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Do banks give us interest even for the money that we only had briefly in our account? | As mentioned in other answers the interest you make is negligible and the calculations would depend on the bank. In saying that the general trend is calculate daily, pay monthly. A typical scenario would be that every night at midnight the interest for your account at that point in time is calculated. This occurs every midnight and at the end of the month the sum of those calculations will be added to your account. You could have had several significant transactions pass through your account in one day although if the interest is calculated at a specific point in time some transactions may not contribute to any interest. These calculations are worth thinking about, even in circumstances of negligible returns, as it could assist when considering combining credit cards with home loan offset accounts so it is not a complete waste of time to understand how interest is calculated. The more you know ;) |
Should my husband's business pay my business? | Is it worth it for me to "charge" him? I can think of two reasons why you might want to charge your husband: |
Should I participate in a 401k if there is no company match? | Another consideration that is not in the hard numbers. Many people, myself included, find it hard to have the discipline to save for something that is so far off. The 401K plan at work has the benefit of pulling the money out before you see it, so you learn to live on what is left more easily. Also, depending on the type of 401K it attaches penalties to using the money early disincentive you to pull it out for minor emergencies. |
Simple and safe way to manage a lot of cash | Overall I think your idea is sound. The key here is to choose that 401k provider wisely and have a specific asset allocation plan (like Joe mentioned) Summary of this approach: Pluses: Minuses: I'd consider Vanguard for simple, no frills investing. If you're looking to get into choosing stocks, check out the Motley Fool. |
Is there a significant danger to market orders as opposed to limit orders? | If you want your order to go through no matter what then you should be using market orders rather than limit orders. With limit orders you may get the price you are after or better but you are not guaranteed to get your order transacted. With a market order you are guaranteed to get you order transacted but may get a price inferior to what you were after. Most times this should only be a few cents but can get much larger in a fast moving or less liquid market. You should incorporate this slippage into your trading plan. Maybe a better option for you, if you are looking at + or - 0.5% from the last price, would be to use conditional triggers (stop buy and sell orders) with your market orders. Once the market moves in your direction your conditional order will be triggered and the stock will be bought at current market price. |
How smart is it to really be 100% debt free? | A Simple Rule to discern between good and bad debt: Does this mean you should never buy a house or car? Of course not. But if you accrue bad debt, make sure that you can handle it and understand the costs and repercussions. |
Why does the biotechnology industry have such a high PE ratio? | I want to elaborate on some of the general points made in the other answers, since there is a lot that is special or unique to the biotech industry. By definition, a high P/E ratio for an industry can stem from 1) high prices/demand for companies in the industry, and/or 2) low earnings in the industry. On average, the biotech industry exhibits both high demand (and therefore high prices) and low earnings, hence its average P/E ratio. My answer is somewhat US-specific (mainly the parts about the FDA) but the rest of the information is relevant elsewhere. The biotech industry is a high-priced industry because for several reasons, some investors consider it an industry with significant growth potential. Also, bringing a drug to market requires a great deal of investment over several years, at minimum. A new drug may turn out to be highly profitable in the future, but the earliest the company could begin earning this profit is after the drug nears completion of Phase III clinical trials and passes the FDA approval process. Young, small-cap biotech companies may therefore have low or negative earnings for extended periods because they face high R&D costs throughout the lengthy process of bringing their first drug (or later drugs) to market. This process can be on the order of decades. These depressed earnings, along with high demand for the companies, either through early investors, mergers and acquisitions, etc. can lead to high P/E ratios. I addressed in detail several of the reasons why biotech companies are in demand now in another answer, but I want to add some information about the role of venture capital in the biotech industry that doesn't necessarily fit into the other answer. Venture capital is most prevalent in tech industries because of their high upfront capital requirements, and it's even more important for young biotech companies because they require sophisticated computing and laboratory equipment and highly-trained staff before they can even begin their research. These capital requirement are only expected to rise as subfields like genetic engineering become more widespread in the industry; when half the staff of a young company have PhD's in bioinformatics and they need high-end computing power to evaluate their models, you can see why the initial costs can be quite high. To put this in perspective, in 2010, "venture capitalists invested approximately $22 billion into nearly 2,749 companies." That comes out to roughly $7.8M per company. The same year (I've lost the article that mentioned this, unfortunately), the average venture capital investment in the biotech industry was almost double that, at $15M. Since many years can elapse between initial investment in a biotech company and the earliest potential for earnings, these companies may require large amounts of early investment to get them through this period. It's also important to understand why the biotech industry, as a whole, may exhibit low earnings for a long period after the initial investment. Much of this has to do with the drug development process and the phases of clinical trials. The biotech industry isn't 100% dedicated to pharmaceutical development, but the overlap is so significant that the following information is more than applicable. Drug development usually goes through three phases: Drug discovery - This is the first research stage, where companies look for new chemical compounds that might have pharmaceutical applications. Compounds that pass this stage are those that are found to be effective against some biological target, although their effects on humans may not be known. Pre-clinical testing - In this stage, the company tests the drug for toxicity to major organs and potential side effects on other parts of the body. Through laboratory and animal testing, the company determines that the drug, in certain doses, is likely safe for use in humans. Once a drug passes the tests in this stage, the company submits an Investigational New Drug (IND) application to the FDA. This application contains results from the animal/laboratory tests, details of the manufacturing process, and detailed proposals for human clinical trials should the FDA approve the company's IND application. Clinical trials - If the FDA approves the IND application, the company moves forward with clinical trials in human, which are themselves divided into several stages. "Post-clinical phase" / ongoing trials - This stage is sometimes considered Phase IV of the clinical trials stage. Once the drug has been approved by the FDA or other regulatory agency, the company can ramp up its marketing efforts to physicians and consumers. The company will likely continue conducting clinical trials, as well as monitoring data on the widespread use of the drug, to both watch for unforeseen side effects or opportunities for off-label use. I included such detailed information on the drug development process because it's vitally important to realize that each and every step in this process has a cost, both in time and money. Most biopharm companies won't begin to realize profits from a successful drug until near the end of Phase III clinical trials. The vast R&D costs, in both time and money, required to bring an effective drug through all of these steps and into the marketplace can easily depress earnings for many years. Also, keep in mind that most of the compounds identified in the drug discovery stage won't become profitable pharmaceutical products. A company may identify 5,000 compounds that show promise in the drug discovery stage. On average, less than ten of these compounds will qualify for human tests. These ten drugs may start human trials, but only around 20% of them will actually pass Phase III clinical trials and be submitted for FDA approval. The pre-clinical testing stage alone takes an average of 10 years to complete for a single drug. All this time, the company isn't earning profit on that drug. The linked article also goes into detail about recruitment delays in human trials, scheduling problems, and attrition rates for each phase of the drug development process. All of these items add both temporal and financial costs to the process and have the potential to further depress earnings. And finally, a drug could be withdrawn from the market even after it passes the drug development process. When this occurs, however, it's usually the fault of the company for poor trial design or suppression of data (as in the case of Vioxx). I want to make one final point to keep in mind when looking at financial statistics like the P/E ratio, as well as performance and risk metrics. Different biotech funds don't necessarily represent the industry in the same way, since not all of these funds invest in the same firms. For example, the manager of Fidelity's Select Biotechnology Portfolio (FBIOX) has stated that he prefers to weight his fund towards medium to large cap companies that already have established cash flows. Like all biopharm companies, these firms face the R&D costs associated with the drug development process, but the cost to their bottom line isn't as steep because they already have existing cash flows to sustain their business and accumulated human capital that should (ideally) make the development process more efficient for newer drugs. You can also see differences in composition between funds with similar strategies. The ishares Nasdaq Biotech Index Fund (IBB) also contains medium to large cap companies, but the composition of its top 10 holdings is slightly different from that of FBIOX. These differences can affect any metric (although some might not be present for FBIOX, since it's a mutual fund) as well as performance. For example, FBIOX includes Ironwood Pharmaceuticals (IRWD) in its top 10 holdings, while IBB doesn't. Although IBB does include IRWD because it's a major NASDAQ biotech stock, the difference in holdings is important for an industry where investors' perception of a stock can hinge on a single drug approval. This is a factor even for established companies. In general, I want to emphasize that a) funds that invest more heavily in small-cap biotech stocks may exhibit higher P/E ratios for the reasons stated above, and b) even funds with similar mixes of stocks may have somewhat different performance because of the nature of risk in the biotech industry. There are also funds like Vanguard's Healthcare ETF (VHT) that have significant exposure to the biotech industry, including small-cap firms, but also to major players in the pharmaceutical market like Pfizer, Johnson and Johnson, etc. Since buyouts of small-cap companies by large players are a major factor in the biotech industry, these funds may exhibit different financial statistics because they reflect both the high prices/low earnings of young companies and the more standard prices/established earnings of larger companies. Don't interpret anything I stated above as investment advice; I don't want anything I say to be construed as any form of investment recommendation, since I'm not making one. |
UK Limited Company paying third party medical costs | According to HMRC's manual BIM42105, you can't deduct expenses of this kind when calculating your profits for corporation tax: No deduction is allowed for expenditure not incurred wholly and exclusively for trade purposes So at the least, the company will have to pay corporation tax on this donation at some point, assuming it ever makes any profits. There's also the risk that HMRC would say that what is really happening is that you are making a personal donation to this person and the company is giving you income to allow you to do it. In that case, you'd be liable to income tax and employees national insurance, and the company liable to employers national insurance. It should then be deductible from corporation tax, though. |
