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Diagnostic Questions to Determine if Renter intends to pay | Assuming the renter was properly vetted, the only question worth asking is "what has changed in your life?" Perhaps one of the earners has lost a job, or has moved out because a couple has broken up. If nothing has changed but they just don't feel like paying you, start the eviction process. If something has changed and you assess that it's temporary (I lent my brother money and he didn't pay me back - I'll be behind for a few months but I will catch up; my employer went out of business and didn't pay me for the last two weeks - I have a new job already and am waiting for my first paycheque) then perhaps you are willing to wait. If something has changed and it seems pretty permanent then you might reluctantly start the process. Depending on how long it takes where you live, the renter might get things under control before you finish. |
How can a company charge a closed credit card? | You should contact the Company who purchased your visa balance and ask/write the following questions: 1. Dispute the charge from Emusic.com as invalid. 2. Instruct that no future charges will be accepted. 3. How come Emusic.com was allowed to debit your account? 4. When did they purchased your visa account? 5. Ask for written verification that they purchased your account from the original company? such as a bill of sale? 6. Ask if the company is a registered debt collector in your state? 7. The FAIR DEBT COLLECTION PRACTICES ACT (FDCPA) may apply to your circumstance(s) and provide for $1,000 in damages to the consumer and $1,000 attorney fees from a third party debt collector per violation. You may want to seek the advice of an attorney to help determine if you have a good cause to sue the company and Emusic. If you did not receive anything form Emusic.com or your contract/agreement ended without a cancelation/early termination fee, ALso, file a written dispute with Emusic.com. Check your credit report. Many companies automatically charge your accounts through automatic payments after termination of the agreement because they get away with it in the U.S., if the consumer does not take steps to dispute the current charge and stop future charges from occurring in the future. Never use auto pay unless required and the service is essential. When using auto pay use a dedicated account not your main checking account. It is less of a pain in the neck to close the account if its your 2nd or 3rd checking account and not your only account. |
How to share income after marriage and kids? | What equal percentage of both you and your girlfriend's income will cover the essential household expenses? Although we earned different amounts, both of us turned over half our income over to the household. Between us this percentage slice from each of our earnings neatly covered all the essentials. The amounts contributed were different, but the contributions where nonetheless equal. Beyond this the financial relationship was fast and loose. |
How do I figure out if I will owe taxes | Do I get a write off for paying student loans? Maybe. See https://www.irs.gov/publications/p970/ch04.html Generally, personal interest you pay, other than certain mortgage interest, isn't deductible on your tax return. However, if your modified adjusted gross income (MAGI) is less than $80,000 ($160,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. This deduction can reduce the amount of your income subject to tax by up to $2,500. Read the whole document to be sure, but that's the basics. You'll have to fill out a 1040 or 1040A to claim a student loan deduction. It won't be on the 1040EZ. You do not have to itemize though. What kinds of write-offs and credits are available for someone who is single and lives in an apartment with two roommates? As a practical matter, in 2016 you'll get the standard deduction for someone who is single ($6300) and the personal exemption ($4050). It's extremely unlikely that you'll be able to deduct more by itemizing. Most people who itemize are taking a mortgage interest deduction. Major medical bills are another possibility, but they have to be more than 10% of your adjusted gross income (it's one of the lines on your tax return). Assuming you rent and are reasonably healthy, you are unlikely to have enough to itemize. The most likely additional deduction would be the one for an IRA (Individual Retirement Account). Although you might be better off doing a Roth anyway (no tax deduction). If you are self-employed or making more than $100,000 a year, there are additional issues. But most people aren't. If you filled out a W-4 and will get a W-2 back, you aren't self-employed. Hopefully you have a rough idea of your annual income. The first $9275 over your deductions will pay 10%. After that, up to $37,650 you pay 15%. The 2016 link above has a link (PDF) to the full table if you need more than that. Note that that is the first $48,000 in income with your $10,350 in deductions. |
Evidence for timing market in the short run? | The study of technical analysis is generally used (sometimes successfully) to time the markets. There are many aspects to technical analysis, but the simplest form is to look for uptrends and downtrends in the charts. Generally higher highs and higher lows is considered an uptrend. And lower lows and lower highs is considered a downtrend. A trend follower would go with the trend, for example see a dip to the trend-line and buy on the rebound. Whilst a bottom fisher would wait until a break in the downtrend line and buy after confirmation of a higher high (as this could be the start of a new uptrend). There are many more strategies dealing with the study of technical analysis, and if you are interested you would need to find and learn about ones that suit your investment styles and your appetite for risk. |
Is there legal reason for restricting someone under 59-1/2 from an in-service rollover from a 401K to an IRA? | You're going to find a lot of conflicting or vague answers on the internet because there are a lot of plan design elements that are set by the plan sponsor (employer). There are laws that mandate certain elements and dictate certain requirements of plan sponsors, many of these laws are related to record keeping and fiduciary duty. There is a lot of latitude for plan sponsors to allow or restrict employee actions even if there is no law against that activity. There are different rules mandated for employee pre-tax contributions, employee post-tax contributions, and employer contributions. You have more flexibility with regard to the employer contributions and any post tax contributions you may have made; your plan may allow an in-service distribution of those two items before you reach age 59.5. While your HR department (like most -all- HR departments) is not staffed with ERISA attorneys and CPAs it is your HR department and applicable plan documents that will lay out what an employee is permitted to do under the plan. |
Why would a stock opening price differ from the offering price? | The offering price is the price at which that IPO is, well, offered. Think of it as a suggested retail price. The opening price is the actual price at which trading begins, on a particular day, for a stock. That price depends on demand/overnight-orders/what-have-you. Think of this as the actual price in the store. |
How to measure how the Australian dollar is faring independent of the US dollar | What you want is the average change in rate of the Australian Dollar against multiple other currencies, to even out the effect of moves in a single other currency. People often look at the trade-weighted exchange rate to get an idea of this, as it allows you to look at the currencies that are most relevant, rather than every tiny other currency having an equal weight. |
Average Price of a Stock | I would have to disagree with the other responders. In technical analysis of stock charts, various short and long term moving averages are used to give an indication of the trend of the stock in the short and long term, as compared to the current price. I would prefer to use the term moving average (MA) rather than average as the MA is recalculated every day (or at appropriate frequencies for your data) on the period you are using. I would also expand on the term "moving average". There are two that are commonly used Going back to the question, of the value of this number, For example if the current price is above the 200 day EWMA and also above the 30 day EWMA, then the stock is broadly trending upwards. Conversely if current price is below the 200 day EWMA and also below the 30 day EWMA, then the stock is broadly trending downwards. These numbers are chosen on the basis of the market you are trading in, the volatility and other factors. For another example of how a number of moving averages are used together, please have a read of Daryl Guppy's Multiple Moving Average, though this does not use moving averages as large as 200 days. |
How does a brokerage firm work? | Real target of commisions is providing "risk shelter". It is kind of "insurance", which is actually last step for external risks to delete all your money. In part it cuts some of risks which you provide, brokers track history of all your actions for you (nobody else does). When brokerage firm fails, all your money is zero. It depends from case to case if whole account goes zero, but I wouldn't count on that. |
What is the best way to stay risk neutral when buying a house with a mortgage? | How can one offset exposure created by real-estate purchase? provides a similar discussion. Even if such a product were available in the precise increments you need, the pricing would make it a loser for you. "There's no free lunch" in this case, and the cost to insure against the downside would be disproportional to the true risk. Say you bought a $100K home. At today's valuations, the downside over a given year might be, say, 20%. It might cost you $5000 to 'insure' against that $20K risk. Let me offer an example - The SPY (S&P ETF) is now at $177. A $160 (Dec '14) put costs $7.50. So, if you fear a crash, you can pay 4%, but only get a return if the market falls by over 14%. If it falls 'just' 10%, you lose your premium. With only 5% down, you will get a far better risk-adjusted return by paying down the mortgage to <78% LTV, and requesting PMI, if any, be removed. Even if no PMI, in 5 years, you'll have 20% more equity than otherwise. Over the long term, 5 year's housing inflation would be ~ 15% or so. This process would help insure you are not underwater in that time. Not guarantee, but help. |
Double-entry accounting: how to keep track of mortgage installments as expenses? | The best thing for you to do will be to start using the Cash Flow report instead of the Income and Expense report. Go to Reports -> Income and Expense -> Cash Flow Once the report is open, open the edit window and open the Accounts tab. There, choose your various cash accounts (checking, saving, etc.). In the General tab, choose the reporting period. (And then save the report settings so you don't need to go hunting for your cash accounts each time.) GnuCash will display for you all the inflows and outflows of money, which appears to be what you really want. Though GnuCash doesn't present the Cash Flow in a way that matches United States accounting rules (with sections for operating, investing, and financial cash flows separated), it is certainly fine for your personal use. If you want the total payment to show up as one line on the Cash Flow report, you will need to book the accrual of interest and the payment to the mortgage bank as two separate entries. Normal entry for mortgage payments (which shows up as a line for mortgage and a line for interest on your Cash Flow): Pair of entries to make full mortgage payment show up as one line on Cash Flow: Entry #1: Interest accrual Entry #2: Full mortgage payment (Tested in GnuCash 2.6.1) |
Is income from crypto-currencies taxed? | Mining is income at the value at time of earning, I would use an index like XBX to determine price. Asset appreciation is capital gains. These aspects of crypto-assets are not a gray area in the US financial sector, and have been addressed for almost half a decade now. |
Which is the better strategy for buying stocks monthly? | Powers makes a good point: trading costs may eat up a significant portion of your ROI. A fee as little as 2% can consume more than 50% of your long-term ROI! A rule of thumb is keep your fees to less than 1%. One way to do that is to buy stock in companies that have a DRIP with a Share Purchase Plan (SPP). Often the SPP allows investors to purchase shares for low fees or free. Once you have the ability to purchase shares for (virtually) free, you can use InvestMete. Roughly, you send more money to the companies whose share prices are near their 52-week low, and less money to those who are near their 52-week high. Getting back to your original question... |
Are there statistics showing percentage of online brokerage customers that are actually making a profit trading forex/futures/options? | Interactive Brokers advertises the percent of profitable forex accounts for its own customers and for competitors. They say they have 46.9% profitable accounts which is higher than the other brokers listed. It's hard to say exactly how this data was compiled- but I think the main takeaway is that if a broker actually advertises that most accounts lose money, it is probably difficult to make money. It may be better for other securities because forex is considered a very tough market for retail traders to compete in. https://www.interactivebrokers.com/en/?f=%2Fen%2Ftrading%2Fpdfhighlights%2FPDF-Forex.php |
Personal finance software for Mac that can track stocks and mutual funds? (Even manual updating of share prices will do.) | I currently use Moneydance on my Mac. Before that I had used Quicken on a PC until version 2007. It is pretty good, does most simple investment stuff just fine. It can automatically download prices for regular stocks. Mutual funds I have to input by hand. |
