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Can an unmarried couple buy a home together with only one person on the mortgage? | There is no issue whatsoever, getting a mortgage this way as an unmarried couple. This is very similar to what I did while my wife and I were engaged. We we're on the title as joint tenants. I would expect them to have her as a signee to the mortgage. She won't be able to claim 50% ownership and make things hard on the lender. The title will be contingent on the mortgage being paid. What will be harder is if you guys decide to split. It's not at all uncommon for unmarried couples to buy a house together. Find a broker and get their advice. |
Buying from an aggressive salesperson | I often spend weeks or months (and sometimes even years) deciding whether to buy something. Certainly the dealer should recognize you by now if you take a third opportunity to look at the same instrument. You could politely remind him that you've twice declined his excellent prices. From there you can assert that you will purchase only when you are ready. |
Why is the fractional-reserve banking not a Ponzi scheme? | Your question contains two different concepts: fractional reserve banking and debt-based money. When thinking of these two things I think it is important to analyze these items separately before trying to understand how the whole system works. Fractional Reserve Banking As others have pointed out fractional reserve banking is not a ponzi scheme. It can be fraudulent, however. If a bank tells all its depositors that they can withdrawal their money at any time (i.e. on demand) and the bank then proceeds to loan out some portion of the depositors' money then the bank has committed fraud since there is no way they could honor the depositors' requests for their money if many of them came for their money at one time. This is true regardless of what type of money is deposited - dollars, gold, etc.. This is how most modern banks operate. Debt-based money Historically, the Fed would introduce new money by buying US Treasuries. This means Federal Reserve Notes (FRN) are backed by US Treasuries. I agree that this seems strange. Does this mean if I take my FRNs to the Fed I could redeem them for US Treasuries? But US Treasuries are promises to pay FRNs in the future. This makes my head hurt. Reminds me of the definition for recursion: see recursion. Here is an experiment. What if we wanted to recreate FRNs today and none existed? The US government would offer a note to pay 100 FRNs in one year and pay 5% interest on the note. The Fed would print up its first 100 FRNs to buy the note from the US government. The US government would spend the FRNs. The first 100 FRNs have now entered into circulation. At the end of the note's term the Fed should have 105 FRNs since the government agreed to pay 5% interest on the note. But how is the US government going to pay the interest and principal on the note when only 100 FRNs exist? I think this is the central point to your question. I can come up with only two answers: 1) the Fed must purchase some assets that are not debt based 2) the US government must continue to issue debt that is purchased by newly printed FRNs in order to pay back older debt and interest. This is a ponzi scheme. The record debt levels seem to indicate the ponzi scheme option was chosen. |
Why is Insider Trading Illegal? | To be flippant: it is illegal because it is against the law; there is no considered involved, it just is. To elaborate, part of the illusion of the stock exchange and other market-like entities is that of (apparent) fairness. If I think a stock will go up because it is involved in a growing industry, that is generally public information. Conversely if I have a dim view of a particular company because of its track record of product launches, that is similarly out in the open. A secret formula is something that I invented or discovered, not (presumably) something that I stole from someone else. To stretch that further: If I notice that Company X stock always moves with Company Y stock, that is indeed something that I have found, that I can try to profit from. It is secret to me, but not particularly dependent upon information not available to others, just that my interpretation is better. So trading on information in the public domain is fine, as it preserves the principal of fairness I mentioned, whereas inside knowledge breaks that principal. |
How can I find a list of self-select stocks & shares ISA providers? | http://www.moneysupermarket.com/shares/CompareSharesForm.asp lists many. I found the Interactive Investor website to be excruciatingly bad. I switched to TD Waterhouse and found the website good but the telephone service a bit abrupt. I often use the data presented on SelfTrade but don't have an account there. |
How To Interpret Share Prices? | The missing information is at the end of the first line: the price is from NASDAQ (most specifically Nasdaq Global Select), which is a stock exchange in the USA, so the price is in US Dollars. |
Why is “cheque cashing” a legitimate business? | This answer is based on my understanding of the US banking system. We have check cashing businesses here too, which are just like what you describe, except for the spelling :-) Let's consider what "cash it for free at the bank" really means, and why it might not be an option for everyone. One key issue is "which bank?" As an example, suppose that I have an account at ABC Bank. I take out my checkbook for that account and write you a check for $500. (Terminology: In this case, I am the drawer or maker of the check, ABC Bank is the drawee bank, and you, user54609, are the payee. Disclaimer: "You" here is meant as a generic pronoun and I do not mean to insinuate that anything here actually applies to you personally.) There are two common things you might do with the check: If you have an account at some bank, say XYZ Bank, you might take the check to XYZ Bank and deposit it in your account. (You might be able to do this through an ATM, mobile app, or by mail, instead of in person.) XYZ Bank does not have a way to verify with certainty that the check is valid (e.g. they don't know what my signature looks like, nor whether I actually have $500 in my account at ABC), so they send it to ABC Bank, which verifies the check and transfers $500 to XYZ. (This is usually done through a central clearinghouse, such as the Federal Reserve in the US, and in some cases an image of the check may be sent electronically, instead of the physical check.) This process takes some time, so XYZ may not make the $500 available to you right away - there may be a hold period before you can withdraw that $500 from your account. You could take the check to ABC Bank, in person. They will verify on the spot that the check is valid and that you are in fact user54609. If everything looks good, they will hand you $500 in cash (perhaps subtracting a fee of a few dollars). Now we can see some possible problems with each of these approaches. For 1: Maybe you don't have a bank account at all. There are many possible reasons: You don't have enough money to meet the minimum balance that a bank account would require. You used to have an account, but you overdrew or otherwise misused an account, so the bank closed it. They then entered you in a registry such as ChexSystems which ensures that other banks know about this, and so no other bank will open a new account for you. You immigrated to the country illegally and cannot get the documents (driver's license, social security number, etc) that a bank normally requires to open an account. You simply don't like the idea of keeping your money in a bank. Maybe you do have an account at XYZ Bank, but it's in another town. You need the cash today, so you can't use mail or a mobile app, and third-party ATMs usually don't accept deposits. Maybe you need to spend the money today, and XYZ Bank would place a hold. For 2: ABC Bank may not have a branch you can conveniently visit. Maybe the nearest one is a long way away, in another city or across the country. Or maybe ABC is an online bank with no physical branches at all. Maybe it's in the same city, but you don't have transportation to get you there. Or maybe it's simply less convenient than the check-cashing business on the corner. Maybe it is after usual banking hours, or a weekend, and ABC Bank is closed, but you need cash now. In any of these situations, "cash it at the bank" might not be a viable option, and so you might reasonably turn to a check cashing business instead. As you say, you will pay a much higher fee there, but maybe it is worth it to you, or you just don't have any choice. Another possibility, of course, is that you are poorly educated about the banking system, and you don't really understand that 1 and 2 are options, or how to go about them. But there's this storefront on the corner that says "Check Cashing", so this seems like a low-stress, uncomplicated way to exchange this piece of paper for money. As such, there certainly are people who legitimately might want to cash a valid check at a check-cashing business. Check cashing business do of course take some risk of fraud, since they can't necessarily verify the check. There are sometimes steps they can take to minimize this risk. Sometimes they can call ABC Bank and check that I have sufficient money in my account. Maybe they'll only accept certain kinds of checks, such as payroll checks from well-known companies for which you can produce a matching pay stub. And they can demand identification from you (perhaps allowing more flexible options than a bank), which helps ensure that you are the payee, and would make you easier to track down if you did commit fraud. But they will probably lose some money this way, so they will have to make their fees high enough to cover those losses. |
Home Valuation in a Dodgy neighborhood | Bad areas are tough to value as a owner-occupied property, because the business model for being a slumlord is to rent apartments in absentia, usually to tenants receiving goverment subsidies such as Section 8 vouchers. The vouchers are based on a prevailing rent, which are often on par with nice suburban apartment complexes due to how that "prevailing" rate is calculated. So the value of the house is really an annuity calculation. You figure out the potential rental cash flow and apply whatever your local market premium is. The point is, doing an apples to apples comparison is going to be tough, and justifying the cost of repairs that aren't remediating health and safety issues probably won't be recoverable from a home valuation standpoint. A buyer would probably rip out your central air conditioner and sell it! If I were in your shoes, I'd look at the time horizon that you think you're going to be there and amortize the cost over that period. Assuming your mortgage is small and you're staying for about 5 years, spending $10k costs you about $170 a month. Your reward is a modern A/C and heating system. Compare that cost to the cost of moving and your desires and see if it's worth it to you. |
Is it preferable to move emergency savings/retirement into offset mortgage? | The way offset mortgages work, you are keeping savings in an account effectively earning the rate of the mortgage. You have the ability to leave it, paying the mortgage off early, or borrowing back, any time. |
IRR vs. Interest Rates | Yes, if your IRR is 5% per annum after three years then the total return (I prefer total rather than your use of actual) over those three years is 15.76%. Note that if you have other cashflows in and out, it gets a bit more complicated (e.g. using the XIRR function in Excel), but the idea is to find an effective annual percentage return that you're getting for your money. |
How to calculate my real earnings from hourly temp-to-hire moving to salaried employee? | Here's an alternative. There are hundreds, maybe thousands, of contract engineering firms ("job shops") in the United States, probably hundreds in California alone. They are in the business of doing what your "employer" wants you to do, they know how to do it, they have been doing it for decades, working with the biggest, most-established companies in the country. They have forgotten more about providing engineering services to clients, and paying the engineers, than you can learn in a lifetime. Call a few of them. Set up meetings. Budget a few hours for it. You want to talk with the most experienced recruiter in the office, the Old Guy Who Has Been There And Done That. Explain your situation, and tell them that, rather than go through all of the headaches yourself, you want to investigate the possibility of THEM handling all the headaches, for their usual markup of course. (You can probably word this better than I can, but you get the idea.) The shop may or may not be willing to talk about their markup. My personal opinion is that this is perfectly OK. What they make off of you, after your rate is paid, is THEIR business. Also, talk about what you do, and your recommended rate. It would not surprise me to learn that you are currently grossly underpaid. AND, mention that, if the client declines, you're going to be available immediately, and you'd certainly be open to working with them. (You will see this again.) In fact, if they have any current leads that you fit, you would certainly be interested in hearing about them. (They may already have a req from another client, for which you fit, for which the client is willing to pay much more than your current "employer".) If it were me, personally, I'd start with Yoh, Belcan, and maybe TAD Technical. These are three of the oldest and best. I'd also hit up CE Weekly, get a subscription, and find some other shops with offices in your area. Once you have a shop lined up, then ask your "employer" if, rather than you setting up a personal corporation, they'd be willing to work with an established Contract Engineering firm, who does this kind of thing for a living, who does this every day, who has been doing this for decades. Doing this is simpler for everyone, and, by going through an established firm, they avoid having to teach you how to do business with them. They also avoid the risk of having you reclassified by IRS as an employee, which exposes them to all kinds of legal and financial liability. If they say "No", WALK AWAY FROM THEM. Immediately. They've just thrown up a HUGE red flag. This is where the other discussions with the shop come into play. |
