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What does “Company Distribution” mean on Google Finance's stock screener? | Company Distribution is attempting to show a histogram of how many companies fall within a given range so you can visualize the number of companies that meet a certain parameter. For example if you move the "Market Cap" sliders so the minimum slider is just before the large rise in the distribution and move the maximum slider so it is just after the fall off in distribution, you can see that most companies have a market cap between ~5700 and ~141B. |
Claiming income/deductions on an illegal apartment | A basement unit would typically rent for less than similar space on a higher floor. Taxwise, you should be claiming the income, and expenses via schedule E, as if it were legal. Keep in mind, Al Capone was convicted on tax evasion not his other illegal activities. As long as you treat it as a legitimate business, a rental unit, you will be good with the IRS. The local building department will fine you if they find out. |
How to calculate ownership for property with a partner | To add to ChrisInEdmonton's answer: Your conveyancing solicitor should be able to advise on the details, but a typical arrangement involves: As an alternative to the numbers in Chris' answer, it could be argued that you should first be reimbursed for the fees you paid (accounting for inflation), but that any remaining profits from the property itself should be divided in proportion to your individual investments (so 51.6% to you, and 48.4% to your partner, assuming you contribute to the loans equally). |
What does inflation mean to me? | Inflation as defined in the general, has many impacts at a personal level. For example, you say that the reduction in the price of oil has no impact on you. That's absolutely not true, unless you're a hermit living off of the land. Every box or can or jar of food you buy off the shelf of the grocery store has the price of oil baked into it, because it had to get there somehow. High fuel costs for trucks mean increased costs to put food on shelves, which mean increased prices for that food. Even tobacco prices can affect you, because they affect what other people are spending. Demand is always a significant factor in prices, particularly retail prices, and if people are spending more money on tobacco, they're probably spending less on other things - either buying less snacks, for example, or buying cheaper brands of those snacks. So the price of Doritos may drop a bit (or not rise), for example. General inflation also tends to drive raises, particularly in industries with relatively small performance ties to raises. If inflation is 3%, wages need to raise 3% or so in order to keep up, on average; even if your personal cost-of-living went up 0%, or 5%, or 10%, the default wage inflation will be closer to that of the national average. Any raise less than national average is effectively a pay cut (which is one reason why inflation is needed in a healthy economy). So your company probably has a cost-of-living raise everyone gets that's a bit less than inflation, and then good performers get a bump up to a bit more than inflation. You can read more on this topic for a more in-depth explanation. Finally, inflation rates tend to be major factors in stock market movement. Inflation that is too high, or too low, can lead to higher volatility; inflation that is "right" can lead to higher stability. An economy that has consistently "right" inflation (around 2-3% typically) will tend to have more stable stock market in general, and thus more reliable returns from that market. There are many other factors that lead to stock markets rising and falling, but inflation is one very relevant one, particularly if it's not in the "right" zone. |
How is an ETF's NAV determined? | An ETF manager will only allow certain financial organisations to create and redeem ETF shares. These are called Authorised Participants (APs). The APs have the resources to bundled up packages of shares that they already own and hold in order to match the ETFs requirements. In the case of the EDEN ETF, this portfolio is the MSCI Denmark Index. Only APs transact business directly with the ETF manager. When ETF shares need to be created, the AP will bundle up the portfolio of shares and deliver them to the ETF manager. In return, the ETF manager will deliver to the AP the corresponding number of shares in the ETF. Note that no cash changes hands here. (These ETF shares are now available for trading in the market via the AP. Note that investors do not transact business directly with the ETF manager.) Similarly, when ETF shares need to be redeemed, the AP will deliver the ETF shares to the ETF manager. In return, the ETF manager will deliver to the AP the corresponding portfolio of shares. Again, no cash changes hands here. Normally, with an established and liquid ETF, investors like you and me will transact small purchases and sales of ETF shares with other small investors in the market. In the event that an AP needs to transact business with an investor, they will do so by either buying or selling the ETF shares. In the event that they have insufficient ETF shares to meet demand, they will bundle up a portfolio deliver them to the ETF provider in return for ETF shares, thus enabling them to meet demand. In the event that a lot of investors are selling and the AP ends up holding an excessive amount of ETF shares, they will deliver unwanted shares to the ETF manager in exchange for a portfolio of the underlying shares. According to this scheme, large liquidations of ETF holdings should not effect the share prices of the underlying portfolio. This is because the underlying shares are not sold in the market, rather they are simply returned to the AP in exchange for the ETF shares (Recall that no cash is changing hands in this type of transaction). The corresponding trail of dividends and distributions to ETF share holders follows the same scheme. |
Why do credit card transactions take up to 3 days to appear, yet debit transactions are instant? | Take a look at http://en.wikipedia.org/wiki/Payment_gateway There is essentially a lead time between when the transaction is made and when it is settled, 2-3 business days is the lead time for settlement. The link explains the process step-by-step |
Long(100%)-Short(-100%) investment explanation | There is no difference. When dealing with short positions, talking about percentages become very tricky since they no longer add up to 100%. What does the 50% in your example mean? Unless there's some base amount (like total amount of the portfolio, then the percentages are meaningless. What matters when dealing with long and short positions is the net total - meaning if you are long 100 shares on one stock trade and short 50 shares on another, then you are net long 50 shares. |
Joint Account for Common Earnings | Short Answer: Go to the bank and ask them about your options for opening a business account. Talk to an attorney about the paperwork and company structure and taxes. Long Answer: You and your buddies jointly own an unincorporated business. This is called a partnership. Yes, there is paperwork involved in doing it properly and the fact that you guys are minors might complicate that paperwork a little bit. In terms of what type of account to open: A business account! Running a business through a personal account (joint or otherwise) is a sure way to get that account shut down. Your bank will want to know the structure of the business, and will require documentation to support that. For a partnership, they will probably want a copy of the partnership agreement. For an LLC, they'll probably want a copy of the filing with Ohio Secretary of State as well as the operating agreement etc. That said, pop into a local bank and ask a business banker directly what you should do. They deal with new businesses all the time, and would probably be best qualified to help you figure out the bank account aspect of it. Regarding business structure... this really impacts a lot more than just the type of bank account to open and how you file your taxes. It is something you guys should really discuss with an attorney. What happens if down the road one of you quits? What happens if you want to bring in a new partner later? What if there is a disagreement about something? These are all things that the attorney can help you address ahead of time - which is a heck of a lot easier (and cheaper) than trying to figure it out later. You're brining in enough that you should certainly be able to buy a couple hours of a lawyer's time. Getting the formation stuff right could save all of you a lot of money and heartache later. |
How to decide on split between large/mid/small cap on 401(k) and how often rebalance | There many asset allocation strategies to chose from that beat lifestyle funds. For example: Relative Strength Asset Allocation keeps your money in Stocks when stocks perform well, bonds when they outperform stocks, and cash when both bonds and stocks are under-performing. The re-allocation happens on a monthly basis. |
Is it better to buy a computer on my credit card, or on credit from the computer store? | The downside of the store card is that the "deal" for using the card is typically 6-12 months of "no payments" or "no interest". In reality, the "deal" is deferred payments/interest. The problem is, if you miss any payment, or fail to pay the computer off in full, you'll have to pay for the accrued interest -- at a rate typically 25% or higher. That means if you buy your computer for $1,000, and pay $999 at the end of 12 months, you may have to pay $250 in accrued interest. These cards can be great deals, just be really careful! |
Am I responsible for an annual fee on a credit card I never picked up? | In the end, I was not required to pay the fee. After some frustrating initial attempts, I ended up writing a letter and sending a copy to card services, customer support, complaints and the legal department. It basically said: 1 - I never signed anything. 2 - I spoke to a very aggressive person at the airport who told me that she was just taking down my information in order to send information about the card, and that I was under no obligation 3 - I never received a card, activated a card, or used a card. 4 - I want this charge canceled immediately 5 - If this ever shows up on my credit report, I will contact my lawyer regarding this unscrupulous business practice. After that I received a notice in the mail confirming that everything had been cancelled and all charges were reversed. |
Withdrawing cash from investment: take money from underperforming fund? | The root of the advice Bob is being given is from the premise that the market is temporarily down. If the market is temporarily down, then the stocks in "Fund #1" are on-sale and likely to go up soon (soon is very subjective). If the market is going to go up soon (again subjective) you are probably better in fictitious Fund #1. This is the valid logic that is being used by the rep. I don't think this is manipulative based on costs. It's really up to Bob whether he agrees with that logic or if he disagrees with that logic and to make his own decision based on that. If this were my account, I would make the decision on where to withdraw based on my target asset allocation. Bob (for good or bad reasons) decided on 2/3 Fund 1 and 1/3 Fund 2. I'd make the withdraw that returns me to my target allocation of 2/3 Fund 1 and 1/3 Fund 2. Depending on performance and contributions, that might be selling Fund 1, selling Fund 2, or selling some of both. |
Investments - Huge drop in bid price versus last close | Depends on when you are seeing these bids & asks-- off hours, many market makers pull their bid & ask prices entirely. In a lightly traded stock there may just be no market except during the regular trading day. |
Why are Rausch Coleman houses so cheap? Is it because they don't have gas? | A 25% variance in price, in most markets, isn't so crazy as to require it be some sort of terrible scam, but that doesn't mean much else. It could be the inclusion of floor plans that are carefully designed to add square footage at minimum cost and thus reduce the average cost per square foot without actually being cheaper otherwise, less insulation, thinner walls, cheap piping, minimized wiring, or they are just efficient and competitive. As you pointed out they don't have gas, so that's certainly one way you know they cut costs - no gas lines to install! As the article from NAHB: Cost of Constructing A Home points out, though, what this figure includes can vary. Does it include the finished lot? If so then a smaller lot would mean lower square footage building price - because the land is smaller and cheaper, not the house! Is any kind of financing quoted in the price? Compare also change-plan costs, any penalties for delays in construction, grade of materials, floor plans, customization costs, fees or premiums to pick colors/floors/counters/cabinets/fixtures, and so on. What about central cooling and heating - are they quoting an electric furnace? How does electrical heating in your area compare to the cost of gas heat? (relative pricing of electric and gas vary widely by region and climate) In short: often square footage price isn't the whole story of what it would cost to construct a home. Ensure you are comparing everything that's important to you and you are getting a full quote, not comparing small isolate sales-pitch figures with no clear details. If it turns out the price is 25% lower than other builders in your area and they give you what you are wanting, and you have the good sense to have a qualified home inspector and/or structural engineer inspect the home thoroughly before you take possession, then you might just have found a good builder! I'd encourage you to personally visit some of their past construction work, such as houses they build 2-10 years ago and ensure they are in the sort of condition you'd expect. |
