a really good and reasonable mechanic near me, and I can float repairs and the higher gas. I love driving my 1999 Mercedes and it is one of the least expensive cars that I have owned while also being one of the most comfortable. |
Should I get cash from credit card at 0% for 8 months and put it on loans? | Do you know how many people end up with an 18-21% rate on their credit card? They started off with low teaser rates. There was an article about it recently on Yahoo. Mainly this comes from a lack of discipline, or an unforeseen emergency. However, lets assume, that you are a bit uncommon and have iron discipline. It comes down to a math question. What is the rate on your student loan? I am going to assume 6%, and lets say that you are now paying interest. So there is 7 months between now an then, you would pay $140 (4000 * .06/12 * 7) in interest if you left it on the student loan. Typically there is not really a free lunch with the zero percent interest rate CC. They often charge a 3% balance transfer fee, so you would pay that on the entire amount, about $120. Is it worth the $20? I would say not. However, those simple calculations are not really correct. Since you would have to pay the CC $588.6/month to take care of this, you have to shrink the balance on the student loan to do a true apples to apples comparison. So doing a little loan amortization, you can retire $4000 on the student loan only paying $583/month, and paying a total of $80.40 in interest. So it would cost you money to do what you are suggesting if there is a 3% transfer fee. Even if there is no transfer fee, you only save about $80 in interest. If it was me, I would direct my energy in other areas, like trying to bring in more money to make this student loan go away ASAP. Oh and GO STEELERS! |
Making $100,000 USD per month, no idea what to do with it | You want CFP or CFA who is also a fiduciary, meaning that by law they have to put your interests ahead of their own. Financial planners who are not fiduciaries can, and often do, recommend investment vehicles that earn them the most commission with little regard of your financial goals. If you already have $500,000 to invest and racking up $100,000 a month you probably qualify for most institutions private client programs. That means that the firm/advisor will look at your financial situation and come up with a custom-tailored investment plan for you which should also include tax planning. I would start with whatever financial institutions you already work with - Schwab, your bank etc. Set up a meeting and see what they have to offer. Make sure you interrogate them about their fees, their licenses/certifications and above all if they are a fiduciary. |
Why can't you just have someone invest for you and split the profits (and losses) with him? | What you are looking for is a pretty terrible deal for you, so I'd say it doesn't exist because there isn't a market for it, or nobody has noticed there is a market for it. In principle I would happily take the deal you offer from as many people as would let me, put the money into treasury bills, and take half the profits while doing pretty much nothing. If I had more risk tolerance I would be pretty happy to have half the value of my "fund" as zero cost investment capital for more aggressive investments. My business would then be a lot like an insurance company without the hassle of selling insurance to get hold of float to invest. Also, most insurance companies actually lose money on policies, but come out ahead by investing the float, so an insurance company with zero cost float is quite a good business. Another answer mentions Berkshire Hathaway. If you read one of the famous Berkshire Hathaway annual letters to shareholders and read the section about insurance you'll see that very low cost float has a large role in that company's success. So, back to your end of the deal: if the deal is that good for me, how good is it for you? I'd have to double market returns just for you to break even. If you're smart enough to pick a financial adviser that can beat the market by that much, how come you aren't able to pick an investment strategy that ties the market? |
Are personal finance / money management classes taught in high school, anywhere? | We had a "civics" class when I was a freshman in high school. This was in the Ann Arbor, MI public schools. It covered the very basics (how to balance your checkbook, what are stocks, how do income taxes work, what is interest, etc.) of money management along with an overview of politics and the legal system. It was a really light class, though, and didn't go deeply into personal finance and money management. I agree that such a class would be very valuable, as would cooking, nutrition, and basic home and car repair. |
Record retention requirements for individuals in the U.S.? | Here is an IRS Publication 552 covering records retention The publication covers many areas, including proof of income, bank statements, old tax returns. There is a table that talks about how long to keep the records. In general it is 3 to 6 years. But for property it is 3 to 6 years after you dispose of the property. |
Requirements for filing business taxes? | While she can certainly get an LLC or EIN, it isn't necessarily required or needed. She can file as a sole-proprietor on her (or your joint) taxes by filling out a schedule-C addition to the 1040. Any income or losses will pass through to your existing income situation (from W-2's and such). The general requirement for filing as a business in this regard has nothing to do with any minimum income, revenue, or size. It is simply the intent to treat it as a business, and unlike a hobby, the overall intent to earn a profit eventually. If you're currently reporting the 1099-MISC income, but not deducting the expenses, this would be a means for you to offset the income with the expenses you mentioned (and possibly other legitimate ones). There is no "2% AGI" restriction for schedule-C. |
What are the disadvantages to borrowing money for energy conservation measures / solar panels? | Depending on the details of your solar panel setup, the monthly savings may change depending on changes in the law or utility company policy. This could change how long it will take for the solar panels to "pay for themselves". So your bullet point about the "payback period"/"break even point" is not fixed at the moment you buy the solar panels; it depends on costs you will incur over many years, and those costs could turn out to be different from what you originally thought. At least in the US, home solar installations typically work by selling excess power back to the power company. The power company can change the amount that it pays you for that power. There is also typically a minimum charge for being connected to the grid, and the power company can raise that charge. (This article mentions one such possible change.) The power companies want to keep making money, and as more people start adding solar panels, the power companies may change their rate structure to make that less financially feasible. You can avoid many of these issues if your solar panels are not connected to the public electricity grid, and you, for instance, store power with your own battery. However (at least in the US) this is very uncommon because it is more complex and expensive. |
For Federal Crimes, where does the money collected from penalties go? | The SFGate had an article on this a few years ago: http://www.sfgate.com/business/networth/article/When-government-fines-companies-who-gets-cash-3189724.php "Civil penalties, often referred to as fines, usually go to the U.S. Treasury or victims." Short answer in the case you references it would be the US Treasury. In cases where there is a harmed party then they would get something to account for their loss. But it can get complicated depending on the crime. |
Investing thought experiment | Yes, if your assumptions are correct then your conclusions are correct. But your assumptions are never correct, and so this thought experiment doesn't tell us anything useful. |
I have $100,000 in play money… what to do? | If you want a concrete investment tip, precious metals (e.g. gold, silver) are on a pretty good run these days, personally I still think they have ways to go as there are just too many problems with modern monetary policy of an almost existential nature, and gold and silver are better stores of value than fiat money. Silver is particularly hot right now, but keep in mind that the increased volatility means increased risk. If the Fed keeps its foot on the pedals of the dollar printing press and we get QE3 this summer, that will most likely mean more people piling into the PMs to hedge against inflation. If the Fed starts to tighten it's policy then that's probably bad news for both equities and bonds and so PMs could be seen as a safe haven investment. These are the main reasons why PMs take up a good portion of my portfolio and will continue to do so untill I see how the global economy plays out over the next couple of years. |
How to avoid tax when taking a windfall in small chunks? | How can I avoid this, so we are taxed as if we are making the $60k/yr that we want to receive? You can't. In the US the income is taxed when received, not when used. If you receive 1M this year, taking out 60K doesn't mean the other 940K "weren't received". They were, and are taxable. Create a pension fund in the corporation, feed it all profits, and pay out $60k/yr of "pension". I doubt that the corporation could deduct a million a year in pension funding. You cannot do that. You can only deposit to a pension plan up to 100% of your salary, and no more than $50K total (maybe a little more this year, its adjusted to inflation). Buy a million dollars in "business equipment" of some sort each year to get a deduction, then sell it over time to fund a $60k/yr salary. I doubt such a vehicle exists. If there's no real business purpose, it will be disallowed and you'll be penalized. Your only purpose is tax avoidance, meaning you're trying to shift income using your business to avoid paying taxes - that's illegal. Do crazy Section 79 life insurance schemes to tax-defer the income. The law caps this so I can only deduct < $100k of the $1 million annually, and there are other problems with this approach.\ Yes. Wouldn't go there. Added: From what I understand, this is a term life insurance plan sponsored by the employer for the employee. This is not a deferral of income, but rather a deduction: instead of paying your term life insurance with your own after tax money, your employer pays with their pre-tax. It has a limit of $50K per employee, and is only available for employees. There are non-discrimination limitations that may affect your ability to use it, but I don't see how it is at all helpful for you. It gives you a deduction, but its money spent, not money in your pocket. End added. Do some tax avoidance like Facebook does with its Double Irish trick, storing the income in some foreign subsidiary and drawing $60k/yr in salary to be taxed at $60k/yr rates. This is probably cost-prohibitive for a $1MM/yr company. You're not Facebook. What works with a billion, will not work with a million. Keep in mind that you're a one-man business, things that huge corporations like Google or Facebook can get away with are a no-no for a sole-proprietor (even if incorporated). Bottom line you'll probably have to pay the taxes. Get a good tax professional to help you identify as much deductions as possible, and if you can plan income ahead - plan it better. |
