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What do these numbers mean? (futures) | The two answers given previously provide excellent information. In relation to your statement: If I buy the above future contract, does that mean I pay $1581.90 on June 13th You cannot buy the futures contract at that price. The 'price' you are seeing quoted is not a dollar value, but rather a value in points. Each contract has a point value, and this varies from one contract to another according to the specifications set out by the exchange. The point value is in dollars, and it therefore acts as a multiplier for the 'price' that you've seen quoted. Let's look at an example for the E-Mini S&P futures. These trade electronically on the Globex exchange, the ECN order book of the CME, and carry the ticker symbol ES. The ES contract has a point value of $50. If the quoted price for the ES is 1581.75, then its dollar value is 50 x 1581.75 = $79,087.50 So in order to buy this contract outright, with absolutely no use of leverage, then one theoretically requires $79,087 in one's account. In practice though, futures are traded on margin and so only a deposit amount is required at the time of purchase, as CQM has explained. |
Does the stock market create any sort of value? | When you own a share, you also own a vote (in most cases). That vote is your means of controlling the assets and management of the company. If you had enough votes and wanted to trade a share for an iPhone or liquidate the company entirely, you could do it. The only thing that prevents you from doing that is that companies are not set up to handle the transaction that way. Stock holders are usually trying to buy investments, not iPhones. There are companies that have more cash in the bank than the market cap (total value) of their stock. They usually don't remain as public companies for long in that case. An investor or group of investors buy them up and split the cash. If you had enough shares of Apple, you could do that to; or, just trade one for an iPhone. |
Owning REIT vs owning real estate - which has a better hypothetical ROI? | REIT's usually invest in larger properties (apartment complexes), individuals usually invest in small properties (single units, duplexes, fourplexes, etc). REIT's also invest in a lot of commercial properties - malls, commercial and business office buildings, etc. These are very different markets. Not to mention the risk spread, geographical spread, research, management and maintenance that someone has to do for REIT and it comes out of the earnings (while your own rentals you can manage yourself, if you want), etc. |
What are the risks of Dividend-yielding stocks? | No stock is risk-free. Some of the biggest companies in the country, that seemed incredibly stable and secure, have suffered severe downturns or gone out of business. Twenty or thirty years ago Kodak ruled the camera film market. But they didn't react quickly enough when digital cameras came along and today they're a shadow of their former self. Forty years ago IBM owned like 90% of the computer market -- many people used "IBM" as another word for computer. Sears used to dominate the retail department store market. Etc. |
How to evaluate an annuity | Guaranteed 8.2% annual return sounds too good to be true. Am I right? Are there likely high fees, etc.? You're right. Guaranteed annual return is impossible, especially when you're talking about investments for such a long period of time. Ponzi (and Madoff) schemed their investors using promises of guaranteed return (see this note in Wikipedia: In some cases returns were allegedly determined before the account was even opened.[72]). Her financial advisor doesn't charge by the hour--he takes a commission. So there's obviously some incentive to sell her things, even if she may not need them. Definitely not a good sign, if the advisor gets a commission from the sale then he's obviously not an advisor but a sales person. The problem with this kind of investment is that it is very complex, and it is very hard to track. The commission to the broker makes it hard to evaluate returns (you pay 10% upfront, and it takes awhile to just get that money back, before even getting any profits), and since you're only able to withdraw in 20 years or so - there's no real way to know if something wrong, until you get there and discover that oops- no money! Also, many annuity funds (if not all) limit withdrawals to a long period, i.e.: you cannot touch money for like 10 years from investment (regardless of the tax issues, the tax deferred investment can be rolled over to another tax deferred account, but in this case - you can't). I suggest you getting your own financial advisor (that will work for you) to look over the details, and talk to your mother if it is really a scam. |
Strategies for saving and investing in multiple foreign currencies | Evaluating the value of currencies is always difficult because you are usually at the mercy of a central bank that can print new currency on a whim. I am trying to diversify my currency holdings but it is difficult to open foreign bank accounts without actually being in the foreign country. Any ideas here? You don't indicate which currencies you own but I would stick with your diversified portfolio of currencies and add some physical assets as a hedge against the fiat currencies. |
Home loan transferred to Freddie Mac — What does this mean? | Lenders may sell your mortgage to other lenders for a fee. For example, your lender might sell your mortgage to the highest bidder who may want to purchase your mortgage by making a one time payment. For your lender that's a quick profit, for the new owner of your mortgage, that's long term returns for a one time fee. For your lender, that is forgoing long term returns for short term gains (and transfer of risk in case you default). (Very similar to how bonds work in a stock exchange!) What does this mean to you? Nothing. You will still keep making payments to your original lender. What does 'transfer of ownership has not been publicly recorded mean'? It means, when you are asked about ownership details regarding your mortgage, and this could be in tax forms or refinancing etc., you would enter your original lender's information and not Freddit Mac's! Pro-tip There are lots of scams based on this. You might receive an official looking letter in mail claiming your loan has been sold and you should start making payments to the new owner. DO NOT FALL FOR THIS! Call your original lender (use the phone number from your loan papers, not mail you received) and verify this information. And if this were to happen, your original lender would always inform you first. And hey, congrats on your new home! :) |
What is Fibonacci values? | Usually when a stock is up-trending or down-trending the price does not go up or down in a straight line. In an uptrend the price may go up over a couple of days then it could go down the next day or two, but the general direction would be up over the medium term. The opposite for a downtrend. So if the stock has been generally going up over the last few weeks, it may take a breather for a week or two before prices continue up again. This breather is called a retracement in the uptrend. The Fibonacci levels are possible amounts by which the price might retract before it continues on its way up again. By the way 50% is not actually a Fibonacci Retracement level but it is a common retracement level which is usually used in combination with the Fibonacci Retracement levels. |
How can I estimate the value of private stock behind employee stock options? | It is difficult to value a private company. Most of the valuations is based on how one feels the idea would translate into revenue in some future time. The VC firms take into account various factors to determine the price, but more often then not, its their hunch. Even VC don't make money on all picks, very few picks turn out to be stars, most picks lose money they have invested. Few picks just return their money. So if you feel that the idea/product/brand/people are great and would someday make good money, invest into it. Else stay away. |
Why do grocery stores in the U.S. offer cash back so eagerly? | Cash back from credit cards is handled separately than the rest of the purchase, i.e. interest begins accumulating on that day, and likely at a higher rate, and usually comes out of a lower limit than the credit allotted to that card. Given all these differences, and the obvious revenue-generation situation for the lender, it makes sense for them to give the store an incentive, rather than penalize them further, for the use of such a feature. Note: I am not privy to the inner-workings or agreements between large stores and credit lenders, so I cannot guarantee any of this. |
Are REIT worth it and is it a good option to generate passive income for a while? | In financial markets, the gains you can expect to make (whether in the form of dividends or capital gains) correspond to the risks you are bearing. There are a variety of REITs but you can expect to make only as much money in them as you bear risk (meaning you can also lose a lot of money in the ones that earn a lot). In that sense they are just like other financial assets like stocks. If you are generically trying to increase your wealth by bearing risk, you can get a better risk/reward ratio in a fully diversified portfolio including stocks and bonds as well and REITs. "Passive income" means making money by bearing risk. REITs alone, without diversifying into other financial assets, do a poor job of generating income for the amount of risk you bear. So why are REITs not very comparable to buying a house and renting it out? Because in the latter case you are being paid not only for bearing the risk of the house depreciating but also you are being compensated for the work you do as a landlord. Moreover, because the house doesn't trade in a liquid market like REITs do, it is possible to actually get a good deal, as opposed to the fair deal you will get on a REIT. TL;DR: The "passive income" generated by REIT investment is more similar to generic equity/bond investment than it is to an investment in a physical home that you rent out. If what you want is to make money without doing anything besides bear risk, you should invest in a fully diversified portfolio of financial assets (equity and bonds being the primary constituents but REITs potentially being a part as well). |
Do I even need credit cards? | People have credit cards for various reasons depending upon their personal situation and uses You don't need to have a Credit Card if you don't have a reason to. But most people do. |
Investing $50k + Real Estate | Get rid of the lease and buy a used car. A good buy is an Audi because they are popular, high-quality cars. A 2007 Audi A4 costs about $7000. You will save a lot of money by dumping the lease and owning. Go for quality. Stay away from fad cars and SUVs which are overpriced for their value. Full sized sedans are the safest cars. The maintenance on a high-quality old car is way cheaper than the costs of a newer car. Sell the overseas property. It is a strong real estate market now, good time to sell. It is never good to have property far away from where you are. You need to have a timeline to plan investments. Are you going to medical school in one year, three years, five years? You need to make a plan. Every investment is a BUY and a SELL and you should plan for both. If your business is software, look for a revenue-generating asset in that area. An example of a revenue-generating asset is a license. For example, some software like ANSYS has license costs in the region of $30,000 annually. If you broker the license, or buy and re-sell the license you can make a good profit. This is just one example. Use your expertise to find the right vehicle. Make sure it is a REVENUE-GENERATING ASSET. |
Choose online stock trading companies | Lower fees are always better, everything else equal. A lower fee makes your transaction overall a better deal, all else equal. Other transactions costs (like the SEC fee on sales) are mostly the same across brokers and there is unlikely to be any difference in execution quality either. When comparing brokers be sure to consider the other issues: To me, most of these are minor issues. For that reason, I'd say let transaction cost be your guide. I hear a lot of talk about the quality of the interface. If you just want to buy or sell a stock, they are all pretty easy. Some brokers have better tools for monitoring the market or looking at technical indicators, if you are into that. |