Is it bad practice to invest in stocks that fluctuate by single points throughout the day? | Its hard to write much in those comment boxes, so I'll just make an answer, although its really not a formal answer. Regarding commissions, it costs me $5 per trade, so that's actually $10 per trade ($5 to buy, $5 to sell). An ETF like TNA ($58 per share currently) fluctuates $1 or $2 per day. IXC is $40 per share and fluctuates nearly 50 cents per day (a little less). So to make any decent money per trade would mean a share size of 50 shares TNA which means I need $2900 in cash (TNA is not marginable). If it goes up $1 and I sell, that's $10 for the broker and $40 for me. I would consider this to be the minimum share size for TNA. For IXC, 100 shares would cost me $4000 / 2 = $2000 since IXC is marginable. If IXC goes up 50 cents, that's $10 for the broker and $40 for me. IXC also pays a decent dividend. TNA does not. You'll notice the amount of cash needed to capture these gains is roughly the same. (Actually, to capture daily moves in IXC, you'll need a bit more than $2000 because it doesn't vary quite a full 50 cents each day). At first, I thought you were describing range trading or stock channeling, but those systems require stop losses when the range or channel is broken. You're now talking about holding forever until you get 1 or 2 points of profit. Therefore, I wouldn't trade stocks at all. Stocks could go to zero, ETFs will not. It seems to me you're looking for a way to generate small, consistent returns and you're not seeking to strike it rich in one trade. Therefore, buying something that pays a dividend would be a good idea if you plan to hold forever while waiting for your 1 or 2 points. In your system you're also going to have to define when to get back in the trade. If you buy IXC now at $40 and it goes to $41 and you sell, do you wait for it to come back to $40? What if it never does? Are you happy with having only made one trade for $40 profit in your lifetime? What if it goes up to $45 and then dips to $42, do you buy at $42? If so, what stops you from eventually buying at the tippy top? Or even worse, what stops you from feeling even more confident at the top and buying bigger lots? If it gets to $49, surely it will cover that last buck to $50, right? /sarc What if you bought IXC at $40 and it went down. Now what? Do you take up gardening as a hobby while waiting for IXC to come back? Do you buy more at lower prices and average down? Do you find other stocks to trade? If so, how long until you run out of money and you start getting margin calls? Then you'll be forced to sell at the bottom when you should be buying more. All these systems seem easy, but when you actually get in there and try to use them, you'll find they're not so easy. Anything that is obvious, won't work anymore. And even when you find something that is obvious and bet that it stops working, you'll be wrong then too. The thing is, if you think of it, many others just like you also think of it... therefore it can't work because everyone can't make money in stocks just like everyone at the poker table can't make money. If you can make 1% or 2% per day on your money, that's actually quite good and not too many people can do that. Or maybe its better to say, if you can make 2% per trade, and not take a 50% loss per 10 trades, you're doing quite well. If you make $40 per trade profit while working with $2-3k and you do that 50 times per year (50 trades is not a lot in a year), you've doubled your money for the year. Who does that on a consistent basis? To expect that kind of performance is just unrealistic. It much easier to earn $2k with $100k than it is to double $2k in a year. In stocks, money flows TO those who have it and FROM those who don't. You have to plan for all possibilities, form a system then stick to it, and not take on too much risk or expect big (unrealistic) rewards. Daytrading You make 4 roundtrips in 5 days, that broker labels you a pattern daytrader. Once you're labeled, its for life at that brokerage. If you switch to a new broker, the new broker doesn't know your dealings with the old broker, therefore you'll have to establish a new pattern with the new broker in order to be labeled. If the SEC were to ask, the broker would have to say 'yes' or 'no' concering if you established a pattern of daytrading at that brokerage. Suppose you make the 4 roundtrips and then you make a 5th that triggers the call. The broker will call you up and say you either need to deposit enough to bring your account to $25k or you need to never make another daytrade at that firm... ever! That's the only warning you'll ever get. If you're in violation again, they lock your account to closing positions until you send in funds to bring the balance up to $25k. All you need to do is have the money hit your account, you can take it right back out again. Once your account has $25k, you're allowed to trade again.... even if you remove $15k of it that same day. If you trigger the call again, you have to send the $15k back in, then take it back out. Having the label is not all bad... they give you 4x margin. So with $25k, you can buy $100k of marginable stock. I don't know... that could be a bad thing too. You could get a margin call at the end of the day for owning $100k of stock when you're only allowed to own $50k overnight. I believe that's a fed call and its a pretty big deal. |
Efficient markets hypothesis and performance of IPO shares after lock-up period | That's the way the markets work in THEORY. In actual fact, markets are subject to "real world" pressures. That is, there are so many things going on in the market that the end of the "Lined In" lock up is just one of many. To produce the result you describe, traders would have to hold cash in reserve for this so-called "contingency" to buy at the end of the lock-up. In most cases, they wouldn't want to because of everything else that is going on. To use a real world analogy, would you want to wait until the last possible moment before going to the bathroom? Or would you go now while you had the chance? That's what the decision about "holding cash in reserve for a contingency" is like. |
Why diversify stocks/investments? | Diversifying is the first advice given to beginner in order to avoid big loss. For example in 2014 the company Theranos was really appealing before it fail in 2016. So a beginner could have invest ALL his money and lose it. But if he has deverified he wouldn't lost everything. As an investor goes from beginner to experience some still Diversify and other concentrate. Mostly it depends how much confident you are about an investement. If you have 20 years of experience, now everything about the company and you are sure there will be profit you can concentrate. If you are not 100% sure there will be a profit, it is better to Diversify. Diversifying can also be profitating when you loose money: because you will pay tax when you earn money, if you diversify you can choose to loose money in some stock (usually in december) and in this way cut your taxes. |
Shares in Chinese startup company | Setting up an entity that is partially foreign owned is not that difficult. It takes an additional 1-1.5 months in total, and in this particular case, you guys would be formed as a Joint Venture. It will cost a bit more (about 3-5000). If you're serious about owning a part of a business in China, you should carefully examine what he means by 'more complicated'. From my point of view, I have set up my own WOFE in China, and examined the possibilities of a JV and even considered using a friend to set up the company under their personal name as a domestic company (which is what your supervisor is doing), any difference between the three are not really a big deal anymore, and comes down to the competency of the agencies you are using and the business partner themselves. It cost me 11,000 for a WOFE including the agency and government registration fees (only Chinese speaking). You should also consider the other shareholders who may be part of this venture as well. If there are other shareholders, and you are not providing further tangible contribution, you will end up replaced and penniless (unless of course you trust them too...), because they are actually paying money to be part of the business and you are not. They will not part with equity for you. I'm not a lawyer, but think you should not rely on any promises other than what it says on a company registration paper. Good luck! |
Are tax deductions voluntary? | Legally: gods know. I would strongly recommend asking the Law asre of Stack Exchange to advise on that. Practically: What's the worst that happens? They audit, you say "Yeah, I could probably have claimed these deductions but I didn't want to; is that a problem?", they decide and either nothing happens or they issue you the unwanted refunnd. They aren't going to fine you for overpaying. Unless this would expose something criminal -- or you're a public figure and it would be embarassing -- this strikes me as falling firmly within the bounds of "no harm, no foul". |
What is a good way to save money on car expenses? | Replace your own brake pads Disc brake pads are usually snap-in replacement parts. YouTube has tons of videos showing how to do it. Find one with a car similar to your own. And it cannot be over-emphasized... Keep up on the routine maintenance. You can look up the schedule on your car manufacturer's website. |
How does start-up equity end up paying off? | The details of how you can convert your 5% equity share to cash or stocks will be detailed in writing in the legal agreement you have already signed. If you do not have any signed written agreement, there is no 5%. Since 0% of anything is zero, you can expect to get $0 some time within the next few years. Lastly, if the person running the business, tells you that there is 5% equity for you, even though it is not in writing, that is extremely unlikely to be the case. This is because the Seller of the equity has no obligation whatsoever to pay you. In fact, they are obligated by their other agreements with actual shareholders not to dilute their equity without good cause. So, odds are, if your agreement is not in writing, not only will it not be honored, but it probably can't be honored. |
If the U.S. defaults on its debt, what will happen to my bank money? | If you are actually referring to all the political rhetoric and posturing over the debt ceiling issue. That's a long ways from the US actually defaulting on paying debts. A lot of government offices might shut down, but I expect anyone holding US debt to be paid off. (they have the printing presses after all) If that's what you are referring to, based on the LAST time that the governement had to shut down because they didn't raise the debt ceiling, it won't be a big deal. Last time, no debt was defaulted on, a bunch of the less essential government offices shut down for a few days, and the stock market did a collective 'meh' over the whole thing. It was basically a non event. I've no reason to expect it will be different this time. (btw, where were all these republican budget cutters hiding when 10 years ago they started with a nearly balanced budget, and ended up blowing up the national debt by about 80% in 8 years time? (from roughly $6B to $11B) I wish they'd been screaming about the debt as much then as they are now. Not that there isn't ample blame to go around, and both sides have not been spending in ways that make a drunken sailor look like the paragon of a fiscal conservative, but to hear nearly any of them tell it, their party had nothing to do with taking us from a balanced budget to the highest burn rate ever while they were in control (with a giant financial crisis through in as pure 'bonus') |
How will a 1099 work with an existing W-2? | You can have multiple W2 forms on the same tax return. If you are using software, it will have the ability for you to enter additional W2 forms. If you are doing it by paper, just follow the instructions and combine the numbers at the correct place and attach both. Similarly you can also have a 1099 with and without a W2. Just remember that with a 1099 you will have to pay the self employment tax ( FICA taxes, both employee and employer) and that no taxes will be withheld. You will want to either adjust the withholding on your main job or file quartely estimated taxes. Travel reimbursement should be the same tax exempt wise. The difference is that with a 1098, you will need to list your business expenses for deduction on the corresponding tax schedule. The value on the 1099 will include travel reimbursement. But then you can deduct your self employment expenses. I believe schedule C is where this occurs. |
Need something more basic than a financial advisor or planner | If you are living near a land-grant university, you might be able to find help from the university's Extension Service. In many land-grant universities (the land grants were given to universities formed for the purpose of improving "agricultural and mechanical arts"), the Extension Services have expanded beyond farm-related services to include horticulture, food and nutrition counseling, consumer finance, money management and budgeting advice etc. See, for example this site. |
