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Are capitalization rate and net profit margin the same thing? | Capitalization rate and "Net Profit margin" are two different things. In Capitalization rate note that we are taking the "total value" in the denominator and in Net profit margin we are taking "Revenue/Sales". Capitalization Rate: Capitalization Rate = Yearly Income/Total Value For example (from Investopedia: ) if Stephane buys a property that will generate $125,000 per year and he pays $900,000 for it, the cap rate is: 125,000/900,000 = 13.89%. Net Profit margin: Net Profit margin = Net Profit/Revenue For example (from finance formulas): A company's income statement shows a net income of $1 million and operating revenues of $25 million. By applying the formula, $1 million divided by $25 million would result in a net profit margin of 4%. Although the formula is simplistic, applying the concept is important in that 4% of sales will result in after tax profit. |
My landlord is being foreclosed on. Should I confront him? | If John signs the lease he is entitled to stay there for the duration of the lease regardless of the foreclosure status. http://www.nolo.com/legal-encyclopedia/renters-foreclosure-what-are-their-30064.html I would suggest that signing a year lease (even by email), with the plan to leave as early as possible is a good thing. The key will be to make sure the penalty for leaving early is nothing. John doesn't know the status of the foreclosure, how long it will take, who might own afterwards and a lot of other unknowns. The worst case is to be unsure of where you are living. Sign the lease, and be secure for one whole year that you know where you will be living. Spend that year finding a new place to live. If the bank doesn't offer you clear and obvious ways to submit rent, open an account AT THE BANK and deposit the rent there, on time. You are establishing credibility that you deserve to stay. You still owe the rent, so pay it. They don't want to be your landlord, but don't let a bank bully you around. |
What does pink-sheet mean related to stocks? | It's an over-the-counter stock quote system. Read all about it. Or visit it. |
The Benefits/Disadvantages of using a credit card | One of the more subtle disadvantages to large credit card purposes purchases (besides what the other answer mentions), is that it makes you less prepared for emergencies. If you carry a large balance on your credit card with the idea that your income can easily handle the payments to beat the no-interest period, you never know when you'll have an unexpected emergency and you'll end up having to pay less, miss the deadline and end up paying huge interest. Even if you are fastidious about saving and budgeting, what if your family comes under a large financial burden (just as one possible example)? |
Organizing Expenses/Income/Personal Finance Documents (Paperless Office) | If you're curious, here are my goals behind this silly madness You said it... The last two words, I mean...:-) If you're auditing your statements - why do you need to keep the info after the audit? You got the statement for last month, you verified that the Starbucks charge that appears there is the same as in your receipts - why keeping them further? Done, no $10 dripping, throw them away. Why do you need to keep your refrigerator owner's manual? What for? You don't know how to operate a refrigerator? You don't know who the manufacturer is to look it up online in case you do need later? Read it once, mark the maintenance details in your calendar (like: TODO: Change the water filter in 3 months), that's it. Done. Throw it away (to the paper recycle bin). You need the receipt as a proof of purchase for warranty? Make a "warranty" folder and put all of them there, why in expenses? You don't buy a refrigerator every months. That's it, this way you've eliminated the need to keep monthly expenses folders. Either throw stuff away after the audit or keep it filed where you really need it. You only need a folder for two months at most (last and current), not for 12 months in each of the previous 4 years. |
Why do stocks tend to trade at high volumes at the end of (or start) the trading day? | Trading volumes are higher at the end of the day as many traders close their open positions. In the morning however, traders incorporate various factors like performance of worldwide markets overnight, any corporate or government announcements, global macro events, etc. |
Questioning my Realtor | My realtor told me that even though they're only asking for 1/2 the money and have excellent credit that the mortgage company may not lend it to them if I'm over priced. Is this true? I've never heard of it before. It is a chance, but it is a red herring to the discussion. Having excellent credit has nothing to do with being eligible for a debt object of a specific size. Just because you have excellent credit, would you get approved for a property of $10,000,000 if you only made $35,000 a year (and had no other net worth)? But regarding your potential buyers, a chance vs a good chance is different. Your realtor just told you some basic always true lending fact that has nothing to do with your situation. |
Will I always be able to get a zero-interest credit card? | After looking at the comments, and your replies it seems that your mind is made up: "You will always be able to obtain 0% credit, and nothing bad will ever happen". Credit cards that offer 0% on balance transfers are very rare. Most have a transfer fee of some kind, which acts like an interest rate. This is a change that probably happened 10 years ago without much fanfare. From this you can draw a lesson: what changes will come in the future? This site and others a full of "tales of woe" where people were playing musical chairs with credit, and when the music stopped, there was no chairs in sight. Job loss, medical expenses, unexpected taxes, natural disasters can all effect one's ability to make payments on time and happen. Once payments start being missed or are late, things tend to avalanche from there. It has happened to me, and loved ones. The pain and suffering is not worth it. Get out of debt. You claim that you are investing the money instead of paying on the debt, and you are making the delta between your prevailing investment rate 7%. Did you include the balance transfer fee in your calculations? First off your investments could lose money. While 2015 was mostly flat, we have not had a correction in a long time. Some say we are long overdue. Secondly, how much money are we really talking about here? Say there is not a balance transfer fee, you could be guaranteed 7%, and you are floating $10K. Congratulations in this mythical scenario you just made $700. If $700 changes your life dramatically perhaps it is time for a second job. This way you can earn that every two weeks (working part time) rather than every year. Now that will really change your life. By applying this amount of mental energy to make $700, what opportunities are you missing? Pay off the debt, you will be much better off in the long run. |
searching for historic exchange rate provider which meets this example data | You will most likely not be able to avoid some form of format conversion, regardless of which data you use since there is, afaik, no standard for this data and everyone exports it differently. One viable option would be, like you said yourself, using the free data provided by Dukascopy. Please take into consideration that those are spot currency rates and will most likely not represent the rate at which physical and business-related exchange would have happened at this time. |
Paid cash for a car, but dealer wants to change price | On the surface this sounds ridiculous, which makes me suspect that there might be something that the dealer intends to cling on to; otherwise it sounds like the dealer should be ashamed to even call your son about its own incompetence. I'd recommend politely refusing the request since said mistake didn't happen on your end, and wait to see if the dealer comes back with some sort of argument. |
If I put a large down payment (over 50%) towards a car loan, can I reduce my interest rate and is it smart to even put that much down? | Talk to your bank first but shop around a bit as well with other reputable lenders in your area. Another option, if you're willing to put down ~84% of the purchase price would be to talk to several dealerships BEFORE you set foot on a single lot. Tell them that you are interested in buying a Versa and that you are willing to pay cash but you are not willing to pay more than $10,200. They won't agree (trust me on that) but they will come down from $13,000. Say "Thanks, I'll call you back." and call one of the other dealerships on your list and tell them "I just spoke with this dealership and they are willing to sell me the car for [whatever number they gave you]." One of two things will happen, either the dealership will come back with a lower price or they will tell you to go buy the car there. Continue this process until you have one dealership left. I did this with 3 dealerships in 2011 and bought a truck with a $27,000 sticker price for just over $19,000. It took about a week to make all of the calls and I ended up going to a dealership 3 hours away but it was worth it for $8,000. |
Looking for suggestions for relatively safe instruments if another crash were to happen | One approach is to invest in "allocation" mutual funds that use various methods to vary their asset allocation. Some examples (these are not recommendations; just to show you what I am talking about): A good way to identify a useful allocation fund is to look at the "R-squared" (correlation) with indexes on Morningstar. If the allocation fund has a 90-plus R-squared with any index, it probably isn't doing a lot. If it's relatively uncorrelated, then the manager is not index-hugging, but is making decisions to give you different risks from the index. If you put 10% of your portfolio in a fund that varies allocation to stocks from 25% to 75%, then your allocation to stocks created by that 10% would be between 2.5% to 7.5% depending on the views of the fund manager. You can use that type of calculation to invest enough in allocation funds to allow your overall allocation to vary within a desired range, and then you could put the rest of your money in index funds or whatever you normally use. You can think of this as diversifying across investment discipline in addition to across asset class. Another approach is to simply rely on your already balanced portfolio and enjoy any downturns in stocks as an opportunity to rebalance and buy some stocks at a lower price. Then enjoy any run-up as an opportunity to rebalance and sell some stocks at a high price. The difficulty of course is going through with the rebalance. This is one advantage of all-in-one funds (target date, "lifecycle," balanced, they have many names), they will always go through with the rebalance for you - and you can't "see" each bucket in order to get stressed about it. i.e. it's important to think of your portfolio as a whole, not look at the loss in the stocks portion. An all-in-one fund keeps you from seeing the stocks-by-themselves loss number, which is a good way to trick yourself into behaving sensibly. If you want to rebalance "more aggressively" then look at value averaging (search for "value averaging" on this site for example). A questionable approach is flat-out market-timing, where you try to get out and back in at the right times; a variation on this would be to buy put options at certain times; the problem is that it's just too hard. I think it makes more sense to buy an allocation fund that does this for you. If you do market time, you want to go in and out gradually, and value averaging is one way to do that. |
