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How much money do you have to make every year before you have to pay tax? | Since your YouTube income is considered self-employment income and because you probably already made more than $400 in net income (after deducting expenses from the $4000 you've received so far), you will have to pay self-employment tax and file a return. This is according to the IRS's Publication 17 (2016), Your Federal Income Tax, so assumes the same rules for 2016 will remain in effect for 2017: You are self-employed if you: Carry on a trade or business as a sole proprietor, Are an independent contractor, Are a member of a partnership, or Are in business for yourself in any other way. Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job. You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if: Your net earnings from self-employment (excluding church employee income) were $400 or more, or You had church employee income of $108.28 or more. (See Table 1-3.) Use Schedule SE (Form 1040) to figure your self-employment tax. Self-employment tax is comparable to the social security and Medicare tax withheld from an employee's wages. For more information about this tax, see Pub. 334, Tax Guide for Small Business. I'd also note that your predicted income is getting close to the level where you would need to pay Estimated Taxes, which for self-employed people work like the withholding taxes employers remove their employees paychecks and pay to the government. If you end up owing more than $1000 when you file your return you could be assessed penalties for not paying the Estimated Taxes. There is a grace period if you had to pay no taxes in the previous year (2016 in this case), that could let you escape those penalties. |
How to plan in a budget for those less frequent but mid-range expensive buys? | We have what we call "unallocated savings" that go into a fund for this purpose. We'll also take advantage of "6 months no interest" or similar financing promotions, and direct this savings towards the payments. |
How is the price of VXX determined? | Generally, ETFs work on the basis that there exists a pair of values that can be taken at any moment in time: A Net Asset Value of each share in the fund and a trading market price of each share in the fund. It may help to picture these in baskets of about 50,000 shares for the creation/redemption process. If the NAV is greater than the market price, then arbitrageurs will buy up shares at the market price and do an "in-kind" transaction that will be worth the NAV value that the arbitrageurs could turn around and sell for an immediate profit. If the market price is greater than the NAV, then the arbitrageurs will buy up the underlying securities that can be exchanged "in-kind" for shares in the fund that can then be sold on the market for an immediate profit. What is the ETF Creation/Redemption Mechanism? would be a source on this though I imagine there are others. Now, in the case of VXX, there is something to be said for how much trading is being done and what impact this can have. From a July 8, 2013 Yahoo Finance article: At big option trade in the iPath S&P 500 VIX Short-Term Futures Note is looking for another jump in volatility. More than 250,000 VXX options have already traded, twice its daily average over the last month. optionMONSTER systems show that a trader bought 13,298 August 26 calls for the ask price of $0.24 in volume that was 6 times the strike's previous open interest, clearly indicating new activity. Now the total returns of the ETF are a combination of changes in share price plus what happens with the distributions which could be held as cash or reinvested to purchase more shares. |
At what price are dividends re-invested? | Keep in mind the ex-dividend date is different from the payable date (the day the dividend is paid). That means the market price will already have adjusted lower due to the dividend. Short answer: you get the lower price when reinvesting. So here's Vanguard's policy, it should be similar to most brokers: When reinvesting dividends, Vanguard Brokerage Services combines the cash distributions from the accounts of all clients who have requested reinvestment in the same security, and then uses that combined total to purchase additional shares of the security in the open market. Vanguard Brokerage will attempt to purchase the reinvestment shares by entering a market order at the market opening on the payable date. The new shares are divided proportionately among the clients' accounts, in whole and fractional shares rounded to three decimal places. If the total purchase can't be completed in one trade, clients will receive shares purchased at the weighted average price paid by Vanguard Brokerage Services. |
In Australia, how to battle credit card debt? | JoeTaxpayer mentioned a budget. Staying on top of your spending will be the result of getting out from under this debt. You may have Excel on your PC now, if not Open Office is free which has a program that handles finance applications. There is budgeting software for free out there. Youneedabudget.com is a lot better but cost a little. It keeps me from spending money I don't necessarily have as I can see a result month to month from having outflow of cash. As Joe mentioned - no more lattes in the near future which will help you pay off this debt which will be a bigger relief than a fashion statement. Having used budgeting software and attempted to stay in budget has been useful. I still over spend a little on food and can see the ramifications immediately. In short, try creating and sticking to a budget no matter the urge. As far as insolvency is concerned I'd struggle with paying it down before I do that. The thought passed my mind but I bit the bullet. DO NOT walk away from the debt however. That isn't a good idea Either. Budget and bite. |
Cannot get a mortgage because I work through a recruiter | To a mortgage lender, it appears that you have a temporary contract (perhaps extending for nine more months) with a agency that supplies workers to companies that need temporary help. You have been placed currently with a company and are making good money, but that job might disappear soon and then you will have no income while your recruiter tries to find you another assignment. How will you make your mortgage payments then? The recruiter agency's contract with your current company probably has clauses to the effect that the company agrees to not offer you a permanent job unless it pays a head-hunter's fee to the recruiter agency. Your contract with the recruiter agency also likely has clauses to the effect that if the company where you have been placed offers you a permanent job, you must pay the recruiter company a fee (typically one or two months of salary) to the recruiter agency as compensation for releasing you from your current contract (unless the company hiring you pays the head-hunter's fee). This is why the company where you are working right now wants to wait until after your contract with the recruiter company ends before making you an offer of permanent employment. Be aware that sometimes such clauses extend out to three months after the ending date of your contract with the recruiter company. As far as the condo is concerned, unless there is a specific one that you absolutely must have because it has an ocean view or other desirable properties, you may well find that another condo in the same complex is available some months from now. If you are lucky, it may well have an acceptable ocean view. If you are even luckier, it may be the condo that you absolutely must have which has remained unsold all that time -- as you said, the economy is crappy -- and you will be able to buy it for a lower price from an owner getting desperate to make a sale. To answer your question: is there any way around this? My recommendation is to simply wait out the end of your recruiter agency contract and get a permanent job with the company where you have been placed. Then there are no issues. If not, get your company to make a written offer of a permanent job starting nine months from now and hope that this (together with your current employment) impresses your bank into lending you money. This might not work, though. In the early 1970s, one of my friends was offered a job at a large aerospace company which lost a major contract in the interim period between offer and joining. My friend showed up for work on the day he was supposed to start, and instead of being processed through HR etc, his job was terminated on the spot, he was paid one day's salary, and shown the door. Times were crappy then too. If this does not work, get your company to offer you a permanent job right away, pay off the recruiter company yourself, and then go to the bank. |
At what age should I start or stop saving money? | It's nearly always a good idea to save for your future, if you don't already have sufficient funds to see out the rest of your days. The hardest part of the saving decision is knowing exactly what portion of your funds to save. If we save too aggressively, we risk having an adverse impact on our everyday life and, of course, there's always the possibility that we'll never make it to old age. But if we don't save, we risk the prospect of a poverty stricken retirement. It's not always easy to find a balance. The best solution is to make so much money that we cannot possibly spend it all! |
How to transfer money to yourself internationally? | It really depends on the amount of money - I currently have to pay my mortgage in the UK from the US until my house there is sold and my wife sends money from her (US) Paypal account to my UK Paypal account. As personal payments these don't attract the sort of fees you see for ebay payments et al. Compared to the fee-o-rama that a wire transfer turns into (I tried once from BofA to HSBC UK), it is noticeably cheaper for the amount of money we're sending. That said, a lot of the currency transfer services have support for monthly payments and you might get a decent exchange rate and fewer (or no) fees that way. |
How to convince someone they're too risk averse or conservative with investments? | Introduce him to the concept of Inflation Risk, and demonstrate that being too conservative with your investments might be a very risky strategy as well. |
Online brokers with a minimum stock purchase lower than $500 | The $500 minimum is a policy of the ASX. As such any broker that offered a different policy would not be offering direct purchase of exchange traded shares. Note however that this policy applies only to the initial purchase. From the CMC FAQs: The ASX requires a minimum parcel of $500 to be traded if you don’t currently hold that particular security. Once you have $500 worth of an individual security, you can purchase any value of shares you like. |
What is the process of getting your first share? | Here's a different take: Look through the lists of companies that offer shareholder perks. Here's one from Hargreaves Lansdown. See if you can find one that you already spend money with with a low required shareholding where the perks would actually be usable. Note that in your case, being curious about the whole thing and based in London, you don't have to rule out the AGM-based perks, unlike me. My reason for this is simple: with 3 out of 4 of the companies we bought shares in directly (all for the perks), we've made several times the dividend in savings on money we would have spent anyway (either with the company in which we bought shares or a direct competitor). This means that you can actually make back the purchase price plus dealing fee quite quickly (probably in 2/4 in our case), and you still have the shares. We've found that pub/restaurant/hotel brands work well if you use them or their equivalents anyway. Caveats: It's more enjoyable than holding a handful of shares in a company you don't care about, and if you want to read the annual reports you can relate this to your own experience, which might interest you given your obvious curiosity. |