Comparing the present value of total payment today and partial payments over 3 months | I got $3394.83 The first problem with this is that it is backwards. The NPV (Net Present Value) of three future payments of $997 has to be less than the nominal value. The nominal value is simple: $2991. First step, convert the 8% annual return from the stock market to a monthly return. Everyone else assumed that the 8% is a monthly return, but that is clearly absurd. The correct way to do this would be to solve for m in But we often approximate this by dividing 8% by 12, which would be .67%. Either way, you divide each payment by the number of months of compounding. Sum those up using m equal to about .64% (I left the calculated value in memory and used that rather than the rounded value) and you get about $2952.92 which is smaller than $2991. Obviously $2952.92 is much larger than $2495 and you should not do this. If the three payments were $842.39 instead, then it would about break even. Note that this neglects risk. In a three month period, the stock market is as likely to fall short of an annualized 8% return as to beat it. This would make more sense if your alternative was to pay off some of your mortgage immediately and take the payments or yp pay a lump sum now and increase future mortgage payments. Then your return would be safer. Someone noted in a comment that we would normally base the NPV on the interest rate of the payments. That's for calculating the NPV to the one making the loan. Here, we want to calculate the NPV for the borrower. So the question is what the borrower would do with the money if making payments and not the lump sum. The question assumes that the borrower would invest in the stock market, which is a risky option and not normally advisable. I suggest a mortgage based alternative. If the borrower is going to stuff the money under the mattress until needed, then the answer is simple. The nominal value of $2991 is also the NPV, as mattresses don't pay interest. Similarly, many banks don't pay interest on checking these days. So for someone facing a real decision like this, I'd almost always recommend paying the lump sum and getting it over with. Even if the payments are "same as cash" with no premium charged. |
Ways to establish credit history for international student | I would like to post a followup after almost a quarter. littleadv's advice was very good, and in retrospect exactly what I should have done to begin with. Qualifying for a secured credit card is no issue for people with blank credit history, or perhaps for anyone without any negative entries in their credit history. Perhaps, cash secured loans are only useful for those who really have so bad a credit history that they do not qualify for any other secured credit, but I am not sure. Right now, I have four cash secured credit cards and planning to maintain a 20% utilization ratio across all of them. Perhaps I should update this answer in 1.5 years! |
Short selling - lender's motivation | Oftentimes, the lender (the owner of the security) is not explicitly involved in the lending transaction. Let's say the broker is holding a long-term position of 1MM shares from Client A. It is common for Client A's agreement with Broker A to include a clause that allows the broker to lend out the 1MM shares for its own profit ("rehypothecation"). Client A may be compensated for this in some form (e.g. baked into their financing rates), but they do not receive any compensation that is directly tied to lending activities. You also have securities lending agents that lend securities for an explicit fee. For example, the borrower's broker may not have sufficient inventory, in which case they would need to find a third-party lending agent. This happens both on-demand as well as for a fixed-terms (typically a large basket of securities). SLB (securities lending and borrowing) is a business in its own right. I'm not sure I follow your follow-up question but oftentimes there is no restriction that prevents the broker from lending out shares "for a very short time". Unless there is a transaction-based fee though, the number of times you lend shares does not affect "pocketing the interest" since interest accrues as a function of time. |
Transfer money from a real estate sale in India to the US | How would I go about doing this? Assuming you had purchased the house by funding from your NRE account, you can easily move back the 30K into NRE Account and out of India from NRI Account. The 30K profit would be taxed in India as per capital gains and can only be moved into NRO account. A CA would need to certify that appropriate taxes have been withheld before the bank will release the funds for repatriation out of India. There is also a limit [large 1 million USD] on how much funds can be moved out of India. Consult a CA who would help you with the formalities. If you have not funded the purchase from NRE account, the entire proceeds should be into NRO account and then move funds from there. |
Restricted Stock Grants - How to prepare tax return when you sell to cover taxes | You don't. When you sell them - your cost basis would be the price of the stock at which you sold the stocks to cover the taxes, and the difference is your regular capital gain. |
What are dividends, when are they paid, and how do they affect my position? | Dividends are declared by the board of directors of a corporation on date A, to stock holders of record on date B (a later date). These stockholders then receive the declared dividend on date C, the so-called payment date. All of these dates are announced on the first (declaration) date. If there is no announcement, no dividend will be paid. The stock typically goes down in price by approximately the amount of the dividend on the date it "goes ex," but then moves in price to reflect other developments, including the possibility of another declaration/payment, three months hence. Dividends are important to some investors, especially those who live on the income. They are less important to investors who are out for capital gains (and who may prefer that the company reinvest its money to seek such gains instead of paying dividends). In actual fact, dividends are one component of "total" or overall return. The other component is capital gains, and the sum of the two represents your return. |
Why do I see multiple trades of very small quantities? | Or it could be a Robinhood user just messing around with their free commissions. I've seen "people that work for organizations" and other analysts go crazy over some completely benign activity. It is like playing poker with a newbie, unpredictable. |
What variety of hedges are there against index funds of U.S. based stocks? | The only way to hedge a position is to take on a countervailing position with a higher multiplier as any counter position such as a 1:1 inverse ETF will merely cancel out the ETF it is meant to hedge yielding a negative return roughly in the amount of fees & slippage. For true risk-aversion, continually selling the shortest term available covered calls is the only free lunch. A suboptimal version, the CBOE BuyWrite Index, has outperformed its underlying with lower volatility. The second best way is to continually hedge positions with long puts, but this can become very tax-complicated since the hedged positions need to be rebalanced continually and expensive depending on option liquidity. The ideal, assuming no taxes and infinite liquidity, is to sell covered calls when implied volatility is high and buy puts when implied volatility is low. |
Why is property investment good if properties de-valuate over time? | When you buy a property the house or the building goes down in value every year (it gets depreciated) similar to when you drive a new car out of the lot. However, it is the land that increases in value over time. As land becomes scarcer the value of land in that area will increase in value, as does land in sought after areas. If more people want to live in a particular suburb the land value will keep on increasing year after year. Sometimes established areas with houses built in the 1980s or even earlier can be worth much more than newly built areas. It comes down to the supply and demand of land and houses in a particular area. You might even get a situation where a run-down dilapidated house in a very sought after suburb sells for more than a brand new house in a less sought-after suburb nearby. Properties can be a very good investment and they can be a very poor investment. It can largely depend on the decisions you make in buying your investment property. The first thing you need to make a decision on is the location of the property. If you buy a property in a good area that is well sought after you can make good capital and rental returns over the long run. If you buy poorly in an area no one wants to live in then you might have problems renting it out or only be able to rent it out to bad tenants who cause damage, and you may not get any capital gains over many years. The second thing you need to decide on is when in the property cycle you buy the property. If you buy at the right time you can get higher rents and make some quick capital gains over a relatively short time. I can provide a personal example of this situation. I had bought a house (in Australia) in 2007 for $240,000 at a time when interests where at their highest (9%), no one was buying property and rents were on the increase (with low vacancy rates). Today, eight years after, we are getting $410 per week rent and the house next door (in worse condition than ours) has been put on the market asking for between $500,000 to $550,000 (most houses in the area had been selling during this year for over $500,000). So you can say that our house has more than doubled in 8 years. However, up to a few months ago houses were selling within 2 weeks of being listed. The house next door however, has been listed for over a month and has not had very much interest. So from this you can conclude that in 2007 we had bought near the bottom of the market, whilst now we are near the top of the market. What you also need to remember is that different areas of a country can have different cycles, so there is not just one property cycle but many property cycles in the same country. |
why do energy stocks trade at lower prices compared to other sectors? | I don't know why stocks in some industries tend to have lower prices per share than others. It doesn't really matter much. Whether a company has 1,000,0000 shares selling for $100 each, or 10,000,000 shares selling for $10 each, either way the total value is the same. Companies generally like to keep the share price relatively low so that if someone wants to buy a small amount, they can. Like if the price was $10,000 per share, than an investor with less than $10,000 to put in that one stock would be priced out of the market. If it's $10, then if someone wants $10 they can buy one share, and if someone wants $10,000 they can buy 1000 shares. As to why energy stocks are volatile, I can think of several reasons. One, in our current world, energy is highly susceptible to politics. A lot of the world's energy comes from the Middle East, which is a notoriously unstable region. Any time there's conflict there, energy supplies from the region become uncertain. Oil-producing countries may embargo countries that they don't like. A war will, at the very least, interfere with transportation and shipping, and may result in oil wells being destroyed. Etc. Two, energy is consumed when you use it, and most consumers have very limited ability to stockpile. So you're constantly buying the energy you need as you need it. So if demand goes down, it is reflected immediately. Compare this to, say, clothing. Most people expect to keep the same clothes for years, wearing them repeatedly. (Hopefully washing them now and then!) So if for some reason you decided today that you only need three red shirts instead of four, this might not have any immediate impact on your buying. It could be months before you would have bought a new red shirt anyway. There is a tendency for the market to react rather slowly to changes in demand for shirts. But with energy, if you decide you only need to burn 3 gallons of gas per week instead of 4, your consumption goes down immediately, within days. Three, really adding to number two, energy is highly perishable, especially some forms of energy. If a solar power station is capable of producing 10 megawatts but today there is only demand for 9 megawatts, you can't save the unused megawatt for some future time when demand is higher. It's gone. (You can charge a battery with it, but that's pretty limited.) You can pile up coal or store natural gas in a tank until you need it, but you can't save the output of a power plant. Note numbers two and three also apply to food, which is why food production is also very volatile. |
How to Store Funds Generated through FX Trading | Earned income is what your software is doing, so it is taxable. So you can't really make it tax exempt. You can form a business and claim the revenues from that business as income and deduct expenses it costs you to earn that revenue. If you buy a server to run your software, then that is an acceptable expense to deduct from your revenues. Others can be more questionable and the best thing to do is to consult a CPA. If you are still in the testing stage and the revenues will be small then it should not matter. Worry about the important things, not if you paid the IRS a few hundred to much. Are you in a state/country that allows online gambling? In most states here in the US you are operating on shaky legal ground. Before "Black Friday" I used to earn a nice part-time income playing online poker. |
Do I have to pay a capital gains tax if I rebuy different stocks? | Probably. It sounds like you're looking for a 1031-exchange for stocks and bonds. From the wikipedia page for 1031-exchanges: To qualify for Section 1031 of the Internal Revenue Code, the properties exchanged must be held for productive use in a trade or business or for investment. Stocks, bonds, and other properties are listed as expressly excluded by Section 1031 of the Internal Revenue Code, though securitized properties are not excluded. 1031-exchanges usually are applicable in real estate. |