What evidence is there that rising interest rates causes Canadian condo prices to go down? | Yes, it's unreasonable to think the prices will drop 10-20% in that time frame. Housing prices are not an equation that can can be solved to "home prices are X% overvalued." You have 3 answers so far, Quanty's "prices are inversely proportional to rates," Rob's "there's no strong correlation between interest rates and house prices," and MB's, "rising interest rates create downward pressure on housing prices." Any research into price history had better take every other variable into account. Articles that look at rates vs price don't always address a key item, income. Say we agree that the data show your city to be 10% too high. But if sellers like their high price and have some 'dig my heels in' power, prices won't drop. The seller simply stays put, and the supply/demand curves result not in a lower price, but in less supply. And the effect is to change the demographic of that area, i.e. attracting higher income earners. Rob linked to an article with a nice set of charts. One chart showing the US30 yr fixed rate and 'Real House Prices'. What results is a chart that can refute the relationship between rates and prices. But that would ignore an historical point that's too important to forget. The tumble that started in Jan '06 had nothing to do with the 30 year rate. It was the result of a series of insane financial products including 'interest only option ARMs' which permitted buyers to get approved for a purchase based on a payment that wasn't fixed, and would change to a fully amortizing mortgage at a higher rate that was unaffordable. A product that was a financial time bomb. Canada Banks offered no such product, and when the US market got pneumonia, Canada experienced a mild cold. With respect to any answers that offer US centric data to prove any hypothesis, I don't feel such comparisons are appropriate. Correlations, and the data used to prove them are an interesting thing. I can suggest that you take the US 30 year rate, along with our median income, or rather 25% of monthly median income. Calculate the mortgage that results. This translates nicely to the home a median family can afford. And I claim that long term this is the equilibrium price of that median home. But supply/demand has another factor, 'stickyness' or the more technical term, 'inelasticity of demand.' This means that for example, a 10% increase in the price of cigarettes does not cause a 10% drop in consumption. Each and every good has its own elasticity, and in the case of housing, a rise in cost would certainly impact the marginal buyers, but others will simply adjust their budgets. Not all buyers were planning to hit the bank's limit on what they could afford, so the rise doesn't change their mind, just their budget. Last - I know that Canada does not have a 30 year mortgage, most common is a 5 year rate with 30 year amortization. (correction/clarification, anyone?) The effect of this is less volatility in the market, since I believe your rates are not poised for the 2.5% to 4% jump implied by another response. Small increases can be absorbed. In a beautiful coincidence, the Federal Reserve Board sent me a link to The Interest Rate Elasticity of Mortgage Demand: Evidence From Bunching at the Conforming Loan Limit. It's a bit long but a worthwhile look at how the correlation isn't as instant as some might think. |
What is a good service that will allow me to practice options trading with a pretend-money account? | Try ThinkOrSwim by TDAmeritrade. It allows you to paper trade with a powerful trading platform. There's also a mobile app so you can trade on the go. Good luck! |
How can this stock have an intra-day range of more than 90% on 24Aug2015? | EDIT: It was System Disruption or Malfunctions August 24, 2015 2:12 PM EDT Pursuant to Rule 11890(b) NASDAQ, on its own motion, in conjunction with BATS, and FINRA has determined to cancel all trades in security Blackrock Capital Investment. (Nasdaq: BKCC) at or below $5.86 that were executed in NASDAQ between 09:38:00 and 09:46:00 ET. This decision cannot be appealed. NASDAQ will be canceling trades on the participants behalf. A person on Reddit claimed that he was the buyer. He used Robinhood, a $0 commission broker and start-up. The canceled trades are reflected on CTA/UTP and the current charts will differ from the one posted below. It is an undesired effect of the 5-minute Trading Halt. It is not "within 1 hour of opening, BKCC traded between $0.97 and $9.5". Those trades only occurred for a few seconds on two occasions. One possible reason is that when the trading halt ended, there was a lot of Market Order to sell accumulated. Refer to the following chart, where each candle represents a 10 second period. As you can see, the low prices did not "sustain" for hours. And the published halts. |
What should one look for when opening a business bank account? | Yes, it's a good idea to have a separate business account for your business because it makes accounting and bookkeeping that much easier. You can open a business checking account and there will be various options for types of accounts and fees. You may or may not want an overdraft account, for example, or a separate business credit card just so you can more easily separate those expenses from your personal cards. When I started my business, I opened a business checking account and met with my banker every year just to show them how the business was doing and to keep the relationship going. Eventually, when I wanted to establish a business line of credit, it was easier to set up because I they were already familiar with my business, its revenue, and needs for a line of credit. You can set up a solo 401k with your bank, too, and they'll be very happy to do so, but I recommend shopping around for options. I've found that the dedicated investment firms (Schwab, Fidelity, etc.) tend to have better options, fees, and features for investment accounts. Just because a specific bank handles your checking account doesn't mean you need to use that bank for everything. Lastly, I use completely different banks for my personal life and for my business. Maybe I'm paranoid, but I just don't want all my finances in the same place for both privacy reasons and to avoid having all my eggs in the same basket. Just something to consider -- I don't really have a completely sane reason for using completely different banks, but it helps me sleep. |
Can a wealthy investor invest in or make a deal with a company before it goes public / IPO? | Yes, it is common for investors to make equity investments in technology companies pre-IPO. There are technology incubators like Y Combinator that exist to make "angel" investments, which are early-stage equity investments in private technology companies (these investments are sometimes in notes that are convertible to equity, but are very similar to a stock investment). Wealthy individuals can also make angel investments (e.g. Peter Thiel made a $500K investment in Facebook in 2004 for 10.2% of the company). Additionally, venture capital firms exist to make equity investments in private companies. In the US, you need to be an Accredited Investor to make private equity investments (income greater than $200K or net worth greater than $1 million), but you probably need a lot more money than the minimum and connections to get in on these deals in reality. |
What are the downsides that prevent more people from working in high-income countries, and then retiring in low-income (and cost of living) ones? | At retirement age, your life priorities are somewhat different, and two key items come to mind. Your social circle, community and extended family contacts are highly related with your lifespan at retirement age. Loneliness kills, literally. Long distance relocation would weaken those ties exactly at the time when you most need and want them. You are also likely to need at least occasional physical assistance at random times, so living in a spot where none your friends&family can visit at a day's notice is hard. Cheaper living locations tend to have worse healthcare. Again, this doesn't matter much for a 25 year old expat, but at an age where you likely have one or multiple chronic diseases, general frailty and a very frequent need for healthcare this is a priority. This might work if you can do it as a family. I met a retired British couple in southern India, and they had a nice system where they were living in UK during the (UK) summer, and in India for the rest of the year. However, the above concerns don't disappear - when at a later time their health deterioates and one of them dies, then it would probably be better for the widow[er] to stay in UK permanently closer to their extended family and with the local healthcare system. |
Money limit to pay tax for Patreon | If you are in the US, you legally must file taxes on any income whatsoever. How much you will pay in taxes, if any, will depend on your total taxable income. Now, for small transactions, the payments are often not reported to the IRS so some people do not file or pay. The threshold at which they payer is required to send a 1099 to the IRS is $600. Patreon considers each donation a separate transaction and therefore does not send a 1099 to the IRS unless you make more than $20,000 in a calendar year. If they do not report it, the IRS will not know about it unless they audit you or something. However, you are technically and legally responsible to report income whether the IRS knows about it or not. -------- EDIT ------- Note that the payer files a 1099, not the recipient. In order to report your patreon income you will either use schedule C or add it to the amount on 1040 line 21 ("other income") depending on whether you consider this a business or a hobby. If it's a business and it's a lot of money you should consider sending in quarterly payments using a 1040-ES in order to avoid a penalty for too little withholding. |
What one bit of financial advice do you wish you could've given yourself five years ago? | Compound interest. Next time you buy a 100$ toy realize that if you save it - in x years that 100$ you saved and invested could potentially be more than 100$ where as most likely whatever you're buying will be worth much less. |
How to withdraw money from currency account without having to lose so much to currency conversion? | In your position I would use one of the existing Polish currency exchange platforms (you can find a list here: http://jakikantor.pl). A few of them have bank accounts in Britain so the exchange rate will be close to market price. |
Applying for and receiving business credit | I'm afraid the great myth of limited liability companies is that all such vehicles have instant access to credit. Limited liability on a company with few physical assets to underwrite the loan, or with insufficient revenue, will usually mean that the owners (or others) will be asked to stand surety on any credit. However, there is a particular form of "credit" available to businesses on terms with their clients. It is called factoring. Factoring is a financial transaction whereby a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount in exchange for immediate money with which to finance continued business. Factoring differs from a bank loan in three main ways. First, the emphasis is on the value of the receivables (essentially a financial asset), not the firm’s credit worthiness. Secondly, factoring is not a loan – it is the purchase of a financial asset (the receivable). Finally, a bank loan involves two parties whereas factoring involves three. Recognise that this can be quite expensive. Most banks catering to small businesses will offer some form of factoring service, or will know of services that offer it. It isn't that different from cheque encashment services (pay-day services) where you offer a discount on future income for money now. An alternative is simply to ask his clients if they'll pay him faster if he offers a discount (since either of interest payments or factoring would reduce profitability anyway). |
On what time scales are stock support and resistance levels meaningful? | Support and resistance only works as a self-fulfilling prophecy. If everyone trading that stock agrees there's a resistance at so-and-so level, and it is on such-and-such scale, then they will trade accordingly and there will really be a support or resistance. So while you can identify them at any time scale (although as a rule the time scale on which you observed them should be similar to the time scale on which you intend to use them), it's no matter unless that's what all the other traders are thinking as well. Especially if there are multiple possible S/P levels for different time scales, there will be no consensus, and the whole system will break down as one cohort ruins the other group's S/P by not playing along and vice versa. But often fundamentals are expected to dominate in the long run, so if you are thinking of trades longer than a year, support and resistance will likely become meaningless regardless. It's not like that many people can hold the same idea for that long anyhow. |