HSBC Hong Kong's “Deposit Plus” Product: What is it, and what strategies to employ? | HSBC, Hang Seng, and other HK banks had a series of special savings account offers when I lived in HK a few years ago. Some could be linked to the performance of your favorite stock or country's stock index. Interest rates were higher back then, around 6% one year. What they were effectively doing is taking the interest you would have earned and used it to place a bet on the stock or index in question. Technically, one way this can be done, for instance, is with call options and zero coupon bonds or notes. But there was nothing to strategize with once the account was set up, so the investor did not need to know how it worked behind the scenes... Looking at the deposit plus offering in particular, this one looks a little more dangerous than what I describe. See, now we are in an economy of low almost zero interest rates. So to boost the offered rate the bank is offering you an account where you guarantee the AUD/HKD rate for the bank in exchange for some extra interest. Effectively they sell AUD options (or want to cover their own AUD exposures) and you get some of that as extra interest. Problem is, if the AUD declines, then you lose money because the savings and interest will be converted to AUD at a contractual rate that you are agreeing to now when you take the deposit plus account. This risk of loss is also mentioned in the fine print. I wouldn't recommend this especially if the risks are not clear. If you read the fine print, you may determine you are better off with a multicurrency account, where you can change your HK$ into any currency you like and earn interest in that currency. None of these were "leveraged" forex accounts where you can bet on tiny fluctuations in currencies. Tiny being like 1% or 2% moves. Generally you should beware anything offering 50:1 or more leverage as a way to possibly lose all of your money quickly. Since you mentioned being a US citizen, you should learn about IRS form TD F 90-22.1 (which must be filed yearly if you have over $10,000 in foreign accounts) and google a little about the "foreign account tax compliance act", which shows a shift of the government towards more strict oversight of foreign accounts. |
Relocating and buying a house simultaneously - How to handle pre-approval on fluctuating yearly income? | Assuming the numbers you gave are forecasted 2013 annual income, you should really use an average and give the lender 1 number, as long as you can provide documentation to back it up. Lenders aren't as sophisticated as considering your monthly income fluctuations into their underwriting algorithm. If you're not tied down to your existing lender, I highly recommend you to shop around. There isn't an "universal lending requirement". You'll be surprised at how flexible they are. Not as a recommendation to get around the rules, but just finding a lender that'll work with your situation. Try personal finance forums such as FatWallet or Slickdeal to find low-cost lenders: http://goo.gl/vIojT |
Is it wise to invest small amounts of money short-term? | You can expect about a 7% return when investing in the general market if your horizon is ten years or more. The market fluctuates, which means that you should be absolutely fine with losing 10% or more of your invested money during this period. You say yourself that: I have been setting aside money (...) into a savings account earmarked for that purpose (repairs/maintenance) so that I don't have to take out loans. It's obvious from your question that the purpose of this money is not savings, this is money that you are already investing, not in stocks or bonds but in your house. While this money sits around, of course you could put it into the market and hope that it grows. It all depends on your horizon, which in your case sounds like about 1 year. Is that long enough to be fairly sure you will make a profit? From what I've written so far, hopefully you can gather that the answer is no. If you choose to invest $6,000 but you need that money back in one year, you need to be aware of the risk that you'll instead end up with $5,400 or even less. Your options are then to: If you're asking for personal advice, my opinion would be this: you're already investing in your house. The housing market, like most markets, fluctuate. Whether you like it or not, you're already a victim (or benefactor) of this value fluctuation. The difference is that a house is something you'll live in for a long time (probably), that will give you daily joy in a way stocks and bonds won't. Of course, saving up money and investing them is always a good idea anyway. You should still save a small amount every month and put it into low/medium risk bonds, in my opinion. |
What is a financial security? | First, realize that Wikipedia is written by individuals, just like this board has thousands of members. The two definition were written and edited by different people, most likely. Think Venn diagram. The definition for financial instruments claims that it's the larger set, and securities is contained in a subset. Comparing the two, it seems pretty consistent. Yes, Securities include derivatives. Transferable is close to tradable, although to me tradable implies a market as compared to private transfers. I don't believe there's an opposite, per se, but there's 'other stuff.' My house has value, but is not a security. My coffee cup has no value. Back to the concept of Venn. There aren't really opposites, just items falling outside the set we're discussing. I'd caution, this is a semantic exercise. If you know what you're buying, a stock, a bond, a gold bar, etc, whether it's a financial instrument or security doesn't matter to you. |
Perform exercise-and-hold AND exercise-and-sell-to-cover? | Ask the folks administering your plan. They're the ones who define and implement the available choices for that specific plan. |
Why Demat/Stock Market Brokers don't support Credit Card Payin | Most credit cards allow you to take "cash advances", but the fees and limits for cash advances are different than for regular purchases. You can buy stock after taking a cash advance from your credit card. When you make a cash advance, you normally pay the credit card company a fee. When you make a regular purchase, the merchant (ie, the stockbroker) pays a fee. Additionally, credit card companies can make merchants wait up to 3 months to actually receive the money, in case the transaction is disputed. Your stockbroker is unlikely to want to pay the fee, accept the delay in receiving the funds, and risking that you will dispute the transaction. Having said that, many FOREX brokers will accept credit card deposits (treated as purchases), although FOREX can be considerably riskier than the stock market. Of course, if you max out your credit cards and lose all your money, you can normally negotiate to pay back the debt for less than the original amount, especially since it's unsecured debt. |
Should I use put extra money toward paying off my student loans or investing in an index fund? | First, I'd like to congratulate you on your financial discipline in paying off your loans and living well within your means. I have friends who make more than twice your salary with similar debt obligations, and they barely scrape by month to month. If we combine your student loan debt and unallocated income each month, we get about $1,350. You say that $378 per month is the minimum payment for your loans, which have an average interest rate of about 3.5%. Thus, you have about $1,350 a month to "invest." Making your loan payments is basically the same as investing with the same return as the loan interest rate, when it comes down to it. An interest rate of 3.5% is...not great, all things considered, and barely above inflation. However, that's a guaranteed return of 3.5%, more or less like a bond. As noted previously, the stock market historically averages 10% before inflation over the long run. The US stock market is right around its historic high at this point (DJIA is at 20,700 today, April 6th, 2017 - historic high hit just over 21,000 on March 1, 2017). Obviously, no one can predict the future, but I get the feeling that a market correction may be in order, especially depending on how things go in Washington in the next weeks or months. If that's the case (again, we have no way of knowing if it is), you'd be foolish to invest heavily in any stocks at this point. What I would do, given your situation, is invest the $1,350/month in a "portfolio" that's 50/50 stocks and "bonds," where the bonds here are your student loans. Here, you have a guaranteed return of ~3.5% on the bond portion, and you can still hedge the other 50% on stocks continuing their run (and also benefiting from dividends, capital gains, etc. over time). I would apply the extra loan payments to the highest-interest loan first, paying only the minimum to the others. Once the highest-interest loan is paid off, move onto the next one. Once you have all your loans paid off, your portfolio will be pretty much 100% stocks, at which point you may want to add in some actual bonds (say a 90/10 or 80/20 split, depending on what you want). I'm assuming you're pretty young, so you still have plenty of time to let the magic of compounding interest do its work, even if you happen to get into the market right before it drops (well, that, and the fact that you won't really have much invested anyway). Again, let me stress that neither I nor anyone else has any way of knowing what will happen with the market - I'm just stating my opinion and what my course of action would be if I were in your shoes. |
How much power does a CEO have over a public company? | This is a very good question and is at the core of corporate governance. The CEO is a very powerful figure indeed. But always remember that he heads the firm's management only. He is appointed by the board of directors and is accountable to them. The board on the other hand is accountable to the firm's shareholders and creditors. The CEO is required to disclose his ownership of the firm as well. Ideally, you (as a shareholder) would want the board of directors to be as independent of the management as it is possible. U.S. regulations require, among other things, the board of directors to disclose any material relationship they may have with the firm's employees, ex-employees, or their families. Such disclosures can be found in annual filings of a company. If the board of directors acts independently of the management then it acts to protect the shareholder's interests over the firm management's interest and take seemingly hard decisions (like dismissing a CEO) when they become necessary to protect the franchise and shareholder wealth. |
What is the purpose of property tax? | Property taxes, at least in Canada, are levied by the municipality or city in which the property is situated. For many cities, it is a significant source of income. Part of the justification from the municipal point of view is that the land is serviced, in that it generally has city services like water, sewer, garbage collection and the like. The taxes also commonly pay for city services like libraries, fire and ambulance. The tax rates vary widely across cities, so where your dream house is located may have a large impact on your overall tax bill. Property tax is more-or-less a government imposed lien on your house. You can be foreclosed on if you are unable to pay. This is a last resort of course, but can and does happen. |
Is it common in the US not to pay medical bills? | Is it common in the US not to pay medical bills? Certainly not. What some might do, however, is not pay them immediately, with the intent to negotiate them down or get them written off. You can also see if there's a discount for paying immediately - I've had moderate success with this, but it was during a time where we couldn't pay them all immediately, so I was more trying to figure out which ones to pay first rather than just haggling. The obvious risk is that they go to a collections agency and get reported as unpaid debt to your credit. I'm with you, however - it's a service that you received and it should be paid. I must precise that they are wealthy upscale members, who can afford paying these bills. Are you certain that they have large medical bills? I suppose it's possible that they have resources that can negotiate these on their behalf, or they don't care about the impact to their credit score. But to say "no one is doing it here" seems ludicrous. |
Would extending my mortgage cause the terms to be re-negotiated? | Run the numbers in advance. Understand what are the current rates for an additional 2nd mortgage, what are the rates for a brand new mortgage that will cover the additional funds. Understand what they are for another lender. Estimate the amount of paperwork involved in each option (new first, new 2nd, and new lender). Ask the what are the options they can offer you. Because you have estimated the costs in money and time for the different options, you can evaluate the offer they make. What they offer you can range from everything you want to nothing you would accept. What they offer will depend on several factors: Do they care to keep you as a customer?; Do they expect you to walk away?; are they trying to get rid of mortgages like the one you have?; Can they make more money with the plan they are offering you? You will be interested in the upfront costs, the monthly costs, and the amount of time required for the process to be completed. |
