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Why buy a vertical spread if I could instead buy a naked call? | Question: are you saying that buying a call is better than buying a vertical spread regardless of fees, or only because of fees? If the former, you are saying that buying a call and selling a vertical spread will always be profitable, which effectively means you're going short an out-of-the-money call. While that's a good strategy, it doesn't guarantee profit, and will lose money exactly when the vertical spread is a better strategy than buying the call outright. The most direct answer to your question in comments: if the stock goes down, you lose less money with the vertical spread than you do with a simple call. In return for this lower risk, you give up gains if the stock goes above the higher calls strike price. |
Is there a way to buy raw oil today and sell it in 1 year time? | There are many ways of investing either directly or indirectly in oil: all of these options are ways to invest in an expected change in the price of oil at various degrees of directness and risk profiles. Investing in derivative or derivative-like products such as futures and CFDs is very risky and requires a good degree of sophisticated knowledge to manage. |
Understanding differences between S&P500 index-tracking ETFs | Back in the olden days, if you wanted to buy the S&P, you had to have a lot of money so you can buy the shares. Then somebody had the bright idea of making a fund that just buys the S&P, and then sells small pieces of it to investor without huge mountains of capital. Enter the ETFs. The guy running the ETF, of course, doesn't do it for free. He skims a little bit of money off the top. This is the "fee". The major S&P ETFs all have tiny fees, in the percents of a percent. If you're buying the index, you're probably looking at gains (or losses) to the tune of 5, 10, 20% - unless you're doing something really silly, you wouldn't even notice the fee. As often happens, when one guy starts doing something and making money, there will immediately be copycats. So now we have competing ETFs all providing the same service. You are technically a competitor as well, since you could compete with all these funds by just buying a basket of shares yourself, thereby running your own private fund for yourself. The reason this stuff even started was that people said, "well why bother with mutual funds when they charge such huge fees and still don't beat the index anyway", so the index ETFs are supposed to be a low cost alternative to mutual funds. Thus one thing ETFs compete on is fees: You can see how VOO has lower fees than SPY and IVV, in keeping with Vanguard's philosophy of minimal management (and management fees). Incidentally, if you buy the shares directly, you wouldn't charge yourself fees, but you would have to pay commissions on each stock and it would destroy you - another benefit of the ETFs. Moreover, these ETFs claim they track the index, but of course there is no real way to peg an asset to another. So they ensure tracking by keeping a carefully curated portfolio. Of course nobody is perfect, and there's tracking error. You can in theory compare the ETFs in this respect and buy the one with the least tracking error. However they all basically track very closely, again the error is fractions of the percent, if it is a legitimate concern in your books then you're not doing index investing right. The actual prices of each fund may vary, but the price hardly matters - the key metric is does it go up 20% when the index goes up 20%? And they all do. So what do you compare them on? Well, typically companies offer people perks to attract them to their own product. If you are a Fidelity customer, and you buy IVV, they will waive your commission if you hold it for a month. I believe Vanguard will also sell VOO for free. But for instance Fidelity will take commission from VOO trades and vice versa. So, this would be your main factor. Though, then again, you can just make an account on Robinhood and they're all commission free. A second factor is reliability of the operator. Frankly, I doubt any of these operators are at all untrustworthy, and you'd be buying your own broker's ETF anyway, and presumably you already went with the most trustworthy broker. Besides that, like I said, there's trivial matters like fees and tracking error, but you might as well just flip a coin. It doesn't really matter. |
Why big clients want the contractor to be incorporated before giving them work | They believe that it reduces the risk that Revenue Canada will deem you to be an employee and make them pay a whole pile of tax, EI, CPP and so on that should have been paid if you had been hired as an employee. It's my recollection that the employer gets dinged for both the employee and employer share of those withholdings (and generally the employer's share is larger than yours) so they really want to prevent it. There's a Revenue Canada publication about whether you're an employee or not. There's nothing on it about being incorporated, but still employers feel more protected when their contracts are incorporated. We did work as a sole proprietorship at the very beginning, so that we could deduct our losses against employment income earned earlier in the year, before we started the business. You can find clients who will take you on. We incorporated once the losses were over with (basically we had bought the equipment and office supplies we needed to get started.) It's a simple and relatively inexpensive thing to do, and gives clients a sense of protection. It won't protect you from your own poor decisions since you'll be a director of the firm. |
Should I make extra payments to my under water mortgage or increase my savings? | You say you are underwater by $10k-15k. Does that include the 6% comission that selling will cost you? If you are underwater and have to sell anyway, why would you want to give the bank any extra money? A loss will be taken on the sale. Personally i would want the bank to take as much of that loss as possible, rather than myself. Depending on the locale the mortgage may or may not be non-recourse, ie the loan contract implies that the bank can take the house from you if you default, but if 'non-recourse' the bank has no legal way to demand more money from you. Getting the bank to cooperate on a short sale might be massively painful. If you have $ in your savings, you might have more leverage to nego with the bank on how much money you have to give them in the event the loan is not 'non-recourse'. Note that even if not 'non-recourse', it's not clear it would be worth the banks time and money to pursue any shortfall after a sale or if you just walk away and mail the keys to the bank. If you're not worried about your credit, the most financially beneficial action for you might be to simply stop paying the mortgage at all and bank the whole payments. It will take the bank some time to get you out of the house and you can live cost-free during that time. You may feel a moral obligation to the bank. I would not feel this way. The banks and bankers took a ton of money out of selling mortgages to buyers and then selling securities based on the mortgages to investors. They looted the whole system and pushed prices up greatly in the process, which burned most home buyers and home owners. It's all about business -my advice is to act like a business does and minimize your costs. The bank should have required a big enough downpayment to cover their risk. If they did not, then they are to blame for any loss they incur. This is the most basic rule of finance. |
devastated with our retirement money that we have left | It sounds like the kinds of planners you're talking to might be a poor fit, because they are essentially salespersons selling investments for a commission. Some thoughts on finding a financial planner The good kind of financial planner is going to be able to do a comprehensive plan - look at your whole life, goals, and non-investment issues such as insurance. You should expect to get a document with a Monte Carlo simulation showing your odds of success if you stick to the plan; for investments, you should expect to see a recommended asset allocation and an emphasis on low-cost no-commission (commission is "load") funds. See some of the other questions from past posts, for example What exactly can a financial advisor do for me, and is it worth the money? A good place to start for a planner might be http://napfa.org ; there's also a franchise of planners providing hourly advice called the Garrett Planning Network, I helped my mom hire someone from them and she was very happy, though I do think your results would depend mostly on the individual rather than the franchise. Anyway see http://www.garrettplanningnetwork.com/map.html , they do require planners to be fee-only and working on their CFP credential. You should really look for the Certified Financial Planner (CFP) credential. There are a lot of credentials out there, but many of them mean very little, and others might be hard to get but not mean the right thing. Some other meaningful ones include Chartered Financial Analyst (CFA) which would be a solid investment expert, though not necessarily someone knowledgeable in financial planning generally; and IRS Enrolled Agent, which means someone who knows a lot about taxes. A CPA (accountant) would also be pretty meaningful. A law degree (and estate law know-how) is very relevant to many planning situations, too. Some not-very-meaningful certifications include Certified Mutual Fund Specialist (which isn't bogus, but it's much easier to get than CFP or CFA); Registered Investment Adviser (RIA) which mostly means the person is supposed to understand securities fraud laws, but doesn't mean they know a lot about financial planning. There are some pretty bogus certifications out there, many have "retirement" or "senior" in the name. A good question for any planner is "Are you a fiduciary?" which means are they legally required to act in your interests and not their own. Most sales-oriented advisors are not fiduciaries; they wouldn't charge you a big sales commission if they were, and they are not "on your side" legally speaking. It's a good idea to check with your state regulators or the SEC to confirm that your advisor is registered and ask if they have had any complaints. (Small advisors usually register with the state and larger ones with the federal SEC). If they are registered, they may still be a salesperson who isn't acting in your interests, but at least they are following the law. You can also see if they've been in trouble in the past. When looking for a planner, one firm I found had a professional looking web site and didn't seem sketchy at all, but the state said they were not properly registered and not in compliance. Other ideas A good book is: http://www.amazon.com/Smart-Simple-Financial-Strategies-People/dp/0743269942 it's very approachable and you'd feel more confident talking to someone maybe with more background information. For companies to work with, stick to the ones that are very consumer-friendly and sell no-load funds. Vanguard is probably the one you'll hear about most. But T. Rowe Price, Fidelity, USAA are some other good names. Fidelity is a bit of a mixture, with some cheap consumer-friendly investments and other products that are less so. Avoid companies that are all about charging commission: pretty much anyone selling an annuity is probably bad news. Annuities have some valid uses but mostly they are a bad deal. Not knowing your specific situation in any detail, it's very likely that 60k is not nearly enough, and that making the right investment choices will make only a small difference. You could invest poorly and maybe end up with 50K when you retire, or invest well and maybe end up with 80-90k. But your goal is probably more like a million dollars, or more, and most of that will come from future savings. This is what a planner can help you figure out in detail. It's virtually certain that any planner who is for real, and not a ripoff salesperson, will talk a lot about how much you need to save and so forth, not just about choosing investments. Don't be afraid to pay for a planner. It's well worth it to pay someone a thousand dollars for a really thorough, fiduciary plan with your interests foremost. The "free" planners who get a commission are going to get a whole lot more than a thousand dollars out of you, even though you won't write a check directly. Be sure to convert those mutual fund expense ratios and sales commissions into actual dollar amounts! To summarize: find someone you're paying, not someone getting a commission; look for that CFP credential showing they passed a demanding exam; maybe read a quick and easy book like the one I mentioned just so you know what the advisor is talking about; and don't rush into anything! And btw, I think you ought to be fine with a solid plan. You and your husband have time remaining to work with. Good luck. |