Are services provided to Google employees taxed as income or in any way? | (1). Is this right? Pretty much, though this is a really rudimentary way to think about it. (2). If it is, why is it that extensive services are provided by high margin companies competing for talent, rather then lower margin businesses looking to boost their profits by reducing their expenditures on employees (by cutting out the government)? It's the polar opposite of that. Google (and companies like that) do things like have a day care center on premises. The company staffs a day care center which has costs, then lets employees use it for free. This is a business expense for Google, and in relative terms, a considerably large business expense that a lower margin business could no afford. Employer healthcare is a tax protected expense for employees via section 125 of the tax code. The company portion of the healthcare costs are a deductible business expense to the company, as expected. Healthcare is different than most other expenses because the employee can forego income before it's effectively received which negates it from taxable income. This doesn't work for something like food purchased at a cafe on a Google complex. If employee money is being spent at a corporate cafe, it's taxable income being spent (though the cost of running the cafe is a tax deductible business expense to the company). There have been discussions in congress to assess a value as income to employees for services like on site child care and no cost employee cafeterias. To address your new example: For example, suppose John Doe makes $100,000 a year taxed at a rate of 20%, for a take home pay of $80,000. He spends $10,000 on food. His employer Corporation decides to give him all of his food and deduct it as a business expense - costing them $10,000. But now they can pay John Doe an amount so his take home pay will be reduced by $10,000 - $87,500 The company is now spending $97500 employing John Doe, for a savings of $2500$. This would be an audit prone administrative nightmare. Either You need John to submit receipts for reimbursement up to the $10,000 agreed upon amount which would require some kind of administrative staff, or After a very short period of time John forgets the abstract value of the food cost arrangement, that is only really benefiting the employer in the form of lower payroll expense, and is enticed away for more pay somewhere else anyway. The company may be saving $2,500, though again there will be an additional administrative expense of some sort, but John is only saving $500 ($97,500 * 0.20 - $100,000 * 0.20). |
Best ISA alternative | Your question is actually quite broad, so will try to split it into it's key parts: Yes, standard bank ISAs pay very poor rates of interest at the moment. They are however basically risk free and should track inflation. Any investment in the 6-7% return range at the moment will be linked to stock. Stock always carries large risks (~50% swings in capital are pretty standard in the short run. In the long run it generally beats every other asset class by miles). If you can’t handle those types of short terms swings, you shouldn’t get involved. If you do want to invest in stock, there is a hefty ignorance tax waiting at every corner in terms of how brokers construct their fees. In a nutshell, there is a different best value broker in the UK for virtually every band of capital, and they make their money through people signing up when they are in range x, and not moving their money when they reach band y; or just having a large marketing budget and screwing you from the start (Nutmeg at ~1% a year is def in this category). There isn't much of an obvious way around this if you are adamant you don't want to learn about it - the way the market is constructed is just a total predatory minefield for the complete novice. There are middle ground style investments between the two extremes you are looking at: bonds, bond funds and mixes of bonds and small amounts of stock (such as the Vanguard income or Conservative Growth funds outlined here), can return more than savings accounts with less risk than stocks, but again its a very diverse field that's hard to give specific advice about without knowing more about what your risk tolerance, timelines and aims are. If you do go down this (or the pure stock fund) route, it will need to be purchased via a broker in an ISA wrapper. The broker charges a platform fee, the fund charges a fund fee. In both cases you want these as low as possible. The Telegraph has a good heat map for the best value ISA platform providers by capital range here. Fund fees are always in the key investor document (KIID), under 'ongoing charges'. |
Applying student loan proceeds toward tuition? | Your university should have a finance department which can help with payments. Speak with them and tell them you have interest in paying for at least part of your next semester in cash. From here they should be able to tell you the best method for this, though most likely cash/check will suffice. If there is no finance department, or you are still unsure, check with student services for more information. |
How does owning a home and paying on a mortgage fit into family savings and investment? | 1) How does owning a home fit into my financial portfolio? Most seem to agree that at best it is a hedge against rent or dollar inflation, and at worst it should be viewed as a liability, and has no place alongside other real investments. Periods of high inflation are generally accompanied with high(er) interest rates. Any home is a liability, as has been pointed out in other answers; it costs money to live in, it costs money to keep in good shape, and it offers you no return unless you sell it for more than you have paid for it in total (in fact, as long as you have an outstanding mortgage, it actually costs you money to own, even when not considering things like property taxes, utilities etc.). The only way to make a home an investment is to rent it out for more than it costs you in total to own, but then you can't live in it instead. 2) How should one view payments on a home mortgage? How are they similar or different to investing in low-risk low-reward investments? Like JoeTaxpayer said in a comment, paying off your mortgage should be considered the same as putting money into a certificate of deposit with a term and return equivalent to your mortgage interest cost (adjusting for tax effects). What is important to remember about paying off a mortgage, besides the simple and not so unimportant fact that it lowers your financial risk over time, is that over time it improves your cash flow. If interest rates don't change (unlikely), then as long as you keep paying the interest vigilantly but don't pay down the principal (assuming that the bank is happy with such an arrangement), your monthly cost remains the same and will do so in perpetuity. You currently have a cash flow that enables you to pay down the principal on the loan, and are putting some fairly significant amount of money towards that end. Now, suppose that you were to lose your job, which means a significant cut in the household income. If this cut means that you can't afford paying down the mortgage at the same rate as before, you can always call the bank and tell them to stop the extra payments until you get your ducks back in the proverbial row. It's also possible, with a long history of paying on time and a loan significantly smaller than what the house would bring in in a sale, that you could renegotiate the loan with an extended term, which depending on the exact terms may lower your monthly cost further. If the size of the loan is largely the same as or perhaps even exceeds the market value of the house, the bank would be a lot more unlikely to cooperate in such a scenario. It's also a good idea to at the very least aim to be free of debt by the time you retire. Even if one assumes that the pension systems will be the same by then as they are now (some don't, but that's a completely different question), you are likely to see a significant cut in cash flow on retirement day. Any fixed expenses which cannot easily be cut if needed are going to become a lot more of a liability when you are actually at least in part living off your savings rather than contributing to them. The earlier you get the mortgage paid off, the earlier you will have the freedom to put into other forms of savings the money which is now going not just to principal but to interest as well. What is important to consider is that paying off a mortgage is a very illiquid form of savings; on the other hand, money in stocks, bonds, various mutual funds, and savings accounts, tends to be highly liquid. It is always a good idea to have some savings in easily accessible form, some of it in very low-risk investments such as a simple interest-bearing savings account or government bonds (despite their low rate of return) before you start to aggressively pay down loans, because (particularly when you own a home) you never know when something might come up that ends up costing a fair chunk of money. |
Filing taxes on stocks | You need to talk to an accountant who practices tax accounting, preferaby someone who is an Enrolled Agent (EA) with the IRS, and possibly an attorney who specializes in tax law. There are multiple issues here, and the executor of your father's estate might need to be involved here too. Presumably you were a minor in 2007 since the transactions took place in a custodial account, and perhaps you were a dependent of your father in 2007. So, were the transactions reported on your father's 2007 income tax return? or did he file a separate income tax return in your name? You say you have a W2 for 2007. So you were earning some income in 2007? This complicates matters. It is necessary to determine who has the responsibility to file income tax returns for a minor with earned income. Above all, I urge you to not file income tax returns on your own or using a tax return preparation program, or after talking to a tax return preparation service (where you will likely get someone who works on a seasonal basis and is unlikely to be familiar with tax law as of 2007). |
When to sell a stock? | Keep a diary, before buying write down why are you buying the stock, how long do you plan to keep it. Put down reasons when you would sell it. For example you buy a stock because it has lot of cash reserve, it is a focused company, good management. You would sell when management leaves or it starts to use its cash for acquisition that are not fitting in profile. |
Pay Yourself With Credit Card Make Money With Cash Back [duplicate] | The idea is old as dirt, and some millions of people had it before you. Credit card swipes cost you between 2.4 and 4.5%, depending on the cards, the provider, and the amounts, plus potentially a fixed small amount per swipe. Of course, a 2% cash back card cost more than 2% to swipe; and a 3% cash back card cost more than 3% to swipe; those guys are not morons. |
US citizen sometimes residing in spain, wanting to offer consulting services in Europe, TAXES? | With something this complicated you are going to want to consult professionals. Either a professional with international experience, who will tell you the best tax arrangement overall but might come expensive, or one professional in each country who will optimize for that country. You will have to pay US taxes, and depending on your residency probably some in Spain. Double tax agreements should kick in to prevent you paying tax on the same money twice. You do not have to pay separate 'European' taxes. If you do substantial business in another country you might have to pay there, but one of your professionals should sort it out. |
Digital money pots? | I guess it depends on your bank. My bank (Rabobank) recently did introduce this feature. You don't get a card per category, though. Instead you set up rules to match each expenditure to one of the existing pots. |
Does investing more money into stocks increase chances of profit? | Have a read of this PF&M article, which @Blackjack has an excellent answer that speaks around risk. Answers which suggest that the return is proportional to the amount invested is a very simplistic argument. It is far more complex than that. I would content that your initial question Does investing more money into stocks increase chances of profit? is not the best question. The answer is it depends upon your investment methodology. The following will increase your chance of overall profit in the stock market |
RSU vested recently | ML is a brokerage firm. Tell them to sell. If you can't or don't know how to do it on-line - call them and do it over the phone. Your citizenship might come in effect when tax are withheld, you need to fill form W8-BEN if you haven't done so yet. If US taxes are withheld, you can file 1040NR to request refund, or get it credited against your local tax liabilities. |
Can the Delta be used to calculate the option premium given a certain target? | One thing I would like to clear up here is that Black Scholes is just a model that makes some assumptions about the dynamics of the underlying + a few other things and with some rather complicated math, out pops the Black Scholes formula. Black Scholes gives you the "real" price under the assumptions of the model. Your definition of what a "real" price entails will depend on what assumptions you make. With that being said, Black Scholes is popular for pricing European options because of the simplicity and speed of using an analytic formula as opposed to having a more complex model that can only be evaluated using a numerical method, as DumbCoder mentioned (should note that, for many other types of derivative contracts, e.g. American or Bermudan style exercise, the Black Scholes analytic formula is not appropriate). The other important thing to note here is that the market does not necessarily need to agree with the assumptions made in the Black Scholes model (and they most certainly do not) to use it. If you look at implied vols for a set of options which have the same expiration but differing strike prices, you may find that the implied vols for each contract differ and this information is telling you to what degree the traders in the market for those contracts disagree with the lognormal distribution assumption made by Black Scholes. Implied vol is generally the thing to look at when determining cheapness/expensiveness of an option contract. With all that being said, what I'm assuming you are interested in is either called a "delta-gamma approximation" or more generally "Greek/sensitivities based profit and loss attribution" (in case you wanted to Google some more about it). Here is an example that is relevant to your question. Let's say we had the following European call contract: Popping this in to BS formula gives you a premium of $4.01, delta of 0.3891 and gamma of 0.0217. Let's say you bought it, and the price of the stock immediately moves to 55 and nothing else changes, re-evaluating with the BS formula gives ~6.23. Whereas using a delta-gamma approximation gives: The actual math doesn't work out exactly and that is due to the fact that there are higher order Greeks than gamma but as you can see here clearly they do not have much of an impact considering a 10% move in the underlying is almost entirely explained by delta and gamma. |