When should I walk away from my mortgage? | Many good answers here, especially that you have to consider that renting may be more expensive than you'd think. Also, keep in mind that rent is money that is completely lost. Even if the property has dropped in value, if you keep paying, you will be able to recuperate part of your mortgage payments when you sell the house. Normally this is about +-30%, but you need to calculate this yourself by dividing the expected sales price of the house by the total mortgage payments you have to make to pack back everything. So I'd say walking away only makes sense if the rents around where you want to live are much lower than (<+-30%) your mortgage payment, and stable. In stead of walking away immediately, perhaps you can refinance your mortgage with a new one? In 2008 the rates were around 5.8%, now they are around 3.6% or so. I don't know how it goes in the USA but in my country, if the rates drop, it is relatively to do this and it can save people who refinance thousands if not more. |
What is a call spread and how does it work? | A bullish (or 'long') call spread is actually two separate option trades. The A/B notation is, respectively, the strike price of each trade. The first 'leg' of the strategy, corresponding to B, is the sale of a call option at a strike price of B (in this case $165). The proceeds from this sale, after transaction costs, are generally used to offset the cost of the second 'leg'. The second 'leg' of the strategy, corresponding to A, is the purchase of a call option at a strike price of A (in this case $145). Now, the important part: the payoff. You can visualize it as so. This is where it gets a teeny bit math-y. Below, P is the profit of the strategy, K1 is the strike price of the long call, K2 is the strike price of the short call, T1 is the premium paid for the long call option at the time of purchase, T2 is the premium received for the short call at the time of sale, and S is the current price of the stock. For simplicity's sake, we will assume that your position quantity is a single option contract and transaction costs are zero (which they are not). P = (T2 - max(0, S - K2)) + (max(0, S - K1) - T1) Concretely, let's plug in the strikes of the strategy Nathan proposes, and current prices (which I pulled from the screen). You have: P = (1.85 - max(0, 142.50 - 165)) - (max(0, 142.50 - 145)) = -$7.80 If the stock goes to $150, the payoff is -$2.80, which isn't quite break even -- but it may have been at the time he was speaking on TV. If the stock goes to $165, the payoff is $12.20. Please do not neglect the cost of the trades! Trading options can be pretty expensive depending on the broker. Had I done this trade (quantity 1) at many popular brokers, I still would've been net negative PnL even if NFLX went to >= $165. |
Making an offer on a property - go in at market price? | From then on we've felt he was really pushy and rushing us to make a decision (we need to lock in a good rate, its a sellers market, it'll go fast, snooze loose, etc). This is the first reason for walking away. I understand that all those factors might be true but my question is: How do I know we made a good offer? I'm going to be blunt, here: You don't. You work out ahead of time what you will pay (ignore the agent) and you make the offer on the basis of your own research, research you spent months undertaking. The listed price on the location is $375,000 and according to our agent similar units over the last few years had sold for that amount. So our agent suggested making an offer at market price. According to the agent. I'm going to be blunt here, what do any of the real estate sites out there - that offer a wealth of information for free - indicate? If you don't know, then yet again you don't know if you made the right offer or not. Do some research now by yourself. I would be shocked if your offer was at the right level. Set your emotions aside - there are a gazillion houses out there. |
One of my stocks dropped 40% in 2 days, how should I mentally approach this? | Have the reasons you originally purchased the stock changed? Is the company still sound? Does the company have a new competitor? Has the company changed the way they operate? If the company is the same, except for stock price, why would you change your mind on the company now? ESPECIALLY if the company has not changed, -- but only other people's PERCEPTION of the company, then your original reasons for buying it are still valid. In fact, if you are not a day-trader, then this COMPANY JUST WENT ON SALE and you should buy more. If you are a day trader, then you do care about the herd's perception of value (not true value) and you should sell. DAY TRADER = SELL BUY AND HOLD (WITH INTELLIGENT RESEARCH) = BUY MORE |
Why do 10 year-old luxury cars lose so much value? | They start at a higher price and repairs are more expensive than with a standard car. From my experience, many luxury cars get too expensive to keep after about 10 years due to increased maintenance costs. |
Why is stock dilution legal? | Alot of these answers have focused on the dilution aspect, but from a purely legal aspect, there are usually corporate bylaws that spell out what kind of vote and percentage of votes is needed to take this type of action. If all other holders of stock voted to do this, so 90% for, and you didn't, so 10% against, it's still legal if that vote meets the threshold for taking the action. As an example of this, I known of a startup where employees got $0/share for their vested shares when the company was sold because the voting stock holders agreed to it. Effectively the purchase amount was just enough to cover debts and preferred stock. |
How does the market adjust for fees in ETPs? | The market doesn't really need to adjust for fees on ETF funds that are often less than 1/10th of a percent. The loss of the return is more than made up for by the diversification. How does the market adjust for trading fees? It doesn't have to, it's just a cost of doing business. If one broker or platform offers better fee structures, people will naturally migrate toward the lower fees. |
What does the term “match the market” mean? | There was a time when everyone felt their goal was to beat the respective index they followed. But of course, in aggregate, that's a mathematical impossibility. The result was that the average say large cap fund, whose benchmark index would be the S&P, would lag on average by 1-2%. A trend toward ETFs that would match the market had begun, and the current ETFs that follow the S&P are sub .1% expense. For the fact that studies (Google "Dalbar" for examples) show the typical investor lags not by 1% or 2%, but by far more for reasons of bad timing, my own statement that "I've gotten a return these past years of .06% less than the S&P" would have been seen many years ago as failure, now it's bragging. It handily beats the typical investor and yet, can be had by anyone wishing to stay the course, keep the ETF very long term. |
Can limits be placed by a merchant on which currency notes are accepted as legal tender? [duplicate] | Can they reject a hundred dollar bill as a payment of debt?! No. A creditor cannot refuse payment in cash, whatever denomination you use. HOWEVER, when you're buying stuff - you don't owe anything to the business owner. There's no debt, so the above rule doesn't apply. As long as there's no debt in existence, the matter of payment is decided between two parties based on the mutual agreement. The demand not to use large bills is reasonable in places like 7/11 or taxi-cab that are frequently robbed, or at a small retailer that doesn't want to invest into forgery detection and fraud prevention. So the answer to this question: Is it the case where this practice of accepting small bills and rejecting large bills is perfectly legal? Is yes. You can find the full explanation on Treasury.gov, including code references. |
Advice on low-risk long-term strategy for extra cash? | Look at a mixture of low-fee index funds, low-fee bond funds, and CDs. The exact allocation has to be tailored to your appetite for risk. If you only want to park the money with essentially no risk of loss then you need FDIC insured products like CDs or a money market account (as opposed to a money market fund which is not FDIC insured). However as others have said, interest rates are awful now. Since you are in your early 30's, and expect to keep this investment for 10+ years, you can probably tolerate a bit of risk. Also considering speaking to a tax professional to determine the specific tax benefits/drawbacks of one investment strategy (funds and CDs) versus another (e.g. real estate). |
Can I convert spread option into regular call or put? | Just so I'm clear- the end result is a long call, and you think the stock is going up. There is nothing wrong with that fundamentally. Be aware though: That's a negative theta trade. This means if your stock doesn't increase in price during the remaining time to expiration of your call option, the option will lose some of its value every day. It may still lose some of its value every day, depending on how much the stock price increases. The value of the call option just goes down and down as it approaches maturity, even if the stock price stays about the same. Being long a call (or a put) is a tough way to make money in the options market. I would suggest using an out-of-the-money butterfly spread. The potential returns are a bit less. However, this is a cheap positive theta trade so you avoid time decay on the value of the option. |
The doctor didn't charge the health insurance in time, am I liable? | Here's my thought - call the insurance company back. Ask them to just tell you what the "reasonable and customary" approved payment would be. Offer that exact amount to the hospital, it's what they would have gotten anyway, and you learned a cheap lesson. |
Is there a benefit, long term, to life insurance for a youngish, debt, and dependent free person? | As Mhoran stated, no dependents, no need. Even with dependants, insurance is to cover those who would otherwise have a hardship. Once the kids are off to college and house paid for, the need drops dramatically. There are some rather complex uses for insurance when estates are large but potentially illiquid. Clearly this doesn't apply to you. |
Understanding the phrase “afford to lose” better | I think that people only use the phrase "only spend what you can afford to lose" when they are talking about the most risky or speculative investments, or even gambling. When talking about gambling, the following quote is a bottom line: The speculative investment that brought me to this question via google is how much should I invest in Bitcoin? I was tempted to put in 10% of my investments, not including the 6 month safety fund and not including equity in my home. Now thinking about this question, it seems that it depends on your income as a percentage of your investment income (which should grow in proportion to the whole over time). For example: Early stage of career, not much investment income: 20% Mid career: 5% Mid-late career, moving to more safe investments: 5% Late career, retirement: 1% Another way to calculate would be as a percentage of the amount you put into retirement savings per year. Maybe 10% of this figure when you're young and 1% nearer to retirement. |
What is a good service that will allow me to practice options trading with a pretend-money account? | Try ThinkOrSwim by TDAmeritrade. It allows you to paper trade with a powerful trading platform. There's also a mobile app so you can trade on the go. Good luck! |
Investing in a offshore bank account | when investing in index funds Index fund as the name suggests invests in the same proportion of the stocks that make up the index. You can choose a Index Fund that tracks NYSE or S&P etc. You cannot select individual companies. Generally these are passively managed, i.e. just follow the index composition via automated algorithms resulting in lower Fund Manager costs. is it possible to establish an offshore company Yes it is possible and most large organization or High Net-worth individuals do this. Its expensive and complicated for ordinary individuals. One needs and army of International Tax Consultants / International Lawyers / etc but do I have to pay taxes from the capital gains at the end of the year? Yes Canada taxes on world wide income and you would have to pay taxes on gains in Canada. Note depending on your tax residency status in US, you may have to pay tax in US as well. |
