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How to spend more? (AKA, how to avoid being a miser) | Maybe minimalism is an option for you. Make your self clear what you really want You only buy what you really need and for that you spend the money. Then there is no point of saving money, i.e. I for example like to invite friends and cook them some fancy diner with expensive products, but the value I get from that exceeds any money I spend. On the other hand most present are the opposite, they have less value to recipient than what they originally have costs. |
Is there anything comparable to/resembling CNN's Fear and Greed Index? | There are a number of ways to measure such things and they are generally called "sentiment indicators". The ones that I have seen "work", in the sense that they show relatively high readings near market tops and relatively low readings near market bottoms. The problem is that there are no thresholds that work consistently. For example, at one market top a sentiment indicator may read 62. At the next market top that same indicator might read 55. So what threshold do you use next time? Maybe the top will come at 53, or maybe it will not come until 65. There was a time when I could have listed examples for you with the names of the indicators and what they signaled and when. But I gave up on such things years ago after seeing such wide variation. I have been at this a long time (30+ years), and I have not found anything that works as well as we would like at identifying a top in real time. The best I have found (although it does give false signals) is a drop in price coupled with a bearish divergence in breadth. The latter is described in "Stan Weinstein's Secrets For Profiting in Bull and Bear Markets". Market bottoms are a little less difficult to identify in real time. One thing I would suggest if you think that there is some way to get a significant edge in investing, is to look at the results of Mark Hulbert's monitoring of newsletters. Virtually all of them rise and fall with the market and almost none are able to beat buy and hold of the Wilshire 5000 over the long term. |
1099 versus corporation to corporation for payments? | Do not mix personal accounts and corporate accounts. If you're paid as your self person - this money belongs to you, not the corporation. You can contribute it to the corporation, but it is another tax event and you should understand fully the consequences. Talk to a tax adviser (EA/CPA licensed in your State). If they pay to you personally (1099) - it goes on your Schedule C, and you pay SE taxes on it. If they pay to your corporation, the corporation will pay it to you as salary, and will pay payroll taxes on it. Generally, payroll through corporation will be slightly more expensive than regular schedule C. If you have employees/subcontractors, though, you may earn money which is not from your own performance, in which case S-Corp may be an advantage. |
Do large market players using HFT make it unsafe for individual investors to be in the stock market? | There's a lot of hype about HFT. It involves computers doing things that people don't really understand and making a bunch of rich guys a bunch of money, and there was a crisis and so we hate rich wall street guys this year, and so it's a hot-button issue. Meh. There's some reason for concern about the safety of the markets, but I think there's also a lot more of people trying to sell you a newspaper. Remember that while HFT may mean there are a lot of trades, the buying and the selling add up to the same thing. Meanwhile, people who buy stock to hold on to it for significant periods of time will still affect the quantity of stock out there on the market, applying pressure to the price, buying and selling at the prices that they think the security is worth. As a result, it's unlikely that high-frequency trading moves the stock price very far from the price that the rest of the market would determine for very long; if it did, the lower-frequency traders could take advantage of it, buying if it's too low and selling if it's too high. How long do you plan to hold a stock? If you're trying to do day-trading, you might have some trouble; these people are competing with you to do the same thing, and have significant resources at their disposal. If you're holding onto your stock for years on end (like you probably should be doing with most stock) then a trivial premium or discount on the price probably isn't going to be a big deal for you. |
How a company in India can misuse my PAN number and its scanned copy that I provided as an interview candidate? | There is a possibility of misuse. Hence it should be shared judiciously. Sharing it with large / trusted organization reduces the risk as there would be right process / controls in place. Broadly these days PAN and other details are shared for quite a few transactions, say applying for a Credit Card, Opening Bank Account, Taking a Phone connection etc. In most of the cases the application is filled out and processed by 3rd party rather than the service provider directly. Creating Fake Employee records is a possibility so is the misuse to create a fake Bank account in your name and transact in that account. Since one cannot totally avoid sharing PAN details to multiple parties... It helps to stay vigilant by monitoring the Form 26AS from the Govt website. Any large cash transactions / additional salary / or other noteworthy transactions are shown here. It would also help to monitor your CIBIL reports that show all the Credit Card and other details under your name. |
