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Why is short-selling considered more “advanced” than a simple buy? | The margin rules are also more complicated. A simple buy on a non-margin account will never run into margin rules and you can just wait out any dips if you have confidence the stock will recover. A "simple" short sell might get you a call from your broker that you have a margin call, and you can't wait it out without putting more money in. Personally I have trouble keeping the short sale margin rules straight in my head, at least compared to a long sale. I got in way over my head shorting AMZN once, and lost a lot of money because I thought it was overvalued at the time, but it just kept going up and I wanted it to go down. I've never gotten stuck like that on a long position. |
Pay for a cheap car or take out a loan? | You may not have a good choice until you start that job. $2,000 is awfully low for a car, so it could be very risky. But you may not be able to get a loan until you start the new job. I would talk to a bank or credit union to get an idea of how much, if anything, you could borrow at this time. If you have a letter offering you the job that might help to get a loan. There are dealers who will finance a very cheap used car for anybody, but that kind of deal is likely to be at a very high interest rate and should be avoided. You could wind up with a debt and no car. One other possibility is to have a co-signer, such as a parent or other relative. That could make getting a car loan easy. |
Retirement planning: Pension or personal saving/investing? | You can never depend ONLY on pension. You must get financial education and invest your money. I recommend you to read The Intelligent Investor by Benjamin Graham...it's the bible of Warren Buffet. Besides, you don't need to be a Billionaire for retiring and be happy. I recommend you to get education in ETFs. I quote The Intelligent Investor by Benjamin Graham p. 131. According to Ibboston Associates, the leading financial research firm, if you had invested $12,000 in the Standard & Poor's 500-stock index at the beginning of september 1929, 10 years later you would have had only $7,223 left. But if you had started with a paltry $100 and simply invested another $100 every single month, then by August 1939, your money would have grown to $15,571! That's the power of disciplined buying-even in the face of the Great Depression and the worst bear market of all time. You are still young to make even bolder investments. But seriously you can never depend ONLY on pension. You won't regret learning how to invest your money, it doesn't matter if it's in the stock market, real state market, whatever market... Knowing what to do with your money is priceless. I hope this helps. Happy profits! |
Are 'per trade' fees charged on every order or just once per stock? | In my experience they charge you coming and going. For example, if a brokerage firm is advertising that their commissions are only $7/trade, then that means you pay money to buy the stock, plus $7 to them, and later on if you want to sell that stock you must pay $7 to get out of the deal. So, if you want to make any money on a stock (say, priced at $10) you would have to sell it at a price above $10+$7+$7=$24. That kind of sale could take a few years to turn a profit. However, with flat-rate fees like that it is advantageous to buy in bulk. |
why do I need an emergency fund if I already have investments? | Let me first start by defining an emergency fund. This is money which is: Because emergency's usually need to be deal with ASAP, boiler breaks, gears box in a car. Generally you need these to be solved as soon as possible, because ou depend on these things working and you can't budget for this type of expenditure using just your monthly salary. This is a personal opinion but I prefer investment types that don't have another fee on access. I really don't like having another fee on top on money that I need right now. Investment Options: Market based investments should be seen as long term investments, therefore they do not really satisfy requirement one, they can also have broker fees, therefore you might pay a small extra charge for taking money out, and so do not satisfy requirement two. Investment Options for Emergency Funds You want to get the best return on your money even if it's your emergency fund. So use regular saving accounts, but from you emergency fund or use tax effective savings accounts, like a cash ISA if based in the UK. Don't think of an emergency money as just sitting there, you have options just makes sure the options fit the requirements. UPDATE Given feedback I appreciate there are levels of emergency fund, the above details things which might be about 1-2 month salary in cost, car repairs, leaks, boiler repairs. Now I have another fund which is in P2P funds which is higher risk than a deposit account but then gives me a better return and is less subject to market fluctuations and it would be the place I go to for loss of job level emergencies say 6 months of salary, this takes a bit longer to access but given I have the above emergency fund I have given myself time to get the money from the P2P account. |
Taxing GoFundMe Donations | I'm going to post this as an answer because it's from the GoFundMe website, but ultimately even they say to speak with a tax professional about it. Am I responsible for taxes? (US Only) While this is by no means a guarantee, donations on GoFundMe are simply considered to be "personal gifts" which are not, for the most part, taxed as income in the US. However, there may be particular, case-specific instances where the income is taxable (dependent on amounts received and use of the monies, etc.). We're unable to provide specific tax advice since everyone's situation is different and tax rules can change on a yearly basis. We advise that you maintain adequate records of donations received, and consult with your personal tax adviser. Additionally, WePay will not report the funds you collect as earned income. It is up to you (and a tax professional) to determine whether your proceeds represent taxable income. The person who's listed on the WePay account and ultimately receives the funds may be responsible for taxes. Again, every situation is different, so please consult with a tax professional in your area. https://support.gofundme.com/hc/en-us/articles/204295498-Am-I-responsible-for-taxes-US-Only- And here's a blurb from LibertyTax.com which adds to the confusion, but enforces the "speak with a professional" idea: Crowdfunding services have to report to the IRS campaigns that total at least $20,000 and 200 transactions. Money collected from crowdfunding is considered either income or a gift. This is where things get a little tricky. If money donated is not a gift or investment, it is considered taxable income. Even a gift could be subject to the gift tax, but that tax applies only to the gift giver. Non-Taxable Gifts These are donations made without the expectation of getting something in return. Think of all those Patriots’ fans who gave money to GoFundMe to help defray the cost of quarterback Tom Brady’s NFL fine for Deflategate. Those fans aren’t expecting anything in return – except maybe some satisfaction -- so their donations are considered gifts. Under IRS rules, an individual can give another individual a gift of up to $14,000 without tax implications. So, unless a Brady fan is particularly generous, his or her GoFundMe gift won’t be taxed. Taxable Income Now consider that same Brady fan donating $300 to a Patriots’ business venture. If the fan receives stock or equity in the company in return for the donation, this is considered an investment and is not taxable . However, if the business owner does not offer stock or equity in the company, the money donated could be considered business income and the recipient would need to report it on a tax return. https://www.libertytax.com/tax-lounge/two-tax-rules-to-know-before-you-try-kickstarter-or-gofundme/ |
gift is taxable but is “loan” or “debt” taxable? | If you are looking to transfer money to another person in the US, you can do do with no tax consequence. The current annual gift limit is $14k per year per person, so for example, my wife and I can gift $56k to another couple with no tax and no forms. For larger amounts, there is a lifetime exclusion that taps into your $5M+ estate tax. It requires submitting a form 709, but just paperwork, no tax would be due. This is the simplest way to gift a large sum and not have any convoluted tracking or structured loan with annual forgiveness. One form and done. (If the sum is well over $5M you should consider a professional to guide you, not a Q&A board) |
How to take advantage of home appreciation | There are basically two ways to get value out of an appreciating asset such as a home: (a) Sell it and take the profit. In the case of a home, you presumably still have to live somewhere, so unless you buy a cheaper home to replace it, this doesn't get you anywhere. If you can get another house that is just as nice and in just as nice a location -- whatever you consider "nice" to be -- than this sounds like a winning option. If it means moving to a less desirable home, then you are getting the cash but losing the nice home. You'll have to decide if it's worth it. (b) Use it as collateral for a loan. In this case, that means a second mortgage, home equity loan, or a home equity line of credit. But this can be dangerous. House prices are very volatile these days. If the value of the house falls, you could be stuck with debts greater than your assets. In my humble opinion, you should be very careful about doing this. Borrowing against your house to send the kids to college or pay for your spouse's life-saving operation may be reasonable. Borrowing against your house to go on a fancy vacation is almost surely a bad idea. The vacation will be over within a couple of weeks, but you could be paying off the debt for decades. |
Income Tax form in India for freelancing | ITR1 or ITR2 needs to be filed. Declare the income through freelancing in the section "income from other sources" |
How much money do I need to have saved up for retirement? | Invest in kids, not pension - they never inflate. Without kids your retirement will be miserable anyway. And with them you'll be good. Personally, I do not believe that that our current savings will be worth it in 30 years in these times. |
Are leverage/ko products the only reasonable way to trade stocks? | There's no free lunch. Here are some positions that should be economically equivalent (same risk and reward) in a theoretically-pure universe with no regulations or transaction costs: You're proposing to buy the call. If you look at the equivalent, stock plus protective put, you can quickly see the "catch"; the protective put is expensive. That same expense is embedded in the call option. See put-call parity on Wikipedia for more: http://en.wikipedia.org/wiki/Put%E2%80%93call_parity You could easily pay 10% a year or more for the protection, which could easily eat up most of your returns, if you consider that average returns on a stock index might be about 10% (nominal, not real). Another way to look at it is that buying the long call and selling a put, which is a synthetic long position in the stock, would give you the put premium. So by not selling the put, you should be worse off than owning the stock - worse than the synthetic long - by about the value of the put premium. Or yet another way to look at it is that you're repeatedly paying time value on the long call option as you roll it. In practical world instead of theory world, I think you'd probably get a noticeable hit to returns just from bid-ask and commissions, even without the cost of the protection. Options cost more. Digressing a bit, some practical complications of equivalency between different combinations of options and underlying are: Anyway, roughly speaking, any position without the "downside risk" is going to have an annual loss built in due to the cost of the protection. Occasionally the options market can do something weird due to supply/demand or liquidity issues but mostly the parity relationships hold, or hold closely enough that you can't profit once expenses are considered. Update: one note, I'm talking about "vanilla" options as traded in the US here, I guess there are some somewhat different products elsewhere; I'm not sure exactly which derivatives you mean. All derivatives have a cost though or nobody would take the other side of the trade. |
Is there any drawback in putting all my 401K into a money market fund? | Yes. There are huge disadvantages to saving money in a money market account. Money market account can be a good place to save some of your emergency fund, because it's basically a cash account and you can withdraw from it at will, with few delays. It's liquid. |
Buying a house. I have the cash for the whole thing. Should I still get a mortgage to get the homeowner tax break? | Except for unusual tax situations your effective interest rate after taking into account the tax deduction will still be positive. It is simply reduced by your marginal rate. Therefore you will end up paying more if the house is financed than if it is bought straight out. Note this does not take into account other factors such as maintaining liquidity or the potential for earning a greater rate of return by investing the money that would otherwise be used to pay for the house |
How to rescue my money from negative interest? | Withdraw your savings as cash and stuff them into your mattress? Less flippantly, would the fees for a safe deposit box at a bank big enough to hold CHF 250'000 be less than the negative interest rate that you'd be penalized with if you kept your money in a normal account? |