Should I always pay my credit at the last day possible to maximize my savings interest? | Mostly ditto to Dillip Sarwate. Let me just add: I don't know how you're making your payments, whether through the biller's web site, your bank's web site, by mail, in person, etc. But whatever the mechanism, if there is a chance that waiting until the due date to pay may mean that you will miss the due date: don't. The cost of a late payment charge is likely to far exceed any interest you would collect on your savings. Bear in mind that we are talking pennies here. I don't know how much the monthly bills that we are discussing here come to. Say it's $3,000. I think that would be a lot for most people. You say you're getting 3.6% on your savings. So if, on the average, you pay a bill 2 weeks later than you might have, you're getting an extra 2 / 52 x 3.6% x $3,000 in interest, or $4 per month. I think the last time I paid a late fee on a credit card it was $35, so if you make one mistake every 8 months and end up getting a late fee it will outweigh any savings. Personally, I pay most of my bills through either my bank's web site or the biller's web site. I schedule all payments when I get a paycheck, and I generally try to schedule them for 1 week before the due date, so there's plenty of breathing room. |
Why do stocks go up? Is it due to companies performing well, or what else? [duplicate] | The value of a stock ultimately is related to the valuation of a corporation. As part of the valuation, you can estimate the cash flows (discounted to present time) of the expected cash flows from owning a share. This stock value is the so-called "fundamental" value of a stock. What you are really asking is, how is the stock's market price and the fundamental value related? And by asking this, you have implicitly assumed they are not the same. The reason that the fundamental value and market price can diverge is that simply, most shareholders will not continue holding the stock for the lifespan of a company (indeed some companies have been around for centuries). This means that without dividends or buybacks or liquidations or mergers/acquisitions, a typical shareholder cannot reasonably expect to recoup their share of the company's equity. In this case, the chief price driver is the aggregate expectation of buyers and sellers in the marketplace, not fundamental evaluation of the company's balance sheet. Now obviously some expectations are based on fundamentals and expert opinions can differ, but even when all the experts agree roughly on the numbers, it may be that the market price is quite a ways away from their estimates. An interesting example is given in this survey of behavioral finance. It concerns Palm, a wholly-owned subsidiary of 3Com. When Palm went public, its shares went for such a high price, they were significantly higher than 3Com's shares. This mispricing persisted for several weeks. Note that this facet of pricing is often given short shrift in standard explanations of the stock market. It seems despite decades of academic research (and Nobel prizes being handed out to behavioral economists), the knowledge has been slow to trickle down to laymen, although any observant person will realize something is amiss with the standard explanations. For example, before 2012, the last time Apple paid out dividends was 1995. Are we really to believe that people were pumping up Apple's stock price from 1995 to 2012 because they were waiting for dividends, or hoping for a merger or liquidation? It doesn't seem plausible to me, especially since after Apple announced dividends that year, Apple stock ended up taking a deep dive, despite Wall Street analysts stating the company was doing better than ever. That the stock price reflects expectations of the future cash flows from the stock is a thinly-disguised form of the Efficient Market Hypothesis (EMH), and there's a lot of evidence contrary to the EMH (see references in the previously-linked survey). If you believe what happened in Apple's case was just a rational re-evaluation of Apple stock, then I think you must be a hard-core EMH advocate. Basically (and this is elaborated at length in the survey above), fundamentals and market pricing can become decoupled. This is because there are frictions in the marketplace making it difficult for people to take advantage of the mispricing. In some cases, this can go on for extended periods of time, possibly even years. Part of the friction is caused by strong beliefs by market participants which can often shift pressure to supply or demand. Two popular sayings on Wall Street are, "It doesn't matter if you're right. You have to be right at the right time." and "It doesn't matter if you're right, if the market disagrees with you." They suggest that you can make the right decision with where to put your money, but being "right" isn't what drives prices. The market does what it does, and it's subject to the whims of its participants. |
Any Ubiquitous Finance App That is on Mac, iOS and Windows? | Mint.com is a web app with an iPhone (and Android) app. Also, You Need A Budget appears to support all three. |
What is the meaning of “writing put options”? | Writing options means "selling" options and "put" options are contracts to sell a defined security (the underlying), at a specific date (expiration date) and at a specific price (strike price). So, writing put options simply mean selling to others contracts to sell. Your profit is limited to the premium but your loss may be unlimited in a falling market. |
Outstanding car bill, and I am primary but have not driven it for 2 years | What can you do? Pay the loan or face the debt collectors. The finance company don't care who now keeps the car, or who drives it. There's money outstanding on the loan, and your signature on the loan form. That's why co-signing a loan for someone else so often ends in tears. |
How do I go about finding an honest & ethical financial advisor? | If your financial needs aren't complex, and mostly limited to portfolio management, consider looking into the newish thing called robo-advisers (proper term is "Automated investing services"). The difference is that robo-advisers use software to manage portfolios on a large scale, generating big economy of scale and therefore offering a much cheaper services than personal advisor would - and unless your financial needs are extremely complex, the state of the art of scaled up portfolio management is at the point that a human advisor really doesn't give you any value-add (and - as other answers noted - human advisor can easily bring in downsides such as conflict of interest and lack of fiduciary responsibility). disclaimer: I indirectly derive my living from a company which derives a very small part of their income from a robo-adviser, therefore there's a possible small conflict of interest in my answer |
Should I sell my rental property or keep it if it has mold growth problems? | I'm going to assume that you will spend the money to fix the mold problem correctly. Using your numbers, after that is done, the home is worth perhaps $280k. To evaluate whether or not to sell, the amount you have spent on the house is irrelevant. The only thing you need to ask yourself is this: Would I spend $280k to buy this house today? You might, if you were happy with the rental income that you were getting. If the house is fully rented, it earns you $24k/year, which is an 8.6% return if you had purchased the house today at $280k. Of course, you will have vacancies, taxes, and other expenses bringing that return number down. Figure out what that is, and see if you are happy with the return based on those numbers. If you decide it would be a bad investment for you at $280k, then sell the house. By the way, this question works for any investment, not just real estate. When deciding whether or not to sell stock, the same thing applies. It is irrelevant what your cost basis is. You only need to ask yourself if the stock would be a good buy for you at the current price. |
Are there any market data providers that provide a query language? | You can give YQL a try. I'm not sure it can do the query you want, but for example you can do: (try it here) And this best thing about it - it's free. |
How to Calculate Profit and Loss for trading position? | Month to date For the month to date (MTD), the price on Feb 28th is $4.58 and the price on March 16th is $4.61 so the return is which can be written more simply as The position is 1000 shares valued at $4580 on Feb 28th, so the profit on the month to date is Calendar year to date For the calendar year to date (YTD), the price on Dec 31st is $4.60 and the price on Feb 28th is $4.58 so the return to Feb 28th is The return from Feb 28th to March 16th is 0.655022 % so the year to date return is or more directly So the 2011 YTD profit on 1000 shares valued at $4600 on Dec 31st is Year to date starting Dec 10th For the year to date starting Dec 10th, the starting value is and the value on Dec 31st is 1000 * $4.60 = $4600 so the return is $4600 / $4510 - 1 = 0.0199557 = 1.99557 % The year to date profit is therefore Note - YTD is often understood to mean calendar year to date. To cover all the bases state both, ie "calendar YTD (2011)" and "YTD starting Dec 10th 2010". Edit further to comment For the calendar year to date, with 200 shares sold on Jan 10th with the share price at $4.58, the return from Dec 31st to Jan 10th is The return from Jan 10th to Feb 28th is The return from Feb 28th to March 16th is The profit on 1000 shares from Dec 31st to Jan 10th is $4600 * -0.00434783 = -$20 The profit on 800 shares from Jan 10th to Feb 28th is zero. The profit on 800 shares from Feb 28th to March 16th is So the year to date profit is $4. |
What is a checking account and how does it work? | As others have noted, in the U.S. a checking account gives you the ability to write a check, while a savings account does not. I think you know what a check is even if you don't use them, right? Let me know if you need an explanation. Personally, I rarely write paper checks any more. I have an account for a small side business, and I haven't bothered to get new checks printed since I moved 6 years ago even though the checks still have my old address, because I've only written I think 3 paper checks on that account in that time. From the bank's point of view, there are all sorts of government regulations that are different for the two types of accounts. But that is probably of little concern to you unless you own a bank. If the software you have bought allows you to do the things you need to do regardless of whether you call the account "savings" or "checking", then ... who cares? I doubt that the banking software police will come to your house and beat you into unconsciousness and arrest you because you labeled an account "checking" that you were supposed to label "savings". If one account type does what you need to do and the other doesn't, then use the one that works. |
Working for recruiter on W-2 vs. working for client on 1099? | I don't think anyone can give you a definitive answer without knowing all about your situation, but some things to consider: If you are on a 1099, you have to pay self-employment tax, while on a W-2 you do not. That is, social security tax is 12.4% of your income. If you're a 1099, you pay the full 12.4%. If you're W-2, you pay 6.2% and the employer pays 6.2%. So if they offer you the same nominal rate of pay, you're 6.2% better off with the W-2. What sort of insurance could you get privately and what would it cost you? I have no idea what the going rates for insurance are in California. If you're all in generally good health, you might want to consider a high-deductible policy. Then if no one gets seriously sick you've saved a bunch of money on premiums. If someone does get sick you might still pay less paying the deductible than you would have paid on higher premiums. I won't go into further details as that's getting off into another question. Even if the benefits are poor, if there are any benefits at all it can be better than nothing. The only advantage I see to going with a 1099 is that if you are legally an independent contractor, then all your business expenses are deductible, while if you are an employee, there are sharp limits on deducting employee business expenses. Maybe others can think of other advantages. If there is some reason to go the 1099 route, I understand that setting up an LLC is not that hard. I've never done it, but I briefly looked into it once and it appeared to basically be a matter of filling out a form and paying a modest fee. |
Does a growing economy mean the economy is becoming less efficient? | A growing economy should become more efficient because of increased opportunity for division of labor: specialization. External regulation or monetary policy external to the free market can cause parts of the economy to grow in response to said regulations. This creates inefficiencies that are wrung out of the economy after the policies reverse. A couple of examples: Tinkering with the economy causes the inefficiencies. |