Please explain the relationship between dividend amount, stock price, and option value? | Regarding: 1) What's the point of paying a dividend if the stock price automatically decreases? Don't the shareholders just break even? As dividends distribution dates and amounts are announced in advance, probably the stock price will rise of the same amount of the divident before the day of distribution. If I know that stock share A's value is y and the dividend announced is x, I would be willing to buy shares of A for anything > y and < than x+y before the distribution.So, arbitrageurs probably would take the price to x+y before the dividend distribution, and then after the dividend distribution the price will fall back to y. |
Taxable Website Ad Revenue | If the $5000 is income, then you need to pay income taxes on it. That's simply the way it works. Hourly rate has nothing to do with whether or not you pay taxes. If it helps, try to think of the $5000 as the first $5000 you make for the year. Now it's covered by your standard deduction and you're not paying taxes on it. |
Which graduate student loans are preferable? | Of course, the situation for each student will vary widely so you'll have to dig deep on your own to know what is the best choice for your situation. Now that the disclaimer is out of the way, the best choice would be to use the Unsubsidized Stafford loan to finance graduate school if you need to resort to loans. The major benefits to the Unsubsidized Stafford are the following: You'll be forced to consider other loan types due to the Unsubsidized Stafford loan's established limits on how much you can borrow per year and in aggregate. The borrowing limits are also adjustable down by your institution. The PLUS loan is a fallback loan program designed to be your last resort. The program was created as a way for parents to borrow money for their college attending children when all other forms of financing have been exhausted. As a result you have the following major disadvantages to using the PLUS loan: You do have the bonus of being able to borrow up to 100% of your educational costs without any limits per year or in aggregate. The major benefit of keeping your loans in the Direct Loan program is predictability. Many private student loans are variable interest rate loans which can result in higher payments during the course of the loan. Private loans are also not eligible for government loan forgiveness programs, such as for working in a non-profit for 10 years. |
Assessed value of my house | It is very simple. You bought the house when prices were near their peak in 2008. Housing prices have dropped considerably since then which was the main cause of the mortgage debacle because people had houses that were worth less than their mortgages. |
Supply & Demand - How Price Changes, Buy Orders vs Sell Orders [duplicate] | That is mostly true, in most situations when there are more buy orders than sell orders (higher buy volume orders than sell volume orders), the price will generally move upwards and vice versa, when there are more sell orders than buy orders (higher sell volume orders than buy volume orders), the price will generally move downwards. Note that this does not always happen, but usually it does. You are also correct that for a trade to take place a buyer has to be matched with a seller (or the buy volume matched with the sell volume). But not all orders get executed as trades. Say there are 50 buy orders in the order book with a total volume of 100,000 shares and the highest buy order is currently at $10.00. On the other side there are only 10 sell orders in the order book with total volume of 10,000 shares and the lowest sell order is currently $10.05. At the moment there won't be a trade unless a new buyer or seller enters the market to match the opposing side, or an existing order gets amended upper or lower to match the opposing side. With more demand than supply in the order books what will be the most likely direction that this stock moves in? Most likely the price will move upwards. If a new buyer sees the price moving higher and then looks at the market depth, they would most likely place an order closer to the lowest sell order than the current highest buy order, say $10.01, to be first in line in case a market sell order is placed on the market. As new buy orders enter the market it drives the price higher and higher until the buy orders dry up. |
What happens to your ability to borrow money based on our joint finances? | The bank will consider total of both parties income for the loan qualification. Provided both parties will be listed on the mortgage. |
High expense ratio funds - are they worth it? | The 10 year comparison between your fund and the S&P 500 - I'd say more, but not sure it's needed. |
Pros & cons of buying gold directly vs. investing in a gold ETF like GLD, IAU, SGOL? | Owning physical gold (assuming coins): Owning gold through a fund: |
Insider Trading? | Nope, its not legal. Easy to explain: If you know something that isn't public known ("inside") it's called insider trading. Hard to prove (impossible), but still illegal. To clarify: If the CEO says it AND its known in public its not illegal. In any case the CEO could face consequences (at least from his company). |
Considering buying a house in town with few major employers (economic stability) | BLUF: Continue renting, and work toward financial independence, you can always buy later if your situation changes. Owning the house you live in can be a poor investment. It is totally dependent on the housing market where you live. Do the math. The rumors may have depressed the market to the point where the houses are cheaper to buy. When you do the estimate, don't forget any homeowners association fees and periodic replacement of the roof, HVAC system and fencing, and money for repairs of plumbing and electrical systems. Calculate all the replacements as cost over the average lifespan of each system. And the repairs as an average yearly cost. Additionally, consider that remodeling will be needful every 20 years or so. There are also intangibles between owning and renting that can tip the scales no matter what the numbers alone say. Ownership comes with significant opportunity and maintenance costs and is by definition not liquid, but provides stability. As long as you make your payments, and the government doesn't use imminent domain, you cannot be forced to move. Renting gives you freedom from paying for maintenance and repairs on the house and the freedom to move with only a lease to break. |
Can two companies own stock in each other? | Yes, this can and does certainly happen. When two companies each own stock in each other, it's called a cross holding. I learned about cross holdings in reference to Japanese companies (see Wikipedia - Keiretsu) but the phenomenon is certainly not exclusive to that jurisdiction. Here are a few additional references: |
How to receive packages pseudonymously? | I've done this before for startup companies where I didn't want the mailing address to really obviously be my apartment or home address. Just for appearances. What you should be Googling are terms like "private mailbox center." If I recall correctly, I used to do this with Mail Boxes Etc before they were bought by UPS. This seems to be the equivalent offering these days: https://www.theupsstore.com/mailboxes I haven't looked at a dummy office for receiving mail -- I imagine that is a bit more expensive. Unless people are delivering things in person I think that would be overkill -- the Fedex guy doesn't care if his package delivery is to a UPS mailbox center. |
How much percent of my salary should I use to invest in company stock? | You're talking about ESPP? For ESPP it makes sense to utilize the most the company allows, i.e.: in your case - 15% of the paycheck (if you can afford deferring that much, I assume you can). When the stocks are purchased, I would sell them immediately, not hold. This way you have ~10% premium as your income (pretty much guaranteed, unless the stock falls significantly on the very same day), and almost no exposure. This sums up to be a nice 1.5% yearly guaranteed bonus, on top of any other compensation. As to keeping the stocks, this depends on how much you believe in your company and expect the stocks to appreciate. Being employed and dependent on the company with your salary, I'd avoid investing in your company, as you're invested in it deeply as it is. |
What are some time tested passive income streams? | Any kind of savings account is a passive income stream. |
Is there a reliable way to find, if a stock or company is heading bankruptcy? | Research the company. Obtain and read their current and past financial statements. Find and read news stories about them. Look for patterns and draw conclusions. Or diversify to the point where one company failing doesn't hurt you significantly. Or both. |
Double entry for mortgage | For the purpose of personal finance, treating $500 as Interest Expense is sufficient. For business accounting, it involves making the $500 a contra-liability and amortizing it as interest expense over the course of life of the loan. |
Calculating theoretical Present Value | If you are using an Excel, the Function PV should be able to easily calculate this. Excel Formulae PV = (Rate,Nper,Pmt,Fv,Type) Where Rate: Rate of return. In this case you can use Inflation or assumed rate that would cost you. Say 3-5%. Note the Rate has to be for Nper. i.e. in Nper if you are counting yearly payments, then rate is yearly, if you are counting as monthly, then the rate should be monthly. NPer: Number of periods. If yearly in your case it would be 20. If Monthly 20*12, if Quarterly 20*4 etc. Pmt: Expected Payments for Nper. If you are saying 20 million over 20 years, it would be 1 million per year. Fv and Type can be blank So assuming a rate of 3%, and yearly payments of 1 million over 20 years. PV = $14,877,474.86 [It would show negative, just ignore the sign] |
Additional credit card with different limit on same account? | Generally not. Since authorized user cards are the same account and the difference between the two (the original and the AU card) are minimal. Note, there's nothing technically stopping banks from offering this as a feature, two cards do have identifiers that indicate they're separate cards, but the banks concern for your needs stops at how much they can bleed from you, and "helping you control your spending" is not part of that. |
As a 22-year-old, how risky should I be with my 401(k) investments? | At 22yo, unless you have a terminal illness, you have many years to earn and save a lot more that you will have in your 401k right now (unless you have already been extremely lucky in the market with your 401k investments). This means that even if you lost everything in your 401k right now, it probably wouldn't hurt you that much over the long term. The net present value of all your future savings should far exceed the net present value of your 401k, if you plan to earn and save responsibly. So take as much risk as you want with it right now. There is no real benefit to playing safe with investments at your age. If you were asking me how much risk should you be taking with a $10m inheritance and no income or much prospects of an income, then I'd be giving you a very different answer. |
Is it possible to make money by getting a mortgage? | This answer is based on Australian tax, which is significantly different. I only offer it in case others want to compare situations. In Australia, a popular tax reduction technique is "Negative Gearing". Borrow from a bank, buy an investment property. If the income frome the new property is not enough to cover interest payments (plus maintenance etc) then the excess each year is a capital loss - which you claim each year, as an offset to your income (ie. pay less tax). By the time you reach retirement, the idea is to have paid off the mortgage. You then live off the revenue stream in retirement, or sell the property for a (taxed) lump sum. |