Why don't boards of directors try to produce results in line with estimates? | First off, some companies do something like this. Microsoft for example was well-known for consistently hitting earnings estimates every quarter - nearly never missed them, and most of the time didn't exceed by much either. In order to do this and not be prosecuted for accounting fraud, you typically have to be a service or nontangible good company (like Microsoft used to be) where you can manipulate the amount of product on hand and move costs fairly easily from one quarter to the next. A company like, say, Home Depot or Caterpillar - both of which have tangible goods they're either retailing or producing - has less flexibility there, although they will still try to move profits around to match earnings estimates more closely. However, you have to be consistently doing well to be able to do this. You can't manufacture additional total revenue; so if you have one 'down' quarter, you have to either have moved some revenue into it from the previous quarter, or you have to be able to move some into it from the next quarter. That obviously doesn't work consistently unless you're a fast-growing company, or have an extremely stable base. It's also hard to do this in a legal-seeming fashion - technically this sort of manipulation is illegal, so decisions have to be justifiable. Companies (like Microsoft) that are expanding can also do things to encourage slightly lower expectations. A company in need of a stock price bump issues press releases touting its inventions and products as amazing things that will drive profits through the roof and an aggressive profit forecast - just as easy to issue a press release with a conservative forecast, meaning the bar will be lower to hit. It's also not really necessary to manipulate earnings to have a consistently well-performing stock. This article for example shows that companies who miss earnings estimates don't really suffer much (when controlling for their actual earnings changes, of course) in the long run. Your price might drop a bit, but if your company is otherwise sound, it will recover. Finally, companies do sometimes come out with information ahead of earnings that cause expectations to be lowered. 7-Eleven for example just lowered its earnings expectations due to various reasons. Some companies choose to do this in order to dilute the effect on the market. I'm not sure if this is ever required, but it seems to me that some companies are much quicker to restate earnings expectations than others. |
Can you help me find an ETF Selection website that evaluates my ETF holdings? | I used to use etfconnect before they went paid and started concentrating on closed end funds. These days my source of information is spread out. The primary source about the instrument (ETF) itself is etfdb, backed by information from Morningstar and Yahoo Finance. For comparison charts Google Finance can't be beat. For actual solid details about a specific ETF, would check read the prospectus from the managing firm itself. One other comment, never trust a site that "tells you" which securities to buy. The idea is that you need sources of solid information about financial instruments to make a decision, not a site that makes the decision for you. This is due to the fact that everyone has different strategies and goals for their money and a single site saying buy X sell Y will probably lead you to lose your money. |
Why do some people go through contortions to avoid paying taxes, yet spend money on expensive financial advice, high-interest loans, etc? | One is a choice the other is not. While they are both liabilities on the balance sheet, in the real world they are quite different. We do not feel as much ownership over our money that goes to interest payments as we do over our tax payments. Taxes pay for our government and the services it provides. Interest, on the other hand, is what we pay in order to have a bank loan us money. Similar to paying for a good or service obtained from some other business, we do not feel we have a say in what the bank does with that money. If we disapprove of a business' practices, we stop doing business with them; assuming there are other choices. We can not practically avoid dealing with our government. We certainly feel that we should have a say in what is done with our tax money. I doubt there is anyone in the world that completely approves of their government's spending. It is very easy to feel marginalized with regard to our tax payments. For example, some people feel resentment because their taxes fund the welfare rolls. All that said, I believe there is little overlap between the two groups. It seems to me that you are referring to those with large amounts of high interest (e.g. credit card) debt. I doubt that a large percentage of them are scouring the tax laws, looking for deductions and loopholes. If they had that mindset, they would also be working hard to get out of the hole they are in. In summary, we choose to pay a financial adviser, to take out a loan or to obtain a credit card. We do not choose to pay taxes. Since taxes are supposed to pay for our government and things which should benefit everyone, we want a say in what is done with it. This is also the case because it is forced on us. ("Fine son, I'll lend you some money, but I don't want you buying cigarettes with it.") Since our say is limited and we likely will not approve of everything our government does, we want to exert what control we do have: reduce our payments as best we can. |
Is it bad etiquette to use a credit or debit card to pay for single figure amounts at the POS | It's fine. Some people (including myself) charge any amount, no matter how small. I think charging small amounts is encouraged by no longer having to sign for small amounts (Not sure if this is state-by-state, though). Somewhere, the transfering of digital money is being paid for - either in the merchant fees, an ATM fee, or my time in going to a bank or ATM where I will not be charged a fee. |
If a stock doesn't pay dividends, then why is the stock worth anything? | The company gets it worth from how well it performs. For example if you buy company A for $50 a share and it beats its expected earnings, its price will raise and lets say after a year or two it can be worth around $70 or maybe more.This is where you can sell it and make more money than dividends. |
USA H1B Employee - Capital gains in India from selling selling stocks | the demat account that I have in India is not an NRI account. Since I was not sure how long I would be in the US, I never converted my account to NRI account. Is it required to convert my account to NRI account? Yes it is very much required by law. One should not buy or sell shares in the Resident account. One has to close and open a new account NRO Demat account and transfer the shares / units into it. Sell from this account. If you need to buy shares when one is NRI, an Demat PINS account is required to be opened. |
What is the best and most optimal way to use margin | This essentially depends on how you prefer to measure your performance. I will just give a few simple examples to start. Let me know if you're looking for something more. If you just want to achieve maximum $ return, then you should always use maximum margin, so long as your expected return (%) is higher than your cost to borrow. For example, suppose you can use margin to double your investment, and the cost to borrow is 7%. If you're investing in some security that expects to return 10%, then your annual return on an account opened with $100 is: (2 * $100 * 10% - $100 * 7%) / $100 = 13% So, you see the expected return, amount of leverage, and cost to borrow will all factor in to your return. Suppose you want to also account for the additional risk you're incurring. Then you could use the Sharpe Ratio. For example, suppose the same security has volatility of 20%, and the risk free rate is 5%. Then the Sharpe Ratio without leverage is: (10% - 5%) / 20% = 0.25 The Sharpe Ratio using maximum margin is then: (13% - 5%) / (2 * 20%) = 0.2, where the 13% comes from the above formula. So on a risk-adjusted basis, it's better not to utilize margin in this particular example. |
Why do new car loans, used car loans, and refinanced loans have different rates and terms? | According to AutoTrader, there are many different reasons, but here are three: New cars have a better resale value and it's easier to predict its resale value in case you default on the loan and they repossess the car. Lenders that are through auto makers can use different incentives for getting you to buy a new car. Used car financing is usually through other banks. People with higher credit scores tend to buy new cars, and therefore can get a lower rate because of their higher credit score. |
Why invest for the long-term rather than buy and sell for quick, big gains? | The stock market's principal justification is matching investors with investment opportunities. That's only reasonably feasible with long-term investments. High frequency traders are not interested in investments, they are interested in buying cheap and selling expensive. Holding reasonably robust shares for longer binds their capital which is one reason the faster-paced business of dealing with options is popular instead. So their main manner of operation is leeching off actually occuring investments by letting the investors pay more than the recipients of the investments receive. By now, the majority of stock market business is indirect and tries guessing where the money goes rather than where the business goes. For one thing, this leads to the stock market's evaluations being largely inflated over the actual underlying committed deals happening. And as the commitment to an investment becomes rare, the market becomes more volatile and instable: it's money running in circles. Fast trading is about running in front of where the money goes, anticipating the market. But if there is no actual market to anticipate, only people running before the imagination of other people running before money, the net payout converges to zero as the ratio of serious actual investments in tangible targets declines. By and large, high frequency trading converges to a Ponzi scheme, and you try being among the winners of such a scheme. But there are a whole lot of people competing here, and essentially the net payoff is close to zero due to the large volumes in circulation as opposed to what ends up in actual tangible investments. It's a completely different game with different rules riding on the original idea of a stock market. So you have to figure out what your money should be doing according to your plans. |
How should I go about creating an estate plan? | Yes, an estate plan can be very important. Estate planning - typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses. Guardians are often designated for minor children and beneficiaries in incapacity. In general, your "estate" includes all of your assets, less all debt, plus death benefits from all life insurance policies not held in an irrevocable trust. The biggest reason to have an estate plan is to make sure that your personal values about both medical and personal finance financial matters are honored in the event that death or incapacity prevents you from acting for yourself. In addition, tax minimization is a further and very important goal of estate planning for persons with taxable estates. To create an estate plan for yourself or update an existing plan, you will most likely need the services of an estate planning attorney. When you consult with an estate planning attorney, the attorney considers how you want assets distributed to heirs, what taxes might your estate be liable for and whether there are tax-minimization strategies that would be appropriate and appealing; what your preferences and values are with respect to the management of medical and financial affairs in the event of incapacity; and any complicating family issues. To deal with these issues, your attorney will need full and accurate information about you, including: When an estate plan is created, be sure you understand what the attorney is saying. Estate planning ideas can be confusing. It is also appropriate and expected for you to ask about the attorney's fee for any legal service. Some articles and resources: Get ahead of your estate planning Estate Planning by CBA |
why do I need an emergency fund if I already have investments? | I treat the concept of emergency funds as a series of financial buffers. One layer is that I have various credit cards with a small positive balance, that I can max out in an emergency should I go broke and not be in employment (those have saved me once or twice) My final level of emergency funds, is kept at home in the form of cash, I've never needed it, but it protects against getting locked out of the financial system (I lose my debit cards, banking system freezes all withdrawals, zombie invasion). It also doubles as my destitution fund, as if all else fails I still have raw cash to buy food and thus I won't starve (at least for a few months). |
Tax benefits of recycling | If a business incurs expenses in the process of its trading, generally those expenses are deductible. Disposing of waste is generally held to be a deductible expense. |
