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Strategies for saving and investing in multiple foreign currencies | If you want to use that money and maybe don't have the time to wait a few years if things should go bad, than you will definitely want to hold a good bunch of your money in the currency you buy most stuff with (so in most cases the currency of the country you live in) even if it is more volatile. |
Buy securities at another stock exchange | In a simple statement, no doesn't matter. Checked on my trade portal, everything lines up. Same ISIN, same price(after factoring in FX conversions, if you were thinking about arbitrage those days are long gone). But a unusual phenomenon I have observed is, if you aren't allowed to buy/sell a stock in one market and try to do that in a different market for the same stock you will still not be allowed to do it. Tried it on French stocks as my current provider doesn't allow me to deal in French stocks. |
Started new job. Rollover previous employer 401k to new 401k, IRA or Roth IRA? | You can't roll it over to a Roth IRA without tax penalties. The best thing to do is roll it to an IRA that isn't tied to work at all. Second best is to roll it into your new employer's 401k. The reason that an IRA makes sense is that it gives you the same tax savings as a 401k, but it allows you to remain in control of the money regardless of your employment status. |
Are RSUs ever taxed as long term capital gains? | Yes. You incur income tax on the RSU on they date they vest. At this point you own the actual shares and you can decide to sell them or to hold them. If you hold them for the required period, and sell them later, the difference between your price at vesting and the sales price would be taxed as long term capital gains. Caution: if you decide to hold, you are still liable to pay income tax in the year they vest. You have to pay taxes on income that you haven't made yet. This is fairly dangerous: if the stock goes down, you may lose a lot of this tax payment. Technically you could recover some of this through claiming capital losses, but that this is severely restricted: the IRS makes it much easier to increase taxes through gains than reducing taxes through losses. |
What are institutional investors? | FINRA defines institutional investors as: Institutional investors include banks, savings and loan associations, insurance companies, registered investment companies, registered investment advisors, a person or entity with assets of at least $50 million, government entities, employee benefit plans and qualified plans with at least 100 participants, FINRA member firms and registered persons, and a person acting solely on behalf of an institutional investor. From: http://www.finra.org/industry/issues/faq-advertising Based on Rules 2210(a)(4) and 4512(c). Institutional investors are expected to understand market risks and as a result, disclosure requirements are much lower (perhaps no SEC filings and no prospectus). |
Is it possible for the average person to profit on the stock market? | Below is a list of rules that will help you to decide what types of products you should be investing in: |
Making an offer on a property - go in at market price? | Firstly, the agent doesn't work for you. He works for himself. It's in his interest not to get you a house at the lowest cost but to sell you a house. The higher the price the higher his commission is, or the higher the probability that the seller will sell it meaning less work for him. It depends on the market what price you should give. If I were you, I would do my own research about this area and not just trust the agent's assessment of it being a "seller's" market. Not sure where we are talking about but as you know, house prices have fallen a lot in the last few years and the economy isn't doing that well. It also depends on yourself. Every house is different and there's an emotional attachment to buying property. How much do you really want this house? Would it matter if you didn't get it? Are you prepared to keep looking? If this is your dream house, then maybe it is worth offering a bit more to ensure that you get it. If not, and you are prepared to wait, then yeah, I would shoot a little lower and see what they say. One thing I will say though is generally even if you give them a low offer, unless they're getting lots of other offers or they have to sell urgently, alot of the times the seller will come back and try to negotiate with you anyway. After all, it's business and they're there to get the highest price. |
How to find a reputable company to help sell a timeshare? | You are right to be skeptical of timeshare listing companies. As you can imagine, it is very difficult to actually sell a timeshare. You know firsthand how awful they are; it takes trickery to sell them. True story: In my office building years ago, the office across the hall was occupied by a timeshare listing service. One day about a dozen FBI agents showed up and raided the office. As with any service company like this, you can sometimes find reviews on the Better Business Bureau. As an alternative, instead of trying to sell your timeshare, you may want to hire a lawyer to try to get out of it. I have absolutely no experience with this, but I have heard advertisements on the radio for one such firm called Timeshare Exit Team. There may be others that do the same thing. Good luck. |
Strategy for investing large amount of cash | What you put that money into is quite relevant. It depends on how soon you will need some, or all, of that money. It has been very useful to me to divide my savings into three areas... 1) very short term 'oops' funds. This is for when you forget to put something in your budget or when a monthly bill is very high this month. Put this money into passbook savings. 2) Emergency funds that are needed quite infrequently. Used for such things as when you go to the hospital or an appliance breaks down. Put this money in higher yeald savings, but where it can be accessed. 3) Retirement savings. Put this money into a 401-K. Never draw on it till you retire. Make no loans against it. When you change jobs roll over into a self-directed IRA and invest in an ETF that pays dividends. Reinvest the dividend each month. So, like I said, where you put that money depends on how soon you will need it. |
How much should a graduate student attempt to save? | First, don't save anything in a tax sheltered vehicle. You will be paying so little tax that there will be essentially no benefit to making the contributions, and you'll pay tax when they come out. Tax free compounding for 40 years is terrific, but start that after you're earning more than a stipend. Second, most people recommend having a month's expenses readily available for emergencies. For you, that would be $1500. If you put $100 a month aside, it will take over a year to have your emergency fund. It's easy to argue that you should pick a higher pace, so as to have your emergency money in place sooner. However, the "emergencies" usually cited are things like home repair, car repair, needing to replace your car, and so on. Since you are renting your home and don't have a car, these emergencies aren't going to happen to you. Ask yourself, if your home was destroyed, and you had to replace all your clothes and possessions (including furniture), how much would you need? (Keep in mind any insurance you have.) The only emergency expense I can't guess about is health costs, because I live in Canada. I would be tempted to tell you to get a credit card with a $2000 limit and consider that your emergency fund, just because grad student living is so tight to the bone (been there, and 25 years ago I had $1200 a month, so it must be harder for you now.) If you do manage to save up $1500, and you've really been pinching to do that (walking instead of taking the bus, staying on campus hungry instead of popping out to buy food) let up on yourself when you hit the target. Delaying your graduation by a few months because you're not mentally sharp due to hunger or tiredness will be a far bigger economic hit than not having saved $200 a month for 2 or 3 years. The former is 3-6 months of your new salary, the latter 5-7K. You know what you're likely to earn when you graduate, right? |
How can I improve my credit score if I am not paying bills or rent? | If credit scoring works in the UK like it does in the US, then I think the fact that you own+use a credit card and pay off your everyday expenses will give you perfectly good credit. Just keep doing what you're doing. I have seen people in the United States with very high credit scores based solely upon owning & occasionally using a credit card, paid in full and on time every month. |
Why do shareholders participate in shorting stocks? | One thing no one else has touched on is the issue of time frame. If I'm looking to hold my shares over the next few years, I don't mind riding out a few short-term bumps, while the short-seller is looking to make a quick profit on some bad news. Sure, I could sell and rebuy, but that's a lot of hassle, not to mention commissions and tax issues. |
What can I take from learning that a company's directors are buying or selling shares? | You can learn very little from it. Company directories are often given share options or shares as a bonus, and because of that they are unlikely to buy shares. When they sell shares, you'll hear people shouting "so-and-so sold his or her shares, they must know something bad about the company". The truth is that you can't eat or drink shares. If that company director owning shares worth a million dollars wants to buy a new Ferrari, he will find that Ferrari doesn't give free cars to people owning lots of shares. He actually has to sell the shares to get the money for the car, and that's what he does. |
Is socialtrend.com or/and feelthetrend.com legitimate? | It's called a "Pyramid scheme". Its illegal in almost every country of the Western world. You're not going to earn lifetime income, of course, and these things collapse pretty quickly. Most of the "common folks" don't return the investment, its the organizers who take the money. Sometimes they run, most times they end up in jail. The way these schemes work is that they pay the early "investors" from the fees paid by new "investors". As long as a steady stream of new people keep signing up and paying into it those who got in very early make money. The idea is based on the geometric procession of each new person signing up two or more people, and those people doing the same. Pretty quickly at that rate you need to sign up every human being on the planet to keep the new money flowing in to make it work, which obviously is not realistic. Ultimately a small % of the people (if they can stay out of jail) will make a big amount of money the vast majority of "investors" get stiffed. |
Wash Sales and Day Trading | Yes, an overall $500 loss on the stock can be claimed. Since the day trader sold both lots she acquired, the Wash Sale rule has no net impact on her taxes. The Wash Sale rule would come into play if within thirty days of second sale, she purchased the stock a third time. Then she would have to amend her taxes because claiming the $500 loss would no longer be a valid under the Wash Sale rule. It would have to be added to the cost basis of the most recent purchase. |
Is it true that the price of diamonds is based on a monopoly? | diamonds are intrinsically worthless -- and therefore have quite little resale value It may be true that De Beers has a near monopoly on diamond supply, but they are still a scarce resource, so their supply is still very limited. They do have resale value - that's one reason why diamond jewelry is stolen so often. There's just not a huge secondary market for diamonds that I know of (unlike cars, for example). You can sell diamond jewelry at pawn shops or online brokers, but you probably only get a fraction of their retail value. They are not intrinsically worthless. They do have value in the industrial sector as powerful cutters, although synthetic diamonds are much more prevalent in this market. Their value in industry is much lower than their worth as jewelry. Think about gold - it does not have a monopolic supplier but it still has a relatively very high value. |
Why is Insider Trading Illegal? | I'm surprised at the tone of the answers to this question! Trading with insider information is corruption and encourages fraud. As in many areas, there's an ethical line where behavior the gap between "ok" and "illegal" or unethical is thin. The classic local government insider information example is when the local councilman finds out that a highway exit is being constructed in an area that consists mostly of farmland. Knowing this, he buys out the farmers at what they think is a premium, and turns around for 10x profit a few months later. In that context, do you think that the councilman acting on that insider information is committing a crime or ethical lapse? Most people say yes. Even in this case, the line is thin. If the same councilman has his finger on the pulse of growth patterns in the area, and realizes that the terrain makes a certain area a prime candiate for a highway and exit, buying up land would not be criminal -- but it would be risky as it creates a perception that he is abusing his position. |
Is it possible to make money by getting a mortgage? | I came up with a real way. I saw once the market be so dumb as to allow this to work. Inflation rate = 2.5%. Home interest rate = 3%. Tax deduction = 1%. Money spent on inflation-adjusted I bonds (at the time these paid 0% net, that is 2.5% gross). Result, .5% profit after accounting for inflation. The kicker: Uncle Sam's I bonds are tax free. Sure it's not possible today, but the rates occasionally drop low enough. |