How to have a small capital investment in US if I am out of the country? | For $100 you better just hold it in Mexico. The cost of opening an account could eat 10% or more of your capital easily, and that won't be able to buy enough shares of an ETF or similar investment to make it worthwhile. |
How can I borrow in order to improve a home I just bought? | It depends on your equity(assets - liabilities). If you have a lot of equity, banks will be happy to lend you money because they now they can always seize your assets. If you don't have a lot of equity another option is to go to hard money lenders. They charge high rates and some of them lend-to-own, but is an option. And consider what Pete said, you might be a little optimistic. |
Why invest in IRA while a low-cost index fund is much simpler? | Here are the few scenarios that may be worth noting in terms of using different types of accounts: Traditional IRA. In this case, the monies would grow tax-deferred and all monies coming out will be taxed as ordinary income. Think of it as everything is in one big black box and the whole thing is coming out to be taxed. Roth IRA. In this case, you could withdraw the contributions anytime without penalty. (Source should one want it for further research.) Past 59.5, the withdrawals are tax-free in my understanding. Thus, one could access some monies earlier than retirement age if one considers all the contributions that are at least 5 years old. Taxable account. In this case, each year there will be distributions to pay taxes as well as anytime one sells shares as that will trigger capital gains. In this case, taxes are worth noting as depending on the index fund one may have various taxes to consider. For example, a bond index fund may have some interest that would be taxed that the IRA could shelter to some extent. While index funds can be a low-cost option, in some cases there may be capital gains each year to keep up with the index. For example, small-cap indices and value indices would have stocks that may "outgrow" the index by either becoming mid-cap or large-cap in the case of small-cap or the value stock's valuation rises enough that it becomes a growth stock that is pulled out of the index. This is why some people may prefer to use tax-advantaged accounts for those funds that may not be as tax-efficient. The Bogleheads have an article on various accounts that can also be useful as dg99's comment referenced. Disclosure: I'm not an accountant or work for the IRS. |
Personal taxes for Shopify / Paypal shop? | (do I need to get a W9 from our suppliers)? Will PayPal or Shopify send me a 1099k or something? Do not assume that you'll get paperwork from anyone. Do assume that you have to generate your own paperwork. Ideally you should print out some kind of record of each transaction. Note that it can be hard to view older transactions in PayPal, so start now. If you can't document something, write up a piece of paper showing the state of the world to the best of your knowledge. Do assume that you need separate receipts for each expenditure. The PayPal receipt might be enough (but print it in case the IRS wants to see it). A receipt from the vendor would be better (again, print it if it is online now). A CPA is not strictly necessary. A CPA is certified (the C in CPA) to formally audit the books of a corporation. In your case, any accountant would be legally sufficient. You still may want to use a CPA, as the certification, while technically unnecessary, still demonstrates knowledge. You may otherwise not be in a position to evaluate an accountant. A compromise option is to go to a firm that includes a CPA and then let them assign you to someone else to process the actual taxes. You are going to have to fill out some business tax forms. In particular, I would expect a schedule C. That's where you would show revenues and expenses. You may well have to file other forms as well. |
Why does short selling require borrowing? | A simple way to ask the question might be to say "why can't I just use the same trick with my own shares to make money on the way down? Why is borrowing someone else's shares necessary to make the concept a viable one? Why isn't it just the inverse of 'going long'?" A simple way to think about it is this: to make money by trading something, you must buy it for less than you sell it for. This applies to stocks like anything else. If you believe the price will go up, then you can buy them first and sell them later for a higher price. But if you believe the price will go down, the only way to buy low and sell high is to sell first and buy later. If you buy the stock and it goes down, any sale you make will lose you money. I'm still not sure I fully understand the point of your example, but one thing to note is that in both cases (i.e., whether you buy the share back at the end or not), you lost money. You say that you "made $5 on the share price dropping", but that isn't true at all: you can see in your example that your final account balance is negative in both cases. You paid $20 for the shares but only got $15 back; you lost $5 (or, in the other version of your example, paid $20 and got back $5 plus the depreciated shares). If you had bought the shares for $20 and sold them for, say, $25, then your account would end up with a positive $5 balance; that is what a gain would look like. But you can't achieve that if you buy the shares for $20 and later sell them for less. At a guess, you seem to be confusing the concept of making a profit with the concept of cutting your losses. It is true that if you buy the shares for $20 and sell them for $15, you lose only $5, whereas if you buy them for $20 and sell for $10, you lose the larger amount of $10. But those are both losses. Selling "early" as the price goes down doesn't make you any money; it just stops you from losing more money than you would if you sold later. |
How are exchange rates decided for each country? | Rates are arrived at by the cumulative buying and selling on the foreign exchange market, much the same way that stock prices are arrived at. If there are more people wanting to buy dollars with euros, EUR/USD goes down. If more people want to buy euros with dollars, then EUR/USD goes up. The initial rate was about $1.18 per euro when it began trading on January 1st, 1999. It replaced the European Currency Unit at that time, which was a weighted basket of currencies of (more or less) the participating countries. You're correct about the printing press in the US and other countries. The exchange rates do reflect in part how much of a relative workout those printing presses get. |
Deductions greater than Income : Traditional IRA to Roth Conversion? | Yes. A most emphatic yes. I suggest you look at your 2014 return and project what 2015 will look like. I'd convert enough to "top off" the 15% bracket. Note, if you overshoot it, and in April 2016, see that you are say $5K into the 25% rate, you can just recharacterize the amount you went over and nail the bracket to the dollar. If you have the time and patience, you can convert into 2 different Roth accounts. One account for one asset class, say large cap stocks/funds, the other, cash/bonds. In April, keep the account that outperformed, and only recharacterize the lagger. Roth Roulette is my name for this strategy. It's risk free, and has the potential to boost the value of your conversions. Edit - To be clear, you are permitted to recharacterize (undo) any or all of the converted amount. You actually have until tax time (4/15 or so) plus the 6 month extension. You can recharacterize for any reason - A personal anecdote - I manage my mother in law's money. She is well under the 25% bracket cutoff. Each year I convert, and each April, recharacterize just enough to be at the top of the 15% bracket. Over $100K has been shifted from Traditional IRA to Roth by now. Taxed at 15% so her daughters will 'not' pay 25% when they withdraw. $10K in tax saved from uncle sam, for my effort of filling out paper twice a year for 12 years now. Well worth my effort. |
How can I find out what category a merchant falls into for my credit card's cashback program? [duplicate] | Not clear what you're asking. Are you trying to figure out their SIC/NAISC classification? That tells you the business category they fall into, but there's no simple, instant way to find that out. Much also depends on how the credit card issuer has classified them and how they arrived at that information. They may have a different means of classifying merchants, so you might try to call your bank and ask them, if they're able/willing to tell you. That'll give you a starting point to figure it out, anyway. |
What is a reasonable rate of return and fee structure for a Roth IRA? | A Roth IRA is just an account wrapper. Inside a Roth IRA you can have a plain 0.1% savings account, or a brokerage account, or an annuity or whatever. There's no rate of return for a Roth IRA. That particular calculator seems to assume you'll be wrapping a brokerage account in a Roth IRA and investing in the stock market. Over a long period 6% is probably a reasonable rate of return considering the S&P 500 has returned about 7% over the last decade. |
Recent college grad. Down payment on a house or car? | That sounds like way too much for a car! I suggest you get a used car that only has a few years on it and is in mint condition. Not only are they cheaper to purchase, they are also the cheapest to insure. |
Are stocks suitable for mid term money storage? | You have several options depending on your tolerance for risk. Certainly open an investment account with your bank or through any of the popular discount brokerage services. Then take however much money you're willing to invest and start earning some returns! You can split up the money into various investments, too. A typical default strategy is to take any money you won't need for the long term and put it in an Index Fund like the S&P 500 (or a European equivalent). Yes, it could go down, especially in the short term, but you can sell shares at any time so you're only 2-3 days away at any time from liquidity. Historically this money will generate a positive return in the long run. For smaller time frames, a short-term bond fund often gives a slightly better return than a money market account and some people (like me!) use short-term bond funds as if it were a money market account. There is a very low but real risk of having the fund lose value. So you could take a certain percentage of your money and keep it "close" in a bond fund. Likewise, you can sell shares at any time, win or lose and have the cash available within a couple days. |
Should I deduct or capitalize the cost to replace a water heater in my rental property? (details Below) | If you're repairing an existing appliance - its an expense. If you're replacing an existing appliance with a new one - that's disposing of one capital asset and putting in service another. You depreciate the new one and you dispose of the old one (if not fully depreciated - talk to your tax adviser how to handle the remaining value). The additional costs of the fixes that are not related to the installation of the new appliance are regular maintenance expenses, so you have to get an itemized invoice from the plumber to know what to expense and what to capitalize. |
Are there any dangers in publicly sharing my personal finance data? | Status alone shouldn't be a problem. A fellow blogger publishes a blogger list at Rock Star Finance where he lists nearly 1000 personal finance bloggers web sites. You can see that many of them publicly offer their numbers. What you need to consider is whether you are anonymous, or if friends and family will know it's you. "Hey Tev, you have no debt and already saved XXX francs? Can you lend me ZZ francs to buy....?" That is the greater risk. The potential larger risk for the higher worth people is that of targeted theft. (Interesting you couldn't find this via search, the PF blogging community is large, mature, and continuing to grow.) |
What does “/” and “^” mean in ticker symbols? How to translate these symbols into yahoo? | On NASDAQ the ^ is used to denote other securities and / to denote warrents for the underlying company. Yahoo maybe using some other designators for same. |