What actions should I be taking to establish good credit scores for my children? | When I was in high school, my mom got me a joint credit account with both of our names on it for exactly this reason. Well, that, and to have in case I found myself in some sort emergency, but it was mostly to build credit history. That account is still on my credit report (it's my oldest by a few years), and looking at the age of it, I was 17 at the time we opened it (and I think my younger sister got one around the same time). In my case, I now have an "excellent" credit score and my weakest area is the age of my accounts, so having that old account definitely helps me. I don't think I've really taken advantage of it, and I'm not sure if I'd really be worse off if my mom hadn't done that, but it certainly hasn't hurt. And I plan on buying a house in the next year or so, so having anything to bump up the credit score seems like a good thing. |
Is there a reason to buy a 0% yield bond? | 0% bonds are desirable for some individuals. It depends on your situation. 0% bonds are usually sold well below par value (eg a 100$ face value bond for 2020 might sell for 90$ today) Hence, your gains will be CAPITAL GAINS. A similar investment paying interest would be taxed as INCOME, and smaller portion of capital gains. In many countries (US, Canada) Capital gains are taxed at a more favourable rate then income. This is especially true when holding these investments in corporations. |
Does Apple have $0 of treasury stock? | Treasury stock is not really represented in the Balance Sheet as a "Treasury stock" line item in the assets. Some companies will break out Treasury Shares as a line item in the "Shareholders Equity" heading of the balance sheet but Apple hides it in the "Shares Issued and Outstanding" counts under the "Shareholders Equity" heading. As of the most recent Q2 2017 quarterly report There are 5,205,815,000 shares issued against 5,336,166,000 shares outstanding. This indicates that Apple is retaining about 130,351,000 shares in treasury. On the Q1 10-Q you can see that Apple had 5,255,423,000 shares issued which indicates roughly 49mm shares were repurchased by the end of Q2. You can roughly verify this by looking at page 18 of the Q2 filing in the summary of the share repurchase program. Repurchased as part of an Accelerated Share Repurchase arrangement bleeds between quarters but from February 2017 through May 2017 there have been 17.5mm shares repurchased. 31mm shares were also repurchased on the open market in Q2. The "shares issued" total is on a downward trend as part of Apple's share repurchase initiative that has been underway for the last couple of years. |
Is it mandatory to report Capital Loss on line 21 of Schedule D? | You are not allowed to pick and choose what years to take a loss once the stock/fund is sold. While I realize it might be too late for you to do anything now, in the future if members should read this, they might consider doing a Roth conversion during that year they will have $3000 in losses. This way they will show some income that can be offset by that loss, effectively getting a free conversion to the Roth. |
Get free option quotes | In addition, since you asked for Montreal, you can get the quotes directly. http://www.m-x.ca/nego_cotes_en.php |
What forms of payment am I compelled to accept? | I just listened to a podcast on this topic this week, and Satanicpuppy is pretty much correct. If you are interested, here is a link to the podcast on Legal Lad: Can Businesses Refuse to Accept Cash? |
Should I get cash from credit card at 0% for 8 months and put it on loans? | If there is any fee at all on the cash advance, and zero interest on the student loans (for now), it's not worth it mathematically. And for only 8 months of "free" money, it's rare for it to be worth it overall. You need to save a significant amount either by having a good net interest rate (e.g., saving 20% on another card and not paying any interest on the new loan) or by saving a lot on principal (e.g., paying off $100k now and not paying the interest on that for the next 8 months). I wouldn't worry about it hurting your credit score unless your credit is going to be evaluated during the time you're maxing your card. Part of your score (20-30% IIRC) is your credit utilization ratio, which is how much you have available vs. how much you're using. It's separate from the part that accounts for history, so it's only relevant at the time you're looked up. |
Is there a standard or best practice way to handle money from an expiring UTMA account? | I'd first put it in CDs or other short term account. Get through school first, then see where you land. If you have income that allows you to start a Roth IRA, I'd go for that, but keep it safe in case you actually need it back soon. After school, if you don't land a decent job fast, this money might be needed to live on. How long will it last if you take a few months to find work? If you do find a good job, moving, and setting up an apartment has a cost. Once you're there, I'd refer you to the many "getting started" Q&As on this site. |
Everyone got a raise to them same amount, lost my higher pay than the newer employees | Why do you think you are entitled to "fairness"? In this world you get what you get. I am pretty sure your employer is not paying you for how you "feel" either. And by-the-way turning up on time and not leaving early is not exceptional behaviour; it is expected behaviour. Bottom line: do you add more value to your employer's business then the new hires? If so, ask for a raise, if not find a way to add more value and then ask for a raise or keep doing what you're doing and accept what you get. |
Do stock prices drop due to dividends? | Yes, the stock price drops on the ex-dividend date by roughly the amount of the dividend. There is even academic research testing this and confirming that the popular rule of thumb works well. |
Why did the stock chart for Facebook's first trading day show an initial price of $42 when the IPO price was $38? | I'd add, this is actually the way any stock opens every day, i.e. the closing price of the prior day is what it is, but the opening price will reflect whatever news there was prior to the day's open. If you watch the business news, you'll often see that some stock has an order imbalance and has not opened yet, at the normal time. So, as Geo stated, those who were sold shares at the IPO price paid $38, but then the stock could open at whatever price was the point where bid and ask balanced. I snapped a screen capture of this chart on the first day of trading, the daily charts aren't archived where I can find them. This is from Yahoo Finance. You can see the $42 open from those who simply wanted in but couldn't wait, the willingness of sellers to grab their profit right back to what they paid, and then another wave of buying, but then a sell-off. It closed virtually unchanged from the IPO price. |
Optimal term/number of months for car finance or lease? | If you have the money to pay cash for the car. Then 0 months will save you the most money. There are of course several caveats. The money for the car has to be in a relatively liquid form. Selling stocks which would trigger taxes may make the pay cash option non-optimal. Paying cash for the car shouldn't leave you car rich but cash poor. Taking all your savings to pay cash would not be a good idea. Note: paying cash doesn't involve taking a wheelbarrow full of bills to the dealer; You can use a a check. If cash is not an option then the longest time period balanced by the rates available is best. If the bank says x percent for 12-23 months, y percent for 24-47 months, Z percent for 48 to... It may be best to take the 47 month loan, because it keeps the middle rate for a long time. You want to lock in the lowest rate you can, for the longest period they allow. The longer period keeps the required minimum monthly payment as low as possible. The lower rate saves you on interest. Remember you generally can pay the loan off sooner by making extra or larger payments. Leasing. Never lease unless you are writing off the monthly lease payment as a business expense. If the choice is monthly lease payments or depreciation for tax purposes the lease can make the most sense. If business taxes aren't involved then leasing only means that you have a complex deal where you finance the most expensive part of the ownership period, you have to watch the mileage for several years, and you may have to pay a large amount at the end of the period for damages and excess miles. Plus many times you don't end up with the car at the end of the lease. In the United States one way to get a good deal if you have to get a loan: take the rebate from the dealer; and the loan from a bank/credit Union. The interest rate at banking institution is a better range of rates and length. Plus you get the dealer cash. Many times the dealer will only give you the 0% interest rate if you pay in 12 months and skip the rebate; where the interest paid to the bank will be less than the rebate. |
Why should a company go public? | The purpose is to go public but also to generate more wealth. The real money comes when market values you at a price more than your cash flow. If a company brings in $1000 of cash flow, then that is what the employees and owners have to distribute among themselves. But if they are likely to increase to $2000 next and $4000 next year and they go public then the stock will do well. In this case, the promoters and employees with options/RSUs will benefit as well. The increased visibility is also very useful. Look at Google or FB. They didn't need the IPO proceed when they went public. They had enough cash from their business but then they would only have $1-10 billion a year. But due to the IPO their investors and employees have a huge net worth. Basically, with just a small % of shares in the public you can value the company at a high price valuing in the future cash flows (with a discount rate etc.). So instead of realizing the profit over the next 15 years, you get to enjoy it right away. |
Bonds vs equities: crash theory | Cash would be the better alternative assuming both stocks take a major hit in ALL categories AND the Fed raise rates at the same time for some reason. Money market funds that may have relatively low yields at the moment would likely be one of the few securities not to be repriced downward as interest rates rising would decrease bond values which could be another crash as I could somewhat question how broad of a crash are you talking here. There are more than a few different market segments so that while some parts may get hit really hard in a crash, would you really want to claim everything goes down? Blackrock's graphic shows in 2008 how bonds did the best and only it and cash had positive returns in that year but there is something to be said for how big is a crash: 20%, 50%, 90%? |
What assets would be valuable in a post-apocalyptic scenario? | A book on the power of persuasion. The people will need you to lead them to the glory land like the Deacon* from Waterworld *Dennis Hopper. Study up. |
What is a normal amount of money to spend per week on food/entertainment/clothing? | I'll start with a question... Is the 63K before or after taxes? The short answer to your question on how much is reasonable is: "It depends." It depends on a lot more than where you live, it depends on what you want... do you want to pay down debt? Do you want to save? Are you trying to buy a house? Those will influence how much you "can" (should let yourselves) spend. It also depends on your actual salary... just because I spend 5% of my salary on something doesn't mean bonkers to you if you're making 63,000 and I'm only making 10,000. I also have a lot of respect for you trying to take this on. It's never easy. But I would also recommend you start by trying to see what you can do to track how much you are actually spending. That can be hard, especially if you mostly use cash. Once you're tracking what you spend, I still think you're coming at this a bit backwards though... rather than ask 'how much is reasonable' to spend on those other expenses, you basically need to rule out the bigger items first. This means things like taxes, your housing, food, transportation, and kid-related expenses. (I've got 2.5 kids of my own.) I would guess that you're listing your pre-tax salaries on here... so start first with whatever it costs you to pay taxes. I'm a US citizen living in Berlin, haven't filed UK taxes, but uktaxcalculators.co.uk says that on 63,000 a year with 3 deductions your net earnings will actually be 43,500. That's 3,625/month. Then what does it cost you each month for rent/utilities/etc. to put a house over your family's head? The rule of thumb they taught in my home-economics class was 35-40%, but that's not for Europe... you'll know what it costs. Let's say its 1,450 a month (40%) for rent and utilities and maybe insurance. That leaves 2,175. The next necessity after housing is food. My current food budget is about 5-6% of my after-tax salary. But that may not compare... the cost to feed a family of 3 is a fairly fixed number, and our salaries aren't the same. As I said, I am a US expat living in Berlin, so I looked at this cost of living calculator, and it looks like groceries are about 7-10% higher there around Cardiff than here in Germany. Still, I spend about 120 € per week on food. That has a fair margin in it for splurging on ice cream and a couple brewskies. It feeds me (I'm almost 2m and about 100 kilos) and my family of four. Let's say you spend 100£ a week on groceries. For budgeting, that's 433£ a month. (52 weeks / 12 months == 4.333 weeks/month) But let's call it 500£. That leaves 1,675. From here, you'll have to figure out the details of where your own money is going--that's why I said you should really start tracking your expenses somehow... even just for a short time. But for the purposes of completing the answers to your questions, the next step is to look at saving before you try spending anything else. A nice target is to aim for 10% of your after-tax pay going into a savings account... this is apart from any other investments. Let's say you do that, you'll be putting away 363£ per month. That leaves 1,300£. As far as other expenses... you need some money for transport. You haven't mentioned car(s) but let's say you're spending another 500£ there. That would be about enough to cover one with the petrol you need to get around town. That leaves 800£ As far as a clothing budget and entertainment, I usually match my grocery budget with what I call "mad money". That's basically money that goes towards other stuff that I would love to categorize, but that my wife gets annoyed with my efforts to drill into on a regular basis. That's another 500£, which leaves 300£. You mentioned debts... assuming that's a credit card at around 20% interest, you probably pay 133£ a month just in interest... (20% = 0.20 / 12 = 0.01667 x 8,000 = 133) plus some nominal payment towards principal. So let's call it 175£. That leaves you with 125£ of wiggle room, assuming I have even caught all of your expenses. And depending on how they're timed, you are probably feeling a serious squeeze in between paychecks. I recognize that you're asking specific questions, but I think that just based on the questions you need a bit more careful backing into the budget. And you REALLY need to track what you're spending for the time being, until you can say... right, we usually spend about this much on X... how can we cut it out? From there the basics of getting your financial house in order are splattered across the interwebs. Make a budget... stick to it... pay down debts... save. Develop goals and mini incentives/rewards as a way to make sure your change your psyche about following a budget. |