How do credit card payments work? What ensures the retailer charges the right amount? | Your credit card limit is nothing more than a simple number. When you purchase something, the merchant receives a number (i.e. the amount of the transaction) from your card company (e.g. Visa) in their bank account, and that number is subtracted from your limit (added to your balance). The amount is recorded, and isn't changed, so that's how they get the "exact" amount you paid. Transferring a number is easier than the retailer having to wait for cash to get from you to your card company to them. Moving numbers around is the basis of the modern financial system. And yes, it is always a risk to let someone else have your credit card number. An untrustworthy company/person may use it to charge you without your permission, or if they have your full details they could use it as if they were you. With a reputable retailer like Amazon, the main risk is data theft: If a security hole is found in Amazon's system, someone could steal your credit card info and misuse it. |
Is it better to pay an insurance deductible, or get an upgrade? | I'm going to guess you're on Verizon and your wife has an iPhone. I just went through this exact same situation with my mom's phone last week. When you're off contract with Verizon you're saving $25/month on your plan (at least, I am), so staying off contract is big. If you do the monthly payment you're paying full retail over 2 years, without interest, so you do stay off contract at least. Here's the thing, as long as it's a 16GB iPhone 5 or better, you're going to be able to Craigslist it for the cost of the deductible, no problems. To me that makes the decision pretty easy to make. As long as you can Craigslist it for more than the deductible, get the insurance replacement. Then when you want a new phone you can sell your old one. Since you can sell the phone, I think that makes the comparison between the deductible and deciding to pay off the $100 now and start payments on the new phone less relevant. The real comparison I'd suggest looking at is the value of the phone and the deductible. |
Is it worth working at home to earn money? Can I earn more money working at home? | It completely depends on what type of work you intend to do. Are you intending to run/setup your own business? Or stay with your current employer, but work from home instead of going to the office? If thats the case, then yes it is a good idea, since you will save on commuting costs amongst other things If you are asking about working from home under one of those "work from home piecework" schemes, I would be wary. Many of them require you do an insane amount of piecework, for literally peanuts, so it might not be worth the effort (since you could earn 2, 3x as much in a supermarket shift of the same duration) |
Understanding the phrase “afford to lose” better | I think it's a silly statement. If you are prepared from the start that you might lose it then you shouldn't invest. You invest to earn not to lose. Most often losses are a result of fear. Remember you only lose when you sell lower than you bought for. So if you have the patience you will probably regain. I ask my clients many times how much do they want to earn and they all say "as much as possible". Last time I checked, that's not an objective and therefore a strategy can't be built for that. If there is a strategy then exiting a stock is easy, without a strategy you never know when to exit and then you are exposed to bottomless losses. I've successfully traded for many years with large amounts of money. I made money in the FC and in the bubble, both times it wasn't because I was prepared to lose but because I had an entry and exit strategy. If you have both the idea of investing what u are prepared to lose has little value. |
Optimal way to use a credit card to build better credit? | nan |
Why don't banks print their own paper money / bank notes? | In Scotland, each bank issues its own separate notes. It's not uncommon to see identical-valued £10 notes, for example, from three different banks in one's wallet. |
Investment strategies for young adults with entrepreneurial leanings? | Diversity of risk is always a good idea. The cheapest equity-based investment (in terms of management costs) is some form of tracker or indexed fund. They're relatively low risk and worth putting in a fixed amount for long-term investment. I agree with Ngu Soon Hui, you're going to need a lot of cash if you decide to start your own business. You may have to cover a significant amount of time without an income and you don't want all your cash tied up. However, putting all your money into one business is not good risk management. Keep some savings where they can be a lifeline, should you need it. |
Why are residential investment properties owned by non-professional investors and not large corporations? | Your experience is anecdotal (outside Australia things are different). There are many companies and real estate investment trusts (REITs) that own residential properties (as well as commercial in many cases to have a balanced portfolio). They are probably more common in higher-density housing like condos, apartment buildings, flats, or whatever you like to call them, but they are certainly part of the market for single family units in the suburbs as well. What follows is all my own opinion. I have managed and rented a couple of properties that I had lived in but wasn't ready to sell yet when I moved out. In most cases, I wish I would have sold sooner, rather than renting them out. I think that there are easier/less risky ways to get a good return on your money. Sometimes the market isn't robust enough to quickly sell when it's time to move, and some people like the flexibility of having a property that a child could occupy instead of moving back in at home. I understand those points of view even if I disagree with them. |
Can I save our credit with a quickie divorce? | If you're not insolvent, doing something like this is both a moral and legal hazard: When you are insolvent, the tax and moral hazard issues can be a non-issue. Setting up a scenario that makes you appear to be insolvent is where the fraud comes in. If you decide to go down this road, spend a few thousand dollars on competent legal advice. |
Are these really bond yields? | that would imply that a 30Y US Treasury bond only yields 2.78%, which is nonsensically low. Those are annualized yields. It would be more precise to say that "a 30Y US Treasury bond yields 2.78% per year (annualized) over 30 years", but that terminology is implied in bond markets. So if you invest $1,000 in a 30-year T-bond, you will earn roughly 2.78% in interest per year. Also note that yield is calculated as if it compounded, meaning that investing in a 30-year T-bind will give you a return that is equivalent to putting it in a savings account that earns 1.39% interest (half of 2.78%) every 6 months and compounds, meaning you earn interest on top of interest. The trade-off for these low yields is you have virtually no default risk. Unlike a company that could go bankrupt and not pay back the bond, the US Government is virtually certain to pay off these bonds because it can print or borrow more money to pay off the debts. In addition, bonds in general (and especially treasuries) have very low market risk, meaning that their value fluctuates much less that equities, even indicies. S&P 500 indices may move anywhere between -40% and 50% in any given year, while T-bonds' range of movement is much lower, between -10% and 30% historically). |
Why is everyone saying how desperately we need to save money “in this economy”? | It's all about risk. In 1990, expressing the idea of the US defaulting on debt payments would result in you being labelled as a crank. Yet in 2011, the President and Speaker of the House played chicken with the credit of the United States, and have a date to do it again in December 2011. |
Why do credit cards require a minimum annual household income? | It is much simpler than any of that. People who make money have a greater capacity to pay their bills. Credit card companies make money off of people who can afford to pay several hundred dollars a month in interest charges. If you only make 500 a month you can not afford to pay 200 in interest. So their cost of doing business with you is higher. These cards are issued to make money. And they make their money off of people paying 12-29% interest on their 5k+ credit limits they have nearly maxed. |
How can I save on closing costs when buying a home? | According to Realtor.com, there are a variety of options to save on closing costs: A general Google search on "how to reduce closing costs" will return a lot of results on other people's experiences, as well as tips and tricks. |
How U.S. Depreciation works Explain in brief? | If a business tool has a limited lifespan, it's value decreases (depreciates) from year to year. The business can capture that loss of value on some things that it couldn't otherwise write off as expenses. A few tools can be either expenses or depreciated, but only one of those can be chosen for that particular object. This is generally not relevant for individual taxpayers, unless you can show that the item is being used for income-producing purposes. |
How to read a mutual fund spec sheet? | The 0.14% is coming out of the assets of the fund itself. The expense ratio can be broken down so that on any given day, a portion of the fund's assets are set aside to cover the administrative cost of running the fund. A fund's total return already includes the expense ratio. This depends a lot on what kind of account in which you hold the fund. If you hold the fund in an IRA then you wouldn't have taxes from the fund itself as the account is sheltered. There may be notes in the prospectus and latest annual and semi-annual report of what past distributions have been as remember the fund isn't paying taxes but rather passing that along in the form of distributions to shareholders. Also, there is something to be said for what kinds of investments the fund holds as if the fund is to hold small-cap stocks then it may have to sell the stock if it gets too big and thus would pass on the capital gains to shareholders. Other funds may not have this issue as they invest in large-cap stocks that don't have this problem. Some funds may invest in municipal bonds which would have tax-exempt interest that may be another strategy for lowering taxes in bond funds. Depending on the fund quite a broad range actually. In the case of the Fidelity fund you link, it is a "Fund of funds" and thus has a 0% expense ratio as Fidelity has underlying funds that that fund holds. What level of active management are you expecting, what economies of scale does the fund have to bring down the expense ratio and what expense ratio is typical for that category of fund would come to mind as a few things to consider. That Fidelity link is incorrect as both Morningstar and Fidelity's site list an expense ratio for the fund of funds at .79%. I'd expect an institutional US large-cap index fund to have the lowest expense ratio outside of the fund of fund situation while if I were to pick an actively managed fund that requires a lot of research then the expense ratio may well be much higher though this is where you have to consider what strategy do you want the fund to be employing and how much of a cost are you prepared to accept for that? VTTHX is Vanguard Target Retirement 2035 Fund which has a .14% expense ratio which is using index funds in the fund of funds system. |