Advice for opening an IRA as a newbie | If you want to 'offset' current (2016) income, only deductible contribution to a traditional IRA does that. You can make nondeductible contributions to a trad IRA, and there are cases where that makes sense for the future and cases where it doesn't, but it doesn't give you a deduction now. Similarly a Roth IRA has possible advantages and disadvantages, but it does not have a deduction now. Currently he maximum is $5500 per person ($6500 if over age 50, but you aren't) which with two accounts (barely) covers your $10k. To be eligible to make this deductible traditional contribution, you must have earned income (employment or self-employment, but NOT the distribution from another IRA) at least the amount you want to contribute NOT have combined income (specifically MAGI, Modified Adjusted Gross Income) exceeding the phaseout limit (starts at $96,000 for married-joint) IF you were covered during the year (either you or your spouse) by an employer retirement plan (look at box 13 on your W-2's). With whom. Pretty much any bank, brokerage, or mutual fund family can handle IRAs. (To be technical, the bank's holding company will have an investment arm -- to you it will usually look like one operation with one name and logo, one office, one customer service department, one website etc, but the investment part must be legally separate from the insured banking part so you may notice a different name on your legal and tax forms.) If you are satisified with the custodian of the inherited IRA you already have, you might just stay with them -- they may not need as much paperwork, you don't need to meet and get comfortable with new people, you don't need to learn a new website. But if they sold you an annuity at your age -- as opposed to you inheriting an already annuitized IRA -- I'd want a lot of details before trusting they are acting in your best interests; most annuities sold to IRA holders are poor deals. In what. Since you want only moderate risk at least to start, and also since you are starting with a relatively small amount where minimum investments, expenses and fees can make more of an impact on your results, I would go with one or a few broad (= lower risk) index (= lower cost) fund(s). Every major fund familly also offers at least a few 'balanced' funds which give you a mixture of stocks and bonds, and sometimes some 'alternatives', in one fund. Remember this is not committing you forever; any reasonable custodian will allow you to move or spread to more-adventurous (but not wild and crazy) investments, which may be better for you in future years when you have some more money in the account and some more time to ponder your goals and options and comfort level. |
Deducting last years (undocumented) side business loss | You should speak to a good tax adviser. The less documentation you have the more problems IRS are going to cause you. Generally you can deduct business losses (in the year they occurred, which is 2011), but you have to show that that was a valid business, not just a way to reduce your tax bill with personal expenses. Thus lack of documentation reduces your ability to prove that you're entitled to the deduction. The burden of proof is generally on you. You can not deduct it from 2012 taxes, but you can still amend 2011. Keep in mind though that amended returns have higher chance of audit, and a significant business loss on a business that only existed that year is a major red flag which will raise the probability of an audit to very high percentage. Theoretically, if the business was real and just failed - you can definitely deduct this. But practically, lack of documentation may cause too big a problem, and a tax adviser might suggest you giving it up if he doesn't think you have a real chance to convince the IRS. Definitely don't do that without a professional advice. It is worth fighting for, its quite a loss, but don't do it on your own as you will definitely lose. |
Optimal Asset Allocation | There are a couple of reasons to diversify your assets. First, since we cannot predict which of our investments will perform best, we want to "cast our net" broadly enough to have something invested in what's going to be performing well. Second, diversification isn't intended to provide the highest returns, but rather it is used to soften the effects of market volatility. By softening the downsides and lowering the overall volatility among our assets, returns are more consistent. If a model does not address future downside risk it is only telling you part of the story. (Past performance does not guarantee... you get the picture) |
Definition of gross income (Arizona state tax filing requirements) | Disclaimer: I am not a tax professional. Please don't rely on this answer in lieu of professional advice. If your sole source of Arizona income is your commercial property, use the number on line 17 of your federal form 1040. This number is derived from your federal Schedule E. If you have multiple properties (or other business income from S corporations or LLCs), use only the Schedule E amount pertaining to the AZ property. |
First concrete steps for retirement planning when one partner is resistant | Bringing your spouse on board a financial plan is key to success. The biggest part is to have a shared dream. Having retirement saving doesn't mean that you can't work. It does mean that you both will have some level of security as you age. Does your husband really want you to be impoverished when he dies? I doubt it, he probably just hasn't given it much thought. A strong nest-egg can help you after his is gone even if you are still working. My wife and I follow Dave Ramsey's baby steps. It has worked like a champ for us and can help you as well. You can look up his plan, most of the materials are free. A few highlights: So in short, don't worry about retirement until you two are out of debt. Once you two are out of debt then save for your retirement, kids college and pay off your home early. Building a shared dream with your husband is the best way to get him onboard. Talk about helping the kids, freedom to vacation, your parents struggle, whatever gets him to see the importance of having some savings. |
How to calculate how much a large stock position is really worth? | I don't have a formula for anything like this, but it is important to note that the "current value" of any asset is really theoretical until you actually sell it. For example, let's consider a house. You can get an appraisal done on your house, where your home is inspected, and the sales of similar houses in your area are compared. However, this value is only theoretical. If you found yourself in a situation where you absolutely had to sell your house in one week, you would most likely have to settle for much less than the appraised value. The same hold true for collectibles. If I have something rare that I need cash for immediately, I can take it to a pawn shop and get cash. However, if I take my time and locate a genuinely interested collector, I can get more for it. This is comparable to someone who holds a significant percentage of shares in a publicly held corporation. If the current market value of your shares is $10 million, but you absolutely need to sell your entire stake today, you aren't going to get $10 million. But if you take your time selling a little at a time, you are more likely to get much closer to this $10 million number. A "motivated seller" means that the price will drop. |
View asset/holdings breakdown within fund | The full holdings will be listed in the annual report of the fund, obviously the holdings would only be completely accurate as of the date of the reporting. This is the most recent annual report for FMAGX. I got it from my Schwab research section under "All Fund Documents" but I'm sure you can find it other ways. When I use google to search for "fmagx annual report" this link was the first result. |
Received an unexpected cashiers check for over $2K from another state - is this some scam? | Some of these answers are actually wrong. Basically if you were to cash this cheque, you are committing bank fraud. The cheque is usually fake and ends up with them cashing it off your account--this is how cheques work, when you cash a cheque, you are the one ultimately responsible for the validity of what you're cashing. This is why large cheques are balanced against your active account--so what happens is they essentially just take money from you and leave you red handed. |
Equation to determine if a stock is oversold and by how much? | There are those who would suggest that due to the Efficient Market Hypothesis, stocks are always fairly valued. Consider, if non-professional posters on SE (here) had a method that worked beyond random chance, everyone seeking such a method would soon know it. If everyone used that method, it would lose its advantage. In theory, this is how stocks' values remain rational. That said, Williams %R is one such indicator. It can be seen in action on Yahoo finance - In the end, I find such indicators far less useful than the news itself. BP oil spill - Did anyone believe that such a huge oil company wouldn't recover from that disaster? It recovered by nearly doubling from its bottom after that news. A chart of NFLX (Netflix) offers a similar news disaster, and recovery. Both of these examples are not quantifiable, in my opinion, just gut reactions. A quick look at the company and answer to one question - Do I feel this company will recover? To be candid - in the 08/09 crash, I felt that way about Ford and GM. Ford returned 10X from the bottom, GM went through bankruptcy. That observation suggests another question, i.e. where is the line drawn between 'investing' and 'gambling'? My answer is that buying one stock hoping for its recovery is gambling. Being able to do this for 5-10 stocks, or one every few months, is investing. |
Why do employers require you to spread your 401(k) contributions throughout the year to get the maximum match? | If one makes say, $10K/mo, and the company will match the first 5% dollar for dollar, a 10%/mo deposit of $1K/mo will see a $500/mo match. If the employee manages to request 90% get put into the 401(k), after 2 months, he's done. If the company wished, they could continue the $500/mo match, I agree. They typically don't and in fact, the 'true up' you mention isn't even required, one is fortunate to get it. Many companies that match are going the other way, matching only after the year is over. Why? Why does any company do anything? To save money. I used to make an attempt to divide my deposit over the year to max out the 401(k) in December and get the match real time, not a true up. |
Does an option trading below parity always indicate an arbitrage opportunity? | Defining parity as "parity is the amount by which an option is in the money", I'd say there may be an arbitrage opportunity. If there's a $50 strike on a stock valued at $60 that I can buy for less than $10, there's an opportunity. Keep in mind, options often show high spreads, my example above might show a bid/ask of $9.75/$10.25, in which case the last trade of $9.50 should be ignored in favor of the actual ask price you'd pay. Mispricing can exist, but in this day and age, is far less likely. |
The Benefits/Disadvantages of using a credit card | If you can use and pay off your credit card in full every month, there are plenty of benefits including improved credit, reward points and more. Many fall into the trap of just making the minimum payments and facing high interest charges or missing payments and getting a hit on their credit reports. To start off, put something small that you know you can pay off every month. It could be your Netflix or your gas. Make sure you pay it off before any interest is accrued. Over time, you can ask for higher limits to boost your utilization rate. |
Why is Net Asset Value (NAV) only reported by funds, but not stocks? | Nobody tracks a single company's net assets on a daily basis, and stock prices are almost never derived directly from their assets (otherwise there would be no concept of 'growth stocks'). Stocks trade on the presumed current value of future positive cash flow, not on the value of their assets alone. Funds are totally different. They own nothing but stocks and are valued on the basis on the value of those stocks. (Commodity funds and closed funds muddy the picture somewhat, but basically a fund's only business is owning very liquid assets, not using their assets to produce wealth the way companies do.) A fund has no meaning other than the direct value of its assets. Even companies which own and exploit large assets, like resource companies, are far more complicated than funds: e.g. gold mining or oil extracting companies derive most of their value from their physical holdings, but those holdings value depends on the moving price and assumed future price of the commodity and also on the operations (efficiency of extraction etc.) Still different from a fund which only owns very liquid assets. |
Looking to buy a house in 1-2 years. Does starting a Roth IRA now make sense? | First, look at the local housing market, and the price to rent ratios. If you are comfortable that a house can be had for near to the cost of renting, and are not still dropping is price, then focus on the down-payment. I don't imagine housing prices to start picking up any time soon, so you don't be too rushed. If you feel like you have a longer time to save before you want to buy, I would focus as much money as I can into a retirement account while still saving for a down payment. Since you are young, you really want your retirement accounts working for you as soon as possible. You should not be investing in 3% stable funds, but the stock market index funds. Retirement is for 40 years in the future. Using funds for a down-payment from a retirement account should be a last resort. Remember this money is to provide you security later in life, not to get you into a house. When you take out money and put it into a house, it will not be appreciating nearly as fast. It is easy to say you will save later, but the money you save early in life will make up 50% or more of your funds when you retire. That is why it is critical to save for retirement as soon as possible. |