How risky are penny stocks? | Penny stocks are only appealing to the brokers who sell the penny stocks and the companies selling "penny stock signals!". Generally penny stocks provide abysmal returns to the average investor (you or me). In "The Missing Risk Premium", Falkenstein does a quick overview on average returns to penny stock investors citing the following paper "Do Investors Overpay for Stocks with Lottery-Like Payoffs? An Examination of the Returns on OTC Stocks". Over the 2000 to 2009 time period, average investors lost nearly half their investment. A comparable investment in the S&P over this period would have been flat see here. There is a good table in the book/paper showing that the average annual return for stocks priced at either a penny or ten cents range from -10 percent (for medium volume) to -30% to -40% for low or high volume. A different paper, "Too Good to Ignore? A Primer on Listed Penny Stocks" that cites the one above finds that listed, as opposed to OTC "Pink Sheet" penny stocks", have better returns, but provide no premium for the additional risk and low liquidity. The best advice here is that there is no "quick win" in penny stocks. These act more like lottery tickets and are not appropriate for the average investor. Stear clear! |
Is foreign stock considered more risky than local stock and why? | If you intend to be responsive to news and intraday price moves, for foreign stocks these will often happen while you're asleep (e.g. the Tokyo Stock Exchange opens at roughly midnight UK time). |
Do I pay a zero % loan before another to clear both loans faster? | This is more of an interesting question then it looks on first sight. In the USA there are some tax reliefs for mortgage payments, which we don’t have in the UK unless you are renting out the property with the mortgage. So firstly work out the interest rate on each loan taking into account any tax reliefs, etc. Then you need to consider the charges for paying off a loan, for example often there is a charge if you pay off a mortgage. These days in the UK, most mortgagees allow you to pay off at least 10% a year without hitting such a charge – but check your mortgage offer document. How interest is calculated when you make an early payment may be different between your loans – so check. Then you need to consider what will happen if you need another loan. Some mortgages allow you to take back any overpayments, most don’t. Re-mortgaging to increase the size of your mortgage often has high charges. Then there is the effect on your credit rating: paying more of a loan each month then you need to, often improves your credit rating. You also need to consider how interest rates may change, for example if you mortgage is a fixed rate but your car loan is not and you expect interest rates to rise, do the calculations based on what you expect interest rates to be over the length of the loans. However, normally it is best to pay off the loan with the highest interest rate first. Reasons for penalties for paying of some loans in the UK. In the UK some short term loans (normally under 3 years) add on all the interest at the start of the loan, so you don’t save any interest if you pay of the loan quicker. This is due to the banks having to cover their admin costs, and there being no admin charge to take out the loan. Fixed rate loans/mortgagees have penalties for overpayment, as otherwise when interest rates go down, people will change to other lenders, so making it a “one way bet” that the banks will always loose. (I believe in the USA, the central bank will under right such loans, so the banks don’t take the risk.) |
What are the financial advantages of living in Switzerland? | Switzerland was once known for its high regard for private property rights. Recently it is has started to violate those rights by forcing banks to turn over the names of account holders to the US government. Not a great trend. Another aspect that makes Switzerland an attractive place for people and businesses is the Swiss governemnt's neutral policy. The Swiss government is not deploying the Swiss military around the globe to fight terrorism, to spread democracy, to advance its own power, or other such murderous government programs. The Swiss people do not have to worry about the payback that arrives because of such depraved government programs. The Swiss were traditionally extreme advocates of individual gun rights which allows the people to provide protection for themselves against others and against the government. This too is changing (read section on The Enemy Within) in a not so favorable direction. I also belive the Swiss Franc was the last major currency to sever its tie to gold. The currency use to be highly desired due to its tie to gold. I think the currency is still highly regarded but the Swiss central bank is participating in the currency war and has attempted multiple times in the past couple of years to debase its currency so it does not appreciate against the euro or dollar. |
Sale of house profit gifted to child | 1) You parents will have to pay tax on the gain as it wasn't their primary home. You don’t pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply: As I look at it, it is your parents are the ones who own the property and they will have to pay on £60000. But as you say you pay part of the mortgage, I would go to a tax advisor/accountant to confirm if they will only pay on the £15000. I couldn't find any guidance on that matter on gov.uk 2) Inheritance tax will not be levied on it as it is below £325000, but tax will be levied on £325000, less £3000 annual gift allowance. Two articles for further information - GOV.UK's Tax when you sell your home Money.co.UK's Gifting money to your children: FAQs |
Do any publically available documents from IR or SEC include all patents the company holds? | It appears as others have said that companies are not required to state this on as any sort of Asset. I remembered a friend of mine is a lawyer specializing in Intellectual Property Rights so asked him and confirmed that there's no document companies are required to file which states all patent holdings as assets. There are two ways he suggested for finding out. Once you find a company you're interested in can search patents by company using one of the two following: US Patent Office website's advanced search: http://patft.uspto.gov/netahtml/PTO/search-adv.htm aanm/company for example entering into the textarea, "aanm/google" without the quotation marks will find patents by Google. The other is a Google Patent Search: http://www.google.com/patents/ |
For very high-net worth individuals, does it make sense to not have insurance? | Indeed, there is conservation of money. If the insurance companies have those big buildings and television commercials and CEOs, then that money comes from only one place: the insurance premiums of customers. To say insurance is a good deal is either The benefit and cost of insurance for most: Indeed, of all the answers here, James Turner's is best. If you can't afford to lose something, it is vital to insure it. Ideally insurance would be a non-profit operation to best cover this. Such that people would as a whole lose nothing. Theoretically it could even be slightly for profit by making wise investment decisions, and benefiting from the future value of money by beating inflation. But they don't (see this writeup for slightly dated information on health, and this Wikipedia article for more direction). But even if you are taking an average loss (by using a profit-making insurance company), by taking insurance you avoid the situation where you're crippled by a catastrophe. You are paying a fee to hedge your losses. Like James said, insure what you cannot afford to lose. But realize you're going into a situation where the overall net is an average loss of between 10-50% of your money, on average. Basically you're playing the lottery, except your net losses mostly go to fund the company and the CEOs rather than nominally support education. But you sounded like you understood those ideas well, so... Can you self insure? As others noted, yes, there is the option of self insurance in most places. Even even often when insurance is considered as required. For example, in the US, basically car insurance coverage is required. But generally you are legally able to self insure to cover this requirement: The cost of self insuring: There is one cost to self-insure: time. It takes time to research the laws, time to to satisfy those requirements, and then time to find/setup all the care providers (doctors, mechanics, lawyers, etc). When is it worth it? First, again, you must satisfy the prerequisite: you are able to financially handle the loss of the topic under consideration. At a commenter's request, here is an attempt to better spell out this requirement (though it doesn't appear pertinent to the question asked, it is indeed very important not to mistakenly assume you satisfy this requirement). Can you comfortably cover the level of insurance you would otherwise be taking out. $50,000/$100,000/$50,000 is a common reasonable insurance level, so that would be $200,000. Basically, have enough money to cover the loss of your car, your possible injury expenses, and most importantly the damage and medical of anyone else you hit. You would need to have that value available, optimally in your accounts. Alternatively, you could weigh it against your assets, such that if you had low accounts but a paid off $200,000 house, you could conceivably sell your property and still be able to survive financially afterwards. However, it is indeed dangerous to make this assumption, as there may be additional costs and troubles in selling assets, and you may fail to recognize how precious the property is to you. Having at least double or triple in property you'd be willing to part with might be a more comfortable number. Again, the main idea is: can you afford to lose the insured value tomorrow? Though you hope it wouldn't happen, if someone came and took $200,000+ of yours tomorrow, would you be able to adjust to it relatively easily? If the answer is yes, you've satisfied this requirement. In many states it's easier to understand whether you can meet this requirement: it instead becomes can you take out the liability bond required. If you've met that requirement, then it comes down to the time you'd lose versus the savings you'd gain. To get a fair idea, you'll need: The premium you would pay to purchase the insurance: Since you are likely losing 10-50% of your premiums, it should be fair to make a rough estimate of value lost by using 25% for most purposes (especially given that this still ignores the future value/opportunity cost of your money, which could often be 5-10% if invested well) The value of your time: You must properly identify either: A rough estimate of how much time it will take you to research the legal requirements and meet them, and then to research/handle the subsequent needs that come up which the insurance would take care of in an average year. So try to balance those typical years where you wouldn't have a lot of work to do with a year where you'd need to call repair mechanics or find health practitioners. Perhaps aim high, research/calling usually takes more time than we think. Is this calculation positive? Your estimated net annual benefit (or cost) from self insuring is: 0.25 * (Insurance Premium Per Year) - (Estimated Value of Your Time)*(Estimated Hours Of Work\Research to Self-Insure Per Year) This is a rough estimate. But if the result is quite positive (and you can afford to cover the hit the insurance would otherwise cover), you're likely better off self-insuring. If the result is quite negative (or you can't cover the possible costs insurance would cover), you're probably better off buying insurance. Finally, indeed there are still a few other factors on each side to consider... Most often those additional pluses and minuses probably are smaller than the primary cost/benefits spelt out earlier. But if you're rich enough to have the money, you're in a situation where you can likely sacrifice a little income to have your peace of mind. So there's certainly a lot to consider in it. But if you're a self starter, I believe you're right that you'll find it's more worthwhile to self-insure if you indeed have the resources. |
Should I get cash from credit card at 0% for 8 months and put it on loans? | Do you know how many people end up with an 18-21% rate on their credit card? They started off with low teaser rates. There was an article about it recently on Yahoo. Mainly this comes from a lack of discipline, or an unforeseen emergency. However, lets assume, that you are a bit uncommon and have iron discipline. It comes down to a math question. What is the rate on your student loan? I am going to assume 6%, and lets say that you are now paying interest. So there is 7 months between now an then, you would pay $140 (4000 * .06/12 * 7) in interest if you left it on the student loan. Typically there is not really a free lunch with the zero percent interest rate CC. They often charge a 3% balance transfer fee, so you would pay that on the entire amount, about $120. Is it worth the $20? I would say not. However, those simple calculations are not really correct. Since you would have to pay the CC $588.6/month to take care of this, you have to shrink the balance on the student loan to do a true apples to apples comparison. So doing a little loan amortization, you can retire $4000 on the student loan only paying $583/month, and paying a total of $80.40 in interest. So it would cost you money to do what you are suggesting if there is a 3% transfer fee. Even if there is no transfer fee, you only save about $80 in interest. If it was me, I would direct my energy in other areas, like trying to bring in more money to make this student loan go away ASAP. Oh and GO STEELERS! |