UK Tax - can I claim expenses against a different tax year? | In some circumstances losses from self-employment can be offset against total income and/or capital gains. If this applies to you may be able to claim back some of the tax taken by PAYE from your day job. You can also to some extent carry the loss backwards into previous tax years or forward into the next one if you can't use it fully this year. HMRC have some information available on the current rules: When you can claim losses You can claim: But You can’t claim: |
What debts are both partners liable for in a 'community property' state? | I know one piece of information that can help you (in a macabe sort of way) - from what my wife has told me, if your partner dies, you are not responsible for paying for their debts, especially student loans. I expect the same thing for credit cards - if someone were to happen to charge $2,000 on their credit card and get hit by a bus, the credit card company can cajole and plead for you to pay for it, but you have no legal requirement to do so. Unfortunately I do not have as much information about as if you spouse is living. |
If I make over 120k a year, what are my options for retirement plans? | All data for a single adult in tax year 2010. Roth IRA 401K Roth 401k Traditional IRA and your employer offers a 401k Traditional IRA and your employer does NOT offer a 401k So, here are your options. If you have a 401k at work, you could max that out. If you make close to $120K, you could reduce your AGI enough to contribute to a Roth IRA. If you do not have a 401k at work, you could contribute to a Traditional IRA and deduct the $5K from your AGI similar to how a 401k works. Other than that, I think you are looking at investing outside of a retirement plan which means more flexibility, but no tax advantage. |
First job: Renting vs get my parents to buy me a house | As everyone is saying, this depends on a lot of variables. However... I had my dad help me with the downpayment on my house. In my case, the cost of mortgage payment and all maintenance expenses is still lower than paying rent. If I sell my house and walk away from the closing office with just $1 then I've still come out ahead compared to renting. The New York Times has a fantastic tool figure out if it's a good idea to buy vs. rent. http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0 It's asks all the relevant questions, and then it tells you how cheap rent would have to be make it the better option. |
Does payment in goods count as “income” for tax purposes? | The IRS defines income quite specifically. On the topic What is Taxable and Nontaxable Income, they note: You can receive income in the form of money, property, or services. This section discusses many kinds of income that are taxable or nontaxable. It includes discussions on employee wages and fringe benefits, and income from bartering, partnerships, S corporations, and royalties. Bartering, or giving someone wages (or similar) in something other than currency (or some other specifically defined things, like fringe benefits), is taxed at fair market value: Bartering Bartering is an exchange of property or services. You must include in your income, at the time received, the fair market value of property or services you receive in bartering. For additional information, Refer to Tax Topic 420 - Bartering Income and Barter Exchanges. Bartering is more specifically covered in Topic 420 - Bartering Income: You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X (PDF), Amended U.S. Individual Income Tax Return. Refer to Topic 308 for information on filing an amended return. More details about income in general beyond the above articles is available in Publication 525, Taxable and Nontaxable Income. It goes into great detail about different kinds of income. In your example, you'd have to calculate the fair market value of an avocado, and then determine how much cash-equivalent you were paid in. The IRS wouldn't necessarily tell you what that value was; you'd calculate it based on something you feel you could justify to them afterwards. The way I'd do it would be to write down the price of avocados at each pay period, and apply a dollar-cost-averaging type method to determine the total pay's fair value. While the avocado example is of course largely absurd, the advent of bitcoins has made this much more relevant. Publication 525 has this to say about virtual currency: Virtual Currency. If your employer gives you virtual currency (such as Bitcoin) as payment for your services, you must include the fair market value of the currency in your income. The fair market value of virtual currency (such as Bitcoin) paid as wages is subject to federal income tax withholding, Federal Insurance Contribution Act (FICA) tax, and Federal Unemployment Tax Act (FUTA) tax and must be reported on Form W-2, Wage and Tax Statement. Gold would be fundamentally similar - although I am not sure it's legal to pay someone in gold; assuming it were, though, its fair market value would be again the definition of income. Similarly, if you're paid in another country's currency, the US dollar equivalent of that is what you'll pay taxes on, at the fair market value of that currency in US dollars. |
What does inflation actually mean? [duplicate] | Inflation also provides incentives for consumers to purchase now rather than later (which helps drive sales) and it provides incentive for money to be invested and put back into businesses, rather than held as cash, because you need to earn at least a little interest on your money just to break even. |
How to map stock ticker symbols to ISIN (International Securities Identification Number)? | There is no simple way to convert an ISIN into a stock ticker symbol. The only way to even attempt to do so is to map the ISIN to a CUSIP or SEDOL or other national identifier and then map that identifier to a stock ticker symbol. |
Should I sell and rebuy stocks before the end of the year to trigger a gain and offset capital losses? | You have multiple issues buried within this question. First, we don't know your tax bracket. For my answer, I'll assume 25%. This simply means that in 2016, you'll have a taxable $37,650 or higher. The interesting thing is that losses and gains are treated differently. A 25%er's long term gain is taxed at 15%, yet losses, up to $3000, can offset ordinary income. This sets the stage for strategic tax loss harvesting. In the linked article, I offered a look at how the strategy would have resulted in the awful 2000-2009 decade producing a slight gain (1%, not great, of course) vs the near 10% loss the S&P suffered over that time. This was by taking losses in down years, and capturing long term gains when positive (and not using a carried loss). Back to you - a 15%er's long term gain tax is zero. So using a gain to offset a loss makes little sense. Just as creating a loss to offset the gain. The bottom line? Enjoy the loss, up to $3000 against your income, and only take gains when there's no loss. This advice is all superseded by my rule "Don't let the tax tail wag the investing dog." For individual stocks, I would never suggest a transaction for tax purposes. You keep good stocks, you sell bad ones. Sell a stock to take a short term loss only to have it recover in the 30 day waiting period just once, and you'll learn that lesson. Learn it here for free, don't make that mistake at your own expense. |
How do multi-currency bank accounts work? What is the advantage? | Today typically a Business needs to hold accounts in more than one currency. Banks in certain countries are offering what is called a dual currency account. It is essentially 2 accounts with same account number but different currency. So One can have an account number say 123456 and have it in say AUD and USD. So the balance will always show as X AUD and Y USD. If you deposit funds [electronic, check or cash] in USD; your USD balance goes up. Likewise at the time of withdrawal you have to specify what currency you are withdrawing. Interest rates are calculated at different percentage for different currencies. So in a nutshell it would like operating 2 accounts, with the advantage of remembering only one account number. Designate a particular currency as default currency. So if you don't quote a currency along with the account number, it would be treated as default currency. Otherwise you always quote the account number and currency. Of-course bundled with other services like free Fx Advice etc it makes the entire proposition very attractive. Edit: If you have AUD 100 and USD 100, if you try and withdraw USD 110, it will not be allowed; Unless you also sign up for a auto sweep conversion. If you deposit a GBP check into the account, by default it would get converted into AUD [assuming AUD is the default currency] |
Are tax deductions voluntary? | What kind of "deductions" are you talking about? Many deductions, like the standard/itemized deductions, come after the AGI, and do not affect the AGI, so I don't see how this would make any difference. Maybe you are talking about deductions that come before the AGI? If you want to increase your AGI legitimately, here's a way: Every year, itemize deductions on your federal return, and over-withhold your state income tax (assuming your state has income tax) by a lot, and/or make voluntary extra payments to your state income tax. As a result, you will get a huge refund on your state taxes the following year. Then you will need to include this refund as income on line 10 of the federal return that year, which will be included in the AGI. (Of course, you will also be able to deduct a lot of state income tax paid every year in the federal itemized deductions, but those come after the AGI.) |
How often are preferred shareholders made whole after a company goes bankrupt? | From the Times A Reader Q.&A. on G.M.’s Bankruptcy Q. I own G.M. preferred shares. Should I be looking to sell them, or hold on? I bought them at $25 a share when they were issued in late 2001. — Karen, Manhattan A. When a company files for bankruptcy, its various stock and bondholders essentially get in line. The first investors to be repaid are secured debt holders, then senior bond investors, followed by subordinated debt holders. Preferred shareholders are next, and lastly, holders of common stock. In a bankruptcy, preferred shares are usually worthless, much like shares of common stock. But in the case of G.M., there may be some good — or at least somewhat better — news. Most of G.M.’s preferred shares are actually senior notes or “quarterly interest bonds,” which means you will be treated as a bondholder, according to Marilyn Cohen, president of Envision Capital Management. So you will be able to exchange your preferreds for G.M. stock (bondholders will receive 10 percent of the new company’s stock). It’s not the best deal, but it beats the empty bag true preferred shareholders would have been left holding. Of course this is just one example, and you were hoping to get some larger picture. The article stated "In a bankruptcy, preferred shares are usually worthless, much like shares of common stock" which at least is a bit closer to that, if you accept usually as a statistic. |
Does a restaurant have to pay tax on a discount? | In almost any jurisdiction, the restaurant will pay tax on the amount after the discount. Discounting is just a selective way to reduce prices for particular clients and thus achieve some degree of price discrimination. It's no different in principle to cutting prices for everyone or having a sale or similar. It would be very strange for a tax jurisdiction to work any other way, because businesses would end up being taxed on money they never actually got. While tax systems often have that kind of anomaly in rare cases at the edge of the system, discounting via vouchers is extremely common. For example, here are the rules in the UK. |
Is sales tax for online purchases based on billing- or shipping address? | From Amazon's Site: "If an item is subject to sales tax in the state to which the order is shipped, tax is generally calculated on the total selling price of each individual item." I'm going to trust a company of this size has this correct. Shipping address. |
Any reason to keep around my account with my old, 'big' bank? | I'd add that bigger banks tend to have experience doing more complicated things. As an example, my local credit union (~12 offices), simply didn't have the software to wire money to a Canadian bank, as where Chase did. The Canadian routing number wasn't in the format of a US institution, and their software user interface just didn't allow for that number to be entered. Also, most smaller banks don't have international toll free (in-country) numbers for foreign access. Smaller banks also tend to have less sophisticated business banking tools and experience. If you take a Treasury bond approval to a small bank, they'll generally look at you like you have three heads. So the international side of things is definitely in the favor of big banks; they have a lot more money to dump on services. |