Simple income and expense report in gnucash | The official guide can be found here, but that can be a little in depth as well. To make good use of you need at least a little knowledge of double-entry bookkeeping. Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account. From Wikipedia Another way to think of it is that everything is an account. You'll need to set up accounts for lots of things that aren't accounts at your bank to make the double-entry system work. For example you'll need to set up various expense accounts like "office supplies" even though you'll never have a bank account by that name. Generally an imbalanced transfer is when you have a from or to account specified, but not both. If I have imbalanced transactions I usually work them from the imbalance "account", and work each transaction to have its appropriate tying account, at which point it will no longer be listed under imbalance. |
How to keep control of shared expenses inside marriage? | Why not start a third account, the "house" account? However you decide to fund it, equally or in proportion to income, you both chip in, and the payments for all joint expenses come from there. Rent, utilities, food, phone, cable. |
What should I do with the 50k I have sitting in a European bank? | You can do many things: Risk free: Risk of losing: |
Should you keep your stocks if you are too late to sell? | The stock price is not only based on the general market trend and the stock's current profitability and prospects, but is also based on prediction of how the stock's prospects might change in the future. In almost every case, there are professional investors analysing the stock's future prospects and considering whether it's over or under values for its current price. However even professionals can be totally wrong. If you feel like you have a good grasp on whether the stock will have improving or declining prospects over time, then you might be (if you're right) equipped to make a sensible decision on whether to hold the stock or not. If you don't think you have a good understanding about the stock, then an understanding of the general market direction might at least make stock in general worth holding. Otherwise, you are simply taking a punt. If you know of another stock that has better prospects, then ask yourself why you would hold onto the stock that you think will perform worse. But also bear in mind that (in my understanding) research has shown that, on average, people who try to pick stocks rarely do better than a random selection, and more stock trades means more brokerage (which thanks to brokerage losses would mean you will end up doing worse than average unless you really do know better than the market). |
What do I need to be aware of if I choose to resell property early (in Alberta)? | You will have no problem doing this for one home and living in it for one or two years. There's a recent court case with around six homes bought and sold by the same person in that time frame. That's what you've probably heard about. There's no hard and fast rule about when it becomes a business but here are some highlights from that court case. Among the criteria developed by the case law, the following are of note: Constantin v. The Queen, 2014 TCC 327 (CanLII) |
Indie Software Developers - How do I handle taxes? | I think the best advice you're going to get on the subject is: If you made $250k in half a year, you definitely have enough to hire an accountant! Get professional help on the subject, and they'll make sure you don't end up getting in any legal trouble. |
Is interest on a personal loan tax deductible? | When you pay interest on a loan used to fund a legitimate investment or business activity, that interest becomes an expense that you can deduct against related income. For example, if you borrowed $10k to buy stocks, you could deduct the interest on that $10k loan from investment gains. In your case, you are borrowing money to invest in the stock of your company. You would be able to deduct the interest expense against investment gain (like selling stock or receiving dividends), but not from any income from the business. (See this link for more information.) You do not have to pay taxes on the interest paid to your father; that is an expense, not income. However, your father has to pay taxes on that interest, because that is income for him. |
Should I finance a used car or pay cash? | Unless you are getting better than a 2.95% return on that money market account. Pay cash. That's the purely logical way to make the decision. However if it were me I'd pay cash anyway just because I like the idea of not owing money and having the hassle of dealing with a payment every month. |
American taxes if living outside the US and get paid by US company on a US bank account | Technically, if you earn in US (being paid there, which means you have a work visa) and live in other country, you must pay taxes in both countries. International treaties try to decrease the double-taxation, and in this case, you may pay in your country the difference of what you have paid in US. ie. your Country is 20% and USA is 15%, you will pay 5%, and vice-versa. This works only with certain areas. You must know the tax legislation of both countries, and I recommend you seek for advisory. This site have all the basic information you need: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion Good luck. |
What happens if a Financial Services Company/Stockbroker goes into administration in the UK? | Although I posted this question more than a year ago, I subsequently read information which may be of use as an answer, specifically regarding Pritchard Stockbrokers in the UK several years ago, in which the FSCS stepped in to compensate investors, as detailed in the following: http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-pritchard-stock-6n940n01k/ http://www.ft.com/cms/s/0/89957c56-21e4-11e3-9b55-00144feab7de.html#axzz3crZYbGZ9 For reference, in case the links above are at some point in future taken offline, the FSCS FAQ states: Q: I had “deposited” money with Pritchard so can I expect £85,000 compensation from FSCS? A: No. Pritchard was not a deposit-taker so the money held does not qualify under regulatory rules as a deposit. The money will be treated as an investment, which carries maximum FSCS compensation of £50,000 per person. FSCS has no discretion to pay any more. Q: What happens if my losses are over the FSCS maximum of £50,000 and I accept the FSCS’s compensation? A: If you choose to accept compensation from FSCS, you will be required to assign (or legally transfer) to FSCS all of your rights to claim in the Administration. FSCS will then claim in the Administration standing “in your shoes” and will claim for the whole of your loss, even if it was over £50,000. When FSCS receives the dividends in your place it will then pay to you any amounts recovered to ensure that you do not suffer a disadvantage for having accepted FSCS compensation first. Example 1: Loss = £80,000 FSCS compensation = £50,000 Dividend of 50p/£ received by FSCS = £40,000 FSCS pays £30,000 to claimant so he is fully compensated (total £80,000), and retains £10,000 recovery for itself Example 2: Loss = £100,000 FSCS compensation = £50,000 Dividend of 50p/£ received by FSCS = £50,000 FSCS pays £50,000 to claimant so he is fully compensated (total £100,000), and retains nothing for itself FSCS does not have to have make a full recovery of its £50,000 before it starts paying its dividend recovery on to claimants. Claimants are not compelled to claim from FSCS, or to accept the FSCS offer of compensation. If a person does not want to transfer his legal rights to claim in the Administration to FSCS in return for accepting the payment of compensation, then s/he can decline our compensation and continue his claim in the Administration. After s/he has received the dividend(s), s/he can then return to FSCS to claim for any remaining shortfall. Therefore, the answer provided by @DumbCoder was correct, but in circumstances where fraudulent activity would mean otherwise, the FSCS was willing to intervene on the behalf of investors. |
Help! I've cancelled their service, but this company continues to bill my credit card an annual fee. What can I do? | Short of canceling the card, you could just report the card as lost and ask for a new card number on the same account. Another option is to just make a note to look for the charge and keep disputing it. It has been a while since I did credit card processing at my business, but I think the company gets dinged if too many customers dispute charges and kicks them into a higher fee schedule with the credit card company. |
The life cycle of money | I'll answer but avoiding discussion of M1, M2 etc, too pedantic. I don't believe you are asking about the lifetime of either coins or paper money. I think you are referencing the fractional reserve system, and how a good portion of the total money supply is created by the banks lending out their deposits in effect 'creating' money. My answer to you is that if all loans were simply paid off, no mortgages, no car loans, etc, the total money in the system would collapse to some reasonable fraction of what it is today, 10% or a bit less. This comes from the fact that the reserve requirement for most large banks is 10%. I'm referencing money, but not bills or coins. Think about what you make in a year. How much do you touch as paper money? For my wife and me, it's no more than a few percent. Most goes from a direct deposit to online payments. So this would be the subject of a different question altogether. Let me know if this addresses your question. |
What increases your chance of being audited? | Here's a few things: |
If I have AD&D through my employer, should I STILL purchase term life insurance? | Most likely, yes. AD&D is insurance against a specific type of peril. Life insurance is, too, but there are fewer exceptions to payout. I'd imagine that you'd have to die by accident, or be dismembered but not die, for it to pay out. The exceptions in the policy are what you need to be concerned about. If loss of you (and your income) would be of financial hardship to your wife and your goals for your family, then you should consider life insurance. (If you do, consider having your wife buy the policy on you, and make sure it's clear that her funds were paying for it. It may be possible to avoid having the payout go into your estate that way.) |
“In-the-Money” vs “Out-of-the-Money” Call Options | First, welcome to Money.SE. The selected page is awful. I don't know the value in listing different expirations at the same strike. Usually, all the strikes are grouped by month, so I'd be looking at Jan '15 across all strikes. "In the money" means the price of a stock is trading above the strike price, if a call, or below it, if a put. On 10/20 of some year, Intel was trading at $23.34. The January $25 call strike was just $0.70, and April's was $1.82. These were out of the money. The $25 puts were "in the money" by $1.66 so you could have paid $1.90 for the Jan $25 put, with $.24 of time premium. By November, the price rose and the put fell, to $.85, all time premium. As with stocks, the key thing is to only buy calls of stock that are going to go up. If a stock will fall, buy puts. Curious, what was the class discussion just before the teacher gave you this image? |
What is the p/e ratio? | The PE ratio stands for the Price-Earnings ratio. The price-earnings ratio is a straightforward formula: Share Price divided by earnings per share. Earnings per share is calculated by dividing the pre-tax profit for the company by the number of shares in issue. The PE ratio is seen by some as a measure of future growth of a company. As a general rule, the higher the PE, the faster the market believes a company will grow. This question is answered on our DividendMax website: http://www.dividendmax.co.uk/help/investor-glossary/what-is-the-pe-ratio Cheers |