Saving/ Investing a lump sum | 5 years is very short term, and since you are sure you'll need the money, investing it into the markets should probably not be done. You can toss it in Ally bank for 1% or consider a 5 yr raise your rate CD A decent write-up on time horizons: http://www.investopedia.com/articles/investing/110813/using-time-horizons-investing.asp If you want to go the stock/bond route you can assess the benefits of using something like a vanguard target date fund, or a roboadvisor such as wealthfront or betterment. You need to assess whether you think you may move up your time horizon, say you want to buy a house in 4 years, or, if it is 5 years, are you ok with it being 6.5-7 if there is a market downturn. |
Transfer $70k from Wells Fargo (US) to my other account at a Credit Union bank | The LLC is paying you. It would only be fraudulent if you were trying to move the money out of the LLC to avoid a liability. I'm pretty sure the transaction will be taxable income for you personally. Consider consulting with a CPA to ensure that you're doing the proper record keeping and to get advice on the best way to minimize tax burden while achieving your goals. |
What's the most conservative split of financial assets for my portfolio in today's market? | This is a somewhat complicated question because it really depends on your personal situation. For example, the following parameters might impact your optimal asset allocation: If you need the money before 3 years, I would suggest keeping almost all of it in cash, CDs, Treasuries, and ultra safe short-term corporate bonds. If however, you have a longer time horizon (and since you're in your 30s you would ideally have decades) you should diversify by investing in many different asset classes. This includes Australian equity, international equity, foreign and domestic debt, commodities, and real estate. Since you have such a long time horizon market timing is not that important. |
Does a failed chargeback affect my credit score? | I think your confusion comes from the negative impact when a creditor writes off your bad credit and ceases attempting to collect it. "Chargebacks" as you call them are an attempt to undo fraudulent charges on your card, whether from stolen credit card info or from a merchant who is using shady business practices. For what it's worth, if you joined on December 20, January 20 seems like a reasonable date for the next billing cycle, with the December 31 date reflecting the fact that their system couldn't automatically bill you the day you joined. I also think it's reasonable for you to ask them to refund the bill for the second month if you do not plan to use their gym further. So the dispute seems like a reasonable one on both sides. Good luck. |
How many days do I have to hold a stock before it is considered a capital gain by the CRA? | You don't have to wait. If you sell your shares now, your gain can be considered a capital gain for income tax purposes. Unlike in the United States, Canada does not distinguish between short-term vs. long-term gains where you'd pay different rates on each type of gain. Whether you buy and sell a stock within minutes or buy and sell over years, any gain you make on a stock can generally be considered a capital gain. I said generally because there is an exception: If you are deemed by CRA to be trading professionally -- that is, if you make a living buying and selling stocks frequently -- then you could be considered doing day trading as a business and have your gains instead taxed as regular income (but you'd also be able to claim additional deductions.) Anyway, as long as your primary source of income isn't from trading, this isn't likely to be a problem. Here are some good articles on these subjects: |
When (if) I should consider cashing in (selling) shares to realize capital gains? | You should know when to sell your shares before you buy them. This is most easily done by placing a stop loss conditional order at the same time you place your buy order. There are many ways to determine at what level to place your stop losses at. The easiest is to place a trailing stop loss at a percentage below the highest close price, so as the price reaches new highs the trailing stop will rise. If looking for short to medium term gains you might place your trailing stop at 10% below the highest close, whilst if you were looking for more longer term gains you should probably place a 20% trailing stop. Another way to place your stops for short to medium term gains is to keep moving your trailing stop up to just below the last trough in an existing uptrend. |
What is a normal amount of money to spend per week on food/entertainment/clothing? | Zero? Ten grand? Somewhere in the middle? It depends. Your stated salary, in U.S. dollars, would be high five-figures (~$88k). You certainly should not be starving, but with decent contributions toward savings and retirement, money can indeed be tight month-to-month at that salary level, especially since even in Cardiff you're probably paying more per square foot for your home than in most U.S. markets (EDIT: actually, 3-bedroom apartments in Cardiff, according to Numbeo, range from £750-850, which is US$1200-$1300, and for that many bedrooms you'd be hard-pressed to find that kind of deal in a good infield neighborhood of the DFW Metro, and good luck getting anywhere close to downtown New York, LA, Miami, Chicago etc for that price. What job do you do, and how are you expected to dress for it? Depending on where you shop and what you buy, a quality dress shirt and dress slacks will cost between US$50-$75 each (assuming real costs are similar for the same brands between US and UK, that's £30-£50 per shirt and pair of pants for quality brands). I maintain about a weeks' wardrobe at this level of dress (my job allows me to wear much cheaper polos and khakis most days and I have about 2 weeks' wardrobe of those) and I typically have to replace due to wear or staining, on average, 2 of these outfits a year (I'm hard on clothes and my waistline is expanding). Adding in 3 "business casual" outfits each year, plus casual outfits, shoes, socks, unmentionables and miscellany, call it maybe $600(£400)/year in wardrobe. That doesn't generally get metered out as a monthly allowance (the monthly amount would barely buy a single dress shirt or pair of slacks), but if you're socking away a savings account and buying new clothes to replace old as you can afford them it's a good average. I generally splurge in months when the utilities companies give me a break and when I get "extra" paychecks (26/year means two months have 3 checks, effectively giving me a "free" check that neither pays the mortgage nor the other major bills). Now, that's just to maintain my own wardrobe at a level of dress that won't get me fired. My wife currently stays home, but when she worked she outspent me, and her work clothes were basic black. To outright replace all the clothes I wear regularly with brand-new stuff off the rack would easily cost a grand, and that's for the average U.S. software dev who doesn't go out and meet other business types on a daily basis. If I needed to show up for work in a suit and tie daily, I'd need a two-week rotation of them, plus dress shirts, and even at the low end of about $350 (£225) per suit, $400 (£275) with dress shirt and tie, for something you won't be embarrassed to wear, we're talking $4000 (£2600) to replace and $800 (£520) per year to update 2 a year, not counting what I wear underneath or on the weekends. And if I wore suits I'd probably have to update the styles more often than that, so just go ahead and double it and I turn over my wardrobe once every 5 years. None of this includes laundering costs, which increase sharply when you're taking suits to the cleaners weekly versus just throwing a bunch of cotton-poly in the washing machine. What hobbies or other entertainment interests do you and your wife have? A movie ticket in the U.S. varies between $7-$15 depending on the size of the screen and 2D vs 3D screenings. My wife and I currently average less than one theater visit a month, but if you took in a flick each weekend with your wife, with a decent $50 dinner out, that's between $260-$420 (£165-270) monthly in entertainment expenses. Not counting babysitting for the little one (the going rate in the US is between $10 and $20 an hour for at-home child-sitting depending on who you hire and for how long, how often). Worst-case, without babysitting that's less than 5% of your gross income, but possibly more than 10% of your take-home depending on UK effective income tax rates (your marginal rate is 40% according to the HMRC, unless you find a way to deduct about £30k of your income). That's just the traditional American date night, which is just one possible interest. Playing organized sports is more or less expensive depending on the sport. Soccer (sorry, football) just needs a well-kept field, two goals and and a ball. Golf, while not really needing much more when you say it that way, can cost thousands of dollars or pounds a month to play with the best equipment at the best courses. Hockey requires head-to-toe padding/armor, skates, sticks, and ice time. American football typically isn't an amateur sport for adults and has virtually no audience in Europe, but in the right places in the U.S., beginning in just a couple years you'd be kitting your son out head-to-toe not dissimilar to hockey (minus sticks) and at a similar cost, and would keep that up at least halfway through high school. I've played them all at varying amateur levels, and with the possible exception of soccer they all get expensive when you really get interested in them. How much do you eat, and of what?. My family of three's monthly grocery budget is about $300-$400 (£190-£260) depending on what we buy and how we buy it. Americans have big refrigerators (often more than one; there's three in my house of varying sizes), we buy in bulk as needed every week to two weeks, we refrigerate or freeze a lot of what we buy, and we eat and drink a lot of high-fructose corn-syrup-based crap that's excise-taxed into non-existence in most other countries. I don't have real-world experience living and grocery-shopping in Europe, but I do know that most shopping is done more often, in smaller quantities, and for more real food. You might expect to spend £325 ($500) or more monthly, in fits and starts every few days, but as I said you'd probably know better than me what you're buying and what it's costing. To educate myself, I went to mysupermarket.co.uk, which has what I assume are typical UK food prices (mostly from Tesco), and it's a real eye-opener. In the U.S., alcohol is much more expensive for equal volume than almost any other drink except designer coffee and energy drinks, and we refrigerate the heck out of everything anyway, so a low-budget food approach in the U.S. generally means nixing beer and wine in favor of milk, fruit juices, sodas and Kool-Aid (or just plain ol' tap water). A quick search on MySupermarkets shows that wine prices average a little cheaper, accounting for the exchange rate, as in the States (that varies widely even in the U.S., as local and state taxes for beer, wine and spirits all differ). Beer is similarly slightly cheaper across the board, especially for brands local to the British Isles (and even the Coors Lite crap we're apparently shipping over to you is more expensive here than there), but in contrast, milk by the gallon (4L) seems to be virtually unheard of in the UK, and your half-gallon/2-liter jugs are just a few pence cheaper than our going rate for a gallon (unless you buy "organic" in the US, which carries about a 100% markup). Juices are also about double the price depending on what you're buying (a quart of "Innocent" OJ, roughly equivalent in presentation to the U.S. brand "Simply Orange", is £3 while Simply Orange is about the same price in USD for 2 quarts), and U.S.-brand "fizzy drinks" are similarly at a premium (£1.98 - over $3 - for a 2-liter bottle of Coca-Cola). With the general preference for room-temperature alcohol in Europe giving a big advantage to the longer unrefrigerated shelf lives of beer and wine, I'm going to guess you guys drink more alcohol and water with dinner than Americans. Beef is cheaper in the U.S., depending on where you are and what you're buying; prices for store-brand ground beef (you guys call it "minced") of the grade we'd use for hamburgers and sauces is about £6 per kilo in the UK, which works out to about $4.20/lb, when we're paying closer to $3/lb in most cities. I actually can't remember the last time I bought fresh chicken on the bone, but the average price I'm seeing in the UK is £10/kg ($7/lb) which sounds pretty steep. Anyway, it sounds like shopping for American tastes in the UK would cost, on average, between 25-30% more than here in the US, so applying that to my own family's food budget, you could easily justify spending £335 a month on food. |