Video recommendation for stock market education | Before you go filling your head with useless information as there is way too much stuff out there on the stock market. First ask yourself a few questions: There is going to be a balance between the three... don't kid yourself. After you answer these questions find a trading strategy to get the returns you are looking for. Remember the higher returns you expect... the more time you have to put in. Find a trading strategy you like and that works for you. Ounce you have your strategy then find the stocks or ETF that work for that strategy.... Ignore everything else, it is designed to separate you from your money. Making money in the stock market is easy, don't let the media hype and negative people tell you any different. Find something that works for you and perfect it... stick to it. |
Do I need to pay tax on the amount of savings I have in the bank? | Not for the amount in the accounts but for the interest you earn per year is taxable. But the sum of your all taxable incomes is under the limit, then you dont need to pay any income tax. The limit is available at wiki here But you should intimate your bank not to deduct TDS (Tax Deducted at Source) by submitting Form 15G/15H (which will be normally available in Bank itself), provided your total interest income for the year will not fall within overall taxable limits. You may calculate your income tax amount at Official website at here |
Algorithmic trading in linux using python | A couple options that I know of: Interactive Brokers offers a "paper trading" mode to its account holders that allows you to start with a pretend stack of money and place simulated trades to test trading ideas. They also provide an API that allows you to interface with their platform programmatically for retrieving quotes, placing orders, and the such. As you noted, however, it's not free; you must hold a funded brokerage account in order to qualify for access to their platform. In order to maintain an account, there are minimums for required equity and monthly activity (measured in dollars that you spend on commissions), so you won't get access to their platform without having a decent amount of skin in the game. IB's native API is Java-based; IbPy is an unofficial wrapper that makes the interface available in Python. I've not used IB at all myself, but I've heard good things about their API and its accessibility via IbPy. Edit: IB now supports Python natively via their published API, so using IbPy is no longer needed, unless you wish to use Python 2.x. The officially supported API is based on Python 3. TD Ameritrade also offers an API that is usable by its brokerage clients. They do not offer any such "paper trading" mode, so you would need to "execute" transactions based on quotes at the corresponding trade times and then keep track of your simulated account history yourself. The API supports quote retrieval, price history, and trade execution, among other functions. TDA might be more attractive than IB if you're looking for a low-cost link into market data, as I believe their minimum-equity levels are lower. To get access, you'll need to sign up for an API developer account, which I believe requires an NDA. I don't believe there is an official Python implementation of the API, but if you're a capable Python writer, you shouldn't have trouble hooking up to the published interfaces. Some caveats: as when doing any strategy backtesting, you'll want to be sure to be pessimistic when doing so, so your optimism doesn't make your trades look more successful than they would be in the real world. At a minimum, you'll want to ensure that your simulations transact at the posted bid/ask prices, not necessarily the last trade's price, as well as any commissions and fees associated with the trade. A more robust scheme would also take into account the depth of the order book (also known as level 2 quotes), which can cause additional slippage in the prices at which you buy/sell your security. An even more robust scheme would take into account the potential latency of trade execution, looking at all prices over some time period that covers the maximum expected latency and simulating the trade at the worst-possible price. |
New to options trading and need help understanding an options spread risk graph. What am I missing? | Suppose the stock is $41 at expiry. The graph says I will lose money. I think I paid $37.20 for (net debit) at this price. I would make money, not lose. What am I missing? The `net debit' doesn't have anything to do with your P/L graph. Your graph is also showing your profit and loss for NOW and only one expiration. Your trade has two expirations, and I don't know which one that graph is showing. That is the "mystery" behind that graph. Regardless, your PUTs are mitigating your loss as you would expect, if you didn't have the put you would simply lose more money at that particular price range. If you don't like that particular range then you will have to consider a different contract. it was originally a simple covered call, I added a put to protect from stock going lower.. Your strike prices are all over the place and NBIX has a contract at every whole number.... there is nothing simple about this trade. You typically won't find an "always profitable" combination of options. Also, changes in volatility can distort your projects greatly. |