Fair Value of a monthly payment given two Bank Payment structures | There is one basic principle to apply here: to compare money paid at different times, all the amounts must be compounded or discounted to the same point in time. In this case, the moment of the initial $225,000 loan is convenient. At that moment, you get $225,000 You then make 30 payments on the 40% mortgage. The amount of these payments has to be calculated; they're paying off a $90,000 mortgage with 30 monthly payments at a monthly rate of 0.5% Finally, you make 30 payments of an amount X, starting one month after the 40% mortgage ends. So far we've just listed the amount and time of all the payments back and forth. A time-line type diagram is a huge help here. Finally, use compound interest and annuity formulas to bring all the payments to the starting point, using an interest rate of 1% a month! Equate money in with money out and solve for X |
How does the price of oil influence the value of currency? | Because we need energy in the form of oil. If more of our money is spent on oil, there is less money to spend on other items especially luxuries like dining out and new cars (ironically) Since there is less money available, the price of other things shift with it and the whole economy moves. Since less money is available, the value of a single dollar goes up. Basically, it is because we as a species (let alone nations) are unbelievably dependent on having oil at this point in our existence. How do currency markets work? What factors are behind why currencies go up or down? |
Why buy a vertical spread if I could instead buy a naked call? | Late to the party, but it's just improving your cost basis in a defined risk trade even further. If you want to put up less risk capital but want to test the waters, this can be one way to do it. Another could be buying cheap OTM butterflies or financing a further otm option with the basis reduction from the debit spread if you want to gamble a bit further and venture into 15-20 delta positions. Usually, I am doing debit spreads with a buying atm and selling a couple strikes further otm or at least at the most liquid strikes, but if it's a high flier, it can be disappointing, but a good trade. If you're more of a contrarian in where you buy your calls/puts, it's absolutely a good way to lessen your risk on a calculated bet. |
How can rebuilding a city/large area be considered an economic boost? | Wikipedia's article on the Parable of the broken window mentions that Keynesians would argue that broken windows can be useful in depressed economies. I think Japan's economy was somewhat depressed, so if it applies anywhere, it'd apply in this scenario. |
If you want to trade an equity that reflects changes in VIX, what is a good proxy for it? | VXX VZX XVIZ and there are plenty others correlated to market volatility if you want the wildest hedge, use VXX, it is also the most liquid |
What does “profits to the shareholders jumped to 15 cents a share” mean? | It's a way to help normalize the meaning of the earnings report. Some companies like Google have a small number of publicly traded shares (322 Million). Others like Microsoft have much larger numbers of shares (8.3 Billion). The meaning depends on the stock. If it's a utility company that doesn't really grow, you don't want to see lots of changes -- the earnings per share should be stable. If it's a growth company, earnings should be growing quickly, and flat growth means that the stock is probably going down, especially if slow growth wasn't expected. |
Does high frequency trading (HFT) punish long-term investment? | No, at least not noticeably so. The majority of what HFT does is to take advantage of the fact that there is a spread between buy and sell orders on the exchange, and to instantly fill both orders, gaining relatively risk-free profit from some inherent inefficiencies in how the market prices stocks. The end result is that intraday trading of the non-HFT nature, as well as speculative short-term trading will be less profitable, since HFT will cause the buy/sell spread to be closer than it would otherwise be. Buying and holding will be (largely) unaffected since the spread that HFT takes advantage of is miniscule compared to the gains a stock will experience over time. For example, when you go to buy shares intending to hold them for a long time, the HFT might cost you say, 1 to 2 cents per share. When you go to sell the share, HFT might cost you the same again. But, if you held it for a long time, the share might have doubled or tripled in value over the time you held it, so the overall effect of that 2-4 cents per share lost from HFT is negligible. However, since the HFT is doing this millions of times per day, that 1 cent (or more commonly a fraction of a cent) adds up to HFTs making millions. Individually it doesn't affect anyone that much, but collectively it represents a huge loss of value, and whether this is acceptable or not is still a subject of much debate! |
Where should my money go next: savings, investments, retirement, or my mortgage? | As the others said, you're doing everything right. So, at this it's not a matter of what you should do, it's a matter of what do you want to do? What would make you the happiest? So, what would you like to do most with that extra money? The point is, since you're already doing everything right with the rest of your money, there's really nothing you can do that's wrong with this money. Except using it on something that increases your monthly expenses, like a down payment on a car. In fact, there's no reason you have to do anything "sensible" with this money at all. You could blow it at nightclubs if you wanted to, and that would be perfectly ok. In fact, since you've got everything else covered, why not "invest" it in making some memories? How about vacations to exotic and rugged places, while you're still young enough to enjoy them? |
Can you buy out a pink sheet listed company by purchasing all of the oustanding shares? | Depends on the structure of the company and what shares are outstanding. If the pink sheet stock has no voting power then buying all that stock doesn't get you any control at all. On the other hand, if the outstanding shares only represent 20% of the company's overall shares, then buying all the shares isn't likely enough to have a controlling interest. Thus, you'll have to dig into the details. If you want an example of where I'd have my doubts, look at Nestle's stock which has the ticker of NSRGY. There can be companies that are structured with stock on multiple exchanges that can also be a challenge at times. There is also something to be said if you own enough stock in a company that this has to be disclosed to the SEC when you buy more. |
Comparison between buying a stock and selling a naked put | Why do all this work yourself? Pay a modest price to have a professional do this for you. Look at the tickers PUTX, PUTW. |
Correct way to amend tax return as a result of not correctly reporting gains on sale of private stock based on Installment method? | After much research, the answer is "a": recompute the tax return using the installment sales method because (1) the escrow payment was subject to "substantial restrictions" by virtue of the escrow being structured to pay buyer's indemnification claims and (2) the taxpayer did not correctly elect out of the installment method by reporting the entire gain including the escrow payments on the return in the year of the transaction. |
Are prepayment penalties for mortgages normal? | It used to be much more common, particularly for sub-prime loans. If you do run into someone offering a loan with a prepayment penalty, you should certainly consider other options. |
I am a contractor with revenue below UK's VAT threshold. Should I register for VAT? | The most important thing to remember is that being VAT registered, you must add VAT to every bill, so every bill will be 20% higher. If the bill payer is a company, they don't care because they deduct the 20% VAT from their own VAT bill. If the bill payer is a private person, their cost of your services has just gone up by 20% and it is going to hurt your business. So the question is, what kind of customers do you have? But if your customers are companies, then the flat rate scheme mentioned above is very little work and puts a nice little amount of extra cash in your pocket (suitable if your bills are mostly for your work and not for parts that you buy for the customer and bill them for). |
What emergencies could justify a highly liquid emergency fund? | Visa card expired while on the other side of the world. Visa from other bank declined for suspected fraud. "You should have told us you were going to a country that has lots of fraud." Nearest ATM, twelve kilometers. |
How can I increase my hourly pay as a software developer? | Most full time developer jobs in the US are paid on a salary basis rather than hourly unless you are a contractor. Also, the pay varies widely by region in the US with the West and East coast typically paying the most, but also having the highest cost of living. A site I really like for getting salary data by region and keyword for technical jobs is indeed.com. Here is a link to a chart on that site comparing salary trends for PHP and Joomla. |
Do I have to pay taxes in the US if my online store sells to US customers even though I don't live in the US? | You're not physically present in the US, you're not a US citizen, you're not a green card holder, and you don't have a business that is registered in the US - US laws do not apply to you. You're not in any way under the US jurisdiction. Effectively connected income is income effectively connected to your business in the US. You're not in the US, so there's nothing to effectively connect your income to. Quote from the link: You usually are considered to be engaged in a U.S. trade or business when you perform personal services in the United States. You ask: If I form an LLC or C corp am I liable for this withholding tax? If you form a legal entity in a US jurisdiction - then that entity becomes subjected to that jurisdiction. If you're physically present in the US - then ECI may become an issue, and you also may become a resident based on the length of your stay. |
Does home equity grow with the investment put into the house? | Your best bet is to talk with a banker about your specific plans. One of the causes of the housing crash was an 80/20 loan. There you would get a first for 80% of the value of a home and 20% on a HELOC for the rest. This would help the buyer avoid PMI. Editorially, the reason this was popular was because the buyer could not afford the home with the PMI and did not have a down payment. They were simply cutting things too close. Could you find a banker willing to do something like this, I bet you could. In your case it seems like you are attempting to increase the value of your home by using money to do an improvement so the situation is better. However, sizable improvements rarely return 100% or more on investments. Typically, I would think, the bank would want you to have some money invested too. So if you wanted to put in a pool, a smart banker would have you put in about 60% of the costs as pools typically have a 40% ROI. However, I bet you can find a banker that would loan you 100%. You don't seem to be looking for advice on making a smart money decision, and it is difficult to render a verdict as very little detail is supplied about your specific situation. However, while certain decisions might look very profitable on paper, they rarely take into consideration risk. |
How can rebuilding a city/large area be considered an economic boost? | You're entirely correct. It's one of those "broken window" fallacies. Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation - "It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?" Frederic Bastiat's 1850 essay, "That which is seen and that which is not seen" is still the best and most beautifully-written of such explanations. As you point out, a gain for the construction companies is more than offset by the loss of life and financial expenditure of the insurance companies. Plus, it is never possible to quantify the entirety of the loss in terms of opportunities foregone ("that which is not seen"). People who were about to do incredible things but now gone. Property, of any nature, no longer of use to build on or perform service. Any replacement comes at the expense of other opportunities. |