Why do 10 year-old luxury cars lose so much value? | The answer is very simple. Part of the luxury is having the cutting edge technology with the very latest features. The price premium is not just from increased build quality; it's simply a perception. Additionally, 10 years takes its toll on a car. The smooth suspension gets rougher over time, and all the little features start to break down. Part of the price of that car factors in the expense of expected repairs. That's true of every car, but the repairs are more expensive when there are lots of gadgets to break down, especially on imports. |
Is it possible for credit card companies to check credit score in India? | Is it possible for the card issuing banks to check my score without my permission? As far as I understand these things, that is exactly the whole purpose of these sorts of credit-rating institutions. The banks and other financial businesses are their customers. They exist to serve those customers. Their relationship, if any, with a consumer is probably secondary to that. When you apply for credit, you give that business any permission needed. |
5/1 ARM: Lifetime cap, First Adjustment Cap, Margin, and Annual Cap? | I hope this image is clear. A spreadsheet is how I look at these things. Unfortunately, you didn't offer the starting balance so I use $100K which makes it easy to scale. You build a simple spreadsheet and enter the "what if" scenario, this tells me that worse case, an increase of 1% on the rate each year results in a near 60% increase in payments over the 10 years. Of course, this isn't the end of the story, I'd first change the payments to reflect the 5% rate, and see how much that drives the balance down. This would reduce the principal enough that the increase would be much less. On $100K, you'd pay $536.82 based on a 5% rate, regardless of the required payment. At 7.75% the payment is $563.11, not even 5% higher. If you'd like a spreadsheet started for you, I'll put it someplace for you to grab it. |
Should I buy ~$2200 of a hot stock or invest elsewhere? | Your debt is insane. Forget investing, pay off your debt. You owe 100% of your salary, with only one smallish asset (6K in the bank). Sure you have a car, but the value of the car is falling rapidly and can be taken to near zero by a simple accident. Once you have your debts paid off (or at least to a reasonable level) you can think about investing. The 401K is the best place to start as you alluded to. Okay so you have some money left over and you want to do some other investing. What is the goal of that investing? If your desire is to learn about the stock market, and play a bit, then sure, by a few shares of some hot stock. If your goal is to buy a house, then a savings account is probably best. It all depends on what you want to do. |
Investing Account Options | Immediately move your Roth IRA out of Edward Jones and into a discount broker like Scottrade, Ameritrade, Fidelity, Vanguard, Schwab, or E-Trade. Edward Jones will be charging you a large fraction of your money (probably at least 1% explicitly and maybe another 1% in hidden-ish fees like the 12b-1). Don't give away several percent of your savings every year when you can have an account for free. Places like Edward Jones are appropriate only for people who are unwilling to learn about personal finance and happy to pay dearly as a result. Move your money by contacting the new broker, then requesting that they get your money out of Edward Jones. They will be happy to do so the right way. Don't try and get the money out yourself. Continue to contribute to your Roth as long as your tax bracket is low. Saving on taxes is a critically important part of being financially wise. You can spend your contributions (not gains) out of your Roth for any reason without penalty if you want/need to. When your tax bracket is higher, look at traditional IRA's instead to minimize your current tax burden. For more accessible ways of saving, open a regular (non-tax-advantaged) brokerage account. Invest in diversified and low-cost funds. Look at the expense ratios and minimize your portfolio's total expense. Higher fee funds generally do not earn the money they take from you. Avoid all funds that have a nonzero 12b-1 fee. Generally speaking your best bet is buying index funds from Fidelity, Vanguard, Schwab, or their close competitors. Or buying cheap ETF's. Any discount brokerage will allow you to do this in both your Roth and regular accounts. Remember, the reason you buy funds is to get instant diversification, not because you are willing to gamble that your mutual funds will outperform the market. Head to the bogleheads forum for more specific advice about 3 fund portfolios and similar suggested investment strategies like the lazy portfolios. The folks in the forums there like to give specific advice that's not appropriate here. If you use a non-tax-advantaged account for investing, buy and sell in a tax-smart way. At the end of the year, sell your poor performing stocks or funds and use the loss as a tax write-off. Then rebalance back to a good portfolio. Or if your tax bracket is very low, sell the winners and lock in the gains at low tax rates. Try to hold things more than a year so you are taxed at the long-term capital gains rate, rather than the short-term. Only when you have several million dollars, then look at making individual investments, rather than funds. In a non-tax-advantaged account owning the assets directly will help you write off losses against your taxes. But either way, it takes several million dollars to make the transactions costs of maintaining a portfolio lower than the fees a cheap mutual/index fund will charge. |
Why are some funds only recommended for investors starting out? | Most articles on investing recommend that investors that are just starting out to invest in index stock or bonds funds. This is the easiest way to get rolling and limit risk by investing in bonds and stocks, and not either one of the asset classes alone. When you start to look deeper into investing there are so many options: Small Cap, Large Cap, technical analysis, fundamental analysis, option strategies, and on and on. This can end up being a full time job or chewing into a lot of personal time. It is a great challenge to learn various investment strategies frankly for the average person that works full time it is a huge effort. I would recommend also reading "The Intelligent Asset Allocator" to get a wider perspective on how asset allocation can help grow a portfolio and reduce risk. This book covers a simple process. |
What benefits do “title search companies” have over physically visiting a land records offices? | Basically what @littleadv said, but let me amplify what I think is the most important point. As he/she says, one thing you're paying them for is their expertise. If the title on record at the county office had a legal flaw in it, would you recognize it? In a way your question is like asking, Why should I go to a doctor when I could just make my own medicine out of herbs I grow in my garden and treat myself? Maybe you could. But the doctor and the pharmacist have years of training on how to do this right. You probably don't. Is it possible for you to learn everything you need to do it right? Sure. But do you want to spend the time to study all that for something that you will do -- buy a house -- maybe once every ten years? Will you remember it all next time or have to learn it all over? But really most important is, title companies offer insurance in case the title turns out to be flawed. That, to me, is the big reason why I would use a title company even if I was paying cash and there was no bank involved to insist on it. If there's some legal flaw in the title and it turns out that someone else has a claim to my house, and I lose in court, I would be out about $100,000. Your house might be costing you much more. That's a huge risk to take. Paying the couple of hundred dollars for insurance against that risk seems well worth it to me. And by the way, I don't think the "due diligence" is easy. It's NOT just a matter of making sure a title is really on file at the court house and has the proper stamp on it. It's all about, Does someone else have a legal claim to this property? Like, maybe three owners ago someone forged a signature on a deed, so the sale is fraudulent, and now the person who was defrauded or his heirs discover the issue and claim the property. Or maybe the previous owner failed to pay a contractor who did repairs on the house, and now he goes to court and gets a lien on the property. It's unlikely that you have the expertise to recognize a forged document. You almost surely have no way to recognize a forged signature of someone you never met on an otherwise valid-looking document. And you'd have to do a lot of research to find every contractor who ever worked on the house and insure none of them have a claim. Etc. |
What are the alternatives to compound interest for a Muslim? | My understanding of Muslim finance is that you may not lend money at interest, including investing in in things that pay interest. However you may still make investments: it just has to be in places where you get a share of profit, rather than a fixed rate of return. You would be better asking the Muslim community specifically for more details. The benefits of compound interest apply, more or less, to other non-fixed-interest investments. If you invest $1000 in a business and get a 10% rate of return, you have $1100 to invest in your next venture, which means it will be more profitable and so on. That's why the growth happens, not specifically because it is interest. Stocks do not pay interest, and the 'magic' applies to them too. The fact that you might lose as well as win complicates things, but doesn't change the principle. |
Are market orders safe? | Market orders can be reasonably safe when dealing with stocks that are rather liquid and have quite low volatility. But it's important to note that you're trading a large degree of control over your buy / sell price for a small benefit in speed or complexity of entering an order. I always use limit orders as they help me guard against unexpected moves of the stock. Patience and attention to details are good qualities to have as an investor. |
Can I negotiate a credit card settlement by stopping payments? | This would be on your credit for ~8 years. If it goes according to your plan, it will take 6 months to a year to do the settlement by getting behind enough to let it go to collections and then settling. The write-off will then be on your credit record for 7 years before it "falls off". Your cash out refinance would have to cover you for at least the next 8 years to be valuable. And you have a lot of assumptions to get there: In short, there's one way (or only a few ways) this works out well in your favor. There are many ways that this has the chance to hurt you. I don't like "investments" with those kind of odds. |
How to estimate a reasonable amount for a signing bonus? | Signing bonuses are probably the most variable of all, as there is a general understanding that more personal factors are taken into account. As a result, HR isn't under a huge obligation to explain away the differences. In comparison, for salary there's the wide expectation that same job = same pay. Since there's so variable, but also fairly rare, "budget" isn't a main concern for many HR departments. And they certainly won't have a finely grained budget breakdown. "This year we'll pay $250.000 for headhunters, $50000 for relocation payments, $100,000 for pension transfers, $150.000 for stock option losses...". It's generally tossed on one big heap, "cost of hiring". So, what can you ask for? That's really a market question. What's your value to the company? How much of that is already reflected in salary and other benefits? The main downside to signing bonuses is that a company won't know how long you'd stay. Your value to the company is probably your monthly work. Therefore they cannot amortize that bonus over a fixed amount of months. What if you leave after 3 months? For that reason, a "conditional" signing bonus is a reasonable offer from your side. E.g. ask for one month salary, conditional on you staying for 24 months, and otherwise you'll repay them from your last salary. |
Unable to understand logic behind why there is no exit load on liquid fund | Imagine that a fund had a large exit load that declined over several years. If you wanted to sell some or all of your investment in that fund you would face a large fee, unless you held it a long time. You would be hesitant to sell because waiting longer would save you money. That is the exact opposite of a liquid investment. Therefore the ideal level for a liquid fund is to have zero exit load. |