Why can it be a bad idea to buy stocks after hours? | There are several reasons it is not recommended to trade stocks pre- or post-market, meaning outside of RTH (regular trading hours). Since your question is not very detailed I have to assume you trade with a time horizon of at least more than a day, meaning you do not trade intra-day. If this is true, all of the above points are a non-issue for you and a different set of points becomes important. As a general rule, using (3) is the safest regardless of what and how you trade because you get price guarantee in trade for execution guarantee. In the case of mid to longer term trading (1 week+) any of those points is viable, depending on how you want to do things, what your style is and what is the most comfortable for you. A few remarks though: (2) are market orders, so if the open is quite the ride and you are in the back of the execution queue, you can get significant slippage. (1) may require (live) data of the post-market session, which is often not easy to come by for the entire US stock universe. Depending on your physical execution method (phone, fax, online), you may lack accurate information of the post-market. If you want to execute orders based on RTH and only want to do that after hours because of personal schedule constraints, this is not really important. Personally I would always recommend (3), independent of the use case because it allows you more control over your orders and their fills. TL;DR: If you are trading long-term it does not really matter. If you go down to the intra-day level of holding time, it becomes relevant. |
How should I allocate short-term assets in a rising-interest rate environment? | How should I allocate short-term assets in a rising-interest rate environment? Assuming that the last part is correct, there could be bear bond funds that short bonds that could work well as a way to invest. However, bear in that the the "rising-interest rate environment" is part of the basis that may or may not be true in the end as I'm not sure I've seen anything to tell me why rates couldn't stay where they are for another couple of years or more. Long-Term Capital Management would be a cautionary tale before about bonds that had assumptions that backfired when something that wasn't supposed to happen, happened. Thus, while you can say there is "rising-interest rate environment" what else are you prepared to assume and how certain are you of that happening? An alternate theory here would be that "junk bonds" may do well because the economy has to be heating up for rates to rise and thus the bonds that are priced down so much because of default risk may turn out to not go bust and thus could do well. Course this would carry the "Your mileage may vary" and without a working time machine I couldn't say which funds will be good and which would suck. As for what I would do if I was dealing with my own money: Money market funds and CDs would likely be my suggestion for the short-term where I want to prevent principal risk. This is likely what I would do if I believed the rising rate environment is here. |
Any experience with maxing out 401(k)? | I second CrimsonX's advice to max out Roth then 401k. At your age in what sounds like a similar situation I did the same thing -- thankfully. It's easier to do when you're young and unencumbered. 10 years later with kids, house, changing from double to single income, job changes, etc, it's harder to max out retirement accounts. Not to mention that priorities change, e.g. saving for college. |
Creating S-Corp: Should I Name My Wife as a Director/Shareholder? | There are many aspects to consider in deciding what sort of company you want to form. Instead of an S-corporation, you should determine whether it would be better to form a Limited Liability Company (LLC), Limited Partnership (LP) or even a professional company (PC). Littleadv is correct: There is minimal benefit in forming an S-corp with you and your wife as the shareholders, if you will be the only contributor-worker. There are costs associated with an S-corporation, or any corporation, that might outweigh benefits from more favorable tax treatment, or personal protection from liability: Filing fees and disclosure rules vary from state to state. For example, my father was a cardiologist who had no employees, other than my grandmother (she worked for free), in a state with income taxes (NM). He was advised that a PC was best in New Mexico, while an S-Corp was better in Florida (there are no personal income taxes in Florida). The only way to know what to do requires that you consult an accountant, a good one, for guidance. |
Algorithmic trading in linux using python | In Japan, there's a competition well-lasting since 2004 or so where you can run your own software agent in a virtual market. Market data is updated from the real world everyday. And if your agent proves good, the organizer puts it into the real market. The language is unfortunately limited to Java only to my knowledge. OS is not limited since your agent is supposed to run on the organizer's environment. English might not be well supported on their web site... |
Mortgage or not? | In addition to the other answers, I think you would also need to account for the increased utility and maintenance costs on the more expensive house. Typically it is recommended to budget 1% to 4% the cost of the home per year for routine maintenance. While it likely won't cost that much every year, you will have those expensive items come up (e.g. roof, HVAC) that come up periodically. The larger house will also cost more to heat/cool. Depending on where you live could also have increased property taxes. |
How to prevent myself from buying things I don't want | I use cash exclusively. I go to the cash machine once a week and withdraw the money I want to spend in one week (so I have to plan if I want to buy something expensive). Otherwise I leave the card at home. As bonus you get anonymity, i.e. big brother cannot track you. |
Is there any online personal finance software without online banking? | I don't think Xero Personal does. I have my bank account in there, but since there's no automatic feed for the bank I use I imported it manually. I entered the bank by hand, so I think you could use it without listing a bank account at all. |