Is there a NY tax form to use when one is missing a K-1 (or 1065) from an LLC? | Form 10-K is filed by corporations to SEC. You must be thinking of form 1065 (its schedule K) that a partnership (and multi-member LLC) must file with the IRS. Unless the multi-member LLC is legally dissolved, it must file this form. You're a member, so it is your responsibility, with all the other members, to make sure that the manager files all the forms, and if the manager doesn't - fire the manager and appoint another one (or, if its member managed - chose a different member to manage). If you're a sole member of the LLC - then you don't need to file any forms with the IRS, all the business expenses and credits are done on your Schedule C, as if you were a sole propriator. |
Calculating the total capital of a company? | Total Capital This is a very old fashioned term that really is mostly only used in the finance industry today, like when everyone was obsessed with "bank capital". Total Capital = Preferred Equity + Common Equity + Liabilities True blue preferred shares are almost only used by financial companies, banks specifically. The more modern ones that convert to common are used by all other companies. Notes Payable This is another old fashioned term that now carries a different meaning in Generally Accepted Account Principles (GAAP). The oldest definition of a note or a promissory note is a promise to pay a fixed amount of money on a specific date. This has been modified to resemble more a bond and evolved into the zero coupon bond, a bond that makes no cash interest payments but makes one final payment that includes principal & interest. A bank note, like a One Dollar bill, is a note that pays something, in this case One Dollar, never (technically, the repayment date is simply not specified in the contract). While it pays One Dollar, it never pays it back, so it has a constant value of One Dollar. The constant nature, inflation notwithstanding, is what makes bank notes the preferred medium of exchange. GAAP has taken its' own definition to mean any debt payable within 12 months, as it is a current (<12 months) liability. |
What does it mean that stocks are “memoryless”? | This is an interesting question that may actually be better suited to Quant.SE. First of all, stock prices are random variables, or, to be more precise, stochastic processes (a time-ordered string of random variables). The alternative to being stochastic is being deterministic, and I doubt you believe that stock prices are deterministic (meaning, they are fully knowable in advance). The fact that real world events drive the randomness has no bearing on whether or not it is random. So, to start, I think you have confused the technical definition of random with a colloquial concept. Now, the heart of the question is whether stock prices are memoryless. Ultimately, this is an empirical question that has been addressed in many academic studies. The conclusion of most of this research is that stock prices are "almost" memoryless, in the sense that the distribution of future stock prices displays very little dependence upon past realizations, although a few persistent anomalies remain. One of the most robust deviations from memorylessness is the increase in the volatility of a stock following large declines. Another is persistence in volatility. In general, in fact, the volatility is far more predictable than the mean of stock price changes. Hence "memorylessness" is a far stronger assumption than the efficient markets hypothesis. The bottom line, however, is that the deviations from memorylessness are relatively small. As such, despite its limitations, it is a decent working assumption in some contexts. |
Are account holders with a bank better able to receive a loan from that bank? | Banks are businesses, and as such should have the right to refuse service, so they should probably be able to choose one customer over another at will. [I say "should" because business owners protecting themselves against litigation related to discrimination could restrict their freedom as business owners.] However, banks are businesses and if the customers are identical, both will be approved (or not) according to credit records. Does not make sense to approve one person with a given credit record and refuse someone with a similar record. Unless they barely qualify. Since no two credit histories are identical, there are surely edge cases. Finally, if a customer is a long term customer with large deposits and/or significant amounts of business with the bank, the bankers will likely be inclined to do more business. |
Is this the right formula to use implied volatility to gauge probability of a stock being within a certain range? | To get the probability of hitting a target price you need a little more math and an assumption about the expected return of your stock. First let's examine the parts of this expression. IV is the implied volatility of the option. That means it's the volatility of the underlying that is associated with the observed option price. As a practical matter, volatility is the standard deviation of returns, expressed in annualized terms. So if the monthly standard deviation is Y, then Y*SQRT(12) is the volatility. From the above you can see that IV*SQRT(DaysToExpire/356) de-annualizes the volatility to get back to a standard deviation. So you get an estimate of the expected standard deviation of the return between now and expiration. If you multiply this by the stock price, then you get what you have called X, which is the standard deviation of the dollars gained or lost between now and expiration. Denote the price change by A (so that the standard deviation of A is X). Note that we seek the expression for the probability of hitting a target level, Q, so mathematically we want 1 - Pr( A < Q - StockPrice) We do 1 minus the probability of being below this threshold because cumulative distribution functions always find the probability of being BELOW a threshold, not above. If you are using excel and assuming a mean of zero for returns, the probability of hitting or exceeding Q at expiration, then, is That's your answer for the probability of exceeding Q. Accuracy is in the eye of the beholder. You'd have to specify a criterion by which to judge it to know the answer. I'm sure more sophisticated methods exist that are more unbiased and have less error, but I think it's a fine first approximation. |
Is there a good strategy to invest when two stock companies either merge or acquisition? | There is a strategy called merger-arbitrage where you buy the stock of the acquired company when it sells for less than the final acquisition price. Usually the price will rise to about the acquisition price fairly rapidly after the merge is announced, so you have to move fast. The danger is that the merger gets called off (regulatory reasons, the acquired company board votes no) and you get left holding shares bought at a price higher than the price after the merger collapses. This is kind of an advanced strategy and a tough one to back test since each M&A deal is unique. |
A friend wants to use my account for a wire transfer. Is this a scam or is it legitimate? | I know people who work in the gulf and most contracts are of the 14 days on/ 14 days (or so) off flavor. I've never heard of someone being onboard a ship or platform for a year. I bet this is a scam. |
Are warehouse clubs like Costco and Sam's Club worth it? | Only select items. First - I agree, beware the Goldfish Factor - any of those items may very well lead to greater consumption, which will impact your waistline worse than your bottom line. And, in this category, chips, and snacks in general, you'll typically get twice the size bag for the same price as supermarket. For a large family, this might work ok. If one is interested in saving on grocery items, the very first step is to get familiar with the unit cost (often cents per ounce) of most items you buy. Warehouse store or not, this knowledge will make you a better buyer. In general, the papergoods/toiletries are cheaper than at the store but not as cheap as the big sale/coupon cost at the supermarket or pharmacy (CVS/RiteAid). So if you pay attention you may always be stocked up from other sources. All that said, there are many items that easily cover our membership cost (for Costco). The meat, beef tenderloin, $8.99, I can pay up to $18 at the supermarket or butcher. Big shrimp (12 to the lb), $9.50/lb, easily $15 at fish dept. Funny, I buy the carrots JCarter mentioned. They are less than half supermarket price per lb, so I am ahead if we throw out the last 1/4 of the bag. More often than not, it's used up 100%. Truth is, everyone will have a different experience at these stores. Costco will refund membership up to the very end, so why not try it, and see if the visit is worth it? Last year, I read and wrote a review of a book titled The Paradox of Choice. The book's premise was the diminishing return that come with too many things to choose from. In my review, I observed how a benefit of Costco is the lack of choice, there's one or two brands for most items, not dozens. If you give this a bit of thought, it's actually a benefit. |
Dollar-cost averaging: How often should one use it? What criteria to use when choosing stocks to apply it to? | Why do people keep talking about 401K's at work? That is NOT dollar cost averaging. DCA refers to when you have a large sum of money. Do you invest it all at once or spread it out over several smaller purchases over a period of time? There really isn't a "when" should I use it. It is simply a matter of where your preferences lie on the risk/reward scpectrum. DCA has lower risk and lower reward than lump sum investing. In my opinion, I don't like it. DCA only works better than lump sum investing if the price drops. But if you think the price is going to drop, why are you buying the stock in the first place? Example: Your uncle wins the lottery and gives you $50,000. Do you buy $50,000 worth of Apple now, or do you buy $10,000 now and $10,000 a quarter for the next four quarters? If the stock goes up, you will make more with lump-sum(LS) than you will with DCA. If the stock goes down, you will lose more with LS than you will with DCA. If the stock goes up then down, you will lose more with DCA than you will with LS. If the stock goes down then up, you will make more with DCA than you will with LS. So it's a tradeoff. But, like I said, the whole point of you buying the stock is that you think it's going to go up! So why pick the strategy that performs worse in that scenario? |
Why is it rational to pay out a dividend? | Paying out dividends and financing new projects with debt also lessens the agency problem. The consequences of a failed project are greater when debt is used, so the manager now has a greater incentive to see that the project is a success. This, in addition to the paid divided is a benefit to the shareholder. If equity wasn't paid out and instead used for the project then the manager may not be so interested in its success. And if it's a failure then the shareholders are worse off. |
How can a U.S. citizen open a bank account in Europe? | Each country will have different rules. I can only speak about the Netherlands. There, there are two options as a resident to open an account. You needed a BSN (Dutch ID number) or a strong reference from an international company sponsoring your residence there at a bank branch that dealt frequently with foreign customers. It was not possible to open an account as a nonresident although high wealth customers probably get special treatment. Recent US reporting requirements have made European banks very unwilling to deal with US people. I have received a letter from my Dutch bank saying they will continue my current products but not offer me anything new. If I call the bank, the normal staff cannot see anything about my accounts. I need to call a special international department even for mundane questions. |
How are dividends for shareholders of banks paid? | A typical manufacturer buys raw materials, produces a product using labor and energy at a specific cost with some waste, and then sells the product to produce income. A bank buys raw materials (deposits) by paying interest, then uses labor and energy to turn a portion of the raw materials into their product (loans), they then receive income (interest) on those loans. If the income exceeds the cost to buy and produce the loans taking into account losses due to delinquencies (waste) the bank company has made a profit. The growing profits can lead to an increase in stock prices or the paying of dividends. The search for more raw materials can lead to paying more for the raw materials, or by buying other factories (branches) or even other bank companies. |