How do I evaluate a health insurance policy that covers a specific disease? | These policies are usually called dread disease policies or critical illness insurance, and they normally aren't a good deal. Furthermore, with the passage of the Affordable Care Act, such policies may become less common or disappear entirely. These policies aren't a great deal because of the effects of adverse selection and asymmetric information, two closely related concepts in the economics of insurance. When you purchase an insurance policy, the insurance company charges you a premium based on your average risk level or the average risk level of your risk pool, e.g. you and your fellow employees, if you get insurance through your employer. For health insurance, this average risk level is the average probability that you'll incur healthcare costs. The insurer's actuaries calculate this probability from numerous factors, like your age, sex, current health, socioeconomic status, etc. Asymmetric information exists when you know more about this probability than the insurance company does. For example, you may look like a relatively low-risk individual on paper, but little does the insurance company know, BASE jumping is one of your hobbies. Because you know about your hobby and the insurance company doesn't, you secretly know that your risk of incurring healthcare expenses is much higher than the insurance company expects. If the insurance company knew this, they would like to charge you a much higher premium, if they could. However, they can't, because a) they don't know about your hobby, and b) the premium may be decided for the entire group/risk pool, so they can't increase it simply because a few individuals in the group have higher risk levels. Adverse selection occurs when individuals with higher risk levels are more likely to buy insurance. You may decide that because of your dangerous hobby, you do want to take advantage of your employer's healthcare plan. Unfortunately for the insurance company, they can't adjust their price accordingly. Adverse selection is a major factor in insurance markets, so I didn't go into much detail here (too much detail is probably off-topic anyway). I can point you towards more resources on the topic if you're interested. However, the situation is different when you purchase a dread disease policy. By expressing interest in such a specific policy, e.g. a cancer insurance policy, you signal to the insurance company that you feel you have a higher risk of facing that disease. In your case, you're signaling to the insurance company that your family probably has a history of cancer or that you have habits that make you more susceptible to it, and your premiums will be higher to compensate the insurance company for bearing this additional risk. Since the insurance company already has a rough estimate of your chances of developing that illness, they may already know that you have a higher chance of facing it. However, when you express interest in a disease-specific policy, this signals the existence of asymmetric information (your family history or other habits), and the insurer assumes you know something they don't that elevates your risk level of that specific disease. Since these policies are optional policies often sold as riders to existing policies, the insurance company has more flexibility in pricing them. They can charge you a higher premium because you've signaled to the insurer that you have a significantly above-average risk of contracting a specific disease*. Also, the insurer can do a much better job of estimating the expected costs of insuring you since they need only focus on data surrounding one disease. The policy will be priced accordingly, i.e. in such a way that isn't necessarily beneficial to you. Furthermore, most dread disease policies aren't guaranteed renewable, which means that even if you are willing to keep paying the premiums, the insurance company doesn't have to keep insuring you. As your risk of developing the specific disease grows, e.g. with age, it may pass the point where insuring you is no longer an acceptable risk. The company expects you to develop the illness with the next few renewal cycles, so they decide not to renew your policy. The end result? The insurance company has the premiums you've paid previously, but you no longer have coverage for that illness, and ex post, you've suffered a net loss with no reduction of risk for the foreseeable future. Dread disease policies are changing under the Affordable Care Act. According to healthcare.gov Starting in 2014, ... all new health insurance plans sold to individuals and small businesses, and plans purchased in the new Affordable Insurance Exchanges, must include a range of essential health benefits. The essential health benefits include quite a few areas of coverage; since this applies to policies offered on the state insurance exchanges and those offered outside of it, dread disease policies wouldn't seem to qualify. For more information, you can read the linked page on healthcare.gov or see Section 1302, subsection b), titled "Essential Health Benefits Requirements" in the law itself (p87). I imagine more details will be available on a state-by-state basis through 2014 and into 2015. One legal source (see the discussion on p24) states that: whatever else the ACA does with excepted benefit policies, including specific disease and fixed dollar indemnity policies, it does explicitly provide that such policies do not count as minimum essential coverage for purposes of the ACA This seems pretty straightforward; a dread disease (or "specific disease" policy, as it's referred to in the article), won't count towards the minimum essential requirements. This may not be an issue for you, but for others, it's important to understand that you'll still need to pay the penalty if you only purchase one of these policies. The ACA spells this out in Section 5000(f) (see p316, which states that "excepted benefit policies" are excluded and defines them using the definition in the Public Health Service Act (PHSA). **The PSHA specifically includes "Coverage only for a specified disease or illness" in their definition of "excepted benefit policies" (see section 2791(b), paragraph 3A on p82, so it's probably a safe bet that such policies won't count towards the minimum. Also, as Rick pointed out in the comments, the Affordable Care Act also forbids lifetime limits on most insurance plans, so assuming you find an insurance policy with adequate coverage for the specific disease you're worried about, such a plan should cover the related expenses without a lifetime limit. Deductibles, annual limits, and other factors may complicate this somewhat. In the section about lifetime limits (Sec. 2711, p2), the Affordable Care Act states that: A group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish ... lifetime limits on the dollar value of benefits for any participant or beneficiary. However, the law states in the next paragraph that the preceding statement should not be construed to prevent a group health plan or health insurance coverage from placing annual or lifetime per beneficiary limits on specific covered benefits that are not essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act, to the extent that such limits are otherwise permitted under Federal or State law The section also contains similarly vague caveats about annual limits, so the actual details and limits may vary once individual states finalize their policies. The law is intentionally vague because the vast majority of the law's implementation is left up to individual states. Furthermore, certain parts of the law specify actions involving the Secretary of Health and Human Services, so these may require further codification in the future too. You should still read the fine print of any insurance policy you buy and evaluate it as you would any contract (see the next section). Since a dread disease policy probably isn't a good idea, you'll probably want to evaluate the healthcare plans offered by your employer or individual plans offered in your area (if your employer doesn't offer coverage). I've tried to include the basic points offered in these articles to give you or future visitors some idea of where to start. These points may change once the Affordable Care Act is implemented, so I'll try to keep them as general as possible. Services - Above and beyond the minimum essential requirements, what services does the plan offer? Are these services a good match for you and/or your family, or do they add unnecessary cost to the premium with little or no benefit? For example, my health insurance plan offers basic dental coverage with a small co-pay, so I don't need a separate dental plan, even though my employer offers one. Choice - What doctors, clinics, hospitals, etc. are preferred providers under your plan? Do you need a referral from your primary care doctor to see a specialist, or can you find one on your own? Are the preferred providers convenient for you? In my first year of college (about five years ago), my student health insurance only covered a few hospitals that were in the suburbs and somewhat difficult for me to reach. This is something to keep in mind, depending on where you live. Costs - This is a major one, obviously. Deductibles, copays, maximum cost limits over a year or your lifetime, out-of-network costs, etc. are all variables to consider. There are other factors, but since I don't have a family, other members of the site can provide more detailed information about what to look for in family policies. In place of a dread disease policy, you're likely better off purchasing a comprehensive health insurance policy, perhaps a catastrophic coverage policy with a high deductible that will kick in once you've exhausted your standard insurance policy. However, this may be a moot point since the passage of the Affordable Care Act may significantly reduce the availability of such policies anyway. |
How do currency markets work? What factors are behind why currencies go up or down? | According to Soros in "The Alchemy of Finance", exchange rates fluctuations are mostly influenced by: (sorry I do not have the quote here, and I am paraphrasing from the top of my head what I read about a week ago). I mention his point of view as he is one of the most successful hedge fund manager ever, proved his skills, and dealt a lot with currencies. This is not just theory as he actively used the above points when managing his fund (as explained in the book). What I find interesting is that, according to him, the fundamental reason (the balance of trade) is not the most influential. Speculation on future value of currencies is the most influential, and these can set trends that can last years. Also it is key to notice that Soros thought foreign exchange markets are "wrong" most of the time, just like he thought stock markets are "wrong" most of the time (a point on which Warren Buffet and Jim Rogers also agree from my understanding). |
Is it normal to think of money in different “contexts”? | All value given to products is subjective and is different from person to person. It can also vary for the same person from year to year, month to month, day to day, or even hour to hour as a person analyzes different products and prices to determine which imparts the most value to him or her at a given point in time. In regards to losing money in your investment accounts. This reminds of a book I read on Jesse Livermore. Jesse was a famous stock broker who made millions (in the 1920's so he would be a billionaire in today's money) in the stock market multiple times. Jesse felt like you - he felt like after a while the losses on paper did not seem to concern him as much as he thought it should. He thought it was due to the investment accounts being simply being numbers on papers and not cold, hard cash. So what did Jesse do to remove the abstract nature of investment accounts? From here: Livermore always sold out all his positions at the end of every year and had the cash deposited in his account at the Chase Manhattan Bank. Then he would arrange with the bank to have the money, in cash, in the bank’s vault in chests. “There was a desk, a chair, a cot and an easy chair in the middle of the cash.” On the occasion described in 1923, there was $50 million in cash. In the corner was a fridge with food, enough for a few days. There was lighting installed. Then, like Scrooge McDuck, Livermore would have himself locked in the vault with his cash. He would stay a couple of days and “review his year from every aspect.” After his stay was over, he would fill his pockets with cash and go on a shopping spree. He would also take a vacation and not re-enter the market until February. But unlike Scrooge McDuck, this was not the act of a miser, explains Smitten. Livermore lived a world of paper transactions all year long. He believed that “by the end of the year he had lost his perception of what the paper slips really represented, cash money and ultimately power.” He “needed to touch the money and feel the power of cash.” It made him re-appraise his stock and commodity positions. Imagine the $60,000 from your investment account sitting on your kitchen table. Imagine seeing $1,000 dumped into the trash can one day. I know I would appreciate the money much more seeing that happen. |
Is there such a thing as a deposit-only bank account? | Legally, no one else can withdraw from your account. If you suspect the direct-deposit websites are making withdrawals, you can monitor your account balance and dispute any transactions that were not made by you. But realistically, any company that did that would soon be out of business and in so much legal trouble that it wouldn't be worth the money they could get from you. |
Moving 401k balance into self-directed IRA | Your question asks "how" but "if" may be your issue. Most companies will not permit an external transfer while still employed, or under a certain age, 55 or so. If yours is one of the rare companies that permits a transfer, you simply open an IRA with the broker of your choice. Schwab, Fidelity, eTrade, or a dozen others. That broker will give you the paperwork you need to fill out, and they initiate the transfer. I assume you want an IRA in which you can invest in stocks or funds of your choosing. A traditional IRA. The term "self-directed" has another meaning, often associated with the account that permits real estate purchases inside the account. The brokers I listed do not handle that, those custodians have a different business model and are typically smaller firms with fewer offices, not country-wide. |