Is being a landlord a good idea? Is there a lot of risk? | Buying a property and renting it out can be a good investment if it matches your long term goals. Buying an investment property is a long term investment. A large chunk of your money will be tied up with the property and difficult to access. If you put your money into dividend producing stocks you can always sell the stock and have your money back in a matter of days this is not so with a property. (But you can always do a Home equity line of credit (HELOC)) I would also like to point out landlording is not a passive endeavor as JohnFx stated dealing with a tenant can be a lot of work. This is not work you necessarily have to deal with, it is possible to contract with a property management company that would place tenants and take care of those late night calls. Property management companies often charge 10% of your monthly rent and will eat a large portion of your profits. It could be worth the time and headache of tenant relations. You should build property management into you expenses anyway in case you decide to go that route in the future. There are good things about owning an investment property. It can produce returns in a couple of ways. If you choose this route it can be lucrative but be sure to do your homework. You must know the area you are investing very well. Know the rent, and vacancy rates for Single family homes, look at multifamily homes as a way of mitigating risk(if one unit is vacant the others are still paying). |
Multiple accounts stagnant after quitting job. | What is my best bet with the 401K? I know very little about retirement plans and don't plan to ever touch this money until I retire but could this money be of better use somewhere else? If you don't know your options, I would suggest reading some material on it that might be a little more extensive than an answer here (for instance, http://www.getrichslowly.org/blog/ has some good and free information about a myriad of financial topics). With retirement accounts you can roll it over or leave it in the current account. Things to look at would be costs of the accounts, options you have in each account, and the flexibility of moving it if you need to. Depending on what type of retirement account it is (Roth 401K, Traditional 401K, etc, you may have some advantages with moving it to another type). The student loans.... pay them off in one shot? I have the extra money and it would not be a hardship to do so unless that money can be best used somewhere else? Unless I was making more money in a savings/investing/business opportunity, I would pay off the student loans in a lump sum. The reason is basic opportunity cost (economics) - if a better opportunity isn't on the horizon with your money, kill the interest you're paying because it's money you're losing every month. With the money just sitting in the bank I get a little sick feeling thinking that I can be doing something better with that. Outside of general savings you could look at investing in stocks, ETFs, mutual funds, currencies, lending club loans (vary by state), or something similar. Or you could try to start a business or invest in a start up directly (though, depending on the start up, they may not accept small investors). Otherwise, if you don't have a specific idea at this time, it's best to have money in savings while you ponder where else it would serve you. Keep in mind, having cash on hand, even if it's not earning anything, can bail you out in emergencies or open the door if an opportunity arises. So, you're really not "losing" anything by having it in cash if you're patiently waiting on opportunities. |
What to do if the stock you brought are stopped trading | The Indian regulator (SEBI) has banned trading in 300 shell companies that it views as being "Shady", including VB Industries. According to Money Control (.com): all these shady companies have started to rally and there was a complaint to SEBI that investors are getting SMSs from various brokerage firms to invest in them This suggests evidence of "pump and dump" style stock promotion. On the plus side, the SEBI will permit trading in these securities once a month : Trading in these securities shall be permitted once a month (First Monday of the month). Further, any upward price movement in these securities shall not be permitted beyond the last traded price and additional surveillance deposit of 200 percent of trade value shall be collected form the Buyers which shall be retained with Exchanges for a period of five months. This will give you an opportunity to exit your position, however, finding a buyer may be a problem and because of the severe restrictions placed on trading, any bid prices in the market are going to be a fraction of the last trade price. |
Growth of unrealized gains in tax-managed index funds | Right now, the unrealized appreciation of Vanguard Tax-Managed Small-Cap Fund Admiral Shares is 28.4% of NAV. As long as the fund delivers decent returns over the long term, is there anything stopping this amount from ballooning to, say, 90% fifty years hence? I'd have a heck of a time imagining how this grows to that high a number realistically. The inflows and outflows of the fund are a bigger question along with what kinds of changes are there to capital gains that may make the fund try to hold onto the stocks longer and minimize the tax burden. If this happens, won't new investors be scared away by the prospect of owing taxes on these gains? For example, a financial crisis or a superior new investment technology could lead investors to dump their shares of tax-managed index funds, triggering enormous capital-gains distributions. And if new investors are scared away, won't the fund be forced to sell its assets to cover redemptions (even if there is no disruptive event), leading to larger capital-gains distributions than in the past? Possibly but you have more than a few assumptions in this to my mind that I wonder how well are you estimating the probability of this happening. Finally, do ETFs avoid this problem (assuming it is a problem)? Yes, ETFs have creation and redemption units that allow for in-kind transactions and thus there isn't a selling of the stock. However, if one wants to pull out various unlikely scenarios then there is the potential of the market being shut down for an extended period of time that would prevent one from selling shares of the ETF that may or may not be as applicable as open-end fund shares. I would however suggest researching if there are hybrid funds that mix open-end fund shares with ETF shares which could be an alternative here. |
Are there “buy and hold” passively managed funds? | Usually, the amswer to "why sell it" is "to maintain the specific distribution balance, or to track the index, that this fund was designed to offer." A "buy and hold" fund could only buy when users are actively putting money into it. That limits their ability to follow those approaches. And I think there would be problems msking withdrawls/redeptions "fair", in terms of what shares are sold and how the costs for selling them are distributed, that don't arise for a single buy-and-hold investor. If you're willing to accept the limitations of the former, and can overcome the latter, it's an interesting idea... But note that one of the places index funds save money is that, since the composition of indexes changes rately, they are already operating mostly in buy-and-hold mode.It's unclear how much your variant would save. Worth exploring in greater depth, though. I think. |
Unusual real estate market with seemingly huge rental returns | I would not claim to be a personal expert in rental property. I do have friends and family and acquaintances who run rental units for additional income and/or make a full time living at the rental business. As JoeTaxpayer points out, rentals are a cash-eating business. You need to have enough liquid funds to endure uncertainty with maintenance and vacancy costs. Often a leveraged rental will show high ROI or CAGR, but that must be balanced by your overall risk and liquidity position. I have been told that a good rule-of-thumb is to buy in cash with a target ROI of 10%. Of course, YMMV and might not be realistic for your market. It may require you to do some serious bargain hunting, which seems reasonable based on the stagnant market you described. Some examples: The main point here is assessing the risk associated with financing real estate. The ROI (or CAGR) of a financed property looks great, but consider the Net Income. A few expensive maintenance events or vacancies will quickly get you to a negative cash flow. Multiply this by a few rentals and your risk exposure is multiplied too! Note that i did not factor in appreciation based on OP information. Cash Purchase with some very rough estimates based on OP example Net Income = (RENT - TAX - MAINT) = $17200 per year Finance Purchase rough estimate with 20% down Net Income = (RENT - MORT - TAX - MAINT) = $7500 per year |
Are there any statistics that support the need for Title Insurance? | When I bought the house I had my lawyer educate me about everything on the forms that seemed at all unclear, since this was my first time thru the process. On of the pieces of advice that he gave was that title insurance had almost no value in this state unless you had reason to believe the title might be defective but wanted to buy the property anyway. In fact I did get it anyway, as an impulse purchase -- but I'm fully aware that it was a bad bet. Especially since I had the savings to be able to self-insure, which is always the better answer if you can afford to risk the worst case scenario. Also: Ask the seller whether they bought title insurance. Often, it is transferrable at least once. |
What is Systematic about Systematic Investment Plan (SIP) and who invented it? | According to https://en.wikipedia.org/wiki/Systematic_Investment_Plan it's nothing but a fancy term for plain old dollar cost averaging. |
Are there cons to paying monthly bills with a rewards card and then paying it off monthly? | Some accounts, such as my electric, and payments to the tax collector charge a significant enough fee that is counter productive to use a rewards card. One example of this is Alligent Air. They give you a $6 discount if you pay with a debit card which was about 5% of the ticket price. Anytime you borrow money, even as well intentioned and thought out as you plan to do so, you are increasing risk. By managing it carefully you can certainly mitigate it. The question becomes, does that time spent in management worth the $600/year? I did the costco amex deal for about 12 years earning about $300-$400 per year and only once getting hit with a late/finance charge. Despite the success, I opted to end this for a few different reasons. First off people using credit tend to spend more. Secondly, I felt it was not worth my time in management. Thirdly, I did not want the risk. Despite the boasts of many, the reality is that few people actually pay off their card each month. By your post, it seems to me that you will be one of the rare few. However, if you are expending 5K per month, your income must be above the US national average. Is $600 really worth it? Perhaps budgeting for Christmas would be a better option. |
Calculate Future Value with Recurring Deposits | Let's break this into two parts, the future value of the initial deposit, and the future value of the payments: D(1 + i)n For the future value of the payments A((1+i)n-1) / i) Adding those two formulas together will give you the amount of money that should be in your account at the end. Remember to make the appropriate adjustments to interest rate and the number of payments. Divide the interest rate by the number of periods in a year (four for quarterly, twelve for monthly), and multiply the number of periods (p) by the same number. Of course the monthly deposit amount will need to be in the same terms. See also: Annuity (finance theory) - Wikipedia |
Car dealer saying that they cannot see any credit information for my co-applicant. Could this be a scam? | Its not a scam. The car dealership does not care how you pay for the car, just that you pay. If you come to them for a loan they will try and service you. If you come with cash, they will sell you a car and not try to talk you into financing. If you come with a check from another bank, they will happily accept it. I would try to work with Equifax or a local credit union to figure out what is going on. Somehow she probably had her credit frozen. Here are some really good things to mitigate this situation: Oh and make sure you do #1 and forget about financing cars ever again. I mean if you want to build wealth. |
How exactly is implied volatility assigned to an option's strike price? | As I understand it, Implied Volatility represents the expected gyrations of an options contract over it's lifetime. No, it represents that expected movement of the underlying stock, not the option itself. Yes, the value of the option will move roughly in the same direction the value of the stock, but that's not what IV is measuring. I even tried staring at the math behind the Options pricing model to see if that could make more sense for me but that didn't help. That formula is correct for the Black-Scholes model - and it is not possible (or at least no one has done it yet) to solve for s to create a closed-form equation for implied volatility. What most systems do to calculate implied volatility is plug in different values of s (standard deviation) until a value for the option is found that matches the quoted market value ($12.00 in this example). That's why it's called "implied" volatility - the value is implied from market prices, not calculated directly. The thing that sticks out to me is that the "last" quoted price of $12 is outside of the bid-ask spread of $9.20 to $10.40, which tells me that the underlying stock has dropped significantly since the last actual trade. If the Implied Vol is calculated based on the last executed trade, then whatever algorithm they used to solve for a volatility that match that price couldn't find a solution, which then choose to show as a 0% volatility. In reality, the volatility is somewhere between the two neighbors of 56% and 97%, but with such a short time until expiry, there should be very little chance of the stock dropping below $27.50, and the value of the option should be somewhere around its intrinsic value (strike - stock price) of $9.18. |