What's so hard about a mutual fund manager pricing their mutual fund? | Remember that in most news outlets journalists do not get to pick the titles of their articles. That's up to the editor. So even though the article was primarily about ETFs, the reporter made the mistake of including some tangential references to mutual funds. The editor then saw that the article talked about ETFs and mutual funds and -- knowing even less about the subject matter than the reporter, but recognizing that more readers' eyeballs would be attracted to a headline about mutual funds than to a headline about ETFs -- went with the "shocking" headline about the former. In any case, as you already pointed out, ETFs need to know their value throughout the day, as do the investors in that ETF. Even momentary outages of price sources can be disastrous. Although mutual funds do not generally make transactions throughout the day, and fund investors are not typically interested in the fund's NAV more than once per day, the fund managers don't just sit around all day doing nothing and then press a couple buttons before the market closes. They do watch their NAV very closely during the day and think very carefully about which buttons to press at the end of the day. If their source of stock price data goes offline, then they're impacted almost as severely as -- if less visibly than -- an ETF. Asking Yahoo for prices seems straightforward, but (1) you get what you pay for, and (2) these fund companies are built on massive automated infrastructures that expect to receive their data from a certain source in a certain way at a certain time. (And they pay a lot of money in order to be able to expect that.) It would be quite difficult to just feed in manual data, although in the end I suspect some of these companies did just that. Either they fell back to a secondary data supplier, or they manually constructed datasets for their programs to consume. |
Is there any way to pay online in a country with no international banking system | If the vendor accepts cryptocurrencies, this may be your only option. It's not clear if exporting cryptocurrency violates Ethiopian law, but at least cryptocurrencies have not yet been banned. If you can find someone who can trade you cryptocurrency, you can send it anywhere. Because cryptocurrencies are still extremely price volatile, I recommend you use Ripple, the fastest I can find. It can 100% confirm transactions on average within 10 seconds. This will keep your exposure to price volatility at a minimum if you send the cryptocurrency as soon as you buy it. If you choose this route, please take precausions. Your government may retroactively ban it and pursue you. Considering the Ethiopian government's history, this is not unlikely, and banning cryptocurrencies outright is. |
How does owning a home and paying on a mortgage fit into family savings and investment? | Unless you plan to sell your home and live in a box during your retirement I wouldn't consider it an investment that is a viable replacement for a retirement account. Consider this: Even if housing prices DO go way up, you still need a place to live. When you sell that house and try to buy another one to live in, you will find that the other houses went up in price too, negating your gain. The only way this might work is if you buy a much bigger house than you will need later and trade down to pull out some equity, or consider a reverse-mortgage for retirement income. |
What is Chit funds. And how to invest in it? | Chit funds started as group of people pooling money every month and drawing a lot to determine who would get the entire funds that month. For example 5 people pool together Rs 1000/- on first month person "A" gets the draw and takes the Rs 5000/-. Next month again same set of people pool Rs 1000/-, the person who got the money last month is removed from the list and again a draw is made. Thus everyone pays Rs 1000/- for 5 month and gets back Rs 5000/- some sooner and some later. This was done more to buy big ticket purchases, or group of ladies getting together. There is always a leader who would ensure that everyone pays and manages the process. In more business oriented chit fund, unknown people come together and contribute Rs 1000/-. There is a organiser who is a local strong man who runs this and ensures that everyone pays. The variation here is that every month instead of a lucky draw, you can buy for discount. Say this month you need the money badly, you are willing to take only Rs 4800/-, there maybe some one who is more desperate and may say he is OK with only Rs 4600/-. The balance Rs 400 is distributed amongst the other 4 members. Thus the other who had contributed Rs 5000/- over 5 months now get Rs 100 more. The next month this person is eliminated from bidding, and others 4 can bid for Rs 5000 or less. The balance is again re-distributed amongst others. This is typically run by people who do not get loans at good rates from bank and essentially borrow outside the financial industry. The people who are part of this most of the times make good returns / better than banks. But this entire industry is unregulated and hence the Strong man can dupe you, there are cases where people who take the first shot at money vanish without trace. Every city has quite a few of such funds running. It is advisable you do not indulge in such funds. |
Details on opening a small corporation in ontario | The Canada Revenue Agency does indeed put out just the guide you want. It's at http://www.cra-arc.gc.ca/E/pub/tg/rc4070/rc4070-e.html - you should always take a good look at URLs to make sure they're really from the government and not from some for-profit firm that will charge you to fill out forms for free services. It covers ways to structure your business (probably a sole proprietor in your case), collecting and submitting GST or HST, sending in payroll remittances (if you pay yourself a T4 salary), and income tax including what you can deduct. It's a great place to start and you can use it as a source of keywords if you want to search for more details. |
GBP savings, what to do with them if leaving the U.K. in about 2 years time? | In general, to someone in a similar circumstance I might suggest that the lowest-risk option is to immediately convert your excess currency into the currency you will be spending. Note that 'risk' here refers only to the variance in possible outcomes. By converting to EUR now (assuming you are moving to an EU country using the EUR), you eliminate the chance that the GBP will weaken. But you also eliminate the chance that the GBP will strengthen. Thus, you have reduced the variance in possible outcomes so that you have a 'known' amount of EUR. To put money in a different currency than what you will be using is a form of investing, and it is one that can be considered high risk. Invest in a UK company while you plan on staying in the UK, and you take on the risk of stock ownership only. But invest in a German company while you plan on staying in the UK, you take on the risk of stock ownership + the risk of currency volatility. If you are prepared for this type of risk and understand it, you may want to take on this type of risk - but you really must understand what you're getting into before you do this. For most people, I think it's fair to say that fx investing is more accurately called gambling [See more comments on the risk of fx trading here: https://money.stackexchange.com/a/76482/44232]. However, this risk reduction only truly applies if you are certain that you will be moving to an EUR country. If you invest in EUR but then move to the US, you have not 'solved' your currency volatility problem, you have simply replaced your GBP risk with EUR risk. If you had your plane ticket in hand and nothing could stop you, then you know what your currency needs will be in 2 years. But if you have any doubt, then exchanging currency now may not be reducing your risk at all. What if you exchange for EUR today, and in a year you decide (for all the various reasons that circumstances in life may change) that you will stay in the UK after all. And during that time, what if the GBP strengthened again? You will have taken on risk unnecessarily. So, if you lack full confidence in your move, you may want to avoid fully trading your GBP today. Perhaps you could put away some amount every month into EUR (if you plan on moving to an EUR country), and leave some/most in GBP. This would not fully eliminate your currency risk if you move, but it would also not fully expose yourself to risk if you end up not moving. Just remember that doing this is not a guarantee that the EUR will strengthen and the GBP will weaken. |
What things are important to consider when investing in one's company stock? | I would pass on their deal if they will only match if you invest in their stock. Think about when/if the company falls on bad times. What happens to the stock of a company when bad times come? The board of directors will reduce or eliminate the dividend payout. Current and potential investors will take notice. Current owners of the stock will sell. Potential investors will avoid buying. The price of the stock with go down. And, quite likely, the company will lay off workers. If/when that happens you would find yourself without a job and holding (almost) worthless stock as your savings. That would be quite a bad situation to be in. |
Definition of gross income (Arizona state tax filing requirements) | Many states have a simple method for assessing income tax on nonresidents. If you have $X income in State A where you claim nonresident status and $Y income overall, then you owe State A a fraction (X/Y) of the income tax that would have been due on $Y income had you been a resident of State A. In other words, compute the state income tax on $Y as per State A rules, and send us (X/Y) of that amount. If you are a resident of State B, then State B will tax you on $Y but give you some credit for taxes paid to State A. Thus, you might be required to file a State A income tax return regardless of how small $X is. As a practical matter, many commercial real-estate investments are set up as limited partnerships in which most of the annual taxable income is a small amount of portfolio income (usually interest income that you report on Schedule B of Form 1040), and the annual bottom line is lots of passive losses which the limited partners report (but do not get to deduct) on the Federal return. As a result, State A is unlikely to come after you for the tax on, say, $100 of interest income each year because it will cost them more to go after you than they will recover from you. But, when the real estate is sold, there will (hopefully) be a big capital gain, most of which will be sheltered from Federal tax since the passive losses finally get to be deducted. At this point, State A is not only owed a lot of money (it knows nothing of your passive losses etc) but, after it processes the income tax return that you filed for that year, it will likely demand that you file income tax returns for previous years as well. |
Automatic transaction on credit card to stay active | I agree with the rest of the answers -- you're probably better off just using it for some predictable flat-rate recurring monthly service like NetFlix, or making a charitable donation if you're into that sort of thing. But since that wasn't what you asked, I'll try to provide an answer: If you don't mind throwing away money, send money to yourself using PayPal. Here's how: Set up a PayPal Business Account, and use your personal PayPal account to send funds to it by setting up a PayPal subscription. PayPal says "You can have one Consumer account and one Business account." A PayPal Payments Standard business account has no monthly fee -- only transaction fees. According to PayPal, "in order to set up a repeating payment, [you] would need to create a Subscription or Recurring Payments button from the Merchant Services tab" (in the Business Account). You would then click the link/button to set up the subscription from your personal PayPal account, to make it send money to your Business account on an automatic schedule. You can then, at your own leisure, send the money back to your personal account without paying a second transaction fee, then finally send it back to your bank account. Or, if your bank account is not yet tied to your personal account, you can tie it to the business account instead, and deposit the funds into your bank account. Unfortunately, this step can't be automated. Again, to reiterate, you're much better off just using it for something recurring. |
Why does the Fed use PCE over CPI? | The reason is in your own question. The answer is simple. They use that code to tax the product otherwise it would just be out of pocket expenses. |