Sell or keep rental Property? | And he has to pay for it every home repair and every month the property sets empty. His loss each month is not $250, but probably closer to $500. In generally you need to clear at least $200 ABOVE PTI (principle, taxes and interest) to cover repair and the like to property. From your post, it sounds like your dad was forced into the land-lord business by the recession. Unless he plans to hold the property until its rental value has increased by $500 a month, he should consider selling it and writing-off the loss. Losing money bit by bit on a house isn't a tax write-off event. Selling a property for less than you bought it for generally is. FYI, I got the $500/month loss by assuming that repairs/emptiness/etc will cost you about $200 a month, and added $50 for your dad's time managing the property. |
What is the difference between a bad/bounced check and insufficient funds? | Insufficient funds will cause a check to bounce. If there is evidence that you "kited" the check deliberately, that's a potential fraud charge. If the vendor accepts that you were just stupid/careless, you'll probably just have to pay a penalty processing fee in addition to making good the payment. It is your responsibility to track your account balance and not write bad checks. If the timing could be bad, don't write the check yet. If you insist on paying with money you may not have, talk to your bank about setting up overdrafts to draw from another account, or automatic overdraft loans... or use a credit card rather than paying by check. |
What options do I have at 26 years old, with 1.2 million USD? | You should invest your money. To figure out what rate of return you need, use this equation: (How Much Money You Want Per Year) / (Total Amount of Cash You Have) = (Annualized Interest Rate) If we plug in the amount of annualized interest you can expect to safely get while not managing your money personally, 2% by my estimate, we get X / 1.2m = 0.02%; X=24K/year A measly $24,000 / year. Many people say that you can get 10, 12, even 30% return on your investment. I won't speculate on if this is true, but I will guarantee that you cannot get those returns simply by handing your money over to a money manager. So your options are, 1) Earn a guaranteed $24,000 and earn the rest you need to live by working 2) Learn to invest your money (and then do so intelligently) and earn enough to live off the interest To learn how to invest your money, read Beating the Street, by Peter Lynch. https://www.amazon.ca/Beating-Street-Peter-Lynch/dp/0671891634 Good luck! |
Why is there such disparity of max contribution limits between 401K accounts and regular IRA accounts? | IRAs were invented to help individuals save for retirement. 401(k)s were invented to help corporations provide more compensation to highly valued employees. |
Deducting last years (undocumented) side business loss | You should speak to a good tax adviser. The less documentation you have the more problems IRS are going to cause you. Generally you can deduct business losses (in the year they occurred, which is 2011), but you have to show that that was a valid business, not just a way to reduce your tax bill with personal expenses. Thus lack of documentation reduces your ability to prove that you're entitled to the deduction. The burden of proof is generally on you. You can not deduct it from 2012 taxes, but you can still amend 2011. Keep in mind though that amended returns have higher chance of audit, and a significant business loss on a business that only existed that year is a major red flag which will raise the probability of an audit to very high percentage. Theoretically, if the business was real and just failed - you can definitely deduct this. But practically, lack of documentation may cause too big a problem, and a tax adviser might suggest you giving it up if he doesn't think you have a real chance to convince the IRS. Definitely don't do that without a professional advice. It is worth fighting for, its quite a loss, but don't do it on your own as you will definitely lose. |
Has anyone compared an in-person Tax Advisor to software like Turbo Tax? | It depends on the person. i will take turbo tax over any mediocre or poor accountant ANY DAY. You get consistent, accurate tax preparation with the software (desktop - not the online version) I was in a housing rental partnership with my brothers and one of them insisted on using his accountant... what a mistake. I have been using turbo tax for 10+ years and have always been happy. It handles my non trivial situation with ease: I am happy with it but have to admit I don't have a good accountant to compare it to. I see no reason to go to an accountant except for planning purposes. Just for tax prep it is more than worth it and more than you will need. |
Hourly rate negotiation tips for paid internship | I am not sure if I would get any benefit besides the hourly payment as an intern. What are the benefits I can expect while working for this company (or any other software company) Probably none. Changes from company to company but usually only full-time employees are entitled for benefits. For example, could I ask them to reimburse my bus fare or fuel costs in addition to the hourly pay? You can always ask:-) If it's not in the offer - better ask now, you'll get paid what is written in the offer you accepted. Highly unlikely though. What kind of an "employee" is an intern? (Read about exempt and non-exempt employee, but that's all very confusing) As intern you're non-exempt. As a professional (i.e.: Not part of internship) you would be exempt. Since this is the second time, since my interview, that I have requested, and been offered a higher rate, should I continue to ask them for a value near a $35/hr rate Have you asked them for $35? Or just for more? Anyway, I don't think that if they raised the offer from $17 to $21.75 that there's a chance for you to get $35 from them. |
If I have a home loan preapproval letter for x, can the seller know this without me explicitely telling them? | I will preface saying that I only have personal experience to go on (purchased home in KS earlier this year, and have purchased/sold a home in AR). You do not give the seller the document stating the amount you have been approved for. Your real estate agent (I recommend having one if you don't) will want to see it to make sure you will actually be able to purchase a house though. But the contract that is sent to the Seller states the total purchase price you are willing to pay and how much of that will be financed. Link to blank KS real estate contract shows what would be listed. Looks like it is from 2012 - it is similar to the one I had back in March, but not exactly the same format. |
Clarify on some Stocks Terminology | Volume is measured in the number of shares traded in a given day, week, month, etc. This means that it's not necessarily a directly-comparable measure between stocks, as there's a large difference between 1 million shares traded of a $1 stock ($1 million total) and 1 million shares traded of a $1000 stock ($1 billion total). Volume as a number on its own is lacking in context; it often makes more sense to look at it as an overall dollar amount (as in the parentheses above) or as a fraction of the total number of shares in the marketplace. When you see a price quoted for a particular ticker symbol, whether online, or on TV, or elsewhere, that price is typically the price of the last trade that executed for that security. A good proxy for the current fair price of an asset is what someone else paid for it in the recent past (as long as it wasn't too long ago!). So, when you see a quote labeled "15.5K @ $60.00", that means that the last trade on that security, which the service is using to quote the security's price, was for 15500 shares at a price of $60 per share. Your guess is correct. The term "institutional investor" often is meant to include many types of institutions that would control large sums of money. This includes large banks, insurance companies, pooled retirement funds, hedge funds, and so on. |
Transfer $70k from Wells Fargo (US) to my other account at a Credit Union bank | Making a payment of any amount is usually legal, although of course the specific circumstances matter, and I'm not qualified to give legal advice. Just had to throw in that disclaimer not because I think there's a problem here, but because it is impossible to give a definite answer to a legal question in a specific situation on Stack Exchange. But the government will be involved. There are two parts to that. First, as part of anti-money-laundering laws, banks have to report all transactions above a certain limit; I believe $10k. When you use a check or similar to pay, that happens pretty much automatically. When making a cash payment, you may have to fill out some forms. An secondly, Edward Snowden revealed that the government also tapped into banking networks, so pretty much every transaction is recorded, even if it is not reportable. |
property owned 50/50 between my brother and me | Not sure what you are talking about. The house isn't part of a business so neither of you can deduct half of normal maintenance and repairs. It is just the cost of having a house. The only time this would be untrue is if the thing that you are buying for the house is part of a special deduction or rebate for that tax year. For instance the US has been running rebates and deductions on certain household items that reduce energy - namely insulation, windows, doors, and heating/cooling systems (much more but those are the normal things). And in actuality if your brother is using the entire house as a living quarters you should be charging him some sort of rent. The rent could be up to the current monthly market price of the home minus 50%. If it were my family I would probably charge them what I would pay for a 3% loan on the house minus 50%. Going back to the repairs... Really if these repairs are upgrades and not things caused by using the house and "breaking" or "wearing" things you should be paying half of this, as anything that contributes to the increased property value should be paid for equally if you both are expecting to take home 50% a piece once you sell it. |
Someone asks you to co-sign a loan. How to reject & say “no” nicely or politely? | I have been in this situation and I essentially went for the truthful answer. I first explained that co-signing for a loan wasn't just vouching for the person, which I certainly would do, but it was putting my name on the loan and making me the person they loan company would go after if a payment was ever missed. Then I explained that even within married couples, money can be a major source of strife and fights, it would be even worse for someone not quite as close like a family member or friend. Essentially I wouldn't want to risk my relationship with a good friend or family member over some financial matter. |
Why is it important to research a stock before buying it? | The only sensible reason to invest in individual stocks is if you have reason to think that they will perform better than the market as a whole. How are you to come to that conclusion other than by doing in-depth research into the stock and the company behind it? If you can't, or don't want to, reach that conclusion about particular stocks then you're better off putting your money into cheap index trackers. |
What is the difference between speculating and investing? | Classic investing guru Benjamin Graham defines "An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return." He contrasts this with speculation which is anything else (no thorough analysis, no safety of principal, or no adequate return). The word "adequate" is important, since it contrasts adequate returns with those that are either lower than needed or higher than necessary to reach your goals. |
Ray Dalio - All Weather Portfolio | Here are the specific Vanguard index funds and ETF's I use to mimic Ray Dalio's all weather portfolio for my taxable investment savings. I invest into this with Vanguard personal investor and brokerage accounts. Here's a summary of the performance results from 2007 to today: 2007 is when the DBC commodity fund was created, so that's why my results are only tested back that far. I've tested the broader asset class as well and the results are similar, but I suggest doing that as well for yourself. I use portfoliovisualizer.com to backtest the results of my portfolio along with various asset classes, that's been tremendously useful. My opinionated advice would be to ignore the local investment advisor recommendations. Nobody will ever care more about your money than you, and their incentives are misaligned as Tony mentions in his book. Mutual funds were chosen over ETF's for the simplicity of auto-investment. Unfortunately I have to manually buy the ETF shares each month (DBC and GLD). I'm 29 and don't use this for retirement savings. My retirement is 100% VSMAX. I'll adjust this in 20 years or so to be more conservative. However, when I get close to age 45-50 I'm planning to shift into this allocation at a market high point. When I approach retirement, this is EXACTLY where I want to be. Let's say you had $2.7M in your retirement account on Oct 31, 2007 that was invested in 100% US Stocks. In Feb of 2009 your balance would be roughly $1.35M. If you wanted to retire in 2009 you most likely couldn't. If you had invested with this approach you're account would have dropped to $2.4M in Feb of 2009. Disclaimer: I'm not a financial planner or advisor, nor do I claim to be. I'm a software engineer and I've heavily researched this approach solely for my own benefit. I have absolutely no affiliation with any of the tools, organizations, or funds mentioned here and there's no possible way for me to profit or gain from this. I'm not recommending anyone use this, I'm merely providing an overview of how I choose to invest my own money. Take or leave it, that's up to you. The loss/gain incured from this is your responsibility, and I can't be held accountable. |