Dividend vs Growth Stocks for young investors | The key is to look at total return, that is dividend yields plus capital growth. Some stocks have yields of 5%-7%, and no growth. In that case, you get the dividends, and not a whole lot more. These are called dividend stocks. Other stocks pay no dividends. But if they can grow at 15%-20% a year or more, you're fine.These are called growth stocks. The safest way is to get a "balanced" combination of dividends and growth, say a yield of 3% growing at 8%-10% a year, for a total return of 11%-13%. meaning that you get the best of both worlds.These are called dividend growth stocks. |
What drives the stock of bankrupt companies? | What drives the stock of bankrupt companies? Such stock is typically considered "distressed assets". Technically, what drives it is what drives every stock - supply and demand. A more interesting question is of course, why would there be demand? First, who exerts the buying pressure on the stock? Typically, three types of entities: The largest ones are financial institutions specializing in distressed assets (frequently, alternatives specialists - hedge funds, private equity firms etc...). Usually, they invest in distressed debt or distressed preferred equity; but sometimes distressed equity as well. Why? We will discuss their motivations separately in this answer. Second one are existing equity holders. Why? Short answer, behavioral psychology and behavioral economics. Many investors - especially non-professionals - insist on holding distressed stocks due to variety of investment fallacies (sunk cost etc...); usually constructing elaborate theories of why and how the company and the stock will recover Sometimes, people who buy into penny stock scams, pump and dump schemes etc... Why? "There's a sucker born every minute." - P.T. Barnum Let's find out why an investment professional would invest in distressed equity? First, the general process is always the same. Company's assets are used to pay off its liabilities; in accordance with applicable law. There are two ways this can be done - either through selling the company; OR through bankruptcy process. The liabilities are paid according to seniority. The seniority priorities rules are covered by 11 U.S. Code § 507 - Priorities A company in bankruptcy can have one of 2 outcomes: Buyout. Some buyer might decide that the company's assets are worth something to them as a whole; and buy the whole enterprise; rather than risk it being destroyed piecemeal in bankruptcy proceedings. In that case, the proceeds from the sale will be used to fund the liabilities as discussed above. This option is one of the possible reasons people might consider investing in distressed equity. For example, if the company is in bankruptcy because it can't get enough financing right now, but is likely to have good profits in the future. The chances are, some buyer will buy it for a premium that includes those future profits; and that sale amount might possibly exceed the liabilities. Bankruptcy. The assets are sold and liabilities are covered according to priorities. In that case, the investors in distressed equity might be hoping that there are un-obvious assets whose value would also put the total assets above claimed liabilities. Additional possible beneficial factor is that unsecured debtors must file with the court in order to be paid; and the claim must be validated. Some might fail on either count; so total amount of liabilities might lessen once the bankruptcy process goes through. Assets Now, here's where things get interesting. Of course, companies have usual assets. Real estate, inventory, plants, cash, etc... These are all able to be sold to cover liabilities, and at first glance are possibly not enough to cover liabilities, leaving equity holders with nothing (and even that's not a certainty - bankruptcy is simply inability to service debt payments; and while it correlates to assetsliquid assets, not full asset valuation). But some assets are less sure, and are thus rarely included in such calculations. These may include: Chances of winning appeals if specific existing liabilities are results of litigation, e.g. tax appeals, court judgement appeals etc... Clawbacks and lawsuits against former executives, especially in cases where the company's financial distress resulted from executive malfeasance. I was personally involved in one such case as an equity holder, where the company assets were valued at $X; had liabilities of $X*2; but had a real possibility of winning about $X*3 in a lawsuit against former CEO accused of various malfeasance including fraud and insider trading. As such, the best case scenario was literally 100% profit on holding that distressed equity. |
How do you find out who the investors are in a U.S. stock? e.g. how ownership may be concentrated? | Companies absolutely know who ALL their shareholders are. Ownership is filed on Form 3/4 and in 10-Q/Ks. Look there. Guidelines for required disclosure are as follows: 1) Individuals must disclose when their ownership exceeds 5%; 2) Non-individual legal entities (read: companies; e.g. a hedge fund) must disclose when their ownership exceeds 10% (Form 13-F); and 3) All Officers and Directors Notice the word "required." For example, a entity (individual/company) may file "confidentiality letter" (which allows them to delay disclosing ownership) with the SEC as they are building a position. So at any given point in time the information that is publicaly available may not be "up-to-date." And in all cases beneficial owner(ship). |
What is a maximum amount that I can wire transfer out of US? | I can clear the Thailand side for you. These are the sale tax in Thailand: Don't forget to ask your bank in Thailand to issue an (FTFs). This document shows the money originated from abroad (before in came to your Thai account) from outside of Thailand. The land office will ask for the (FTFs). |
Claiming business expense from personal credit card | or just input it in my accounting software along with receipts, and then when I'm doing taxes this would go under the investment or loses (is it somewhere along that line)? Yes, this. Generally, for the long term you should have a separate bank account and charge card for your business. I started my business (LLC) by filing online, and paying a fee for a registration, and that makes it a business cost right? Startup cost. There are special rules about this. Talk to your tax adviser. For the amounts in question you could probably expense it, but verify. |
Scam or Real: A woman from Facebook apparently needs my bank account to send money | The other answers describe why this is highly likely to be a scam. This answer describes why you don't want to get involved, even in the unlikely case that it isn't a scam. I'm describing this using US law (which I'm not particularly familiar with, so if I go astray I'd suggest others fix any flaws in this answer), but most other countries have similar laws as these laws are all implementations of a small number of international treaties have very large memberships. The service you describe (accepting money transfers from one party and transferring them to another) is one which, if you engage in it for profit, would classify you as a "financial institution" under 31 USC 5312, specifically paragraph (a)(2)(R): any other person who engages as a business in the transmission of funds, including any person who engages as a business in an informal money transfer system Because you would be acting as a financial institution: Failure to follow such requirements can lead to a fine of up to $250,000 or a 5 year prison sentence (31 USC 5322). See also: Customer Identification Program and Know Your Customer. |
Should I charge my children interest when they borrow money? | This is largely a cultural issue. I would be appalled at the very idea that my parents would charge me interest for lending me money. Just as they would be appalled if I were to do so if lending them money. I find the idea of attempting to make money off of your children fundamentally wrong. I realize that you only want to do this to teach them, that you have their best interests in mind and not your own profit. Nevertheless, what will actually happen were you to charge them interest is that you would accrue a monetary gain at the expense of your children. Is that really something you would be comfortable with? Now, as I stated at the beginning, this is clearly a cultural issue. Based on the other answers here, many cultures, probably including your own, find nothing wrong with this. I've even heard of people charging their adult children rent when they come home for the holidays, something that is completely baffling to me. The point I am trying to make is that asking other people's opinions on whether you should do this is not very useful unless those people share your own cultural background. My family and culture are such that the idea of charging interest to one's family members seems downright immoral to me. Given that you are asking here, it seems like you might be on the fence about it yourself. However, I freely admit that my answer is colored by my own cultural prejudices and may very well not be applicable to you. Still, ask yourself, is a relatively small amount of money in the grand scheme of things—or, for that matter, an entire fortune—worth jeopardizing your relationship with your children? Do you really believe that having their parents retroactively charge them interest for a loan will somehow teach them something about the "real world" that your already adult children don't know? One of the main reasons they came to you and didn't go to a bank is precisely that they expected the loan to be interest free. So, sure, tell them that you won't lend any more until they repay what they owe. Even better, sit them down and have an honest, adult conversation, explaining that the absence of the money they owe is making itself felt in your household and work out a way they can repay you. What, in my opinion, you most certainly shouldn't do is treat your relationship with your children as a regular business transaction. It isn't and I am sure you don't want it to be. |
Why the need for human brokers while there are computers? | There are still human brokers on the floor primarily due to tradition. Their numbers have certainly dwindled, however, and it's reasonable to expect the number of floor traders to decrease even more as electronic trading continues to grow. A key reason for human brokers, however, is due to privacy. Certain private exchanges such as dark pools maintain privacy for high profile clients and institutional investors, and human brokers are needed to execute anonymous deals in these venues. Even in this region, however, technology is supplanting the need for brokers. I don't believe there is any human-broker-free stock exchange, but Nasdaq and other traditionally OTC (over the counter) exchanges are as close as it gets since they never even had trading floors. |
If I get a bill (e.g. for internet service), is that a debt I owe? If no, what are the practical difference between a bill and a debt? | From accounting perspective, an unpaid bill for internet services, according to the Accruals Concept, is recorded as a liability under 'Current Liabilities' section of the Balance Sheet. Also as an expense on the Income Statement. So to answer your question it is both: a debt and an expense, however this is only the case at the end of the period. If you manage to pay it before the financial period ends this is simply an expense that is financed by cash or other liquid Asset on the Balance Sheet such as prepayment for example. For private persons you are generally given some time to pay the bill so it is technically a debt (Internet Provider would list you as a debtor on their accounts), but this is not something to worry about unless you are not considering to pay this bill. In which case your account may be sold as part of a factoring and you will then have a debt affecting your credit rating. |
Why do people buy stocks that pay no dividend? | There are many stocks that don't have dividends. Their revenue, growth, and reinvestment help these companies to grow, and my share of such companies represent say, one billionth of a growing company, and therefore worth more over time. Look up the details of Berkshire Hathaway. No dividend, but a value of over $100,000. Not a typo, over one hundred thousand dollars per share. |