Hiring freelancers and taxes | You need to clarify with Bob what your agreement is. If you and Bob are working together on these jobs as partners, you should get a written partnership agreement done by a lawyer who works with software industry entity formation. You can legally be considered a partnership if you are operating a business together, even if there is nothing in writing. The partnership will have its own tax return, and you each will be allocated 50% of the profits/losses (if that's what you agree to). This amount will be reported on your own individual 1040 as self-employment income. Since you have now lost all the expense deductions you would have taken on your Schedule C, and any home office deduction, it's a good idea to put language in the partnership agreement stating that the partnership will reimburse partners for their out-of-pocket expenses. If Bob is just hiring you as a contractor, you give him your SSN, and he issues you a 1099, like any other client. This should be a situation where you invoice him for the amount you are charging. Same thing with Joe - figure out if you're hiring him as an independent contractor, or if you have a partnership. Either way, you will owe income and self-employment tax on your profits. In the case of a partnership, the amount will be on the K-1 from the partnership return. For an independent contractor who's operating as a sole proprietor, you report the income you invoiced for and received, and deduct your expenses, including independent contractors that you hired, on your Schedule C. Talk to your tax guy about quarterly estimated payments. If you don't have a tax guy, go get one. Find somebody people in your city working in your industry recommend. A good tax person will save you more money than they cost. IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law. |
UK university student finance - should I use my sponsorship money to pay the debt? | Borrow the lot (as your family recommended)! The extra money will come in useful when you want to buy a house and move back to the area where your employer is. The government loan in the UK is a fantastic system, just a shame they are charging you so much in tuition fees... |
Mortgage loan plus home loan | You can be a co-borrower on the property that your father owns. Some Banks require that you also be part owner of the property, some banks do not require this. You can take a home loan for a new property, normally Banks will ask you of all your current loans [auto/other home/personal/ etc] to determine the amount they will be ready to lend. Edit: The first loan I believe your father already has a property in his name ... your father can apply for Loan against property ... if he does not have sufficient income, then you can guarantee the loan [ie co-sign on the loan, some banks allow this ... however there is no tax benefit on this loan] . The second is the Home Loan for the balance amount that you would get it … Both the loans can be taken from the same Bank, there would be a overall cap as to the amount of loan a Bank would give depending on your income, further the finance for this house will only be to the extent of 80% of the value. |
If I buy a share from myself at a higher price, will that drive the price up so I can sell all my shares the higher price? | This probably won't be a popular answer due to the many number of disadvantaged market participants out there but: Yes, it is possible to distort the markets for securities this way. But it is more useful to understand how this works for any market (since it is illegal in securities markets where company shares are involves). Since you asked about the company Apple, you should be aware this is a form of market manipulation and is illegal... when dealing with securities. In any supply and demand market this is possible especially during periods when other market participants are not prevalent. Now the way to do this usually involves having multiple accounts you control, where you are acting as multiple market participants with different brokers etc. The most crafty ways to do with involve shell companies w/ brokerage accounts but this is usually to mask illegal behavior In the securities markets where there are consequences for manipulating the shares of securities. In other markets this is not necessary because there is no authority prohibiting this kind of trading behavior. Account B buys from Account A, account A buys from Account B, etc. The biggest issue is getting all of the accounts capitalized initially. The third issue is then actually being able to make a profit from doing this at all. Because eventually one of your accounts will have all of the shares or whatever, and there would still be no way to sell them because there are no other market participants to sell to, since you were the only one moving the price. Therefore this kind of market manipulation is coupled with "promotions" to attract liquidity to a financial product. (NOTE the mere fact of a promotion does not mean that illegal trading behavior is occurring, but it does usually mean that someone else is selling into the liquidity) Another way to make this kind of trading behavior profitable is via the derivatives market. Options contracts are priced solely by the trading price of the underlying asset, so even if your multiple account trading could only at best break even when you sell your final holdings (basically resetting the price to where it was because you started distorting it), this is fine because your real trade is in the options market. Lets say Apple was trading at $200 , the options contract at the $200 strike is a call trading at $1 with no intrinsic value. You can buy to open several thousand of the $200 strike without distorting the shares market at all, then in the shares market you bid up Apple to $210, now your options contract is trading at $11 with $10 of intrinsic value, so you just made 1000% gain and are able to sell to close those call options. Then you unwind the rest of your trade and sell your $210 apple shares, probably for $200 or $198 or less (because there are few market participants that actually valued the shares for that high, the real bidders are at $200 and lower). This is hardly a discreet thing to do, so like I mentioned before, this is illegal in markets where actual company shares are involved and should not be attempted in stock markets but other markets won't have the same prohibitions, this is a general inefficiency in capital markets in general and certain derivatives pricing formulas. It is important to understand these things if you plan to participate in markets that claim to be fair. There is nothing novel about this sort of thing, and it is just a problem of allocating enough capital to do so. |