In what circumstances will a bank waive the annual credit card fee? | See if the bank has other credit cards they offer. Many banks have multiple ones: some cards have great benefits, others do not; some cards have high rates, some do not; some cards are secured, some do not. If they have a card that you like ask them to switch you to the card you want. They should be able to do so very easily. Your card number will change, but they will treat it is a replacement so that your credit score will not take a hit during the switch. It may be possible to get them to waive the annual fee, but most won't because each card type they offer are separate products so they only allow you to pick one of their options. If they don't have a card to your liking apply for a card from anther bank that has the benefits and annual fees (zero) that you are looking for. It may be that the new card will start with a lower limit, but it will increase over time, especially as you shift more of your business to the new card. When you cancel the old card before the next year rolls around you will take a small short hit to your credit score, but that is ok. |
I want to invest in Gold. Where do I go and buy it? | You can buy from any of the well known jewelry shops. Or you can even buy it from banks. For a 24carat gold purchase, you would normally also get a certificate attesting the quality of the gold item. Also while selling your gold, you can sell to above mentioned jewellers or any decent jeweller as a matter of fact. |
Can I get a tax deduction for PMI? | No. And I'll let my good friend and fellow blogger Kay Bell answer in some detail, in her article Deducting private mortgage insurance. |
How do I make a small investment in the stock market? What is the minimum investment required? | Many brokers offer a selection of ETFs with no transaction costs. TD Ameritrade and Schwab both have good offerings. Going this route will maximize diversification while minimizing friction. |
Why did I lose 2 cents more than the difference in the stock prices on my Robinhood trade? | There is a misunderstanding somewhere that your question didn't illuminate. You should have lost $0.04 as you say. Assuming the prices are correct the missing $0.02 aren't covered by a reasonable interpretations of the Robinhood fees schedule. For US-listed stocks: $0 plus SEC fees: 0.00221% of principal ($22.10 per $1,000,000 of principal) plus Trading Activity Fee: $0.000119/share rounded to nearest penny plus short/long term capital gains taxes The total fee rate is 0.002329% or 0.00002329*the price of the trade. With you trades totaling around $11, the fee would be ~0.000256 or ~1/40 of a penny. The answer is probably that they charge $0.01 for any fraction of a penny. It's difficult to explain as anything other than avarice, so I won't try. |
How accurate is Implied Volatility in predicting future moves? | A change in implied volatility tells us something about what investors are thinking (or fearing) about the volatility going forward for the life of the associated option contracts (which may be short or long-lived). IV does a good job of summarizing the information available to investors, which includes information about the past and the present. However, whether these investor views actually translate into what happens in the future is a topic of debate in the finance literature--investors do not generally know the future--there are conflicting results available. There have been papers that show that implied volatility has predictive power in some situations, time periods, and horizons (though it is also biased) and other papers that show that it does not have statistically significant predictive power at all. The consensus last time I checked was that implied volatility is no worse than historical volatility (including methods that use trends in historical volatility to forecast where it is going) at predicting future volatility. Whether it is significantly better and whether either reliably predicts the future is something that is not agreed on. I take this lack of consensus as evidence that if it does predict future volatility, it does so poorly. Somewhat dated FAJ survey on the subject |
Investing thought experiment | The market cap always reflect the company's equity. Except that you cannot fix a stock price in a free market. A company with such profit pattern would have stock price behave like present value of a perpetuity (future income stream discounted by risk free rate) Since your assumption is unachievable, there is no point in determining the logic. |
Does keeping 'long-term' safety net in bonds make sense? | The answer to your question depends very much on your definition of "long-term". Because let's make something clear: an investment horizon of three to six months is not long term. And you need to consider the length of time from when an "emergency" develops until you will need to tap into the money. Emergencies almost by definition are unplanned. When talking about investment risk, the real word that should be used is volatility. Stocks aren't inherently riskier than bonds issued by the same company. They are likely to be a more volatile instrument, however. This means that while stocks can easily gain 15-20 percent or more in a year if you are lucky (as a holder), they can also easily lose just as much (which is good if you are looking to buy, unless the loss is precipitated by significantly weaker fundamentals such as earning lookout). Most of the time stocks rebound and regain lost valuation, but this can take some time. If you have to sell during that period, then you lose money. The purpose of an emergency fund is generally to be liquid, easily accessible without penalties, stable in value, and provide a cushion against potentially large, unplanned expenses. If you live on your own, have good insurance, rent your home, don't have any major household (or other) items that might break and require immediate replacement or repair, then just looking at your emergency fund in terms of months of normal outlay makes sense. If you own your home, have dependents, lack insurance and have major possessions which you need, then you need to factor those risks into deciding how large an emergency fund you might need, and perhaps consider not just normal outlays but also some exceptional situations. What if the refrigerator and water heater breaks down at the same time that something breaks a few windows, for example? What if you also need to make an emergency trip near the same time because a relative becomes seriously ill? Notice that the purpose of the emergency fund is specifically not to generate significant interest or dividend income. Since it needs to be stable in value (not depreciate) and liquid, an emergency fund will tend towards lower-risk and thus lower-yield investments, the extreme being cash or the for many more practical option of a savings account. Account forms geared toward retirement savings tend to not be particularly liquid. Sure, you can usually swap out one investment vehicle for another, but you can't easily withdraw your money without significant penalties if at all. Bonds are generally more stable in value than stocks, which is a good thing for a longer-term portion of an emergency fund. Just make sure that you are able to withdraw the money with short notice without significant penalties, and pick bonds issued by stable companies (or a fund of investment-grade bonds). However, in the present investment climate, this means that you are looking at returns not significantly better than those of a high-yield savings account while taking on a certain amount of additional risk. Bonds today can easily have a place if you have to pick some form of investment vehicle, but if you have the option of keeping the cash in a high-yield savings account, that might actually be a better option. Any stock market investments should be seen as investments rather than a safety net. Hopefully they will grow over time, but it is perfectly possible that they will lose value. If what triggers your financial emergency is anything more than local, it is certainly possible to have that same trigger cause a decline in the stock market. Money that you need for regular expenses, even unplanned ones, should not be in investments. Thus, you first decide how large an emergency fund you need based on your particular situation. Then, you build up that amount of money in a savings vehicle rather than an investment vehicle. Once you have the emergency fund in savings, then by all means continue to put the same amount of money into investments instead. Just make sure to, if you tap into the emergency fund, replenish it as quickly as possible. |
Does borrowing from my 401(k) make sense in my specific circumstance? | Your comment regarding your existing finances is very relevant and helpful. You need to understand that generally in personal finance circles, when a strong earning 22 year-old is looking for a loan it's usually a gross spending problem. Their car costs $1,000 /month and their bar tabs are adding up so the only logical thing to do is get a loan. Most 22-year-olds don't have a mortgage soaking up their income, or a newborn. With all of this in mind I essentially agree with DStanley and, personally, and many people here would probably disagree, I'd stop the 401(K) contribution and use that money to pay the debt. You're still very young from a retirement standpoint, let the current balance ride and forego the match until the debt is paid. I think this is more about being debt free at 22 quickly than it's about how much marginal money could be saved via 401(k) or personal loan or this strategy or that strategy. I think at your age, you'll benefit greatly from simply being debt free. There are other very good answers on this site and other places regarding the pitfalls of a 401(k) loan. The most serious of which is that you have an extremely limited time to pay the entire loan upon leaving the company. Failure to repay in that situation incurs tax liability and penalties. From my quick math, assuming your contribution is 8% of $70,000 /year, you're contributing something in the neighborhood of $460/month to your 401(k). If you stopped contributing you'd probably take home a high $300 number net of taxes. It'll take around 20 months to pay the loan off using this contribution money without considering your existing payments, in total you're probably looking at closer to 15 months. You'll give up something in the neighborhood of $3,500 in match funds over the repayment time. But again, you're 22, you'll resume your contributions at 24; still WAY ahead of most people from a retirement savings standpoint. I don't think my first retirement dollar was contributed until I was about 29. Sure, retirement savings is important, but if you've already started at age 22 you're probably going to end up way ahead of most either way. When you're 60 you're probably not going to bemoan giving up a few grand of employer match in your 20s. That's what I would do. Edit: I actually like stannius's suggestion in the comments below. IF there's enough vested in your plan that is also available for withdrawal that you could just scoop $6,500 out of your 401(k) net of the 10% penalty and federal and state taxes (which would be on the full amount) to pay the debt, I'd consider that instead of stopping the prospective contributions. That way you could continue your contributions and receive the match contributions on a prospective basis. I doubt this is a legitimate option because it's very common for employers to restrict or forbid withdrawal of employee and/or employer contributions made during your employment, but it would be worth looking in to. |
Ongoing things to do and read to improve knowledge of finance? | For learning about finances my main two financial resources are this site, and the Motley Fool. My secondary sources are keeping up with columns by my favourite economic journalists - in the press in the US, Australia, England, and India. Regarding your comment about feeling green on the basics despite the reading - you're not alone. I've been interested in financials for better than 10 years, but there are a lot of questions on this site where I say to myself, "I've no idea of what the answer could be, what are our resident experts saying?" Having said that, there are some topics where I feel as though I can weigh in - and they tend to be where I have a little book knowledge and a lot of personal experience. |
Will I, as a CS student, be allowed to take loans for paying the fees of Ivy Leagues? | I would be surprised if a bank cared about an undergraduate major. Usually, such things are only important if it is a professional degree, like a law degree or medical degree. The big issue is that if you are not a US citizen, a US bank would be unlikely to make an unsecured loan because you could just return to your country and renege on the loan and they would have no way to collect. Therefore, a bank in your own country might be more logical. If you get accepted by a top Ivy school, they all have financial policies that will allow you to attend regardless of how rich or poor you are, so if you are applying to a top school (Harvard, Princeton, MIT, Stanford, Yale) and get accepted, they will fully finance your attendance. The only exception is if (A) they find out you lied about something, or (B) your parents/family are wealthy and they refuse to pay anything. As long as neither of these two things is true, all of the schools listed GUARANTEE they will provide sufficient financial aid. Princeton even has a no-loan policy, which means not only will they fund your attendance, they will do so without you having to take on any loans. |