Using Loan to Invest - Paying Monthly Installments with Monthly Income | I hope I'm misunderstanding your plan... you want to invest in a way that will make SO MUCH that you pay back all of the loan payments with investment gains? Like the answer I gave on the preceding question, and like @littleadv's comment/mhoran's answers... don't do this. No good will come of it. This strategy requires higher returns, but does not necessarily give you a better return. But because you asked the question again, let me specify what you're missing... I do think that learning is a good thing. It boils down to two very significant problems that you haven't addressed: (1) Where are you getting your monthly "income" from? (2) Realistic vs. Daydreaming--How big do any gains have to be and does that exist in the real world in a way that you can capture? In a nutshell, if my answer to the last question showed that it's crazy to invest and pay back out of your capital and income... since you're trying to keep your capital and only pay back with monthly gains, this one will require even higher and thus more unrealistic gains. The model you're implying: If that's what you mean with this model, (which I think you do), then here are my two very key questions again: How are you getting your monthly income? Financial investments (i.e. stocks or bonds) will have two components of value. One component of value is the stream of payments, such as a monthly dividend from stocks that pay those, or the interest payment from a bond. The other is the ability to resell a security to another investor, receiving back your capital. So... you either have to find Bonds//Dividend stocks that pay >52% returns tax-free each year, and pay this loan off with the payments. (Or higher returns to cover taxes, but these kinds of investments do not exist for you.) OR you can try to invest in something, pray that it goes up ≥4.323% per month and so that you can sell it, pay back your loan payment with the proceeds, and use the capital to buy your next investment... that will go up 4.323% per month, to turn and sell it again. The pros that do model this type of speculation go into much more depth than you are capable of. They build models that incorporate probabilities for rates of return based on historical data. They have better information, and have specialized in calculating this all out. They even have access to better investment opportunities (like pre-IPO Twitter or private notes). You just won't find the opportunities to make this happen, each month, for 24 months. (Again, you won't find them. They do not exist for you in as an investor in securities) Realistic vs. Daydreaming So... clearly I hope that by now I have convinced you that these would be the required returns. They simply aren't available to you. If they were, you would still run into obstacles with converting 'book' returns into physical money that you could repay the loans with, and then continuing that growth. And while I appreciate the notion that 'if I could just make the payments each month, I'd have $10,000 after 24 months!' I guarantee you that you'll be better off finding another way to target that same investment. Along the lines of what mhoran said, if you aim for a basic 401K or other similar investment account and target it into the S&P500, you might see returns of anywhere from -25% to +25% over the next 24 months... but if things went like they tend to average for the S&P500, it's more like ~7% annually. Check out a "savings target calculator" like this one from Bankrate.com and put in the numbers... if you can save about $390 a month you'll be at $10K in 24 months. It's not as fun as the other, but you can actually expect to achieve that. You will not find consistent >50% returns on your money annually. |
Is there a way to set a stop for a stock before you own it? | why not just use a conditional order (http://www.investopedia.com/university/intro-to-order-types/conditional-orders.asp)? Like a one triggers one order? an order like this lets you place a buy order for the stock and if its executed another order is automatically placed. you could choose to let your second order be a stop order. so here's a company that offers stuff like this as an ex. (https://www.tradeking.com/education/tools/one-triggers-other-order) |
Are there online brokers in the UK which don't require margin account? | Disclosure: I am working for an aggregation startup business called Brokerchooser, that is matching the needs of clients to the right online broker. FxPro and similar brokers are rather CFD/FX brokers. If you want to trade stocks you have to find a broker who is registered member of an exchange like LSE. Long list: http://www.londonstockexchange.com/exchange/traders-and-brokers/membership/member-firm-directory/member-firm-directory-search.html From the brokers we have tested at Brokerchooser.com I would suggest: |
Is there a term for the risk of investing in an asset with a positive but inferior return? | Opportunity cost is the term you're looking for. I.e. (quoting from link) Definition of 'Opportunity Cost' 1. The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action. |
What else besides fees should I consider in rebalancing my fund portfolio's asset allocation? | Taxes Based on the numbers you quoted (-$360) it doesn't appear that you would have a taxable event if you sell all the shares in the account. If you only sell some of the shares, to fund the new account, you should specify which shares you want to sell. If you sell only the shares that you bought when share prices were high, then every share you sell could be considered a loss. This will increase your losses. These losses can be deducted from your taxes, though there are limits. Fees Make sure that you understand the fee structure. Some fund families look at the balance of all your accounts to determine your fee level, others treat each fund separately. Procedure If you were able to get the 10K into the new account in the next few months I would advise not selling the shares. Because it will be 6 to 18 months before you are able to contribute the new funds then rebalancing by selling shares makes more sense. It gets you to your goal quicker. All the funds you mentioned have low expense ratios, I wouldn't move funds just to chase a the lowest expense ratio. I would look at the steps necessary to get the mix you want in the next few weeks, and then what will be needed moving forward. If the 60/40 or 40/60 split makes you comfortable pick one of them. If you want to be able to control the balance via rebalancing or changing your contribution percentage, then go with two funds. |
Ghana scam and direct deposit scam? | The scammer is definitely up to something fishy. He (it's certain that the she is a he) may deposit some money into your father's account to gain his trust. After which, he will propose to come meet your dad. That's where the scamming begins. He will come up with a story about flight, VISA issues, or a problem he has to solve before coming over. Another is that he can use your dad's empty account to receive monies he scammed off people. That way there's no direct link with him and his other victim. |
Does high frequency trading provide economic value? | You pointed out that HFT does not create ipods are mine minerals. Neither does human trading. HFT is a proxy for human trading. Although the computer is executing trades automatically based on an algorithm, it is still using money from a human being's account so the trading is still being done with someone's money. Fast execution of trades is desirable in exchanges. Imagine two exchanges: One only executes trades once a month, the other executes trades once a week. Which exchange would be more desirable? The exchange that trades once a week. Why? Because if I'm holding a stock that I would like to sell, I want to sell it now - not a month from now. Same reason for buying. This concept works all the way down to seconds and fractions of seconds. The issue with HFT, however, is there are cases where the market goes against the HFT algorithm and the algorithm continues to execute trades driving prices up or down by large amounts in the matter of minutes or even seconds. The exchange frequently cancels these trades which only encourages more aggressive HFT trading since HFT traders can have their losses cancelled. This is a privilege that LFTs (low frequency traders) do not receive. This is a valid criticism of HFTs. A short list of such cancelled trades: 8/26/2010: Nasdaq cancels trades of CORE stock 10/4/2010: Nasdaq cancels trades of CENX stock 10/15/2010: NYSE cancels trades of PAY stock 10/18/2010: NYSE cancels $500 million worth of SPY trades 5/18/2011: NYSE cancels 15,900 trades of BEE.PR.C 6/21/2011: Nasdaq cancels CNTY trades 12/2/2011: London Metals Exchange cancel trades of copper |