Can I buy only 4 shares of a company? | The least expensive way to buy such small amounts is through ING's Sharebuilder service. You can perform a real-time trade for $9, or you can add a one-time trade to their investment schedule for $4 (transaction will be processed on the next upcoming Tuesday morning). They also allow you to purchase fractional shares. |
What are my tax-advantaged investment options at a university job? | Yes. Two years after your first contribution to the SIMPLE IRA, you can roll it to a traditional IRA. You can still contribute "pre-tax", but the mechanism will be slightly different, since with an employer plan the contribution was automatically deducted from your paycheck. With an individual plan, you make the contributions yourself and then get a tax deduction when you file. Since contributions to traditional and Roth IRAs combined are capped at $5,500 if you're under 50, some sort of employer-sponsored plan might be better from a contribution standpoint. If your institution offers some sort of plan other than a 401(k), you might still want to roll to a traditional IRA, since you will have much more flexibility in the investments you choose. On the flip side, if that thought is overwhelming, having a smaller set of options might be better for your peace of mind. |
First Job, should I save or invest? | Congrats on your first real job! Save as much as your can while keeping yourself (relatively) comfortable. As to where to put your hard earned money, first establish why you want to save the money in the first place. Money is a mean to acquire the things we want or need in your life or the lives of others. Once your goals are set, then follow this order: |
Would I ever need credit card if my debit card is issued by MasterCard/Visa? | Skimmers are most likely at gas station pumps. If your debit card is compromised you are getting money taken out of your checking account which could cause a cascade of NSF fees. Never use debit card at pump. Clark Howard calls debit cards piece of trash fake visa/mc That is because of all the points mentioned above but the most important fact is back in the 60's when congress was protecting its constituents they made sure that the banks were responsible for fraud and maxed your liability at $50. Debit cards were introduced much later when congress was interested in protecting banks. So you have no protection on your debit card and if they find you negligent with your card they may not replace the stolen funds. I got rid of my debit card and only have an ATM card. So it cannot be used in stores which means you have to know the pin and then you can only get $200 a day. |
How to convince someone they're too risk averse or conservative with investments? | I feel these beliefs can not be changed so easily. Once someone loses their money, how can you convince him? And on what ground can you convince him? Can you give a guarantee that investments will perform at a certain level? There are many people who are happy with low returns but highly safe instruments. They are not concerned with what you earn in the stock market or the realty market. They are happy not losing their money. I known many people who earned decently during the up-rise of the stock market but all profits were squared up in the downturn and it turned to negative. Such people have their own thinking and such thinking is not out of place. After experience with much turmoil, I feel that they are also right to a great extent. Hence I feel if the person is not getting convinced, you should accept it with greatness. |
Figuring out an ideal balance to carry on credit cards [duplicate] | The fact that you pay the bill reliably is going to count more for your credit rating than anything else, even if you are paying it off in full every month. Lenders seem to like to see at least one instance where you charged a large balance, held it a couple months, then paid it off in full... but I wouldn't go out of my way to do that. Remember that the credit card company is making money on transaction fees as well as interest. If you're pushing money through their system, they're happy. They'd be happier if you were paying them interest too -- reportedly, they actually refer to those of us who pay in full every month as "deadbeats" -- but they aren't going to kick you out or ding your credit rating for it. The quote you give says that a small balance "may be slightly better". I submit that "may be slightly" is too small a difference to be worth worrying about, unless you have reason to believe that your credit rating actively needs to be repaired. (And as noted in the comments, it's actually stated even less strongly than that!) Personal recommendation: You can get a free credit report each year from each of the "big three" credit rating agencies. Those reports usually include a brief explanation of what they think the most negative item on your record is. The phrasing of those explanations is often somewhat misleading, but I'd still suggest that you get these reports and see what they think would improve your rating. I'm willing to bet it won't be "doesn't carry a high enough debt balance." |
~$75k in savings - Pay off house before new home? | With an annual income of $120,000 you can be approved for a $2800 monthly payment on your mortgage. The trickier problem is that you will save quite a bit on that mortgage payment if you can avoid PMI, which means that you should be targeting a 20% down-payment on your next purchase. With a $500,000 budget for a new home, that means you should put $100,000 down. You only have $75,000 saved, so you can either wait until you save another $25,000, or you can refinance your current property for $95k+ $25k = $120k which would give you about a $575 monthly payment (at 30 years at 4%) on your current property. Your new property should be a little over $1,900 per month if you finance $400,000 of it. Those figures do not include property tax or home owners insurance escrow payments. Are you prepared to have about $2,500 in mortgage payments should your renters stop paying or you can't find renters? Those numbers also do not include an emergency fund. You may want to wait even longer before making this move so that you can save enough to still have an emergency fund (worth 6 months of your new higher expenses including the higher mortgage payment on the new house.) I don't know enough about the rest of your expenses, but I think it's likely that if you're willing to borrow a little more refinancing your current place that you can probably make the numbers work to purchase a new home now. If I were you, I would not count on rental money when running the numbers to be sure it will work. I would probably also wait until I had saved $100,000 outright for the down-payment on the new place instead of refinancing the current place, but that's just a reflection of my more conservative approach to finances. You may have a larger appetite for risk, and that's fine, then rental income will probably help you pay down any money you borrow in the refinancing to make this all worth it. |
How does a high share price benefit a company when it is raising funds? | Share price is based on demand. Assuming the same amount of shares are made available for trade then stocks with a higher demand will have a higher price. So say a company has 1000 shares in total and that company needs to raise $100. They decide to sell 100 shares for $1 to raise their $100. If there is demand for 100 shares for at least $1 then they achieve their goal. But if the market decides the shares in this company are only worth 50 cents then the company only raises $50. So where do they get the other $50 they needed? Well one option is to sell another 100 shares. The dilution comes about because in the first scenario the company retains ownership of 900 or 90% of the equity. In the second scenario it retains ownership of only 800 shares or 80% of the equity. The benefit to the company and shareholders of a higher price is basically just math. Any multiple of shares times a higher price means there is more value to owning those shares. Therefore they can sell fewer shares to raise the same amount. A lot of starts up offer employees shares as part of their remuneration package because cash flow is typically tight when starting a new business. So if you're trying to attract the best and brightest it's easier to offer them shares if they are worth more than those of company with a similar opportunity down the road. Share price can also act as something of a credit score. In that a higher share price "may" reflect a more credit worthy company and therefore "may" make it easier for that company to obtain credit. All else being equal, it also makes it more expensive for a competitor to take over a company the higher the share price. So it can offer some defensive and offensive advantages. All ceteris paribus of course. |
What are the best software tools for personal finance? | Money Manager Ex PROS: CONS |
Unemployment Insurance Through Options | Options do act, somewhat, like insurance.... However.... An insurance policy will not have such short term expiration time frames. A 20 year term life insurance policy can be thought of as insurance with an expiration. But the expiration on options is in weeks, not decades. So (IMO) options make terrible insurance policies because of the very short term expirations they have. |
Consolidate my debt? Higher APR, but what does that actually mean? | Your question indicates you really don't have a good grasp on personal finance. you might want to read a book or two. I'd recommend attending Financial Peace University, but my buddy Joe Taxpayer would throw an egg at me for that. Please take some sort of class. In the mean time, here is your plan: Pay this off do not borrow more. |
How can I find a list of all North American ETF's including symbols? | You can use www.etfdb.com and search on geography. |
Why are Rausch Coleman houses so cheap? Is it because they don't have gas? | I have lived in my RC Home since 2008 and I have had ZERO PROBLEMS! We are in the process of building another RC home in a different community. The only thing I've done was replace the roof ONLY because of a very bad hail storm (baseball sized) that came through OKC. My mom also purchased a RC home in 2007 and didn't have any problems. What buyers have to do is be involved the whole time before, during, and after the build. Take lots of pictures of the entire process if you can. We went by our build daily (we didn't live that far), but if you can go by your build at least once a week, it helps. During my inspection, there was a hairline crack in the baseboard and it was corrected immediately. If you have a good inspector and sales rep that genuinely cares, you will be just fine and will love your home. Good Job RC HOMES! |
Is investing into real estate a good move for a risk-averse person at the moment | Real estate is never a low-risk investment. I'd keep your money in the bank, and make sure that you don't have more in any one bank than is guaranteed in the event of bank failure. If your bank account is in Greece, Italy, Spain, Portugal or Ireland, I'd consider moving it to Eurozone country that's in better shape, as there's just a slight possibility of one or more of those countries exiting the Eurozone in a disorderly fashion and forcibly converting bank accounts to a new and weak currency. |
Am I considered in debt if I pay a mortgage? | Yes. A mortgage is a kind of debt. Someone lends you money to buy your house, and you owe them the money, so you have debt. |