Should I pay off a 0% car loan? | Between now and October, your $3,000 will earn $30 in your savings account. If you are late on a payment for your 0% loan, your interest rate will skyrocket. In my opinion, the risk is just not worth the tiny gain you are trying to achieve in the savings account. If it was me, I would pay off the loan today. A few more thoughts: There is a reason that businesses offer 0% consumer loans. They are designed to trick you into thinking that you are getting a better deal than you are. Businesses don't lose money on these loans. The price of the loan is built into the cost of the purchase, whether you are buying expensive furniture, or a car. Typically with a car, you forfeit a rebate by taking the 0% loan, essentially paying all the interest up-front. Now that you have the loan, you might be ahead a few dollars by waiting to pay it off, but only because you've already paid the interest. Don't make the mistake of thinking that you can come out ahead by buying things at 0%. It's really not free money. In the comments, @JoeTaxpayer mentioned that fear of mistakes can lead to missed rewards. I understand that; however, these 0% loans are full of small print designed to trip you up. A single mistake can negate years and years of these small gains. You don't want to be penny wise and pound foolish. |
Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | The stock market is not a zero-sum game. Some parts are (forex, some option trading), but plain old stock trading is not zero sum. That is to say, if you were to invest "at random", you would on average make money. That's because the market as a whole makes money - it goes up over time (6-10% annually, averaged over time). That's because you're not just gambling when you buy a stock; you're actually contributing money to a company (directly or indirectly), which it uses to fund activities that (on average) make money. When you buy Caterpillar stock, you're indirectly funding Caterpillar building tractors, which they then sell for a profit, and thus your stock appreciates in value. While not every company makes a profit, and thus not every stock appreciates in true value, the average one does. To some extent, buying index funds is pretty close to "investing at random". It has a far lower risk quotient, of course, since you're not buying a few stocks at random but instead are buying all stocks in an index; but buying stocks from the S&P 500 at random would on average give the same return as VOO (with way more volatility). So for one, you definitely could do worse than 50/50; if you simply sold the market short (sold random stocks short), you would lose money over time on average, above and beyond the transaction cost, since the market will go up over time on average. Secondly, there is the consideration of limited and unlimited gains or losses. Some trades, specifically some option trades, have limited potential gains, and unlimited potential losses. Take for example, a simple call option. If you sell a naked call option - meaning you sell a call option but don't own the stock - for $100, at a strike price of $20, for 100 shares, you make money as long as the price of that stock is under $21. You have a potential to make $100, because that's what you sold it for; if the price is under $20, it's not exercised, and you just get that $100, free. But, on the other hand, if the stock goes up, you could potentially be out any amount of money. If the stock trades at $24, you're out $400-100 = $300, right? (Plus transaction costs.) But what if it trades at $60? Or $100? Or $10000? You're still out 100 * that amount, so in the latter case, $1 million. It's not likely to trade at that point, but it could. If you were to trade "at random", you'd probably run into one of those types of situations. That's because there are lots of potential trades out there that nobody expects anyone to take - but that doesn't mean that people wouldn't be happy to take your money if you offered it to them. That's the reason your 16.66 vs 83.33 argument is faulty: you're absolutely right that if there were a consistently losing line, that the consistently winning line would exist, but that requires someone that is willing to take the losing line. Trades require two actors, one on each side; if you're willing to be the patsy, there's always someone happy to take advantage of you, but you might not get a patsy. |
2008-2009 Stock Market Crash — what caused the second drop? | The second drop was part of the same event. The short-term resurgence is often called a "dead cat bounce". Mongus Pong's answer is a great answer, I'm going to approach from a more anecdotal POV. Think about the fear that was in the air in Fall 2008. From my recollection, that short-term stabilization came from the Fed, President, Congress, etc standing up and saying that the government would do everything in its power to maintain liquidity in the marketplace. So the fear of a broader collapse of investment banks (beyond Lehman Brothers, Merrill Lynch, etc) due to the Fed behaving as it did in 1929 was abated. By the time you got to Q1 of 2009, it became clear that business vaporized -- nothing was happening. No cars were selling, Christmas was dismal, vacations were cancelled. (example: I went on vacation to a fancy resort in December 2008 and paid $60/night for a $450/night room! The place was half empty.) |
Does a market maker sell (buy) at a bid or ask price? | Market Makers are essentially just there to process the buys and sells of traders, so just like you and I buy and sell at the ask and bid prices they do to. They are just completing the process of making our orders a reality. Market makers are just representative of brokers, meaning that when you place your order at ask or bid, you are placing that particular brokers order at ask or bid. People often say that certain brokers have too many shares and claim that they are games when really that just means that there happen to be a lot of people using a particular broker all at once, or more troubling, perhaps even company execs using a broker, to sell a large amount of shares. |
What happens when a non-U.S. citizen who's been making money from the U.S. moves to the U.S.? | Its not for US citizens - its for US residents. If the US considers you as a tax resident - you'll be treated the same as a US citizen, regardless of your immigration status. The question is very unclear, since it is not mentioned whether your US sourced income "from the Internet" is sales in the US, sales on-line, services you provide, investments, or what else. All these are treated differently. For some kinds of US-sourced income you should have paid taxes in the US already, regardless of where you physically reside. For others - not. In any case, if you become US tax resident, you'll be taxed on your worldwide income, not only the $10K deposited in the US bank account. ALL of your income, everywhere in the world, must be declared to the US government and will be taxed. You should seek professional advice, before you move to the US, in order to understand your responsibilities, liabilities and rights. I suggest looking for a EA/CPA licensed in California and experienced with taxation of foreigners (look for someone in the SF or LA metropolitan areas). Keep in mind that there may be a tax treaty between the US and your home country that may affect your Federal (but not California) taxes. |
What's an economic explanation for why greeting cards are so expensive? | It cost a lot of money to pay the poet to make wording, designers/photographers to make the post-cards and miscellaneous staff (Executives, HR, shareholders etc.) These cost are thrown onto the buyers. |
what are the downsides of rolling credit card debt in this fashion | Awesome, you are a math guy. Very good for you. In theory, what you are proposing, should work out great as the math works out great. However have you taken a economics or finance coursework? The math that they do in these class will leave a most math guys uncomfortable with the imprecision even when one is comfortable with chaos theory. Personal finance is worse. If it were about math things like reverse mortgages, payday lenders, and advances on one income tax returns would not exist. The risk derived from the situation you describe is one born out of behavior. Sometimes it is beyond control of the person attempting your scheme. Suppose one of these happen: In my opinion the market is risky enough without borrowing money in order to invest. Its one thing to not pay extra principle to a mortgage in order to put that money in play in the market, it is another thing to do what you are suggesting. While their may be late fees associated with a mortgage payment, a fixed rate mortgage will not change if you late on payment(s). On these balance transfer CC schemes they will jack your rate up for any excuse possible. I read an article that the most common way to end up with a 23%+ credit card was to start out with a 0% balance transfer. One thing that is often overlooked is that the transfer fee paid jacks up the stated rate of the card. In the end, get out of consumer debt, have an emergency fund, then start investing. Building a firm financial foundation is the best way to go about it. Without one it will be difficult to make headway. With one your net worth will increase faster then you imagined possible. |
Should I buy a house because Mortgage rates are low | The simple answer is that you are correct. You should not purchase a house until you are financially stable enough to do so. A house is an asset that you must maintain, and it can be expensive to do so. Over the long term, you will generally save money by purchasing. However, in any given year you may spend much more money than a similar rental situation - even if the rent is higher than your mortgage payment. If you are financially stable with good cash savings or investments plus a 20% down payment, then anytime is a good time to buy if that is part of your financial plan. As of now in 2016, is is safe to assume that mortgage rates would/should not get back to 10%? Does this mean that one should always buy a house ONLy when mortgage rates are low? Is it worth the wait IF the rates are high right now? The mortgage rates are not the primary driver for your purchase decision. That might be like saying you should buy everything on sale at Target... because it's on sale. Don't speculate on future rates. Also, keep in mind that back when rates were high, banks were also giving much better savings/CD rates. That is all connected. Is refinancing an option on the table, if I made a deal at a bad time when rates are high? You need to make sure you get a loan that allows it. Always do a break-even analysis, looking at the money up-front you spend to refi vs the savings-per-year you will get. This should give you how many years until the refi pays for itself. If you don't plan on being in the house that long, don't do it. How can people afford 10% mortgage? Buying a house they can afford, taking into consideration the entire payment+interest. It should be a reasonable amount of your monthly income - generally 25% or less. Note that this is much less than you will be 'approved' for by most lenders. Don't let good rates suck you into a deal you will regret. Make sure you have the margin to purchase and maintain a home. Consider where you want to be living in 5 years. Don't leave so little financial breathing room that any bump will place you at risk of foreclosure. That said, home ownership is great! I highly recommend it. |
Dad paid cash for house and we want to put it in my name | If your parents are not on the deed then I am not sure how it could be their house. It seems like the sale was done unofficially. If your parents or aunt pass away this could be a real mess. Make this official ASAP. It might be possible for your aunt to gift you the house. This may have tax implication but the article below suggests that it may not be an issue. http://www.bankrate.com/finance/real-estate/aunt-be-taxed-for-bargain-price-on-house.aspx As you're probably aware, owning a house is expensive. Make sure you can afford taxes, bills, and maintenance. Things add up fast. I should have address the "rent to own" plan. If you plan on transferring the house from your aunt to you by renting with $0 monthly payment and then claiming it is all paid off, then I think this would be considered a gifting of the house from your aunt to you. It sounds like fraud to claim you paid something that you didn't. In the end, it is either a gift from your parents or from your aunt. The sooner you get the house in your name the better |