How do you quantify investment risk? | For a retail investor who isn't a Physics or Math major, the "Beta" of the stock is probably the best way to quantify risk. Examples: A Beta of 1 means that a stock moves in line with the market. Over 1 means that you would expect the stock to move up or down faster than the market as a whole. Under 1 means that you would expect the stock to move slower than the market as a whole. |
HELOC vs. Parental Student Loans vs. Second Mortgage? | Debt is no fun. Getting out of debt to replace it with more debt is no fun. In both cases, you are making an investment in your child's future. That's laudable, but there might be other ways to economize on the education costs. I prefer HELOC debt because I can deduct the interest (as you pointed out) and it usually allows re-borrowing if other cash-flow problems crop up. The downside of borrowing against your house is that your house could be foreclosed if you become insolvent, and you will lose your buffer if you max out the equity now. The same problem exists with a 2nd mortgage. The fact that you would still have a mortgage either way does make the option more attractive though (or less unattractive anyway). |
Double-Taxation of Royalties paid for in Korea to a US Company | If treaties are involved for something other than exempting student wages on campus, you shouldn't do it yourself but talk to a licensed US tax adviser (EA/CPA licensed in your state) who's well-versed in the specific treaty. Double taxation provisions generally mean that you can credit the foreign tax paid to your US tax liability, but in the US you can do that regardless of treaties (some countries don't allow that). Also, if you're a US tax resident (or even worse - a US citizen), the royalties related treaty provision might not even apply to you at all (see the savings clause). FICA taxes are generally not part of the income tax treaties but totalization agreements (social security-related taxes, not income taxes). Most countries who have income tax treaties with the US - don't have social security totalization agreements. Bottom line - talk to a licensed professional. |
(Almost) no credit unions in New York City, why? | There are 2 credit unions in the Metro NY area that are open to everyone: You might also want to check out aSmarterChoice.org to see if there are other credit union options based on where you live, work, worship & more. |
Data source for historical intra-day bid/ask price data for stocks? | This amazing site will answer all your data questions. You will need some patience and willingness to spend to get the data that you want. A lot of data is available for free too` https://www.quandl.com/ |
Mutual fund value went down, shares went up, no action taken by me | You did something that you shouldn't have done; you bought a dividend. Most mutual fund companies have educational materials on their sites that recommend against making new investments in mutual funds in the last two months of the year because most mutual funds distribute their earnings (dividends, capital gains etc) to their shareholders in December, and the share price of the funds goes down in the amount of the per share distribution. These distributions can be taken in cash or can be re-invested in the fund; you most likely chose the latter option (it is often the default choice if you ignored all this because you are a newbie). For those who choose to reinvest, the number of shares in the mutual fund increases, but since the price of the shares has decreased, the net amount remains the same. You own more shares at a lower price than the day before when the price was higher but the total value of your account is the same (ignoring normal market fluctuations in the price of the actual stocks held by the fund. Regardless of whether you take the distributions as cash or re-invest in the fund, that money is taxable income to you (unless the fund is owned inside a 401k or IRA or other tax-deferred investment program). You bought 56 shares at a price of $17.857 per share (net cost $1000). The fund distributed its earnings shortly thereafter and gave you 71.333-56= 15.333 additional shares. The new share price is $14.11. So, the total value of your investment is $1012, but the amount that you have invested in the account is the original $1000 plus the amount of the distribution which is (roughly) $14.11 x 15.333 = $216. Your total investment of $1216 is now worth $1012 only, and so you have actually lost money. Besides, you owe income tax on that $216 dividend that you received. Do you see why the mutual fund companies recommend against making new investments late in the year? If you had waited till after the mutual fund had made its distribution, you could have bought $1000/14.11 = 70.871 shares and wouldn't have owed tax on that distribution that you just bought by making the investment just before the distribution was made. See also my answer to this recent question about investing in mutual funds. |
Pros/Cons of Buying Discounted Company Stock | I see another way of looking at this that hasn't been addressed yet. By offering the discount, the company is attempting to change your behavior into doing something irrational, that benefits them at your expense. The company hopes for one (or more) of the following psychological effects to happen to you: The proper thing to do, if you have enough capital to prevent margin calls, it to short-sell the stock at the same instant the price is set, thus locking in the profit. Eventually you can take possession of the shares and deliver them to offset the short -- hopefully before you get a margin call from the stock dropping. |
What are the typical repayment plans for Credit Cards in the United States? | It is called "Credit card installments" or "Equal pay installments", and I am not aware of them being widely used in the USA. While in other countries they are supported by banks directly (right?), in US you may find this option only in some big stores like home improvement stores, car dealerships, cell phone operators (so that you can buy a new phone) etc. Some stores allow 0% financing for, say, 12 months which is not exactly the same as installments but close, if you have discipline to pay $250 each month and not wait for 12 months to end. Splitting the big payment in parts means that the seller gets money in parts as well, and it adds risks of customer default, introduces debt collection possibility etc. That's why it's usually up to the merchants to support it - bank does not care in this case, from the bank point of view the store just charges the same card another $250 every month. In other countries banks support this option directly, I think, taking over or dividing the risk with the merchants. This has not happened in US. There is a company SplitIt which automates installments if stores want to support it but again, it means stores need to agree to it. Here is a simple article describing how credit cards work: https://www.usbank.com/credit-cards/how-credit-cards-work.html In general, if you move to US, you are unlikely to be able to get a regular credit card because you will not have any "credit history" which is a system designed to track each customer ability to get & pay off debt. The easiest way to build the history - request "secured credit card", which means you have to give the bank money up front and then they will give you a credit card with a credit limit equal to that amount. It's like a "practice credit card". You use it for 6-12 months and the bank will report your usage to credit bureaus, establishing your "credit score". After that you should be able to get your money back and convert your secured card into a regular credit card. Credit history can be also built by paying rent and utilities but that requires companies who collect money to report the payments to credit bureaus and very few do that. As anything else in US, there are some businesses which help to solve this problem for extra money. |
Is a car loan bad debt? | Here is another way to look at it. Does this debt enable you to buy more car than you can really afford, or more car than you need? If so, it's bad debt. Let's say you don't have the price of a new car, but you can buy a used car with the cash you have. You will have to repair the car occasionally, but this is generally a lot less than the payments on a new car. The value of your time may make sitting around waiting while your car is repaired very expensive (if, like me, you can earn money in fine grained amounts anywhere between 0 and 80 hours a week, and you don't get paid when you're at the mechanic's) in which case it's possible to argue that buying the new car saves you money overall. Debt incurred to save money overall can be good: compare your interest payments to the money you save. If you're ahead, great - and the fun or joy or showoff potential of your new car is simply gravy. Now let's say you can afford a $10,000 car cash - there are new cars out there at this price - but you want a $30,000 car and you can afford the payments on it. If there was no such thing as borrowing you wouldn't be able to get the larger/flashier car, and some people suggest that this is bad debt because it is helping you to waste your money. You may be getting some benefit (such as being able to get to a job that's not served by public transit, or being able to buy a cheaper house that is further from your job, or saving time every day) from the first $10,000 of expense, but the remaining $20,000 is purely for fun or for showing off and shouldn't be spent. Certainly not by getting into debt. Well, that's a philosophical position, and it's one that may well lead to a secure retirement. Think about that and you may decide not to borrow and to buy the cheaper car. Finally, let's say the cash you have on hand is enough to pay for the car you want, and you're just trying to decide whether you should take their cheap loan or not. Generally, if you don't take the cheap loan you can push the price down. So before you decide that you can earn more interest elsewhere than you're paying here, make sure you're not paying $500 more for the car than you need to. Since your loan is from a bank rather than the car dealership, this may not apply. In addition to the money your cash could earn, consider also liquidity. If you need to repair something on your house, or deal with other emergency expenditures, and your money is all locked up in your car, you may have to borrow at a much higher rate (as much as 20% if you go to credit cards and can't get it paid off the same month) which will wipe out all this careful math about how you should just buy the car and not pay that 1.5% interest. More important than whether you borrow or not is not buying too much car. If the loan is letting you talk yourself into the more expensive car, I'd say it's a bad thing. Otherwise, it probably isn't. |
How can a credit card company make any money off me? I have a no-fee card and pay my balance on time | Ever wonder why certain businesses won't accept certain credit cards? (The sign above the register saying "Sorry, we don't accept AmericanExpress"). It's because they don't want to pay that credit card company's transaction fees. One of the roles of the credit card company is to facilitate the transaction process between the customer (you) and the store. And now that using credit cards over cash or check is so ingrained in our culture, it creates extra work for the customer to make purchases at an establishment that is cash-only. Credit card companies know this, and so do businesses. So businesses will partner with credit card companies so that customers can use their cards. This way, everything is handled electronically (this can also benefit the business, since there's added security as they're not dealing with cash directly, and they don't have to manually count as much cash later). However a business may only budget a certain amount of their profits they want taken by credit card transactions. So if a company's fees are too high (say AmericanExpress, for example) and they are banking on you already having a Visa card, the company isn't going to go out of its way to provide the AmericanExpress option for you. If it were free for the business to use a credit card company's service at their stores, then they would all just provide the option for every card! So the credit card company making money is all contingent on you spending your money by using their credit card. You use the card, and the store pays the company for the transaction. |
What are the usual terms of a “rent with an option to buy” situation? | In most cases an rent with option to buy is structured as follows: The renter/buyer will place a deposit/premium (not the same as a security deposit) that purchases the option( the right ) to buy the home at a future date at a specific price. The renter / buyer will often pay extra rent in addition to market rent. Many times this additional rent is contracted to be applied to the purchase price of the home. The risks to the renter/buyer are as follows: Also, something to note: Many people will recommend that you use the additional rents to be applied specifically towards the downpayment. Be wary of this. There are no institutional lenders available today that will allow the additional rent money to be applied towards your downpayment. That means you must come up with the downpayment in cash before closing. The additional rent payments can be used towards the price. Hope that helps. Good luck! |