How does the world - in aggregate - generate a non-zero return? | It appears that you have bought into the Communist lie. Milton Friedman lats it all out so well. No transaction ever occurs unless both sides in the transaction benefit. Let's say you are out for a walk. While walking you feel hungry. You find two quarters ($0.50) in your pocket. You enter the nearest convenience store and look for a snack cake to buy. You find a Twinky selling for 40 cents. You pay for the Twinky and leave the store while eating it. You also leave with a dime in your pocket. To you the Twinky is worth 50 cents as you would have paid what you had to obtain one. So made 10 cents profit on the deal. The shopkeeper sold his merchandise for 40 cents but it only cost him 25 cents to obtain the Twinky. He made 15 cents profit on the deal. You wanted the snack more than you wanted the money. The shopkeeper wanted the money more than the snack. You both got what you valued more. You both profited by the transaction. That is why Capitalism works. Value (worth) is in the eye of the beholder. Remember: no transaction occurs unless both sides profit. Edit: once again I ask: if you give me a negative vote please explain with a comment. |
Is Stock Trading legal for a student on F-1 Visa doing CPT in USA? | There are no legal reasons preventing you from trading as a F-1 visa holder, as noted in this Money.SE answer. Per this article, here are the things you need to set up an account: What do I need to have for doing Stock trading as F1 student ? Typically, most of the stock brokerage firms require Social Security Number (SSN) for stock trading. The reason is that, for your capital gains, it is required by IRS for tax purposes. If you work on campus, then you would already get SSN as part of the job application process…Typically, once you get the on-campus job or work authorization using CPT or OPT , you use that offer letter and take all your current documents like Passport, I-20, I-94 and apply for SSN at Social Security Administration(SSA) Office, check full details at SSA Website . SSN is typically used to report job wages by employer for tax purposes or check eligibility of benefits to IRS/Government. I do NOT have SSN, Can I still do stock trading as F1 student ? While many stock brokerage firms require SSN, you are not out of luck, if you do not have one…you will have to apply for an ITIN Number ( Individual Taxpayer Identification Number ) and can use the same when applying for stock brokerage account. While some of the firms accept ITIN number, it totally depends on the stock brokering firm and you need to check with the one that you are interested in. The key thing is that you'll need either a SSN or ITIN to open a US-based brokerage account. |
What is the opposite of a sunk cost? A “sunk gain”? | In the second example you are giving up future free cash flows in exchange for a capital gain on the original investment. With that respect the money you will not gain will be the difference of the future cash flows ( net of related costs) minus the net gain on the panel you have sold. The financial result can be considered as the opposite of a sunk cost, that is a cost you have already incurred ( and cannot be recovered) vs net future gains you are giving up. In more sophisticated financial terms we are talking about the benefit-cost ratio: ( from Investopedia) |
Pros and cons of using a personal assistant service to manage your personal finances? | When you want to hire personal assistants, you must be sure that you are hiring in a trusted company or the person you talk to have been proven by a lot of people. You must be wise in choosing one because these people will handle some of your personal things and data. |
Should I charge my children interest when they borrow money? | This is largely a cultural issue. I would be appalled at the very idea that my parents would charge me interest for lending me money. Just as they would be appalled if I were to do so if lending them money. I find the idea of attempting to make money off of your children fundamentally wrong. I realize that you only want to do this to teach them, that you have their best interests in mind and not your own profit. Nevertheless, what will actually happen were you to charge them interest is that you would accrue a monetary gain at the expense of your children. Is that really something you would be comfortable with? Now, as I stated at the beginning, this is clearly a cultural issue. Based on the other answers here, many cultures, probably including your own, find nothing wrong with this. I've even heard of people charging their adult children rent when they come home for the holidays, something that is completely baffling to me. The point I am trying to make is that asking other people's opinions on whether you should do this is not very useful unless those people share your own cultural background. My family and culture are such that the idea of charging interest to one's family members seems downright immoral to me. Given that you are asking here, it seems like you might be on the fence about it yourself. However, I freely admit that my answer is colored by my own cultural prejudices and may very well not be applicable to you. Still, ask yourself, is a relatively small amount of money in the grand scheme of things—or, for that matter, an entire fortune—worth jeopardizing your relationship with your children? Do you really believe that having their parents retroactively charge them interest for a loan will somehow teach them something about the "real world" that your already adult children don't know? One of the main reasons they came to you and didn't go to a bank is precisely that they expected the loan to be interest free. So, sure, tell them that you won't lend any more until they repay what they owe. Even better, sit them down and have an honest, adult conversation, explaining that the absence of the money they owe is making itself felt in your household and work out a way they can repay you. What, in my opinion, you most certainly shouldn't do is treat your relationship with your children as a regular business transaction. It isn't and I am sure you don't want it to be. |
What laws/regulations are there regardings gifts in the form of large sums of money? | This forum is not intended to be a discussion group, but I would like to add a different perspective, especially for @MrChrister, on @littleadv's rhetorical question "... estates are after-tax money, i.e.: income tax has been paid on them, yet the government taxes them again. Why?" For the cash in an estate, yes, that is after-tax money, but consider other assets such as stocks and real estate. Suppose a rich man bought stock in a small computer start-up company at $10 a share about 35 years ago, and that stock is now worth $500 a share. The man dies and his will bequeaths the shares to his son. According to US tax law, the son's basis in the shares is $500 per share, that is, if the son sells the shares, his capital gains are computed as if he had purchased the shares for $500 each. The son pays no taxes on the inheritance he receives. The deceased father's last income tax return (filed by the executor of the father's will) does not list the $490/share gain as a capital gain since the father did not sell the stock (the gain is what is called an unrealized gain), and so there is no income tax due from the father on the $490/share. Now, if there is no estate tax whatsoever, the father's estate tax return pays no tax on that gain of $490 per share either. Would this be considered an equitable system? Should the government not tax the gain at all? It is worth noting that it would be possible for a government to eliminate estate taxes entirely, but instead have tax laws that say that unrealized gains on the deceased's property would be taxed (as capital gains) on the deceased's final tax return. |
How to find out the amount of preferred stock of Coca Cola Company? | Coca Cola doesn't seem to have any preferred shares outstanding. From the annual report, it does say that the number of common shares outstanding was 2,294,316,831 as of February 22, 2011. (cover page, right before the horizontal break) But normally, you can find it either toward the beginning of the document or in the statement of shareholder's equity. |
If I invest in securities denominated in a foreign currency, should I hedge my currency risk? | As the other answer already states, whether you should or shouldn't currency-hedge your equity investments depends on a lot of factors. If you decide to do so, depending on your investment vehicles, there might be a more cost-efficient way than arranging a separate futures contract with a bank: If you are open to (or are already investing in) ETFs, there are currency-hedged versions of some popular ETFs. These are hedged against the currency risk for a specific currency; for example, if you are buying in (and expecting to sell for) USD, you would buy an ETF hedged to USD. Of course they have a higher expense ratio than non-hedged ETFs since the costs of the necessary contracts are included in the expenses. |
When is the right time to buy a car and/or a house? | Obviously, the best thing financially would be to continue using your present car, unless it impacts you financially on a regular basis. For example, maintenance or breakdowns impacting your ability to work. An unreliable car also impacts your freedom, for example preventing you from taking road-trips you might want to take or taking up free time with maintenance. Give thought to what it is about your present car that you dislike, both to determine the value you gain from a new car and what's most important to you. Anytime you buy a car, you generally lose thousands of dollars simply driving it off the lot. This is the profit which goes to dealers, salespeople, etc... and not part of the actual value of the car. Cars also depreciate over time, with most of the depreciation happening in the first few years of operation. Many of the newer model cars have additional expenses. (For example, replacement $200 keys or electronic systems that can only be repaired at special facilities.) In addition, if you have insurance (other than the minimum third-party required by law), consider the rate increases and add up the long-term impact of that. Imagine you had invested that money instead at 8% interest over the lifetime of the car. If you don't have insurance, consider what you would do in the unfortunate situation where you were at fault in a collision. Could you afford to lose your investment? Even with safe responsible driving, there is always the potential for road/weather conditions or mechanical failures. If you determine there is sufficient value to be gained from changing vehicles, I would recommend that you buy a vehicle with history from someone privately, doing appropriate background checks and consulting friends or family who know about vehicles and can provide feedback. Do research into the models which interest you ahead of time, read online reviews. Every vehicle generally has known advantages and disadvantages which can take years to discover, so buying an older vehicle gives you the advantage of knowing what to expect. I would say there is probably a reasonable middle ground between using a 1991 vehicle you don't like (that's as old as you are) and getting a relatively new model. Look at what you value in the vehicle, consider all the costs, and find the balance that works best for you. Vehicles from 2000-2005 years are quite affordable and still 10-15 years newer than your car. |