What happens when PayPal overdrafts a checking account (with an ample backup funding source available)? | You should check directly with the seller. I suspect you will find they have not recieved any money. Paypal tend to hang on to money as long as possible in all transactions, and will do anything to avoid giving out cash before it has come in. |
When to trade in a relatively new car for maximum value | I don't disagree with the current answers, but I feel like no one really answered your question directly. Seems to me like what you were asking is when to trade in your car in relation to when/whether your loan is paid off? Assuming you are committed to trading your car in (and not selling it privately as has been suggested), whether the car is paid off should have no impact on what you get for a trade-in. The car is worth what it's worth, and what you owe on it should not affect the transaction. |
Do I owe taxes if my deductions are higher than my income? | I'm going to echo Phil and say that you should add more information. That being said, I think it is possible for you to owe the government that much. If you received a federal health insurance subsidy and live in a state that didn't expand medicaid, you could have received a subsidy through out the year that you did not end up qualifying for. It appears you are outside the medicaid limit of 133% of the poverty level($11,670) or $15,521. If you received a subsidy of $275 a month from the marketplace, you would have received $3300 worth of aid from the government that you don't qualify for. Now they are expecting you to pay it back. |
Why IV and stock price are inversely related | people are willing to pay higher premiums for options when stocks go down. Obviously the time value and intrinsic value and interests rates of the option doesn't change because of this so the miscalculation remainder is priced into the implied volatility part of the formula. Basically, anything that suggests the stock price will get volatile (sharp moves in either direction) will increase the implied volatility of the option. For instance, around earnings reports, the IV in both calls and puts in the nearest expiration dates are very high. When stocks go down sharply, the volatility is high because some people are buying puts for protection and others are buying calls because they think there will be a rebound move in the other direction. People (the "sleep-at-night" investors, not the derivatives traders ;) ) tend to be calm when stocks are going up, and fearful when they are going down. The psychology is important to understand and observe and profit from, not to quantitatively prove. The first paragraph should be your qualitative answer |
Why are daily rebalanced inverse/leveraged ETFs bad for long term investing? | If you want to make a profit from long term trading (whatever "long term" means for you), the best strategy is to let the good performers in your portfolio run, and cull the bad ones. Of course that strategy is hard to follow, unless you have the perfect foresight to know exactly how long your best performing investments will continue to outperform the market, but markets don't always follow the assumption that perfect information is available to all participants, and hence "momentum" has a real-world effect on prices, whether or not some theorists have chosen to ignore it. But a fixed strategy of "daily rebalancing" does exactly the opposite of the above - it continuously reduces the holdings of good performers and increases the holdings of bad. If this type of rebalancing is done more frequently than the constituents of benchmark index are adjusted, it is very likely to underperform the index in the long term. Other issues in a "real world" market are the impact of increased dealing costs on smaller parcels of securities, and the buy/sell spreads incurred in the daily rebalancing trades. If the market is up and down 1% on alternate days with no long tern trend, quite likely the fund will be repeatedly buying and selling small parcels of the same stocks to do its daily balancing. |
What are the advantages/disadvantages of a self-directed IRA? | Our company does a lot of research on the self-directed IRA industry. We also provide financial advice in this area. In short, we have seen a lot in this industry. You mentioned custodian fees. This can be a sore spot for many investors. However, not all custodians are expensive, you should do your research before choosing the best one. Here is a list of custodians to help with your research Here are some of the more common pros and cons that we see. Pros: 1) You can invest in virtually anything that is considered an investment. This is great if your expertise is in an area that cannot be easily invested in with traditional securities, such as horses, private company stock, tax liens and more. 2) Control- you have greater control over your investments. If you invest in GE, it is likely that you will not have much say in the running of their business. However, if you invest in a rental property, you will have a lot of control over how the investment should operate. 3) Invest in what you know. Peter lynch was fond of saying this phrase. Not everyone wants to invest in the stock market. Many people won't touch it because they are not familiar with it. Self-directed IRAs allow you to invest in assets like real estate that you know well. Cons: 1) many alternative investments are illiquid. This can present a problem if you need to access your capital for withdrawals. 2) Prohibited transactions- This is a new area for many investors who are unfamiliar with how self-directed IRAs work 3) Higher fees- in many cases, the fees associated with self-directed IRA custodians and administrators can be higher. 4) questionable investment sponsors tend to target self-directed IRA owners for fraudulent investments. The SEC put out a good PDF about the risks of fraud with self-directed IRAs. Self Directed IRAs are not the right solution for everyone, but they can help certain investors focus on the areas they know well. |
Do Americans really use checks that often? | I know this an old thread, but one that caught my interest as I just moved to the USA from Australia. As per the OP I had never written a check in my whole life, and upon arriving in the US I was surprised as to their proliference. In Australia pretty much all bills you receive can be paid in a number of ways: For small amounts between friends cash is probably used most, but for larger amounts direct transfer is popular. Your friend/landlord will give you their bank account number and BSB number, which identifies their bank, and then you transfer the money in. We don't have a SSN like some other countries. Cheques are still used by some however, esp by the older generations. Now that I'm in the US initially I had tried to set up direct transfer to pay my rent however the bank has a $1000 daily transfer limit. I contacted the bank to get this increased however I was informed that this limit applies to ALL accounts at the bank. I asked how do people pay their rents with this low limit and was told that most people used cheques. (This explains the strange look I got from my landlord when I asked for their bank account details so I could pay the rent!) I now have some bills to pay here and I use online banking. You enter the biller's name and address and then the bank actually prints off a cheque and posts it to the biller on your behalf! My first couple of pays here were also cheques, which were the first actual "paychecks" I had ever received. |
Can this year's free extension-to-pay be filed electronically? IRS Form 1127 | Form 1127 (updated link) should be filed in paper (with the supporting documents) to the IRS office that has jurisdiction in the area where you live. From the instructions (see the link above): File Form 1127 with the Internal Revenue Service (Attn: Advisory Group Manager), for the area where you maintain your legal residence or principal place of business. See Pub. 4235, Collection Advisory Group Addresses, to find the address for your local advisory group. However, if the tax due is a gift tax reportable on Form 709, send Form 1127 to: Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999 |
How do I find an ideal single fund to invest all my money in? | In the past 10 years there have been mutual funds that would act as a single bucket of stocks and bonds. A good example is Fidelity's Four In One. The trade off was a management fee for the fund in exchange for having to manage the portfolio itself and pay separate commissions and fees. These days though it is very simple and pretty cheap to put together a basket of 5-6 ETFs that would represent a balanced portfolio. Whats even more interesting is that large online brokerage houses are starting to offer commission free trading of a number of ETFs, as long as they are not day traded and are held for a period similar to NTF mutual funds. I think you could easily put together a basket of 5-6 ETFs to trade on Fidelity or TD Ameritrade commission free, and one that would represent a nice diversified portfolio. The main advantage is that you are not giving money to the fund manager but rather paying the minimal cost of investing in an index ETF. Overall this can save you an extra .5-1% annually on your portfolio, just in fees. Here are links to commission free ETF trading on Fidelity and TD Ameritrade. |
How could USA defaulting on its public debt influence the stock/bond market? | The default scenario that we're talking about in the Summer of 2011 is a discretionary situation where the government refuses to borrow money over a certain level and thus becomes insolvent. That's an important distinction, because the US has the best credit in the world and still carries enormous borrowing power -- so much so that the massive increases in borrowing over the last decade of war and malaise have not affected the nation's ability to borrow additional money. From a personal finance point of view, my guess is that after the "drop dead date" disclosed by the Treasury, you'd have a period of chaos and increasing liquidity issues after government runs out of gimmicks like "borrowing" from various internal accounts and "selling" assets to government authorities. I don't think the markets believe that the Democrats and Republicans are really willing to destroy the country. If they are, the market doesn't like surprises. |
Why do stores and manufacturers use mail in rebates? A scam, or is there a way to use them effectively? | Unfortunately too many companies view a Mail in rebate as an unwelcome cost instead of as a customer interaction issue, and it gives the company a bad reputation when someone gets stiffed on the mail in rebate, and it also has basically ruined the concept to a large degree. Many people will simply regard the rebate as worthless and evaluate the product based on the full price - killing what the company wanted to get out of it (Rich Seller hit the nail on the head), which is why you see "instant rebates" etc. |
Is giving my girlfriend money for her mortgage closing costs and down payment considered fraud? | When you purchase a mortgage, you have to prove the source of your down payment. Primarily this is so that the mortgage lender knows that there are no other outstanding liens against the property. If you show that some or part of your down payment was a gift, there is no fraud, but it may affect your qualification for the mortgage. Consult a lawyer in your area to determine if there is a legal way to gift the money that is not taxed. If all else fails you could just pay the tax. Also, you should research whether your gift is above the floor of taxable gifts. |
I'm thinking of getting a new car … why shouldn't I LEASE one? | Also consider how cars fare under your ownership: Does your current car... If any of the answers to these questions are "Yes", you're probably going to get hosed with fees when you return the car. |
How can small children contribute to the “family economy”? | Similar to the lawn care you mentioned: if you have space, you could have the kids create a mini-farmstand. They could grow flowers for cutting, some vegetables, etc. It would be a different twist on the classic lemonade stand. If the kids are into animals and space and zoning allows, you could keep chickens and add eggs to your mini-farmstand. Upfront costs for the garden would be small enough that they can learn about how investing in a business works at a very small scale. Along with learning about money, they also learn responsibility because it requires commitment and daily attention. It's also seasonal in a way that meshes well with school (though having animals is a constant year-round responsibility). |
Should I pay off a 0% car loan? | Don't pay off the 0% loan. First, set up an automatic monthly payment to ensure you never miss the payment (which could lower your credit score). If you are in Canada, depending on your situation: If you are employed and make more than $50k/year: |
Why does it take two weeks (from ex-date) for dividends to pay out? | Why does it take two weeks (from ex-date) for dividends to pay out? For logistical and accounting purposes. This article says on the payment date: This date is generally a week or more after the date of record so that the company has sufficient time to ensure that it accurately pays all those who are entitled. It is for the same reasons that there is a often a two-week period between the time an employee submits her time sheet and the employee's pay date. The company needs time to set and send the payment while minimizing accounting errors. |