How do you report S-corporation Shareholder loans / capital contributions? | As the owner of the S-corp, it is far easier for you to move money in/out of the company as contributions and distributions rather than making loans to the company. Loans require interest payments, 1099-INT forms, and have tax consequences, whereas the distributions don't need to be reported because you pay taxes on net profits regardless of whether the money was distributed. If you were paid interest, disregard this answer. I don't know if or how you could re-categorize the loan once there's a 1099-INT involved. If no interest was ever paid, you just need to account for it properly: If the company didn't pay you any interest and never issued you a 1099-INT form (i.e. you wrote a check to the company, no promissory note, no tax forms, no payments, no interest, etc.) then you can categorize that money as a capital contribution. You can likewise take that money back out of the company as a capital distribution and neither of these events are taxable nor do they need to be reported to the IRS. In Quickbooks, create the following Equity accounts -- one for each shareholder making capital contributions and distributions: When putting money into the company, deposit into your corporate bank account and use the Capital Contribution equity account. When taking money out of the company, write yourself a check and use the Distributions account. At the end of every tax year, you can close out your Contributions and Distributions to Retained Earnings by making a general journal entry. For example, debit retained earnings and credit distributions on Dec 31 every year to zero-out the distributions account. For contributions, do the reverse and credit retained earnings. There are other ways of recording these transactions -- for example I think some people just use a Member Capital equity account instead of separate accounts for contributions and distributions -- and QB might warn you about posting journal entries to the special Retained Earnings account at the end of the year. In any case, this is how my CPA set up my books and it's been working well enough for many years. Still, never a bad idea to get a second opinion from your CPA. Be sure to pay yourself a reasonable salary, you can't get out of payroll taxes and just distribute profits -- that's a big red flag that can trigger an audit. If you're simply distributing back the money you already put into the company, that should be fine. |
Search index futures in Yahoo Finance or Google Finance | Yahoo finance does in fact have futures quotes. But I've found them difficult to search for because you also have to know the expiration codes for the contract to find them. S&P 500 Emini quote for June 2012 |
What are some good books for learning stocks, bonds, derivatives e.t.c for beginner with a math background? | Not perhaps practically useful, but I found it conceptually useful to learn the basics of mathematical finance, a way of describing financial markets via probability theory and stochastic processes. It's a little like trying to understand horse racing by studying spherical horses rolling without friction in a vacuum, but it does give you some ways of thinking that may be more appealing to someone with a math background. For instance, there's the idea that shorting a stock is effectively owning negative shares. Option pricing is a common motivation. There's a brief introduction, at the advanced undergraduate level, in Durrett's Essentials of Stochastic Processes. At the graduate level, I liked Ruth Williams' Introduction to the Mathematics of Finance. |
Mortgage or not? | Here is something that should help your decision: Currently you are 57, suppose that means that you will still work for 10 years, and then be retired for another 20 before you sell the house. Your retirement account is nearly flat, so you will have to support yourself with your own income. If there are no surprises, you and your wife could expect to earn 1.16 million over the next 10 years. There will be interest on your savings, but also inflation, so to simplify I will ignore both. That means you will have an average of 40k (gross?) per year available to live from during the next 30 years. If you get a mortgage where you only pay nett 3% interest (no payback of the loan), that would cost you 6k per year on interest (based on 350k-150k), if you also want to pay back the 200k difference within 30 years, it would totally be close to 13k in annual interest+payback. Now consider whether you would rather live on 40k per year in your current place, or on a lower amount in a bigger place. Personally I would not choose to make a 200k investment at this point, perhaps after trying to live on a budget for a while. (This has the additional benefit that you can even build some cash reserve before buying anything.) |
How long to wait after getting a mortgage to increase my credit limit? | My recommendation is to not ask for a credit increase, but just increase the utilization of one card if you have multiple cards, and decrease the utilization of the others, and continue paying off all cards in full each month. In a few months, you will likely be offered a credit increase by the card that is getting increased use. The card company that is getting the extra business knows that you are paying off big bills each month and keeping your account in good standing, and they will likely offer you a credit increase all by themselves because they want to keep your business. If no offer is forthcoming, you can call the card company and ask for a credit increase. If they refuse, tell them that you will be charging very little on the card in the future (or even canceling your card, though that will cause a hit on your credit score) because of their refusal, and switch your high volume to a different card. |
Being a 1099 for a company I part-own? | The contract he wants me to sign states I'll receive my monthly stipend (if that is the right word) as a 1099 contractor. The right word is guaranteed payment, which is what "salary" is called when a partner is working for a partnership she's a partner in. Which is exactly the case in your situation. 1099 is not the right form to report this, the partnership (LLC in your case) should be using the Schedule K-1 for that. I suggest you talk to a lawyer and a tax adviser (EA/CPA) who are licensed in your State, before you sign anything. |
Foreign currency conversion for international visitors to ecommerce web site? | For manual conversion you can use many sites, starting from google (type 30 USD in yuan) to sites like xe.com mentioned here. For programmatic conversion, you could use Google Calculator API or many other currency exchange APIs that are available. Beware however that if you do it on the real site, the exchange rate is different from actual rates used by banks and payment processing companies - while they use market-based rates, they usually charge some premium on currency conversion, meaning that if you have something for 30 dollars, according to current rate it may bet 198 yuan, but if he uses a credit card for purchase, it may cost him, for example, 204 yuan. You should be very careful about making difference between snapshot market rates and actual rates used in specific transaction. |
What does it mean for a company to have its market cap larger than the market size? | First read mhoran's answer, Then this - If the company sold nothing but refrigerators, and had 40% market share, that's $4M/yr in sales. If they have a 30% profit margin, $1.2M in profit each year. A P/E of 10 would give a stock value totaling $12M, more than the market size. The numbers are related, of course, but one isn't the maximum of the other. |
person on loan with cosigner | This will probably require asking the SO to sign a quitclaim and/or to "sell" him her share of the vehicle's ownership and getting it re-titled in his own name alone, which is the question you actually asked. To cancel the cosigner arrangement, he has to pay off the loan. If he can't or doesn't want to do that in cash, he'd have to qualify for a new loan to refinasnce in his name only, or get someone else (such as yourself) to co-sign. Alternatively, he might sell the car (or something else) to pay what he still owes on it. As noted in other answers, this kind of mess is why you shouldn't get into either cosigning or joint ownership without a written agreement spelling out exactly what happens should one of the parties wish to end this arrangement. Doing business with friends is still doing business. |
Trading on exchanges or via brokerage companies? | I was wondering what relations are between brokerage companies and exchanges? Are brokers representing investors to trade on exchanges? Yes...but a broker may also buy and sell stocks for his own account. This is called broker-delaer firm. For individual investors, what are some cons and pros of trading on the exchanges directly versus indirectly via brokers? Doesn't the former save the investors any costs/expenses paid to the brokers? Yes, but to trade directly on an exchange, you need to register with them. That costs money and only a limited number of people can register I believe. Note that some (or all?) exchanges have their websites where I think trading can be done electronically, such as NASDAQ and BATS? Can almost all stocks be found and traded on almost every exchange? In other words, is it possible that a popular stock can only be found and traded on one exchange, but not found on the other exchange? If needed to be more specific, I am particularly interested in the U.S. case,and for example, Apple's stock. Yes, it is very much possible with smaller companies. Big companies are usually on multiple exchanges. What are your advices for choosing exchange and choosing brokerage companies? What exchanges and brokerage companies do you recommend? For brokerage companies, a beginner can go with discount broker. For sophisticated investors can opt for full service brokers. Usually your bank will have a brokerage firm. For exchanges, it depends...if you are in US, you should send to the US exchanges. IF you wish to send to other exchanges in other countries, you should check with the broker about that. |
Can the purchaser of a stock call option cancel the contract? | You bought the right – but not the obligation – to buy a certain number of shares at $15 from whomsoever sold you the option, and you paid a premium for it. You can choose whether you want to buy the shares at $15 during the period agreed upon. If you call for the shares, the other guy has to sell the shares to you for $15 each, even if the market price is higher. You can then turn around and promptly resell the purchased shares at the higher market price. If the market price never rises above $15 at any time while the option is open, you still have the right to buy the shares for $15 if you choose to do so. Most rational people would let the option expire without exercising it, but this is not a legal requirement. Doing things like buying shares at $15 when the market price is below $15 is perfectly legal; just not very savvy. You cannot cancel the option in the sense of going to the seller of the option and demanding your premium money back because you don't intend to exercise the option because the market price is below $15. Of course, if the market price is above $15 and you tell the seller to cancel the contract, they will be happy to do so, since it lets them off the hook. They may or may not give you the premium back in this case. |
Got charged ridiculous amount for doctor's walk in visit. What are my options? | Some doctors will give folks who are not covered by insurance a price break. If that describes you, you could ask. But if you didn't discuss the price in advance, that isn't the doctor's fault, any more than it would be the mechanic's fault if you asked for auto service without getting an estimate first. Consider it a cheap lesson in not making assumptions. |
Does getting a 1099 from another state count as working in another state if I was physically in my home state? | This depends on the state law. In case of the State of New York - these are the criteria for sourcing the NY income: As a sole proprietor or partnership, your New York source income includes: Business activities As a nonresident sole proprietor or partnership, you carry on a business, trade, profession, or occupation within New York State if you (or your business): As you can see, the qualification depends on the way you do business, and the amount of business transactions you have in New York. If it is not clear to you - talk to a CPA/EA licensed to practice in the State of New York to give you an advice. |
Free, web-based finance tracking with tag/label support? | hledger fits your criteria, have you tried it ? Here's the web interface. |
Current accounts reward schemes and reciprocal standing orders? | I don't think it would be counted as income, and if it's a short-term loan it doesn't really matter as the notional interest on the loan would be negligible. But you can avoid any possible complications by just having two accounts in the name of the person trying to get the account benefits, particularly if you're willing to just provide the "seed" money to get the loop started. |
What should I reserve “emergency savings” for? | I think it is stated perfectly in the question, "unforeseen critical needs." You know you will need to buy new tires for your car, they are critical but not unforeseen. However, if a tree falls on your car and you need to pay the insurance deductible for the repairs it would be unforeseen. You should budget for the expenses you can plan for in advance like car maintenance and repairs. An emergency fund is for items that are out of the ordinary. |