What should I be aware of as a young investor? | You can't get much better advice for a young investor than from Warren Buffet. And his advice for investors young and old, is "Put 10% of the cash in short‑term government bonds, and 90% in a very low‑cost S&P 500 index fund." Or as he said at a different time, "Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees". You are not going to beat the market. So just save as much money as you can, and invest it in something like a Vanguard no-load, low-cost mutual fund. Picking individual stocks is fun, but treat it as fun. Never put in more money than you would waste on fun. Then any upside is pure gravy. |
trailing stop loss in slow price decline | The price doesn't have to drop 5% in one go to activate your order. The trailing aspect simply means your sell trigger price will increase if the current value increases (it will never decrease). |
What taxes are assessed on distributions of an inherited IRA? | For an inherited IRA, there are a few options for taking distributions. You clearly haven't done option 1. It sounds like you haven't done option 2 because otherwise you would probably know how it is taxed. That leaves you with option 3. With option 3, you must distribute the entire amount within 5 years. For you, I'm not sure if that means you need to distribute the entire amount by the end of 2016 or 2017. If it was 2016, then you'll probably have to pay penalties. Distributions from an inherited IRA are taxed as ordinary income regardless of your age or the distribution option you select. |
How do I choose between buying a car or buying a plot of land in Pakistan? | “The plot of land definitely is going to give better results in long term.” Will it? Land is not guaranteed to go up in value. And a car can provide more employment opportunities for you. You need to look at your specific situation—with specific numbers—rather than using rules of thumb as hard guidelines. |
Diversification reduces risk, but does this base on the assumption that expected return of each asset is always in proportion to its risk? | if I have a asset A with expected return of 100% and risk(measured by standard deviation) 1%, and asset B with expected return of 1% and risk 100%, would it be rational to put asset B into the portfolio ? No, because Modern Portfolio Theory would say that if there is another asset (B2) with the same (or higher) return but less risk (which you already have in asset A), you should invest in that. If those are the only two assets you can choose from, you would invest completely in Asset A. The point of diversification is that, so long as two assets aren't perfectly positively correlated (meaning that if one moves up the other always moves up), then losses in one asset will sometimes be offset by gains in another, reducing the overall risk. |
W-8BEN? What's the tax from selling my software to a U.S. company, from abroad? | I realize this is a stale topic, but to anybody who may swing by looking for an answer to this question (on the recently revised W-8BEN), a foreign taxpayer can get an individual taxpayer identification number (ITIN) without being resident in the US. However, an ITIN will often not be necessary for W-8BEN purposes if you have a tax number from your local jurisdiction. Check the Form W-8BEN instructions for your specific situation, but some taxpayers will need neither a US-issued ITIN nor a foreign-issued TIN. Forming a Delaware or Nevada LLC would be expensive and generally subject to federal and state tax and filing obligations. It would also moot the need for a W-8BEN, which only applies to foreign taxpayers; the equivalent form for domestic taxpayers is Form W-9. |
How do I estimate my taxes when I have only 1099 income? | As long as you paid 100% of your last year's tax liability (overall tax liability, the total tax to pay on your 1040) or 90% of the total tax liability this year, or your underpayment is no more than $1000, you won't be penalized as long as you pay the difference by April 15th. That's per the IRS. I don't know where the "10% of my income" came from, I'm not aware of any such rule. |
Does an individual share of a stock have some kind of unique identifier? | I agree with the answer by @Michael that this number doesn't exist. It's hard to see what use it would have and it would be difficult to track. I'm writing a separate answer because I also disagree with the premise of your question: Individual shares of stock have never to my knowledge had such a number. Your comment about numbers on stock certificates identifies the certificate document, which will generally represent multiple shares of stock. That number no more identifies a single share of stock than the serial number on a $10 bill identifies any one of the ten dollars it represents. Even at the "collective" unit of $10, when the bill is eventually replaced with a new one, the new bill has a new number. No continuity. |
Should I accept shares as payment? | For one, the startup doesn't exist yet, so until March I will get nothing on hand, though I have enough reserves to bridge that time. I would not take this deal unless the start-up exists in some form. If it's just not yet profitable, then there's a risk/reward to consider. If it doesn't exist at all, then it cannot make a legal obligation to you and it's not worth taking the deal yet. If everything else is an acceptable risk to you, then you should be asking the other party to create the company and formalize the agreement with you. As regards reserves, if you're really getting paid in shares instead of cash, then you may need them later. Shares in a start-up likely are not easy to sell (if you're allowed to sell them at all), so it may be a while before a paycheck given what you've described. For a second, who pays the tax? This is my first non-university job so I don't exactly know, but usually the employer has to/does pay my taxes and some other stuff from my brutto-income (that's what I understood). If brutto=netto, where is the tax? This I cannot answer for Germany. In the U.S. it would depend in part on how the company is organized. It's likely that some or all of the tax will be deferred until you monetize your shares, but you should get some professional advice on that before you move forward. As an example, it's likely that you'd get taxed (in part or in whole) on what we'd call capital gains (maybe Abgeltungsteuer in German?) that would only be assessed when you sell the shares. For third, shares are a risk. If I or any other in the startup screw really, my pay might be a lot less than expected. Of course, if it works out I'm rich(er). This is the inherent risk of a start-up, so there's no getting around the fact that there's a chance that the business may fail and your shares become worthless. Up to you if you think the risk is acceptable. Where you can mitigate risk is in ensuring that there's a well-written and enforceable set of documents that define what rights go with the shares, who controls the company, how profits will be distributed, etc. Don't do this by spoken agreement only. Get it all written down, and then get it checked by a lawyer representing your interests. |
What is the best use of “spare” money? | With 40% of your take-home available, you have a golden opportunity here. Actually two, and the second builds out easily from the first. Golden Opportunity # 1: Layoff Immunity Ok, not really immunity. Most people don't think of themselves getting laid off, and don't prepare. Of course it may not happen to you, but it can. It's happened to me twice. The layoff itself is an emotional burden (getting rejected is hard), but then you're suddenly faced with a gut-wrenching, "how am I gonna pay the rent????" If you have no savings, it's terrifying. Put yourself in that spot. Imagine that tomorrow, you're out of a job. For how many months could you pay your expenses with the money you have? Three months? One? Not even that? How about shooting for 12 months? It's really, really comforting to be able to say: "I don't have to worry about it for a year". 12 months saved up gives you emotional and financial stability, and it gives you options -- you don't have to take the first job that comes along. Now, saving 12 months of expenses is huge. But, you're in the wonderful spot where you can save 40% of your income. It would only take 2.5 years to save up a year's worth of income! But, actually, it's better than that. Because your 12-month Layoff Immunity fund doesn't have to include the amount for retirement, or taxes, or that 40% we're talking about. Your expenses are less than 60% of take-home -- you'd only need 12 months of that. So, you could have a fully funded 12-Month Layoff Immunity Fund only in a year and a half! Golden Opportunity #2: Freedom Fund Do you like your Job? Would you still do it, if you didn't need the money? If so, great. But if not, why not get yourself into a position where you don't need it? That is, build up enough money from saving and investing to where you can pay your expenses - forever - from your investments. The number to keep in mind is 25. Figure out your annual expenses, and multiply it by 25. That's the amount you'd need to never need a job again. (That works out to a 4% withdrawal rate, adjusting for inflation every year, with a low risk of running out of money. It's a rule of thumb, but smart people doing a lot of math worked it out.) Here you keep saving and investing that 40% in solid mutual funds in a regular, taxable account. Between your savings and the compounding returns off the investments, you could easily have a fully funded "Freedom Fund" by the time you're 50. In fact, by 45 isn't unreasonable. It could be even better. If you live in that high-rent area because of the job, and wouldn't mind living were the rents are lower once you quit, your target amount would be lower. Between that, working dedicatedly toward this goal, and maybe a little luck, you might even be able to do this by age 40. Final Thoughts There are other things you could put that money toward, like a house, of course. The key take-away here, is to save it, and invest it. You're in a unique position of being able to do that with 40% of your income. That's fabulous! But don't think it's the norm. Most people can't save that much, and, once you lose the ability to save that much, it's very difficult to get it back. Expenses creep in, lifestyle "wants" become "needs", and so on. If you get into the habit of spending it, it's very difficult to shrink your lifestyle back down - down to what right now you're perfectly comfortable with. So, spend some time figuring out what you want out of life -- and in the mean time, sock that 40% away. |