How is a relocation fee of more than 40k taxed? | It is ordinary income to you. You should probably talk to a California licensed CRTP/EA/CPA, but I doubt they'll say anything different. You would probably ask them whether you can treat some of it as a refund of rent paid, but I personally wouldn't feel comfortable with that. |
Should I scale down my 401k? | IMHO your thinking is spot on. More than likely, you are years away from retirement, like 22 if you retire somewhat early. Until you get close keep it in aggressive growth. Contribute as much as you can and you probably end up with 3 million in today's dollars. Okay so what if you were retiring in a year or two from now, and you have 3M, and have managed your debt well. You have no loans including no mortgage and an nice emergency fund. How much would you need to live? 60 or 70K year would provide roughly the equivalent of 100K salary (no social security tax, no commute, and no need to save for retirement) and you would not have a mortgage. So what you decide to do is move 250K and move it to bonds so you have enough to live off of for the next 3.5 years or so. That is less than 10% of your nest egg. You have 3.5 years to go through some roller coaster time of the market and you can always cherry pick when to replenish the bond fund. Having a 50% allocation for bonds is not very wise. The 80% probably good for people who have little or no savings like less than 250k and retired. I think you are a very bright individual and have some really good money sense. |
Employer options when setting up 401k for employees | If you were looking to maximize your ability to save in a qualified plan, why not setup a 401K plan in Company A and keep the SEP in B? Setup the 401K in A such that any employee can contribute 100% of their salary. Then take a salary for around 19K/year (assuming under age 50), so you can contribute and have enough to cover SS taxes. Then continue to move dividends to Company A, and continue the SEP in B. This way if you are below age 50, you can contribute 54K (SEP limit) + 18K (IRA limit) + 5500 (ROTH income dependent) to a qualified plan. |
Shares; are they really only for the rich/investors? | I think I have a better answer for this since I have been an investor in the stock markets since a decade and most of my money is either made through investing or trading the financial markets. Yes you can start investing with as low as 50 GBP or even less. If you are talking about stocks there is no restriction on the amount of shares you can purchase the price of which can be as low as a penny. I stared investing in stocks when I was 18. With the money saved from my pocket money which was not much. But I made investments on a regular period no matter how less I could but I would make regular investments on a long term. Remember one thing, never trade stock markets always invest in it on a long term. The stock markets will give you the best return on a long term as shown on the graph below and will also save you money on commission the broker charge on every transaction. The brokers to make money for themselves will ask you to trade stocks on short term but stock market were always made to invest on a long term as Warren Buffet rightly says. And if you want to trade try commodities or forex. Forex brokers will offer you accounts with as low as 25 USD with no commissions. The commission here are all inclusive in spreads. Is this true? Can the average Joe become involved? Yes anyone who wants has an interest in the financial markets can get involved. Knowledge is the key not money. Is it worth investing £50 here and there? Or is that a laughable idea? 50 GBP is a lot. I started with a few Indian Rupees. If people laugh let them laugh. Only morons who don't understand the true concept of financial markets laugh. There are fees/rules involved, is it worth the effort if you just want to see? The problem with today's generation of people is that they fear a lot. Unless you crawl you dont walk. Unless you try something you dont learn. The only difference between a successful person and a not successful person is his ability to try, fail/fall, get back on feet, again try untill he succeeds. I know its not instant money, but I'd like to get a few shares here and there, to follow the news and see how companies do. I hear that BRIC (brasil, russia, india and china) is a good share to invest in Brazil India the good thing is share prices are relatively low even the commissions. Mostly ROI (return on investment) on a long term would almost be the same. Can anyone share their experiences? (maybe best for community wiki?) Always up for sharing. Please ask questions no matter how stupid they are. I love people who ask for when I started I asked and people were generous enough to answer and so would I be. |
How to pay with cash when car shopping? | You could write a personal check after the final price has been set and you're ready to purchase. Another option would be to get the final price - then walk over to your bank and get a cashier's check. |
Merchant dispute with airline over missed flight, and which credit cards offer protection? | You have no grounds for a refund. The flight took off on time, and you chose not to be on board. The fact that the airline could not guarantee ahead of time that the flight would leave on time is not relevant. You can certainly try to dispute the charge with the airline, and it sounds like you have done so. The airline correctly indicates that your dispute is unfounded. You can call up your credit card company and explain the situation, and they may accept your dispute. However, I am not aware of any credit card that would reimburse you (that is, issue a chargeback) in this situation. I'm not trying to be unsympathetic. It sucks that you felt you could not rely on the airline, and are now out some money. Fundamentally, though, this was your choice. The airline would be obligated to reimburse you the cost of your flight, or book you on another flight, if the flight was cancelled due to bad weather or other issues, but they owe you nothing if the flight took off on schedule. |
How do I screen for stocks that are near to their 52 weeks low | The screener at FinViz.com will let you screen for stocks at their 52-week low. |
Why doesn’t every company and individual use tax-havens to pay less taxes? | Your "average company and taxpayer" generally wouldn't have significant off-shore/foreign income. In the U.S., for example, even if you have your employer deposit all of your salary to an account at a foreign bank, they would still report it to the IRS as income. Removing the money from your home country isn't what gets it out of being taxed, it's that the money was never in your home country. |
What's the best use for this money? Its only a small amount but can make a big difference to me | Its very silly of you to have house savings while you have these debts. Your total (listed) debt is 1657, with a savings of 2000, and a tax refund of 985. I'd be done with the Apple loan and CC tomorrow. Does that accomplish the goal of making a significant difference in your debt? Yes it does. This will leave you with 1328. I'd keep 500 or so in an emergency fund, and put the rest to the car. Although 828 will not help much with the car it would probably knock a month off. Next work like crazy to pay off the car. Get a second job or work overtime. Then save a emergency fund of 3 to 6 months of expenses as if you already owned the house. I would tend to go on the high side as I suspect you are single. Only then does it makes sense to save for a down payment. Although it is an American institution, the book The Millionaire Next Door might be helpful for you. Your most powerful wealth building tool is your income. When one handicaps that tool with payments and exorbitant lifestyle choices you greatly reduce your ability to become wealthy. These amounts are so small, you should just knock them out. |
Is it possible for me to keep my credit card APR at 0% permanently? | Banks are in it to make money. But they're expected to provide a social good which powers our economy: secure money storage (bank accounts) and cashless transactions (credit/debit cards). And the government does not subsidize this. In fact, banks are being squeezed. Prudent customers dislike paying the proper cost of their account's maintenance (say, a $50/year fee for a credit card, or $9/month for a checking account) - they want it free. Meanwhile government is pretty aggressive about preventing "fine print" trickery that would let them recover costs other ways. However there isn't much sympathy for consumers who make trivial mistakes - whether they be technical (overdraft, late fee) or money-management mistakes (like doing balance transfers or getting fooled by promotional interest rates). So that's where banks are able to make their money: when people are imprudent. The upshot is that it's hard for a bank to make money on a prudent careful customer; those end up getting "subsidized" by the less-careful customers who pay fees and buy high-margin products like balance transfers. And this has created a perverse incentive: banks make more money when they actively encourage customers to be imprudent. Here, the 0% interest is to make you cocky about running up a balance, or doing balance transfers at a barely-mentioned fee of 3-5%. They know most Americans don't have $500 in the bank and you won't be able to promptly pay it off right before the 0% rate ends. (or you'll forget). And this works - that's why they do it. By law, you already get 0% interest on purchases when you pay the card in full every month. So if that's your goal, you already have it. In theory, the banks collect about 1.5% from every transaction you do, and certainly in your mind's eye, you'd think that would be enough to get by without charging interest. That doesn't work, though. The problem is, such a no-interest card would attract people who carry large balances. That would have two negative impacts: First the bank would have to spend money reborrowing, and second, the bank would have huge exposure to credit card defaults. The thing to remember is the banks are not nice guys and are not here to serve you. They're here to use you to make money, and they're not beneath encouraging you to do things that are actually bad for you. Caveat Emptor. |
How does start-up equity end up paying off? | In the real world, there are only two times you'll see that 5% become worth anything - ie, something you can exchange for cash - 1) if another company buys them; (2) if they go public. If neither of these things happen, you cannot do anything with the stock or stock options that you own. |
How to record “short premium” in double-entry accounting? | Thanks for your reply. I’m not familiar with the term “Held-For-Trading Security”. My securities are generally held as collateral against my shorts. To clarify, I am just trying to track the “money in” and “money out” entries in my account for the shorts I write. The transaction is relatively straight forward, except there is a ton of information attached! In simple terms, for the ticker CSR and short contract CSRUQ8, the relevant entries look something like this: There are no entries for expiries. I need to ensure that funds are available for future margin calls and assignments. The sale side using covered calls is as involved. |
Where can I open a Bank Account in Canadian dollars in the US? | If you can make the trip to BC yourself, I'd recommend opening an account with TD Canada Trust. They allow non-citizens to make accounts — apparently the only Canadian bank to do so. The customer service is great and they have a good online banking site that will allow you to manage it from the US. If you have an account with TD Bank in the US, it's also very easy to set up a TD Canada account through them that will be linked on their online site (though you will still have separate logins for both and manage them separately). I've done the reverse as a Canadian living in the US. You can set it up over the phone; their Cross-Border Banking number is listed here. They also offer better currency conversion rates than their standard ones when you do a cross-border transfer. You could also look into HSBC as well. They operate in Washington as well as across the border in BC. If you can't open a CAD account locally, they can help you open and manage one in Canada from the US. It may or may not require having a small business account instead of a personal account. |