Why are real-term bond yields systematically declining, and what does it mean for investors? | Keep in mind there are a couple of points to ponder here: Rates are really low. With rates being so low, unless there is deflation, it is pretty easy to see even moderate inflation of 1-2% being enough to eat the yield completely which would be why the returns are negative. Inflation is still relatively contained. With inflation low, there is no reason for the central banks to raise rates which would give new bonds a better rate. Thus, this changes in CPI are still in the range where central banks want to be stimulative with their policy which means rates are low which if lower than inflation rates would give a negative real return which would be seen as a way to trigger more spending since putting the money into treasury debt will lose money to inflation in terms of purchasing power. A good question to ponder is has this happened before in the history of the world and what could we learn from that point in time. The idea for investors would be to find alternative holdings for their cash and bonds if they want to beat inflation though there are some inflation-indexed bonds that aren't likely appearing in the chart that could also be something to add to the picture here. |
Where can I find a definition of psychological barriers with respect to marketable securities? | I think "Psychological Pricing" is a similar phenomenon to what you are looking for. This is where retailers use certain numbers in prices because those prices are more appealing to consumers. Since stocks - and in your case bitcoin - have prices, they too will be more or less appealing at different prices based on psychology alone. |
How is Butterfly Trade Strategy good if the mid Strike price is already past? | One way to look at a butterfly is to break it into two trades. A butterfly is actually made up of two verticals... One is a debit vertical: buy 490 put and sell the 460 put. The other is a credit vertical: sell a 460 put and buy a 430 put. If someone believes Apple will fall to 460, that person could do a few things. There are other strategies but this just compares the three common ones: 1) Buy a put. This is expensive and if the stock only goes to 460 you overpay for it. 2) Buy a put vertical. This is less expensive because you offset the price of your put. 3) Buy a butterfly. This is cheapest of the three because you have the vertical in #2 as well as a credit vertical on top of that to offset your cost. The reason why someone would use the butterfly is to pay less upfront while capitalizing on a fall to 460. Of the three, this would be the better strategy to use if that happens. But REMEMBER that this only applies if the trader is right and it goes to 460. There is always a trade off for every strategy that the trader must be aware of. If the trader is wrong, and Apple goes to say 400, the put (#1) would make the most money and the butterfly(#3) would lose money while the vertical (#2) would still gain. So that is what you're sacrificing to get the benefits of the butterfly. Also helps to draw a diagram to compare the strategies. |
Friend was brainwashed by MLM-/ponzi investment scam. What can I do? | As others have stated, it will be very difficult for you to turn your friend around. He has already demonstrated great commitment. What can I do? There may be other people (perhaps mutual friends of you and this man) who are in danger. He may try to get them into this (as he apparently tried to with you). If this was me, I would try to warn the mutual friends of me and him. It's easier to get to them before they have been exposed to the brainwashing. So I would: Yes, I realize this means you're going behind his back, talking to his friends, etc. But I believe these people also deserve to be warned. They are in danger of being adversely affected by what he is doing. |
Credit Card Approval | Banks use quite a few parameters to arrive at the decision for card approval. The credit score is just one input. There are multiple other inputs it would source, for example total years in job, the number of years in current job, income streams, etc ... the exact formula is a trade secret and varies from Bank to Bank |
Taxable income on full-time job + business earnings | In Australia, any income you earn is taxable despite where it came from. Using your example your taxable income is $70,000. Keep in mind that with a business even as a sole trader any business expenses that contribute to the earning of your business income is deductible, reducing the final amount of tax you'll have to pay. The ATO website has lots of good information and examples to look at including tax rates. If your total income is pushing into a higher tax bracket over 30c tax per $1 earned, it may be worth looking at shifting your business to operate under a company structure that just has a fixed tax rate around 30c per $1. That said, for me, I don't want the paperwork overhead of a company yet so I'm running my side business as a sole trader too. I'd rather do that and keep it easy for now while my business gets profitable that waste time on admin structures for tax reasons even if in the shortterm it may mean slightly higher tax. In the end, you only pay tax on profit (income minus expenses) as opposed to raw/gross income. For more info there are good books in the bookshops or local library (to read free) on starting a business on the side while still working. They discuss these issues too. |