Is it possible for me to keep my credit card APR at 0% permanently? | Banks are in it to make money. But they're expected to provide a social good which powers our economy: secure money storage (bank accounts) and cashless transactions (credit/debit cards). And the government does not subsidize this. In fact, banks are being squeezed. Prudent customers dislike paying the proper cost of their account's maintenance (say, a $50/year fee for a credit card, or $9/month for a checking account) - they want it free. Meanwhile government is pretty aggressive about preventing "fine print" trickery that would let them recover costs other ways. However there isn't much sympathy for consumers who make trivial mistakes - whether they be technical (overdraft, late fee) or money-management mistakes (like doing balance transfers or getting fooled by promotional interest rates). So that's where banks are able to make their money: when people are imprudent. The upshot is that it's hard for a bank to make money on a prudent careful customer; those end up getting "subsidized" by the less-careful customers who pay fees and buy high-margin products like balance transfers. And this has created a perverse incentive: banks make more money when they actively encourage customers to be imprudent. Here, the 0% interest is to make you cocky about running up a balance, or doing balance transfers at a barely-mentioned fee of 3-5%. They know most Americans don't have $500 in the bank and you won't be able to promptly pay it off right before the 0% rate ends. (or you'll forget). And this works - that's why they do it. By law, you already get 0% interest on purchases when you pay the card in full every month. So if that's your goal, you already have it. In theory, the banks collect about 1.5% from every transaction you do, and certainly in your mind's eye, you'd think that would be enough to get by without charging interest. That doesn't work, though. The problem is, such a no-interest card would attract people who carry large balances. That would have two negative impacts: First the bank would have to spend money reborrowing, and second, the bank would have huge exposure to credit card defaults. The thing to remember is the banks are not nice guys and are not here to serve you. They're here to use you to make money, and they're not beneath encouraging you to do things that are actually bad for you. Caveat Emptor. |
I'm only spending roughly half of what I earn; should I spend more? | Heck no, don't spend more! I saved a ton of money when I got my first real job. You won't always be able to do this. Save a bundle while you can. |
Facebook buying WhatsApp for 19 Billion. How are existing shareholders affected? | Of course it is a dilution of existing shareholders. When you buy milk in the supermarket - don't you feel your wallet diluted a little? You give some $$$ you get milk in return. You give some shares, you get Watsapp in return. That's why such purchases must go through certain process of approval - board of directors (shareholders' representatives) must approve it, and in some cases (don't know if in this particular) - the whole body of the shareholders vote on the deal. |
Why is auto insurance ridiculously overpriced for those who drive few miles? | There is plenty of over-rationalisation in the majority of these answers, when the simple answer is that it is simply down to statistics. Say an insurer had two pieces of information about two separate drivers: annual mileage, and whether they had had an accident in the last 3 years. Driver A drives 10,000 miles a year and hasn't had an accident in the past 3 years. Driver B drives 500 miles a year and hasn't had an accident in the past 3 years. Which would the insurer think was the safer bet? The answer is A, and this makes his premiums lower. The reason for this is that the insurer has a lot more data about Driver A than Driver B: they know that Driver A has driven 30,000 miles without having an accident. This could, of course, be luck, or a fluke, but it is likely that Driver A is actually a safe driver. The chance that Driver A hasn't had an accident just through sheer luck and that they are actually a terrible driver is quite slim. On the other hand, Driver B has only driven 1,500 miles in the past three years. Whilst this seems like prima facie evidence of them being as safe a driver as Driver A, it is much more likely that Driver B could have driven 1,500 miles and avoided an accident through sheer luck, even though they are a terrible driver. This means drivers who drive low amounts of mileage will be penalised relative to other drivers who have high mileage. It has nothing to do with insurers taking a judgement that 'doing more mileage makes you more experienced' or 'makes you a better driver' as others have suggested here (although, it is probably true - it's not quantifiable from an insurer's perspective). |
Ideal investments for a recent college grad with very high risk tolerance? | If you're sure you want to go the high risk route: You could consider hot stocks or even bonds for companies/countries with lower credit ratings and higher risk. I think an underrated cost of investing is the tax penalties that you pay when you win if you aren't using a tax advantaged account. For your speculating account, you might want to open a self-directed IRA so that you can get access to more of the high risk options that you crave without the tax liability if any of those have a big payout. You want your high-growth money to be in a Roth, because it would be a shame to strike it rich while you're young and then have to pay taxes on it when you're older. If you choose not to make these investments in a tax-advantaged account, try to hold your stocks for a year so you only get taxed at capital gains rates instead of as ordinary income. If you choose to work for a startup, buy your stock options as they vest so that if the company goes public or sells privately, you will have owned those stocks long enough to qualify for capital gains. If you want my actual advice about what I think you should do: I would increase your 401k percentage to at least 10% with or without a match, and keep that in low cost index funds while you're young, but moving some of those investments over to bonds as you get closer to retirement and your risk tolerance declines. Assuming you're not in the 25% tax bracket, all of your money should be in a Roth 401k or IRA because you can withdraw it without being taxed when you retire. The more money you put into those accounts now while you are young, the more time it all has to grow. The real risk of chasing the high-risk returns is that when you bet wrong it will set you back far enough that you will lose the advantage that comes from investing the money while you're young. You're going to have up and down years with your self-selected investments, why not just keep plugging money into the S&P which has its ups and downs, but has always trended up over time? |
Should I replace bonds in a passive investment strategy | The fact that some asset (in this case corporate bonds) has positive correlation with some other asset (equity) doesn't mean buying both isn't a good idea. Unless they are perfectly correlated, the best risk/reward portfolio will include both assets as they will sometimes move in opposite directions and cancel out each other's risk. So yes, you should buy corporate bonds. Short-term government bonds are essentially the risk-free asset. You will want to include that as well if you are very risk averse, otherwise you may not. Long-term government bonds may be default free but they are not risk free. They will make money if interest rates fall and lose if interest rates rise. Because of that risk, they also pay you a premium, albeit a small one, and should be in your portfolio. So yes, a passive portfolio (actually, any reasonable portfolio) should strive to reduce risk by diversifying into all assets that it reasonably can. If you believe the capital asset pricing model, the weights on portfolio assets should correspond to market weights (more money in bonds than stocks). Otherwise you will need to choose your weights. Unfortunately we are not able to estimate the true expected returns of risky assets, so no one can really agree on what the true optimal weights should be. That's why there are so many rules of thumb and so much disagreement on the subject. But there is little or no disagreement on the fact that the optimal portfolio does include risky bonds including long-term treasuries. To answer your follow-up question about an "anchor," if by that you mean a risk-free asset then the answer is not really. Any risk-free asset is paying approximately zero right now. Some assets with very little risk will earn a very little bit more than short term treasuries, but overall there's nowhere to hide--the time value of money is extremely low at short horizons. You want expected returns, you must take risk. |
Looking for suggestions for relatively safe instruments if another crash were to happen | Nobody has a "crash proof" portfolio -- you can make it "crash resistant". You protect against a crash by diversifying and not reacting out of fear when the markets are down. Be careful about focusing on the worst possible scenario (US default) vs. the more likely scenarios. Right now, many people think that inflation and interest rates are heading up -- so you should be making sure that your bond portfolio is mostly in short-duration bonds that are less sensitive to rate risk. Another risk is opportunity cost. Many people sold all of their equities in 2008/2009, and are sitting on lots of money in cash accounts. That money is "safe", but those investors lost the opportunity to recoup investments or grow -- to the tune of 25-40%. |
Self Assessment UK - Goods and services for your own use | Work on your own site is certainly not relevant here, that's just a part of your trade, not a service you provided to yourself. The business received the benefit of that work, not you. Suppose your business sold televisions. If you took a TV from stock for your own lounge, that would be included in this box because you have effectively paid yourself with a TV rather than cash. If you take a TV from stock to use as a demo model, that's part of your trade and not goods you have taken out of the business for your own use. For services provided to your dad it's less clear. As Skaty said, it depends whether it's your business providing the service, or you personally. If you gave your dad a free TV then it would be clear that you have effectively paid yourself with another TV and then given it to your dad as a gift. With services it's less clear whether you're receiving services from the business for free. You might consider how it would be treated by your employer if you weren't self-employed. If you were just applying your skills to help your dad in your free time, your employer wouldn't care. If you used your employer's equipment or facilities, or hosted his site on a server that your employer pays for, your employer would be more likely to discipline you for effectively stealing services from them, as they would if you took a TV from their warehouse for him. |
Should I pay off my 50K of student loans as quickly as possible, or steadily? Why? | Two things you should consider about paying off student loans ahead of the 10 year amortization schedule: What interest rate are you paying on your loans? What are you earning on your investments in a balanced mutual fund? When you pay off your student loans you are essentially guaranteed a return of the interest rate on your loan (future interest you would have had to pay). However if you are investing well and getting a good return on your investments you will get a greater return. Ex. Half of my student loans are at 6.8%, thr other half are at 2.5%. I make the minimum payments on the loans at 2.5% and invest my money in tax sheltered retirement accounts. The return on these funds has been 8% and that is on per-tax dollars so really closer to 11%. Now there is also downside risk when you invest in the market, but 2.5% guaranteed I will forgoe for 11% in low risk return. However my loans at 6.8% I repay in excess of the minimums because 6.8% guaranteed return is pretty good! So this decision is based on your confidence in your investments and your own risk tolerance. Once you pay your bank on your student loans that money is gone, out of your control. If you need it in the future you may need to pay higher interest on an unsecured loan, or you may not be able to borrow it. When you want to make large purchases (a car, house) that money you per-paid on your loans isn't available to you as a down payment. Banks should want you to have some of your own "skin in the game" on these purchases and the lending standards keep getting tougher. You are better off if you have money saved in your name rather than against the balance on your loan. Yes you can't bankrupt these loans, but the money you repay on them doesn't go toward housing you or paying your bills on a rainy day. I went through the same feeling when I completed my MBA with $50k in debt, you want to pay it off as soon as possible. But you need to step away and realize that it was an investment in your future and your future is long, you need time to make a financial foundation for it. And you will feel a lot more empowered when you have money saved and you can make the decision for how you want to deploy it to work for you. (Ex. I could pay down my student loans with the balance I have in the bank, but I am going to use it to invest in myself and open my own business). |