Long term bond index prices before 2000? | The Barclay's 20+ Year Treasury Bond inception date was July 21, 2002. You aren't going to find treasury bond information going back to 1900 because Treasury Bills have only been issued since 1929. The U.S. Department of the Treasury will give you data back to 1990. There's a good article in the Globe and Mail which covers why you may want to buy bonds as part of your portfolio. The key is diversification. Historically, stocks have done better than bonds long-term, but when stocks fall, bonds tend to (though do not always) go up. If you are investing for 30 years, the risk of putting money into bonds is that you will not make as much money as if you had put the money into stocks. Historically (in the US or Canada), you'd have seen positive returns, just not as high as investing in the stock market. There are many investment strategies. I live in Canada and personally favour the one described in the Canadian Couch Potato, a passive index investment strategy where I invest my money in Canadian, U.S. and International equity (stock market mutual funds) and also in a Canadian bond fund. There are, of course, plenty of people who will tell you to take a radically different strategy with your investments. |
Legality of facilitating currency exchange between private accounts | I can't answer from the Indian side but on the UK side, if you and your friend are not related then there is no tax implication - you are effectively giving each other gifts - other than a possible inheritance tax liability if one of you dies within 7 years of the transfer and has an estate above the IHT allowance. |
What is a good way to keep track of your credit card transactions, to reduce likelihood of fraud? | The best way is to retain the charge slips. After you are done for the month you can discard them. Alternatively if you are using any of the personal finance tool or a simple XLS to track exepnses, it would be easy to figure out what you actually spent and what was not yours. |
Investment Newbie - Options in India - For $10K - for 10 years | I would suggest you to put your money in an FD for a year, and as soon as you get paid the interest, start investing that interest in a SIP(Systematic investment plan). This is your safest option but it will not give you a lot of returns. But I can guarantee that you will not lose your capital(Unless the economy fails as a whole, which is unlikely). For example: - you have 500000 rupees. If you put it in a fixed deposit for 1 year, you earn 46500 in interest(At 9% compounded quarterly). With this interest you can invest Rs.3875(46500/12) every month in an SIP for 12 months and also renew your FD, so that you can keep earning that interest.So at the end of 10 years, you will have 5 lacs in your FD and Rs. 4,18,500 in your SIP(Good funds usually make 13-16 % a year). Assuming your fund gives you 14%, you make: - 1.) 46500 at 14% for 9 years - 1,51,215 2.)8 years - 1,32,645 3.) 7 years - 1,16,355 4.) 6 years - 1,02,066 5.) 5 years - 89,531 6.) 4 years - 78,536 7.) 3 years - 68891 8.) 2 years 60,431 9.) 1 year - 53010 Total Maturity Value on SIP = Rs, 8,52,680 Principal on FD = Rs 5,00,000 Interest earned on 10th year = Rs. 46,500 Total = Rs. 13,99,180(14 lacs). Please note: - Interest rates and rate of return on funds may vary. This figure can only be assumed if these rates stay the same.:). Cheers! |
Should a high-school student invest their (relative meager) savings? | Is investing a good idea with a low amount of money? Yes. I'll take the angle that you CAN invest in penny stocks. There's nothing wrong with that. The (oversimplified) suggestion I would make is to answer the question about your risk aversion. This is the four quadrant (e.g., http://njaes.rutgers.edu:8080/money/riskquiz/) you are introduced to when you first sit down to open your brokerage (stocks) or employer retirement account (401K). Along with a release of liability in the language of "past performance is not an indicator..." (which you will not truly understand until you experience a market crash). The reason I say this is because if you are 100% risk averse, then it is clear which vehicles you want to have in your tool belt; t-bills, CDs, money market, and plain vanilla savings. Absolutely nothing wrong with this. Don't let anyone make you feel otherwise with remarks like "your money is not working for you sitting there". It's extremely important to be absolutely honest with yourself in doing this assessment, too. For example, I thought I was a risk taker except when the market tumbled, I reacted exactly how a knee-jerk investor would. Also, I feel it's not easy to know just how honest you are with yourself as we are humans, and not impartial machines. So the recommendation I would give is to make a strong correlation to casino gambling. In other words, conventional advice is to only take "play money" to the casino. This because you assume you WILL lose it. Then you can enjoy yourself at the casino knowing this is capital that you are okay throwing in the trash. I would strongly caution you to only ever invest capital in the stock market that you characterize as play money. I'm convinced financial advisors, fund managers, friends will disagree. Still, I feel this is the only way you will be completely okay when the market fluctuates -- you won't lose sleep. IF you choose this approach, then you can start investing any time. That five drachma you were going to throw away on lottery tickets? transfer it into your Roth IRA. That twenty yen that you were going to ante in your weekly poker night? transfer it into your index fund. You already got past the investors remorse of (losing) that money. IF you truly accept that amount as play money, then you CAN put it into penny stocks. I'll get lots of criticism here. However, I maintain that once you are truly okay with throwing that cash away (like you would drop it into a slot machine), then it's the same whether you lose it one way or in another investment vehicle. |
Question about stock taxes buy/sell short term | As Victor says, you pay tax on net profit. If this is a significant source of income for you, you should file quarterly estimated tax payments or you're going to get hit with a penalty at the end of the year. |
Oversimplify it for me: the correct order of investing | All of the provided advice is great, but a slightly different viewpoint on debt is worth mentioning. Here are the areas that you should concentrate your efforts and the (rough) order you should proceed. Much of the following is predicated upon your having a situation where you need to get out of debt, and learn to better budget and control your spending. You may already have accomplished some of these steps, or you may prioritize differently. Many people advise prioritizing contributing to a 401(k) savings plan. But with the assumption that you need advise because you have debt trouble, you are probably paying absurd interest rates, and any savings you might have will be earning much lower rates than you are paying on consumer debt. If you are already contributing, continue the plan. But remember, you are looking for advice because your financial situation is in trouble, so you need to put out the fire (your present problem), and learn how to manage your money and plan for the future. Compose a budget, comprised of the following three areas (the exact percentages are fungible, fit them to your circumstances). Here is where planning can get fun, when you have freed yourself from debt, and you can make choices that resonate with your individual goals. Once you have "put out the fire" of debt, then you should do two things at the same time. As you pay off debt (and avoid further debt), you will find that saving for both independence and retirement become easier. The average American household may have $8000+ credit card debt, and at 20-30%, the interest payments are $150-200/month, and the average car payment is nearly $500/month. Eliminate debt and you will have $500-800/month that you can comfortably allocate towards retirement. But you also need to learn (educate yourself) how to invest your money to grow your money, and earn income from your savings. This is an area where many struggle, because we are taught to save, but we are not taught how to invest, choose investments wisely and carefully, and how to decide our goals. Investing needs to be addressed separately, but you need to learn how. Live in an affordable house, and pay off your mortgage. Consider that the payment on a mortgage on even a modest $200K house is over $1000/month. Combine saving the money you would have paid towards a mortgage payment with the money you would have paid towards credit card debt or a car loan. Saving becomes easy when you are freed from these large debts. |
High Leverage Inflation Hedges for Personal Investors | $10k isn't really enough to make enough money to offset the extremely high risks in investing in options in this area. Taking risks is great, but a sure losing proposition isn't a risk -- it's a gamble. You're likely to get wiped out with leveraged options, since you don't have enough money to hedge your bets. Timing is critical... look at the swings in valuation in the stock market between the Bear Sterns and Lehman collapses in 2009. If you were highly leveraged in QQQQ that you bought in June 2009, you would have $0 in November. With $10k, I'd diversify into a mixture of foreign cash (maybe ETFs like FXF, FXC, FXY), emerging markets equities and commodities. Your goal should be to preserve investment value until buying opportunities for depressed assets come around. Higher interest rates that come with inflation will be devastating to the US economy, so if I'm betting on high inflation, I want to wait for a 2009-like buying opportunity. Then you buy depressed non-cyclical equities with easy to predict cash flows like utilities (ConEd), food manufacturers (General Mills), consumer non-durables (P&G) and alcohol/tobacco. If they look solvent, buying commodity ETFs like the new Copper ETFs or interests in physical commodities like copper, timber, oil or other raw materials with intrinsic value are good too. I personally don't like gold for this purpose because it doesn't have alot of industrial utility. Silver is a little better, but copper and oil are things with high intrinsic value that are always needed. As far as leverage goes, proceed with caution. What happens when you get high inflation? High cost of capital. |
Why invest for the long-term rather than buy and sell for quick, big gains? | Every time you buy or sell a share for some price, somebody must have thought that that was exactly the right moment to sell or buy that share at that price (and to trade with you). Every time a trade is made, both sides think they are doing the smart thing. Most of the time, one will turn out to be wrong, the other right. Nothing in your proposed method of trading explains why you would be the side that was right more often. So they'll probably even out. Or maybe there are people in the market who actually do have a slightly better than average method, and you'll be wrong somewhat more often than right. Each trade has transaction costs. If you simply hang on to your shares, that's more or less the same as evening out good trades and bad trades, but without the transaction costs. |
Clarify Microsoft's explanation of MIRR | The value does change from 12.61% to 13.48%. The difference between re-investing cashflows at 14% vs 12% is not big enough to change the rounded value. Edit: The initial cashflow is discounted at t0, meaning it's already equal to its present value and the finance rate doesn't have an effect. It does impact future outgoing cashflows, as you've noted. |