How do I factor dividends and yield into the performance of a security? | Usually I've seen people treat the dividend like a separate cash flow, which is discounted if the company doesn't have a well-established dividend history. I've never really seen dividends rolled into a total return chart (except in the context of an article), probably because dividend reinvestment is a nightmare of record-keeping in a taxable account, and most folks don't do it. One of my brokers (TD Ameritrade) does allow you to plot dividend yield historically on their charts. |
Purpose of having good credit when you are well-off? | Your dad may have paid an "opportunity cost" for that outright purchase. If the money he saved had been invested elsewhere, he may have made more money. If he was that well off, then his interest rate should have been the lowest possible. My own father is a multi-millionaire (not myself) and he could afford to have paid for his house outright. He didn't though. To do so would have meant cashing in on several investments. I don't know his interest rate but let's say it was 2.5%. If he invests that million dollars into something he expects to get a 7% return on in the same period, then he would make more money by borrowing the money. Hence, he would be paying an opportunity cost. Assuming you need to work, some jobs will also do background or credit checks. Credit cards can be used by well off people to actually make them money by offering rewards (compared to straight cash transactions). The better your credit history, the better the cards/rewards you can get. You can build that credit history better by having these loans and making timely payments. |
Is there any kind of unsecured stock loan? | In the U.S. it is typical that a stock brokerage account can be set up to buy stock with up to half the cost being borrowed from the broker. This is called a margin account. The stock purchased must remain in the account until sold (or the loan is paid off), as it serves as built-in collateral for the loan. If the market price for the stock goes down too much, you will be required to add money, or the stock will be sold to cover the loan. See this question for some more information. |
How can my friend send $3K to me without using Paypal? | Most bank bill pay services will work for this purpose. Generally you can pay any person or business that has a valid address. As an added Paypal will no longer take ~3% of the money. |
Stock sale cost basis calculations for 2013, now that rules changed, is FIFO or another method the smartest financially? | Once again I offer some sage advice - "Don't let the tax tail wag the investing dog." Michael offers an excellent method to decide what to do. Note, he doesn't base the decision on the tax implication. If you are truly indifferent to holding the stock, taxwise, you might consider selling just the profitable shares if that's enough cash. Then sell shares at a loss each year if you have no other gains. That will let you pay the long term gain rate on the shares sold this year, but offset regular income in years to come. But. I'm hard pressed to believe you are indifferent, and I'd use Michel's approach to decide. Updated - The New Law is simply a rule requiring brokers to track basis. Your situation doesn't change at all. When you sell the shares, you need to identify which shares you want to sell. For older shares, the tracking is your responsibility, that's all. |
If I use stock as collateral for a loan and I default, does the bank pay taxes when they sell my stock? | The short answer is that the exchange of the stock in exchange for the elimination of a debt is a taxable exchange, and gains or losses are possible for the stock investor as well as the bank. The somewhat longer answer is best summarized as noting that banks don't usually accept stocks as collateral, mostly because stock values are volatile and most banks are not equipped to monitor the risk involved but it is very much part of the business of stock brokers. In the USA, as a practical matter I only know of stock brokerages offering loans against stock as part of the standard services of a "margin account". You can get a margin account at any US stock broker. The stockholder can deposit their shares in the margin account and then borrow around 50% of the value, though that is a bit much to borrow and a lower amount would be safer from sudden demands for repayment in the form of margin calls. In a brokerage account I can not imagine a need to repay a margin loan if the stocks dividends plus capital appreciation rises in value faster than the margin loan rate creates interest charges... Trouble begins as the stock value goes down. When the value of the loan exceeds a certain percentage of the stock value, which can depend on the stock and the broker's policy but is also subject to federal rules like Regulation T, the broker can call in the loan and/or take initiative to sell the stock to repay the loan. Notice that this may result in a capital gain or loss, depending on the investor's tax basis which is usually the original cost of the stock. Of course, this sale affects the taxes of the investor irregardless of who gets the money. |
Tracking down forgotten brokerage account | A company as large as Home Depot will have a fairly robust Human Resources department and would probably be able to steer you in the right direction: odds are they know the name of the brokerage and other particulars. I did some googling around, their # is (1-866-698-4347). Different states have different rules about how long an institution can have assets abandoned before turning them over to the state. California, as an example, has an abandoned property search site that you can use. That being said, I had some penny stocks sitting in a brokerage account I never touched for about 20 years and when I finally logged back in there they were, still sitting there. |
401k Rollover - on my own or through my financial advisor? | I thought the Finance Buff made a pretty solid argument for a financial advisor the other day: http://thefinancebuff.com/the-average-investor-should-use-an-investment-advisor-how-to-find-one.html But 1.5% is too expensive. The blog post at Finance Buff suggests several alternatives. He also has the great suggestion to use Vanguard's cheap financial planning service if you go with Vanguard. A lot of investing advice fails to consider the human factor. Sure it'd be great to rebalance exactly every 6 months and take precisely the amount of risk to theoretically maximize returns. But, yeah right. It's well-known that in the aggregate individual investors go to cash near market bottoms and then buy near market tops. It's not that they don't know the right thing to do necessarily, it's just that the emotional aspect is stronger than any of us expect. You shouldn't rely on sticking to your investments any more than you rely on sticking to your diet and exercise program ;-) the theoretically optimal solution is not the real-world-people-are-involved optimal solution. My own blog post on this suggests a balanced fund rather than a financial advisor, but I think the right financial advisor could well be a better approach: http://blog.ometer.com/2010/11/10/take-risks-in-life-for-savings-choose-a-balanced-fund/ Anyway, I think people are too quick to think of the main risk as volatility, and to think of investing as simple. Sure in theory it is simple. But the main risk is yourself. Fear at market bottoms, greed at market tops, laziness the rest of the time... so there's potential value in taking yourself out of the picture. The human part is the part that isn't simple. On whether to get a financial advisor in general (not just for investments), see also: What exactly can a financial advisor do for me, and is it worth the money? |
Are warehouse clubs like Costco and Sam's Club worth it? | We were members at costco, but decided not to renew. Meat was a definite cost savings, and laundry detergent as well. Diapers used to be a huge savings, but loblaws seems to be pricing things better now. We did by a bunch of Kirkland brand diapers and wipes before the membership ended. The problem we had was that you just get too much stuff - you save a bunch on that laundry detergent that you buy once every two years, or the chicken you have in your freezer forever. In Canada, the basic membership is $55 and we could not be certain we made that back, nor that we weren't over consuming as we walked the aisles. I have heard that the more expensive membership ($100) which gives you 2% back on purchases is a good way to gauge your usage and determine if it is worth it. It also costs nothing to give it a try - their policy is a full refund at any time, so in theory you could go in on your 364th day and get a refund. |