How much time would I have to spend trading to turn a profit? | I suppose it depends on your goals and expectations, but I'd argue its not easy. Regardless of the chosen sub discipline of trading or investing you pursue there will be some theoretical and research work to do, some learning of the mechanics of the market, and some 'ropes' to learn upfront. After that the time frame you are working in, the complexity and time requirements of your methodology dictate how much time you need. I personally spend enough time on it to be considered equivalent to a part time job, but I enjoy continually learning and researching. If I weren't constantly trying to improve and research I would say the mechanics might take a half hour a day. However, I would gladly do it full time if I were able. I believe that is important, if you simply want to make lots of money but hate the process you will likely fail. As mentioned earlier if you are new to this the majority of your time will be spent initially learning whats out there, trying various things out, and finding what works for you. There are a lot of different ways to approach the market and a number of markets to approach. For me it took two years to find my niche and become profitable. Learn to loose small and keep your itchy fingers in check during that learning curve. |
Filling Balance sheet in ITR4 for freelancers | ITR-4 is for incorporated business. For freelancing, You can fill ITR 2 and declare the freelancing income as "income from other source". Refer to the Income Tax website for more details |
How can I estimate business taxes / filing fees for a business that has $0 income? | You need to hire a tax professional and have them sort it out for you properly and advise you on how to proceed next. Don't do it yourself, you're way past the stage when you could. You're out of compliance, and you're right - there are penalties that a professional might know how to mitigate, and maybe even negotiate a waiver with the IRS, depending on the circumstances of the case. Be careful of answers like "you don't need to pay anything" that are based on nothing of facts. Based on what you said in the question and in the comments, it actually sounds like you do have to pay something, and you're in trouble with the IRS already. It might be that you misunderstood something in the past (e.g.: you said the business had filed taxes before, but in fact that might never happened and you're confusing "business filed taxes" with "I filed schedule C") or it might be the actual factual representation of things (you did in fact filed a tax return for your business with the IRS, either form 1120 of some kind or 1065). In any case a good licensed (CPA or EA) professional will help you sort it out and educate you on what you need to do in the future. |
Is Bitcoin a commodity or a currency [duplicate] | It has properties of both. Tax authorities will eventually give their opinion on this. Through its properties of finite quantity, fungibility, and resistance to forgery/duplication, it acts as a commodity. It can be sent directly between any two parties anywhere on Earth, without regard for the quantity transacted or physical distance, to act as a currency. By the way, establishing trust in a trust-free environment through cryptographic proof-of-work is a remarkable invention. Sending economic value, cheaply and securely, around the world in minutes, not days/weeks, is a remarkable invention. This is where the value comes from. |
What happens if one brings more than 10,000 USD with them into the US? | The $10,000 mark is not a ceiling in importing cash, but rather a point where an additional declaration needs to be made (Customs Form 4790). At 1 million, I suspect you might be in for a bit of an interview and delay. Here's an explanation of what happens when the declaration isn't made: https://www.cbp.gov/newsroom/local-media-release/failure-declare-results-seizure-24000-arrest-two |
Can an unmarried couple buy a home together with only one person on the mortgage? | The mortgage and title of the house would be under both your names equally. When I applied for a mortgage with my girlfriend, I was the primary applicant because of my credit score and she was the secondary because of her income (she makes more). When all was said and done, it was explained to us that the mortgage was ours equally and so was the house, and that I didn't hold more ownership than her over either. We were approved quickly and hassle free. This is our first house too. This is in Florida. |
How is Discover different from a Visa or a MasterCard? | Each of those is a network. Merchants displaying their logos - participate in their network and will accept cards that bear the same logo. Most merchants participate in more than one network. Discover is mostly used in the US, while Visa, Mastercard and American Express are more widely spread in the world (Amex less, Visa and MC are much more widely spread). In addition to being widely spread in the US, Discover is accepted everywhere where UnionPay is accepted (mostly in China) and Diners Club (mostly in EMEA). Advantages/disadvantages? You'll have to compare specific cards, but if you're a traveler in the world - then Discover will probably not be as appealing as Visa or Mastercard. |
In a competitive market, why is movie theater popcorn expensive? | I think a labor management issue explains the high cost of popcorn. Some weeks theaters are loaded with patrons and other weeks there are many fewer patrons. If popcorn were priced so that most patrons bought some the theater manager would have to have lots of employees to sell popcorn on the really busy days. The manager would have to cover the cost of wages on the slow days. A simple solution would be to adjust employee hours. To a certain extent I suspect this is done. If you look at the situation from the standpoint of the employee being sent home early or being told not to work tomorrow or, perhaps for the next week because the theater has a bunch of bombs, is not a good situation. A job in popcorn sales is probably not a high paying job so the employees may just quit and they may do this, not by giving notice, but rather by not showing up for a scheduled shift. The result of this is that managers determine the maximum number of employees they can hire if there theater has low drawing movies and they set the price of popcorn so that when the theater is filled this number of employees will not be overwhelmed by patron buying popcorn. At least not to the extent that the start of the movie has to be delayed. |
Saving for a non-necessity | In the course of one's spending, it's not tough to find things that are going to be that expensive. A median income is in the $50K range in the US. The diamond folk advertise that one should spend 3 month's salary on an engagement ring. Even with a decent income, I spent zero. My wife was practical, not interested in jewelry, and wanted a big house. The money went to the downpayment. The house cost 2.5 years salary at that time. A car, even used, will cost some month's salary. If that $50K earner is saving, has an emergency account, and is on track with their financial long term goals, a week's pay can buy a nice sized TV. A nice vacation can cost a week's pay to a month's pay. Your question is great, although it shows a concern that's typical very early on in one's career. There are related question here about "how can I spend more?" They tend to come from someone living on a student budget that now has an adult's income from a desirable job. The answer is to sit down, list your monthly spending, properly budget a decent portion for savings, and see how much you have for frivolous spending. Keep in mind, it's easier to sock it away now. No house, no kids, etc. When we were first married, we lived on my wife's income (in effect) and socked mine away. The house tightened the budget, as did the kid. In the end, the PS4 is less about the $400 than it is about the rest of your finances. |
Credit card closed. Effect on credit score (USA) | As documented in MyFICO (http://www.myfico.com/credit-education/whats-in-your-credit-score/), there are several factors that affect credit scores. Payment history (35%) The first thing any lender wants to know is whether you've paid past credit accounts on time. This is one of the most important factors in a FICO® Score. As @Ben Miller mentioned, checking your credit report to determine whether or not late payments were reported to credit bureaus will give you a sense of whether or not this was effected. You mentioned several bounced payments, which certainly could have caused this. This would be my largest concern with a closed account, is to investigate why and what was reported to the bureaus, and in turn, other lenders. Also, since this has the highest impact on credit scores (35%), it's arguably, the most important. This is further detailed here, which details the public record and late payment effect on your score. Amounts owed (30%) Having credit accounts and owing money on them does not necessarily mean you are a high-risk borrower with a low FICO® Score....However, when a high percentage of a person's available credit is been used, this can indicate that a person is overextended, and is more likely to make late or missed payments. Given that this card was closed, whatever your credit limit was is now no longer added into your total credit limit. However, your utilization on that card is gone (assuming it gets paid off), depending on any other credit lines, and since you reported "heavy use" that could be a positive impact, though likely not. Length of credit history (15%) In general, a longer credit history will increase your FICO® Scores. However, even people who haven't been using credit long may have high FICO Scores, depending on how the rest of the credit report looks. Depending how old your card was, and particularly since this was your only credit card, it will likely impact your average age of credit lines, depending on other lines of credit (loans etc) you have open. This accounts for about 15% of your score, so not as large of an impact as the first two. Credit mix in use (10%) FICO Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Given that this was your only credit card, your loan mix has been reduced (possibly to none). New credit (10%) Research shows that opening several credit accounts in a short period of time represents a greater risk - especially for people who don't have a long credit history. This focuses on credit inquiries, which as you mentioned, you will likely have another either re-opening this credit card or opening another at some point in the future. Regardless, paying off the rest of that card is a priority, as interest rates on average credit cards are over 13%, and often higher (source). This rate comes into play when not paying the balance in full every month, and also as @Ben Miller suggested, I would not utilize a credit card without being able to pay it in full. It can often be a dangerous cycle of debt. |
Paying Off Principal of Home vs. Investing In Mutual Fund | Paying off the debt is low-risk, low-reward. You're effectively guaranteed a 4% return. If you buy a mutual fund, you're going to have to take some risk to have a decent chance of getting better than 4% and change return in the long run, which probably means a fund that invests primarily in stocks. Buying a stock mutual fund is high-risk, high reward, especially when you're in significant debt. On the other hand, 4% and change is very low-interest. If you wanted to buy stocks on margin, financing stock investments directly with debt, you'd pay a heck of a lot more. Bottom line: It comes down to your personal risk tolerance. |
Is the return on investment better with high or low dividends? | Someone (I forget who) did a study on classifying total return by the dividend profiles. In descending order by category, the results were as follows: 1) Growing dividends. These tend to be moderate yielders, say 2%-3% a year in today's markets. Because their dividends are starting from a low level, the growth of dividends is much higher than stocks in the next category. 2) "Flat" dividends. These tend to be higher yielders, 5% and up, but growing not at all, like interest on bonds, or very slowly (less than 2%-3% a year). 3) No dividends. A "neutral" posture. 4) Dividend cutters. Just "bad news." |