What home improvements are tax deductible? | On a personal income tax return home improvements are generally not deductible on a federal level. There might be some exceptions made for special tax programs, such as solar panels, but they tend to be the exception rather than the rule. |
Why is economic growth so important? | nan |
Treasury Bonds, and why has the NYSE 20+ Year Treasury Bond index (AXTWEN) gone up so much in the last year (2011)? | The price of a bond goes up when yields go down. For example, you purchase a 5% bond today for $100 and the very next day the same bond is being offered with a rate of 10%. Will you be able to sell you bond for the $100 you paid? No, you must compete with the 10% bonds being sold so you will have to sell your bond for less than the $100 you paid to compete with the new bonds being sold. Thus, bond prices are inversely related to bond yields. The 20-year index you cited tracks bond prices and bond prices have gone up over the last 10 years which means bond yields have gone down. Why have bond prices gone up? Demand. More investors are moving their savings into bonds. Why? I believe there a couple of reasons. One, US Treasuries are thought to be one of the safest investments. With the financial crisis and increased stock market volatility (see chart below) more investors are allocating more of their portfolios to safer investments. Two, a large portion of the US population is approaching retirement (see chart below). These folks are not interested in watching their retirement portfolios potentially shrink in the stock market so they move into bonds. |
Strange values in ARM.L price data 1998-2000 from Yahoo | This is just a shot in the dark but it could be intermarket data. If the stock is interlisted and traded on another market exchange that day then the Yahoo Finance data feed might have picked up the data from another market. You'd have to ask Yahoo to explain and they'd have to check their data. |
I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment? | If the company is stable. I like to recoup losses by buying in the valley and selling it all at the plateau and then learning as all beginners do, don't buy stocks because there's a feeding frenzy...or because Joe told me too. Pick your strategy in stocks and learn to stick with that. If you have no strategy, buy land. |
Is house swapping possible? | You would have to find someone in the other state who wanted to swap. This is conceivable but difficult if you want the houses to be the same value. How do you find the one person who lives in the right place now and wants to move to the right area? The normal way this situation is handled is to simply put your house on the market. At the same time, you find a new house in the new location. You arrange for a new mortgage for the new house and make purchase contingent on selling the old house. Your buyer pays off your mortgage and gives you a bit left over that you use as a downpayment on the new house. Note that you take a loss on closing costs when you do this. This is why if you are in the position where you move frequently, you may be better off renting. Sometimes an employer will help with this, paying for a long term hotel or short term rental. This can give you more room to sell and buy the houses. If you have to move right now, immediately, not in a few months when your housing situation is fixed, consider double renting. You rent out your mortgaged house to someone and pay rent on a new place. You may put some of your stuff in storage until you get into your permanent place. The downside is that it can be harder to sell a house with a tenant until you are close to the end of the lease. And of course, you are probably not in the best position to get or pay good rent. Your situation restricts your options. You might get stuck in this situation for a year so as to get the time that you need to line up a buyer. Of course, you may get lucky and find someone who wants your old house as an investment property. Such a person won't be bothered by a tenant. But they usually want a good price. After all, they want to make money off it. There are those operations that advertise that they buy ugly houses. They want a good deal. You'll probably take a bath. But they can buy quickly, so you can move on quickly. No waiting until they find a buyer. And I'm not saying that you can't do a swap like you want. I'm just saying that you may find it difficult to find a swapping partner. Perhaps an investment person would be up for it. They take your house in trade for their house, letting you stay in their house until they can fix up your old house and either rent it or sell it. The problem is that it may be hard to find such an investor who can handle a house where you are and has a house where you need to be. I don't have a good suggestion for finding a swapping partner other than calling a lot of realtors and asking for suggestions. Maybe a bit of online checking for properties where the owner's business is managing the sale. |
Where do I find the exercise price and date for warrants? | I agree that a random page on the internet is not always a good source, but at the same time I will use Google or Yahoo Finance to look up US/EU equities, even though those sites are not authoritative and offer zero guarantees as to the accuracy of their data. In the same vein you could try a website devoted to warrants in your market. For example, I Googled toronto stock exchange warrants and the very first link took me to a site with all the information you mentioned. The authoritative source for the information would be the listing exchange, but I've spent five minutes on the TSX website and couldn't find even a fraction of the information about that warrant that I found on the non-authoritative site. |
Why are Rausch Coleman houses so cheap? Is it because they don't have gas? | A 25% variance in price, in most markets, isn't so crazy as to require it be some sort of terrible scam, but that doesn't mean much else. It could be the inclusion of floor plans that are carefully designed to add square footage at minimum cost and thus reduce the average cost per square foot without actually being cheaper otherwise, less insulation, thinner walls, cheap piping, minimized wiring, or they are just efficient and competitive. As you pointed out they don't have gas, so that's certainly one way you know they cut costs - no gas lines to install! As the article from NAHB: Cost of Constructing A Home points out, though, what this figure includes can vary. Does it include the finished lot? If so then a smaller lot would mean lower square footage building price - because the land is smaller and cheaper, not the house! Is any kind of financing quoted in the price? Compare also change-plan costs, any penalties for delays in construction, grade of materials, floor plans, customization costs, fees or premiums to pick colors/floors/counters/cabinets/fixtures, and so on. What about central cooling and heating - are they quoting an electric furnace? How does electrical heating in your area compare to the cost of gas heat? (relative pricing of electric and gas vary widely by region and climate) In short: often square footage price isn't the whole story of what it would cost to construct a home. Ensure you are comparing everything that's important to you and you are getting a full quote, not comparing small isolate sales-pitch figures with no clear details. If it turns out the price is 25% lower than other builders in your area and they give you what you are wanting, and you have the good sense to have a qualified home inspector and/or structural engineer inspect the home thoroughly before you take possession, then you might just have found a good builder! I'd encourage you to personally visit some of their past construction work, such as houses they build 2-10 years ago and ensure they are in the sort of condition you'd expect. |
Price of a call option | EDIT quid keenly identified the 1:7 reverse split In May 2017. In a 1:7 reverse split, your shares are worth 7 times as much per share but you have 1/7 the amount of shares. A share worth $3.78 now was worth (all else being equal) $0.54 a month ago. So a call with a $2.50 strike a month ago was well out-of-the-money, and would now be the equivalent of a call with a $17.50 strike. A $17.50 call with a $3.78 underlying (or a $2.50 call with a $0.54 underlying) would reasonably be worth only 5 cents. So I now suspect that the quote is a stale quote that existed pre-split and hasn't been adjusted by the provider. OLD ANSWER I can find no valid reason why those calls would be so cheap. The stock price has been trending down from its onset in 2000, so either no one expects it to be above $2.50 in a month or it's so illiquid that there's not any real data to evaluate the options. They did pay some massive (30%) dividends in 2010 and 2012, they've been hemorrhaging cash for the past 4 years at least, and I have found at least on "strong sell" rating, so there's not much to be optimistic about. NASDAQ does not list any options for the stock, so it must be an OTC trade. With an ask size of 10 you could buy calls on 1,000 shares for $0.05, so if you can afford to lose $50 and want to take a flyer you can give it a shot, but I suspect it's not a valid quote and is something that's been manufactured by the option broker. |
Insider Trading? | I am a flight attendant on a private jet and I hear a bank CEO discussing a merger or a buyout. I proceed to purchase that stock before the announcement. The CEO did not tell me to buy it, I just overheard him. If you are a flight attendant on a private jet that is operated by one of the principals, probably including a bank, attorney, consultant, broker, etc., in the merger or buyout, then you probably have a fiduciary duty to safeguard the information and are prohibited from trading. Please see: http://www.kiplinger.com/article/investing/T052-C008-S001-would-you-be-guilty-of-insider-trading.html You’re a janitor at a major company. You hear members of the company’s board convening outside the room you’re cleaning and decide to hide in the closet. The board okays a deal to sell the company for a fat premium to the current share price. You load up on the shares. Illegal insider trading? Definitely. This is not a public place, and “you’d be in a position to understand that confidential information was being disclosed, which changes the calculus,” says Andrew Stoltmann, a Chicago-based securities lawyer. Also see: http://meyersandheim.com/how-to-win-an-insider-trading-case/ However, between these two extremes of a bystander with no duty to the corporation and a corporate officer with a clear duty to the corporation stood a whole group of people such as printers, lawyers and others who were involved in non-public transactions that did not necessarily have a duty to the company whose securities they traded. To address this group of people the courts developed the misappropriation theory. The misappropriation theory covers people who posses inside information and who are prohibited from trading on such information because they owe a duty to a third party and not the corporation whose securities are traded. Yours is the perfect example. You owe a duty to your employer to operate in its best interests. As for the broader, more common example, where you overhear information in an elevator, restaurant, in line at the coffee shop, etc., trading on such information was found not to be insider trading in SEC v. Switzer: http://law.justia.com/cases/federal/district-courts/FSupp/590/756/2247092/ In this case, Mr. Switzer overheard information at a track meet and traded on it with profits. The court found: The information was inadvertently overheard by Switzer at the track meet. Rule 10b-5 does not bar trading on the basis of information inadvertently revealed by an insider. On the basis of the above findings of fact and conclusions of law, the court orders judgment in favor of defendants. |