As an investor or speculator, how might one respond to QE3 taper? | As I tell all my clients... remember WHY you are investing in the first. Make a plan and stick to it. Find a strategy and perfect it. A profit is not a profit until you take it. the same goes with a loss. You never loose till you sell for less than what you paid. Stop jumping for one market to the next, find one strategy that works for you. Making money in the stock market is easy when you perfect your trading strategy. As for your questions: Precious metal... Buying or selling look for the trends and time frame for your desired holdings. Foreign investments... They have problem in their economy just as we do, if you know someone that specializes in that... good for you. Bonds and CD are not investments in my opinion... I look at them as parking lots for your cash. At this moment in time with the devaluation of the US dollar and inflation both killing any returns even the best bonds are giving out I see no point in them at this time. There are so many ways to easily and safely make money here in our stock market why look elsewhere. Find a strategy and perfect it, make a plan and stick to it. As for me I love Dividend Capturing and Dividend Stocks, some of these companies have been paying out dividends for decades. Some have been increasing their payouts to their investors since Kennedy was in office. |
TDAmeritrade Quote Summary TREE vs APRN | I suspect this is related to the fact that Blue Apron completed its IPO very recently and insider shares are likely still under a lockup period. So in the case of APRN stock only the 30mm shares involved in the IPO are trading until the insider lockup expires which is usually about 90 days. |
Are stock index fund likely to keep being a reliable long-term investment option? | I think you need a diversified portfolio, and index funds can be a part of that. Make sure that you understand the composition of your funds and that they are in fact invested in different investments. |
What is the meaning of realization in finance? | Realization is when you actually have something in hand, it isn't just theoretical anymore. For instance, you may win the lottery, but until they hand you a check, you haven't realized the windfall. Another example is that you may be paid a particular hourly wage, but until you cash the paycheck, you haven't realized the pay. |
Why do Americans have to file taxes, even if their only source of income is from a regular job? | A couple things. First of all, most people's MAIN source of income is from their job, but they have others, such as bank interest, stock dividends, etc. So that income has to be reported with their wage income. The second thing is that most people have deductions NOT connected with their job. These deductions reduce income (and generate refunds). So it's in their interest to file. |
How can I find out which ETFs has holdings in a particular stock? | This ETFchannel.com page shows which ETFs hold Wells Fargo and you can search other stocks the get the same information on that site. This the same information for Google This even tells you what percentage of an ETF is a particular stock. Be warned that this site is not entirely free. You will be limited to 6 pages in 6 hours unless you pay for a subscription. Additionally ETFdb.com offers a similar tool. |
Any specific examples of company valuations according to Value Investing philosophy? | I highly recommend http://pages.stern.nyu.edu/~adamodar/ Professor Damodaran. He's written some of the best valuation books in existence (my favorite, simply "Investment Valuation"). On his website you'll find a big pile of spreadsheets, that are models for working the various approaches to valuing a company. Also, he teaches an MBA-level valuation course at Stern School of Business in NYC. And he videotapes it and you can watch it for free. Very smart, kind, generous man. |
How smart is it to really be 100% debt free? | If you can borrow for an asset that gives you income that's more than the cost of carrying the debt, then go for it. But the kinds of debts you have now aren't those kinds of debt, so get rid of them. |
Where to find LEAPS option quotes (full chain)? CBOE & Yahoo! Finance not working | I'm familiar with and have traded U.S.-listed LEAPS and I've always used the CBOE quotes page you linked to. So, I too was surprised I couldn't find 3M (MMM) LEAPS quotes at that page, even after checking the "List all options, LEAPS, Credit Options & Weeklys if avail." radio button. Used to work! Fortunately, I was able to get access to the full chain of option quotes from the CBOE's other quotes page: Go to the "Quotes & Data" menu, then select Delayed Quotes - NEW! Here's how: I think the new interface is terrible: it's too many steps to get to the information desired. I preferred the all-in-one table of the Delayed Quotes Classic page, the one you linked to. As to why that classic page isn't yielding the full chain, I can only suggest it is a recently introduced bug (software defect). I certainly was able to get LEAPS quotes from that page before. On Yahoo! Finance option quotes: I don't know why their chain is incomplete – I can't see the logic, for instance, as to why MMM Jan 2012 60 calls are missing. I thought at first it may be lack of volume or open interest, but nope. Anyway, I don't trust Yahoo! to provide accurate, reliable quotes anyway, having seen too many errors and missing data in particular in the feed of Canadian stocks, which I also trade. I rely on the exchange's quotes, and my broker's real-time quotes. I check Yahoo! only for convenience sake, and when it actually matters I go to the other more reliable sources. For what it's worth, though, you can also get full chain option quotes at NASDAQ. See here for the 3M (MMM) example then click on the "Jan 12" link near the top. However, I would consider CBOE's quotes more definitive, since they are the options exchange. |
What are futures and how are they different from options? | Cart's answer is basically correct, but I'd like to elaborate: A futures contract obligates both the buyer of a contract and the seller of a contract to conduct the underlying transaction (settle) at the agreed-upon future date and price written into the contract. Aside from settlement, the only other way either party can get out of the transaction is to initiate a closing transaction, which means: The party that sold the contract buys back another similar contract to close his position. The party that bought the contract can sell the contract on to somebody else. Whereas, an option contract provides the buyer of the option with the choice of completing the transaction. Because it's a choice, the buyer can choose to walk away from the transaction if the option exercise price is not attractive relative to the underlying stock price at the date written into the contract. When an option buyer walks away, the option is said to have expired. However – and this is the part I think needs elaboration – the original seller (writer) of the option contract doesn't have a choice. If a buyer chooses to exercise the option contract the seller wrote, the seller is obligated to conduct the transaction. In such a case, the seller's option contract is said to have been assigned. Only if the buyer chooses not to exercise does the seller's obligation go away. Before the option expires, the option seller can close their position by initiating a closing transaction. But, the seller can't simply walk away like the option buyer can. |
If a stock doesn't pay dividends, then why is the stock worth anything? | It seems to me that your main question here is about why a stock is worth anything at all, why it has any intrinsic value, and that the only way you could imagine a stock having value is if it pays a dividend, as though that's what you're buying in that case. Others have answered why a company may or may not pay a dividend, but I think glossed over the central question. A stock has value because it is ownership of a piece of the company. The company itself has value, in the form of: You get the idea. A company's value is based on things it owns or things that can be monetized. By extension, a share is a piece of all that. Some of these things don't have clear cut values, and this can result in differing opinions on what a company is worth. Share price also varies for many other reasons that are covered by other answers, but there is (almost) always some intrinsic value to a stock because part of its value represents real assets. |
Boyfriend is coowner of a house with his sister, he wants to sell but she doesn't | He doesn't have to follow through on this, but he could tell this sister that he will stop making mortgage payments, which will result in foreclosure and sale at lower price than might be realized by a voluntary sale. Translation: the house will sold, sis. Do you want to maximize your share of the proceeds? And, as I said in a comment above: I hope that he is keeping careful records of mortgage an utility payments, as he might (should) be entitled to a refund from the proceeds of an eventual sale (possibly adjusted by the fair rent value of the time which he spent living there) |
Shares; are they really only for the rich/investors? | A guy I used to work with would buy some shares in certain companies on a regular basis. The guy in question chose Coke, Pepsi, GE, Disney and some other old stable stocks. He just kept buying a few shared ($50 or so at a time) year after year after year. He worked his entire life, but by the time he was ready to retire, he had a pretty sizable investment; he was worth a rather tidy sum. The moral of the story is, it is very much worth it to invest a bit at a time. Don't bother with the idea of buying low and selling high; not right now. Just go ahead and buy stable stocks (or shares of index funds) and wait them out. This strategy (mixed with other retirement tactics like a 401K from work, and IRA of your own, Social Security in the US) is a good way to build wealth. Don't spend money you don't have, be ready for a long term investment and I think it makes great sense, regardless of what country you live in. |
Who can truly afford luxury cars? | Each of us makes our own way in life, making choices based upon or own needs and desires. Some of us choose to live simple lives, others choose more complex lives where we earn and spend more. There are several points which one should examine and consider. Consider that the market for new cars is not the entire population, but only the fraction of the population that can afford to spend $20,000+ for a new car (at $400+/month payments). You quickly realize that most people making below median income cannot afford to purchase a new car. They buy used cars, from the pool of cars left after depreciation has reduced the price of the car by half (or more). One rule of thumb might be to spend < 10% of your income on transportation. Which might allow for a $400-500/month car payment for half of families. And when you keep a car for 10 years, that can mean two cars, one payment-free. Consider that a new Honda Accord or Toyota Camry is $20-30,000 which is 2/3 to 3/4 the price of a new luxury car. When I purchased my (used) Civic several years ago, the price was nearly 1/2 the price of a new luxury car. I recently purchased a (used) luxury car (7 year old, 70,000 miles) less than 1/3 the new price. The leather interior looks new, more amenities, better performance than my Civic, the car runs well, and with proper maintenance, I expect to drive it for 2-3 years and pass it along to one of my children. |
Do Banks Cause Inflation? What are other possible causes? | Some people believe that inflation is caused by an increase in the money supply when the banks engage in fractional reserve lending. Is this correct? You are referring to the Austrian school of thought. The Austrians define inflation in terms of money supply. In other words, inflation is defined as an increase in the aggregate money supply, even if prices stay the same of fall. This is not the only definition of inflation. The mainstream defines inflation as a general increase in the prices of consumer goods. Based on the first definition, then your supposition is correct by definition. Based on the second definition, you can make a case that money supply affects prices. But keep in mind, it's just one factor affecting prices. Furthermore, economics is resistant to experimentation, so it is difficult to establish causality. Austrian economists tend to approach the problem of "proof" using a 2-pronged tactic: establish plausibility by explaining the mechanism, then look for historical evidence to back up that explanation. As I understand it, when there is more available money in the market, the price of goods will increase. But will a normal merchant acknowledge the increase of money supply and raise prices immediately? I posit that, in the short run, merchants won't increase prices in response to increased money supply. So, why does increased money supply lead to price inflation? The simple answer, in the Austrian school of thought, is that you have more money chasing the same amount of goods. In other words, printing money doesn't actually increase the number of widgets made. I believe the Austrian school is consistent with your supposition that prices don't increase in the short run. In other words, producers don't increase prices immediately after observing an increase in the money supply. Specifically, after the banks print more notes, where will the money be distributed first? The Austrian story goes as follows: Imagine that the first borrower is a home constructor, and he is borrowing freshly "printed" money to build new homes. This constructor will need to buy materials and hire labor to build homes, and in doing so he will bid against other home constructors. The increased demand for lumber, nails, tools, carpentry, etc. will ever so slightly increase the market prices for these goods and services. So the money goes first to the borrower, but then flows also to the people selling to the borrower, and the people selling to the sellers, etc. It has a ripple effect. Who will be the first one to have a need to rise their price? These producers won't need to increase their price, but they will choose to do so if the believe that demand outstrips supply. In other words if you have more orders than you can fill, then you may post higher prices because you think consumers will tolerate the higher price. You might object that competition deters any one producer from unilaterally raising prices, but in fact if all producers are failing to keep up with demand, then you can unilaterally raise prices because other producers don't have any excess inventory to undercut you with. |