Should I pay off my credit card online immediately or wait for the bill? | I am going to break rank slightly with the consensus so far. Here's the deal, it probably DOES help your credit slightly to pay it multiple times per month if it isn't a hassle, but the bump is likely to be minimal and very temporary. Here's why: A key component of your score is your credit usage ratio. That is the ratio of how much of your credit limits you are using. You want to keep this number down as low as possible. Now here is where it gets tricky. Although you have a grace period to pay off your card with no interest, the credit card companies don't generally report the balance as of the due date. They either report the high balance or an average balance over the month. That is, it is based on how much you use, not how much balance you carry over each month. It isn't very intuitive, but that's just how it is. So technically, keeping that balance lower over the course of the month WILL probably help you, but the credit usage ratio is generally a rolling average over the last x months, so the effect will wear off quickly. So it is probably not worth doing unless you know you are going to apply for a loan in the next 6 months and need a temporary, small bump. Another consideration is that paying early provides no real financial benefit in terms of finance charges, but you are giving up liquidity which does have some value. 1) You probably could get at least a little interest for keeping the money in your account a few more weeks. 2) If you have a major financial emergency, e.g. broken down car, you might appreciate the fact that you kept your options open to carry that balance over a month. |
Paying Off Principal of Home vs. Investing In Mutual Fund | The mathematically correct answer is to invest, because you'll get a higher rate of return. I think that answer is bunk -- owning your home free and clear is a huge burden lifted off of your shoulders. You're at an age where you may find a new job, business, personal or other opportunities will be easier to take advantage of without that burden. |
Tracking down forgotten brokerage account | A company as large as Home Depot will have a fairly robust Human Resources department and would probably be able to steer you in the right direction: odds are they know the name of the brokerage and other particulars. I did some googling around, their # is (1-866-698-4347). Different states have different rules about how long an institution can have assets abandoned before turning them over to the state. California, as an example, has an abandoned property search site that you can use. That being said, I had some penny stocks sitting in a brokerage account I never touched for about 20 years and when I finally logged back in there they were, still sitting there. |
Is it wise to switch investment strategy frequently? | My super fund and I would say many other funds give you one free switch of strategies per year. Some suggest you should change from high growth option to a more balance option once you are say about 10 to 15 years from retirement, and then change to a more capital guaranteed option a few years from retirement. This is a more passive approach and has benefits as well as disadvantages. The benefit is that there is not much work involved, you just change your investment option based on your life stage, 2 to 3 times during your lifetime. This allows you to take more risk when you are young to aim for higher returns, take a balanced approach with moderate risk and returns during the middle part of your working life, and take less risk with lower returns (above inflation) during the latter part of your working life. A possible disadvantage of this strategy is you may be in the higher risk/ higher growth option during a market correction and then change to a more balanced option just when the market starts to pick up again. So your funds will be hit with large losses whilst the market is in retreat and just when things look to be getting better you change to a more balanced portfolio and miss out on the big gains. A second more active approach would be to track the market and change investment option as the market changes. One approach which shouldn't take much time is to track the index such as the ASX200 (if you investment option is mainly invested in the Australian stock market) with a 200 day Simple Moving Average (SMA). The concept is that if the index crosses above the 200 day SMA the market is bullish and if it crosses below it is bearish. See the chart below: This strategy will work well when the market is trending up or down but not very well when the market is going sideways, as you will be changing from aggressive to balanced and back too often. Possibly a more appropriate option would be a combination of the two. Use the first passive approach to change investment option from aggressive to balanced to capital guaranteed with your life stages, however use the second active approach to time the change. For example, if you were say in your late 40s now and were looking to change from aggressive to balanced in the near future, you could wait until the ASX200 crosses below the 200 day SMA before making the change. This way you could capture the majority of the uptrend (which could go on for years) before changing from the high growth/aggressive option to the balanced option. If you where after more control over your superannuation assets another option open to you is to start a SMSF, however I would recommend having at least $300K to $400K in assets before starting a SMSF, or else the annual costs would be too high as a percentage of your total super assets. |
Live in Florida & work remote for a New York company. Do I owe NY state income tax? | New York State is one of a few states that will go after telecommuter taxes (such that some people may end up paying double tax even if they don't live in NY). There are a few ways that you can avoid this. If you NEVER come to NY for work, and your employer can stipulate that your position is only available to be filled remotely, you will likely be covered. But there are a myriad of factors relating to this such as whether the employer reimburses you for your home office and whether you keep "business records" at your office. Provided you can easily document the the factors in TSB-M-06(5)I, you shouldn't have to pay NYS taxes. (source: I've worked with a NYS tax attorney as an employer to deal with this exact scenario). |
Using GnuCash for accurate cost basis calculation for foreign investments (CAD primary currency) | You would need to use Trading Accounts. You can enable this, File->Properties->Account settings tab, and check Use Trading Accounts. For more details see the following site: http://wiki.gnucash.org/wiki/Trading_Accounts |
Best way to start investing, for a young person just starting their career? | First I'd like to echo msemack's answer. Start by maxing out your 401K and IRA contributions. Not a lot of people just starting their career have the luxury of doing much more outside of that. Here are some additional tips that I learned when I was just getting started: |
Can a retail trader do bid-ask spread scalping through algo-trading? | In US public stock markets there is no difference between the actions individual retail traders are "permitted" to take and the actions institutional/corporate traders are "permitted" to take. The only difference is the cost of those actions. For example, if you become a Registered Market Maker on, say, the BATS stock exchange, you'll get some amazing rebates and reduced transaction prices; however, in order to qualify for Registered Market Maker status you have to maintain constant orders in the book for hundreds of equities at significant volumes. An individual retail trader is certainly permitted to do that, but it's probably too expensive. Algorithmic trading is not the same as automated trading (algorithmic trading can be non-automated, and automated trading can be non-algorithmic), and both can be anywhere from low- to high-frequency. A low-frequency automated strategy is essentially indistinguishable from a person clicking their mouse several times per day, so: no, from a legal or regulatory perspective there is no special procedure an individual retail trader has to follow before s/he can automate a trading strategy. (Your broker, on the other hand, may have all sorts of hoops for you to jump through in order to use their automation platform.) Last (but certainly not least) you will almost certainly lose money hand over fist attempting bid-ask scalping as an individual retail trader, whether your approach is algorithmic or not, automated or not. Why? Because the only way to succeed at bid-ask scalping is to (a) always be at/near the front of the queue when a price change occurs in your favor, and (b) always cancel your resting orders before they are executed when a price change occurs against you. Unless your algorithms are smarter than every other algorithm in the industry, an individual retail trader operating through a broker's trading platform cannot react quickly enough to succeed at either of those. You would have to eschew the broker and buy direct market access to even have a chance, and that's the point at which you're no longer a retail trader. Good luck! |
Why an inner suburbs small apartment considered a risky investment | The banks see small apartments as a higher risk because usually very small apartments are harder to sell, especially during a falling market when there is an oversupply of these apartments. The price of small apartments will also fall a lot quicker in a falling market. Regarding yield vs capital growth - the emphasis here is manly on high yielding properties in small country towns with small populations. How many properties can you buy with cash? Properties with good growth will enable you to build equity quicker and enable you to build a larger portfolio. In my opinion you need a combination of good yield and reasonable growth, because without yield you cannot replace your earned income with passive income, but without growth you can't expand your portfolio. So a combination of good yield with reasonable growth will give the best outcome. |
What is the best way to get a “rough” home appraisal prior to starting the refinance process? | If you're willing to pay a fee, you can probably just get a commercial appraiser to give you a valuation. In Australia I think it's around $100-200. |
How do the returns generated via Equity/Debt investment differ from the returns from a Mutual Fund based on Equity/Debt? | Just sticking to equities: If you are investing directly in a share/stock, depending on various factors, you may have picked up a winner or to your dismay a loser. Say you just have Rs 10,000/- to invest, which stock would you buy? If you don't know, then it’s better to buy a Mutual Fund. Now if you say you would buy a few of everything, then even to purchase say Rs 5000/- worth of each stock in the NIFTY Index [50 companies] you would require at least an investment of 250,000/-. When you are investing directly you always have to buy in whole numbers, i.e. you can't buy 1/2 share or 1.6 share of some stock. The way Mutual funds work is they take 10,000 from 250 people and invest in all the stocks. There are fund managers who's job is to pick good stocks, however even they cannot predict winners all the time. Normally a few of the picks become great winners, most are average, and a few are losers; this means that overall your returns are average VS if you had picked the winning stock. The essential difference between you investing on your own and via mutual funds are: It is good to begin with a Mutual Fund, and once you start understanding the stocks better you can invest directly into the equities. The same logic holds true for Debt as well. |