My investment account is increasingly and significantly underperforming vs. the S&P 500. What should I do? | absolutely $SPY ETF is the way to go if your point of comparison is the S&P and you want to do low maintenance. |
Calculate Finance Rate, Interest Amount when we have below line Fees | The equation for the payment is This board does not support Latex (the number formatting code) so the above is an image, the code is M is the payment calculated, n is the number of months or periods to pay off, and i is the rate per period. You can see that with i appearing 3 times in this equation, it's not possible to isolate to the form i=.... so a calculator will 'guess,' and use, say, 10%. It then raises or lowers the rate until the result is within the calculator's tolerance. I've observed that unlike other calculations, when you hit the button to calculate, a noticeable time lag occurs. I hope I haven't read too much into your question, it seemed to me this was what you asked. |
Question about dividends and giant companies [duplicate] | Dividends are a way of distributing profits from operating a business to the business owners. Why would you call it "wasting money" is beyond me. Decisions about dividend distribution are made by the company based on its net revenue and the needs of future capital. In some jurisdictions (the US, for example), the tax policy discourages companies from accumulating too much earnings without distributing dividends, unless they have a compelling reason to do so. Stock price is determined by the market. The price of a stock is neither expensive nor cheap on its own, you need to look at the underlying company and the share of it that the stock represents. In case of Google, according to some analysts, the price is actually quite cheap. The analyst consensus puts the target price for the next 12 months at $921 (vs. current $701). |
Why are bank transactions not instant? | If you want your bank to pay $1 to a beneficiary Bob, then the service (no matter how implemented) needs to result in Bob's bank saying to Bob "Hey, I owe you $1". The usual way how this is done consists of two parts - your bank needs to somehow tell Bob's bank "hey guys, do us a favor and please give Bob $1 with a message from the sender", and your bank needs to convince the other bank that they'll pay for (cover) that. This is the main source for the delays in international payments - there are thousands of banks, and most of possible pairs have no legal contact between themselves whatsoever, no bilateral agreements, no trust and no reasonable enforcement mechanism for small claims. If I'm Bob's bank, then a random bank from anywhere from Switzerland to Nigeria can send me an instruction "give Bob $1, we'll make it up for you", the SWIFT network is a common way of doing this. However, most likely I'm going to give Bob the money only after I receive the funds somehow, which means that they have given the money to some institution I work with. For payments within a single country, it often is a centralized exchange or a central bank, and the payment speed is then determined by the details of that particular single payment network - e.g. UK Faster Payments or the various systems used in USA. For international payments, it may require a chain of multiple intermediaries (correspondent banks) - for example, a payment of $1mm from Kazakhstan to China will likely involve the Kazakhstan bank asking their main correspondent in USA (some major bank such as Chase JPMorgan) to give the money to the relevant chinese bank's correspondent in USA (say, Citi) to then give the money to that chinese bank to then give the money to the actual recipient. Each of those steps can happen because those entities have bilateral agreements, trust and accounts with each other; and each of those steps generally takes time and verification. If you want all payments to happen instantly, then you need all institutions to join a single binding payment system. It's not as easy as it sounds, as it is a nightmare of jurisdiction - for example, if you'd want me (as Bob's bank) to credit Bob instantly, then the system needs to provide solid guarantees that I would get paid even if (a) the payer institution changes its mind, made a mistake or intentional fraud; (b) the payer institution goes insolvent; (c) the system provider gets insolvent. Providing such guarantees is expensive, they need to be backed by multi-billion capital, and they're unrealistic to enforce across jurisdictions (e.g. would an Iranian bank get recourse if some funds got blocked because of USA sanctions). The biggest such project as far as I know is SEPA, across most of Europe. Visa and MasterCard networks perform the same function - a merchant gets paid by the CC network even if the payer can't pay his CC bill or the paying bank goes insolvent. |
Should I wait a few days to sell ESPP Stock? | An instant 15% profit sounds good to me, so you can't go wrong selling as soon as you are able. Here are a couple other considerations: Tax implications: When you sell the stock, you have to pay taxes on the profit (including that 15% discount). The tax rate you pay is based on how long you wait to sell it. If you wait a certain amount of time (usually 2 years, but it will depend on your specific tax codes) before you sell, you could be subject to lower tax rates on that profit. See here for a more detailed description. This might only apply if you're in the US. Since you work for the company, you may be privy to a bit more information about how the company is run and how likely it is to grow. As such, if you feel like the company is headed in the right direction, you may want to hold on the the stock for a while. I am generally wary of being significantly invested in the company you work for. If the company goes south, then the stock price will obviously drop, but you'll also be at risk to be laid off. As such you're exposed much more risk than investing in other companies. This is a good argument to sell the stock and take the 15% profit.* * - I realize your question wasn't really about whether to sell the stock, but more for when, but I felt this was relevant nonetheless. |
Should I stockpile nickels? | The question I think is not: "What is a certain material worth in a coin" but "What is a certain material worth in a coin and how much does it cost to get it out of there". Just because something contains a certain element doesn't mean that you can get to it cheaply. Also as George Marian said: I don't think that it is legal to melt coins. So if the time comes you would first have to find a company willing to process the coins etc. Also you should not only compare what it is worth now and at a later time but also what that money would be worth if you put it into a high yielding savings account or something like that. |
How does a brokerage firm work? | Real target of commisions is providing "risk shelter". It is kind of "insurance", which is actually last step for external risks to delete all your money. In part it cuts some of risks which you provide, brokers track history of all your actions for you (nobody else does). When brokerage firm fails, all your money is zero. It depends from case to case if whole account goes zero, but I wouldn't count on that. |
Strategies to recover from a bad short-term call options purchase where the underlying dropped instead? | The nature of options requires you to understand that they are essentially a bet. In one sense, so is investing in stocks. We imagine a bell curve (first mistake) with a median return at 10%/yr and a standard deviation of about 14%. Then we say that odds are that over some period of time a monte-carlo simulation can give us the picture of the likely returns. Now, when you buy short term options, say one month or so, you are hoping the outcome is a rise in price that will yield some pretty high return, right? There was a time I noticed a particular stock would move a large percent based on earnings. And earnings were a day before options expiration. So I'd buy the call that was just out of the money and if the surprise was up, I'd make 3-4X my money. But I was always prepared to lose it all and often did. I never called this investing. I know of no recovery strategy. Sorry. |
Is 401k as good as it sounds given the way it is taxed? | If you put it in a normal account it is (1) taxed as ordinary income now and then (2) any growth is taxed again at the capital gains rate. Additionally, (3) any dividends will be taxed each year. If you put it in a 401(k), you will only be taxed once, at the ordinary income rate. Mathematically, if you start with X and have a regular tax rate of t and capital gains rate of g and your investments return r and there are n years to retirement, then your total wealth if you put it in a mutual fund (ignoring annual taxes on dividends) will be While if you used a 401(k) it would simply be The whole g term (along with any annual taxes on dividends) is gone in the second case and that's potentially a lot of taxes. The 401(k) is much better in terms of total wealth unless tax rates dramatically rise between now and when you retire so that the t in the second case is much higher than in the first. This is virtually never the case for people retiring now. Of course, what tax rates the future holds, we do not know. |
What is the difference between a 'trader' and a 'stockbroker'? | Traders trade for a living, stockbrokers tell people to get involved in trades for a living. To be employed as a trader, you need a proven track record of being able to consistently make money. To be employed as a stockbroker, you need to get licensed but you don't need to prove you can consistently make money. |
Why do people buy stocks that pay no dividend? | I don't know why there is so much confusion on such a simple concept. The answer is very simple. A stock must eventually pay dividends or the whole stock market is just a cheap ponzi scheme. A company may temporarily decided to reinvest profits into R&D, company expansion, etc. but obviously if they promised to never pay dividends then you can never participate in the profits of the company and there is simply no intrinsic value to the stock. For all of you saying 'Yeah but the stock price will go up!', please people get a life. The only reason the price goes up is in anticipation of dividend yield otherwise WHY would the price go up? "But the company is worth more and the stock is worth more" A stocks value is not set by the company but by people who buy and sell in the open market. To think a stock's price can go up even if the company refuses to pay dividends is analogous to : Person A says "Hey buy these paper clips for $10". But those paper clips aren't worth that. "It doesn't matter because some fool down the line will pay $15". But why would they pay that? "Because some fool after him will pay $20" Ha Ha! |
How does a bank make money on an interest free secured loan? | Car dealers as well as boat dealers, RV dealers, maybe farm vehicle dealers and other asset types make deals with banks and finance companies to they can make loans to buyers. They may be paying the interest to the finance companies so they can offer a 0% loan to the retail customer for all or part of the loan term. Neither the finance company nor the dealer wants to make such loans to people who are likely to default. Such customers will not be offered this kind of financing. But remember too that these loans are secured by the asset - the car - which is also insured. But the dealer or the finance company holds that asset as collateral that they can seize to repay the loan. So the finance company gets paid off and the dealer keeps the profit he made selling the car. So these loans are designed to ensure the dealer nor the finance company looses much. These are called asset finance loans because there is always an asset (the car) to use as collateral. |
Pros/Cons of Buying Discounted Company Stock | Some other answers mention the ability to sell at grant. This is very important. If you have that ability, think about your guaranteed return. In my case, I get a 15% discount on the lowest 6 month window price from the last two years. If you do the math, the worst case return can be calculated: 1) Money that from the beginning of the window, I make 15% for 6 months (30% annual return guaranteed) 2) Money at the end of the window (say the last month) is 15% for one month (180% annual return guaranteed) In the end, your average holding window for your money is about 3 months (you can calculate it exactly). At that rate, you have a guaranteed 60% annual return. You can't beat that anywhere, with a significant upside if your company stock is increasing. So, if your company has an instant sell at grant option, you have to be brain dead not to do it. If it takes time to get your shares, then you need to look at the volatility of the stock to see how big the chance of losing money is. To generalize to a formula (if that's what you want): WM = purchase window (in months); D = Discount Percentage; GR = Guaranteed Return GR = 12/(WM/2) * D = 6*D/WM One last thing, If you are going to participate in ESPP, make you that you understand how to do your taxes yourself. I haven't found a tax person yet who does ESPP correctly (including an ex IRS agent), so I always have to do my taxes myself to make sure they get done correctly. |