Are there disadvantages to day trading ETFs? | ETFs are well suited to day trading, but you should be mindful of the bid-ask spread. See article: Commission-free ETFs are a great way to save money, but watch the bid-ask spread too. Bid-ask spread is largely a function of liquidity, or the volume of buyers and sellers for an asset during a particular moment in time. ... It may be more difficult to trade certain assets that are less liquid, where bid-ask spreads can be higher. Think some penny stocks. If you have the choice, compare the spreads of the ETF and the target stock. Longer-term "keep & hold" trading on ETFs tracking futures can be somewhat disadvantageous. Futures contracts roll-over every month. Exchange traders have to sell and buy in on the next contract. ETFs don't reflect the price differential between the futures contract. See here for more detail on that: Positioning For An Oil ETF Rebound? Watch For Contango Contango occurs when the price on a futures contract is higher than the expected future spot price, which creates the upward sloping curve on future commodity prices over time. Essentially, the phenomenon reflects a current spot price that is lower than the futures price. ... While this phenomena is a normal occurrence in the futures market, contango can have a negative effect on ETFs. |
Is it possible to borrow money to invest in a foreign country? | Yes it is possible. It would depend on Banks policies whether they would lend. Quite a few large corporations borrow money in one country for business needs in other country |
Unemployment Insurance Through Options | That's not unemployment insurance. Because it's perfectly possible, and even likely, that your industry will do badly but you'll keep your job, or that your industry will do well but you'll lose your job anyway. Any bet you make to insure yourself against unemployment has to be individually about you -- there are no suitable proxies. |
Can't the account information on my checks be easily used for fraud? | That's accurate. Here is another risk with the current checking system, which many people are not aware of: Anyone who knows your checking account number can learn what your balance in that account is. (This is bank-specific, but it is possible at the major banks I've checked.) How does that work? Many banks have a phone line where you can dial up and interact with an automated voice response system, for various customer service tasks. One of the options is something like "merchant check verification". That option is intended to help a merchant who receives a check to verify whether the person writing the check has enough money in their account for the check to clear. If you select that option in the phone tree, it will prompt you to enter in the account number on the check and the amount of the check, and then it will respond by telling you either "there are currently sufficient funds in the account to cash this check" or "there are not sufficient funds; this check would bounce". Here's how you can abuse this system to learn how much someone has in their bank account, if you know their account number. You call up and check whether they've enough money to cash a $10,000 check (note that you don't actually have to have a check for $10,000 in your hands; you just need to know the account number). If the system says "nope, it'd bounce", then you call again and try $5,000. If the system says "yup, sufficient funds for a $5,000 check", then you try $7,500. If it says "nope, not enough for that", you try $6,250. Etcetera. At each step, you narrow the range of possible account balances by a factor of two. Consequently, after about a dozen or so steps, you will likely know their balance to within a few dollars. (Computer scientists know this procedure by the name "binary search". The rest of us may recognize it as akin to a game of "20 questions".) If this bothers you, you may be able to protect your self by calling up your bank and asking them how to prevent it. When I talked to my bank (Bank of America), they told me they could put a fraud alert flag on your account, which would disable the merchant check verification service for my account. It does mean that I have to provide a 3-digit PIN any time I phone up my bank, but that's fine with me. I realize many folks may terribly not be concerned about revealing their bank account balance, so in the grand scheme of things, this risk may be relatively minor. However, I thought I'd document it here for others to be aware of. |
What's the point of a benchmark? | One reason it matters whether or not you're beating the S&P 500 (or the Wilshire 5000, or whatever benchmark you choose to use) is to determine whether or not you'd be better off investing in an index fund (or some other investment vehicle) instead of pursuing whatever your current investment strategy happens to be. Even if your investment strategy makes money, earning what the S&P 500 has averaged over multiple decades (around 10%) with an index fund means a lot more money than a 5% return with an actively managed portfolio (especially when you consider factors like compound interest and inflation). I use the S&P 500 as one of my criteria for judging how well (or poorly) my financial adviser is doing for me. If his recommendations (or trading activity on my behalf, if authorized) are inferior to the S&P 500, for too long, then I have a basis to discontinue the relationship. Check out this Wikipedia entry on stock market indices. There are legitimate criticisms, but on the whole I think they are useful. As an aside, the reason I point to index funds specifically is that they are the one of the lowest-cost, fire-and-forget investment strategies around. If you compare the return of the S&P 500 index over multiple decades with most actively managed mutual funds, the S&P 500 index comes out ahead. |
California resident, Delaware C-Corp - Taxes for 1-person software freelancer? | Supposedly this also means that I am free from having to pay California corporate taxes? Not in the slightest. Since you (the corporate employee) reside in CA - the corporation is doing business in CA and is liable for CA taxes. Or, does this mean I am required to pay both CA taxes and Delaware fees? (In this case, minimal, just a paid agent from incorporate.com) I believe DE actually does have corporate taxes, check it out. But the bottom line is yes, you're liable for both CA and DE costs of doing corporate business (income taxes, registered agents, CA corp fee, etc). Is there any benefit at all for me to be a Delaware C-Corp or should I dissolve and start over. Or just re-incorporate as California LLC Unless you intend to go public anytime soon or raise money from VCs/investors - there's no benefit whatsoever in incorporating in DE. You should seek a legal advice with an attorney, of course, since benefits are legal issues (usually related to choosing jurisdiction for litigation etc). If you're a one-person freelancer, doing C-Corp was not the best decision as well. Tax-wise you'd be much better off with a S-Corp, or a LLC - both pass-through and have no (Federal) entity-level taxes. Corporate rates are generally higher than individual rates, and less deductions can be taken. In California, check with a CPA/EA licensed in the State, since both S-Corp and LLC would be taxed, and taxed differently. |
Advantages/Disadvantages to refinancing online? | For what its worth, I recently closed on a 30 year refinance mortage with an agent I found through Zillow. The lender has a perfect 5/5 reputation score, whose office was located within 5 miles of my house, and as suggested by justkt on MrChrister's response, I checked out the business on the better business bureau and its online presence prior to going forward with the bank. The process was relatively painless, and the APR and closing costs were less than my previous loan with a federal credit union which I've used in the past. I can't say if the bank I'll be using going forward is as good as the one I've used in the past, but overall I'm quite happy with it. I never met the individual in person but this saved both of us a fair amount of time honestly. |
How can I withdraw money from my LLC? | Generally, unless you explicitly elect otherwise, LLCs are transparent when it comes to taxes. So the money in the LLC is your money for tax purposes, there's no need to pay yourself a salary. In fact, the concept of salary for LLC members doesn't exist at all. It is either distributions or guaranteed payments (and even that is mostly relevant to multi-member LLCs). The only concern is the separation of personal and LLC finances - avoiding commingling. Mixing your personal and business expenses by using the same accounts/cards for both business and personal spending may cause troubles when it comes to the liability protection in case of a lawsuit. I'd suggest discussing this with a FL-licensed attorney. Bottom line - technically the withdrawal is just writing yourself a check from the business account or moving money between your personal and business accounts. If you're a sole member - you need not more than that. Make sure the operating agreement explicitly empowers you to do that, of course. There are no tax consequences, but as I mentioned - there may be legal consequences. |
What does inflation mean to me? | Everyone buys different kinds of goods. For example I don't smoke tobacco so I'm not affected by increased tobacco prices. I also don't have a car so I'm not affected by the reduced oil prices either. But my landlord increased the monthly fee of the apartment so my cost of living per month suddenly increased more than 10% relative to the same month a year before. This is well known, also by the statistical offices. As you say, the niveau of the rent is not only time- but also location specific, so there are separate rent indices (German: Mietspiegel). But also for the general consumer price indices at least in my country (Germany) statistics are kept for different categories of things as well. So, the German Federal Statistical Office (Statistisches Bundesamt) not only publishes "the" consumer price index for the standard consumer basket, but also consumer price indices for oil, gas, rents, food, public transport, ... Nowadays, they even have a web site where you can put in your personal weighting for these topics and look at "your" inflation: https://www.destatis.de/DE/Service/InteraktiveAnwendungen/InflationsrechnerSVG.svg Maybe something similar is available for your country? |
Is it a good idea to rebalance without withdrawing money? | Yes, rebalancing with new money avoids capital gains taxes and loads (although if you're financially literate enough to be thinking about rebalancing techniques, I'm surprised to hear that you're invested in funds with loads). On the other hand, if it's taking you years to rebalance, then: (a) you are not rebalancing anywhere near frequently enough. Rebalancing should be something you do every 6 months or 1 year, such that it would take only a few weeks or maybe a month of new investment to get back in balance. (b) you will be out-of-balance for quite a long time, while the whole point of the theory of rebalancing is to always be mathematically prepared for swings in the market. Any time spent out of balance represents that much more risk that an unexpected market move can seriously hurt your portfolio. You should weigh the time it will take you to rebalance the long way (i.e. the risk cost of not rebalancing immediately) vs. the taxes and fees involved in rebalancing quickly. If you had said that it would take you only a couple weeks or a month to rebalance the long way, I would say that the long way is fine. But the prospect of spending years without a balanced portfolio seems far more costly to me than any expenses you might incur rebalancing quickly. Since it's almost the end of the calendar year, have you considered doing two quick rebalances, one this year, and another in January? That way half of the tax consequences would happen in April, and the other half not until the next April, giving you plenty of time to scrounge up the money. Also, even if you have no capital losses this year with which to offset some of your expected capital gains, you would have all of next year to harvest some losses against next year's half of the rebalancing gains. |