How to increase my credit score | I've been in the UK for 3.5 years, and I have the same problem: I can't get even a small loan from my bank; no one will give me a phone contract; it's a nightmare. I have 8 direct debits, I pay everything on time and I earn decent money, but still my credit is seen as no good. I have got a few ideas for you though: Good luck! |
Pay online: credit card or debit card? | I use another solution: debit card with an account kept empty most of the time and another account in the same bank without any card. I keep the money on the second card-less account, and when I want to buy something, I instantly transfer the appropriate amount to the account with the card and pay. That way money is on the account tied to a debit card only for a minute before payment, and normally it is empty - so even if someone would try to fraudulently use my card number - I don't care - the transaction will be rejected. I think its the perfect solution - no fraud possible, and I don't have to worry about possibly having to bother calling my bank and requesting a chargeback, which is stressful and a waste of time and harmful to peace of mind (what if they refuse the chargeback)? I prefer to spend a minute before each transaction to transfer the money between the two accounts, and that time is not a waste, because I use it to reconsider the purchase - which prevents impulse-buying. |
what if a former employer contributes to my 401k in the year following my exit? | Publication 590a covers this in a fairly specific manner. Page 11, section "Are You Covered by an Employer Plan?", specifies: The Form W-2 you receive from your employer has a box used to indicate whether you were covered for the year. The “Retirement Plan” box should be checked if you were covered. So, by default, if that's checked, you're covered. 590 does go into more detail, though. Assuming you're covered under a Defined Contribution plan (a 401k for example): Defined contribution plan. Generally, you are covered by a defined contribution plan for a tax year if amounts are contributed or allocated to your account for the plan year that ends with or within that tax year. Tax Year: Tax year. Your tax year is the annual accounting period you use to keep records and report income and expenses on your income tax return. For almost all people, the tax year is the calendar year. Further, they cover issues related to an employee leaving Dec. 31 very specifically: A special rule applies to certain plans in which it is not possible to determine if an amount will be contributed to your account for a given plan year. If, for a plan year, no amounts have been allocated to your account that are attributable to employer contributions, employee contributions, or forfeitures, by the last day of the plan year, and contributions are discretionary for the plan year, you are not covered for the tax year in which the plan year ends. If, after the plan year ends, the employer makes a contribution for that plan year, you are covered for the tax year in which the contribution is made. Example: Example. Mickey was covered by a profit-sharing plan and left the company on December 31, 2014. The plan year runs from July 1 to June 30. Under the terms of the plan, employer contributions do not have to be made, but if they are made, they are contributed to the plan before the due date for filing the company's tax return. Such contributions are allocated as of the last day of the plan year, and allocations are made to the accounts of individuals who have any service during the plan year. As of June 30, 2015, no contributions were made that were allocated to the June 30, 2015, plan year, and no forfeitures had been allocated within the plan year. In addition, as of that date, the company was not obligated to make a contribution for such plan year and it was impossible to determine whether or not a contribution would be made for the plan year. On December 31, 2015, the company decided to contribute to the plan for the plan year ending June 30, 2015. That contribution was made on February 15, 2016. Mickey is an active participant in the plan for his 2016 tax year but not for his 2015 tax year. Mickey is in a similar (but different) circumstance, and it's clear from the IRS's treatment of his circumstance that you would be in the same boat (just a year less off) - but be aware given Mickey's situation that it's theoretically possible for them to make another contribution next year, as Mickey had, depending on when their plan year/etc. ends. So - from the IRS's point of view, everything you said the company did is correct. They paid you in January, contributed to your 401k as a result of that paycheck, and thus you were officially considered covered for 2015. |
Options vs Stocks which is more profitable | More perspective on whether buying the stock ("going long") or options are better. My other answer gave tantalizing results for the option route, even though I made up the numbers; but indeed, if you know EXACTLY when a move is going to happen, assuming a "non-thin" and orderly option market on a stock, then a call (or put) will almost of necessity produce exaggerated returns. There are still many, many catches (e.g. what if the move happens 2 days from now and the option expires in 1) so a universal pronouncement cannot be made of which is better. Consider this, though - reputedly, a huge number of airline stock options were traded in the week before 9/11/2001. Perversely, the "investors" (presumably with the foreknowledge of the events that would happen in the next couple of days) could score tremendous profits because they knew EXACTLY when a big stock price movement would happen, and knew with some certainty just what direction it would go :( It's probably going to be very rare that you know exactly when a security will move a substantial amount (3% is substantial) and exactly when it will happen, unless you trade on inside knowledge (which might lead to a prison sentence). AAR, I hope this provides some perspective on the magnitude of results above, and recognizing that such a fantastic outcome is rather unlikely :) Then consider Jack's answer above (his and all of them are good). In the LONG run - unless one has a price prediction gift smarter than the market at large, or has special knowledge - his insurance remark is apt. |
Buying real estate with cash | If they really want cash, you notify your bank in advance of the amount and have it put in your account, then you both sign the paperwork at the bank and after everything is signed you have the bank hand them the money. Guarding it after that is entirely their problem. Personally, I would consider this a stupid request and tell them to have their lawyer discuss it with my lawyer in the hope they can be talked out of it. As far as where to get the money: Same as for any purchase, find a bank willing to write a mortgage for you on this new house. What you choose to do about the other two houses is an independent question. You can sell one or both, but that may take money so you probably won't finish doing so before needing to pay for the new house. Of course when they do sell you can use the money toward paying down/paying off the new mortgage. |
Where do I invest my Roth IRA besides stock market and mutual funds? | In general, investors with a long period of time until they would need to withdraw the cash are best off holding mostly equities. While the dividends that equities would return are less than the interest you would get in peer-to-peer lending, over long periods of time not only do you get the dividends from equity investment but the value of the stock will grow faster than interest on loans. The higher returns from stocks, however, comes with more risk of big downturns. Many people pull their investments out of stocks right after crashes which really hurts their long term returns. So, in order to get the benefit of investing in stocks you need to be strong enough to continue to hold the stocks through the crash and into the recovery. As for which stocks to invest in, generally it is best to invest in low-fee index funds/etfs where you own a broad collection of stocks so that if (when) any one stock goes bust that your portfolio does not take much damage. Try to own both international and domestic stocks to get good diversification. The consensus recommends adding just a little bit of REITs and bonds to your investments, but for someone at 25 it might not be worth it yet. Warren Buffett had some good thoughts on index investing. |
What can cause rent prices to fall? | Sure! Anything that affects the balance of supply and demand could cause rent prices to fall. I'll betcha rent prices in Wilmington, Ohio collapsed when the biggest employer, DHL, shut down. An economic depression of any sort would cause people to substitute expensive rentals for cheaper ones, putting downward pressure on rents. It would also cause people to double up or move in with family, decreasing demand for rentals. Anything that makes buying a house cheaper will actually make rents lower, too, because more people will buy houses when houses get cheaper... those people are moving out of rentals, thus decreasing demand for rentals. |
Sell home to buy another home for cash | The cleanest way to accomplish this is to make the purchase of your new house contingent on the sale of your old one. Your offer should include that contingency and a date by which your house needs to sell to settle the contract. There will also likely be a clause that lets the seller cancel the contract within a period of time (like 24-48 hours) if another offer is received. This gives you (the buyer) at least an opportunity to either sell the house or come up with financing to complete the deal. For example, suppose you make an offer to buy a house for $300,000 contingent on the sale of your house, which the seller accepts. In the meantime, the seller gets an offer of $275,000 in cash (no contingency). The seller has to notify you of the offer and give you some time to make good on your offer, either by selling your house or obtaining $300,000 in financing. If you cannot, the seller can accept the cash offer. This is just a hypothetical example; the offer can have whatever clauses you agree to, but since sale contingencies benefit the buyer, the seller will generally want some compensation for that benefit, e.g. a larger offer or some other clause that benefits them. Or do I find a house to buy first, set a closing date far out and then use that time to sell my current one? Most sellers will not want to set a closing date very far out. Contingency clauses are far more common. In short, yes it's possible, and any competent realtor should be able to handle it. It also may mean that you have to either make a higher offer to compensate for the contingency and to dissuade the seller from entertaining other offers, or sell your home for less than you'd like to get the cash sooner. You can weigh those costs against the cost of financing the new house until yours sells. |
Can I lose more on Forex than I deposit? | Contrary to what other people said I believe that even without leverage you can lose more that you invest when you short a FX. Why? because the amount it can go down is alwasy limited to zero but it can, potentially, go up without limit. See This question for a mored detailed information. |
historical stock data starting from 1900 | Robert Shiller published US Stock Market data from 1871. Ken French also has historical data on his website. Damodaran has a bunch of historical data, here is some historical S&P data. |
Should I pay more than 20% down on a home? | The primary reason to put 20% down on your home is to avoid paying PMI (private mortgage insurance). Anyone who buys a house with a down-payment of under 20% is required to pay for this insurance (which protects the lender in case you default on your loan). PMI is what enables people to buy homes with as little as 3-5% down. I would recommend against paying more than 20%, because having liquidity for emergency funds, or other investments will give you the sort of flexibility that's good to have when the economy isn't so great. Depending on whether the house you purchase is move-in ready or a fixer-upper, having funds set aside for repairs is a good idea as well. |
Why do I get a much better price for options with a limit order than the ask price? | I can often get the option at [a] price [between bid and ask] The keyword you use here is quite relevant: often. More realistically, it's going to be sometimes. And that's just how supply and demand should work. The ask is where you know you can buy right away. If you don't wanna buy at ask, you can try and put a higer bid but you can only hope someone will take it before the price moves. If prices are moving up fast, you will have missed a chance if you gambled mid-spread. Having said that, the larger the spread is, the more you should work with limits mid-spread. You don't want to just take ask or bid with illiquid options. Make a calculation of the true value of the option (i.e. using the Black Scholes Model), then set your bid around there. Of course, if not only the option but also the underlying is illiquid, this all gets even more difficult. |
Financing Education through Credit Card or Student Loans | If you are very sure, say 90%, that you'll pay the zero percent card off before paying interest, that would be my choice. Less certainty than that, I think the 6.8% over a longer term is less of a cash flow issue, and you can still pay it in full upon getting the job bonus. |