Are traders 100% responsible for a stock's price changes? | Traders = every market participant. Not some shadow figure that excludes you just because you passively drop cash into a 401k Vanguard fund every paycheck. So yes, if everyone stopped trading then the price won't move. Trades are 100% responsible for the prices you see on charts and tickers. A stock won't be worth "$100" if nobody ever traded $100 for it. It only has that price now or in the past because somebody placed an order for it at $100 and somebody else filled that order at $100 |
Does a US LLC owned by a non-resident alien have to pay US taxes if it operates exclusively online? | Since as you say, an LLC is a pass-through entity, you will be making income in the U.S. when you sell to U.S. customers. And so you will need to file the appropriate personal tax forms in the US. As well as potentially in one or more States. The US government does not register LLCs. The various States do. So you'll be dealing with Oregon, Wisconsin, Wyoming, one of those for the LLC registration. You will also need to have a registered agent in the State. That is a big deal since the entire point of forming an LLC is to add a liability shield. You would lose the liability shield by not maintaining the business formalities. Generally nations aim to tax income made in their nation, and many decline to tax income that you've already paid taxes on in another nation. A key exception: If money is taxed by the U.S. it may also be taxed by one of the States. Two States won't tax the same dollar. Registering an LLC in one State does not mean you'll pay state taxes there. Generally States tax income made in their State. It's common to have a Wyoming LLC that never pays a penny of tax in Wyoming. Officially, an LLC doing business in a State it did not form in, must register in that State as a "foreign LLC" even though it's still in the USA. The fee is usually the same as for a domestic LLC. "Doing business" means something more than incidental sales, it means having a presence specifically in the State somehow. It gets complicated quick. If you are thinking of working in someone's app ecosystem like the Apple Store, Google Play, Steam etc. Obviously they want their developers coding, not wrestling with legalities, so some of them make a priority out of clearing and simplifying legal nuisances for you. Find out what they do for you. |
Is it OK to use a credit card on zero-interest to pay some other credit cards with higher-interest? | good vs "bad" debt in the context of that post. At least in the UK this can be a good tactic to reduce the cost of credit card debt. Some things to consider |
How should I pay off my private student loans that have a lot of restrictions? | It doesn't make a whole lot of sense to save up and wait to make a payment on any of these loans. Any dollar you pay today works better than saving it and waiting months to pay it, no matter which loan it will be applied to. Since your lender won't let you choose which loan your payment is being applied to, don't worry about it. Just make as big a payment as you can each month, and try to get the whole thing out of your life as soon as possible. The result of this will be that the smaller balance loans will be paid off first, and the bigger balance loans later. It is unfortunate that the higher interest rate loans will be paid later, but it sounds like you don't have a choice, so it is not worth worrying about. Instead of thinking of it as 5 loans of different amounts, think of it as one loan with a balance of $74,000, and make payments as quickly and as often as possible. For example, let's say that you have $1000 a month extra to throw at the loans. You would be better off paying $1000 each month than waiting until you have $4000 in the bank and paying it all at once toward one loan. How the lender divides up your payment is less significant than when the lender gets the payment. |
Frustrated Landlord | If you're losing money or breaking even, you own a bad investment. The problem you have is that you are emotionally invested in your tenant. That isn't a bad thing in general but it's costing you money and, unless interest rates fall enough to justify a refi or property taxes go down in your area, that's kind of unlikely to change. Option #1 - Tell your wife that you are willing to accept a loss up to a certain level because of your long term relationship with your tenant. In a perfect world, the two of you would then discuss what the "magic number" would be where you got out and come to a compromise. For example, if you are comfortable losing up to $3,000 per year and she is unhappy with any loss, you may agree on selling the house when your losses climb to $1,500. In a less perfect world, it would cause an argument as she has already told you what she wants you to do. Option #2 - Raise the rent to the break even point. From what you've said, this will likely result in the loss of your tenant but you could then rent to someone else for significantly more. Option #3 - Sell the house. It's an investment property which means it's supposed to make money for you. It can do that very quickly by way of a sale and then it's no longer your problem. Option #4 - Sell the house to your tenant. You bought it for $50,000 and it's currently worth $150,000 (roughly). The problem you face is that property taxes have gone up and caused your mortgage to increase past your tenants ability to pay. My guess is, after 15 years, your payoff is somewhere in the high $20's to mid 30's assuming you got a 30 year loan and haven't refinanced. If you sell to her for say $75,000 (or even up to $90,000) you will still make a profit (wife is happy), she will get a mortgage she can afford and be able to stay in the house (you and the tenant are happy). Added bonus is that her property taxes would be lower (assuming a different rate for investment property in your area). I would discuss this at length with your wife as well before making such an offer. Option #5 - Get a property management company. As mentioned above, they will keep a percentage but will remove your emotions from the equation altogether and turn the situation into a winner. I don't know if your wife is right in saying you don't have the stomach for this, but I do think your heart is getting in the way in this particular situation. I get the feeling that if your tenant was 25 years old and had only been renting from you since last October, you would have no problem raising the rent to market levels at every renewal. |
What is the buy-hold-sell indication based on? | The indication is based on the average Buy-Hold-Sell rating of a group of fundamental analysts. The individual analysts provide a Buy, Hold or Sell recommendation based on where the current price of the stock is compared to the perceived value of the stock by the analyst. Note that this perceived value is based on many assumptions by the analyst and their biased view of the stock. That is why different fundamental analysts provide different values and different recommendations on the same stock. So basically if the stock's price is below the analyst's perceived value it will be given a Buy recommendation, if the price is equal with the perceived value it will be given a Hold recommendation and if the price is more than the perceived value it will be given a Sell recommendation. As the others have said this information IMHO is useless. |
Are binary options really part of trading? | If I really understood it, you bet that a quote/currency/stock market/anything will rise or fall within a period of time. So, what is the relationship with trading ? I see no trading at all since I don't buy or sell quotes. You are not betting as in "betting on the outcome of an horse race" where the money of the participants is redistributed to the winners of the bet. You are betting on the price movement of a security. To do that you have to buy/sell the option that will give you the profit or the loss. In your case, you would be buying or selling an option, which is a financial contract. That's trading. Then, since anyone should have the same technic (call when a currency rises and put when it falls)[...] How can you know what will be the future rate of exchange of currencies? It's not because the price went up for the last minutes/hours/days/months/years that it will continue like that. Because of that everyone won't have the same strategy. Also, not everyone is using currencies to speculate, there are firms with real needs that affect the market too, like importers and exporters, they will use financial products to protect themselves from Forex rates, not to make profits from them. [...] how the brokers (websites) can make money ? The broker (or bank) will either: I'm really afraid to bet because I think that they can bankrupt at any time! Are my fears correct ? There is always a probability that a company can go bankrupt. But that's can be very low probability. Brokers are usually not taking risks and are just being intermediaries in financial transactions (but sometime their computer systems have troubles.....), thanks to that, they are not likely to go bankrupt you after you buy your option. Also, they are regulated to insure that they are solid. Last thing, if you fear losing money, don't trade. If you do trade, only play with money you can afford to lose as you are likely to lose some (maybe all) money in the process. |
Is it possible for me to keep my credit card APR at 0% permanently? | Banks are in it to make money. But they're expected to provide a social good which powers our economy: secure money storage (bank accounts) and cashless transactions (credit/debit cards). And the government does not subsidize this. In fact, banks are being squeezed. Prudent customers dislike paying the proper cost of their account's maintenance (say, a $50/year fee for a credit card, or $9/month for a checking account) - they want it free. Meanwhile government is pretty aggressive about preventing "fine print" trickery that would let them recover costs other ways. However there isn't much sympathy for consumers who make trivial mistakes - whether they be technical (overdraft, late fee) or money-management mistakes (like doing balance transfers or getting fooled by promotional interest rates). So that's where banks are able to make their money: when people are imprudent. The upshot is that it's hard for a bank to make money on a prudent careful customer; those end up getting "subsidized" by the less-careful customers who pay fees and buy high-margin products like balance transfers. And this has created a perverse incentive: banks make more money when they actively encourage customers to be imprudent. Here, the 0% interest is to make you cocky about running up a balance, or doing balance transfers at a barely-mentioned fee of 3-5%. They know most Americans don't have $500 in the bank and you won't be able to promptly pay it off right before the 0% rate ends. (or you'll forget). And this works - that's why they do it. By law, you already get 0% interest on purchases when you pay the card in full every month. So if that's your goal, you already have it. In theory, the banks collect about 1.5% from every transaction you do, and certainly in your mind's eye, you'd think that would be enough to get by without charging interest. That doesn't work, though. The problem is, such a no-interest card would attract people who carry large balances. That would have two negative impacts: First the bank would have to spend money reborrowing, and second, the bank would have huge exposure to credit card defaults. The thing to remember is the banks are not nice guys and are not here to serve you. They're here to use you to make money, and they're not beneath encouraging you to do things that are actually bad for you. Caveat Emptor. |
Should I learn to do my own tax? | If you've been using TurboTax, let me suggest a compromise: Let TTax fill out the forms, but then print them out and go through it again by hand. If you don't get the same numbers, investigate why. If you do, you can probably conclude that you could do it by hand if you really want to, especially if you have the previous year's returns as a reference. (I've gone through every version of this from before personal tax software existed thru hand-constructed spreadsheets to commercial software and e-filing (federal only; I refuse to pay for something that reduces THEIR work). I can't use the free online version -- my return's got complications it won't handle -- and I'm uncomfortable putting that much data on a machine I don't control, so I'm still buying software each year. I COULD save the money, but it's worth a few bucks to me to make the process less annoying.) Late edit: Note that a self-constructed spreadsheet is one answer to the annoyance of pencil and paper -- you're still doing all the data manipulation yourself, but you're recording HOW you manipulated it as you go, and if numbers change you don't have to redo all the work. And it avoids raw math errors. It does require that you enter all the formulas rather than just their results, and figuring out how to express some things in stylesheet form can be a nuisance, but it isn't awful... and once you've done it (assuming you got it right) updating it for the next year is usually not hard unless you've introduced a completely new set of issues. |