What is the role of a manager in a passively managed index fund? | There still is some buying and selling to do in a passively-managed fund. The stocks might pay dividends. If the fund manager didn't reinvest these dividends, the fund would begin to accumulate a cash position, which would cause it to stray from being an index fund. Stocks come and go from an index as well; if the fund is to maintain a composition that matches a particular index, this must be taken into account as well. The role of the manager is to ensure that the fund maintains the composition that it was intended to replicate. It doesn't involve as much "stock picking" that active managers do. The manager has less leeway as to what s/he buys and sells, but there still is work involved. |
Unusual real estate market with seemingly huge rental returns | I would not claim to be a personal expert in rental property. I do have friends and family and acquaintances who run rental units for additional income and/or make a full time living at the rental business. As JoeTaxpayer points out, rentals are a cash-eating business. You need to have enough liquid funds to endure uncertainty with maintenance and vacancy costs. Often a leveraged rental will show high ROI or CAGR, but that must be balanced by your overall risk and liquidity position. I have been told that a good rule-of-thumb is to buy in cash with a target ROI of 10%. Of course, YMMV and might not be realistic for your market. It may require you to do some serious bargain hunting, which seems reasonable based on the stagnant market you described. Some examples: The main point here is assessing the risk associated with financing real estate. The ROI (or CAGR) of a financed property looks great, but consider the Net Income. A few expensive maintenance events or vacancies will quickly get you to a negative cash flow. Multiply this by a few rentals and your risk exposure is multiplied too! Note that i did not factor in appreciation based on OP information. Cash Purchase with some very rough estimates based on OP example Net Income = (RENT - TAX - MAINT) = $17200 per year Finance Purchase rough estimate with 20% down Net Income = (RENT - MORT - TAX - MAINT) = $7500 per year |
How to manage 20 residential apartments | There are many property management companies are available in India. You can easily find trusted companies just searching on the google. They manage all these things legally. You just try this |
What are the consequences of IRS “reclassification” on both employer and employee? | You are confusing entirely unrelated things. First the "profit distribution" issue with Bob's S-Corp which is in fact tax evasion and will probably trigger a very nasty audit. Generally, if you're the sole employee of your own S-Corp, and the whole S-Corp income is from your own personal services, as defined by the IRS - there's no profit there. All the net income from such a S-Corp is subject to SE tax, either through payroll or through your K-1. Claiming anything else would be lying and IRS is notorious for going after people doing that. Second - the reclassification issue. The reason employers classify employees as contractors is to avoid payroll taxes (which the IRS gets through Bob's S-Corp, so it doesn't care) and providing benefits (that is Bob's problem, not the IRS). So in the scenario above, the IRS wouldn't care whose employee Bob is since Bob's S-Corp would have to pay all the same payroll taxes. The reclassification is an issue when employees are abused. See examples of Fedex drivers, where they're classified as contractors and are not getting any benefits, spend their own money on the truck and maintenance, etc. The employees are the ones who sued for reclassification, but in this case the IRS would be interested as well since a huge chunk of payroll taxes was not paid (driver's net is after car maintenance and payments, not before as it would be if he was salaried). So in your scenario reclassification is not as much a concern to Bob as his tax evasion scheme claiming earnings from performing personal services as "profits from S-Corp". A precedent to look at, as I mentioned elsewhere, would be the Watson v Commissioner case. |
Why would a public company not initiate secondary stock offerings more often? | What prevents a company from doing secondary public stock offerings on regular basis? The primary goal of a company doing secondary public offering is to raise more funds, that can be utilized for funding the business. If no funding is needed [i.e. company has sufficient funds, or no expansion plans], this funding creates a drag and existing shareholder including promoters loose value. For example with the current 100 invested, the company is able to generate say 125 [25 as profit]. If additional 100 is taken as secondary public offering, then with 200, the company should mark around 250, else it looses value. So if the company took additional 100 and did not / is not able to deploy in market, on 200 they still make 25 as profit, its bad. There are other reasons, i.e. to fight off hostile acquisition or dilute some of promoters shares etc. Thus the reasons for company to do a secondary PO are few and doing it often reduces the value for primary share holders as well as minority share holders. |
Starting an investment portfolio | Is this amount an adequate starting amount to begin investing with? Yes. You can open an account at a brokerage with this amount. I'm not sure I would invest in individual stocks at this point. Which services should I use to start buying shares? (Currently my bank offers this service but I'm willing to use other sources) I can't make UK-specific recommendations, but I'd compare your bank's fees to those of a discount broker -- as well as the variety and level of service available. I would like to regularly increase the amount invested in shares. Is it worth doing this in say £200 increments? Take a look at the fees associated with each investment. Divide the fee by the increment to see what percent you'll lose to fees/commissions. Keep in mind that you have to gain more than that percentage to start earning a positive return on your investment. If you have access to fee-free automatic mutual fund investments, and you can commit to the £200 amount on a regular basis going forward, then this can be a completely free way of making these incremental investments. See also this answer on dollar cost averaging, and my comment on the other answer on that question for how fees impact returns. When buying shares should I focus on say two or three companies, or diversify more? I would diversify into two or three different index funds. Read up on asset allocation. For example, you might invest 1/3 of your balance into S&P 500 index fund, bond index fund, and MSCI EAFE index fund (but that's just a rough example, and not necessarily good for you). I highly recommend "The Intelligent Asset Allocator" by William Bernstein for excellent info on diversification and asset allocation. |
Economics: negative consumer sentiment following failure to upsell | There are several different participants in the transaction, and you may not be aware of all the issues: In some business (fast food) they are required to ask if you want to super size, they are expected to do this at every transaction, but aren't paid more if you buy more. The employee can also decide that too much pressure to up-sell may push you to purchase the item online. That will cost them a commission, the store location a sale, and maybe drive you to a different company. It is also possible they don't have the training to be able to explain the difference between the items. |
How does a bank make money on an interest free secured loan? | Car dealers as well as boat dealers, RV dealers, maybe farm vehicle dealers and other asset types make deals with banks and finance companies to they can make loans to buyers. They may be paying the interest to the finance companies so they can offer a 0% loan to the retail customer for all or part of the loan term. Neither the finance company nor the dealer wants to make such loans to people who are likely to default. Such customers will not be offered this kind of financing. But remember too that these loans are secured by the asset - the car - which is also insured. But the dealer or the finance company holds that asset as collateral that they can seize to repay the loan. So the finance company gets paid off and the dealer keeps the profit he made selling the car. So these loans are designed to ensure the dealer nor the finance company looses much. These are called asset finance loans because there is always an asset (the car) to use as collateral. |
Who puts out buy/sell orders during earnings reports or other scheduled relevant information? | The early bird catches the worm. The first person who makes use of the information gains! That is why hedge funds pay billions of dollars to place their routers right at the center of wall street. Moreover, the information is not always correct. The article you are reading may be a rumor spread by someone on wall street.Then there is speculation and that is factored into the price. For example:- In spite of all the bad news from Greece, the market still continued to rise. This was because, everyone had an idea about what was going to happen and the price was factored in way before Greece actually defaulted. The game is way more complicated than it seems. If everyone sat down and read reports, opportunities to make millions of dollars would have been lost in those few seconds. (Please note:- I do not mean reading reports is bad) |
Offsetting capital losses against gains for stocks | The loss for B can be used to write off the gain for A. You will fill out a schedule 3 with cost base and proceeds of disposition. This will give you a $0 capital gain for the year and an amount of $5 (50% of the $10 loss) you can carry forward to offset future capital gains. You can also file a T1-a and carry the losses back up to 3 years if you're so inclined. It can't be used to offset other income (unless you die). Your C and D trades can't be on income account except for very unusual circumstances. It's not generally acceptable to the CRA for you to use 2 separate accounting methods. There are some intricacies but you should probably just use capital gains. There is one caveat that if you do short sales of Canadian listed securities, they will be on income account unless you fill out form T-123 and elect to have them all treated as capital gains. I just remembered one wrinkle in carrying forward capital losses. They don't reduce your capital gains anymore, but they reduce your taxable income. This means your net income won't be reduced and any benefits that are calculated from that (line 236), will not get an increase. |