Is it common in the US not to pay medical bills? | Is it common in the US not to pay medical bills? Or do I misunderstood what had been said? There has definitely been a misunderstanding as it is not that common for people to not pay medical bills. Yes, there are those that cannot afford to pay them, and that does contribute to increasing prices, but overall people do pay. I think there is an aspect to this that has not been covered by the other two answers. What is common, at least in my experience, is that medical providers (i.e. doctors, hospitals, radiology, etc) are much more likely to work with you on establishing a payment plan than utilities, credit card companies, banks, etc are. This is different than holding off payment in the hopes of negotiating a reduction in payment. I am speaking of paying the total amount, but over multiple payments, and without a penalty for paying over multiple payments. And usually they will ask you what you can afford. If you can pay $50 per month, likely that will work. And even what I do that and call to pay the monthly amount, they will ask if I will pay that or some other (including lesser) amount. Also, if I skip a month (usually from forgetting, not intentionally) there is again no additional fee. This doesn't cover ALL providers, but so far has been consistent across all of the ones I have used. I suspect this is what your colleagues were referring to. |
Wage earners of age ≥ 60 with dependents: What Life Insurance, if any, should they buy? | Without knowing the WSC's objectives, priorities of those objectives and affordability we cannot determine which type of insurance is best. Life insurance for seniors is very expensive if you examine the per unit cost (e.g. cost per $1000 of death benefit). Therefore affordability is a critical deciding factor for WSC. Let's assume that we know the WSC's affordability and therefore the monthly premium is a fixed determined number, then there is a inverse relationship between the length of coverage and the amount of coverage. We have to achieve a balance between these two factors to best meet the WSC's objective. If the proposed plan is not affordable then the WSC must leave out his/her objectives with lesser priorities out of the total coverage amount. |
Can a merchant charge you more in the US if you want to use a credit card? | I'm not sure about the laws in specific states. However it's part of their merchant agreement that they can not charge a fee for a customer paying with credit card. It's also against merchant agreements to require a minimum purchase to use a credit card, although this is less commonly enforced. Apparently (http://fso.cpasitesolutions.com/premium/le/06_le_ic/fg/fg-merchants.html) merchants can offer a cash discount. Offering payment by credit card, though practically a requirement in todays retail environment, is a privilege for the merchant. It's a way of making buying convenient for the customer. As a result, penalizing the customer in any way is not just against their agreement, but rather disingenuous as well. edit: here's a bit more information about what they can and can't do. Amex prohibits discrimination, so if a merchant can't do something to a Visa/MC customer they can't do it to an Amex customer either. http://fso.cpasitesolutions.com/premium/le/06_le_ic/fg/fg-merchants.html |
What is an exercise price in regards to restricted stock awards? | It's still the purchase price or the price at which the shares are purchased or granted. This Investopedia article describes how the price is used for tax purposes: The amount that must be declared [for tax purposes] is determined by subtracting the original purchase or exercise price of the stock (which may be zero) from the fair market value of the stock as of the date that the stock becomes fully vested. Restricted stock awards are similar to stock options. The employer promises to grant the employee a certain number of shares upon the completion of the vesting schedule. The price at which the shares are purchased (or granted, if the price is zero) is the exercise price. |
Who puts out buy/sell orders during earnings reports or other scheduled relevant information? | The early bird catches the worm. The first person who makes use of the information gains! That is why hedge funds pay billions of dollars to place their routers right at the center of wall street. Moreover, the information is not always correct. The article you are reading may be a rumor spread by someone on wall street.Then there is speculation and that is factored into the price. For example:- In spite of all the bad news from Greece, the market still continued to rise. This was because, everyone had an idea about what was going to happen and the price was factored in way before Greece actually defaulted. The game is way more complicated than it seems. If everyone sat down and read reports, opportunities to make millions of dollars would have been lost in those few seconds. (Please note:- I do not mean reading reports is bad) |
Buy a parking spot and rent it out, or invest savings in an interest-bearing account? | From strictly a gross revenue point of view, the parking spot is going to yield a higher rate (5.4%) versus a 3% savings account, assuming you have it rented all year. Your break-even point (not considering other expenses) is 7-8 months of rent per year. So, what are things to consider? Here's a few to start with. The parking spot is a nice investment in that you get a decent return, and the potential for appreciation. The savings account/CD will give you a fixed return with no risk. To support your decision, make sure you understand all of the costs and understand all of the downside risk. If you're 50 and this is alot of money to you, be conservative. If you're 25 and have a good job, you can afford to chase the yield. |
At what interest rate should debt be used as a tool? | Money is a commodity like any other, and loans are a way to "buy" money. Like any other financial decision, you need to weigh the costs against the benefits. To me, I'm happy to take advantage of a 0% for six months or a modest 5-6% rate to make "capital" purchases of stuff, especially for major purchases. For example, I took out a 5.5% loan to put a roof on my home a few years ago, although I had the money to make the purchase. Why did I borrow? Selling assets to buy the roof would require me to sell investments, pay taxes and spend a bunch of time computing them. I don't believe in borrowing money to invest, as I don't have enough borrowing capacity for it to me worth the risk. Feels too much like gambling vs. investing from my point of view. |
How much more than my mortgage should I charge for rent? | Agree with the previous posts the question is poorly worded. -but- Clark Howard does say you really need to be getting 90% back in the mortgage payment. Remember that what ever your paying in principle a month is adding to your net worth and every month that gets you a little more money than the last payment. Also this is a good hedge on inflation and at some point within a few years you will be at break even. |
Why does ExxonMobil's balance sheet show more liabilities than assets? | I believe you are missing knowledge of how to conduct a ratio analysis. Understanding liquidity ratios, specifically the quick or acid-test ratio will be of interest and help your understanding. http://www.investopedia.com/terms/a/acidtest.asp Help with conducting a ratio analysis. http://www.demonstratingvalue.org/resources/financial-ratio-analysis Finally, after working through the definitions, this website will be of use. https://www.stock-analysis-on.net/NYSE/Company/Exxon-Mobil-Corp/Ratios/Liquidity |
Supporting a Kickstarter project: Should a customer's pledge payment include sales tax, e.g. GST/HST in Canada? | You can only claim an input tax credit if tax was actually collected by the seller, irrespective of whether it should have been or not. You need to contact the seller to request an invoice that shows the GST/HST, if any, as well as the seller's GST/HST number, which is required to be printed on invoices. If the seller is not including GST/HST in the prices indicated on Kickstarter, I would like to know how they get away with that! |
Former public employer that we have options in just sold | The deal is expected to close sometime in Q4. The fluctuation though the day is just noise. The price will reflect a discount to the full takeover value, reflecting the risk of the deal falling through. Cashless exercise is a good idea if you don't wish to own any QVC shares. |
How to find historical stock price for a de-listed or defunct company? | http://www.euroinvestor.com/exchanges/nasdaq/macromedia-inc/41408/history will work as DumbCoder states, but didn't contain LEHMQ (Lehman Brother's holding company). You can use Yahoo for companies that have declared bankruptcy, such as Lehman Brothers: http://finance.yahoo.com/q/hp?s=LEHMQ&a=08&b=01&c=2008&d=08&e=30&f=2008&g=d but you have to know the symbol of the holding company. |
How does a Non US citizen gain SEC Accredited Investor Status? | Here are the SEC requirements: The federal securities laws define the term accredited investor in Rule 501 of Regulation D as: a bank, insurance company, registered investment company, business development company, or small business investment company; an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million; a charitable organization, corporation, or partnership with assets exceeding $5 million; a director, executive officer, or general partner of the company selling the securities; a business in which all the equity owners are accredited investors; a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person; a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes. No citizenship/residency requirements. |
Student loan payments and opportunity costs | The only real consideration I would give to paying off the debt as slowly as possible is if inflation were much higher than it is now. If you had a nice medium to low interest (fixed rate) loan, like yours, and then inflation spiked to 7-8%, for example, then you're better off not paying it now because it's effectively making you money (and then when inflation calms back down, you pay it off with your gains). However, with a fairly successful and active Federal Reserve being careful to avoid inflation spikes, it seems unlikely that will occur during your time owing this debt - and certainly isn't anywhere near that point now. Make sure you're saving some money not for the return but for the safety net (put it in something very safe), and otherwise pay off your debt. |
Why do interest rates increase or decrease? | Fundamentally interest rates reflect the time preference people place on money and the things money can buy. If I have a high time preference then I prefer money in my hand versus money promised to me at some date in the future. Thus, I will only loan my money to someone if they offer me an incentive which would be an amount of money to be received in the future that is larger than the amount of money I’m giving the debtor in the present (i.e. the interest rate). Many factors go into my time preference determination. My demand for cash (i.e. my cash balance), the credit rating of the borrower, the length of the loan, and my expectation of the change in currency value are just a few of the factors that affect what interest rate I will loan money. The first loan I make will have a lower interest rate than the last loan, ceteris paribus. This is because my supply of cash diminishes with each loan which makes my remaining cash more valuable and a higher interest rate will be needed to entice me to make additional loans. This is the theory behind why interest rates will rise when QE3 or QEinfinity ever stops. QE is where the Federal Reserve cartel prints new money to purchase bonds from cartel banks. If QE slows or ends the supply of money will stop increasing which will make cash more valuable and higher interest rates will be needed to entice creditors to loan money. Note that increasing the stock of money does not necessarily result in lower interest rates. As stated earlier, the change in value of the currency also affects the interest rate lenders are willing to accept. If the Federal Reserve cartel deposited $1 million everyday into every US citizen’s bank account it wouldn’t take long before lenders demanded very high interest rates as compensation for the decrease in the value of the currency. Does the Federal Reserve cartel affect interest rates? Yes, in two ways. First, as mentioned before, it prints new money that is loaned to the government. It either purchases the bonds directly or purchases the bonds from cartel banks which give them cash to purchase more government bonds. This keeps demand high for government bonds which lowers the yield on government bonds (yields move inverse to the price of the bond). The Federal Reserve cartel also can provide an unlimited amount of funds at the Federal Funds rate to the cartel member banks. Banks can borrow at this rate and then proceed to make loans at a higher rate and pocket the difference. Remember, however, that the Federal Reserve cartel is not the only market participant. Other bond holders, such as foreign governments and pension funds, buy and sell US bonds. At some point they could demand higher rates. The Federal Reserve cartel, which currently holds close to 17% of US public debt, could attempt to keep rates low by printing new money to buy all existing US bonds to prevent the yield on bonds from going up. At that point, however, holding US dollars becomes very dangerous as it is apparent the Federal Reserve cartel is just a money printing machine for the US government. That’s when most people begin to dump dollars en masse. |