Option trading: High dollar value stock option and equity exposure | Seems like you are concerned with something called assignment risk. It's an inherent risk of selling options: you are giving somebody the right, but not the obligation, to sell to you 100 shares of GOOGL. Option buyers pay a premium to have that right - the extrinsic value. When they exercise the option, the option immediately disappears. Together with it, all the extrinsic value disappears. So, the lower the extrinsic value, the higher the assignment risk. Usually, option contracts that are very close to expiration (let's say, around 2 to 3 weeks to expiration or less) have significantly lower extrinsic value than longer option contracts. Also, generally speaking, the deeper ITM an option contract is, the lower extrinsic value it will have. So, to reduce assignment risk, I usually close out my option positions 1-2 weeks before expiration, especially the contracts that are deep in the money. edit: to make sure this is clear, based on a comment I've just seen on your question. To "close out an options position", you just have to create the "opposite" trade. So, if you sell a Put, you close that by buying back that exact same put. Just like stock: if you buy stock, you have a position; you close that position by selling the exact same stock, in the exact same amount. That's a very common thing to do with options. A post in Tradeking's forums, very old post, but with an interesting piece of data from the OCC, states that 35% of the options expire worthless, and 48% are bought or sold before expiration to close the position - only 17% of the contracts are actually exercised! (http://community.tradeking.com/members/optionsguy/blogs/11260-what-percentage-of-options-get-exercised) A few other things to keep in mind: certain stocks have "mini options contracts", that would correspond to a lot of 10 shares of stock. These contracts are usually not very liquid, though, so you might not get great prices when opening/closing positions you said in a comment, "I cannot use this strategy to buy stocks like GOOGL"; if the reason is because 100*GOOGL is too much to fit in your buying power, that's a pretty big risk - the assignment could result in a margin call! if margin call is not really your concern, but your concern is more like the risk of holding 100 shares of GOOGL, you can help manage that by buying some lower strike Puts (that have smaller absolute delta than your Put), or selling some calls against your short put. Both strategies, while very different, will effectively reduce your delta exposure. You'd get 100 deltas from the 100 shares of GOOGL, but you'd get some negative deltas by holding the lower strike Put, or by writing the higher strike Call. So as the stock moves around, your account value would move less than the exposure equivalent to 100 shares of stock. |
How can I legally and efficiently help my girlfriend build equity by helping with a mortgage? | all the other answers are spot on, but look at it this way. really all you mean when you say "building equity" is "accumulating wealth". if that is the goal, then having her invest the money in a brokerage (e.g. ira) account makes a lot more sense. if you can't afford the apartment without her, then you can't afford to pay out her portion of the equity in the future. which means she is not building equity, you are just borrowing money from her. the safest and simplest thing for you to do is to agree on a number that does not include "equity". to be really safe, you might want to both sign something in writing that says she will never have an equity stake unless you agree to it in writing. it doesn't have to be anything fancy. in fact, the shorter the better. i am thinking about 3 sentences should do the trick. if you feel you absolutely have to borrow money from her on a monthly basis to afford your mortgage, then i recommend you make it an unsecured loan. just be sure to specify the interest rate (even if it is zero), and the repayment terms (and ideally, late payment penalties). again, nothing fancy, 10 sentences maybe. e.g. "john doe will borrow x$ per month, until jane doe vacates the apartment. after such time, john doe will begin repaying the loan at y$ per month...." that said, borrowing money from friends and family almost never turns out well. at the very least, you need to save up a few months of rent so that if you do break up, you have time to find another roommate. disclaimer: i do not have any state-issued professional licenses. |
Will I be paid dividends if I own shares? | gnasher729, was able to see my problem here. It was a silly oversight. It's not 50p a share, its 0.5p a share. @Bezzzo: The dividend is not 50p per share, it is 0.50p per share - half a penny per share. Thanks! |
What choices should I consider for investing money that I will need in two years? | Investing $100k into physical gold (bars or coins) is the most prudent option; given the state of economic turmoil worldwide. Take a look at the long term charts; they're pretty self explanatory. Gold has an upward trend for 100+ years. http://www.goldbuyguide.com/price/ A more high risk/high reward investment would be to buy $100k of physical silver. Silver has a similar track record and inherent benefits of gold. Yet, with a combination of factors that could make it even more bull than gold (ie- better liquidity, industrial demand). Beyond that, you may want to look at other commodities such as oil and agriculture. The point is, this is troubled times for worldwide economies. Times like this you want to invest in REAL things like commodities or companies that are actually producing essential materials. |
Sole proprietorship or LLC? | The primary advantage is protection of your personal assets. If your LLC gets sued, they can't take your house/car/dog/wife. There aren't really any financial incentives to be an LLC; because of the pass-thru taxing structure, you wind up paying the same in taxes either way. "The cost" will depend on where you're located, and usually involves a few factors -- Expect to pay $300-500 to start it, depending on your state and who you register with (technically, you can usually register for free at the secretary of state, but wouldn't you rather pay an expert?), and "State Franchise Tax", which will can be a minimum of up to $1000/year depending on the state, plus even more if your LLC earns more than $xxx,000. EDIT -- As an aside, I'll mention that I'm based in California, and our state franchise tax starts at $800/yr. I'm all-web-based, so I've been investigating incorporating in Nevada or Delaware instead (no franchise tax, lower filing fees), but from what I've found, it's hardly worth the trouble. In addition to having to pay a Registered Agent (someone to act as my permanent mailing address in that state for ~$100/yr), apparently California likes to search for people just like me, and charge them $800 anyway. You can fight that, of course, and claim that your business really is done in Nevada, but do you really want to? |
What could a malicious party potentially achieve by having *just* a name, account number, and sort code? | I think the answer to this must differ from country to country. I have lived in several countries where the normal everyday way of making a payment is to instruct my bank to transfer the money to the recipient's account. Of course this means I must know his name, SC and account number – but this is an accepted part of the system; businesses routinely display that information on invoices and correspondence. It is simply not regarded as confidential. DumbCoder's comment suggests that if he has that information he can take money from my account without my permission – in other words, my bank will pay money out of my account on someone else's request, without my authority. Is this correct? In which country or countries can this happen? (I must go there quickly and begin stealing people's money.) |
Are real estate prices memory-less? | Housing prices are set by different criteria. It can become memoryless the same as the stock if the criteria used to set its price in the past is no longer valid. For example, take Phoenix or Las Vegas - in the past these were considered attractive investments because of the economical growth and the climate of the area. While the climate hasn't changed, the economical growth stopped not only there but also in the places where people buying the houses lived (which is all over the world really). What happened to the housing market? Dropped sharply and stays flat for several years now at the bottom. So it doesn't really matter if the house was worth $300K in Phoenix 5 years ago, you can only sell it now for ~$50K, and that's about it. The prices have been flat low for several years and the house price was $50K, but does it mean its going to stay so? No, once economy gears up, the prices will go up as well. So its not exactly memory-less, but the stocks are not memory-less as well. There is correlation between the past and the future performance. If the environment conditions are similar - the performance is likely to be similar. For stocks however there's much more environment conditions than the housing market and its much harder to predict them. But even with the housing people were burnt a lot on the misconception that the past performance correlates to the future. It doesn't necessarily. |
Should I finance a new home theater at 0% even though I have the cash for it? | I won't repeat what's already been said, but I agree that it's a good move to take advantage of the free financing so long as you read the fine print carefully, keep the money designated to pay off this debt and not use it for anything else, and make sure to pay it off before you get smacked with some bad interest. One thing that hasn't been mentioned is that this kind of offer can help build credit. You mentioned that you already have excellent credit, but for someone who has good credit, this could be an account that, if used carefully, could give their credit a boost by adding to their history of on-time payments. |
Should I pay off my credit card online immediately or wait for the bill? | I'm really going to go against the crowd here--paying it too fast could be a problem. The thing is you want them reporting that you paid the bill as agreed. To do that you need to pay the bills--which means you need to leave the charges there to get billed for. Paying less than the total is fine, paying as soon as they bill you but before you even get the bill is fine. |
Is it a good idea to rebalance without withdrawing money? | There will quickly come a time when buying to rebalance is impractical. Consider, you save 10%, and at some point, you have 5x your income saved. (you earn $50K and have accumulated $250K). A simple allocation, 50/50, so $125K stock, $125K bonds. Now, in a year the market is up much over 4%, your $5K deposit will not be enough to balance. Earlier on, the method may work just fine, later on, not so much. Edit - The above is an example, to show that there will come a time when deposits are not enough to rebalance. The above single year produces a 52/48 split, and the rebalance deposits more than 2 years. If the market continues to rise a reasonable amount, 2 years later you are even more out of balance, perhaps 56/44. I chose reasonable numbers as a starting point, just 5X income saved, and a 10% annual deposit. In the end, you can waive off any divergence from your target. That's your choice. |
Taxable income on full-time job + business earnings | Possible alternative: In my case, the part-time locksmithing is a small enough portion of my I come that I just submit it as hobby income, rather than trying to track it as a separate entity. |
Should I sell my stocks when the stock hits a 52-week high in order to “Buy Low, Sell High”? | I bought 1000 shares of Apple, when it was $5. And yet, while the purchase was smart, the sales were the dumbest of my life. "You can't go wrong taking a profit" "When a stock doubles sell half and let it ride", etc. It doubled, I sold half, a $5000 gain. Then it split, and kept going up. Long story short, I took gains of just under $50,000 as it rose, and had 100 shares left for the 7 to 1 split. The 700 shares are worth $79,000. But, if I simply let it ride, 1000 shares split to 14,000. $1.4M. I suppose turning $5,000 into $130K is cause for celebration, but it will stay with me as the lost $1.3M opportunity. Look at the chart and tell me the value of selling stocks at their 52 week high. Yet, if you chart stocks heading into the dotcom bubble, you'll see a history of $100 stocks crashing to single digits. But none of them sported a P/E of 12. |
Bi-weekly payment option | Your question is unclear about whether you are moving from bi-weekly payments or to bi-weekly payments. Let's calculate each case. Bi-weekly pay means you will be paid every two weeks. The amount for each payment will be your annual salary divided by 26, possibly with a small decrease (around 0.3%) to account for the fact that years are slightly longer than 52 weeks (i.e. there are slightly more than 26 two-week periods in a year), and possibly an even smaller adjustment to take account of the fact that some years are a day longer than that. You will be paid literally every 14 days (with some adjustments if a payday falls on a holiday) If you are going to be paid twice a month, then each payment will be your annual salary divided by 24. Typically you are paid on the same days of each month - for example the 1st and the fifteenth, or the last business day before those. |