What is an ideal number of stock positions that I should have in my portfolio? | There is no ideal number of stocks you should own. There are several factors you should consider though. First, how actively do you want to manage your portfolio. If you want to be very active then the number of stocks you own should be based on the amount of time you have to research the company, by reading SEC filings and listening to conference calls, so you are not surprised when the company reports every quarter. If you don't want to be very active, then you are better off buying solid companies that have a good reputation and good history of performance. Second, you should decide how much risk you are willing to take. If you have $10,000 that you can afford to lose, then you can put your money into more risky stocks or into fewer stocks, which could potentially have a higher return. If you want your $10,000 grow (or lose) with the market, better off, again, going with the good rep and history stocks or a variety of stocks. Third, this goes along with your risk to some extent, but you should consider if you are looking for short term or long term gains? If you are looking to put your money in the market for the short term, you will probably be looking at fewer stocks with more money in each. If you are looking for long term, you will be around 5 stocks that you swap as they reach goals you set out for each stock. In my opinion, and I am not a financial expert, I like to stay at around 5 companies, mostly for the fact that it is about the ideal number of companies to keep track of. |
If gold's price implodes then what goes up? | Ok, I think what you're really asking is "how can I benefit from a collapse in the price of gold?" :-) And that's easy. (The hard part's making that kind of call with money on the line...) The ETF GLD is entirely physical gold sitting in a bank vault. In New York, I believe. You could simply sell it short. Alternatively, you could buy a put option on it. Even more risky, you could sell a (naked) call option on it. i.e. you receive the option premium up front, and if it expires worthless you keep the money. Of course, if gold goes up, you're on the hook. (Don't do this.) (the "Don't do this" was added by Chris W. Rea. I agree that selling naked options is best avoided, but I'm not going to tell you what to do. What I should have done was make clear that your potential losses are unlimited when selling naked calls. For example, if you sold a single GLD naked call, and gold went to shoot to $1,000,000/oz, you'd be on the hook for around $10,000,000. An unrealistic example, perhaps, but one that's worth pondering to grasp the risk you'd be exposing yourself to with selling naked calls. -- Patches) Alternative ETFs that work the same, holding physical gold, are IAU and SGOL. With those the gold is stored in London and Switzerland, respectively, if I remember right. Gold peaked around $1900 and is now back down to the $1500s. So, is the run over, and it's all downhill from here? Or is it a simple retracement, gathering strength to push past $2000? I have no idea. And I make no recommendations. |
Is there an advantage to a traditional but non-deductable IRA over a taxable account? [duplicate] | This is ideal placement for your allocation to income investments or those with nonqualified dividends: bonds, REITS, MLPS, other partnerships, and so forth. These are all taxed at income rate, generally throw off more income than capital gains, so you get the deferment without losing the cap gains rate. |
Wardrobe: To Update or Not? How-to without breaking the bank | I buy new clothes when the old ones fall apart, literally. When jeans get holes in the knees, they're relegated to gardening or really messy jobs. Shirts go until they're worn so much that I can't reasonably wear them to work any more. Sounds like your "dress code" at work is about like mine (also a software engineer). I've found that the Dickies jeans and work pants are sturdy, long lasting, fit in reasonably at the workplace, and are very inexpensive. If you know that you're going to need to replace some pants or shirts, wait for a sale to roll around at a local store, and then stock up. I don't specifically budget for clothes since I spend so little. But I'd be at the bottom of anybody's list in terms of giving fashion advice... |
Avoid Capital Gains on Rental | Don't let the tax tail wag the investment dog. There is risk in exchanging this (known) property for another (unknown) property. That risk may be more than $9000 worth of risk. Tax considerations are important, but most important is that your investments make money. If you intend to continue as a landlord, you had better be sure you are finding a better deal elsewhere if you are going to trade this property up. I should also mention that you have a 5 year window in which you need to have lived in the home for 2 years. You have time and might be able to sell for a higher price if you wait a little longer. |
Transfer $70k from Wells Fargo (US) to my other account at a Credit Union bank | Yes, you can do this. I do this for my own single-member LLC, but I usually do it online instead of writing a check. Your only legal obligation is to pay quarterly estimated tax payments to the IRS. I'm assuming you are not otherwise doing anything shady. For example, that you have funds in your business account to pay any expenses that will be due soon or that you are trying to somehow pull a fast one on someone else... |
Car Insurance - Black box has broken and insurance company wants me to pay? | First read the fine print. If you have to pay it, pay it and switch company. If you don't have to pay it and there is no proof that you abused the component beyond normal usage, you don't have to sue them, just return the invoice with legal (not so layman) text like "I hereby reject paying invoice number xxxx dated xxx because the black box was used under normal conditions and it stopped working". In this case you wait for them and answer every other letter with the same text until the decide to either sue you, or drop the whole thing. If you choose this path, remember to save all invoice, copies of your rejections, all written/email/phone calls, picutres of the broken item, serial nubmers, contract etc. If they sue you and they loose (can't prove the item was destroied by you), they have to pay you up to one hour of legal advice cost and drop the invoice, if you loose, you do the same (100 pounds) plus the invoice amount according to Swedish law, don't know about your country. Before you follow any advice here, consult your local consumer protection agency, they usually comes up with smart options, they know a bad company with history and give you the right advice. |
What price can *I* buy IPO shares for? | It depends a large part on your broker's relationship with the issuing bank how early you can participate in the IPO round. But the nature of the stock market means the hotter the stock and the closer to the market (away from the issuing bank) you have to buy the higher the price you'll pay. The stock market is a secondary market, meaning the only things for sale are shares already owned by someone. As a result, for a hot stock the individual investor will have to wait for another investor (not the issuing bank) to trade (sell) the stock. |
Tenant wants to pay rent with EFT | How can someone use the account number to withdraw money without my consent? They can use your account number to game your banks phone support and try to phish their way into your account. Banks have gotten very good at combating this, but theoretically with just the address he lives in, your name, and a bad bank phone rep, he could get into your business. The account number would just be one more piece of information to lead with. I have 1 savings and 3 checking accounts with the same bank. Would they be able to gain access to the other accounts? Dependent on how incompetent the bad bank rep I referenced above is, sure. But the odds are incredibly low, and if anything were to happen, the bank would be falling over itself to fix it and make reparations so that you don't sue for a whole crap ton more. Is there a more secure and still free option that I have overlooked? Opening up yet another checking account solely for accounts receivable and transfer to accounts payable would keep your financial records more transparent. Also, banks are doing "money transfer by email" now, so I don't know how great that is for business transactions, but in that instance you're just giving out an email linked to a money receiving account instead of an actual account number. Paypal is also a pretty good EFT middleman, but their business practices have become shady in the past 5 years. |
Saving for retirement without employer sponsored plan | I'm looking for ways to geared to save for retirement, not general investment. Many mutual fund companies offer a range of target retirement funds for different retirement dates (usually in increments of 5 years). These are funds of funds, that is, a Target 2040 Fund, say, will be invested in five or six different stock and bond mutual funds offered by the same company. Over the years and as the target date approaches closer, the investment mix will change from extra weight given to stock mutual funds towards extra weight being given to bond mutual funds. The disadvantage to these funds is that the Target Fund charges its own expense ratio over and above the expense ratios charged by the mutual funds it invests in: you could do the same investments yourself (or pick your own mix and weighting of various funds) and save the extra expense ratio. However, over the years, as the Target Fund changes its mix, withdrawing money from the stock mutual funds and investing the proceeds into bond mutual funds, you do not have to pay taxes on the profits generated by these transactions except insofar as some part of the profits become distributions from the Target Fund itself. If you were doing the same transactions outside the Target Fund, you would be liable for taxes on the profits when you withdrew money from a stock fund and invested the proceeds into the bond fund. |
Is there a list of OTC stocks being added to the major exchanges? | Check your broker's IPO list. Adding a new stock to a stock exchange is called "Initial Public Offering" (IPO), and most brokers have a list of upcoming IPO's in which their clients can participate. |
What is the difference between a bond and a debenture? | Some additional links which explain their differences. But mostly as @bstpierre says, both are very similar and in some cases the terms may be used inter changeably |
How can a school club collect money using credit cards? | Large and small universities have procedures in place regarding the use of the universities name, logo, facilities, and budget. They should have in place guidelines regarding the collection and use of funds from members, and participants. These guidelines are what allows you to have an account with the university. Generally these are not kept in the credit union but are with the university treasurer. I would approach this as if I knew nothing about how to get an officially recognized club or organization started. They should then provide you with all the rules and policies regarding money for student organizations. These policies may also discuss how to collect cash, checks, and credit cards. Some universities also allow the use of special card readers to process the special debit card attached to your university ID. The 10% fee charged by the university is typical. They will need to account for your funds, while maintaining their tax exempt status. If you get fully inline with their policies that will allow you to avoid tax issues. |
Why buy insurance? | Lots of people make poor decisions in crises. Some panic, and don't make any decision at all. Insurance for affordable things can provide emotional security: If something goes wrong, the purchaser will not have to make a painful financial decision in a crisis. Many people do not want to have the burden of arguing about money, or having to spend precious cash, or borrow money, or raid savings accounts, just at the time they are already reeling from another loss. Having insurance "just take care of it" can save them an emotional double-whammy. Several kinds of insurance fill this perceived need: |
Wardrobe: To Update or Not? How-to without breaking the bank | Sounds more of a question for the fine people at StyleForum.net but i would suggest to start looking carefully at the quality of the fabrics: once you start studying the subject you will quickly recognize a solid shirt from a cheap one. That'll help you save money in the long term. Also keeping it simple (by choosing classic color tones and patterns) will make your wardrobe more resistant to the fashion du jour. |
Why is the stock market rising after Trump's attack on the TPP? | Everything is worth what its purchaser will pay for it - Publilius Syrus It could be that, despite predictions from experts to the contrary, investors believe that renegotiating trade deals will have a positive affect on the economy, despite the upheaval uncertainty, and risk that it brings. Keep in mind that, as Pete B points out, this is part of a bigger post-election trend many people refer to as the "trump rally," which is a factor of more than one policy. Whether or not these policies will actually result in an a more robust economy, investors seem to be betting that it will. |
Can zero-coupon bonds go down in price? | Certainly, yes, a zero coupon bond can go down in price. If interest rates rise before your bond matures, the price of the bond will go down – and the longer to maturity, the more it will tend to drop. Depending on when you bought and how much interest rates rise, you can incur a capital loss. The bond is guaranteed to be worth a certain amount at maturity as long as the issuer hasn't defaulted, but before maturity the market price of the bond will fluctuate, primarily based on interest rate movements. In fact, zero coupon bonds are even more interest-rate-sensitive than regular bonds (which have periodic coupon interest payments.) |
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