How do ETF fees get applied? | The ETF price quoted on the stock exchange is in principle not referenced to NAV. The fund administrator will calculate and publish the NAV net of all fees, but the ETF price you see is determined by the market just like for any other security. Having said that, the market will not normally deviate greatly from the NAV of the fund, so you can safely assume that ETF quoted price is net of relevant fees. |
What can I replace Microsoft Money with, now that MS has abandoned it? | I have been using Acemony http://www.mechcad.net/products/acemoney/ for a couple of years now and extremely happy with it. Very simple and intuitive to use. The best part is - life-long free upgrades |
US Banks offering Security Tokens in 2012 | Bank of America "safe-pass" generates a code that is sent to your phone as a text message. Its an optional feature, this happens during log in, if you enter that code correctly, then you are taken to your more traditional login, which also features the weak (but widely heralded) two-factor authentication which shows a picture you chose and a password field. Some other banks do other things, but yes, your craigslist phone verification is generally more secure. |
Strategies for paying off my Student loans | Starting up a company is fun, stressful, and exciting. It's also often a lot harder than you expect. Income, revenue, and cash flow are big concerns, and you need to be able to eat while you're hunting down your first paying customers. Don't pay off all the debt if that will leave you without any money for living expenses. Perhaps a compromise is in order? Pay off the high-interest loans first, and continue to make payments on the lower-interest loans while you start up. It doesn't have to be all or nothing. |
Diversification reduces risk, but does this base on the assumption that expected return of each asset is always in proportion to its risk? | Diversifying your portfolio between asset A and asset B only reduces the portfolio risk if asset A and asset B are not correlated. If they have either a low correlation or a negative correlation to each other, then you benefit from combining them in a portfolio in terms of risk reduction. The standard deviation of returns will be lower in a portfolio of low or uncorrelated assets. If on the other hand you combine two correlated assets into a portfolio you are doubling down on the same assumption, which means you are not reducing your risk. You are also wasting capital because now you have allocated capital to 2 separate trades / investments yet they have shown a high tendency of moving together. Here is an article that discusses this further: Why Diversify your Stock Portfolio |
In Australia, how to battle credit card debt? | Short-term, getting a balance transfer will help. It'll reduce the interest you pay. You can also reduce the interest you pay on your cars if you are able to consolidate your debt into a personal loan. To your question about debt consolidation companies, as far as I know, that's all they do. However, long-term, there's only two ways to stay on top of debt: increase your income, or reduce your spending. Basically, if you can't or won't get a raise or a job that pays more (or a second job), you need to cut back on your spending. You might need to do something radical, like move somewhere with cheaper rent (as long as increased travel costs doesn't offset the saving). But you'll be much better off in the long run if you step back and take a look at your situation now, and make adjustments accordingly. |
Do I have to pay a capital gains tax if I rebuy the same stock within 30 days? | Yes, you would have to report the gain. It is not relevant that you traded the stock previously, you still made a profit on the trade-at-hand. Imagine if for some reason this type of trade were exempt. Investors could follow the short term swings of volatile stocks completely tax-free. |
Should the poor consider investing as a means to becoming rich? | A cautionary tale: About 25 years ago I decided that I should try my hand at investing in some technology companies. I was in the computer biz but decided that I might suffer from myopia there, so I researched some medical startups. And I did some reasonably good research, given the available resources (the Internet was quite primitive). I narrowed things down to 4-5 companies, studying their technology plans, then researched their business plans and their personnel. In the end I picked a drug company. Not only did it have a promising business plan, but it had as it's CEO a hotshot from some other company, and the BOD was populated buy big names from tech companies and the like. AND the company had like $2 of cash for every $1 of outstanding share value, following their recent IPO. So I sold a bit of stock I had in my employer and bought like $3000 worth of this company. Then, taking the advice I'd seen several places, I forgot about it for about 6 months. When I went back to look their stock value had dropped a little, and the cash reserves were down about 20%. I wasn't too worried. 6 months later the cash was down 50%. Worrying a little. After I'd had the stock for about 2 years the stock price was about 10% of what I'd paid. Hardly worth selling, so I hung on for awhile longer. The company was eventually sold to some other company and I got maybe $50 in stock in the new company. |
Can LLC legally lend money to a friend? | I can't say if there is anything specific that makes lending illegal, but if your company goes bankrupt, you might end up in trouble. First, it's a loan. It must be repaid. It must be in the books as a loan, and if your company couldn't pay its bills, you would have to ask for the money back. If the company goes bankrupt, your creditors will ask for the loan to be repaid. Now if things are worse, your company goes bankrupt, and the person cannot pay back the money, then you could get into real trouble. Creditors won't like that situation at all. They will claim that you moved that money aside to protect it from creditors. They might be able to force you personally to pay, or even start criminal charges against you if you can't pay either. In the UK (and probably elsewhere) it's criminal for the company to pay dividends if that means it cannot fulfil its financial obligations. If there is no money left because of that loan, then you can't get dividend payments from your company. So as long as your company's finances are fine, and that person's finances are fine, you will be Ok (except I don't know if you would need a license), but if there are financial problems then being an LLC might not protect you. |
mortgage vs car loan vs invest extra cash? | Pay off your car loan. Here is why: As you mentioned, the interest on your home mortgage is tax deductible. This may not completely offset the difference in interest between your two loans, but it makes them much closer. Once your car debt is gone, you have eliminated a payment from your life. Now, here's the trick: take the money that you had been paying on your car debt, and set it aside for your next car. When the time comes to replace your car, you'll be able to pay cash for your car, which has several advantages. |
Snowball debt or pay off a large amount? | Basically, your CC is (if normal) compounded monthly, based on a yearly APR. To calculate the amount of interest you'd pay on each of these accounts in a year, pull up a spreadsheet like Office Excel. Put in your current balance, then multiply it by the annual interest rate divided by 12, and add that quantity to the balance. Subtract any payment you make, and the result is your new balance. You can project this out for several months to get a good estimate of what you'll pay; in accounting or finance terms, what you're creating is an "amortization table". So, with a $10,000 balance, at 13.99% interest and making payments of $200/mo, the amortization table for one year's payments might look like: As you can see, $200 isn't paying down this card very quickly. In one year, you will have paid $2,400, of which $1,332.25 went straight into the bank's pockets in interest charges, reducing your balance by only $1,067.75. Up the payments to $300/mo, and in 1 year you will have paid $3,600, and only been charged $1,252.24 in interest, so you'll have reduced your balance by $2,347.76 to only $7,652.24, which further reduces interest charges down the line. You can track the differences in the Excel sheet and play "what-ifs" very easily to see the ramifications of spending your $5,000 in various ways. Understand that although, for instance, 13.99% may be your base interest rate, if the account has become delinquent, or you made any cash advances or balance transfers, higher or lower interest rates may be charged on a portion of the balance or the entire balance, depending on what's going on with your account; a balance transfer may get 0% interest for a year, then 19.99% interest after that if not paid off. Cash advances are ALWAYS charged at exorbitantly high rates, up to 40% APR. Most credit card bills will include what may be called an "effective APR", which is a weighted average APR of all the various sub-balances of your account and the interest rates they currently have. Understand that your payment first pays off interest accrued during the past cycle, then pays down the principal on the highest-interest portion of the balance first, so if you have made a balance transfer to another card and are using that card for purchases, the only way to avoid interest on the transfer at the post-incentive rates is to pay off the ENTIRE balance in a year. The minimum payment on a credit card USED to be just the amount of accrued interest or sometimes even less; if you paid only the minimum payment, the balance would never decrease (and may increase). In the wake of the 2008 credit crisis, most banks now enforce a higher minimum payment such that you would pay off the balance in between 3 and 5 years by making only minimum payments. This isn't strictly required AFAIK, but because banks ARE required by the CARD Act to disclose the payoff period at the minimum payment (which would be "never" under most previous policies), the higher minimum payments give cardholders hope that as long as they make the minimum payments and don't charge any more to the card, they will get back to zero. |
How to graph the market year over year? for example Dow Jones Index | Instead of using the actual index, use a mutual fund as a proxy for the index. Mutual funds will include dividend income, and usually report data on the value of a "hypothetical $10,000 investment" over the life of the fund. If you take those dollar values and normalize them, you should get what you want. There are so many different factors that feed into general trends that it will be difficult to draw conclusions from this sort of data. Things like news flow, earnings reporting periods, business cycles, geopolitical activity, etc all affect the various sectors of the economy differently. |
I have $10,000 sitting in an account making around $1 per month interest, what are some better options? | I disagree with most of the answers here so far because they are either too risky or too conservative and don't take taxes and retirement into consideration. OP, keep in mind the higher the potential return, the greater the risk. You haven't stated your risk tolerance, but consider the following: Pick a certain percentage of your $10k to invest for the long term. Pick a low-cost index fund like the S&P500 Index. Historically this investment does well in the long run, and it gets you started in investing. Keep the balance, the money you will need for the short term, right where it is not earning much interest. Have you started saving for retirement? Consider starting a Roth IRA (if you are in the USA) with some of the money for tax advantages. It's up to you to decide how much you should invest and how much you need to keep on hand for emergencies or short-term needs. There are plenty related questions on this forum you can browse. |
Do I make money in the stock market from other people losing money? | There's really not a simple yes/no answer. It depends on whether you're doing short term trading or long term investing. In the short term, it's not much different from sports betting (and would be almost an exact match if the bettors also got a percentage of the team's ticket sales), In the long term, though, your profit mostly comes from the growth of the company. As a company - Apple, say, or Tesla - increases sales of iPhones or electric cars, it either pays out some of the income as dividends, or invests them in growing the company, so it becomes more valuable. If you bought shares cheaply way back when, you profit from this increase when you sell them. The person buying it doesn't lose, as s/he buys at today's market value in anticipation of continued growth. Of course there's a risk that the value will go down in the future instead of up. Of course, there are also psychological factors, say when people buy Apple or Tesla because they're popular, instead of at a rational valuation. Or when people start panic-selling, as in the '08 crash. So then their loss is your gain - assuming you didn't panic, of course :-) |
What are good games to play to teach young children about saving money? | I know this question is closed now, but I just found this site that people might be interested in... http://www.practicalmoneyskills.com/games/ |
How will I pay for college? | Firstly, good on you for thinking about it before you commit to it. Next. Chelonian provides lots of detail. Read that answer. Consider the cost of going. Use your local community college. Use a state school. Get a job as an intern or another entry level position, with an employer that will reimburse you for education. Consider the military in the United State. Consider not going. That last one sounds rough, but do you have a very clear idea in your mind what you want to do for a living? I would suggest that at today's costs, figuring out what you want to do should be done before you commit to school. |