What's the most conservative split of financial assets for my portfolio in today's market? | You don't say your level of consumer debt. You don't say how much of an emergency fund you have. If you have debt, pay it off before you invest. If you don't have an emergency fund (X months' expenses, pick your own X) get that before investing. If you have neither, get a small emergency fund, and then throw as much as you can to getting rid of debt. Beyond that, look for prudent investments. They're not the same as conservative investments. To know what's prudent, learn about the ones you listed and what determines their prices. Learn how or why they go up or down in value. |
What to think of two at the money call options with different strike prices and premiums? | As other uses have pointed out, your example is unusual in that is does not include any time value or volatility value in the quoted premiums, the premiums you quote are only intrinsic values. For well in-the-money options, the intrinsic value will certainly be the vast majority of the premium, but not the sole component. Having said that, the answer would clearly be that the buyer should buy the $40 call at a premium of $10. The reason is that the buyer will pay less for the option and therefore risk less money, or buy more options for the same amount of money. Since the buyer is assuming that the price will rise, the return that will be realised will be the same in gross terms, but higher in relative terms for the buyer of the $40 call. For example, if the underlying price goes to $60, then the buyer of the $40 call would (potentially) double their money when the premium goes from $10 to $20, while the buyer of the $30 call would realise a (potential) 50% profit when the premium goes from $20 to $30. Considering the situation beyond your scenario, things are more difficult if the bet goes wrong. If the underlying prices expires at under $40, then the buyer of the $40 call will be better off in gross terms but may be worse off in relative terms (if it expires above $30). If the underlying price expires between $40 and $50, then the buy of the $30 will be better off in relative term, having lost a smaller percentage of their money. |
What does “Yield Curve” mean? | Yield is the term used to describe how much income the bond will generate if the bond was purchased at a particular moment in time. If I pay $100 for a one year, $100 par value bond that pays 5% interest then the bond yields 5% since I will receive $5 from a $100 investment if I held the bond to maturity. If I pay $90 for the same one year bond then the bond yields 17% since I will receive $15 from a $90 investment if I held the bond to maturity. There are many factors that affect what yield creditors will accept: It is the last bullet that ultimately determines yield. The other factors feed into the creditor’s desire to hold money today versus receiving money in the future. I desire money in my hand more than a promise to receive money in the future. In order to entice me to lend my money someone must offer me an incentive. Thus, they must offer me more money in the future in order for me to part with money I have. A yield curve is a snapshot of the yields for different loan durations. The x-axis is the amount of time left on the bond while the y-axis is the yield. The most cited yield curve is the US treasury curve which displays the yields for loans to the US government. The yield curve changes while bonds are being traded thus it is always a snapshot of a particular moment in time. Short term loans typically have less yield than longer term loans since there is less uncertainty about the near future. Yield curves will flatten or slightly invert when creditors desire to keep their money instead of loaning it out. This can occur because of a sudden disruption in the market that causes uncertainty about the future which leads to an increase in the demand for cash on hand. The US government yield curve should be looked at with some reservation however since there is a very large creditor to the US government that has the ability to loan the government an unlimited amount of funds. |
Closing a credit card with an annual fee without hurting credit score? | The two factors that will hurt you the most is the age of the credit account, and your available credit to debt ratio. Removing an older account takes that account out of the equation of calculating your overall credit score, which can hurt significantly, especially if that is the only, or one of just a couple, of open credit lines you have available. Reducing your available credit will make your current debt look bigger than what it was before you closed your account. Going over a certain percentage for your debt to available credit can make you look less favorable to lenders. [As stated above, closing a credit card does remove it from the credit utilization calculation which can raise your debt/credit ratio. It does not, however; affect the average age of credit cards. Even closed accounts stay on your credit report for ten years and are credited toward average age of cards. When the closed credit card falls off your report, only then, will the average age of credit cards be recalculated.] And may I suggest getting your free credit report from https://www.annualcreditreport.com . It's the only place considered 'official' to receive your free annual credit report as told by the FTC. Going to other 3rd party sites to pull your credit report can risk your information being traded or sold. EDIT: To answer your second point, there are numerous factors that banks and creditors will consider depending on the type of card you're applying for. The heavier the personal rewards (cash back, flyer miles, discounts, etc.) the bigger the stipulation. Some factors to consider are your income to debt ratio, income to available credit ratio, number of revolving lines of credit, debt to available credit ratio, available credit to debt ratio, and whether or not you have sufficient equity and/or assets to cover both your debt and available credit. They want to make sure that if you go crazy and max out all of your lines of credit, that you are capable of paying it all back in a sufficient amount of time. In other words, your volatility as a debt-consumer. |
Should I fund retirement with a static asset allocation or an age based glide path? | The thing about the glide path is that the closer you're to the retirement age, the less risk you should be taking with your investments. All investments carry risk, but if you invest in a volatile stock market at the age of 20 and lose all your retirement money - it will not have the same effect on your retirement as if you'd invest in a volatile stock market at the age of 65 and then lose all your retirement money. Static allocation throughout your life without changing the risk factor, will lead you to a very conservative investment path, which would mean you're not likely to lose your investments, but you're not likely to gain much either. The point of the glide path is to allow you taking more risks early with more chances of higher gains, but to limit your risks down the road, also limiting your potential gains. That is why it is always suggested to start your retirement funds early in your life, to make sure you have enough time to invest in potentially high return stocks (with high risk), but when you get close to your retirement age, it is advised to do exactly the opposite. The date-targeted funds do that for you, but you can do it on your own as well. As to the academic research - you don't need to go that far. Just look at the graphs to see that over long period investments in stocks give much better return than "conservative" bonds and treasuries (especially when averaging the investments, as it usually is with the retirement funds), but over a given short period, investments in stocks are much more likely to significantly lose in value. |
Expecting to move in five years; how to lock mortgage rates? | Outside of broadly hedging interest rate risk as I mentioned in my other answer, there may be a way that you could do what you are asking more directly: You may be able to commit to purchasing a house/condo in a pre-construction phase, where your bank may be willing to lock in a mortgage for you at today's rates. The mortgage wouldn't actually be required until you take ownership from the builder, but the rates would be set in advance. Some caveats for this approach: (1) You would need to know the house/condo you want to move into in advance, and you would be committing to that move today. (2) The bank may not be willing to commit to rates that far in advance. (3) Construction would likely take far less than 5 years, unless you are buying a condo (which is the reason I mention condos specifically). (4) You are also committing to the price you are paying for your property. This hedges you somewhat against price fluctuation in your future area, but because you currently own property, you are already somewhat hedged against property price fluctuation, meaning this is taking on additional risk. The 'savings' associated with this plan as they relate to your original question (which are really just hedging against interest rate fluctuations) are far outweighed by the external pros and cons associated with buying property in advance like this. By that I mean - if it was something else you were already considering, this might be a (small) tick in the "Pro" column, but otherwise is far too committal / complex to be considered for interest rate hedging on its own. |
Car dealer saying that they cannot see any credit information for my co-applicant. Could this be a scam? | You say Also I have been the only one with an income in our household for last 15 years, so for most of our marriage any debts have been in my name. She has a credit card (opened in 1999) that she has not used for years and she is also a secondary card holder on an American Express card and a MasterCard that are both in my name (she has not used the cards as we try to keep them only for emergencies). This would seem to indicate that the dealer is correct. Your wife has no credit history. You say that you paid off her student loans some years back. If "some years" was more than seven, then they have dropped off her credit report. If that's the most recent credit activity, then she effectively has none. Even if you get past that, note that she also doesn't have any income, which makes her a lousy co-signer. There's no real circumstance where you couldn't pay for the car but she could based on the historical data. She would have to get a job first. Since they had no information on her whatsoever, they probably didn't even get to that. |
total of all dividend payments for a particular company | No - there are additional factors involved. Note that the shares on issue of a company can change for various reasons (such as conversion/redemption of convertible securities, vesting of restricted employee shares, conversion of employee options, employee stock purchase programs, share placements, buybacks, mergers, rights issues etc.) so it is always worthwhile checking SEC announcements for the company if you want an exact figure. There may also be multiple classes of shares and preferred securities that have different levels of dividends present. For PFG, they filed a 10Q on 22 April 2015 and noted they had 294,385,885 shares outstanding of their common stock. They also noted for the three months ended March 31 2014 that dividends were paid to both common stockholders and preferred stockholders and that there were Series A preferred stock (3 million) and Series B preferred stock (10 million), plus a statement: In February 2015, our Board of Directors authorized a share repurchase program of up to $150.0 million of our outstanding common stock. Shares repurchased under these programs are accounted for as treasury stock, carried at cost and reflected as a reduction to stockholders’ equity. Therefore the exact amount of dividend paid out will not be known until the next quarterly report which will state the exact amount of dividend paid out to common and preferred shareholders for the quarter. |
Why do investors buy stock that had appreciated? | Imagine how foolish the people that bought Apple at $100 must have felt. It was up tenfold for the $10 it traded at just years prior, how could it go any higher? Stocks have no memory. A stock's earnings may grow and justify the new higher price people are willing to pay. When FB came public, I remarked how I'd analyze the price and felt it was overvalued until its earnings came up. Just because it's gone down ever since, doesn't make it a buy, yet. |
Disputing Items to Improve Credit Report | Disputing the remark seems unlikely to move your score, since it is just that -- a remark. It's hard to say whether the scoring models can/do read the remarks and incorporate them (somehow) into the scoring metric itself. Disputing the revolving account that should be reported as closed is a different matter. The question there would be what the status of that account is/was. In other words, is it showing as an open collection or some other status which would indicate the creditor still has a pending claim? If so, disputing it might have some effect, although nobody would be able to tell you for certain or even how much your score might be affected. If, as you say, that account should have been part of the bankruptcy package then getting that corrected could be important enough to achieve what you're looking for. You can try it and see, but even if the effect is minor, you still want your credit report to be a true reflection of the facts. I hope this helps. Good luck! |