Buying a multi-family home to rent part and live in the rest | There's nothing wrong with it. Living in a two-family house and renting the downstairs was a fairly standard path to the middle class and home ownership in the 20th century. Basically, if market conditions are good, you'll have someone else paying your mortgage. The disadvantage of the situation is that you're a landlord. So you have to deal with your tenant, who is also a neighbor. Most tenants are fine, but the occasional difficult person may come out of the woodwork. That model of achieving home ownership became less popular in the late 60's-early 70's when the law allowed two incomes to be used for mortgage underwriting. Also, as suburbanization became a national trend, absentee landlords became more common Sounds like you are in the right place at the right time, and have stumbled into a good deal. |
Why would a bank need to accept deposits from private clients if it can just borrow from the Federal Reserve? | Let's just focus on the "why would a bank need to accept deposits from private clients part" and forget the central bank for a moment. I'm a guy. I have a wife and two kids. They have this pesky habit of wanting to buy stuff. When I get paid, I could just get a check, cash it, stuff it under a mattress, and pull it out when I need it. Hey that worked for a long time didn't it? But sometimes it's nice to write checks. (Just kidding, that's so gauche...) I use my debit card. I use my credit cards, but they need to be paid somehow. My light and phone bills need to be paid too. If only there were someone out there who could facilitate this transfer of money between me, the private client and the merchants I'm forced to spend my money at. Now some of those merchants have plans. Light bills I can pay at my grocer if I choose. But most of the other's don't. Luckily I have a bank that's willing to do this, for a fee. So basically they do it because there's a void in the market if they don't. I don't know if it's true what they say about supply creating its own demand, but it certainly is true that demand creates supply! |
Pay off car loan entirely or leave $1 until the end of the loan period? | Among the other fine answers, you might also consider that owning a vehicle outright will free you from the requirement to carry insurance on the vehicle (you must still carry insurance on yourself in most states). |
Where to park money low-risk on interactivebrokers account? | I would refrain from commenting on market timing strategy, but please don't park extra AUD cash in IB. Park cash in your local bank high interest savings, and get a Margin account at IB. When you want to pull the trigger, use margin loan to buy stocks immediately, then transfer cash from local bank to IB afterwards. |
Calculating Future and Present value into mortgage comparisons | You mentioned 15-20 years in your comment on mhoran_psprep's response. This is the most important factor to consider in the points vs. rate question. With a horizon that long it sounds like the points are probably a better option for you. There is a neat comparison tool at The Mortgage Professor's website that may help you build your spreadsheet or simply check the numbers you are getting. |
Why invest for the long-term rather than buy and sell for quick, big gains? | The price of a shares reflects the expected future returns of that company. If it does not someone will notice and buy until it does. Look at this chart http://www.finanzen.net/chart/Arcandor (click on max), that's a former DAX company, so one of the largest german companys. Now it's bankrupt. Why do you think you are the only one who is going to notice? There are millions of people and even more computers, some a going to be smarter than you. Of course that does not happen to everyone but who knows. Is Volkswagen going to survive the current crisis? Probably. Is it coming back to former glory in the next half year? Who knows? Here comes the obvious solution: Don't buy single stocks, spread it out over many companies, some will shine, some will plument and you get the average. Oh that's an index, how convinent. Now if there were a way to save on all these transaction costs you're incurring... |
LLC Partnership Earned Income vs. Partnership Share | Why would you file four K-1s for each partner? You file one K-1 per partner, on which you report the total of income attributed to that partner. It shouldn't and cannot "vary". There's no variables here, the income you report is the income already earned and attributed to that partner. What's there to vary? How you decide the attribution of income is governed by your operating agreement, the IRS only needs the bottom line. |
Do rental car agencies sell their cars at a time when it is risky for the purchaser? | The rental industry is seasonal. They purchase additional inventory (vehicles) for their busy seasons and sell the extra inventory afterwards. |
What are the advantages of paying off a mortgage quickly? | I used to think that paying off ahead of time made sense, but I no longer do, at least in most cases. The upside is that you can get a return on your money equal to the mortgage interest rate (it's less than that in the US, where mortgage interest is deductible, so it's roughly the mortgage interest rate * 1 - your marginal income tax rate). There are a few downsides. The biggest is that cash is the most liquid asset you can have; you can get at it with no restrictions. If you put that cash into your house, you are converting that into an asset with a lot of restrictions; you can't get at it without fees, nor can you get at it if you don't have a job, which is when you would need it most. So, you are putting your money in a hard-to-get-at place for a small interest rate. I don't think it is worthwhile. (edit) One complication is PMI. If you are currently paying PMI, it may make sense to put money towards the mortgage until you get to 20% and can get rid of the PMI. |
Companies that use their cash to buy back stock, issue dividends, etc. — how does this this typically affect share price? | IBM is famous for spending lots of money on stock buyback to keep the stock price higher. The technique works, and investors in growth stocks generally prefer a high market prices to a taxable dividend payment. Dividends are ways to return shareholder value when a company generates a lot of cash, but doesn't have alot of growth. Electric and gas companies are a classic example of high-dividend companies. |
Is there a way to roll over short-term gains and avoid capital gain tax | If the investments are in a non-retirement, taxable account, there's not much you can do to avoid short-term capital gains if you sell now. Ways to limit short-term capital gains taxes: Donate -- you can donate some of the stock to charity (before selling it). Transfer -- you can give some of the stock to, say, a family member in a lower tax bracket. But there are tons of rules, gift limits, and won't work for little kids or full time students. They would still pay taxes at their own rate. Protect your gains by buying puts. Wait it out until the long-term capital gains rate kicks in. This allows you to lock in your gains now (but you won't benefit from potential future appreciation.) Buying puts also costs $, so do the ROI calculation. (You could also sell a call and buy a put at the same time and lock in your gains for certain, but the IRS often looks at that as locking in the short-term capital gain, so be careful and talk to a tax professional if you are considering that method.) Die. There's a "step-up" basis on capital gains for estates. source: http://www.forbes.com/2010/07/30/avoid-capital-gains-tax-anschutz-personal-finance-baldwin-tax-strategy.html |
How to share income after marriage and kids? | I haven't seen this addressed anywhere else, so I'll make a small answer to add on to the great ones already here. Money isn't the only way a person can contribute to a relationship. Time and effort are valuable contributions. Who runs the household? Who cooks, cleans, does laundry? How will you share these duties? My husband and I have a couple of rules. One of which is that we don't keep count. "I did dishes, so you do laundry". "I made coffee last time, so now it's your turn". "I paid this, so you pay that". That's not allowed. I happen to make ~4x as much as my husband, but I work 4x the hours (he's part time at the moment). So, he does the dishes, he cooks, he does laundry, he runs the household. Do I value him less? No! I value him more, because he is part of the team, and he feeds me coffee while I work (we have our own business). Even though I make so much more than him, we still split everything down the middle. Because his contribution to this relationship, to this household, is so much more than just money. And I value him. I value his contribution. At the end of the day, you are a team - and if you split hairs over finances, you'll find yourself splitting hairs over everything. |
The board of directors in companies | Boards of Directors are required for corporations by nearly all jurisdictions. Some jurisdictions have almost self-defeating requirements however, such as in tax havens. Boards of Directors are compensated by the company for which they sit. Historically, they have set their own compensation almost always with tight qualitative legal bounds, but in the US, that has now changed, so investors now set Director compensation. Directors are typically not given wages or salary for work but compensation for expenses. For larger companies, this is semantics since compensation averages around one quarter of a million of USD. Regulations almost always proscribe agencies such as other corporations from sitting on boards and individuals convicted of serious crimes as well. Some jurisdictions will even restrict directories to other qualities such as solvency. While directors are elected by shareholders, their obligations are normally to the company, and each jurisdiction has its own set of rules for this. Almost always, directors are forbidden from selling access to their votes. Directors are almost always elected by holders of voting stock after a well-publicized announcement and extended time period. Investors are almost never restricted from sitting on a board so long as they meet the requirements described above. |