What does a high operating margin but a small but positive ROE imply about a company? | The operating margin deals with the ability for a company to make a profit above the costs of running the company and generating sales. While ROE is how much money the company makes relative to the shareholders equity. I'd be willing to bet that if a company has a small ROE then it also has a quite large P/E (price to earnings) ratio. This would be caused by the company's stock being bid up in relation to its earnings and may not necessarily be a bad thing. People expect the high operating margin to help drive increased revenues in the future, and are willing to pay a higher price now for when that day comes. |
What is the correct answer for percent change when the start amount is zero dollars $0? | What is the probability of a real occasion (meaning not just an example) being exactly zero? Even if you have 0.1 you can still do the math. Also, it is kind of depending on the occasion. For example, you want to calculate the ROI of an investment for which you had zero capital and you made that investment with leverage, meaning you got a loan. In order to get that loan you should have provided a collateral, so in this case as a starting sum you use the collateral. In another example, say EAT it's difficult to have exactly zero. So, in most cases you won't have to deal with zero values, only positives and negatives. |
Why do some people say a house “not an investment”? | A house is a funny kind of investment. Normally when you invest, you do it to make money. The return on a house, though, isn't principally real money, it's the imputed rent - money that you would have needed to pay to rent the house. The thing about this imputed rent is that you consume it right away. Getting a bigger house and putting more money into it doesn't save you any money, it's just a way to consume more "house" - so, unlike regular investing, it's not really responsible and doesn't contribute to your financial well-being. |
New car price was negotiated as a “cash deal”. Will the price change if I finance instead? | So there are a few angles to this. The previous answers are correct in saying that cash is different than financing and, therefore, the dealer can rescind the offer. As for financing, the bank or finance company can give the dealership a "kickback" or charge a "fee" based on the customer's credit score. So everyone saying that the dealers want you to finance....well yes, so long as you have good credit. The dealership will make the most money off of someone with good credit. The bank charges a fee to the dealership for the loan to a customer with bad credit. Use that tactic with good credit...no problem. Use that tactic with bad credit.....problem. |
What kind news or information would make the price of a stock go up? | You should not trade based on what news is just released, if you try you will be too slow to react most of the time. In many cases the news is already priced into the stock during the anticipation of the news being released. Other times as soon as the news is released the price will gap up or down in response to the news. Some times when you think that the news is good, like new record profits have been achieved, but the share price goes down instead of up. This may be due to the expectation of the record profits by analysts to be 20% more than last year, but the company only achieves 10% more than last year. So the news is actually seen as bad because, even though record profits, it hasn't met expectations. The same can happen in the other direction, a company may make a loss and the share price goes up. This may be because it was expected to make a 50% loss but only made a 20% loss due to cost cutting, so this is seen as a good thing and the price can shoot up, especially if it had been beaten down for months. An other example is when the Federal Reserve in the USA put up interest rates earlier this month. Some may have seen this as bad news and expected share prices to fall, but instead prices rallied. This was actually seen as good news, firstly because it had been expected for a long time, and secondly and more importantly because a small rise in interest rates after many years of near zero rates is a sign of the economy finally starting to improve. If the economy is improving, that means more people will have jobs, more people will be spending more money, companies will start to make higher revenues and start to expand, which means higher profits and higher share prices. A better way to trade is to have a written trading plan and use technical analysis to develop a set of buy and sell criteria that you follow to the tea. Then back test your trading plan through various market conditions to make sure you get a positive expectancy. |
The Asset Allocation Paradox | Asset Allocation serves many purposes, not just mitigating risk via a diversification of asset classes, but also allowing you to take a level of risk that is appropriate for a given investor at a given time by how much is allocated to which asset classes. A younger investor with a longer timeframe, may wish to take a lot more risk, investing heavily in equities, and perhaps managed funds that are of the 'aggressive growth' variety, seeking better than market returns. Someone a little older may wish to pull back a bit, especially after a bull market has brought them substantial gains, and begin to 'take money off the table' perhaps by starting to establish some fixed income positions, or pulling back to slightly less risky index, 'value' or 'balanced' funds. An investor who is near or in retirement will generally want even less risk, going to a much more balanced approach with half or more of their investments in fixed income, and the remainder often in income producing 'blue chip' type stocks, or 'income funds'. This allows them to protect a good amount of their wealth from potential loss at a time when they have to be able to depend on it for a majority of their income. An institution such as Yale has very different concerns, and may always be in a more aggressive 'long term' mode since 'retirement' is not a factor for them. They are willing to invest mostly in very aggressive ways, using diversification to protect them from one of those choices 'tanking' but still overall taking a pretty high level of risk, much more so than might be appropriate for an individual who will generally need to seek safety and to preserve gains as they get older. For example look at the PDF that @JLDugger linked, and observe the overall risk level that Yale is taking, and in addition observe the large allocations they make to things like private equity with a 27%+ risk level compared to their very small amount of fixed income with a 10% risk level. Yale has a very long time horizon and invests in a way that is atypical of the needs and concerns of an individual investor. They also have as you pointed out, the economy of scale (with something like #17B in assets?) to afford to hire proven experts, and their own internal PHD level experts to watch over the whole thing, all of which very few individual investors have. For either class of investor, diversification, is a means to mitigate risk by not having all your eggs in one basket. Via having multiple different investments (such as picking multiple individual stocks, or aggressive funds with different approaches, or just an index fund to get multiple stocks) you are protected from being wiped out as might happen if a single choice might fail. For example imagine what would have happened if you had in 2005 put all your money into a single stock with a company that had been showing record profits such as Lehman Brothers, and left it there until 2008 when the stock tanked. or even faster collapses such as Enron, etc that all 'looked great' up until shortly after they failed utterly. Being allocated across multiple asset classes provides some diversification all on it's own, but you can also be diversified within a class. Yale uses the diversification across several asset classes to have lower risk than being invested in a single asset class such as private equity. But their allocation places much more of their funds in high risk classes and much less of their funds in the lowest risk classes such as fixed income. |
How to find a business consultant that would ensure that all your business activities are legal and compliant with all regulations? | Getting a specific service recommendation is off-topic, but the question of what type of professional you need seems on-topic to me. You may be looking for more than one professional in this case, but you could try these to start your search: Different people do things differently, but I think it would be pretty common to have a relationship (i.e. contract, retainer agreement, at least have met the person in case you have an "emergency") with a business law attorney and either a CPA or tax attorney. You may try not to use them too much to keep costs down, but you don't want to be searching for one after you have an issue. You want to know who you're going to call and may establish at least a basis working relationship. |
Any problem if I continuously spend my credit card more than normal people? | Sometimes when you are trying to qualify for a loan, the lender will ask for proof of your account balances and costs. Your scheme here could be cause for some questions: "why are you paying $20-30k to your credit card each month, is there a large debt you haven't disclosed?". Or perhaps "if you lost your job, would you be able to afford to continue to pay $20-30k". Of course this isn't a real expense and you can stop whenever you want, but still as a lender I would want to understand this fully before loaning to someone who really does need to pay $20-30k per month. Who knows this might hiding some troublesome issues, like perhaps a side business is failing and you're trying to keep it afloat. |
My university has tranfered me money by mistake, and wants me to transfer it back | Call in to the bank using a publicly available number to verify the request. |