Is it legal if I'm managing my family's entire wealth? | My answer is with respect to the United States. I have no idea about India's regulatory environment. You are opening yourself up to massive liabilities and problems if you deposit their money in your account. I managed investment accounts as a private investment advisor for years (those with less than 15 clients were not required to register) until Dodd-Frank changed the rules. Thus you would have to register as an advisor, probably needing to take the series 65 exam (or qualifying some other way, e.g. getting your CFP/CFA/etc...). I used a discount broker/dealer (Scottrade) as the custodian. Here's how it works: Each client's account was their own account, and I had a master account that allowed me to bill their accounts and manage them. They signed paperwork making me the advisor on their account. I had very little accounting to handle (aside from tracking basis for taxed accounts). If you take custody of the money, you'll have regulatory obligations. There are always lots of stories in the financial advisor trade publications about advisors who go to jail for screwing their clients. The most common factor: they took custody of the assets. I understand why you want a single account - you want to ensure that each client gets the same results, right? Does each client want the same results? Certainly the tax situation for each is different, yes? Perhaps one has gains and wants to take losses in one year, and the other doesn't. If their accounts are managed separately, one can take losses while the other realizes gains to offset other losses. Financial advisors offer these kinds of accounts as Separately Managed Accounts (SMAs). The advisors on these kinds of accounts are mutual funds managers, and they try to match a target portfolio, but they can do things like realize gains or losses for clients if their tax situation would prefer it. You certainly can't let them put retirement accounts into your single account unless the IRS has you on their list of acceptable custodians. I suggest that you familiarize yourself thoroughly with the regulatory environment that you want to operate under. Then, after examining the pros and cons, you should decide which route you want to take. I think the most direct and feasible route is to pass the Series 65, register as an investment advisor, and find a custodian who will let you manage the assets as the advisor on the account. Real estate is another matter, you should talk to an attorney, not some random guy on the internet (even if he has an MBA and a BS in Real Estate, which I do). This is very much a state law thing. |
Can I get my property taxes lowered? | The question is whether the assessment is in line with surrounding homes. If my 1500 sq ft house on 1/4 acre is assessed far higher than a similar sized house/land nearby, I'd have a case. +/- 10% can be for age/quality, but 25% or more, I'd investigate. mhoran is right, values for different purposes need not align. A start would be to use a service like Zillow which offers property tax information, as well as house sizes. Let us know what you discover. Welcome to Money.SE |
I may earn a lot of cash soon through self-employment on a lucrative project. How to handle the tax? | Seek professional advice as duffbeer703 has suggested already. Very important! Consider incorporating. If your income will fluctuate year to year, you can keep profit in the corporation, taxed in its hands at the Canadian small business rate, since such corporate income below $500,000 would likely qualify for the small business deduction. You could pay retained earnings to yourself as dividends over more than one year in order to lessen the personal tax burden. If you don't incorporate, all your profits in the year they are earned are taxed at personal income tax rates, and with our progressive income tax system, taking the tax hit all in one year can be expensive. However, if this project is a one-off and you're not likely to continue working like this, you might not want the overhead of a corporation. Taxes aside, there are also legal issues to consider vis-a-vis incorporating, or not. A professional can help you make this decision. Yes, you can claim deductions for reasonable business expenses, whether or not you are incorporated. No, you can't do free work on the side and claim it as donations. It's nice to volunteer, but you wouldn't get a charitable tax credit for your time, only for money or goods donated. Consider opening an RRSP so you can start saving for retirement and get a tax deduction for any contributions you make. This is but one strategy to reduce your tax. There are others. For instance, if you are a student, you perhaps have some unused tuition credits that you could claim in your first year with higher income. Oh, and seek professional advice! ;-) |
Why invest for the long-term rather than buy and sell for quick, big gains? | Someone entering a casino with $15 could employ a very simple strategy and have a better-than-90% chance of walking out with $16. Unfortunately, the person would have a non-trivial chance (about one in 14) of walking out with $0. If after losing $15 the person withdrew $240 from the bank and tried to win $16, the person would have a better-than-90% chance of succeeding and ending up ahead (holding the original $15, plus the additional $240, plus $1) but would have at that point about a one in 14 chance from that point of losing the $240 along with the original $15. Measured from the starting point, you'd have about a 199 out of 200 chance of gaining $1, and a one out of 200 chance of losing $240. Market-timing bets are like that. You can arrange things so you have a significant chance of making a small profit, but at the risk of a large downside. If you haven't firmly decided exactly how much downside you are willing to accept, it's very easy to simultaneously believe you don't have much money at risk, but that you'll be able to win back anything you lose. The only way you can hope to win back anything you lose is by bringing a lot more money to the table, which will of course greatly increase your downside risk. The probability of making money for the person willing to accept $15 of downside risk to earn $1 is about 93%. The probability of making money for the person willing to accept $255 worth of risk is about 99.5%. It's easy to see that there are ways of playing which have a 99.5% chance of winning, and that there are ways of playing that only have a 15:1 downside risk. Unfortunately, the ways of playing that have the smaller risk don't have anything near a 99.9% chance of winning, and those that have a better chance of winning have a much larger downside risk. |
How to get started with savings, paying off debt, and retirement? | I agree with the other answers here. You need to pay off your debts first, so that you can take the money you would have been spending on debt payments and make retirement contributions instead. The longer they hang around, the more you pay in interest and the more they are a risk to you. Imagine if you or your spouse were laid off, which is better scenario: having to pay for your necessities plus debts or your necessities alone? Just focus on one goal at a time, and you will do well. And the best way for you and your new spouse is to have the same financial goals and a huge part of that agreeing on a budget each month and being flexible. Don't use it to control your spouse, you each have a vote. I have not used Vangaurd, but have heard good things about them. I would do some research before investing with them or anyone else for that matter. What you want to find when it comes to investing is someone with the heart of a teacher, not a product peddler. If you have someone who is pushing financial products, without explaining (A) how they work, and (B) how they fit your situation, then RUN AWAY and find someone else who will do those two things. |
Is a “total stock market” index fund diverse enough alone? | and seems to do better than the S&P 500 too. No, that's not true. In fact, this fund is somewhere between S&P500 and the NASDAQ Composite indexes wrt to performance. From my experience (I have it too), it seems to fall almost in the middle between SPY and QQQ in daily moves. So it does provide diversification, but you're basically diversifying between various indexes. The cost is the higher expense ratios (compare VTI to VOO). |
Are individual allowed to use accrual based accounting for federal income tax? | Yes. But once you chose the method (on your first tax return), you cannot change it without the IRS approval. Similarly the fiscal year. For individuals, I can't think of any reason why would accrual basis be better than cash, or why would an individual use a fiscal year other than the calendar year. |
How to manage household finances (income & expenses) [duplicate] | Obviously, there are many approaches. I’ll describe what we do and why we think it is successful. I have seen many couples having disagreements and even divorce over money; it seems that this is a typical reason to fight and sometimes fight badly. The realization is that different people have different preferences what to spend their money on, and if you are not rich, it continuously leads to disagreements - ‘did you really need another pair of shoes?’, etc. Our solution is a weekly allowance. First, all our money goes into one pot and is considered equal. Many couples find that a difficult step, but I never thought twice about it - I trust my spouse, and I share my life with her, so why not my money? From this, we agree on an ‘allowance’ that is used to cover any non-common cost; this includes all clothing, dining out, buying things, etc. The amount was chosen to match about what we spent for those things anyway, and then adjusted annually. The main point is that there is no critique allowed about what this is spent on - you can blow it all on shoes, or buy books, or wine and dine, or gamble it away, whatever. We are doing this since 23 years now, and we are very happy with the results; we never have financial ‘fights’ anymore. Disadvantages are the effort - you need to keep track of it somehow. Either you use a separate credit card, or hand it out in cash, or have a complete accounting (I do the latter, because I want to). Regarding all other spend, we use the accounting to plan ahead for at least a year on all cost and income that are expected, and that shows us the available cash flow and where it might get tight. It also shows you where the money goes, and where you could cut if cutting is needed (or wanted). Again, there is some effort in collecting the data, but it is worth it (for us). |
How to find trailing 5-year stock returns for 1980s? | I dont know if this data is available for the 1980s, but this response to an old question of mine discusses how you can pull stock related information from google or yahoo finance over a certain period of time. You could do this in excel or google spreadsheet and see if you could get the data you're looking for. Quote from old post: Google Docs spreadsheets have a function for filling in stock and fund prices. You can use that data to graph (fund1 / fund2) over some time period. |
How long does it take for a Tangerine no-fee money-transfer email to be delivered? | I phoned Tangerine; they enlightened me. It generally takes 2 hours for the email to arrive. Next, the recipient must open the email, click the link, and enter their bank account number. They'll generally receive the money 2-3 business days after that. This forum post suggests that the delays are due to systemic risk management, tendering, and clearing. |
What should I consider when I try to invest my money today for a larger immediate income stream that will secure my retirement? | Lets assume you put the max of 5000 per year in a Roth IRA. You have your home and all other debt paid off, and your investment earns 10%, a few points below the market average. You will have $822,470 at 65, 1005K at 67 that you can draw on tax free. It is a fairly tidy sum and should keep you from working as the greeter in WalMart. This kind of return should be expected from most mutual funds, and you could invest some time in reading about how to pick good returning funds. An index fund, which shadows a market index, should have that kind of return. And yes that is 10% per year. In investing it is about momentum. I too write software for a living, and would suggest you should be able to contribute about double that amount and still be comfortable. That would set you up for a pretty comfortable post-work life style. You understand the value of building passive income. Traditionally that is accomplished through dividends of reliable companies, but are now accomplished a variety of ways. Keep in mind the way you are asking this question opens you to many scams. |
For what dates are the NYSE and U.S. stock exchanges typically closed? | The NYSE publishes a list of holidays at its website. New link: https://www.nyse.com/markets/hours-calendars Old link in the original answer that doesn't work now: http://www.nyse.com/about/newsevents/1176373643795.html Hope that helps! |