What are some tips for getting the upper hand in car price negotiations? | JohnFX and TTT provide excellent answers. Researching prices others have paid, being up front that you'll go buy a junker car to hold you over if they won't meet your price, and playing a few dealerships off of each other are all great tactics. In addition, I've got a few points about timing your purchase. If you're not desperate for a car, these can really help give you the upper hand in negotiations: Wait until the end of the month. Dealerships and individual salespeople usually have quotas that they're trying to clear, and the month is usually the standard cutoff. The last time I bought a car, the salesman made the mistake of mentioning, "I don't usually work Thursdays, but I'll be in this Thursday." Thursday was the 31st - I inferred from this information that he hadn't made his quota for the month yet. So I came back on the 31st to negotiate, and managed to hammer out a pretty good deal. Wait until about an hour before the dealership closes to show up and shop. This gives you enough time to not be obvious about the tactic, but you'll definitely be holding them past their normal quitting time if you do much negotiating. The salesman will be a little more inclined to make a deal so he can get home and have dinner. Bonus points if you can wait until a month that ends on a Friday! |
Basic questions about investing in stocks | Now a days, your stocks can be seen virtually through a brokerage account. Back in the days, a stock certificate was the only way to authenticate stock ownership. You can still request them though from the corporation you have shares in or your brokerage. It will have your name, corporation name and number of shares you have. You have to buy shares of a stock either through a brokerage or the corporation itself. Most stock brokerages are legit and are FDIC or SIPC insured. But your risks are your own loses. The $10 you are referring to is the trade commission fee the brokerage charges. When you place an order to buy or sell a stock the brokerage will charge you $10. So for example if you bought 1 share of a $20 stock. The total transaction cost will be $30. Depending on the state you live in, you can basically starting trading stocks at either 18 or 21. You can donate/gift your shares to virtually anyone. When you sell a stock and experience a profit, you will be charged a capital gains tax. If you buy a stock and sell it for a gain within 1 year, you will taxed up to 35% or your tax bracket but if you hold it for more than a year, you will taxed only 15% or your tax bracket. |
How does AMT/state taxes work for stock options in California? | Does this technically mean that she has to pay AMT on $400,000? Yes. Well, not exactly 400,000. She paid $1 per share, so 390,000. And if so, is %28 the AMT for this sum? (0.28 * $400,000 = $112,000)? Or does she have to include her salary on top of that before calculating AMT? (Suppose in the fake example that her salary is $100,000 after 401k). All her income is included in calculating the AMT, minus the AMT exemption amount. The difference between the regular calculated tax and the calculated AMT is then added to the regular tax. Note that some deductions allowed for the regular calculation are not allowed for the AMT calculation. How does California state tax come into play for this? California has its own AMT rules, and in California any stock option exercise is subject to AMT, unless you sell the stock in the same year. Here's a nice and easy to understand write up on the issue from the FTB. When would she have to pay the taxes for this huge AMT? Tax is due when income is received (i.e.: when you exercise the options). However, most people don't actually pay the tax then, but rather discover the huge tax liability when they prepare to submit their tax return on April 15th. To avoid that, I'd suggest trying to estimate the tax and adjust your withholding using form W4 so that by the end of the year you have enough withheld. Suppose in the worst case, the company goes completely under. Does she get her massive amounts of tax back? Or if it's tax credit, where can I find more info on this? That would be capital loss, and only up to $3K a year of capital loss can be deducted from the general income. So it will continue offsetting other capital gains or being deducted $3K a year until it all clears out. Is there any way to avoid this tax? (Can she file an 83b election?) You asked and answered. Yes, filing 83(b) election is the way to go to avoid this situation. This should be done within 30 days of the grant, and submitted to the IRS, and a copy attached to the tax return of the grant year. However, if you're considering exercise - that ship has likely sailed a long time ago. Any advice for Little Susie on how she can even afford to pay that much tax on something she can't even sell anytime soon? Don't exercise the options? Should she take out a loan? (e.g. I've heard that in the extreme case, you can find angel investors who are willing to pay all your taxes/strike price, but want 50% of your equity? I've also heard that you can sell your illiquid shares on SecondMarket?) Is she likely to get audited by IRS for pulling something like this? You can take a loan secured by shares you own, there's nothing illegal in it. If you transfer your shares - the IRS only cares about the taxes being paid, however that may be illegal depending on the terms and the conditions of the grant. You'll need to talk to a lawyer about your situation. I suggest talking to a licensed tax adviser (EA/CPA licensed in your State) about the specifics concerning your situation. |
What are the procedures or forms for a private loan with the sale of a vehicle? | The Nebraska DMV web site has a neat page about this. It seems to be fairly simple, and not costly to record a lien and later release it. Just go there with the title and the sales agreement that details the terms, and pay the $7 fee. |
Does the uptick rule apply to all stocks/ETFs and other securities, or only specific ones? | The uptick rule is gone, but it was weakly reintroduced in 2010, applied to all publicly traded equities: Under the terms of the rule, a circuit breaker would be triggered if a stock falls by 10% or more in a single day. At that point, short selling would only be allowed if the price is above the current national best bid, a restriction that would apply for the rest of the day and the whole of the following day. Derivatives are not yet restricted in such ways because of their spontaneous nature, requiring a short to increase supply; however, this latest rule widens options spreads during collapses because the exemption for hedging is now gone, and what's more a tool used by options market makers, shorting the underlying to offset positive delta, now has to go to the back of the selling line during a panic. Bonds are not restricted because for one there isn't much interest in shorting because bonds usually don't have enough variance to exceed the cost of borrowing, and many do not trade frequently enough because even the cost to trade bonds is expensive, so arranging a short in its entirety will be expensive. The preferred method to short a bond is with swaps, swaptions, etc. |
Pay off entire mortgage or put into investments | I like this option, rather than exposing all 600k to market risk, I'd think of paying off the mortgage as a way to diversify my portfolio. Expose 400k to market risk, and get a guaranteed 3.75% return on that 200k (in essence). Then you can invest the money you were putting towards your mortgage each month. The potential disadvantage, is that the extra 200k investment could earn significantly more than 3.75%, and you'd lose out on some money. Historically, the market beats 3.75%, and you'd come out ahead investing everything. There's no guarantee. You also don't have to keep your money invested, you can change your position down the road and pay off the house. I feel best about a paid off house, but I know that my sense of security carries opportunity cost. Up to you to decide how much risk you're willing to accept. Also, if you don't have an emergency fund, I'd set up that first and then go from there with investing/paying off house. |
Why don't more people run up their credit cards and skip the country? | Quality of life, success and happiness are three factors that are self define by each individual. Most of the time all three factors go hand by hand with your ability to generate wealth and save. Actually, a recent study showed that there were more happy families with savings than with expensive products (car, jewelry and others). These 3 factors, will be very difficult to maintain after someone commit such action. First, because you will fear every interaction with the origin of the money. Second, because every individual has a notion of wrong doing. Third, for the reasons that Jaydles express. Also, most cards, will call you and stop the cards ability to give money, if they see an abusive pattern. Ether, skipping your country has some adverse psychological impact in the family and individual that most of the time 100K is not enough to motivate such change. Thanks for reading. Geo |
How might trading volume affect future share price? | As said previously, most of the time volume does not affect stock prices, except with penny stocks. These stocks typically have a small volume in the 3 or 4 figure range and because of this they typically experience very sharp rises and drops in stock prices, contrasting normal stocks that go up and down constantly every minute. Volume is not one thing you should be looking at when analyzing a stock in most cases, since it is simply the number of people of trades made in a day. That has no effect on the value of the company, whereas looking at P/E ratios, dividend growth, etc all can be analyzed to see if a company is growing and is doing well in its field. If I buy an iPhone, it doesn't matter if 100 other people or 100,000 other people have bought it as well, since they won't really affect my experience with the product. Whereas the type of iPhone I buy will. |
Where can I find historic ratios by industry? | If you would like to find data on a specific industry/market sector, a good option is IBISworld reports. You can find their site here. You can find reports on almost any major US sector. The reports include historical data as well as financial ratios. In college projects, they were very useful for getting benchmark data to compare an individual business against an industry as a whole. |
Ideal investments for a recent college grad with very high risk tolerance? | If you have been putting savings away for the longer term and have some extra funds which you would like to take some extra risk on - then I say work yourself out a strategy/plan, get yourself educated and go for it. If it is individual shares you are interested then work out if you prefer to use fundamental analysis, technical analysis or some of both. You can use fundamental analysis to help determine which shares to buy, and then use technical analysis to help determine when to get into and out of a position. You say you are prepared to lose $10,000 in order to try to get higher returns. I don't know what percentage this $10,000 is of the capital you intend to use in this kind of investments/trading, but lets assume it is 10% - so your total starting capital would be $100,000. The idea now would be to learn about money management, position sizing and risk management. There are plenty of good books on these subjects. If you set a maximum loss for each position you open of 1% of your capital - i.e $1,000, then you would have to get 10 straight losses in a row to get to your 10% total loss. You do this by setting stop losses on your positions. I'll use an example to explain: Say you are looking at a stock priced at $20 and you get a signal to buy it at that price. You now need to determine a stop price which if the stock goes down to, you can say well I may have been wrong on this occasion, the stock price has gone against me so I need to get out now (I put automatic stop loss conditional orders with my broker). You may determine the stop price based on previous support levels, using a percentage of your buy price or another indicator or method. I tend to use the percentage of buy price - lets say you use 10% - so your stop price would be at $18 (10% below your buy price of $20). So now you can work out your position size (the number of shares to buy). Your maximum loss on the position is $2 per share or 10% of your position in this stock, but it should also be only 1% of your total capital - being 1% of $100,000 = $1,000. You simply divide $1,000 by $2 to get 500 shares to buy. You then do this with the rest of your positions - with a $100,000 starting capital using a 1% maximum loss per position and a stop loss of 10% you will end up with a maximum of 10 positions. If you use a larger maximum loss per position your position sizes would increase and you would have less positions to open (I would not go higher than 2% maximum loss per position). If you use a larger stop loss percentage then your position sizes would decrease and you would have more positions to open. The larger the stop loss the longer you will potentially be in a position and the smaller the stop loss generally the less time you will be in a position. Also as your total capital increases so will your 1% of total capital, just as it would decrease if your total capital decreases. Using this method you can aim for higher risk/ higher return investments and reduce and manage your risk to a desired level. One other thing to consider, don't let tax determine when you sell an investment. If you are keeping a stock just so you will pay less tax if kept for over 12 months - then you are in real danger of increasing your risk considerably. I would rather pay 50% tax on a 30% return than 25% tax on a 15% return. |