Is it ever logical to not deposit to a matched 401(k) account? | Some have suggested you can put the money in the 401k then take a loan to pay off the student loan debt. Some things to consider before doing that: Check your 401k plan first. Some plans allow you to continue paying on a loan if you leave the company, some do not. If you have to change jobs before you pay back the 401k loan, you may only have 90 days to completely pay the loan or the IRS will treat this as an early withdrawal, which means taxes and penalties. If you don't have another job lined up, this is going to make things much worse since you will have lost your income and may owe even more to the government (depending on your state, it may be up to 50% of the remaining amount). There are ways to work with some student debt loans to defer or adjust payments. There is no such option with a 401k plan. This may change your taxes at the end of the year. Most people can deduct student loan interest payments. You cannot deduct interest paid to your 401k loan. You are paying the interest to yourself though. It may hurt your long term growth potential. Currently loans on 401k loans are in the 4% range. If you are able to make more than 4% inside of your 401k, you will be losing out on that growth since that money will only be earning the interest you pay back. It may limit flexibility for a few years. When people fall on hard times, their 401k is their last resort. Some plans have a limit on the number of loans you can have at one time. You may need a loan or a withdrawal in the future. Once you take the money out for a loan, you can't access it again. See the first bullet about working with student loan vendors, they typically have ways to work with you under hard circumstances. 401k loans don't. Amortization schedule. Many 401k loans can only be amortized for a max of 5 years, if you currently have 10 year loans, can you afford to pay the same debt back in 1/2 the time at a lower rate? You will have to do the math. When considering debt other than student loans (such as credit cards), if you fall on hard times, you can always negotiate to reduce the amount you owe, or the debt can be discharged (with tax penalties of course). They can't make you take money out. Once it is out, it is fair game. Just to clarify, the above isn't saying you shouldn't do it under any circumstances, it is a few things you need to evaluate before making that choice. The 401k is supposed to be used to help secure your financial future when you can't work. The numbers may work out in the short term, but do they still work out in the long term? Most credit cards require minimum payments high enough to pay back in 7-10 years, so does shortening that to 5 (or less) make up for the (probably early) years of compounding interest for your retirement? I think others have addressed some of this so I won't do the math. I can tell you that I have a 401k loan, and when things got iffy at my job for, it was a very bad feeling to have that over my head because, unlike other debts, there isn't much you can do about it. |
What are the advantages/disadvantages of a self-directed IRA? | There is nothing wrong with self directed IRA's the problem is that most of the assets they specialize in are better done in other ways. Real estate is already extremely tax advantaged in the US. Buying inside a Traditional IRA would turn longterm capital gains (currently 15%) into ordinary income taxed at your tax rate when you withdraw this may be a plus or minus, but it is more likely than not that your ordinary income tax rate is higher. You also can't do the live in each house for 2 years before selling plan to eliminate capital gains taxes (250k individual 500k married couple). The final problem is that you are going to have problems getting a mortgage (it won't be a conforming loan) and will likely have to pay cash for any real estate purchased inside your IRA. Foreign real estate is similar to above except you have additional tax complexities. The key to the ownership in a business is that there are limits on who can control the business (you and maybe your family can't control the business). If you are experienced doing angel investing this might be a viable option (assuming you have a really big IRA you want to gamble with). If you want to speculate on precious metals you will probably be better offer using ETF's in a more traditional brokerage account (lower transactions costs more liquidity). |
How to calculate the closing price percentage change for a stock? | The previous day's close on Thursday 10th October was 5,000.00 The close on Friday 11th October is 5,025.92 So the gain on Friday was 25.92 (5025.92 - 5000) or 0.52% (25.92/5000 x 100%). No mystery! |
What's the benefit of opening a Certificate of Deposit (CD) Account? | Yes. Savings accounts and CDs today pay almost nothing. They are not a way to grow your money for the future. They are a place to keep some spare cash for emergencies. I don't have such accounts any more. Personally, I generally keep about $2000 in my checking account for any sudden surprise expenses. Any other spare money I have I put into very safe mutual funds. They don't grow much either, but it's better than what I'd get on a savings account or CD. |
How to change a large quantity of U.S. dollars into Euros? | To transfer US$30,000 from the USA to Europe, ask your European banker for the SWIFT transfer instructions. Typically in the USA the sending bank needs a SWIFT code and an account number, the name and address of the recipient, and the amount to transfer. A change of currency can be made as part of the transfer. The typical fee to do this is under US$100 and the time, under 2 days. But you should ask (or have the sender ask) the bank in the USA about the fees. In addition to the fee the bank may try to make a profit on the change of currency. This might be 1-2%. If you were going to do this many times, one way to go about it is to open an account at Interactive Brokers, which does business in various countries. They have a foreign exchange facility whereby you can deposit various currencies into your account, and they stay in that currency. You can then trade the currencies at market rates when you wish. They are also a stock broker and you can also trade on the various exchanges in different countries. I would say, though, they they mostly want customers already experienced with trading. I do not know if they will allow someone other than you to pay money into your account. Trading companies based in the USA do not like to be in the position of collecting on cheques owed to you, that is more the business of banks. Large banks in the USA with physical locations charge monthly fees of $10/mo or more that might be waived if you leave money on deposit. Online banks have significantly lower fees. All US banks are required to follow US anti-terrorist and anti-crime regulations and will tend to expect a USA address and identity documents to open an account with normal customers. A good international bank in Europe can also do many of these same sorts of things for you. I've had an account with Fortis. They were ok, there were no monthly fees but there were fees for transactions. In some countries I understand the post even runs a bank. Paypal can be a possibility, but fees can be high ~3% for transfers, and even higher commissions for currency change. On the other hand, it is probably one of the easiest and fastest ways to move amounts of $1000 or less, provided both people have paypal accounts. |
Should I change 401k investment options to prepare for rising interest rates? | I see that you're invested in a couple bond funds. You do not want to be invested in bonds when the Fed raises rates. When rates climb, the value of bond investments decline, and vice-versa. So that means you should sell bonds before a rate hike, and buy them before a rate drop. |
At what point should I begin paying off student loans? | Its almost always better to pay off loans sooner rather than later. Being debt free is amazingly liberating. However, in your case, I'd be reluctant to make significant headway on a loan repayment program. Here's why: The best investment you can make, right now, is in yourself. Completing your education should be the top priority. The next would be to meet the requirements of a job after received after school is complete. So what I would do is estimate the amount of money it would take to complete school. Add to that an estimate of an amount to move to a new city and setup a household. That amount should be held in reserve. Anything above that can used to pay down loans. Once you complete school and get settled into a job, you can then take that money and also throw it at your loans. |
What does it mean to long convexity of options? | First lets understand what convexity means: Convexity - convexity refers to non-linearities in a financial model. In other words, if the price of an underlying variable changes, the price of an output does not change linearly, but depends on the second derivative (or, loosely speaking, higher-order terms) of the modeling function. Geometrically, the model is no longer flat but curved, and the degree of curvature is called the convexity. Okay so for us idiots this means: if the price of ABC (we will call P) is determined by X and Y. Then if X decreases by 5 then the value of P might not necessarily decrease by 5 but instead is also dependent on Y (wtf$%#! is Y?, who cares, its not important for us to know, we can understand what convexity is without knowing the math behind it). So if we chart this the line would look like a curve. (clearly this is an over simplification of the math involved but it gives us an idea) So now in terms of options, convexity is also known as gamma, it will probably be easier to talk about gamma instead of using a confusing word like convexity(gamma is the convexity of options). So lets define Gamma: Gamma - The rate of change for delta with respect to the underlying asset's price. So the gamma of an option indicates how the delta of an option will change relative to a 1 point move in the underlying asset. In other words, the Gamma shows the option delta's sensitivity to market price changes. or Gamma shows how volatile an option is relative to movements in the underlying asset. So the answer is: If we are long gamma (convexity of an option) it simply means we are betting on higher volatility in the underlying asset(in your case the VIX). Really that simple? Well kinda, to fully understand how this works you really need to understand the math behind it. But yes being long gamma means being long volatility. An example of being "long gamma" is a "long straddle" Side Note: I personally do trade the VIX and it can be very volatile, you can make or lose lots of money very quickly trading VIX options. Some resources: What does it mean to be "long gamma" in options trading? Convexity(finance) Long Gamma – How to Make a Long Gamma Position Work for You Delta - Investopedia Straddles & Strangles - further reading if your interested. Carry(investment) - even more reading. |
Transfer of stock of non-public company after vesting | If the company is non-public, your hands are tied. Most startups have a Stock Option Plan with specific rules on the shares. In almost all cases, they have a Transferability clause preventing transfers of options and shares unless approved by the company (who would almost always say no). Additionally, they usually have a Right of First Refusal (ROFR), which states that if shares are going to be transferred, the company gets the chance to buy it first. In your case, the company may argue your friend would sell you the shares for free and the company would exercise their ROFR and buy back the shares for free. There is not much you can do in this case. You may be able to write up a contract between your friend and you, but it would be costly and possibly not worth the effort. You may be better off asking for a lump sum or some other sort of compensation. Additionally, your friend might want to be careful with this idea. You could potentially gain access to sensitive company tools/documents which could get them in a lot of trouble. |
Investor returns from crowdfunding | Crowdfunding can be a legitimate means of funding very small startups. It is an innovative, but obviously risky, method of raising small amounts of money. As such it is now regulated by the SEC under "Regulation Crowdfunding" They have published guides for these types of business startups to help them with required disclosures and reporting requirements: https://www.sec.gov/info/smallbus/secg/rccomplianceguide-051316.htm Here's the introduction to the relevant regulatory authority of the SEC: Under the Securities Act of 1933, the offer and sale of securities must be registered unless an exemption from registration is available. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 added Securities Act Section 4(a)(6) that provides an exemption from registration for certain crowdfunding transactions.[2] In 2015, the Commission adopted Regulation Crowdfunding to implement the requirements of Title III.[3] Under the rules, eligible companies will be allowed to raise capital using Regulation Crowdfunding starting May 16, 2016. It is obviously a new form of investment but you should be able to get historical data on the SEC's real time Edgar reporting system once there is some history. This is a search for all Form C's filed as of 12/2/16 |