Can a US bank prevent you from making early payments to the principal on a home mortgage? | Some lenders want to discourage the borrower from making these additional payments because they want to sell this as a service. They might set this up for you, or they have a contract with a 3rd party to set it up. These services generally charge you to initiate the process, and may have a recurring fee. They take 1/2 a payment every 2 weeks. Then forward the money on the first of the month to the lender. Once a year they will send in the 13th monthly payment. This gives them control of up to a months payment per account. There is no law that says they have to accept early payments. So check the documents to make sure it is allowed for that mortgage. Then send in a test payment directing that the excess funds go to pay down principal. Verify online that the extra funds were credited correctly. Even it works once the borrower will have to keep checking to make sure it is handled correctly each month. |
Why can't I short a stock that sells for less than $5? Is there another way to “go short” on them? | If this is the initial transaction, the rules of a short margin account say that if you shorted 1000 share of ABC at $5/share your credit balance would be $5000 from the short plus you would have to put up yourself $5000 cash or $10,000 of marginal securities. So this is not really leveraging using margin. You have to put in just as much as the short generates. Is that what this relates to? Once the initial purchase has been made the minimum maintenance for a stock trading under $5 per share is 100% of the short market value in the margin account or $2.50 per share whichever is greater. For stock trading at $5/share or greater the minimum maintenance requirement is $5/share or 30% of the short market value, whichever is greater. The minimum maintenance requirements can be tighter. |
Advantage of Financial Times vs. free news sources for improving own knowledge of finance? | If you are interested in a career in algorithmic trading, I strongly encourage you to formally study math and computer science. Algorithmic trading firms have no need for employees with financial knowledge; if they did, they'd just be called "trading" firms. Rather, they need experts in machine learning, statistical modeling, and computer science in general. Of course there are other avenues of employment at an algorithmic trading firm, such as accounting, clearing, exchange relations, etc. If that's the sort of thing you're interested in, again you'll probably want a formal education in those areas as opposed to just reading about finance in the news. If you edit your question or add a comment below with information about your particular background, I could perhaps advise you in a bit more detail. ::edit:: Given your comment, I would say you have a fine academic background for the industry. When hiring mathematicians, firms care most about the ease with which you can explore and extract features from massive datasets (especially time series) regardless of what the dataset might represent. An intelligent firm will not care whether you arrive at their doorstep with zero finance knowledge; they will want to teach you everything from scratch anyway. Nonetheless, some domain knowledge could be helpful, but you're not going to get "more" of it from reading any mass market news source, whether you have to pay for it or not. That's because Some non-mass-market news sources in the industry are These are subscription-only and actually discuss real information that real professional investors care about. They are loaded with industry jargon, they're extremely opinionated, and (in my opinion) they're useless. I can't imagine trying to learn about the industry from them, but if you want to spend money for news in order to be exposed to the innards of the industry, then either of these is far better than the Financial Times. Despite requiring a subscription, the Financial Times still does not cover the technical details of professional trading. Instead of trying to learn from news, then, I would suggest some old favorites: and, above all else, Read everything in the navigation box on the right side under Financial Markets and Financial Instruments. |
Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan? | Forget about terms. Think about loans in terms of months. To simplify things, let's consider a $1000 loan with .3% interest per month. This looks like a ten month term, but it's equally reasonable to think about it on a month-to-month basis. In the first month, you borrowed $1000 and accrued $3 interest. With the $102 payment, that leaves $901 which you borrow for another month. So on and so forth. The payoff after five payments would by $503.54 ($502.03 principal plus $1.51 interest). You'd save $2.99 in interest after paying $13.54. The reason why most of the interest was already paid is that you already did most of the borrowing. You borrowed $502.03 for six months and about $100 each for five, four, three, two, and one month. So you borrowed about $4500 months (you borrowed $1000 for the first month, $901 for the second month, etc.). The total for a ten month $1000 loan is about $5500 months of borrowing. So you've done 9/11 of the borrowing. It's unsurprising that you've paid about 9/11 of the interest. If you did this as a six month loan instead, then the payments look different. Say You borrow $1000 for one month. Then 834 for one month. So on and so forth. Adding that together, you get about $168.50 * 21 or $3538.50 months borrowed. Since you only borrow about 7/9 as much, you should pay 7/9 the interest. And if we adding things up, we get $10.54 in interest, about 7/9 of $13.54. That's how I would expect your mortgage to work in the United States (and I'd expect it to be similar elsewhere). Mortgages are pretty straight-jacketed by federal and state regulations. I too once had a car loan that claimed that early payment didn't matter. But to get rid of the loan, I made extra payments. And they ended up crediting me with an early release. In fact, they rebated part of my last payment. I saved several hundred dollars through the early release. Perhaps your loan did not work the same way. Perhaps it did. But in any case, mortgages don't generally work like you describe. |
How much of a down payment for a car should I save before purchasing it? | I'd put more money down and avoid financing. I personally don't think car debt is good debt and if you can't afford the car, you are better off with a cheaper car. Also, you should read up on the 0% offer before deciding to commit. Here's one article that is slightly dated, but discusses some pros and cons of 0% financing. My main point though is that 0% financing is not "free" and you need to consider the cost of that financing before making the purchase. Aside from the normal loan costs of having a monthly payment, possibly buying too much car by looking at monthly cost, etc., a 0% financing offer usually forces you to give the dealer/financing company any rebates that are due to you, in essence making the car cost more. |
Prices go up and salary doesn't: where goes delta? | Salaries normally shouldn't fluctuate with inflation and deflation... Inflation prevents consumers from spending (prices get too high), ultimately taking money out of circulation. This causes the market to go in to deflation (or at least deflate back to normal). That's when people begin to spend again, and start the cycle all over again. Now... Imagine if salaries increased with inflation... Inflation would never end. Everyone could keep affording the high prices. A Starbucks coffee would eventually cost $150, but the "middle-class" would all be millionaires. Your "small-change" would consist of a wad of useless bills, and the government would have to continually print out more money just to keep up. NOTE: This is not a direct answer to "where goes delta?", but would more be directed to the part "Prices go up and salary doesn't". |
How do dividend reinvestment purchases work? | As far as I know, it has the same price, and effects on the market, as any other transaction... |
What happened when the dot com bubble burst? | It's tough to share exactly what happened. Go to yahoo and look at the chart for Cisco from 1990 to 2003 or so. From a split adjusted 8 cents a share, it peaked at just under $80 in March 2000, up by a factor of 1000. People were buying in thinking this stock would continue to rise at this pace, but logic says that's preposterous. By April of 2001, it was down to $14, 80% off its high, and later to drop below $10. This was a classic bubble and should be studied so you don't get caught in them. A book titled Extraordinary Popular Delusions & the Madness of Crowds was published in 1841, yes is still an interesting read. Bubbles in markets are not new, but can be recognized and avoided. Cisco at $80 had a market cap of $438B. Had it risen 1000 fold over another decade, it would have been worth $438T, but all the wealth in the US isn't even $75T, so something was wrong, very wrong. This is one story, one stock. A remarkable time. Yes, many companies went under, and the employees lost their jobs. And those who were heavy into the "dotcom" stocks lost as much as 80% (or more) of their wealth. Entire 401(k) accounts dropping this amount due to bad decisions. Those who bailed out in time survived, some doing better than others. |
15 year mortgage vs 30 year paid off in 15 | Actually the extra payment comes off the back end of the mortgage. So technically the mortgage is ony reduced one month. However, banks always recalculate the amortization table when the last payment is paid or a payoff amount is requested. There is a difference between the two situations but that is a minor amount. The 30 year note offers flexibility that the 15 does not. Pick one, save money-15 year, get flexibility-30 year. |
What to do when a job offer is made but with a salary less than what was asked for? | If you take less than you think you are worth, you will hate that job with a purple passion in short order. Either make peace with the amount you settle on or move on. |
Do Americans really use checks that often? | A very interesting topic, as I am moving to the US in a month. I realise this thread is old but its been helpful to me. My observations from my home country "Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day labourer who expect to work for a different person each day or week" --- well here a contractor would still be paid by a direct deposit, even if he was working for many different people. On the invoice the contractor provides Bank account details, and customer logs onto their internet banking and pays electronically. It is a a very simple process and is the preferred method of payment by most businesses even small contractors. Many accounting software programs are linked to bank accounts and can quickly reconcile accounts for small business. Many businesses will not accept a cheque in Australia anymore as they are considered to be a higher risk. I started work in 1994 and have never received any payment except via direct deposit. |
Under what circumstance will the IRS charge you a late-payment penalty for taxes? | In practice the IRS seems to apply the late payment penalty when they issue a written paper notice. Those notices typically have a pay-by date where no additional penalty applies. The IRS will often waive penalties, but not interest or tax due, if the taxpayer presses the issue. |
Why can't I short a stock that sells for less than $5? Is there another way to “go short” on them? | Timothy Sykes specializes in this type of trade, according to his website. He has some recommendations for brokers that allow shorting low-priced stocks: |
Where do large corporations store their massive amounts of cash? | They are using several banks, hedge funds or other financial institutions, in order to diversify the risk inherent to the fact that the firm holding (a fraction of) their cash, can be insolvent which would makes them incur a really big loss. Also, the most available form of cash is very often reinvested everyday in overnight*products and any other highly liquid products, so that it can be available quickly if needed. Since they are aware that they are not likely to need all of their cash in one day, they also use longer terms or less liquid investments (bonds, stocks, etc..). |
Will I be turned down for a car loan? | Considering I'm putting 30% down and having my father cosign is there any chance I would be turned down for a loan on a $100k car? According to BankRate, the average credit score needed to buy a new car is 714, but they also show average interest rates at 6.39% for new-car loans to people with credit scores in the 601-660 range. High income certainly helps offset credit score to some extent. Not every bank/dealership does things the same way. Being self-employed you'd most likely be required to show 2 years of tax returns, and they'd use those as a basis for your income rather than whatever you have made recently. If using a co-signer, their income matters. Another key factor is debt to income ratio, if too much of someone's income is already spoken for by other debts a lender will shy away. So, yes, there's a chance, given all the information we don't know and the variability with lender policies, that you could be turned down for a car loan. How should I go about this? If you're set on pursuing the car loan, just go talk to some lenders. You'll want to shop around for a good rate anyway, so no need to speculate just go find out. Include the dealership as a potential financing option, they can have great rates. Personally, I'd get a much cheaper car. Your insurance premium on a 100k car will be quite high due to your age. You might be rightly confident in your earning potential, but nothing is guaranteed, situations can change wildly in short order. A new car is not a good investment or a value-retaining asset, so why bother going into debt for one if you don't have to? If you buy something in cash now, you could upgrade in a few years without financing if your earning prediction holds and would save quite a bit in car insurance and interest over the years between. |