How does a defined contribution plan work | It is comparing apples to oranges. From govt or institution point of view defined contribution is better than defined benefits as they don't have to carry obligations. Although defined benefit sounds good, one can't guarantee it will be enough when you retire compared to inflation. It often becomes political issue. Defined contribution puts you in charge. |
Can I participate in trading Facebook shares on their IPO day from any brokerage? | Yes. The real question is whether you should. You should consider your investment options, and take into the account that there's much more hype than value in many companies. |
Multiple mortgage pre-approvals and effects on credit score | The problem is not the credit score; it is the "competing" inquiries. Multiple inquiries will be considered as one if done withing a short time period (2 month, IIRC) and for the same kind of credit, because people do shop for rates, you're not the first one to do that. So don't worry about that. What you should be worrying about is banks asking questions about these inquiries, which is an annoying (at least for me) technicality. You'll have to explain to each of the banks that you want a pre-approval from that you're going to take the mortgage from them, and not from anyone else. In writing, with your signature notarized. Which is OK because it's done (the signature and notarizing) at closing, but you'll have to "convince" them that they're the chosen ones to get approved. Other than that it's pretty simple. I've done that (including the declaration that I'm not going to take any loans based on the other "competing" inquiries), and it worked fine when I took the original mortgage, and when I refinanced it later in a similar "shopping" fashion. Do it closer to the actual bidding, because closing does take at least 3-4 weeks, and the rate lock is usually for 30-60 days, so not much time to shop if you take that road. |
Can I buy stocks directly from a public company? | This is allowed somewhat infrequently. You can often purchase stocks through DRIPs which might have little or no commission. For example Duke Energy (DUK) runs their plan internally, so you are buying from them directly. There is no setup fee, or reinvestment fee. There is a fee to sell. Other companies might have someone else manage the DRIP but might subsidize some transaction costs giving you low cost to invest. Often DRIPs charge relatively large amounts to sell and they are not very nimble if trading is what you are after. You can also go to work for a company, and often they allow you to buy stock from them at a discount (around 15% discount is common). You can use a discount broker as well. TradeKing, which is not the lowest cost broker, allows buys and sells at 4.95 per trade. If trading 100 shares that is similar in cost to the DUK DRIP. |
Investing in dividend-yielding stocks with money borrowed from margin account? | Is it safe to invest in a portfolio of dividend stocks yielding 7-9% with the money borrowed at 3-4% from one of these brokerages? Yes and no. It depends on your risk profile! Any investment has its risks of losing your capital, but not investing is a guaranteed risk, as you will be guaranteed to fall behind the rate of inflation. Regarding investing on margin, this can increase your gains but can also increase your loses. Regarding the stock market - when investing in stocks you should not only look at the dividend rate but also the capital gain or loss potential. Remember in regards to investing on margin, if the share price drop too much you can get a margin call no matter how much dividend you are getting. It is no use gaining 9% in dividend yield per year if you are losing 15% or more in capital each year. Also, what is the risk of the dividend rate being cut back or dividends not being paid at all in the future? These are some of the risks you should consider before investing and derive a risk management plan as part of your investment plan before you invest. No investment is totally safe or risk free, but it is less risky than not investing at all, as long as you understand the risks involved and have a risk management plan in place as part of your overall investment plan. |
What are the pros and cons of buying an item on installments with zero percent interest? | One small advantage to paying ahead is having an outstanding installment plan may preclude unlocking the phone for use on other carriers, for example during international travel. If unlocking is important, researching the particulars would be in order. I am more familiar with T-Mobile, and will use as a specific example. If I pay upfront, I can purchase the phone from Apple totally unlocked, and T-Mobile has no say in whether I use it on another carrier or not. (This actually costs a little more, because the phone from Apple doesn't come with a SIM, and T-Mobile charges for the SIM. At least as of iPhone 5s.) Looking at "Unlock your mobile wireless device, Unlock Requirements" on T-Mobile's website, at least some payment plans do not allow unlock until the phone is paid off. Obviously phones purchased for full price from T-Mobile start out paid off. |
Can an immigrant get a mortgage in the us? | There are two Questions: Financial institutions do not care about your nationality, only your ability to pay over time. For long term debt the lender will want assurances that the borrower has the ability and means to pay the debt over time. A legal resident in the US should have no more difficulty obtaining financing than a citizen under similar life circumstances. The Lender is also under legal obligation to confirm that the borrower is who they say they are, will have the ability to pay over time AND have no malicious intent in the purchase. Persons who do not have legal status in the US, AND who do not have the means to pay for property outright will have difficulty obtaining financing as they will have trouble establishing the requirements of the Lender. This is simple math, a lender will be reluctant to lend to any person who is more likely to have difficulty paying the obligation than another. In your case Your father would be an unlikely candidate for a mortgage because he cannot establish his legal status nor can he guarantee that he will have the legal right to earn a means to pay the loan back. This puts the lender at risk both of losing the money lent AND losing the right to repossess the property if the borrower doesn't pay. Despite all of the obstacles I have indicated above, it is still possible for your father to purchase property legally, but the risk and the cost go way up for him as a borrower. There may be sellers willing to finance property over time, but your father's status puts him at a disadvantage if the seller is not honest. There may be community coalitions which can help you work through the challenges of property ownership. Please see these related articles |
Under what circumstance will the IRS charge you a late-payment penalty for taxes? | In practice the IRS seems to apply the late payment penalty when they issue a written paper notice. Those notices typically have a pay-by date where no additional penalty applies. The IRS will often waive penalties, but not interest or tax due, if the taxpayer presses the issue. |
Is it advisable to go for an auto loan if I can make the full payment for a new car? | Full payment is always better than auto-loan if you are prudent with finances. I.E if you take a loan, you are factoring the EMI hence your savings will remain as is. However if you manage well, you can buy the car with cash and at the same time put aside the notional EMI as savings and investments. The other factor to consider is what return your cash is giving. If this more than auto-loan interest rate post taxes, you should opt for loan. For example if auto-loan is 10% and you are getting a return of 15% after taxes on investment then loan is better. Company Car lease depends on terms. More often you get break on taxes on the EMI component. But you have to buy at the end of lease period and re-register the car in your name, so there is additional cost. Some companies give lease at very favourable rates. Plus if you leave the job lease has to be broken and it becomes more expensive. |
1.4 million cash. What do I do? | You can get an investment manager through firms like Fidelity or E*Trade to manage your account. It won't be someone dedicated exclusively to you, but you're in the range where they'd take you as a managed account customer. Another option would be to get a financial planner (CFP or something) help you to identify your needs and figure out what your investments portfolio should look like. This is not a whole lot of money, but is definitely enough to have an early retirement if managed and invested properly. |
Discount Rate vs. IRR | The IRR is the Discount Rate r* that makes Net Present Value NPV(r*)==0. What this boils down to is two ways of making the same kind of profitability calculation. You can choose a project with NPV(10%)>0, or you can choose based on IRR>10%, and the idea is you get to the same set of projects. That's if everything is well behaved mathematically. But that's not the end of this story of finance, math, and alphabet soup. For investments that have multiple positive and negative cash flows, finding that r* becomes solving for the roots of a polynomial in r*, so that there can be multiple roots. Usually people use the lowest positive root but really it only makes sense for projects where NPV(r)>0 for r<r* and NPV(r)<0 for r>r*. To try to help with your understanding, you can evaluate a real estate project with r=10%, find the sum future discounted cash flows, which is the NPV, and do the project if NPV>0. Or, you can take the future cash flows of a project, find the NPV as a function of the rate r, and find r* where NPV(r*)==0. That r* is the IRR. If IRR=r*>10% and the NPV function is well behaved as above, you can also do the project. When we don't have to worry about multiple roots, the preceding two paragraphs will select the same identical sets of projects as meeting the 10% return requirement. |
Why is it not a requirement for companies to pay dividends? | This answer will expand a bit on the theory. :) A company, as an entity, represents a pile of value. Some of that is business value (the revenue stream from their products) and some of that is assets (real estate, manufacturing equipment, a patent portfolio, etc). One of those assets is cash. If you own a share in the company, you own a share of all those assets, including the cash. In a theoretical sense, it doesn't really matter whether the company holds the cash instead of you. If the company adds an extra $1 billion to its assets, then people who buy and sell the company will think "hey, there's an extra $1 billion of cash in that company; I should be willing to pay $1 billion / shares outstanding more per share to own it than I would otherwise." Granted, you may ultimately want to turn your ownership into cash, but you can do that by selling your shares to someone else. From a practical standpoint, though, the company doesn't benefit from holding that cash for a long time. Cash doesn't do much except sit in bank accounts and earn pathetically small amounts of interest, and if you wanted pathetic amounts of interests from your cash you wouldn't be owning shares in a company, you'd have it in a bank account yourself. Really, the company should do something with their cash. Usually that means investing it in their own business, to grow and expand that business, or to enhance profitability. Sometimes they may also purchase other companies, if they think they can turn a profit from the purchase. Sometimes there aren't a lot of good options for what to do with that money. In that case, the company should say, "I can't effectively use this money in a way which will grow my business. You should go and invest it yourself, in whatever sort of business you think makes sense." That's when they pay a dividend. You'll see that a lot of the really big global companies are the ones paying dividends - places like Coca-Cola or Exxon-Mobil or what-have-you. They just can't put all their cash to good use, even after their growth plans. Many people who get dividends will invest them in the stock market again - possibly purchasing shares of the same company from someone else, or possibly purchasing shares of another company. It doesn't usually make a lot of sense for the company to invest in the stock market themselves, though. Investment expertise isn't really something most companies are known for, and because a company has multiple owners they may have differing investment needs and risk tolerance. For instance, if I had a bunch of money from the stock market I'd put it in some sort of growth stock because I'm twenty-something with a lot of savings and years to go before retirement. If I were close to retirement, though, I would want it in a more stable stock, or even in bonds. If I were retired I might even spend it directly. So the company should let all its owners choose, unless they have a good business reason not to. Sometimes companies will do share buy-backs instead of dividends, which pays money to people selling the company stock. The remaining owners benefit by reducing the number of shares outstanding, so they own more of what's left. They should only do this if they think the stock is at a fair price, or below a fair price, for the company: otherwise the remaining owners are essentially giving away cash. (This actually happens distressingly often.) On the other hand, if the company's stock is depressed but it subsequently does better than the rest of the market, then it is a very good investment. The one nice thing about share buy-backs in general is that they don't have any immediate tax implications for the company's owners: they simply own a stock which is now more valuable, and can sell it (and pay taxes on that sale) whenever they choose. |