How to handle taxes related to affiliate marketing? | Is it right that I request form W-9 or form W-8BEN (for non U.S. citizens) from the affiliate users before sending them payments? Not just OK. Required. I know that I have to send form 1099, but I don't know where does this form should go to. Should I send it to the IRS or the affiliate user or both? Both. There's also form 1096 that you need to send to the IRS. Read the instructions. Should I send form 1099 once a year or each time I make a payment to the affiliate? Once a year. Read the instructions. Do I have to send form 1099 when the money earned by the affiliate hit a certain threshold or I have to send it anyway? $600 or more requires the form, but you can send for any amount. Read the instructions. Is there any other forms or documents to request from or send to the affiliate user or the IRS? There may be additional forms. Especially if the recipient is a foreign person and you withhold taxes. Talk to your tax adviser. |
How do I set up Quickbooks for a small property rental company that holds its properties in separate LLC's? | You need one "company file" for each company that you want to track through QuickBooks. Looks like, in your case, that is at least the PM and the PH (as you labeled them in your question). The companies that just hold property and pay utilities might be simple enough that you don't need the full power of QB, in which case you might just track their finances on a spread sheet. Subsidiary companies will probably appear as "assets" of some sort on the books of the parent company. This set-up probably does limit liability at some level, but it's going to create a lot of overhead for your that incurs some expense either in your time or in actual fees paid. You should really consider whether the limitations on liability balance against those costs. (Think ahead to what you're going to do when you have to file taxes on this network of companies, whether you need separate insurance policies for each instead of getting one policy covering multiple properties, etc.) |
A deferred capital gains tax similar to the real estate 1031 Exchange but for securities reinvestment? | Sale of a stock creates a capital gain. It can be offset with losses, up to $3000 more than the gains. It can be deferred when held within a retirement account. When you gift appreciated stock, the basis follows. So when I gifted my daughter's trust shares, there was still tax due upon sale. The kiddy tax helped reduce but not eliminate it. And there was no quotes around ownership. The money is gone, her account is for college. No 1031 exchange exists for stock. |
Using Loan to Invest - Paying Monthly Installments with Monthly Income | The best strategy? Skip the loan. Find a way to invest for a low starting amount via a retirement account (such as a 401K or IRA in the United States) or non-retirement account. Use this money to buy individual stocks or funds. Every month put money from your regular income into this investment account. Then buy more stocks or sell if the conditions change based on what the market is doing, not to meet a loan payment. This helps you because if the price fluctuates you will buy more shares if the price is down; and you will buy fewer shares when the price is up. It also allows you to skip worrying about how to repay the loan. It also means that you not have to pull more money out of savings to make the final loan payments if it doesn't make as much money as you plan. Regarding your math. This is a better understanding of the money flow than the earlier question. |
How to decide if I should take my money with me or leave it invested in my home country? | The key is whether you plan to stay in Sweden forever, or plan to move back to Brazil after completion of 2 years. If you have not decided, best is stay invested in Brazil. Generally markets factor in currency prices so if you move the money into Krona and try and move it back it would in ideal market be more or less same. In reality it may be more or less and can't be predicted. |
Sell home to buy another home for cash | The cleanest way to accomplish this is to make the purchase of your new house contingent on the sale of your old one. Your offer should include that contingency and a date by which your house needs to sell to settle the contract. There will also likely be a clause that lets the seller cancel the contract within a period of time (like 24-48 hours) if another offer is received. This gives you (the buyer) at least an opportunity to either sell the house or come up with financing to complete the deal. For example, suppose you make an offer to buy a house for $300,000 contingent on the sale of your house, which the seller accepts. In the meantime, the seller gets an offer of $275,000 in cash (no contingency). The seller has to notify you of the offer and give you some time to make good on your offer, either by selling your house or obtaining $300,000 in financing. If you cannot, the seller can accept the cash offer. This is just a hypothetical example; the offer can have whatever clauses you agree to, but since sale contingencies benefit the buyer, the seller will generally want some compensation for that benefit, e.g. a larger offer or some other clause that benefits them. Or do I find a house to buy first, set a closing date far out and then use that time to sell my current one? Most sellers will not want to set a closing date very far out. Contingency clauses are far more common. In short, yes it's possible, and any competent realtor should be able to handle it. It also may mean that you have to either make a higher offer to compensate for the contingency and to dissuade the seller from entertaining other offers, or sell your home for less than you'd like to get the cash sooner. You can weigh those costs against the cost of financing the new house until yours sells. |
If gold's price implodes then what goes up? | It's not clear that anything needs to go up if gold goes down. In a bubble, asset prices can just collapse, without some other asset increasing to compensate. Economies are not a zero-sum game. On the other hand, gold may fall when people decide they don't need to hoard some store of value that, to their minds, never changes. It could very well indicate that there is more confidence in the broader economy. I am not a gold bug, so I don't much see the point in "investing" in something that is non-productive and also inedible, but to each his own. |
What do I do with a P11D Expenses & Benefits form? | The P11D is a record of the total benefits you've received in a tax year that haven't been taxed in another way, a bit like the P60 is a record of the total pay and tax you've paid in a tax year. Note that travel for business purposes shouldn't be taxable, and if that's what's being reported on the P11D you may need to make a claim for tax relief to HMRC to avoid having to pay the tax. I'm not sure whether it's normal for such expenses to be reported there. HMRC will normally collect that tax by adjusting your tax code after the P11D is issued, so that more tax is taken off your future income. So you don't need to do anything, as it'll be handled automatically. As to how you know it's accurate, if you have any doubts you'd need to contact your former employer and ask them to confirm the details. In general you ought to know what benefits you actually received so should at least be able to figure out if the number is plausible. If your "travel" was a flight to the USA, then probably it was. If it was a bus ticket, less so :-) If you fill in a tax return, you'll also have to report the amount there which will increase the tax you owe/reduce your refund. You won't be charged twice even if your tax code also changes, as the tax return accounts for the total amount of tax you've already paid. For travel benefits, the exact treatment in relation to tax/P11Ds is summarised here. |
How do I invest in the S&P 500? | Buy the ETF with ticker "SPY". This will give you exposure to exactly the S&P 500 stocks, This is similar to the mutual fund suggestion by Ben Miller, except that the ETF has several advantages over mutual funds, especially as regards taxes. You can find information on the difference between ETF and mutual fund in other questions on this site or by searching the web. |
What is a good investment vehicle for introducing kids to investing? | I'd also look into index funds (eg Vanguard) as they have low management fees. you can buy these as ETFs as well - so you can buy in at a very low starting amount. An index fund can also be a talking point for your kids about what an industry index is and how it relates to the companies that fall into it. Also about how mutual funds try to "beat the market" - and often fail. |
Why does the stock market index get affected when a terrorist attack takes place? | While JB King says some useful things, I think there is another fundamental reason why stock markets go down after disasters, either natural or man-made. There is a real impact on the markets - in the case of something like 9/11 due to closed airport, higher security costs, closer inspections on trade goods, tighter restrictions on visas, real payments for the rebuilding of destroyed buildings and insurance payouts for killed people, and eventually the cost of a war. But almost as important is the uncertainty and risk. Nobody knew what was going to happen in the days and weeks after an attack like that. Is there going to be another one a week later, or every week for the next year? Will air travel become essentially impractical? Will international trade be severely restricted? All those would have a huge, massive effect on the economy. You may argue that those things are very unlikely, even after something like 9/11. But even a small increase in the likelihood of a catastrophic economic crash is enough to start people selling. There is another thing that drives the market down. Even if most people are sure that there won't be a catastrophic economic crash, they know that other people think there might be and so will sell. That will drive the market down. If they know the market is going down, then sensible traders will start to sell, even if they think there is zero risk of a crash. This makes the effect worse. Eventually prices will drop so far that the people who don't think there is a crash will start to buy, so they can make a profit on the recovery. But that usually doesn't happen until there has been a substantial drop. |
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