Are car buying services worth it? | Depends on how you value your time. These programs do not say they will get you the lowest basement price; they say you get a reasonable price without negotiation. This is true. Use a service. Pick out the car you want and spend less than an afternoon picking up your vehicle. You don't have to fret or do all of the price research or comparison shopping because that is what the service does for you. Since you have to pick a make and model before you begin AND because you need to arrange your financing at a credit union before you being (regardless of a buying service) I don't think they actually work out financially for most folks. My anecdote: Because we were buying an already inexpensive new car, the Costco pre-negotiated discount was just a few hundred bucks. The discount is different for each car (naturally). Our base model was terrific in consumer reports, but the sticker price doesn't leave dealerships a lot of room for profit to start with. We ended up saving a couple thousand dollars by skipping the Costco program and following these tips from JohnFX: What are some tips for getting the upper hand in car price negotiations? But we did it all over email. We emailed any dealership we could find online that was in driving distance. (There were literally dozens of dealerships to choose from.) We made a new, throw away email address and starting to ask for a lower price. Whenever we got a lower price, we simply asked the others to beat it. All over email. It only took a few days, we know we got a low price and the stress really wasn't a factor. (A couple of the salespeople got a little rude, but it was over the email so we didn't care or fret.) I had time to kill, and the extra hassle and effort saved me much more money. |
What one bit of financial advice do you wish you could've given yourself five years ago? | I wish I would have known macro-economics taught by the Austrian School types at The Mises Institute. Their teachings would have compelled me to do the following: |
I have a horrible 401k plan, with high expenses. Should I stay with it or move my money elsewhere? | 2%? I would put in just what it takes to share in the profit sharing, not a dime more. My S&P fund cost is .02% (edited, as it dropped to .02 since original post), 1/100 of the cost of most funds you list. Doesn't take too many years of this fee to negate the potential tax savings, and not many more to make this a real loser. |
Tax on Stocks or ETF's | I think the answer you are looking for is: You are not taxed on the original basis (purchase cost) of your investment. If you pay $30 a share, and sell at $35, the $5 per share gain is taxable at time of sale. But the $30 basis cost doesn't enter into tax calculations at all. (So it's important to keep good records on your investments and how much you paid for them at purchase.) |
Didn't apply for credit card but got an application denied letter? | This question has the [united kingdom] tag, so the information about USA or other law and procedures is probably only of tangential use. Except for understanding that no, this is not something to ignore. It may well indicate someone trying to use your id fraudulently, or some other sort of data-processing foul-up that may adversely impact your credit rating. The first thing I would do is phone the credit card company that sent the letter to inform them that I did not make his application, and ask firmly but politely to speak to their fraud team. I would hope that they would be helpful. It's in their interests as well as yours. (Added later) By the way, do not trust anything written on the letter. It may be a fake letter trying to lure or panic you into some other sort of scam, such as closing your "compromised" bank account and transferring the money in it to the "fraud team" for "safety". (Yes, it sounds stupid, but con-men are experts at what they do, and even finance industry professionals have fallen victim to such scams) So find a telephone number for that credit card company independently, for example Google, and then call that number. If it's the wrong department they'll be able to transfer you internally. If the card company is unhelpful, you have certain legal rights that do not cost much if anything. This credit company is obliged to tell you as an absolute minimum, which credit reference agencies they used when deciding to decline "your" application. Yes, you did not make it, but it was in your name and affected your credit rating. There are three main credit rating agencies, and whether or not the bank used them, I would spend the statutory £2 fee (if necessary) with each of them to obtain your statutory credit report, which basically is all data that they hold about you. They are obliged to correct anything which is inaccurate, and you have an absolute right to attach a note to your file explaining, for example, that you allege entries x,y, and z were fraudulently caused by an unknown third party trying to steal your ID. (They may be factually correct, e.g. "Credit search on ", so it's possible that you cannot have them removed, and it may not be in your interests to have them removed, but you certainly want them flagged as unauthorized). If you think the fraudster may be known to you, you can also use the Data Protection Act on the company which write to you, requiring them to send you a copy of all data allegedly concerning yourself which it holds. AFAIR this costs £10. In particular you will require sight of the application and signature, if it was made on paper, and the IP address details, if it was made electronically, as well as all the data content and subsequent communications. You may recognise the handwriting, but even if not, you then have documentary evidence that it is not yours. As for the IP address, you can deduce the internet service provider and then use the Data Protection act on them. They may decline to give any details if the fraudster used his own credentials, in which case again you have documentary evidence that it was not you ... and something to give the police and bank fraud investigators if they get interested. I suspect they won't be very interested, if all you uncover is fraudulent applications that were declined. However, you may uncover a successful fraud, i.e. a live card in your name being used by a criminal, or a store or phone credit agreement. In which case obviously get in touch with that company a.s.a.p. to get it shut down and to get the authorities involved in dealing with the crime. In general, write down everything you are told, including phone contact names, and keep it. Confirm anything that you have agreed in writing, and keep copies of the letters you write and of course, the replies you receive. You shouldn't need any lawyer. The UK credit law puts the onus very much on the credit card company to prove that you owe it money, and if a random stranger has stolen your id, it won't be able to do that. In fact, it's most unlikely that it will even try, unless you have a criminal record or a record of financial delinquency. But it may be an awful lot of aggravation for years to come, if somebody has successfully stolen your ID. So even if the first lot of credit reference agency print-outs look "clean", check again in about six weeks time and yet again in maybe 3 months. Finally there is a scheme that you can join if you have been a victim of ID theft. I've forgotten its name but you will probably be told about it. Baically, your credit reference files will be tagged at your request with a requirement for extra precautions to be taken. This should not affect your credit rating but might make obtaining credit more hassle (for example, requests for additional ID before your account is opened after the approval process). Oh, and post a letter to yourself pdq. It's not unknown for fraudsters to persuade the Post Office to redirect all your mail to their address! |
How can I set up a recurring payment to an individual (avoiding fees)? | I think about as close as you're going to get is to use a personal PayPal account, and set up a reminder to yourself to log in and send the money. (Because, as you said, setting up a recurring payment is a business account thing.) From PayPal's website: Sending money – Personal payments: It's free within the U.S. to send money to family and friends when you use only your PayPal balance or bank account, or a combination of their PayPal balance and bank account. ... Receiving money – Personal payments: It's free to receive money from friends or family in the U.S. when they send the money from the PayPal website using only their PayPal balance or their bank account, or a combination of their PayPal balance and bank account. You can automate the reminder to yourself with any of the gazillion task managers out there: Google Calendar, MS Outlook, Todoist, Remember the Milk, etc. |
What emergencies could justify a highly liquid emergency fund? | Emergency funds are defined in terms of months of tightened-belt living -- that's according to the usual gurus such as Suze Orman, Dave Ramsey etc. They aren't for short-term emergencies like a blown transmission. Use other money for those. Why? People with bad financial habits have short-term emergencies all the time, and that emergency fund doesn't have a chance of lasting. This is just their financial habits manifesting. Here's what an emergency fund is for. Scenario: big economic bubble bursts. Stock market drops 50%. Credit dries up. This happened in 2007 by the way. The dominoes start falling boom, boom, boom: I'm exaggerating a bit here, but a lot of people lived at least half this stuff in 2007-11. Nothing starts those dominoes falling like lack of cash at a key moment. That's what an emergency fund is all about - keeping things tight-normal for long enough to get back on your feet. If you want to keep your emergency fund in something risky -- keep a lot more of it! |
I can make a budget, but how can I get myself to consistently follow my budget? | Assuming what is taking you over budget are not essential costs such as fuel bills, food, mortgage etc. you could do the following. Work out your monthly disposable income after all essential base costs have been sutracted. Then simply keep a book of any additional spending. It will be very easy to see if you're at risk of overspending. In fact, even when one has no need to budget it's still an excellent idea to keep a book of all your spending. It's surprising how useful it can be. It's a great reference for dues dates, sizes of past bills and provides an excellent cross check of your bank statement. It's not often that you find an error on your bank statement (at least it shouldn't be!), but my books have helped me locate three such errors over the past 25 years, which I'm sure would have gone unnoticed by most people. So my advice is, keep a book of your spending. |
Need small buisness ideas with 100k $ budjet in a 3rd world country | Firstly, I highly doubt anyone on this site will be able to provide you with accurate input on this matter regarding what TO DO. It's the what not to do that may be possible. That said, if you want to offer equipment for rent, which in a developing country is probably a decent idea, I'd start by asking around and doing some research on what people really need and are wanting to rent. I would suggest studying other developing/developed countries histories to see what companies were successful around a similar stage as well. I'd start small: pressure washers, generators, concrete mixers, fork lifts, hydraulic ladders, etc. Getting things that are just a bit too expensive for someone to own and something they don't need all the time. These can be great revenue generators because they're cheap to purchase, but can be rented at a premium. |
Can I claim a tax deduction for working from home as an employee? I work there 90% of the time | The general rule is: Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly: Exclusively seems to be the toughest standard and I do not know exactly how strict the IRS's interpretation is. Working in your living room where you regularly watch TV and have people over on the weekends would seem to fail that test. A separate room with your computer in it would pass it. If it was your only computer and you regularly played online games with it, that would seem to be a grey area. The IRA booklet covering this area is here http://www.irs.gov/pub/irs-pdf/p587.pdf I know people that have rented rooms in other places or made use of rental offices for this purpose. |
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