What things are important to consider when investing in one's company stock? | It appears your company is offering roughly a 25% discount on its shares. I start there as a basis to give you a perspective on what the 30% matching offer means to you in terms of value. Since you are asking for things to consider not whether to do it, below are a few considerations (there may be others) in general you should think about your sources of income. if this company is your only source of income, it is more prudent to make your investment in their shares a smaller portion of your overall investment/savings strategy. what is the holding period for the shares you purchase. some companies institute a holding period or hold duration which restricts when you can sell the shares. Generally, the shorter the duration period the less risk there is for you. So if you can buy the shares and immediately sell the shares that represents the least amount of relative risk. what are the tax implications for shares offered at such a discount. this may be something you will need to consult a tax adviser to get a better understanding. your company should also be able to provide a reasonable interpretation of the tax consequences for the offering as well. is the stock you are buying liquid. liquid, in this case, is just a fancy term for asking how many shares trade in a public market daily. if it is a very liquid stock you can have some confidence that you may be able to sell out of your shares when you need. personally, i would review the company's financial statements and public statements to investors to get a better understanding of their competitive positioning, market size and prospects for profitability and growth. given you are a novice at this it may be good idea to solicit the opinion of your colleagues at work and others who have insight on the financial performance of the company. you should consider other investment options as well. since this seems to be your first foray into investing you should consider diversifying your savings into a few investments areas (such as big market indices which typically should be less volatile). last, there is always the chance that your company could fail. Companies like Enron, Lehman Brothers and many others that were much smaller than those two examples have failed in the past. only you can gauge your tolerance for risk. As a young investor, the best place to start is to use index funds which track a broader universe of stocks or bonds as the first step in building an investment portfolio. once you own a good set of index funds you can diversify with smaller investments. |
What is a good investment vehicle for introducing kids to investing? | For "real" investing I would usually recommend mutual funds. But if you are trying to teach a kid about investing, I would recommend they choose individual stocks. That will give them a great opportunity to follow the companies they bought in the news. It also gives you an opportunity to sit down with them periodically and discuss their companies performance, economic news, etc. and how those things play into stock prices. |
Mortgage sold to yet another servicer. What are my options? | Your mortgage terms are locked in; the servicer/new owner cannot change the terms without your consent, but the servicer can be more aggressive in taking action (as specified in your mortgage contract) against you. For example, if the mortgage agreement calls for penalties for missing a payment or making it late, your friendly neighborhood banker might waive the penalty if the payment is received a day late once (but perhaps not the second or the third time), but the servicer doesn't know you personally and does not care; you are hit with the penalty right away. If the payment was received a day late because of delays in the post office, too bad. If you used a bank bill payment service that "guarantees" on-time arrival, talk to the bank. All perfectly legal, and what you agreed to when you signed the contract. If you can set up electronic payments of your mortgage payments, you can avoid many of these hassles. If you are sending in more money than what is due each month, you should make sure that the extra money reduces the principal amount owed; easy enough if you are sending a physical check with a coupon that has an entry line for "Extra payment applied to principal" on it. But, the best mortgage contracts (from the bank's point of view) are those that say that extra money sent in applies to future monthly installments. That is, if you send in more than the monthly payment one month, you can send in a reduced payment next month; the bank will gladly hold the extra amount sent in this month and apply it towards next month's payment. So, read your mortgage document (I know, I know, the fine print is incomprehensible) to see how extra money is applied. Finally, re-financing your mortgage because you don't like the servicer is a losing proposition unless you can, somehow, ensure that your new bank will not sell your new mortgage to the same servicer or someone even worse. |
Got charged ridiculous amount for doctor's walk in visit. What are my options? | If you are disputing the size of the charge for specific services, like you think that they overcharged for lab work, you can try disputing it with the business office staff at the doctor's office. If, on the other hand, you just think that the overall bill is too expensive then you really only have one option. You can ask if they will reduce the bill for you. Most hospitals and clinics I've dealt with have programs set up for this, but you usually access them by filling out paperwork demonstrating financial hardship (along with supporting documents). It never hurts to ask. But with the services already rendered the only person with an interest in reducing the bill is you. The reduction, if any, will probably depend on what the clinic thinks your ability to pay is compared with the cost to them of pursuing you for payment, as well as the amount of funding they have for bill reduction. When I worked in the financial services office of a hospital a $400 bill would not even have been reviewed for discounting-- the balance would be too low to devote staff time to reviewing. It's frustrating, and even asking in advance might not have given you accurate (or any!) information on what the cost of the visit would be, so your ability to shop around is limited. Unfortunately, that doesn't give you any additional options in this case. |
Are variable rate loans ever a good idea? | What's going on here is that the variable rate loan is transferring some of the risk from the bank to you. In a reasonable deal taking on risk brings with it reward. It's the same thing as deductibles on insurance--they're transferring some risk to you and thus your expected total cost goes down. Thus the proper evaluation of such deals is whether you can afford the outcome if you draw the short straw. If you feel you can afford the highest payment that can result then the variable rate is a good deal. If you're near your limit then stay with the safe option of the fixed rate. For a house this is easy enough to evaluate--run the calculations assuming the highest payment and see what the debt-to-income ratio is. Note that when we were getting mortgages there was another factor involved: the variable rate loans had a higher initiation cost. Combined with the very low difference between fixed and ARM rates at the time we went fixed but given the rates you quote going variable would have been a no-brainer for us. |
What are the financial advantages of living in Switzerland? | The lake is beautiful. The Swiss people are really good educated The companies want to be a part of these great reputation. We have low taxes We are political stable Our currency is stable We are company-friendly |
How does the value of an asset (valued in two different currencies) change when the exchange rate changes? | The value of the asset doesn't change just because of the exchange rate change. If a thing (valued in USD) costs USD $1 and USD $1 = CAN $1 (so the thing is also valued CAN $1) today and tomorrow CAN $1 worth USD $0.5 - the thing will continue being worth USD $1. If the thing is valued in CAN $, after the exchange rate change, the thing will be worth USD $2, but will still be valued CAN $1. What you're talking about is price quotes, not value. Price quotes will very quickly reach the value, since any deviation will be used by the traders to make profits on arbitrage. And algo-traders will make it happen much quicker than you can even notice the arbitrage existence. |
How some mutual funds pay such high dividends | Look at their dividend history. The chart there is simply reporting the most recent dividend (or a recent time period, in any event). GF for example: http://www.nasdaq.com/symbol/gf/dividend-history It's had basically two significant dividends and a bunch of small dividends. Past performance is not indicative of future returns and all that. It might never have a similar dividend again. What you're basically looking at with that chart is a list of recently well-performing funds - funds who had a good year. They obviously may or may not have such a good year next year. You also have funds that are dividend-heavy (intended explicitly to return significant dividends). Those may return large dividends, but could still fall in value significantly. Look at ACP for example: it's currently trading near it's 2-year low. You got a nice dividend, but the price dropped quite a bit, so you lost a chunk of that money. (I don't know if ACP is a dividend-heavy fund, but it looks like it might be.) GF's chart is also indicative of something interesting: it fell off a cliff right after it gave its dividend (at the end of the year). Dropped $4. I think that's because this is a mutual fund priced based on the NAV of its holdings - so it dividended some of those holdings, which dropped the share price (and the NAV of the fund) by that amount. IE, $18 a share, $4 a share dividend, so after that $14 a share. (The rest of the dividends are from stock holdings which pay dividends themselves, if I understand properly). Has a similar drop in Dec 2013. They may simply be trying to keep the price of the fund in the ~$15 a share range; I suspect (but don't know) that some funds have in their charter a requirement to stay in a particular range and dividend excess value. |
Why is the stock market price for a share always higher than the earnings per share? | When you buy a stock, you're really paying for a STREAM of earnings, from now till whenever. The job of an investor is to figure out how large that stream will be in the future. But if the stock price were the same as "earnings" (for one year), it would mean that you would get all future earnings for "free." That's not likely to happen unless 1) the company is in liquidation," meaning "no future" and 2) it earned ALL of the money it ever earned in the past year, meaning "no past." If there are likely to be any earnings in the future, you will have to pay for those future earnings, over and above what was earned in the most recent year. |
Pay online: credit card or debit card? | One more thing to favor the card. Extended warranty, or damage coverage. An iPad, if dropped on a hard surface, stands a good chance of breaking. Apple isn't going to cover that, as it's not a defect. Many credit cards offer free coverage for breakage of this type as well as doubling the warranty up to a year. This second year of coverage is worth about 10% of the item cost. To be clear, I'm talking about running the expense through a card and paying in full, some call it credit no different than those who carry a balance month to month and pay 18% interest. I believe if I have the money to spend on an item, and use the card to get that coverage along with the benefits others posted, it's a convenience, nothing more. Some people who use certain budgeting methods like to set up a payment each week so the bill comes in close to zero. Whatever works. |
Why is it good to borrow money to buy a house? | In most cases of purchases the general advice is to save the money and then make the purchase. Paying cash for a car is recommended over paying credit for example. For a house, getting a mortgage is recommended. Says who? These rules of thumb hide the actual equations behind them; they should be understood as heuristics, not as the word of god. The Basics The basic idea is, if you pay for something upfront, you pay some fixed cost, call it X, where as with a loan you need to pay interest payments on X, say %I, as well as at least fixed payments P at timeframe T, resulting in some long term payment IX. Your Assumption To some, this obviously means upfront payments are better than interest payments, as by the time the loan is paid off, you will have paid more than X. This is a good rule of thumb (like Newtonian's equations) at low X, high %I, and moderate T, because all of that serves to make the end result IX > X. Counter Examples Are there circumstances where the opposite is true? Here's a simple but contrived one: you don't pay the full timeframe. Suppose you die, declare bankruptcy, move to another country, or any other event that reduces T in such a way that XI is less than X. This actually is a big concern for older debtors or those who contract terminal illnesses, as you can't squeeze those payments out of the dead. This is basically manipulating the whole concept. Let's try a less contrived example: suppose you can get a return higher than %I. I can currently get a loan at around %3 due to good credit, but index funds in the long run tend to pay %4-%5. Taking a loan and investing it may pay off, and would be better than waiting to have the money, even in some less than ideal markets. This is basically manipulating T to deal with IX. Even less contrived and very real world, suppose you know your cash flow will increase soon; a promotion, an inheritance, a good market return. It may be better to take the loan now, enjoy whatever product you get until that cash flows in, then pay it all off at once; the enjoyment of the product will make the slight additional interest worth it. This isn't so much manipulating any part of the equation, it's just you have different goals than the loan. Home Loan Analysis For long term mortgages, X is high, usually higher than a few years pay; it would be a large burden to save that money for most people. %I is also typically fairly low; P is directly related to %I, and the bank can't afford to raise payments too much, or people will rent instead, meaning P needs to be affordable. This does not apply in very expensive areas, which is why cities are often mostly renters. T is also extremely long; usually mortgages are for 15 or 30 years, though 10 year options are available. Even with these shorter terms, it's basically the longest term loan a human will ever take. This long term means there is plenty of time for the market to have a fluctuation and raise the investments current price above the remainder of the loan and interest accrued, allowing you to sell at a profit. As well, consider the opportunity cost; while saving money for a home, you still need a place to live. This additional cost is comparable to mortgage payments, meaning X has a hidden constant; the cost of renting. Often X + R > IX, making taking a loan a better choice than saving up. Conclusion "The general advice" is a good heuristic for most common human payments; we have relatively long life spans compared to most common payments, and the opportunity cost of not having most goods is relatively low. However, certain things have a high opportunity cost; if you can't talk to HR, you can't apply for jobs (phone), if you can't get to work, you can't eat (car), and if you have no where to live, it's hard to keep a job (house). For things with high opportunity costs, the interest payments are more than worth it. |