If Bernie Madoff had invested in Berkshire Hathaway, would the ponzi actually have succeeded? | I could be wrong, but I doubt that Bernie started out with any intention of defrauding anyone, really. I suspect it began the first time he hit a quarter when his returns were lower than everyone else's, or at least not as high as he'd promised his investors they'd be, so he fudged the numbers and lied to get past the moment, thinking he'd just make up for it the next quarter. Only that never happened, and so the lie carried forward and maybe grew as things didn't improve as he expected. It only turned into a ponzi because he wasn't as successful at investing as he was telling his investors he was, and telling the truth would have meant the probability that he would have lost most of his clients as they went elsewhere. Bernie couldn't admit the truth, so he had to keep up the fiction by actually paying out returns that didn't exist, which required constantly finding new money to cover what he was paying out. The source of that money turned out to be new investors who were lured in by people already investing with Bernie who told them how great he was as a financial wizard, and they had the checks to prove it. I think this got so far out of hand, and it gradually dragged more and more people in because such things turn into black holes, swallowing up everything that gets close. Had the 2008 financial crisis not hit then Bernie might still be at it. The rapid downturns in the markets hit many of Bernie's investors with margin calls in other investments they held, so they requested redemptions from him to cover their calls, expecting that all of the money he'd convinced to leave with him really existed. When he realized he couldn't meet the flood of redemptions, that was when he 'fessed up and the bubble burst. Could he have succeeded by simple investing in Berkshire? Probably. But then how many people say that in hindsight about them or Amazon or Google, or any number of other stocks that turned out similarly? (grin) Taking people's money and parking it all in one stock doesn't make you a genius, and that's how Bernie wanted to be viewed. To accomplish that, he needed to find the opportunities nobody else saw and be the one to get there first. Unfortunately his personal crystal ball was wrong, and rather than taking his lumps by admitting it to his investors, his pride and ego led him down a path of deception that I'm sure he had every intention of making right if he could. The problem was, that moment never came. Keep in mind one thing: The $64 billion figure everyone cites isn't money that really existed in the first place. That number is what Bernie claimed his fund was worth, and it is not the amount he actually defrauded people out of. His actual cash intake was probably somewhere in the $20 billion range over that time. Everything else beyond that was nothing more than the fictionalized returns he was claiming to get for his clients. It's what they thought they had in the bank with him, rather than what was really there. |
Does renting a room on AirBnB make all interest taxable? | It says that you are exempt "as long as such interest income is not effectively connected with a United States trade or business". So the interest is from money earned from doing business with/through AirBnb, a US company. So you will have to report it. Even if your bank doesn't send you a 1099-INT, you have to report it, unless it is under $0.49 because the IRS allows rounding. |
At what percentage drop should you buy to average down | TL;DR; There is no silver bullet. You have to decide how much to invest and when on your own. Averaging down definition: DEFINITION of 'Average Down' The process of buying additional shares in a company at lower prices than you originally purchased. This brings the average price you've paid for all your shares down. BREAKING DOWN 'Average Down' Sometimes this is a good strategy, other times it's better to sell off a beaten down stock rather than buying more shares. So let us tackle your questions: At what percentage drop of the stock price should I buy more shares. (Ex: should I wait for the price to fall by 5% or 10% to buy more.) It depends on the behaviour of the security and the issuer. Is it near its historical minimum? How healthy is the issuer? There is no set percentage. You can maximize your gains or your losses if the security does not rebound. Investopedia: The strategy is often favored by investors who have a long-term investment horizon and a contrarian approach to investing. A contrarian approach refers to a style of investing that is against, or contrary, to the prevailing investment trend. (...) On the other side of the coin are the investors and traders who generally have shorter-term investment horizons and view a stock decline as a portent of things to come. These investors are also likely to espouse trading in the direction of the prevailing trend, rather than against it. They may view buying into a stock decline as akin to trying to "catch a falling knife." Your second question: How many additional shares should I buy. (Ex: Initially I bought 10 shares, should I buy 5,10 or 20.) That depends on your portfolio allocation before and after averaging down and your investor profile (risk apettite). Take care when putting more money on a falling security, if your portfolio allocation shifts too much. That may expose you to risks you shouldn't be taking. You are assuming a risk for example, if the market bears down like 2008: Averaging down or doubling up works well when the stock eventually rebounds because it has the effect of magnifying gains, but if the stock continues to decline, losses are also magnified. In such cases, the investor may rue the decision to average down rather than either exiting the position or failing to add to the initial holding. One of the pitfalls of averaging down is when the security does not rebound, and you become too attached to be able to cut your losses and move on. Also if you are bullish on a position, be careful not to slip the I down and add a T on said position. Invest with your head, not your heart. |
Do you know of any online monetary systems? | Congratulations! You see the problem. You can't get away from unstable currencies. The other problem is that the US will shut down anything that appears to be providing a replacement for the US Dollar. Once a token or medallion or gift certificate or whatever starts being used outside the confines of one business or one network of businesses, it will be shut down, quickly. It happened with Las Vegas gambling tokens. Another more recent attempt was with the Liberty Dollar, gold and silver coins and certificates that not only had precious metal backing, but whose proponents encouraged taking them to retailers and paying with them as if they were US Dollars. There were other problems with this idea, but it was the competitive stature of the Liberty dollar that got the headquarters raided and the main site shut down. Basically, all signs point toward dealing with currencies and their state of being systematically eroded over time. If you do find one that appears to exist, be wary, because the rules can change at any time, and the "money" will be nowhere near as liquid as a proper currency. |
Does my net paycheck decrease as the year goes on due to tax brackets filling up? | It seems that you are misunderstanding how your taxes are calculated. You seem to be under the impression that once you pass $37,450 annual income, ALL of your income will be taxed at 25%. However, in reality, only the income you earn above that amount will be taxed at 25%. You can use this chart to determine exactly how much federal tax you will pay; As you can see, if you earned, $37,500 in a year, you would only be charged 25% taxes on $50 (and you will pay 15% on the amount between $9226 and $37450, and 10% on the amount from $0 to $9225, which is $5126.25 when summed together). |
Why buying an inverse ETF does not give same results as shorting the ETF | Suppose that the ETF is currently at a price of $100. Suppose that the next day it moves up 10% (to a price of $110) and the following day it moves down 5% (to a price of $104.5). Over these two days the ETF has had a net gain of 4.5% from its original price. The inverse ETF reverses the daily gains/losses of the base ETF. Suppose for simplicity that the inverse ETF also starts out at a price of $100. So on the first day it goes down 10% (to $90) and on the second day it goes up 5% (to $94.5). Thus over the two days the inverse ETF has had a net loss of 5.5%. The specific dollar amounts do not matter here. The result is that the ETF winds up at 110%*95% = 104.5% of its original price and the inverse ETF is at 90%*105% = 94.5% of its original price. A similar example is given here. As suggested by your quote, this is due to compounding. A gain of X% followed by a loss of Y% (compounded on the gain) is not in general the same as a loss of X% followed by a gain of Y% (compounded on the loss). Or, more simply put, if something loses 10% of its value and then gains 10% of its new value, it will not return to its original value, because the 10% it gained was 10% of its decreased value, so it's not enough to bring it all the way back up. Likewise if it gains 10% and then loses 10%, it will go slightly below its original value (since it lost 10% of its newly increased value). |
What are reasonable administrative fees for an IRA? | Zero. Zero is reasonable. That's what Schwab offers with a low minimum to open the IRA. The fact is, you'll have expenses for the investments, whether a commission on stock purchase or ongoing expense of a fund or ETF. But, in my opinion, .25% is criminal. An S&P fund or ETF will have a sub-.10% expense. To spend .25% before any other fees are added is just wrong. |
Are in-kind donations from my S-Corp tax-deductible in any way? | The relevant IRS publication is 526, Charitable Contributions. The section titled "Contributions you cannot deduct" begins on page 6; item 4 reads: "The value of your time or services." I read that to mean that, if the website you built were a product, you could deduct its value. I don't understand the legal distinction between goods and services I originally said that I believe that a website is considered a service. Whether a website is a service or a product appears to be much more controversial that I originally thought. I cannot find a clear answer. I'm told that the IRS has a phone number you can call for rulings on this type of question. I've never had to use it, so I don't know how helpful it is. The best I can come up with is the Instructions for Form 1120s, the table titled "Principal Business Activity Codes," starting on page 39. That table suggests to me that the IRS defines things based on what type of business you are in. Everything I can find in that table that a website could plausibly fall under has the word "service" in its name. I don't really feel like that's a definitive answer, though. Almost as an afterthought, if you were able to deduct the value of the website, you would have to subtract off whatever the value of the advertisement is. You said that it's not much, but there's probably a simple way of estimating that. |
Credit card statement dates follow pattern? | Check with your bank, usually a statement is either at the same day of month (e.g.: every 15th of the month), or every 30 days (e.g: March 15th, April 14th, May 14th, so forth). From my experience, most credit cards use the same day of month strategy. Keep in mind that if the day is not a business day (e.g.: weekend), the statement is closed either the previous or the next business day. |
What is the purpose of property tax? | Property taxes are levied by the local authorities to pay for their services. Since the services are continuous - so are the charges. You need someone to pave a road to your house, to build infrastructure, to maintain the police force, fire department, local schools etc. That's what your property taxes are going to. However, at times the property taxes become more than what the owners have actually paid for the house. Think of a house bought in the midst of a recession at a bargain price of $20K, but at the top of the market bubble costs $2M. The poor guy who bought it for $20K should pay as if he had ever had $2M? It can certainly be the case that the property taxes change drastically over the years and sometimes people have to give up their property because they cannot afford the taxes. That is exactly the thought that had led Californians to amend the Constitution in Prop 13. |
Where to find free Thailand stock recommendations and research? | On what basis did you do your initial allocation of funds to each stock? If you are 're-balancing' that implies returning things to their initial allocation. You can do this without any research or recommendations. If you started out with say 10 stocks and 10% of the funds allocated to each stock, then re-balancing would simply be either buying/selling to return to that initial allocation. If you are contributing to the portfolio you could adjust where the new money goes to re-balance without selling. Or if you are drawing money from the portfolio, then you could adjust what you are selling. If on the other hand you are trying to decide if you want to alter the stocks the portfolio is HOLDING, then you have an entirely different question from 're-balancing' |
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