Transfer money from a real estate sale in India to the US | If you are using the money to invest in a property (even abroad) then you can claim tax exemption. while some people will tell you that the reinvestment should be in India only, it have been ruled that the property can be purchased abroad too.. |
What percentage of my portfolio should be in individual stocks? | If you are comfortable with the risk etc, then the main thing to worry about is diversity. For some folks, picking stocks is beyond them, or they have no interest in it. But if it's working for you, and you want to keep doing it, more power to you. If you are comfortable with the risk, you could just as well have ALL your equity position in individual stocks. I would offer only two pieces of advice in that respect. 1) no more than 4% of your total in any one stock. That's a good way to force diversity (provided the stocks are not clustered in a very few sectors like say 'financials'), and make yourself take some of the 'winnings off the table' if a stock has done well for you. 2) Pay Strong attention to Taxes! You can't predict most things, but you CAN predict what you'll have to pay in taxes, it's one of the few known quantities. Be smart and trade so you pay as little in taxes as possible 2A)If you live someplace where taxes on Long term gains are lower than short term (like the USA) then try really really hard to hold 'winners' till they are long term. Even if the price falls a little, you might be up in the net compared to paying out an extra 10% or more in taxes on your gains. Obviously there's a balancing act there between when you feel something is 'done' and the time till it's long term.. but if you've held something for 11 months, or 11 months and 2 weeks, odds are you'd be better off to hold till the one year point and then sell it. 2B) Capture Losses when you have them by selling and buying a similar stock for a month or something. (beware the wash sale rule) to use to offset gains. |
When will the U.K. convert to the Euro as an official currency? | In many countries in Europe the prices shot through the roof, so it is not all positive. Also the switching country gives out lot of monetary control that is not welcomed by many. I think that UK is not going to change to euro for a long long time. |
What is the dividend tax rate for UK stock | FYI, I am assuming you are an individual investor.. The rates on the website may change, if the government decides so. Anyway it is a UK government website, so it would reflect the changes immediately. |
What does quantitative easing 2 mean for my bank account? | Probably means next to zero chance of having decent rates on savings accounts for the near future - who needs your money if banks can have government money for free? Probably no short-term effects on you besides that. |
Where can I invest my retirement savings money, where it is safer than stocks? | There are many questions and good answers here regarding investment choices. The first decision you need to make is how involved do you intend to be in investment activity. If you plan to be actively investing by yourself, you should look for questions here about making investment choices. If you intend to be a more passive investor, look for posts by "Bogleheads", who focus on broad-focused, low cost investments. This is the optimal choice for many people. If you are not comfortable managing investments at all, you need to figure out how to find a competent and reasonably priced financial advisor to meet with and guide your investment strategy. This advice generally costs about 1-2% of your total managed assets annually. |
Is it true that 90% of investors lose their money? | The game is not zero sum. When a friend and I chop down a tree, and build a house from it, the house has value, far greater than the value of a standing tree. Our labor has turned into something of value. In theory, a company starts from an idea, and offers either a good or service to create value. There are scams that make it seem like a Vegas casino. There are times a stock will trade for well above what it should. When I buy the S&P index at a fair price for 1000 (through an etf or fund) and years later it's 1400, the gain isn't out of someone else's pocket, else the amount of wealth in the world would be fixed and that's not the case. Over time, investors lag the market return for multiple reasons, trading costs, bad timing, etc. Statements such as "90% lose money" are hyperbole meant to separate you from your money. A self fulfilling prophesy. The question of lagging the market is another story - I have no data to support my observation, but I'd imagine that well over 90% lag the broad market. A detailed explanation is too long for this forum, but simply put, there are trading costs. If I invest in an S&P ETF that costs .1% per year, I'll see a return of say 9.9% over decades if the market return is 10%. Over 40 years, this is 4364% compounded, vs the index 4526% compounded, a difference of less than 4% in final wealth. There are load funds that charge more than this just to buy in (5% anyone?). Lagging by a small fraction is a far cry from 'losing money.' There is an annual report by a company named Dalbar that tracks investor performance. For the 20 year period ending 12/31/10 the S&P returned 9.14% and Dalbar calculates the average investor had an average return of 3.83%. Pretty bad, but not zero. Since you don't cite a particular article or source, there may be more to the story. Day traders are likely to lose. As are a series of other types of traders in other markets, Forex for one. While your question may be interesting, its premise of "many experts say...." without naming even one leaves room for doubt. Note - I've updated the link for the 2015 report. And 4 years later, I see that when searching on that 90% statistic, the articles are about day traders. That actually makes sense to me. |
Leasing a car I intend to buy | What does not seem reasonable about your plan is the payment and buyout. While $200/month payments are possible (but hard to find), buyouts are more typically in the five figure range. Given that your savings and desired payment for a car is low (the average car payment today is about 450/month), can you really afford the massive depreciation of a late model vehicle? Why not purchase a 2000 car now, and save the 200-300 per month? In about a year you could move up to a ~5000 car. You can buy a pretty nice car for 5K. Myself, I am on my third year of driving a 4000 car. |
What governs the shape of price history graphs? | Dividend-paying securities generally have predictable cash flows. A telecom, electric or gas utility is a great example. They collect a fairly predictable amount of money and sells goods at a fairly predictable or even regulated markup. It is easy for these companies to pay a consistent dividend since the business is "sticky" and insulated by cyclical factors. More cyclic investments like the Dow Jones Industrial Average, Gold, etc are more exposed to the crests and troughs of the economy. They swing with the economy, although not always on the same cycle. The DJIA is a basket of 30 large industrial stocks. Gold is a commodity that spikes when people are faced with uncertainty. The "Alpha" and "Beta" of a stock will give you some idea of the general behavior of a stock against the entire market, when the market is trending up and down respectively. |
How does “taking over payments” work? | The phrase doesn't mean anything specifically. Your SO could start paying the payments, but the title and lien would remain in your name. If you wanted to change the title or lien to be in her name, you would have to sell the car to her (sales tax would be involved but the process would be relatively painless). You could sell her the car for a pretty cheap price, but not $1. (unless the depreciated value of the car was less than the rest of the loan amount). You could draft up an agreement that if you break up or something, she agrees to buy the car from you for $x dollars minus all the payments she has made on the car. |
Can saving/investing 15% of your income starting age 25, likely make you a millionaire? | Yes, becoming a millionaire is a reasonable goal. Saving 15% of your income starting at age 25 and investing in the stock market will likely get you there. The CAGR (Compound Annual Growth Rate) of the S&P 500 over the last 35 years has been about 11%. (That 35 years includes at least two fairly serious crashes.) You may get more or less than that number in the future, but let's guess that you'll average 9%. Let's say that you begin with nothing invested, and you start investing $100 per week at age 25. (If your annual income is $35,000, that is about 15% of your income.) You decide to invest your money in an S&P 500 index mutual fund. 35 years from now when you are 60 years old, you would be a millionaire ($1.2 Million, actually). You may earn less than the assumed 9%, depending on how the stock market does. However, if you stick with your 15% investment amount throughout your whole career, you'll most likely end up with more, because your income will probably increase during your career. And you will probably be working past age 60, giving your investments time to earn even more. |
Should I pay off my car loan within the year? | Your plan isn't bad, but it probably isn't worth the cost for the small amount of credit building it will achieve. If you do decide to continue with it though, you'll save in interest if you make the big payment now rather than in 6 months. In other words, you can take the minimum payment, multiply it by 5, subtract that amount from the total you owe and pay the difference immediately. This way you'll still get the 6 months of reporting to the credit bureaus, but you'll pay less interest since you'll have less principle each month. I would recommend applying for the credit card right now. I believe you'll probably get approved now. If you do, then pay off the car loan without thinking about it. (If you don't get approved, think about it, then probably still pay it off.) Regarding the full coverage insurance, even after the loan is paid off and you aren't required to have it, you may still want to keep it. Even if you're the best driver on earth, if someone hits you and doesn't have insurance, or they have insurance and drive off, or a deer runs in front of you, etc, you'll lose your car and won't be reimbursed. Also, as Russell pointed out in the comments below, without collision coverage your insurance company has no incentive to work on your behalf when someone else hits you, so even if it's not your fault you may still not get reimbursed. So, I wouldn't pass on the full coverage unless your car isn't worth very much or you can stomach losing it if something happens. Good luck, and congrats on being able to pay for a car in full at 19 years old. |
Why is Insider Trading Illegal? | Secret formulas are legal, "privileged information" is not. And that may be the whole point. People are allowed to trade stocks profitably if doing so results only from their skill. A "secret formula" (for evaluating information) is part of that skill. But having "privileged information" is not considered skill. It is considered an unfair, illegal advantage. Because company officials (and others) with privileged information are 1) not permitted to trade stocks while that information is privileged and 2) are not allowed to share that information with others. Inevitably, some do one or the other, which is why they are prosecuted. "Raj" took the process to new highs (or lows). He not only "dealt" in privileged information, he PAID for it. Anything from a new car or house to $500,000 a year in cash. In essence, he had a bunch of strategically placed "spies" inside or close to corporations including one on the board of Goldman Sachs, "selling out" their companies, and thereby practicing a form of corporate "treason." |
Do online repositories of publicly traded companies' financial statements exist? | You can use the Securities Exchange Commission's EDGAR search engine to search all available SEC related filings. https://www.sec.gov/edgar/searchedgar/companysearch.html Top tip: use the fast search on the right to search for the company ticker rather than by company name. |
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