Are my purchases of stock, mutual funds, ETF's, and commodities investing, or speculation? | I'd argue the two words ought to (in that I see this as a helpful distinction) describe different activities: "Investing": spending one's money in order to own something of value. This could be equipment (widgets, as you wrote), shares in a company, antiques, land, etc. It is fundamentally an act of buying. "Speculating": a mental process in which one attempts to ascertain the future value of some good. Speculation is fundamentally an act of attempted predicting. Under this set of definitions, one can invest without speculating (CDs...no need for prediction) and speculate without investing (virtual investing). In reality, though, the two often go together. The sorts of investments you describe are speculative, that is, they are done with some prediction in mind of future value. The degree of "speculativeness", then, has to be related to the nature of the attempted predictions. I've often seen that people say that the "most speculative" investments (in my use above, those in which the attempted prediction is most chaotic) have these sorts of properties: And there are probably other ideas that can be included. Corrections/clarifications welcome! P.S. It occurs to me that, actually, maybe High Frequency Trading isn't speculative at all, in that those with the fastest computers and closest to Wall Street can actually guarantee many small returns per hour due to the nature of how it works. I don't know enough about the mechanics of it to be sure, though. |
Buying real estate with cash | To give the seller cash at the closing, you will need to borrow the money ahead of time, which means a mortgage is out. A bank will only make a mortgage if they get the deed. Therefore, you will have to borrow a different way, such as through a more-expensive home equity loan. |
Should I make extra payments to my under water mortgage or increase my savings? | I'd pile up as much cash as you can in a savings account - you will need money for the move (even if it's just gas money) and it's going to be hard to predict where house prices are going so you might or might not be underwater when it comes time to sell the house. Or you might be so deep underwater by then that the extra money doesn't make much of a difference anymore anyway. Once you're actually in the process of selling the house, you can figure out if you can (or need to) use the savings to cover the shortfall, closing costs or if you just built up a little wealth during the time you put the money aside. |
How to invest in a currency increasing in value relative to another? | Forex trading contracts are generally fairly short dated as you mention. Months to weeks. Professional forex traders often extend the length of their bet by rolling monthly or quarterly contracts. Closing a contract out a few days before it would expire and reopening a new contract for the next quarter/month. This process can be rather expensive and time consuming for a retail investor however. A more practical (but also not great) method would be to look into currency ETFs. The ETFs generally do the above process for you and are significantly more convenient. However, depending on the broker these may not be available and when available can be illiquid and/or expensive even in major currency pairs. It's worth a bunch of research before you buy. Note, in both cases you are in a practical sense doubling your NOK exposure as your home currency is NOK as well. This may be riskier than many people would care to be with their retirement money. An adverse move would, at the same time you would lose money, make it much to buy foreign goods, which frankly is most goods in a small open country like Norway. The most simple solution would be to overweight local NOK stocks or if you believe stocks are overvalued as you mention NOK denominated bonds. With this you keep your NOK exposure (a currency you believe will appreciate) without doubling it as well as add expected returns above inflation from the stock growth/dividends or bond real interest rates. |
Comparing keeping old car vs. a new car lease | Look at the basic cost of the lease. Option 1: keep the car for three years. Pay for repairs during that time then sell it for $7,000. Option 2: Sell the current car for $10,000. Lease a new car for three years. Assume no need for repairs during those three years. At the end of the three years return the car in return for $0. Cost of option 1 is $3000 plus repairs. Cost of Option 2 is 36 months x monthly lease cost. The first $83 of the monthly lease cost is to cover the $3000 fixed cost of option 1. The rest of the monthly lease cost is to cover the cost of repairs. Also remember that some leases have a initial down payment due at signing, and penalties for condition, and excess mileage. The lease company may also require a higher level of insurance for the lease to cover their investment if you have an accident. Plus If you fall in love with a different car two year from now, or your needs change you are locked in until the end of the lease period. |
If stock price drops by the amount of dividend paid, what is the use of a dividend | Victor, Yes the drop in price does completely cancel the dividend at first. However, as others have noted, there are other forces working on the price as well. If dividends were pointless then the following scenario would be true: Let's assume, hypothetically, two identical stocks, only one of which pays a 2% annual dividend quarterly. At the end of the year we would expect the share price of the dividend stock to be 2% lower than the non-dividend stock. And an equal investment in both stocks would yield exactly the same amount of money. So that is a hypothetical, and here is real market example: I compared, i.e. took the ratio of Vanguard's S&P 500 ETF (VOO) closing price to the S&P 500 Index closing price from sep 9, (2010-2014), after accounting for the VOO 2013 split. The VOO pays a quarterly dividend(about 2%/year), the S&P is an index, hence no dividend. The VOO share price, reduced each quarter by the dividend, still grew more than the S&P each year except 2012 to 2013, but looking at the entire 4yr period the VOO share price grew 80.3987% while S&P grew 80.083% (1/3 of 1% more for VOO). VOO does drop about 1/2% relative to S&P on every ex date, but obviously it makes it up. There are other forces working on VOO. VOO is trade-able, therefore subject to supply/demand pressures, while the S&P 500 is not. So for the VOO ETF the data does not indicate pointless dividends but instead implies dividends are free money. StockCharts.com supports this. S&P500 for last 1244 days (9/8/2010) shows 90% growth http://stockcharts.com/freecharts/perf.php?%24SPX while VOO for last 1244 days shows 105% growth http://stockcharts.com/freecharts/perf.php?VOO |
Is buying and selling Bitcoin (and other cryptocurrency) legal for a student on F-1 Visa doing OPT in USA? | Given your clarification that you re only intending to use cryptocurrency as a capital asset & a long term investment vehicle, and not as a business day trading or trading for others, I would say this definitely is NOT illegal. The tax man says cryptocurrency is property. The IRS made this clear in Notice 2014-21. As long as you report it every time you do transfer it and an income loss/gain is triggered, I see nothing wrong here. |
How do I calculate what percentage of my portfolio is large-, mid- or small- cap? | All mutual funds disclose their investments, funds are large cap only or midcsp etc. So it depends on what funds you choose. |
What is a good rental yield? | The rule of thumb I have always heard and what we rent our rental house at is 1% per month at the minimum (in the US). The rent has to cover the mortgage, the property taxes, the homeowners insurance, your income taxes (on the rent), the maintenance of the property and the times when the property is vacant. Even at 1% per month that doesn't leave a whole lot of profit compared to what you put in. I have no idea why anybody would buy a rental property in Australia if all they could get is 5% per year before expenses. They couldn't possibly be making money in that investment, not to mention the aggravations of getting late night phone calls because something broke in the rental house. No way I would make that investment. |
Are distributions from an S corp taxable as long term capital gains? | If you have an S-Corp with several shareholders - you probably also have a tax adviser who suggested using S-Corp to begin with. You're probably best off asking that adviser about this issue. If you decided to use S-Corp for multiple shareholders without a professional guiding you, you should probably start looking for such a professional, or you may get yourself into trouble. That said, and reminding you that: 1. Free advice on the Internet is worth exactly what you paid for it, and 2. I'm not a tax professional or tax adviser, you should talk to a EA/CPA licensed in your state, here's this: Generally S-Corps are disregarded entities for tax purposes and their income flows to their shareholders individual tax returns through K-1 forms distributed by the S-Corp yearly. The shareholders don't have to actually withdraw the profits, but if not withdrawing - they're added to their cost bases in the shares. I'm guessing your corp doesn't distribute the net income, but keeps it on the corporate account, only distributing enough to cover the shareholders' taxes on their respective income portion. In this case - the amount not distributed is added to their basis, the amount distributed has already been taxed through K-1. If the corporation distributes more than the shareholder's portion of net income, then there can be several different choices, depending on the circumstances: The extra distribution will be treated as salary to the shareholder and a deduction to the corporation (i.e.: increasing the net income for the rest of the shareholders). The extra distribution will be treated as return of investment, reducing that shareholder's basis in the shares, but not affecting the other shareholders. If the basis is 0 then it is treated as income to the shareholder and taxed at ordinary rates. The extra distribution will be treated as "buy-back" - reducing that shareholder's ownership stake in the company and reallocating the "bought-back" portion among the rest of the shareholders. In this case it is treated as a sale of stock, and the gain is calculated as with any other stock sale, including short-term vs. long-term taxation (there's also Sec. 1244 that can come in handy here). The extra distribution will be treated as dividend. This is very rare for S-Corp, but can happen if it was a C-Corp before. In that case it will be taxed as dividends. Note that options #2, #3 and #4 subject the shareholder to the NIIT, while option #1 subjects the shareholder to FICA/Self Employment tax (and subjects the company to payroll taxes). There might be other options. Your licensed tax adviser will go with you through all the facts and circumstances and will suggest the best way to proceed. |
Income tax on my online drop-shipping business (India) | I find that there are two violation of law , prima facie , if someone earns money by depositing in the online account and then not reporting it ( including in his total income for the year ) and not bringing in India. Income Tax Act violation 1. It is simply comcealment liable for penalty & prosecution under I.T.Act. 2. You should know that anyone who is resident of India as per income Tax Act and having taxable income ( gross total income exceeding exemption limit) will have to fill up the column in his/her income tax return whether Previously these column were not in the Income Tax Return. So , now anyone who is liable to file return of Income can be tried for false return if he has hiddne assets aborad. 2. FEMA violation RBI permits remittance under Liberalized Remittance Scheme. However this scheme can not be used for certain purpose . It is important to examine whether RBI prohibits use of remittance for any entity or business you have described. You can read following FAQ on RBI site Q. 30. What are the prohibited items under the Scheme? Ans. The remittance facility under the Scheme is not available for the following: i) Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000; ii) Remittance from India for margins or margin calls to overseas exchanges / overseas counter-party; iii) Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market; iv) Remittance for trading in foreign exchange abroad; v) Remittance by a resident individual for setting up a company abroad; vi) Remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan; vii) Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories”, from time to time; and viii) Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks. You will have to examine , if the remittance was NOT done for purpose not allowed by RBI under LRS . If you clear this , you can say there is no violation and your violation is restricted to I.T.Act only. |
Confused about employee stock options: How do I afford these? | nan |
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