How can I save on closing costs when buying a home? | Mostly ditto Pete B's answer. There's little you can do about closing costs. Some closing costs are government fees. There's nothing you can do about this. Sad and unfair as it is, taxes are not optional and not generally negotiable. Title insurance and fire insurance are required by the lender. Even if you're paying cash, you don't really want to skip on these. If your house burns down and you have no insurance ... well, if you're worried about saving a few hundred on your closing costs, I assume that losing $200,000 because your house burned down and you have no insurance would be a pretty bad thing. Title insurance protects you against the possibility that the seller doesn't really legally own the property, maybe a scam, more likely a mistake or a technicality. You can, and certainly should, shop around for a better deal on insurance. Last couple of housing transactions I made, title insurance was a one-time fee of around $200. (I'm sure this depends on the cost of the house, where you live, maybe other factors.) Maybe by shopping around I could have saved $10 or $20, but I doubt there's someone out there charging $50 when everyone else is charging $200. Fire insurance you're probably paying a couple of thousand a year, more opportunity for savings. Typically the buyer and the seller each have a realtor and they split the fee. If you go without a realtor but the seller hires one, she'll keep the entire fee. So the only way to avoid this expense is if neither of you has a realtor. I've never done that. Realtors cost a ton of money but they provide a useful service: not only helping you find a house but also knowing how to deal with all the paperwork. Plenty of people do it, though. I presume they get the title agency or the bank or somebody to help with the paperwork. There are also discount realtors out there who don't show your home, do little or nothing to market it, basically just help you with the paperwork, and then charge a very low fee. Timing closing for a certain day of the month can reduce what you owe at closing time -- by reducing the amount of interest you pay on the first month's loan payment -- but it doesn't save you any money. You'll make it up over the course of the loan. You might possibly save some money by timing closing around when property taxes are due. Theoretically this shouldn't matter: the theory is that they pro-rate property taxes between buyer and seller so each pays the taxes for the time when they own the house. So again, you might need less cash at closing but you'll make it up the next time property taxes are due. But the formulas the banks use on this are often goofy. Maybe if you live some place with high property taxes this is worth investigating. You could skip the inspection. But inspections I've had done generally cost about $500. If they found something that was a major issue, they might save you from buying a house that would cost tens of thousands in repairs. Or less dramatically, you can use the inspection report for leverage with the seller to get repairs done at the seller's expense. I once had an inspector report problems with the roof and so I negotiated with the seller that they would pay for a percentage of roof repair. I suppose if you're buying a house that you know is run down and will require major work, an inspection might be superfluous. Or if you know enough about construction that you can do an inspection yourself. Otherwise, it's like not buying insurance: sure, you save a little up front, but you're taking a huge risk. So what can you control? (a) Shop around for fire insurance. Maybe save hundreds of dollars. (b) Find a seller who's not using a realtor and then you don't use a realtor either. Save big bucks, 6 to 7% in my area, but you then have to figure out how to do all the paperwork yourself and you severely limit your buying options as most sellers DO use a realtor. Besides that, there's not much you can do. |
Is it normal for brokers to ask whether I am a beginner? | Yes, this is common and in some cases may be required. They may use it for marketing at some level, but they also use it for risk management in deciding, for example, how much margin to offer and whether to approve access to "riskier" products like stock options. |
International (ex-US) ETFs with low exposure to financial sector? | If you are looking for a European financials ETF to short, you could take a look at the iShares EURO STOXX Banks, which is traded on a a few German stock exchanges (Frankfurt etc.): iShares Euro Stoxx Banks Website You find its current holdings here: holdings. |
Is Bogleheadism (index fund investing) dead? | From http://blog.ometer.com/2008/03/27/index-funds/ , Lots of sensible advisers will tell you to buy index funds, but importantly, the advice is not simply "buy index funds." There are at least two other critical details: 1) asset allocation across multiple well-chosen indexes, maintained through regular rebalancing, and 2) dollar cost averaging (or, much-more-complex-but-probably-slightly-better, value averaging). The advice is not to take your single lump sum and buy and hold a cap-weighted index forever. The advice is an investment discipline which involves action over time, and an initial choice among indexes. An index-fund-based strategy is not completely passive, it involves some active risk control through rebalancing and averaging. If you'd held a balanced portfolio over the last ten years and rebalanced, and even better if you'd dollar cost averaged, you'd have done fine. Your reaction to the last 10 years incidentally is why I don't believe an almost-all-stocks allocation makes sense for most people even if they're pretty young. More detail in this answer: How would bonds fare if interest rates rose? I think some index fund advocacy and books do people a disservice by focusing too much on the extra cost of active management and why index funds are a good deal. That point is true, but for most investors, asset allocation, rebalancing, and "autopilotness" of their setup are more important to outcome than the expense ratio. |
What does it mean to be a “high fee” or “low fee” 401k? | Every 401(k) has managers to make the stock choices. They all have different rates. You want to see that fidelity or Vangard is handling your 401(k).(and I am sure others) If you have a mega bank managing your funds or an insurance company odds are you are paying way to high management fees. So find out, the management fees should be available should be less than 1%. They can get as high as 2%...Ouch |
Where to park money while saving for a car | Bond aren't necessarily any safer than the stock market. Ultimately, there is no such thing as a low risk mutual fund. You want something that will allow you get at your money relatively quickly. In other words, CDs (since you you can pick a definite time period for your money to be tied up), money market account or just a plain old savings account. Basically, you want to match inflation and have easy access to the money. Any other returns on top of that are gravy, but don't fret too much about it. See also: Where can I park my rainy-day / emergency fund? Savings accounts don’t generate much interest. Where should I park my rainy-day / emergency fund? |
What exactly is a “bad,” “standard,” or “good” annual raise? If I am told a hard percentage and don't get it, should I look elsewhere? | Any such number would depend on the country, the market, and the economic situation - especially inflation ratio. Generally, if you are not in a booming or a dying technology, getting a raise above the inflation ratio is 'good'; anything below is poor. |
Who can truly afford luxury cars? | A while back I sold cars for a living. Over the course of 4 years I worked for 3 different dealerships. I sold new cars at 2 and used at the last one. When selling new cars I found that the majority of people buying the higher end cars honestly shouldn't have been - 80%+. They almost always came in owing more on their trades then they were worth, put down very little cash and were close to being financially strapped. From a financial perspective these deals were hard to close, not because the buyer was picky but rather because their finances were a mess. Fully half, and probably more, we had to switch from the car they initially wanted down to a much cheaper version or try to convert to a lease because it was the only way the bank would loan the money. We called them "$30,000 millionaires" because they didn't make a whole lot but tried to look like they did. As a salesman you knew you were in serious trouble when they didn't even try to negotiate. Around 2% of the deals I did were actual cash deals - meaning honest cash, not those who came in with a pre-approved loan from a bank. These were invariably for used cars about 3 to 4 years old and they never had a trade in. The people doing this always looked comfortable but never dressed up, you wouldn't even look at them twice. The negotiations were hard because they knew exactly how much that car should go for and wouldn't even pay that. It was obvious they knew the value of money. That said, I've been in the top 3% of wage earners for about 20 years and at no point have I considered myself in a position to "afford" a new "luxury" car. IMHO, there are far more important things you can do with that kind of money. |
Should I negotiate a lower salary to be placed in a lower tax bracket? | I think Feral Oink said it well here when someone asked if they should negotiate for additional benefits in lieu of a portion of salary. "You never want to take a lower salary, especially not in exchange for something that is conditional e.g. benefits. Your salary is the only thing that is guaranteed as a condition of employment. Other things can be changed by the employer at a future point in time." Does it make sense to take a lower salary so I can still contribute to a Roth IRA? |
Are reimbursements from company taxable,and do I need to deduct them? | I'm assuming that you're in the US. In that case, the answer is that it depends on how your company set up its reimbursement plan. The IRS recognizes "accountable" and "nonaccountable" plans. Accountable plans have to meet certain requirements. Anything else is nonaccountable. If you are reimbursed according to an accountable plan, this is not income and should not be reported to the IRS at all. If you are reimbursed under a nonaccountable plan, then this is income but you might be able to get a deduction on your tax return if you itemize. Most established companies have accountable plans for normal business expenses. More detail from IRS: http://www.tax.gov/TaxabilityCertainFringeBenefits/pdf/Accountable_v_Nonaccountable_Plans_Methods_of_Reimbursing_Employees_for_Expense.pdf |
Do credit checks affect credit scores? | While one credit provider (or credit reference agency) might score you in one way, others may score you differently including treating different things that contribute to your score differently. Different credit providers may also not see all of your credit score as potentially some data may not be available to all credit suppliers. Further too many searches may trigger systems that recognise behavior that is a sign of possible fraudulent activity (such as applying for many items of credit in a short space of time). Whether this would directly affect a score or trigger manual checks is also likely to vary. In situations like this a person could have applied for (say) a dozen credit cards, with all the credit checks being performed before there is any credit history for any of those dozen cards. |
Is Stock Trading legal for a student on F-1 Visa doing CPT in USA? | you dont need any permits or be inside the US to trade the exact same securities on US exchanges. you can literally move your bitcoin from a chinese exchange to us exchange in seconds. i don't see how you can possibly run into legal issues if anyone from outside the country can trade bitcoins on an exchange inside the country without any permit. a lot of these exchanges dont ask for ID or social security number anyways. none of it is government regulated. also trading anything is never a passive income. theres no such thing as an easy or obvious investment. there are always risks- and the actual risk is often deceivingly low |
How could strike price for new shares be higher than the market price | This can arise with very thinly traded stocks for large blocks of shares. If the market only has a few thousand dollars available at between 8.37 and 12.5 the price is largely meaningless for people who want to invest in hundreds of thousands/millions of dollars worth, as the quoted price can't get them anywhere near the number of shares they want. How liquid is the stock in question? |