What traditionally happens to bonds when the stock market crashes? | The short answer is if you own a representative index of global bonds (say AGG) and global stocks (say ACWI) the bonds will generally only suffer minimally in even the medium large market crashes you describe. However, there are some caveats. Not all bonds will tend to react the same way. Bonds that are considered higher-yield (say BBB rated and below) tend to drop significantly in stock market crashes though not as much as stock markets themselves. Emerging market bonds can drop even more as weaker foreign currencies can drop in global crashes as well. Also, if a local market crash is caused by rampant inflation as in the US during the 70s-80s, bonds can crash at the same time as markets. There hasn't been a global crash caused by inflation after countries left the gold standard, but that doesn't mean it can't happen. Still, I don't mean to scare you away from adding bond exposure to a stock portfolio as bonds tend to have low correlations with stocks and significant returns. Just be aware that these correlations can change over time (sometimes quickly) and depend on which stocks/bonds you invest in. |
help with how a loan repayment is calculated | It appears the interest is not compounded daily. Each period of interest has the loan amount calculated on the "capital" remaining on the start of period, for each day in the period. The Excel finance functions don't handle irregular periods that well, but I can reconstruct the interest calculations: |
Paying myself a dividend from ltd company | Adding to webdevduck's answer: Before you calculate your profits, you can pay money tax-free into a pension fund for the company director (that is you). Then if you pay yourself dividends, if you made lots of profit you don't have to pay it all as dividends. You can take some where the taxes are low, and then pay more money in later years. What you must NOT do is just take the money. The company may be yours, but the money isn't. It has to be paid as salary or dividend. (You can give the company director a loan, but that loan has to be repaid. Especially if a limited company goes bankrupt, the creditors would insist that loans from the company are repaid). After a bit more checking, here's the optimal approach, perfectly legal, expected and ethical: You pay yourself a salary of £676 per month. That's the point where you get all the advantages of national insurance without having to pay; above that you would have to pay 13.8% employers NI contributions and 12% employee's NI contributions, so for £100 salary the company has to pay £113.80 and you receive £88.00. Below £676 you pay nothing. You deduct the salary from your revenue, then you deduct all the deductible business costs (be wise in what you try to deduct), then you pay whatever you want into a pension fund. Well, up to I think £25,000 per year. The rest is profit. The company pays 19% corporation tax on profits. Then you pay yourself dividends. Any dividends until your income is £11,500 per year are tax free. Then the next £5,000 per year are tax free. Then any dividends until income + dividends = £45,000 per year is taxed at 7.5%. It's illegal to pay so much in dividends that the company can't pay its bills. Above £45,000 you decide if you want your money now and pay more tax, or wait and get it tax free. Every pound of dividend above £45,000 a year you pay 32.5% tax, but there is nobody forcing you to take the money. You can wait until business is bad, or you want a loooong holiday, or you retire. So at that time you will stay below £45,000 per year and pay only 7.5% tax. |
Does a company's stock price give any indication to or affect their revenue? | Look at the how the income statement is built. The stock price is nowhere on it. The net income is based on the revenue (money coming in) and expenses (money going out). Most companies do not issue stock all that often. The price you see quoted is third parties selling the stock to each other. |
Is debt almost always the cause of crashes and recessions? | The root cause can be said to always be a crisis in confidence. It may be due to a very real event. However, confidence is what pushes the markets up and worries are what bring them down. |
Do I owe taxes in the US for my LLC formed in the US but owned by an Indian citizen? | This is a complicated question that relies on the US-India Tax Treaty to determine whether the income is taxable to the US or to India. The relevant provision is likely Article 15 on Personal Services. http://www.irs.gov/pub/irs-trty/india.pdf It seems plausible that your business is personal services, but that's a fact-driven question based on your business model. If the online training is 'personal services' provided by you from India, then it is likely foreign source income under the treaty. The 'fixed base' and '90 days' provisions in Article 15 would not apply to an India resident working solely outside the US. The question is whether your US LLC was a US taxpayer. If the LLC was a taxpayer, then it has an obligation to pay US tax on any worldwide income and it also arguably disqualifies you from Article 15 (which applies to individuals and firms of individuals, but not companies). If you were the sole owner of the US LLC, and you did not make a Form 8832 election to be treated as subject to entity taxation, then the LLC was a disregarded entity. If you had other owners, and did not make an election, then you are a partnership and I suspect but cannot conclude that the treaty analysis is still valid. So this is fact-dependent, but you may be exempt from US tax under the tax treaty. However, you may have still had an obligation to file Forms 1099 for your worker. You can also late-file Forms 1099 reporting the nonemployee compensation paid to your worker. Note that this may have tax consequences on the worker if the worker failed to report the income in those years. |
How to calculate my estimated taxes. 1099 MISC + Self Employment | There are a couple of things that are missing from your estimate. In addition to your standard deduction, you also have a personal exemption of $4050. So "D" in your calculation should be $6300 + $4050 = $10,350. As a self-employed individual, you need to pay both the employee and employer side of the Social Security and Medicare taxes. Instead of 6.2% + 1.45%, you need to pay (6.2% + 1.45%) * 2 = 15.3% self-employment tax. In addition, there are some problems with your calculation. Q1i (Quarter 1 estimated income) should be your adjusted annual income divided by 4, not 3 (A/4). Likewise, you should estimate your quarterly tax by estimating your income for the whole year, then dividing by 4. So Aft (Annual estimated federal tax) should be: Quarterly estimated federal tax would be: Qft = Aft / 4 Annual estimated self-employment tax is: Ase = 15.3% * A with the quarterly self-employment tax being one-fourth of that: Qse = Ase / 4 Self employment tax gets added on to your federal income tax. So when you send in your quarterly payment using Form 1040-ES, you should send in Qft + Qse. The Form 1040-ES instructions (PDF) comes with the "2016 Estimated Tax Worksheet" that walks you through these calculations. |
Swiss-style Monetary Policy | This is what is called "weasel words". They're trying to put some authority into their ad, but since they don't have any - they're putting meaningless words that sound important. Monetary policy is the state/central bank policy to control the supply of the available currency. Cannot think of a way to connect it to private investments. |
If accepting more than $10K in cash for a used boat, should I worry about counterfeiting? | When you operate outside of the law, you bear the risks of that decision. When you operate within the law, you have a number of avenues, such as the courts and police to mediate disputes or other problems. |
Looking for a good source for Financial Statements | The best source of financial statements would be from the company in question. On corporate websites of public listed companies, you can find such financial statements uploaded in the Investor's Relations section of their website. If their company does not have an online presence, another alternative would be to go to the website of the exchange the company is trading in (e.g. NYSE or NASDAQ) for financial data. |
Analyze stock value | A Bloomberg terminal connected to Excel provides the value correcting splits, dividends, etc. Problem is it cost around $25,000. Another one which is free and I think that takes care of corporate action is "quandl.com". See an example here. |
How do I know if a dividend stock is “safe” and not a “dividend yield trap”? | Great answers. Here's my two cents: First, don't forget to look at the overall picture, not just the dividend. Study the company's income statement, balance sheet and cash flow statement for the last few years. Make sure they have good earnings potential, and are not carrying too much debt. I know it's dull, but it's better to miss an opportunity than to buy a turkey and watch the dividends and the share price tank. I went through this with BAC (Bank of America) a couple of years ago. They had a 38-year history of rising dividends when I bought them, and the yield was about 8%. Then the banking crisis happened and the dividend went from $2.56/share to $0.04, and the price fell from $40 to $5. (I stuck with it, continuing to buy at lower and lower prices, and eventually sold them all at $12 and managed to break even, but it was not a pleasant experience) Do your homework. :) Still, one of the most reliable ways to judge a company's dividend-paying ability is to look at its dividend history. Once a company has started paying a dividend there is a strong expectation from shareholders that these payments will continue, and the company's management will try very hard to maintain them. (Though sometimes this doesn't work out, e.g. BAC) You should see an uninterrupted stream of non-decreasing payments over a period of at least 5 years (this timeframe is just a rule of thumb). Well-established, profitable companies also tend to increase their dividends over time, which has the added benefit of pushing up their share price. So you're getting increasing dividends and capital gains. Next, look at the company's payout ratio over time, and the actual cost of the dividend. Can the projected earnings cover the dividend cost without going above the payout ratio? If not, then the dividend is likely to get reduced. In the case of CIM, the dividend history is short and erratic. The earnings are also all over the place, so it's hard to predict what will happen next year. The company is up to its eyeballs debt (current ratio is .2), and its earnings have dropped by 20% in the last quarter. They have lost money in two of the last three years, even though earning have jumped dramatically. This is a very young company, and in my opinion it is too early for them to be paying dividends. A very speculative stock, and you are more likely to make money from capital gains than dividends. AAE is a different story. They are profitable, and have a long dividend history, although the dividend was cut in half recently. This may be a good to buy them hoping the dividend comes back once the economy recovers. However, they are trading at over 40 times earnings, which seems expensive, considering their low profit margins. Before investing your money, invest in your education. :) Get some books on interpretation of financial staments, and learn how to read the numbers. It's sort of like looking at the codes in The Matrix, and seeing the blonde in the red dress (or whatever it was). Good luck! |
ETF S&P 500 with Reinvested Dividend | The problem there is that there's a tax due on that dividend. So, if you wish, you can buy the ETF and specify to reinvest dividends, but you'll have to pay a bit of tax on them, and keep track of your basis, if the account isn't a retirement account. |
Are there any issues with registering an LLC in a foreign state? | This is an older question but I thought I'd give the correct response for anyone else that might look. Yes there definitely could be issues. You can form in friendly states such as Delaware and Nevada without having a physical location in the state but you can't run a business from another state without having to 'qualify' to do business in that State. To give a bit more clarification. Lets say you open a Delaware LLC. But you answer the phone when it rings on your New York phone and money comes into your New York bank account and your suppliers and vendors all use your New York address to send invoices and correspondence. Well you can pretty much count that you fall into the definition of doing business in New York and expected to pay New York taxes and qualify to do business in the state. The solution would be to set up your business to truly 'operate' from the state you would rather be in. |
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