Why do stock or commodity prices sometimes rise suddenly just before market close? | This is often the case where traders are closing out short positions they don't want to hold overnight, for a variety of reasons that matter to them. Most frequently, this is from day traders or high-frequency traders settling their accounts before the markets close. |
When is the right time to buy a car and/or a house? | My recommendation is to pay off your student loans as quickly as possible. It sounds like you're already doing this but don't incur any other large debts until you have this taken care of. I'd also recommend not buying a car, especially an expensive one, on credit or lease either. Back during the dotcom boom I and many friends bought or leased expensive cars only to lose them or struggle paying for them when the bottom dropped out. A car instantly depreciates and it's quite rare for them to ever gain value again. Stick with reliable, older, used cars that you can purchase for cash. If you do borrow for a car, shop around for the best deal and avoid 3+ year terms if at all possible. Don't lease unless you have a business structure where this might create a clear financial advantage. Avoid credit cards as much as possible although if you do plan to buy a house with a mortgage you'll need to maintain some credit history. If you have the discipline to keep your balance small and paid down you can use a credit card to build credit history. However, these things can quickly get out of hand and you'll wonder why you suddenly owe $10K, $20K or even more on them so be very careful with them. As for the house (speaking of US markets here), save up for at least a 20% down payment if you can. Based on what you said, this would be about $20-25K. This will give you a lot more flexibility to take advantage of deals that might come your way, even if you don't put it all into the house. "Stretching" to buy a house that's too expensive can quickly lead to financial ruin. As for house size, I recommend purchasing a 4 bedroom house even if you aren't planning on kids right away. It will resell better and you'll appreciate having the extra space for storage, home office, hobbies, etc. Also, life has a way of changing your plans for having kids and such. |
If you want to trade an equity that reflects changes in VIX, what is a good proxy for it? | If you want to trade to gain from short-term volatility, you can use Derivative-based ETFs that try to track the inverse of a broad index like the S&P 500. Note that these ETFs only track the index over a 1 day period, so you shouldn't hold these. If you're looking for a longer-term investment strategy, look at low-beta stocks, which often do well or produce dividend income during volatile times. Examples include McDonald's Corp and utilities like Consolidated Edison. |
How to bet against IPOs? | There are 2 primary ways to bet against a stock if you think it will decline. The first is to short sell shares of that stock the second is to buy put options (I would also add that selling naked call options would also be a bet against but I don't believe that is as common as the other 2 mentioned methods). The problem with short selling an IPO is that you first have to borrow the shares you are going to sell. Since the shares are privately held prior to the IPO that can be problematic. Even after the IPO you may have to wait a bit before shares become available to borrow. The problem with options (either buying puts or seeking naked calls) is similar. Options are traded on a different exchange than the stock and they have their own requirements that a stock must meet to have options traded. Both of these problems eventually correct themselves however, not in time for you to catch the initial fall you seem to be looking for. |
Retired, want to buy a mobile home; how to finance? | Do you think your 403b will earn more than the mortgage interest rate? If so, then mortgage seems the way to go. Conservative investment strategies might not earn much more than a 3-4% mortgage, and if you're paying 5-6% it's more likely you'll be earning less than the mortgage. From another point of view, though, I would probably take a loan anyway just from a security standpoint - you have more risk if you put a third of your retirement savings into one purchase directly, whereas if you do a 10-15 year loan, you'll have more of a cushion. Also, if you don't outlive the mortgage, you'll have had use of more of your retirement income than otherwise - though I do wonder if it puts you at some risk if you have significant medical bills (which might require you to liquidate your 403b but wouldn't require you to sell your house, so paying it off has some upside). Also, as @chili555 notes in comments, you should consider the taxation of your 403(b) income. If you pull it out in one lump sum, some of it may be taxed at a higher rate than if you pulled it out more slowly over time, which will easily overwhelm any interest rate differences. This assumes it's not a Roth 403(b) account; if it is Roth then it doesn't matter. |
Finance the land on a non-financeable house? | Some lenders will make loans for vacant land, others will not. You have to discuss with local bank what are your plan for the land: live in the old mobile home; install a new mobile home; build a new house; Sell it to a developer; use it for camping... Is the property part of a development with other mobile homes? If so there may be complications regarding the use and rights of the property. Some local jurisdictions also want to eliminate mobile homes, so they may put limitations on the housing options. |
How to rebalance a portfolio without moving money into losing investments | You are very correct, rebalancing is basically selling off winners to buy losers. Of course the thinking is that selling a winner that has already increased 100% on the basis that it has doubled so it is likely to go down in the near future. However, just look at Apple as an example, if you bought Apple in June 2009 for $20 (adjusted price) and sold it as part of rebalancing when it rose to $40 (adjusted price) in September 2010, you would have missed out on it reaching over $95 2 years later. Similarly you look to rebalance by buying assets which have been battered (say dropped by 50%) on the basis that it has dropped so much that it should start increasing in the near future. But many times the price can fall even further. A better method would be to sell your winners when they stop being winners (i.e. their uptrend ends) and replace them with assets that are just starting their winning ways (i.e. their downtrend has ended and are now starting to Uptrend). This can be achieved by looking at price action and referring to the definitions of an uptrend and a downtrend. Definition of an uptrend - higher highs and higher lows. Definition of a downtrend - lower lows and lower highs. |
Mailed in One-time Payment by Check | I do know that a blank check has all the information they need for the electronic transfer. They probably add it as a customer service to streamline future payments. Though I don't think automatically adding it makes good business sense. It is possible that the form used to submit the check included a line to added the account to the list of authorized accounts. He might have been lucky he didn't set up a recurring payment. I would check the website to see if there is a tool to remove the account info from the list of payment options. There has to be a way to edit the list so that if you change banks you can update the information, yet not keep the old accounts on the list. Talk to customer service if the website doesn't have a way of removing the account. Tell them that you have to edit the account information. And give them your info. If they balk at the change tell them that they could be committing fraud if the money is pulled from an unauthorized account. |
What options do I have at 26 years old, with 1.2 million USD? | You need to find a fiduciary advisor pronto. Yes, you are getting a large amount of money, but you'll probably have to deal with higher than average health expenses and lower earning potential for years to come. You need to make sure the $1.2 million lasts you, and for that you need professional advice, not something you read on the Internet. Finding a knowledgeable advisor who has your interests at heart at a reasonable rate is the key here. These articles are a good start on what to look for: http://www.investopedia.com/articles/financialcareers/08/fiduciary-planner.asp https://www.forbes.com/sites/janetnovack/2013/09/20/6-pointed-questions-to-ask-before-hiring-a-financial-advisor/#2e2b91c489fe http://www.investopedia.com/articles/professionaleducation/11/suitability-fiduciary-standards.asp You should also consider what your earning potential is. You rule out college but at 26, you can have a long productive career and earn way more money than the $1.2 million you are going to get. |
Recommendation for learning fundamental analysis? | Definition: Fundamental analysis involves analyzing financial statements and health, management and competitive advantages, and competitors and markets. Books are a great way to learn fundamental analysis but can be time consuming for something that really isn't very difficult. So the internet might be a better way to get started. When using fundamental analysis all you are doing is trying to figure out how much a company is worth. The vocabulary and huge range of acronyms can be intimidating but really its a fairly simple task. You can use (investopedia) for definitions and simple examples when you do not fully understand something. IE: (PEG) You can search for definitions using the search bar on the top right (google also is a good source to look for additional definitions). I recommend starting out by doing an independent analysis on a well known name such as Proctor & Gamble or Mcdonald's. Then you can compare your analysis to a professionals and see how they stack up. Books and Resources: Getting Started in Fundamental Analysis Fundamental Analysis For Dummies Fundamental analysis Wiki What Is Fundamental Analysis? - Video tut from Investopedia Fundamental Analysis: Introduction Step by Step example of fundamental analysis - It's a pretty in depth forum post. Side Notes: Personally when I first began using fundamental analysis I found it difficult to understand why something is considered undervalued or overvalued. I couldn't figure out who was the "authority" on saying this. Well in short the "authority" basically is the market. You can say you believe XYZ is undervalued but you are only proven correct if the market agrees with you over long period of time. Some key facts you should know: Many times a stock can be "broken" for many reasons. The price can go far beyond what would be considered a "normal valuation" (this is considered a bubble, e.g. the tech bubble of 1999-2000). It can also go far below a "normal valuation". In most cases these types of valuations are short lived and in the end a stock should return to "normal valuation" or at least this is the theory behind fundamental analysis. |
How to “pay” one self in a single member LLC w/ separate checking account? | Basically, yes. Don't use your business account for personal spending because it may invalidate your limited liability protection. Transfer a chunk of money to your personal account, write it down in your books as "distribution" (or something similar), and use it in whatever way you want from your personal account. The IRS doesn't care per se, but mixing personal and business expenses will cause troubles if you're audited because you'll have problems distinguishing one from another. You should be using some accounting software to make sure you track your expenses and distributions correctly. It will make it easier for you to prepare reports for yourself and your tax preparer, and also track distributions and expenses. I suggest GnuCash, I find it highly effective for a small business with not so many transactions (if you have a lot of transactions, then maybe QuickBooks would be more appropriate). |
If an index goes up because an underlying company issues more shares, what happens to the ETF | If a stock that makes up a big part of the Dow Jones Industrial Average decided to issue a huge number of additional shares, that will make the index go up. At least this is what should happen, since an index is basically a sum of the market cap of the contributing companies. No, indices can have various weightings. The DJIA is a price-weighted index not market-cap weighted. An alternative weighting besides market-cap and price is equal weighting. From Dow Jones: Dow Jones Industrial Average™. Introduced in May 1896, the index, also referred to as The Dow®, is a price-weighted measure of 30 U.S. blue-chip companies. Thus, I can wonder what in the new shares makes the index go up? If a stock is split, the Dow divisor is adjusted as one could easily see how the current Dow value isn't equal to the sum or the share prices of the members of the index. In other cases, there may be a dilution of earnings but that doesn't necessarily affect the stock price directly as there may be options exercised or secondary offerings made. SO if the index, goes up, will the ETF DIA also go up automatically although no additional buying has happened in the ETF itself? If the index rises and the ETF doesn't proportionally, then there is an arbitrage opportunity for someone to buy the DIA shares that can be redeemed for the underlying stocks that are worth more in this case. Look at the Creation and Redemption Unit process that exists for ETFs. |