Put-Call parity - what is the difference between the two representations? | Well, the first one is based on the "Pert" formula for continuously-compounded present value, while the second one is the periodically-compounded variant. Typically, the continuously-compounded models represent the ideal; as the compounding period of time-valued money shrinks towards zero, and the discount rate (or interest rate if positive) stays constant over the time period examined, the periodic equation's results approach that of the continuously-compounded equation. Those two assumptions (a constant rate and continuous balance adjustment from interest) that allow simplification to the continuous form are usually incorrect in real-world finance; virtually all financial institutions accrue interest monthly, for a variety of reasons including simpler bookkeeping and less money paid or owed in interest. They also, unless prohibited by contract, accrue this interest based on a rate that can change daily or even more granularly based on what financial markets are doing. Most often, the calculation is periodic based on the "average daily balance" and an agreed rate that, if variable, is based on the "average daily rate" over the previous observed period. So, you should use the first form for fast calculation of a rough value based on estimated variables. You should use the second form when you have accurate periodic information on the variables involved. Stated alternately, use the first form to predict the future, use the second form in retrospect to the past. |
What assets would be valuable in a post-apocalyptic scenario? | Apocalyptic like MAD MAX, huh? Well, no one so far has mentioned Gasoline, not paper gasoline futures but the real thing in barrels or tankers. Guns, ammo, sure... but if everyone on the ground is shooting each other I'd prefer an ultralight helicopter. You all have watched MAD MAX, right? On a more serious note, there is a country in the South Pacific that never saw fighting in world war 2 due to its remoteness, but is large and developed enough to be agriculturally pretty much self sufficient, and with a low population has plenty of space. Might be good to squirrel away something down there... |
Will the ex-homeowner still owe money after a foreclosure? | It is in the bank's interest to sell the property for as much as they can (although it is doubtful they will put as much effort/time into selling it as the owner might). They will certainly not sell it for $1. The main reason for this is that the bank would prefer to own $100k, than a loan to them from a customer for $100k. Banks have to discount the value of loans to take into account the likelihood of the loan not being repaid. They classify certain loans as riskier than others, and these are discounted more heavily. An unsecured home loan to a customer that has already defaulted, has no collateral, and now needs to pay rent AND loan repayments would count as an extremely risky loan. |
W-4 was not updated when moving from part-time to full-time, still showed Tax-Exempt. What happens now? | Legally, do I have anything to worry about from having an incorrectly filed W-4? What you did wasn't criminal. When you submitted the form it was correct. Unfortunately as your situation changed you didn't adjust the form, that mistake does have consequences. Is there anything within my rights I can do to get the company to take responsibility for their role in this situation, or is it basically my fault? It is basically your fault. The company needs a w-4 for each employee. They will use that W-4 for every paycheck until the government changes the regulation, or your employment ends, or you submit a new form. Topic 753 - Form W-4 – Employee's Withholding Allowance Certificate If an employee qualifies, he or she can also use Form W-4 (PDF) to tell you not to deduct any federal income tax from his or her wages. To qualify for this exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year. However, if the employee can be claimed as a dependent on a parent's or another person's tax return, additional limitations may apply; refer to the instructions for Form W-4. A Form W-4 claiming exemption from withholding is valid for only the calendar year in which it is filed with the employer. To continue to be exempt from withholding in the next year, an employee must give you a new Form W-4 claiming exempt status by February 15 of that year. If the employee does not give you a new Form W-4, withhold tax as if he or she is single, with no withholding allowances. However, if you have an earlier Form W-4 (not claiming exempt status) for this employee that is valid, withhold as you did before. (I highlighted the key part) Because you were claiming exempt they should have required you to update that form each year. In your case that may not have applied because of the timing of the events. When do you submit a new form? Anytime your situation changes. Sometimes the change is done to adjust withholding to modify the amount of a refund. Other times failure to update the form can lead to bigger complication: when your marital status changes, or the number of dependents changes. In these situations you could have a significant amount of under-withheld, which could lead to a fine later on. As a side note this is even more true for the state version of a W-4. Having a whole years worth of income tax withholding done for the wrong state will at a minimum require you to file in multiple states, it could also result in a big surprise if the forgotten state has higher tax rate. Will my (now former) employee be responsible for paying their portion of the taxes that were not withheld during the 9 months I was full-time, tax Exempt? For federal and state income taxes they are just a conduit. They take the money from your paycheck, and periodically send it to the IRS and the state capital. Unless you could show that the pay stubs said taxes were being withheld, but the w-2 said otherwise; they have no role in judging the appropriateness of your W-4 with one exception. Finally, and I am not too hopeful on this one, but is there anything I can do to ease this tax burden? I understand that the IRS is owed no matter what. You have one way it might workout. For many taxpayers who have a large increase in pay from one year to the next, they can take advantage of a safe-harbor in the tax law. If they had withheld as much money in 2015 as they paid in 2014, they have reached the safe-harbor. They avoid the penalty for under withholding. Note that 2014 number is not what you paid on tax day or what was refunded, but all your income taxes for the entire year. Because in your case your taxes for the year 2014 were ZERO, that might mean that you automatically reach the safe-harbor for 2015. That makes sense because one of the key requirements of claiming exempt is that you had no liability the year before. It won't save you from paying what you owe but it can help avoid a penalty. Lessons |
How can I invest in gold without taking physical possession? | In addition to the possibility of buying gold ETFs or tradable certificates, there are also firms specializing in providing "bank accounts" of sorts which are denominated in units of weight of precious metal. While these usually charge some fees, they do meet your criteria of being able to buy and sell precious metals without needing to store them yourself; also, these fees are likely lower than similar storage arranged by yourself. Depending on the specifics, they may also make buying small amounts practical (buying small amounts of physical precious metals usually comes with a large mark-up over the spot price, sometimes to the tune of a 50% or so immediate loss if you buy and then immediately sell). Do note that, as pointed out by John Bensin, buying gold gets you an amount of metal, the local currency value of which will vary over time, sometimes wildly, so it is not the same thing as depositing the original amount of money in a bank account. Since 2006, the price of an ounce (about 31.1 grams) of gold has gone from under $500 US to over $1800 US to under $1100 US. Few other investment classes are anywhere near this volatile. If you are interested in this type of service, you might want to check out BitGold (not the same thing at all as Bitcoin) or GoldMoney. (I am not affiliated with either.) Make sure to do your research thoroughly as these may or may not be covered by the same regulations as regular banks, particularly if you choose a company based outside of or a storage location outside of your own country. |
Retirement planning 401(k), IRA, pension, student loans | I'd suggest you avoid the Roth for now and use pretax accounts to get the greatest return. I'd deposit to the 401(k), enough to get as much match as permitted, then use a traditional IRA. You should understand how tax brackets work, and aim to use pre-tax to the extent it helps you avoid the 25% rate. If any incremental deposit would be 15% money, use Roth for that. Most discussions of the pre-tax / post tax decision talk about 2 rates. That at the time of deposit and time of withdrawal. There are decades in between that shouldn't be ignored. If you have any life change, a marriage, child, home purchase, etc, there's a chance your marginal bracket drops back down to 15%. That's the time to convert to Roth, just enough to "top off" the 15% bracket. Last, I wouldn't count on that pension, there's too much time until you retire to count on that income. Few people stay at one job long enough to collect on the promise of a pension that takes 30+ years to earn, and even if you did, there's the real chance the company cancels the plan long before you retire. |
why do I need an emergency fund if I already have investments? | It all depends on the liquidity of your investments some examples: You can mitigate only the risk that you can control. It is always good to have: |
Should I Pay Off my Student Loan Debts First or Invest in an Index Fund? | You are on the right track with your math, but be wary of your assumptions. If you can borrow money at x% (and can afford to make payments on the debt), and you can get a return of > x% from investing, then you would make more money by keeping the debt and investing your savings. Another way to think of it: by paying off the debt you are getting a guaranteed 5% return because that's the rate you'd have paid if you kept the debt. Be wary of your assumption of getting a 10% return in the S&P 500. Nothing is guaranteed, even over the long term. Actual results may well be less, and you could lose money. It doesn't have to be all-or-nothing: why not pay off the higher rate debt at 5% and keep the 3% debt? That's a guaranteed 5% return by paying off the NSLSC loan. And 3% is a pretty low interest rate. If you can afford to make the payments, I see nothing wrong with investing your savings instead of paying off the loan. Make sure you have an emergency fund, too. |
Take advantage of rock bottom oil prices | I'm really surprised more people didn't recommend UGA or USO specifically. These have been mentioned in the past on a myriad of sites as ways to hedge against rising prices. I'm sure they would work quite well as an investment opportunity. They are ETF's that invest in nearby futures and constantly roll the position to the next delivery date. This creates a higher than usual expense ratio, I believe, but it could still be a good investment. However, be forewarned that they make you a "partner" by buying the stock so it can mildly complicate your tax return. |
Digital envelope system: a modern take | I opened several free checking accounts at a local credit union. One is a "Deposit" account where all of my new money goes. I get paid every two weeks. Every other Sunday we have our "Money Day" where we allocate the money from our Deposit account into our other checking accounts. I have one designated as a Bills account where all of my bills get paid automatically via bill pay or auto-pay. I created a spreadsheet that calculates how much to save each Money Day for all of my upcoming bills. This makes it so the amount I save for my bills is essentially equal. Then I allocate the rest of my deposit money into my other checking accounts. I have a Grocery, Household, and Main checking accounts but you could use any combination that you want. When we're at the store we check our balances (how much we have left to spend) on our mobile app. We can't overspend this way. The key is to make sure you're using your PIN when you use your debit card. This way it shows up in real-time with your credit union and you've got an accurate balance. This has worked really well to coordinate spending between me and my wife. It sounds like it's a lot of work but it's actually really automated. The best part is that I don't have to do any accounting which means my budget doesn't fail if I'm not entering my transactions or categorizing them. I'm happy to share my spreadsheet if you'd like. |