I spend too much money. How can I get on the path to a frugal lifestyle? | My father imparted this advice to me when I was a teenager, and it hasn't failed me yet. > Pay yourself first What this means is that the first "bill" you pay should always be your savings. Preferably in a way that automatically comes out of your paycheck or account without requiring you to take an active step to make it happen. I save a ton of money, but I am no more disciplined than anyone else. I just realized that over the years of progressing in my career that I gradually got higher and higher salaries, yet never had a substantial increase in the money I had leftover in my bank at the end of the month despite the fact that I make about 8x the money I used to live reasonably comfortably on. Therein is the point, we spend whatever money we see, so you almost have to hide it from yourself. First, participate to the fullest in your company's 401k if they offer it. After a while you will adjust naturally to the net take home pay and won't miss the savings you are accumulating. Absent that, or in addition to that, set up a separate bank or investment account and arrange an automatic transfer from your checking account every month. Then set up automatic investing in CD's or some other less-liquid-than-cash investment so you it is just enough hassle to get at the money that you won't do it on a whim. It sounds too simple, but it works. |
Why do stocks tend to trade at high volumes at the end of (or start) the trading day? | The shift to trading at the close began in 2008. Traders did not want to be caught off guard by surprise news and there was a lot of volatility during the financial crisis, so they would close their position in the evening. Thats how it began. There are two reasons why it sticks around. First, there has been an increase usage of index funds or passive funds. These funds tend to update their positions at the end of the day. From the WSJ: Another factor behind the shift has been the proliferation of passively managed investments, such as index funds. These funds aim to mimic an index, like the S&P 500, by owning the shares that comprise it. Index funds don’t trade as often as active investors, but when they do, it is typically near the market close, traders say. That is because buying or selling a stock at its closing price better aligns their performance with the index they are trying to emulate. The second reason is simply that volume attracts volume. As a result of whats mentioned above, you have a shift to end of day trading, and the corrolary to that is that there is a liquidity shortage from 10am to 3pm. Thus, if you want to buy or sell a stock, but there are few buyers or sellers around, you will significant move the price when you enter your order. Obviously this does not affect retail traders, but imagine hedge funds entering or closing a billion dollar position. It can make a huge impact on price. And one way to mitigate that is to wait until there are more market participants to take the other end of your trade, just as at the end of the day. So this is a self-reinforcing trend that has begun in the markets and will likely stick around. http://www.wsj.com/articles/traders-pile-in-at-the-close-1432768080 |
Trading an FHA loan to bank for an REO | What you are suggesting will not work. Banks have strict guidelines about what they can and cannot do with an FHA loan property. Remember the FHA is only an insurance policy to the bank saying that if you default they will cover a high percentage of the loan. The bank won't take the risk of violating their insurance policy and the government refusing to pay them off if you default. Instead, consider doing a creative sale on your property, maybe a rent to own deal or owner financing. As long as you pay the mortgage the bank won't even know you don't live there and you can rent the house out to someone who eventually will buy it after the timeframe expires. Meanwhile you can go and get a new home or condo either thru regular financing or owner financing(search the internet to see how to do this) and you can use owner financing until you complete the sale of the first house. Otherwise just tough it out in the house you are in until the time expires and then sell. You made no mention of the property value but I am assuming if you bought it 3 years ago that you may have a little equity. Pleas note that if you sell at that time though you will likely have to come out of cash because your equity won't cover the realtor fee and closing cost. But if you do the rent to own I suggested earlier you can sell at a slightly higher price making sure you can cover those cost. I realize this answer is a little out the box but I deal with people who don't want properties all day and I have completed transactions like this many times. Good Luck and God Bless! |
Why do people use mortgages, when they could just pay for the house in full? | The advantage of using a mortgage is that you pay for a house at TODAY's price, using TOMORROW's money. Your question suggests that you rightly observed that it was not a good idea around 2006 (the last peak in housing). That was when prices were at their maximum, and had nowhere to go but down. Some experts think that house prices STILL have further to go on the downside. Meanwhile, wages have been going nowhere during that time. This phenomenon seems to happen about every 40 years or so, the 1930s, the 1970s, and around 2010. At MOST other times, say the 1980s, houses are likely to go up for the "foreseeable" future. At those times, you want to buy the house at "today's" price, then pay for it in future dollars when you are earning more money. The irony is that what most people observe as teenagers is usually the wrong thing to do when they are, say, forty. In 2035, it will probably make sense to have a large mortgage in a bull housing market, which is the opposite of what you observed around 2010. So a better rule is to do at age 40 what made sense about the time you were born (in your case, perhaps the 1990s). Whereas the people born in the early 1970s that got "caught" recently, observed the bull market of the 1980s and 1990s in THEIR teens and twenties, rather than the bear market of the 1970s that took place about the time they were born. |
Why would a company have 2 listings on the same exchange? | Some companies like Royal Dutch Shell have multiple share classes to suit the tax regimes in Holland and the UK the A shares have dutch withholding tax applied and the B shares dont. Also some split capital investment trusts have multiple share classes http://www.trustnet.com/Education/Split.aspx?ms=1 |
Good book-keeping software? | Best Linux software is PostBooks. It is full double entry, but there is definitely a learning curve. For platform-agnostic, my favorite is Xero, which is web-based. It is full double entry balance sheet, the bank reconciliation is a pleasure to use, and they are coming out with a US version this summer. Easy to use and does everything I need. |
Can you step up your cost basis indefinitely via the 0% capital gains rate? | As JoeTaxpayer illustrated, yes you can. However, one thing to remember is that unless you live in a state with no state income tax, there may be state tax to pay on those gains. Even so, it's likely a good idea if you expect either your income (or the federal capital gains tax rate) to rise in the future. |
Why do some symbols not have an Options chain for specific expiration dates? | All openly traded securities must be registered with the SEC and setup with clearing agents. This is a costly process. The cost to provide an electronic market for a specific security is negligible. That is why the exchange fees per electronic trade are so small per security. It is so small in fact that exchanges compensate price makers partially at the expense of price takers, that exchanges partially give some portion of the overall fee to those that can help provide liquidity. The cost to provide an open outcry market for a specific security are somewhat onerous, but they are initiated before a security has any continual liquidity to provide a market for large trades, especially for futures. Every individual option contract must be registered and setup for clearing. Aside from the cost to setup each contract, expiration and strike intervals are limited by regulation. For an extremely liquid security like SPY, contracts could be offered for daily expiration and penny strike intervals, but they are currently forbidden. |
Do companies that get taken-over have to honour the old gift card/certificate? | I know this is old, but Joe Taxpayer is wrong. When you dissolve a corporation in selling it, all liabilities go with the old owners and the new owners, smartly starting with a new corporation and taxpayer ID, start with a clean slate. The only way this is not true is if the new owners did not change a thing legally and kept everything the same, other than there names, which would be entirely insane if you asked any lawyer in the country. Gift cards are a touchy situation, if not negotiated in the deal, by law the new owners DO NOT have to take them. Yes, it's good PR, but when there's a considerable amount of money out there it could bury the new owners by giving away free stuff. |
Should I pay off my 50K of student loans as quickly as possible, or steadily? Why? | The definitive answer is: It Depends. What are your goals? First and foremost, you need to have at least 3 months expenses in cash or equivalent. (i.e. an investment that you can withdraw from quickly, and without penalty). The good news is that you don't have to come up with it instantly. Set a time frame - one year - for creating this safety net, and pay towards that goal. This is the single most important piece of financial advice you will receive. Now determine what you need to do. For example, you may need a car. Compare interest rates on your student loan and the car loan. Put your cash towards whichever is higher. If you don't need a car or other big ticket item, then you may consider sticking your surplus into the student loans. 50k at $1650 a month will be paid down in about 3 years, which might be a bit long to live the monastic lifestyle. I'd look at paying down the smallest loan first (assuming relatively similar rates), and freeing up that payment for yourself. So if you can pay off 1650 a month, and free up $100 of that in six months, then you can reward yourself with half that surplus, and apply the other half to the next loan. (This is different than some would suggest because you're talking about entering severe spartan mode, which is not sustainable.) Remember that life happens. You'll meet someone. You'll have an accident, your brother will get sick and you'll give him some money to help out. You've got to be prepared for these events, and for these reasons, I don't recommend living that close to the edge. Remember, you're not in default, and you do have the option of continuing to pay the minimum for a long time. |
In the UK, could low-income pensioners (or those near a low-income retirement) find a student loan useful for boosting their finances? | In theory - Yes. So as long as someone will accept you as a (very) mature student, you plan to never earn over 21k a year for the next 30 years (no longer wiped out at 65), you could get a loan, slightly unethically (unless you fancy doing the course). Also if you did have to start paying it back - since interest rates are currently 6.1% this means the loan is doubling potentially just under every 12 years (approx) As to the side question of is it fraud? I couldn't say. Is a student getting maximum loans but planning on being a jobless bum for the rest of their lives and never paying back loans also committing fraud? One could argue Yes, but i don't believe a lack of ambition is currently illegal. |
Going long vs short, mechanisms involved | My instinct says that there should be no difference. Your instincts are right. Your understanding of math is not so much. You sold $100K at the current price of 7500000RUB, but ended up buying at 3500000, you earned 3500000RUB. That's 100% in USD (50% in RUB). You bought 7500000RUB for the current price of $100K, but sold later for $200K. You earned $100K (100% in USD), which at that time was equal 3500000RUB. You earned 3500000RUB. That's 50% in RUB. So, as your instincts were saying - no difference. The reason percentages are different is because you're coming from different angles. For the first case your currency is RUB, for the second case your currency is USD, and in both cases you earned 100%. If you use the same currency for your calculations, percentages change, but the bottom line - is the same. |