Reason for “qualified” buyer requirements to exercise stock options/rights spun off from parent company? | The fact that your shares are of a Canadian-listed corporation (as indicated in your comment reply) and that you are located in the United States (as indicated in your bio) is highly relevant to answering the question. The restriction for needing to be a "qualified institutional buyer" (QIB) arises from the parent company not having registered the spin-off company rights [options] or shares (yet?) for sale in the United States. Shares sold in the U.S. must either be registered with the SEC or qualify for some exemption. See SEC Fast Answers - Securities Act Rule 144. Quoting: Selling restricted or control securities in the marketplace can be a complicated process. This is because the sales are so close to the interests of the issuing company that the law might require them to be registered. Under Section 5 of the Securities Act of 1933, all offers and sales of securities must be registered with the SEC or qualify for some exemption from the registration requirements. [...] There are regulations to follow and costs involved in such registration. Perhaps the rights [options] themselves won't ever be registered (as they have a very limited lifetime), while the listed shares might be? You could contact investor relations at the parent company for more detail. (If I guessed the company correctly, there's detail in this press release. Search the text for "United States".) |
For a car, would you pay cash, finance for 0.9% or lease for 0.9%? | One part of the equation that I don't think you are considering is the loss in value of the car. What will this 30K car be worth in 84 months or even 60 months? This is dependent upon condition, but probably in the neighborhood of $8 to $10K. If one is comfortable with that level of financial loss, I doubt they are concerned with the investment value of 27K over the loan of 30K @.9%. I also think it sets a bad precedent. Many, and I used to be among them, consider a car payment a necessary evil. Once you have one, it is a difficult habit to break. Psychologically you feel richer when you drive a paid for car. Will that advantage of positive thinking lead to higher earnings? Its possible. The old testament book of proverbs gives many sound words of advice. And you probably know this but it says: "...the borrower is slave to the lender". In my own experience, I feel there is a transformation that is beyond physical to being debt free. |
Canceling credit cards - insurance rate increase? | You don't need to have a bunch of credit cards lying around; just a couple is fine. Get a "rewards" card (without annual fee) that pays you back for use, and use it regularly to buy groceries, for example. Pay it off promptly each month, using the rewards, if you like, to reduce the amount you have to send in. Or you can use the rewards for other purchases; some merchants offer $25 worth of merchandise for $20 in rewards. It used to be the case that you could negotiate a discount for paying cash rather than use a credit card, but that is a lot harder to do now, in many cases because credit-card company contracts with merchants prohibit this practice. Also, merchants often prefer credit cards rather than cash because money-handling is an issue (pay for an armored car to come pick up the day's receipts, or risk getting mugged on the way to the bank, possible burglaries if you leave the money overnight in the store, daily balancing of cash-register trays, etc.) So, not being in debt and being rich enough to not need to be in debt are laudable goals, and you have my best wishes that you will reach them soon, but getting rid of all your credit cards as a part of not being in debt may be more trouble than it is worth. Keep a couple, pay them off promptly, and if you are concerned about being in debt, you can time your charges so that you are in debt at most 2 or 3 days each month. |
Legality of facilitating currency exchange between private accounts | Disclaimer: it's hard to be definitive as there may be some law or tax rule I'm not aware of. From a UK perspective, this should be perfectly legal. If it's just a one-off or occasional thing for personal reasons, rather than being done in the course of a business, there probably aren't any tax implications. In theory if there's an identifiable profit from the transaction, e.g. because you originally obtained the INR at a lower exchange rate, then you might be liable to capital gains tax. However this is only payable above approximately £10K capital gains (see http://www.hmrc.gov.uk/rates/cgt.htm) so unless this is a very large transaction or you have other gains in the tax year, you don't need to worry about that. I would only recommend doing this if you trust each other. If one side transfers the money and the other doesn't, the international nature will make it quite hard in practice to enforce the agreement legally, even though I think that in theory it should be possible. If the sums involved are large, you may find that the transaction is automatically reported to the authorities by your bank under money laundering regulations, or they may want documentation of the source of the funds/reason for the transaction. This doesn't automatically mean you'll have a problem, but the transaction may receive some scrutiny. I think that reporting typically kicks in when several thousand pounds are involved. |
How can my friend send $3K to me without using Paypal? | If wire transfer through your bank does not work then perhaps one of the more popular money transfer services may be what you are looking for such as MoneyGram or Western Union. Now these rely on a trusted "registered" third party to do the money transfer so you need to make sure that you are working with a legitimate broker. Each money transfer service has a site that allows you to perform the search on registered parties around your area. There are certain fees that are sometimes applied due to the amount being transferred. All of these you will want to do some detailed research on before you make the transfer so that you do not get scammed. I would suggest doing a lot of research and asking people that you trust to recommend a trusted broker. I have not personally used the services, but doing a quick search brought many options with different competitive conversion rates as well as fees. Good luck. |
Mortgage vs. Cash for U.S. home buy now | I'm in the "big mortgage" camp. Or, to put this another way - what would you be happier to have in 15 years? A house that is worth $300,000, or $50,000 of equity in a house and $225,000 in the bank? I would much rather have the latter; it gives me so many more options. (the numbers are rough; you can figure it out yourself based on the current interest rate you can get on investments vs the cost of mortgage interest (which may be less if you can deduct the mortgage interest)). |
What would be the signs of a bubble in silver? | The problem with commodities is that they don't produce income. With a stock or bond, even if you never sold it to anyone or it wasn't publicly traded, you know you can collect the money the company makes or collect interest. That's a quantifiable income from the security. By computing the present value of that income (cf. http://blog.ometer.com/2007/08/26/money-math/) you can have at least a rough sense of the value of the stock or bond investment. Commodities, on the other hand, eat income (insurance and storage). Their value comes from their practical uses e.g. in manufacturing (which eventually results in income for someone); and from psychological factors. The psychological factors are inherently unpredictable. Demand due to practical uses should keep up with inflation, since in principle the prices on whatever products you make from the commodity would keep up with inflation. But even here there's a danger, because it may be that over time some popular uses for a given commodity become obsolete. For example this commodity used to be a bigger deal than now, I guess: http://en.wikipedia.org/wiki/Frankincense. The reverse is also possible, that new uses for a commodity drive up demand and prices. To the extent that metals such as silver and gold bounce around wildly (much more so than inflation), I find it hard to believe the bouncing is mostly due to changes in uses of the metals. It seems far more likely that it's due to psychological factors and momentum traders. To me this makes metals a speculative investment, and identifying a bubble in metals is even harder than identifying one in income-producing assets that can more easily be valued. To identify a bubble you have to figure out what will go on in the minds of a horde of other people, and when. It seems safest for individual investors to just assume commodities are always in a bubble and stay away. The one arguable reason to own commodities is to treat them as a random bouncing number, which may enhance returns (as long as you rebalance) even if on average commodities don't make money over inflation. This is what people are saying when they suggest owning a small slice of commodities as part of an asset allocation. If you do this you have to be careful not to expect to make money on the commodities themselves, i.e. they are just something to sell some of (rebalance out of) whenever they've happened to go up a lot. |
Why is the dominant investing advice for individuals to use mutual funds, exchanged traded funds (ETFs), etc | Why is that? With all the successful investors (including myself on a not-infrequent basis) going for individual companies directly, wouldn't it make more sense to suggest that new investors learn how to analyse companies and then make their best guess after taking into account those factors? I have a different perspective here than the other answers. I recently started investing in a Roth IRA for retirement. I do not have interest in micromanaging individual company research (I don't find this enjoyable at all) but I know I want to save for retirement. Could I learn all the details? Probably, as an engineer/software person I suspect I could. But I really don't want to. But here's the thing: For anyone else in a similar situation to me, the net return on investing into a mutual fund type arrangement (even if it returns only 4%) is still likely considerably higher than the return on trying to invest in stocks (which likely results in $0 invested, and a return of 0%). I suspect the overwhelming majority of people in the world are more similar to me than you - in that they have minimal interest in spending hours managing their money. For us, mutual funds or ETFs are perfect for this. |
Buying a multi-family home to rent part and live in the rest | Also, does anyone know of any books on doing this sort of thing, i.e. renting out half of your home to a tenant and living in the ret? Head down to your local library. Mine has a state guide for renters and another one for landlords. There will likely be a lot of Nolo Press books around there too. You can also research the property tax on a lot; many counties run an arcGIS server that will tell you who owns a given property, what the assessed value is and the total tax bill, etc. |
Can one get a house mortgage without buying a house? | First, many banks do not keep the loan. Even if they send you a payment notice and process the monthly payment, there's still a good chance the loan itself was packed up and sold to investors. Collateralizing mortgages, in and of itself, is not inherently dangerous. But the loan definitely needs a house behind it. If you found a bank that keeps its loans, it would be a tough sell. You'd be asking them to trust that you've chosen the right number to match up with the house you intend to buy. And then they'd need to have another round of processing to turn this into a loan with normal collateral (i.e. put a lien on the house and tie them together.) |
What options do I have at 26 years old, with 1.2 million USD? | Since the question asked for options, rather than advice, I’ll offer a few. And you can ignore the gratuitous advice that may sneak in. There are countries that will happily give you citizenship for a fee. And others where an investment of far less than your million will get you well on your way. Having citizenship and a passport from another country can be handy if your current one is or becomes unpopular or unstable. From data at numbeo.com, I estimate that my lifestyle would cost me $3300 (US) in Geneva, Switzerland, and that everywhere else on the planet would be less. I haven’t been to Geneva, but I have spent only $2500 (average) per month in eleven countries over three years, and could have been comfortable on far less. $2500/month will go through 1.2 million in only forty years, but if you use it to generate income, and are less wasteful than me, ... With the first few dollars you get, you might take steps to hedge the possibility of not actually getting it all. Appeals can take a long time, and if the defendant runs out of money or figures out how to hide, the size of the judgment is irrelevant. Believe strongly enough in something to donate money for/to it? I’ll leave the investment options to others. |
Automatic investments for cheap | For your purposes, I would recommend using direct investment in a no-load mutual fund. I mostly use Vanguard and would recommend them. They just about invented index funds, usually have the lowest (internal) expenses for index and many other funds, if you take electronic instead of paper statements there is no maintenance fee, have no transaction commission, can do periodic automatic investment from a bank account etc. A typical index fund there would require an initial $3000 investment and would have a minimum of $100 for each additional investment. If you can't come up with an initial sum of that size, you might be able to find a broker with a lower minimum and suitable free ETFs trades as others have suggested. |