How to calculate/reconcile conflicting P/E ratios? | The user who wrote the Zerohedge item: The CBS article: The Quora estimate is similar to the Zerohedge one (estimated a round value of 1000 PE and a price of 70-80). Note that it was 30 days after the first 2 items you quoted. You used the CBS numbers except you used the zerohedge price. It depends on which earnings were for each calculation. Past or future. The CBS numbers make the most sense because you can trace where they come from based on the links in their article. CBS based their price on the estimates made the day before the stock went on sale. The price in the zerohedge item was based on the early trading numbers. |
Money Structuring | See "Structuring transactions to evade reporting requirement prohibited." You absolutely run the risk of the accusation of structuring. One can move money via check, direct transfer, etc, all day long, from account to account, and not have a reporting issue. But, cash deposits have a reporting requirement (by the bank) if $10K or over. Very simple, you deposit $5000 today, and $5000 tomorrow. That's structuring, and illegal. Let me offer a pre-emptive "I don't know what frequency of $10000/X deposits triggers this rule. But, like the Supreme Court's, "We have trouble defining porn, but we know it when we see it. And we're happy to have these cases brought to us," structuring is similarly not 100% definable, else one would shift a bit right." You did not ask, but your friend runs the risk of gift tax issues, as he's not filing the forms to acknowledge once he's over $14,000. |
How do finance professionals procounce “CECL”? | According to the following links, it is commonly pronounced "Cecil". https://kaufmanrossin.com/blog/bank-ready-meet-cecil/ The proposed model introduces the concept of shifting from an incurred loss model to the current expected credit loss model commonly referred to as CECL (pronounced “Cecil”). http://www.gonzobanker.com/2016/02/cecl-the-blind-leading-the-blurry/ [...] and its name is CECL (Current Estimated Credit Losses, pronounced like the name “Cecil”). The name Cecil means “blind,” which is ironic, because FASB’s upcoming guidance will push FIs to clarify the future performance of their loan portfolios by using models to predict CECL of all loan portfolios. https://www.linkedin.com/pulse/operational-financial-impact-cecl-banks-nikhil-deshmukh Termed as Current Expected Credit Loss (CECL, or Cecil, as some call it), [...] |
Should you co-sign a personal loan for a friend/family member? Why/why not? | My personal rule is to not loan money (or co-sign) for any amount that I am not willing to give away. It can go wrong in so many ways, and having a family or friend involved means making a "business" decision is difficult. If a bank won't loan the person the money, why should I? Being a co-signer is the same as borrowing the money in my name and giving it right over to the borrower. There might be great reasons to do it. I would probably sign a loan to keep my family alive or healthy, but no other reason. There are many ways to help without signing a loan. Give a room and a place to live, loan a car. The other thing is if you really truly believe in the borrower, it won't do long term damage to your credit or your financial goals, and you are the only resort; go ahead. I am thinking about helping a teenager afford their first car or student loans. |
Estimated Tax on Unplanned Capital Gains | In general, you are expected to pay all the money you owe in taxes by the end of the tax year, or you may have to pay a penalty. But you don't have to pay a penalty if: The amount you owe (i.e. total tax due minus what you paid in withholding and estimated taxes) is less than $1000. You paid at least 90% of your total tax bill. You paid at least 100% of last year's tax bill. https://www.irs.gov/taxtopics/tc306.html I think point #3 may work for you here. Suppose that last year your total tax liability was, say, $5,000. This year your tax on your regular income would be $5,500, but you have this additional capital gain that brings your total tax to $6,500. If your withholding was $5,000 -- the amount you owed last year -- than you'll owe the difference, $1,500, but you won't have to pay any penalties. If you normally get a refund every year, even a small one, then you should be fine. I'd check the numbers to be sure, of course. If you normally have to pay something every April 15, or if your income and therefore your withholding went down this year for whatever reason, then you should make an estimated payment. The IRS has a page explaining the rules in more detail: https://www.irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/estimated-tax/large-gains-lump-sum-distributions-etc/large-gains-lump-sum-distributions-etc |
Can I buy only 4 shares of a company? | One of my university professors suggested doing this systematically to get access to shareholder meetings where there is typically a nice dinner involved. As long as the stock price + commission is less than the price of a nice restaurant it's actually not a bad idea. |
How are long-term/short-term capital gains tax calculated on restricted stock? | Is the Grant Date or the Vest Date used when determining the 12-month cutoff for long-term and short-term capital gains? You don't actually acquire the stock until it's vested, so that is the date and price used to determine your cost basis and short-term/long-term gain/loss. The grant date really has no tax bearing. If you held the stock (time between vesting and sale) for more than one year you will owe long-term CG tax, if less than one year you will owe short-term CG tax. |
The best credit card for people who pay their balance off every month | For people who are already a Costco member. The American Express TrueEarnings Business Card is a good choice. Note: If you don't own a business, just use your name as the business. The business card is better than the regular TrueEarnings card. Pros: |
Can a Line of Credit be re-financed? Is it like a mortgage, with a term? | You can often convert the outstanding balance of a HELOC into a fixed-rate home equity loan, generally with the same bank. Doing this can open possibilities to extend the term allowing for lower monthly payments, but resulting in a larger overall payoff cost. Most HELOCs allow for an interest-only payment or in some cases no-payment at all if you still have unused available credit. Not advising that you do this. If you are struggling with the size of the payment converting to a fixed-rate, fixed-term loan may be what you need. The key will be getting the term such that you can manage both the principal and interest that will be included in the payment. |
Is it okay to be married, 30 years old and have no retirement? | As a rule, one should have a retirement. HOWEVER, you also have over a half a million dollars of debt. Paying down debt is another way to prepare for retirement. I would say throwing your excess money at your debts is a fine strategy right now. Especially the student loan (the mortgage probably has a lower rate and brings tax savings, so paying it off is less urgent). If I were you I'd probably put SOMETHING into tax deferred retirement accounts because in your tax bracket, the savings from doing so are significant. The max you can put in tax deferred is $5,500 per year (each) in IRA's and up to $17,000 to your 401(k) each. The tax-saving contribution opportunities will not come up again...you can't make up for it later. Any retirement saving beyond the tax advantaged part makes no sense while you have outstanding debt. |
Are variable rate loans ever a good idea? | The earlier you are in your career, the more willing you should be to take a better opportunity even if it has a short-term financial cost. You go to college even if McDonald's has an opening. After college you may take an entry level job with better long-term prospects even if a higher paying job is available. You may train for some professional qualification. Having expenses you have to pay limits your flexibility to do this. A variable rate loan that goes up later may give you the freedom to make better decisions early on. Thus in this case it may be worthwhile. That said - be very wary of variable rate loans. Unless you have iron discipline, they give the opportunity to bury yourself. |
Why would you ever turn down a raise in salary? | There are some student loan repayment programs and the like where, if a raise would bump you past a certain threshold, you become ineligible and are suddenly left holding the whole bag, or alternately the payoff for having your loans forgiven/repaid drops considerably. It can make financial sense to avoid crossing those thresholds. |
Should I try to negotiate a signing bonus? | You asked about a signing bonus and were told the conditions that would be required to get one. It does not appear that you will qualify, but you do have another option. Ask if you can start earlier. Some times they can't change the start date. They might have a contractual issue with the customer and the customer is setting the start date. Other times they are waiting for somebody else to retire or transfer. But ask. Tell them starting earlier speeds up the training process. For you it can make the transfer of insurance benefits sooner. Keep in mind it could be a few weeks before you get your first pay check. How were you planning on bridging the gap? |
How to pay bills for one month while waiting for new job? | What is my best course of action, trying to minimize future debt? Minimizing expenses is the best thing you can do. The first step to financial independence is making do with less. Assuming I receive this $3500, am I better off using the bulk to pay off my credit cards, or should I keep as much cash available as I can? This would depend on the interest rate that is associated with the credit cards and the $3500. If the $3500 has a higher interest rate than your credit cards, then do not use any of it to pay your credit cards. Paying back the money you borrow hurts but it's the interest rate that does you in. If the interest rate for the $3500 is lower than the credit card interest, then placing some of it on the credit cards may be a wise course of action. But this depends on how long you are out of work. If you could be out of work for an extended period of time, I would recommend holding on to all of the funds. Note on saving I know this goes against the grain, but I would actually not recommend saving several months worth of funds (maybe one month though). Most employers offer some type of retirement savings account (401(k), Thrift Savings Plan, etc.). I contribute 5% to this fund instead of putting the money in savings. This is an especially effective strategy if your employer offers matching contributions such as mine. Because the divedends for a savings account are so low, it is not a wise place to store your money in the long run. If I had placed my Thrift Savings Plan contributions in a standard savings account, I would now be $12,000 poorer. In addition to this, most long term investment accounts allow you to withdraw the money early in case of emergency, such as being without work. (I also find it too temping to have huge amounts of funds on hand). |
Does inflation equal more loans? | What is the relationship between inflation and interest rates? notes a relationship between inflation and interest rates that would suggest high inflation would imply higher interest rates that would mean less loans as money becomes more expensive in a sense. In contrast, in times of low inflation then rates may be low and thus there is a greater chance of people and businesses wanting loans. |
Can I claim the standard deduction being an Indian citizen and non-resident in USA for tax purposes? | Prachi - While most non-resident aliens are not allowed to claim the standard deduction here are some exceptions: IRS Law under Article 21: ARTICLE 21 Payments Received by Students and Apprentices This falls under the U.S.A.-India Tax Treaty. Sources: I hope this helps. So, yes, I do believe you would be able to claim the standard deduction, although it's always good to check with a tax adviser. |
US taxes and refunding/returning payment | Get the worker put it in writing, and deduct it in December under constructive receipt rules. The fact that you're getting the actual cash in January isn't significant as long as you've secured the payment. Verify this with a tax adviser, but that's what I would do. |
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