If the U.S. defaults on its debt, what will happen to my bank money? | I have been through default in Ukraine august 1998. That was a real nightmare. The financial system stopped working properly for 1 month, about 30% of businesses went bankrupt because of chain effect, significant inflation and devaluation of currency. So, it is better to be prepared, because this type of processes result in unpredictable situation. |
How to protect yourself from fraud when selling on eBay UK | Just ship using a reputable courier (definitely not Yodel or Hermes!) that requires and obtains a surname and signature which you can view on their website (Citylink, Parcel Force to name a couple). Then remember to submit the tracking details when you mark the item as shipped on eBay. If the buyer is still brazen enough to claim the item never arrived, Paypal (in my experience) don't even entertain their claim. If however they claim the item arrived damaged/not as described, it could be trickier to defend. I'd recommend thoroughly documenting your item with photographs and recording the serial number, just in case you need to provide the details to Paypal. Again, in my experience, this has been enough to protect me from any fraudulent claims. To answer your second question, I don't believe eBay permits you to specify 'No Paypal', but if they did then yes, bank transfer is 100% safe (short of someone using stolen money to pay for the item, in which case you'd be guilty of money laundering thanks to the UK's wonderful laws on such things...) |
What's the difference between Buy and Sell price on the stock exchange [duplicate] | The Bid price is simply the highest buy price currently being offered and the Ask price simply the lowest sell price being offered. The list of Bid and Ask prices is called the market depth. When the Bid and Ask prices match then a sale goes through. When looking to sell you would generally look at both the Bid and Ask prices. As a seller you want to be matched with the Bid price to get a sale, but you also need to check the current list of Ask prices. If the price you want to sell at is too high you will be placed down the Ask price list, and unless the price moves up to match your sell price you will not end up selling. On the other-hand, if your price to sell is too low and in fact much lower than the current lowest sell price you may get a quick sale but maybe at a lower price than you could have gotten. Similarly, when looking to buy, you would generally also look at both the Bid and Ask prices. As a buyer you want to be matched with the Ask price to get a sale, but you also need to check the current list of Bid prices. If the price you want to buy at is too low you will be placed down the Bid price list, and unless the price moves down to match your buy price you will no end up buying. On the other-hand, if your price to buy is too high and in fact much higher than the current highest buy price you may get a quick purchase but maybe at a higher price than you could have gotten. So, whether buying or selling, it is important to look at and consider both the Bid and Ask prices in the market depth. |
Need something more basic than a financial advisor or planner | You know how when people called in on the Car Talk radio show (Click and Clack, I miss those guys), and while the caller asked a question about his car, really he needed marital advice? And the hosts would pounce on the part about the disagreement with family member and provide an unexpected answer ("Yeah, the trick to a using a clutch is [...], but really, if you want to learn to drive a stick shift, get your dad out of the car!") So I'm pouncing on the part about the spouse. It sounds like you and your spouse don't always agree on saving and spending, and you want to find a way to agree on saving and spending. If you can find a coach or planner or counselor that you both like and both trust, then go for it. You're looking more for the right personality than a precise job description. Start with exploring what you do agree on: we agree we need to save money, we agree we need to have a spending plan and budget, etc. The right coach will help you get to more agreement -- the job title is less important. |
Is it worth having a pension? | It all depends on whether you can manage your money or not. Many people are incapable of doing so in a responsible way. Like any service, you get what you pay for -- active management costs money! |
Investment / Savings advice in uncertain economy | An alternative to a savings account is a money market account. Not a bank "Money Market" account which pays effectively the same silly rate as a savings account, but an actual Money Market investment account. You can even write checks against some Money Market investment accounts. I have several accounts worth about 13,000 each. Originally, my "emergency fund" was in a CD ladder. I started experimenting with two different Money market investment accounts recently. Here's my latest results: August returns on various accounts worth about $13k: - Discover Bank CD: $13.22 - Discover Bank CD: $13.27 - Discover Bank CD: $13.20 - Discover Savings: $13.18 - Credit Union "Money Market" Savings account: $1.80 - Fidelity Money Market Account (SPAXX): $7.35 - Vanguard Money market Account (VMFXX): $10.86 The actual account values are approximate. The Fidelity Money Market Account holds the least value, and the Credit Union account by far the most. The result of the experiment is that as the CDs mature, I'll be moving out of Discover Bank into the Vanguard Money Market account. You can put your money into more traditional equities mutual fund. The danger with them is the stock market may drop big the day before you want to make your withdrawl... and then you don't have the down payment for your house anymore. But a well chosen mutual fund will yield better. There are 3 ways a mutual fund increase in value: Here's how three of my mutual funds did in the past month... adjusted as if the accounts had started off to be worth about $13,000: Those must vary wildly month-to-month. By the way, if you look up the ticker symbols, VASGX is a Vanguard "Fund of Funds" -- it invests not 100% in the stock market, but 80% in the stock market and 20% in bonds. VSMGX is a 60/40 split. Interesting that VASGX grew less than VSMGX...but that assumes my spreadsheet is correct. Most of my mutual funds pay dividends and capital gains once or twice a year. I don't think any pay in August. |
How to work around the Owner Occupancy Affidavit to buy another home in less than a year? | Although it may be a little late for you, the real answer is this: When you close on a mortgage for a primary residence you are affirming (in an affidavit), two intents: Now, these are affirming intentions — not guarantees; so if a homeowner has a change of circumstance, and cannot meet these affirmed intentions, there is almost always no penalty. Frankly, the mortgage holder's primary concern is you make payments on time, and they likely won't bother with any inquiry. That being said, should a homeowner have a pattern of buying primary residences, and in less than 1 year converting that primary to a rental, and purchasing a new primary; there will likely be a grounds for prosecution for mortgage fraud. In your specific situation, you cannot legally sign the owner-occupancy affidavit with the intention of not staying for 1 year. A solution would be to purchase the condo as a second home, or investment; both of which you can still typically get 80% financing. A second home is tricky, I would ask your lender what their requirements are for 2nd home classification. Outside that, you could buy the condo as a primary, stay in it for a year, then convert. If you absolutely had to purchase the 2nd property before 1 year, you could buy it as a primary with a 2 month rent back once you reach 10 months. Should you need it earlier, just buy the 2nd house as an investment, then once you move in, refinance it as a primary. This last strategy requires some planning ahead and you should explain your intention to the loan officer ahead of time so they can properly price the non-owner occupied loan. |
Does reading financial statements (quarterly or annual reports) really help investing? | Financial statements provide a large amount of specialized, complex, information about the company. If you know how to process the statements, and can place the info they provide in context with other significant information you have about the market, then you will likely be able to make better decisions about the company. If you don't know how to process them, you're much more likely to obtain incomplete or misleading information, and end up making worse decisions than you would have before you started reading. You might, for example, figure out that the company is gaining significant debt, but might be missing significant information about new regulations which caused a one time larger than normal tax payment for all companies in the industry you're investing in, matching the debt increase. Or you might see a large litigation related spending, without knowing that it's lower than usual for the industry. It's a chicken-and-egg problem - if you know how to process them, and how to use the information, then you already have the answer to your question. I'd say, the more important question to ask is: "Do I have the time and resources necessary to learn enough about how businesses run, and about the market I'm investing in, so that financial statements become useful to me?" If you do have the time, and resources, do it, it's worth the trouble. I'd advise in starting at the industry/business end of things, though, and only switching to obtaining information from the financial statements once you already have a good idea what you'll be using it for. |
Best Practices for Managing Paper Receipts | I store all my receipts digitally, and make sure to input them into accounting program sooner than later, just so I don't forget about it. For practical purposes, the two important things are: Any kind of a digital system makes this pretty easy, even just putting the sums in a spreadsheet and the receipts into files with the date in the name. However, because it's easy enough, I also have a box where I stuff the paper receipts. I expect never to need them, but should something very weird happen to my computer and backups, they would be there. |
Reinvesting dividends and capital gains | I'd like to add that many companies offer Divident Re-Investment Plans or DRIPs, which is basically a regular automatic stock purchase program. More info here: http://en.wikipedia.org/wiki/Dividend_reinvestment_plan. While your stock broker may offer dividend reinvestment, this is not the same as a DRIP. DRIPs are offered directly by the company, rather than the stock broker. They have the added benefits that the stock purchases are almost always commission-free, and in some cases, the company even offers a discount on the stock price. It can take a little more effort to get enrolled in a DRIP, but if you are interested in holding the stock long-term, this is a good option to consider. |
question about early exercise of a NQSO | Now assume these shares are vested, held for at least 1 year, and are then sold for $5 each. Everything I've read implies that the grantee now owes long-term capital gains taxes on the difference, which would be 10k * ($5 - $1). No. That's exactly what the SO is NQ for. Read more on the differences between ISO and NQSO here. Now assume these shares are vested, held for at least 1 year, and are then sold for $5 each. Everything I've read implies that the grantee now owes long-term capital gains taxes on the difference, which would be 10k * ($5 - $1). At this point you no longer have NQSO, you have RSU. If you filed 83(b) when you exercised, then you pay capital gains tax when they vest. If you didn't - its ordinary income to you. NQSO is a red herring here since once exercised they no longer exist. If you didn't file 83(b), then when the stock vests the difference between the FMV at vest and the money you spent on it when exercising (if any) is considered wages and taxed as ordinary income (+FICA etc). From that point the RSU becomes a regular stock investment and the capital gains clock starts ticking. |
Stock not available at home country nor at their local market - where should I buy it | Theoretically, it shouldn't matter which one you use. Your return should only depend on the stock returns in SGD and the ATS/SGD exchange rate (Austrian Schillings? is this an question from a textbook?). Whether you do the purchase "through" EUR or USD shouldn't matter as the fluctuations in either currency "cancel" when you do the two part exchange SGD/XXX then XXX/ATS. Now, in practice, the cost of exchanging currencies might be higher in one currency or the other. Likely a tiny, tiny amount higher in EUR. There is some risk as well as you will likely have to exchange the money and then wait a day or two to buy the stock, but the risk should be broadly similar between USD and EUR. |
What's an economic explanation for why greeting cards are so expensive? | As one answer points out, people buying greeting cards care little about whether they cost 25 cents or $5. Those are both small amounts of money and it's not something you buy often---also people feel the need to spend money because it's a gift. On the supplier side, it should be noted that the cost of cards has little to do with the paper they are printed on. There is an expectation that cards are new and unique...something the buyer and recipient have never seen. So they have writers and graphic designers constantly cranking out a large variety of cards and replacing existing cards with new ones, of which only a small number get sold before they move to the next model. Relatively speaking, there is a lot of human effort per thousand cards sold. Then of course there is the real estate they occupy in the store (disproportionate to a bunch of pieces of paper) and other retail, marketing, and distribution costs. I'm not saying margins are particularly thin, but if they were crazy high we probably would see more entry as you suggest. |