Opportunity to buy Illinois bonds that can never default? | Sovereign immunity is the state's ultimate "get out of bankruptcy free" card. After all, the state has a hand in defining what bankruptcy even is in their state. Federal law is a framework, states customize it from there. The state's simplest tactic is to simply not pay you. And leave you scrambling to the courthouse for redress. Is that an automatic win? Not really, the State can plead sovereign immunity, e.g. Hans v. Louisiana, Alden v. Maine. You could try to pierce that sovereign immunity, essentially you'd be in Federal court trying to force the state into bankruptcy. This would pit State authority against Federal authority. The Feds are just as likely to come in on the state's side, and you lose. Best scenario, it's a knock-down drag-out all the way to the Supreme Court. You would have to be one heck of a creditor for the legal fees to be worth your trouble. States don't make a habit of this because if they did, no one would lend money to them, and this would be rather bad for the economy all around. So business and government work really hard to avert it. But it always stands as their "nuclear option". And you gotta know that when loaning money to States. |
If a put seller closes early, what happens to the buyer? | You're assuming options traded on the open market. To close open positions, a seller buys them back on the open market. If there's little on offer, this will drive the price up. |
Are there any Social Responsibility Index funds or ETFs? | Try this site for the funds http://www.socialinvest.org/resources/mfpc/ I'm not aware of any etfs. I'm sure some exist though. |
Is there any advantage to owning equity in a company compared to a royalty agreement? | Each way you go is a little bit of a gamble. Owning equity in the company is best in situations where you can trade and sell that equity, or where the dilution of your royalty product would affect your returns, or if you can maintain a certain equity stake without working at the company or if you can hold out on taking equity to reinvest profits for the purposes of growth. The royalty is best in situations where you're getting a portion of the gross, since you get paid as a creditor, no matter how the company is performing, or if you intend to collect royalties after you leave the company. Now for your situation: if your royalties are fluctuating with profit instead of gross and your equity is tied to your continued partnership and not subject to potential growth... then they're pretty much both workarounds for the same thing, you've removed the particular advantages for each way of receiving payment. If the company ever does buy out or go public, how much of your additional X earning a month would you have to then re-invest to get an equity stake? And for royalties, if another developer came aboard, or your company bought another company, how much would this dilute your IP contribution? So, aside from the gambling nature of the issue, I'm not sure your tax calculation is right. You can take equity profit as dividend, as long as you're collecting a sufficient salary (this prevents a business from declaring all profits as a dividend). This would put those profits into a different tax bracket, 15% capital gains. Or if all profits are equitably split, you could take part as salary, part as dividend. As well, as someone who's making active income off of their IP, not passive income, you're supposed to file a Schedule C, not a Schedule E, so your royalties would include your self employment taxes. The schedule E is for royalties where the author isn't actively in the field or actually self employed in that area, or if you own royalties on something you didn't create. Should you keep the royalties then go to another job field or retire then your royalties could go on a Schedule E. Now, a tax advantage may exist on a Schedule C if you can write off certain health and business expenses reducing your income that you can't on a Schedule E, though it'd probably be difficult to write off more than the adjusted self employment cost savings of a Schedule E. |
How to invest with a low net worth | I'm of the opinion that speculating is for young people like you, because they can afford to lose it all. Avoiding losses becomes necessary once you have to sustain a family, and manage a somewhat large retirement funds. Even if you lose all your money when speculating, you'll probably be better off later, because you make less costly mistakes once you have larger amounts of money. |
How to find out the amount of preferred stock of Coca Cola Company? | From The Coca-Cola Company website, section for Investors: Stock History, Issues Year 1919 Original issue -- 600,000 shares 100,000 preferred, par $100 each 500,000 common, without nominal or par value 1926 Eliminated 100,000 preferred in November. This means there were preferred shares issued in 1919. However, all preferred shares were "eliminated" (not sure what that means) as of 1926. There has been no subsequent reissuance of preferred shares of Coca-Cola since then. I think the company is still authorized to issue them, should they choose to do so in the future. |
Why is auto insurance ridiculously overpriced for those who drive few miles? | People who drive long distances tend to do more of their driving on larger, well-built roads (freeways / motorways) that are designed for high-speed driving. Although some people find them intimidating, they are much safer in terms of accidents per kilometre driven for several reasons: |
What should I do with the 50k I have sitting in a European bank? | You can do many things: Risk free: Risk of losing: |
How much total salary to allocate to defer $17,500 to 401(k)? | You're on the right track, and yes, that small difference is subject to income taxes. Do you use a payroll service? I do the same thing and use my payroll software to tweak the salary until the paycheck is just a few dollars every month (we run payroll once a month), with the rest going to the 401(k) and payroll taxes. So we're rounding up just a bit just so there's an actual paycheck with a positive number, and a bit does get withheld for fed/state income tax. Also keep in mind you can make a company match. If your plan is a solo 401(k) with just you and your wife as the sole employees, consider the 25% match for both of you. The match is not subject to payroll taxes because it is a company expense. IRS web page: http://www.irs.gov/Retirement-Plans/One-Participant-401(k)-Plans |
Paying off student loan or using that money for a downpayment on a house | Yes, one is certainly better than the other. Which one depends on your priorities and the interest and tax rates on your student loan, your savings, and your (future) mortgage plus how much you can afford to save and still enjoy the lifestyle you want as well as how soon you want to move out. Basically, you havn't given enough information. |
Can a company block a specific person from buying its stock? | The company could use registered shares with restricted transferability, i.e. shares that require the consent of the issuing company for a change of ownership. |
How to invest in a currency increasing in value relative to another? | The increase of currency value in relation to another is a critical determinant of the economic health. It plays an important part in the level of trade and affects the world’s free market economy. But, they also effect on smaller scale as they create an impact on the portfolio of investors. So, it is suggested that the investors should make their trades wisely keeping in mind the value of other currencies that might your trade. Also, you should check the news daily to get regular updates and be well-informed of any changes happening in the market |
Sales Tax: Rounded Then Totaled or Totaled Then Rounded? | Taxes should not be calculated at the item level. Taxes should be aggregated by tax group at the summary level. The right way everywhere is LINE ITEMS SUMMARY PS:If you'd charge at the item level, it would be too easy to circumvent the law by splitting your items or services into 900 items at $0.01 (Which once rounded would mean no tax). This could happen in the banking or plastic pellets industry. |
What happens if a purchase is $0.02 in Canada? | The rounding should always follow the same rule. If the value ends in .01 or .02 then you round to .00. Doesn't matter if it's 10.01 rounding to 10.00 or 0.01 to 0.00. The decision on what a company wants to do if an invoice total is $0.01 or $0.02 would be up to the company. The POS system should follow the rule and round to $0.00 if the method of payment is cash, but the company has the right to not give things away for free. They can impose a minimum cash invoice amount of $0.05. But you would do this by requiring the customer to add more items to their purchase. You couldn't just round the invoice up to $0.05 and to charge them $0.05 for a $0.01 item It would be similar to companies having a minimum purchase amount when paying by credit card. If their minimum amount is $10.00 and you want to buy something that's $5.00, you either pay cash or add something to your order. They don't just charge you $10.00 for your $5.00 item. I think this would be a extreme edge case where you have an invoice with a total of $0.01 or $0.02, without any discounts, partial payments, etc. If the customer's total was $10.01 and they paid with a $10.00 gift card, the final amount owing of $0.01 would round down to $0.00 and they wouldn't owe any more. If they had paid cash, the total would have rounded to $10.00 anyway. Similarly, if the customer returned an item and bought a new item, or used coupons, and the total owing was $0.01 or $0.02, then you would round down to $0.00 and they wouldn't pay anything. As BobbyScon said, you can implement some options to allow the company to decide how they want to handle this. You could have an option that doesn't allow a sale to be processed if the total amount is less than $0.03 and the sale doesn't include any discounts, returned items, coupons, etc. The option could be to completely block the sale, require a supervisor override, or just display a warning to the cashier. Best bet is to talk to as many of your current or potential clients as you can to see how they would like this edge case handled. For many, it's probably a mute case since they wouldn't have items that have a unit price less than $0.03. Maybe a place like a hardware store that sells individual nuts, bolts, and washers. |
Best way to pay off debt? | The most tax efficient way to get some cash would be to sell some stocks from the Fidelity account that have the lowest capital gains. The tax will typically be 15% of the capital gains. This will be a one-time cost which should save you money compared to paying 7.5% on the loan year after year. Tax on selling the stock options will probably be higher, since you imply there would be high capital gains, and some of the proceeds might even be taxed as income, not capital gains. |
Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building? | Banks should be risk averse by default. They make loans to people and businesses after measuring their ability to repay. After they approve a big project loan like an apartment building, they don't give all the money to the builders upfront. They give money as progress is made and they make sure the funds are not being used inappropriately. There's no reason they couldn't do all this while owning the project, but that would also open them to lawsuits later on if anything wasn't built to code. By keeping the project at arm's length, they avoid future liability. |