Are variable rate loans ever a good idea? | The simple answer is absolutely. With the parameters you quote, if you will pay off the loan in 82 months or less, you will be ahead taking the variable rate. You have put your finger on the important question as well. The higher initial interest is buying insurance against rates rising if you don't pay off the loan within 82 months. I suspect the contract loan term is much longer than that, because otherwise a variable rate does not make sense. You need to assess whether the insurance you are buying is worth the premium. You can look at what the formula for the variable rate would set the rate at today. It is probably somewhat higher than the 3.79%. That will tell you how much rates have to rise to make the variable rate go above 5.02%. Note that if the loan term is around 160 months (and it could well be 180 months, 15 years) you can afford the interest to rise to about 6.2% for the last half and you will still be dollars ahead. It could even rise higher if you discount expenses in the future. You could also hope that if inflation rises to make interest rates rise like that you will get cost of living raises that make this easy to pay. |
Will refinancing my auto loan hurt my mortgage approval or help it? | Generally it is not recommended that you do anything potentially short-term deleterious to your credit during the process of seeking a mortgage loan - such as opening a new account, closing old accounts, running up balances, or otherwise applying for any kind of loan (people often get carried away and apply for loans to cover furniture and appliances for the new home they haven't bought yet). You are usually OK to do things that have at least a short-term positive effect, like paying down debt. But refinancing - which would require applying for a non-home loan - is exactly the sort of hard-pull that can drop your credit rating. It is not generally advised. The exception to this is would be if you have an especially unusual situation with an existing loan (like your car), that is causing a deal-breaking situation with your home loan. This would for example be having a car payment so high that it violates maximum Debt-to-Income ratios (DTI). If your monthly debt payments are more than 43% of your monthly income, for instance, you will generally be unable to obtain a "qualified mortgage", and over 28-36% will disqualify you from some lenders and low-cost mortgage options. The reason this is unusual is that you would have to have a bizarrely terrible existing loan, which could somehow be refinanced without increasing your debt while simultaneously providing a monthly savings so dramatic that it would shift your DTI from "unacceptable" to "acceptable". It's possible, but most simple consumer loan refis just don't give that kind of savings. In most cases you should just "sit tight" and avoid any new loans or refinances while you seek a home purchase. If you want to be sure, you'll need to figure out your DTI ratio (which I recommend anyway) and see where you would be before and after a car refinance. If this would produce a big swing, maybe talk with some mortgage loan professionals who are familiar with lending criteria and ask for their opinion as to whether the change would be worth it. 9 times out of 10, you should wait until after your loan is closed and the home is yours before you try to refinance your car. However I would only warn you that if you think your house + car payment is too much for you to comfortably afford, I'd strongly recommend you seriously reconsider your budget, current car ownership, and house purchasing plans. You might find that after the house purchase the car refi isn't available either, or fine print means it wouldn't provide the savings you thought it would. Don't buy now hoping an uncertain cost-saving measure will work out later. |
When a Company was expected and then made a profit of X $ then that X$ increased it's share price. or those the Sellers and Buyers [duplicate] | There are a few reason why share prices increase or decrease, the foremost is expectation of the investors that the company/economy will do well/not well, that is expectation of profit/intrinsic value growth over some time frame (1-4 qtrs.)there is also demand & supply mismatch over (usually) short time. If you really see, the actual 'value' of a company is it's net-worth (cash+asset+stock in trade+brand value+other intangibles+other incomes)/no of shares outstanding, which (in a way) is the book value, then all shares should trade at their book value, the actual number but it does not, the expectation of investors that a share would be purchased by another investor at a higher price because the outlook of the company over a long time is good. |
Why having large capital is advantageous to trading | It is a general truism but the reasons are that the rules change dramatically when you simply have more capital. Here are some examples, limited to particular kinds of markets: Under $2,000 in capital Nobody is going to offer you a margin account, and if you do get one it isn't with the best broker on commissions and other capabilities. So this means cash only trading, enjoy your 3 business day settlement periods. This means no shorting, confining a trader to only buy and hold strategies, making them more dependent on luck than a more capable trader. This means it is more expensive to buy stock, since you have to put down 100% of the cash to hold a share, whereas someone with more money puts down less capital to hold the exact same number of shares. This means no covered options strategies or spreads, again limiting the market directions where a trader could earn Under $25,000 in capital In the stock market, the pattern day trader rule applies to retail margin accounts with a balance under $25,000 and this severally limits the kinds of trades you are able to take because of the limit in the number of trades you can take in a given time period. Forget managing a multi-leg option position when the market isn't moving your direction. Under $125,000 in capital Worse margin rules. You excluded portfolio margin from your post, but it is a key part of the answer Over $1,000,000 in capital Participate in private placements, regulation D offerings reserved for accredited investors. These days, as buy and hold investments, these generally have more growth potential than publicly traded offerings. Over $5,000,000 in capital You can easily get the compliance and risk manager to turn the other way on margin rules. This is not conjecture, leverage up to infinity, try not to bankrupt yourself and the trading firm. |
Negatives to increased credit card spending limit? [duplicate] | The one big drawback I know is when you take the mortgage credit, your credit ability is calculated, and from that sum all of your credits are subtracted, and credit limit on credit card counts as credit... I don't know if it is worldwide praxis, but at least it is the case in Poland. |
Multiple mortgage pre-approvals and effects on credit score | The problem is not the credit score; it is the "competing" inquiries. Multiple inquiries will be considered as one if done withing a short time period (2 month, IIRC) and for the same kind of credit, because people do shop for rates, you're not the first one to do that. So don't worry about that. What you should be worrying about is banks asking questions about these inquiries, which is an annoying (at least for me) technicality. You'll have to explain to each of the banks that you want a pre-approval from that you're going to take the mortgage from them, and not from anyone else. In writing, with your signature notarized. Which is OK because it's done (the signature and notarizing) at closing, but you'll have to "convince" them that they're the chosen ones to get approved. Other than that it's pretty simple. I've done that (including the declaration that I'm not going to take any loans based on the other "competing" inquiries), and it worked fine when I took the original mortgage, and when I refinanced it later in a similar "shopping" fashion. Do it closer to the actual bidding, because closing does take at least 3-4 weeks, and the rate lock is usually for 30-60 days, so not much time to shop if you take that road. |
Why would a bank take a lower all cash offer versus a higher offer via conventional lending? | It's because financing can fall through, and then the time between offer and closing is wasted. Often buyers will include preapprovals and other evidence of financing eligibility with their offer for this reason. |
Will paying off my car early hinder my ability to build credit? | Don't fuss about your credit score when you're paying 9%. Get rid of the loan as fast as you can. Period. |
Why would a bank take a lower all cash offer versus a higher offer via conventional lending? | Often the counter-party has obligations with respect to timelines as well -- if your buying a house, the seller probably is too, and may have a time-sensitive obligation to close on the deal. I'm that scenario, carrying the second mortgage may be enough to make that deal fall through or result in some other negative impact. Note that "pre-approval" means very little, banks can and do pass on deals, even if the buyer has a good payment history. That's especially true when the economy is not so hot -- bankers in 2011 are worried about not losing money... In 2006, they were worried about not making enough! |
How long should I keep my bills? | Shred it all. You might want to keep a record going back at most a year, just in case. But just in case of what? What is a good idea is to have an electronic record. It's a good practice to know how your spending changes over time. Beyond that, it's just a fire hazard. The thing is, I know I'm right in the above paragraph, but I'm a hypocrite: I have years' worth of paper records of all kinds. I need to get rid of it. But I have grown attached. I have trucked this stuff around in move after move. I have a skill at taking good care of useless things. I've even thought of hiring somebody to scan it all in for me, so that I can feel safe shredding all this paper without losing any of the data. But that's insane! |
PayPal wants me to “add a bank account”, another funding source. Credit card isn't working. Why? | I would guess that this is due to the card issuer, not Paypal. Credit card transactions are tagged with a code describing the type of purchase, and some issuers disallow certain types (such as gambling). |
Why do only motor insurers employ “No Claims Discounts”? | Discounting premiums based on some past history is not unique to auto policies. Other insurers will discount premiums based on past claims history they just don't shout about it as a marketing means to attract customers. Life insurance is underwritten based on your health history; if you want to consider your "preferred" underwriting status based on your clear health history a "discount based on your healthy habits" you're free to do so. All sorts of lines of insurance use all sorts of things to determine an underwriting classes. The fact that auto insurers trumpet specific discounts does not mean the same net effect is not available on other lines of coverage. Most states require auto rates and discounts to be filed and approved with some state regulator, some regulatory bodies even require that certain discounts exist. You could likely negotiate with your business insurance underwriters about a better rate and if the underwriters saw fit they could give you a discount. Auto insurers can offer discounts but are generally beholden to whatever rate sheet is on file with the applicable regulatory body. For the person who downvoted, here's a link to a spreadsheet outlining one of the CA department of insurance allowable rating factor sheets related to auto insurance. |
I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment? | The market doesn't know or care why you bought. What you are asking is effectively 'this share went down in price after I bought. Is there anything I can do?'. Consider what you are asking for - if there were anything you could do, then no one would ever make a loss. How do you suppose that would work? |
Taxable income on full-time job + business earnings | I'm not sure I am fully understanding the nuance of your question, but based on your answer in the comments you and your business are not separate legal entities. So your income is the full $70K, there is no distinct business to have income. If you clarify your question to include why you want to know this I might be able to give a more meaningful answer for your situation. |
FICA was not withheld from my paycheck | Should I have a W-2 re-issued? A W-2 can be corrected and a new copy will be filed with the IRS if your employer incorrectly reported your income and withholding on a W-2 that they issued. In this case, though the employer didn't withhold those taxes, they should not reissue the W-2 unless they plan to pay your portion of the payroll taxes that were not withheld. (If they paid your share of the taxes, that would increase your gross income.) Who pays for the FICA I should have paid last year? Both you and your employer owe 7.65% each for FICA taxes. By law your employer is required to pay their half and you are required to pay your half. Both you and your employer owe additional taxes because of this mistake. Your other questions assume that your employer will pay your portion of the taxes withheld. You employer could decide to do that, but this also assumes that it was your employer's fault that the mistakes were made. If you transitioned to resident alien but did not inform your employer, how is that your employer's fault? |
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