What is the equation for an inflation adjusted annuity held in perpetuity? | Let P denote the amount of the investment, R the rate of return and I the rate of inflation. For simplicity, assume that the payment p is made annually right after the return has been earned. Thus, at the end if the year, the investment P has increased to P*(1+R) and p is returned as the annuity payment. If I = 0, the entire return can be paid out as the payment, and thus p = P*R. That is, at the end of the year, when the dust settles after the return P*R has been collected and paid out as the annuity payment, P is again available at the beginning of the next year to earn return at rate R. We have P*(1+R) - p = P If I > 0, then at the end of the year, after the dust settles, we cannot afford to have only P available as the investment for next year. Next year's payment must be p*(1+I) and so we need a larger investment since the rate of return is fixed. How much larger? Well, if the investment at the beginning of next year is P*(1+I), it will earn exactly enough additional money to pay out the increased payment for next year, and have enough left over to help towards future increases in payments. (Note that we are assuming that R > I. If R < I, a perpetuity cannot be created.) Thus, suppose that we choose p such that P*(1+R) - p = P*(1+I) Multiplying this equation by (1+I), we have [P(1+I)]*(1+R) - [p*(1+I)] = P*(1+I)^2 In words, at the start of next year, the investment is P*(1+I) and the return less the increased payout of p*(1+I) leaves an investment of P*(1+I)^2 for the following year. Each year, the payment and the amount to be invested for the following year increase by a factor of (1+I). Solving P*(1+R) - p = P*(1+I) for p, we get p = P*(R-I) as the initial perpetuity payment and the payment increases by a factor (1+I) each year. The initial investment is P and it also increases by a factor of (1+I) each year. In later years, the investment is P*(1+I)^n at the start of the year, the payment is p*(1+I)^n and the amount invested for the next year is P*(1+I)^{n+1}. This is the same result as obtained by the OP but written in terms that I can understand, that is, without the financial jargon about discount rates, gradients, PV, FV and the like. |
How smart is it really to take out a loan right now? | Yes, it's a buyer's market. If one is looking to buy a house, comparing the cost to rent vs own is a start. Buying a property to rent to a stranger is a different issue altogether, it's a business like any other, it takes time and has risk. If today, one has a decent downpayment (20%) and plans to stay in the house for some time, buying may make economic sense. But it's never a no-brainer. One needs to understand that housing can go down as well as up, and also understand all the expenses of owning which aren't so obvious. Ever increasing property tax, repairs, etc. |
Is it possible, anywhere in the US for a funding firm to not have a license number showing somewhere? | Well, these can range from loan broker to outright scams. It is pretty typical that loan broker just take some fee in the middle for their service of filling your applications for a bunch of real loan provider companies. Because making a web page costs nothing, a single loan broker could easily have many web pages with a bit different marketing so that they can get as many customers as possible. But of course some of the web pages can be actual scams. As soon as you provide enough information for taking out a loan, they can go to a real financial institution, take out the loan and run with the money. In most countries consumer protection laws do not apply to business-to-business transactions, so you have to be even more wary of scams than usual. |
1000 pound to invest | Depending what your timeframe preferences are, here are a couple of options: Stock indexes: as per Fool's investing guide, historically this had the highest return / risk ratio. On a 5-year horizont, with no extra work, this seems the best option. Premium bonds, similar to most cash ISAs currently available, have a rather rubbish ROI ATM (~3-5% AER at max) Invest it into yourself, in the form of personal development, classes & courses, or starting a business. Disadvantage: this also will carry an opportunity cost in the form of your time. On a longer timeline, however, if this improves your market value only by 1%, that pays extreme dividends over the rest of your carrier. With a single grand at hand, I'd definitely recommend going for option 3 -considering yourself as an investing vehicle, and ask yourself: how can you best improve stakeholder value? You'd be surprised at the kind of results a single grand can make. |
PayPal wants me to “add a bank account”, another funding source. Credit card isn't working. Why? | I've used PayPal for my business for a long time. Sometimes PayPal doesn't trust credit cards. Debit or direct bank transfer are reliable. There is also a charge for using a credit card but I don't think that is the reason. You may be trying to purchase a high value item. That would be a possible reason why PayPal allowed you to use credit cards in the past, but will not allow you to do so now, for these particular transactions. |
Stocks vs. High-yield Bonds: Risk-Reward, Taxes? | When credit locks up, junk bond prices fall rapidly, and you see more defaults. The opportunity to make money with junk is to buy a diversified collection of them when the market declines. Look at the charts from some of the mutual funds or ETFs like PIMCO High Yield Instl (PHIYX), or Northeast Investors (NTHEX). Very volatile stuff. Keep in mind that junk bonds are not representative of the economy as a whole -- they cluster in certain industries. Retail and financials are big industry segments for junk. Also keep in mind that the market for these things is not as liquid as the stock market. If your investment choice is really a sector investment, you might be better served by investing in sector funds with stocks that trade every day versus bonds whose market price may be difficult to determine. |
Are underlying assets supposed to be sold/bought immediately after being bought/sold in call/put option? | No, if you are trading options to profit solely off the option and not own the underlying, you should trade it away because it costs more to exercise: |
What threshold to move from SEP to Solo401k? | I think this article explains it pretty well: Contributions to a SEP are limited to 20% of your business income (which is business income minus half of your self-employment tax), up to a maximum of $45,000. With a solo 401(k), on the other hand, you can contribute up to $15,500 plus 20% of your business income (defined the same way as above), with a maximum contribution of $45,000 in 2007. You can make an extra $5,000 catch-up contribution if you're 50 or older |
Investment property information resources | As user14469 mentions you would have to decide what type of properties you would like to invest in. Are you after negatively geared properties that may have higher long term growth potential (usually within 15 to 20km from major cities), or after positive cash-flow properties which may have a lower long term growth potential (usually located more than 20km from major cities). With negative geared properties your rent from the property will not cover the mortgage and other costs, so you will have to supplement it through your income. The theory is that you can claim a tax deduction on your employment income from the negative gearing (benefits mainly those on higher tax brackets), and the potential long term growth of the property will make up for the negative gearing over the long term. If you are after these type of properties Michael Yardney has some books on the subject. On the other hand, positive cash-flow properties provide enough rental income to cover the mortgage and other costs. They put cash into your pockets each week. They don't have as much growth potential as more inner city properties, but if you stick to the outer regions of major cities, instead of rural towns, you will still achieve decent long term growth. If you are after these type of properties Margaret Lomas has some books on the subject. My preference is for cash-flow positive properties, and some of the areas user14469 has mentioned. I am personally invested in the Penrith and surrounding areas. With negatively geared properties you generally have to supplement the property with your own income and generally have to wait for the property price to increase so you build up equity in the property. This then allows you to refinance the additional equity so you can use it as deposits to buy other properties or to supplement your income. The problem is if you go through a period of low, stagnate or negative growth, you may have to wait quite a few years for your equity to increase substantially. With positively geared properties, you are getting a net income from the property every week so using none of your other income to supplement the property. You can thus afford to buy more properties sooner. And even if the properties go through a period of low, stagnate or negative growth you are still getting extra income each week. Over the long term these properties will also go up and you will have the benefit of both passive income and capital gains. I also agree with user14469 regarding doing at least 6 months of research in the area/s you are looking to buy. Visit open homes, attend auctions, talk to real estate agents and get to know the area. This kind of research will beat any information you get from websites, books and magazines. You will find that when a property comes onto the market you will know what it is worth and how much you can offer below asking price. Another thing to consider is when to buy. Most people are buying now in Australia because of the record low interest rates (below 5%). This is causing higher demand in the property markets and prices to rise steadily. Many people who buy during this period will be able to afford the property when interest rates are at 5%, but as the housing market and the economy heat up and interest rates start rising, they find it hard to afford the property when interest rate rise to 7%, 8% or higher. I personally prefer to buy when interest rates are on the rise and when they are near their highs. During this time no one wants to touch property with a six foot pole, but all the owners who bought when interest rates where much lower are finding it hard to keep making repayments so they put their properties on the market. There ends up being low demand and increased supply, causing prices to fall. It is very easy to find bargains and negotiate lower prices during this period. Because interest rates will be near or at their highs, the economy will be starting to slow down, so it will not be long before interest rates start dropping again. If you can afford to buy a property at 8% you will definitely be able to afford it at 6% or lower. Plus you would have bought at or near the lows of the price cycle, just before prices once again start increasing as interest rates drop. Read and learn as much as possible from others, but in the end make up your own mind on the type of properties and areas you prefer. |
Pay off credit cards in one lump sum, or spread over a few months? | Pay them off immediately. But, as I note in my article Too Little Debt?, a zero utilization is actually a negative hit. So you want to just use the cards to get over 1%. i.e. if the lines add to $38K, just charge say, gas and some groceries, $100/wk. Pay in full every month. It's the amount on the statement that counts, not the amount carried month to month accruing interest, which, I hope is zero for you from now on. |
Where can one find intraday prices for mutual funds? | This idea does not make sense for most mutual funds. The net asset value, or NAV, is the current market value of a fund's holdings, minus the fund's liabilities, that is usually expressed as a per-share amount. For most funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day. http://en.wikipedia.org/wiki/Mutual_fund I am not certain, but I believe that OppenheimerFunds does not report intraday prices. I would call them up and ask. |
W2 vs 1099 Employee status | In general that's illegal. If you're a W2 employee, you don't miraculously become a 1099 contractor just because they pay you more. If your job doesn't change - then your status doesn't change just because they give you a raise. They can be sued (by you, and by the IRS) for that. Other issues have already been raised by other respondents, just wanted to point out this legal perspective. |
Are there any issues with registering an LLC in a foreign state? | No, there are no issues. When you form the corp in DE, you pick a business there to serve as your "agent" (essentially someone who knows to get in contact with you). The "agent" will notify you about taxes and any mail you get, but besides the fee they charge you for being the agent, you should file all the taxes directly with DE (franchise tax is easy to file on the web) instead of going through the agent and paying a surcharge. When your LLC files taxes, you'll do so in DE and then the LLC will issue you a federal and state K1. You'll file taxes where you reside and use the federal K1, but I think you might have to file DE state taxes (unsure about this part, feel free to edit or comment and I'll correct). |
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