How do i get into investing stocks [duplicate] | Everything that I'm saying presumes that you're young, and won't need your money back for 20+ years, and that you're going to invest additional money in the future. Your first investments should never be individual stocks. That is far too risky until you have a LOT more experience in the market. (Once you absolutely can't resist, keep it to under 5% of your total investments. That lets you experiment without damaging your returns too much.) Instead you would want to invest in one or more mutual funds of some sort, which spreads out your investment across MANY companies. With only $50, avoiding a trading commission is paramount. If you were in the US, I would recommend opening a free online brokerage account and then purchasing a no-load commission-free mutual fund. TD Ameritrade, for example, publishes a list of the funds that you can purchase without commission. The lists generally include the type of fund (index, growth, value, etc.) and its record of return. I don't know if Europe has the same kind of discount brokerages / mutual funds the US has, but I'd be a little surprised if it didn't. You may or may not be able to invest until you first scrape together a $500 minimum, but the brokerages often have special programs/accounts for people just starting out. It should be possible to ask. One more thing on picking a fund: most charge about a 1% annual expense ratio. (That means that a $100 investment that had a 100% gain after one year would net you $198 instead of $200, because 1% of the value of your asset ($200) is $2. The math is much more complicated, and depends on the value of your investment at every given point during the year, but that's the basic idea.) HOWEVER, there are index funds that track "the market" automatically, and they can have MUCH lower expense fees (0.05%, vs 1%) for the same quality of performance. Over 40 years, the expense ratio can have a surprisingly large impact on your net return, even 20% or more! You'll want to google separately about the right way to pick a low-expense index fund. Your online brokerage may also be able to help. Finally, ask friends or family what mutual funds they've invested in, how they chose those funds, and what their experience has been. The point is not to have them tell you what to do, but for you to learn from the mistakes and successes of other experienced investors with whom you can follow up. |
Where can I open a Bank Account in Canadian dollars in the US? | If you can make the trip to BC yourself, I'd recommend opening an account with TD Canada Trust. They allow non-citizens to make accounts — apparently the only Canadian bank to do so. The customer service is great and they have a good online banking site that will allow you to manage it from the US. If you have an account with TD Bank in the US, it's also very easy to set up a TD Canada account through them that will be linked on their online site (though you will still have separate logins for both and manage them separately). I've done the reverse as a Canadian living in the US. You can set it up over the phone; their Cross-Border Banking number is listed here. They also offer better currency conversion rates than their standard ones when you do a cross-border transfer. You could also look into HSBC as well. They operate in Washington as well as across the border in BC. If you can't open a CAD account locally, they can help you open and manage one in Canada from the US. It may or may not require having a small business account instead of a personal account. |
Does high frequency trading (HFT) punish long-term investment? | No, at least not noticeably so. The majority of what HFT does is to take advantage of the fact that there is a spread between buy and sell orders on the exchange, and to instantly fill both orders, gaining relatively risk-free profit from some inherent inefficiencies in how the market prices stocks. The end result is that intraday trading of the non-HFT nature, as well as speculative short-term trading will be less profitable, since HFT will cause the buy/sell spread to be closer than it would otherwise be. Buying and holding will be (largely) unaffected since the spread that HFT takes advantage of is miniscule compared to the gains a stock will experience over time. For example, when you go to buy shares intending to hold them for a long time, the HFT might cost you say, 1 to 2 cents per share. When you go to sell the share, HFT might cost you the same again. But, if you held it for a long time, the share might have doubled or tripled in value over the time you held it, so the overall effect of that 2-4 cents per share lost from HFT is negligible. However, since the HFT is doing this millions of times per day, that 1 cent (or more commonly a fraction of a cent) adds up to HFTs making millions. Individually it doesn't affect anyone that much, but collectively it represents a huge loss of value, and whether this is acceptable or not is still a subject of much debate! |
Home owners association for houses, pro/cons | As I understand it the basic premiss of a HOA is to ease communication between neighbors and help work towards common community goals. As I understand it the reality is that the HOA works to keep the community homogenous so there are no "sore thumb" neighbors. As to why look for one or avoid one. If you would want a uniform image out of your neighbors and don't mind towing the party line, then they are for you. If you don't care about what your neighbors do with their property (within civic ordinance) and would like freedom to do things different from your neighbors (paint your house blue, hang a clothes line, increase the size of your flower beds), then they are to be avoided. |
How does one value Facebook stock as a potential investment? | In the long term, a P/E of 15-25 is the more 'normal' range. With a 90 P/E, Facebook has to quadruple its earnings to get to normal. It this possible? Yes. Likely? I don't know. I am not a stock analyst, but I love numbers and try to get to logical conclusions. I've seen data that worldwide advertising is about $400B, and US about $100B. If Facebook's profit runs 25% or so and I want a P/E of 20, it needs profit of $5B on sales of $20B (to reconcile its current $100B market cap). No matter what FB growth in sales is, the advertising spent worldwide will not rise or fall by much more than the economy. So with a focus on ads, they would need about 5% of the world market to grow into a comfortable P/E. Flipping this around, if all advertising were 25% profit (a crazy assumption), there are $100B in profit to be had world wide each year, and the value of the companies might total $2T in aggregate. The above is a rambling sharing of the reasonable bounds one might expect in analyzing a stock. It can be used for any otherwise finite market, such as soft drinks. There are only so many people on the planet, and in aggregate, the total soft drink consumption can't exceed, say 6 billion gallons per day. The pie may grow a bit, but it's considered fixed as an order of magnitude. Edit - for what it's worth, as of 8/3/12, the price has dropped significantly, currently $20, and the P/E is showing as 70X. I'm not making any predictions, but the stock needs a combined higher earnings or lower valuation to still approach 'normal.' |
How can I trade in U.S stock exchange living in India by choosing the broker in U.S? | It is more easier if you select a Broker in India that would allow you these services. The reason being the broker in India will follow the required norms by India and allow you to invest without much hassel. Further as the institution would be in India, it would be more easy for resolving any disputes. ICICI Direct an Indian online broker allows one to trade in US stocks. For more details refer to ICIC Direct. Reliance Money also offers limited trading in US stocks. Selecting a Broker in US maybe more difficult as your would have to met their KYC norm's and also operate a Bank account in US. I am not aware of the requirements. For more details visit ICICI Direct website. Refer to http://www.finance-trading-times.com/2007/10/investing-in-us-stocks-and-options.html for a news article. TDAmeritrade or Charlesschwab are good online brokers, however from what I read they are more for US nationals holding Social Security. Further with the recent events and KYC norms becoming more stringent, it would be difficult for an individual [Indian Citizen] to open an account directly with these firms. |
Scammer wants details and credentials for my empty & unused bank account. What could go wrong? | First off, do not ever tell someone your password. Nobody who actually works for the bank would need your password to access the account. Also, it may or may not be a scam (it almost assuredly is), but it is not a good idea to let someone use your bank account in your name. What if they use your account to launder money for illegal or terrorist activities? Then you would potentially face criminal charges. There is no way this story makes sense. A company would never put their payroll in some random stranger's account; they would create an account in the company's name for handling payroll and use that. |
Why are index funds called index funds? | Because they track an index. Edited: The definition of the word in this case meaning "something used or serving to point out; a sign, token, or indication" from Meaning #3 I presume therefore you are asking what an index is? There are many variations of what makes up an Index but in short it is a representation of some part of a market. An extremely simplistic calculation would be to take a basket of stocks, and sum their prices. If one stock moves up a dollar, and one moves down a dollar, the index has effectively not changed, as it is presumed that the loss in one is offset by the gain in the other. |
Why does short selling require borrowing? | It's actually quite simple. You're actually confusing two concept. Which are taking a short position and short selling itself. Basically when taking a short position is by believing that the stock is going to drop and you sell it. You can or not buy it back later depending on the believe it grows again or not. So basically you didn't make any profit with the drop in the price's value but you didn't lose money either. Ok but what if you believe the market or specific company is going to drop and you want to profit on it while it's dropping. You can't do this by buying stock because you would be going long right? So back to the basics. To obtain any type of profit I need to buy low and sell high, right? This is natural for use in long positions. Well, now knowing that you can sell high at the current moment and buy low in the future what do you do? You can't sell what you don't have. So acquire it. Ask someone to lend it to you for some time and sell it. So selling high, check. Now buying low? You promised the person you would return him his stock, as it's intangible he won't even notice it's a different unit, so you buy low and return the lender his stock. Thus you bought low and sold high, meaning having a profit. So technically short selling is a type of short position. If you have multiple portfolios and lend yourself (i.e. maintaining a long-term long position while making some money with a short term short-term strategy) you're actually short selling with your own stock. This happens often in hedge funds where multiple strategies are used and to optimise the transaction costs and borrowing fees, they have algorithms that clear (match) long and short coming in from different traders, algorithms, etc. Keep in mind that you while have a opportunities risk associated. So basically, yes, you need to always 'borrow' a product to be able to short sell it. What can happen is that you lend yourself but this only makes sense if: |
High Leverage Inflation Hedges for Personal Investors | I assume you're looking for advice, not an actual guaranteed-to-appreciate answer, yes? If you believe Treasury bonds will increase as fast as inflation, that may be the way to go. |
What's a reliable way for a non-permanent resident alien in the USA to get an auto loan? | You have figured out most of the answers for yourself and there is not much more that can be said. From a lender's viewpoint, non-immigrant students applying for car loans are not very good risks because they are going to graduate in a short time (maybe less than the loan duration which is typically three years or more) and thus may well be leaving the country before the loan is fully paid off. In your case, the issue is exacerbated by the fact that your OPT status is due to expire in about one year's time. So the issue is not whether you are a citizen, but whether the lender can be reasonably sure that you will be gainfully employed and able to make the loan payments until the loan is fully paid off. Yes, lenders care about work history and credt scores but they also care (perhaps even care more) about the prospects for steady employment and ability to make the payments until the loan is paid off. Yes, you plan on applying for a H1-B visa but that is still in the future and whether the visa status will be adjusted is still a matter with uncertain outcome. Also, these are not matters that can be explained easily in an on-line application, or in a paper application submitted by mail to a distant bank whose name you obtained from some list of "lenders who have a reliable track record of extending auto loans to non-permanent residents." For this reason, I suggested in a comment that you consider applying at a credit union, especially if there is an Employees' Credit Union for those working for your employer. If you go this route, go talk to a loan officer in person rather than trying to do this on the phone. Similarly, a local bank,and especially one where you currently have an account (hopefully in good standing), is more likely to be willing to work with you. Failing all this, there is always the auto dealer's own loan offers of financing. Finally, one possibility that you might want to consider is whether a one-year lease might work for you instead of an outright purchase, and you can buy a car after your visa issue has been settled. |
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