How do finance professionals procounce “CECL”? | According to the following links, it is commonly pronounced "Cecil". https://kaufmanrossin.com/blog/bank-ready-meet-cecil/ The proposed model introduces the concept of shifting from an incurred loss model to the current expected credit loss model commonly referred to as CECL (pronounced “Cecil”). http://www.gonzobanker.com/2016/02/cecl-the-blind-leading-the-blurry/ [...] and its name is CECL (Current Estimated Credit Losses, pronounced like the name “Cecil”). The name Cecil means “blind,” which is ironic, because FASB’s upcoming guidance will push FIs to clarify the future performance of their loan portfolios by using models to predict CECL of all loan portfolios. https://www.linkedin.com/pulse/operational-financial-impact-cecl-banks-nikhil-deshmukh Termed as Current Expected Credit Loss (CECL, or Cecil, as some call it), [...] |
Getting correlation from regression slope (Completely stumped) | I just used the formula in below link and did some math. I have that book too but haven't looked at it yet really. Lots of maths to have fun with. Let me know if this is correct or needs fixing. Source: http://wiki.fool.com/How_to_Calculate_Beta_From_Volatility_%26_Correlation |
When's the best time to sell the stock of a company that is being acquired/sold? | Here is one "other consideration": don't, don't, don't sell based on insider information. Insider trading can land you in jail. And it's not restricted to top executives. Even overhearing a discussion about the current status of the acquisition talks can mean that you have insider information that you legally cannot act on in many jurisdictions. If you are just a regular employee, the SEC will likely not subject your dealings to special scrutiny, especially since lots of your colleagues will likely trade your company's shares at this point in time. And if you definitely hold insider info (for example, if you are intimately involved with the acquisition talks), you will likely have had a very serious warning about insider trading and know what you can and what you cannot do. Nevertheless, it's better to be careful here. |
How to amend an amended return? | File a 2nd amended return that corrects the mistake I made on the 1st amended return This. Pay the $500 before April 27th and try to get it back later This. |
Historical stock prices: Where to find free / low cost data for offline analysis? | Go to http://finance.google.com, search for the stock you want. When you are seeing the stock information, in the top left corner there's a link that says 'Historical prices'. Click on it. then select the date range, click update (don't forget this) and 'Download to spreadsheet' (on the right, below the chart). For example, this link takes you to the historical data for MSFT for the last 10 years. http://finance.yahoo.com has something similar, like this. In this case the link to download a CSV is at the bottom of the table. |
Are there any viable alternatives to Paypal for a small site? | While I've never used the service, there's also Amazon Flexible Payments Services (AFPS): (emphasis below is mine) Amazon Flexible Payments ServiceTM (Amazon FPS) is the first payments service designed from the ground up for developers. It is built on top of Amazon’s reliable and scalable payments infrastructure and provides developers with a convenient way to charge Amazon’s tens of millions of customers (with their permission, of course!). Amazon customers can pay using the same login credentials, shipping address and payment information they already have on file with Amazon. [...] Considering Amazon.com is an e-commerce heavyweight, it might be worth a look. |
What can I replace Microsoft Money with, now that MS has abandoned it? | I suggest you to test AlauxSoft Accounts and Budget. This software is a money-like. There is a freeware and a shareware (24 EUR). You will find its at http://www.alauxsoft.com Best regards, Michel ALAUX. |
Should I pay off my student loan before buying a house? | Paying off your student loan before buying a house is certainly a great risk reduction move for you. It will lower your debt to income ratio allowing your mortgage approval to go easier and it will free up more of your dollars to pay for the many miscellaneous projects that come with buying a house. I think that if you are considering paying off your student loan before buying a house that means that your student loans are an amount you can fathom paying off and that you are motivated to be rid of your student loan debt. Go for it and pay off your student loan. |
Events that cause major movement in forex? | currency's central bank or treasury/finance department speeches that can announce a significant change in policy. That includes: Particularly when it is a high level figure within the department such as the President or Prime Minister making the announcement. Macroeconomic stats: GeoPolitical considerations, such as: Economic calendars, such as ForexFactory and MyFxBook track planned economic news releases. Obviously, a coup d'etat or war declaration may not be well known in advance. |
How does giving to charity work? | If you don't have much money, and more important, don't itemize, donations are strictly between you and your karma. If you itemize (from a combination of mortgage interest, property tax, and state tax), by donating used goods, you can get some return on your taxes, and feel good about yourself. When I donate at charity time (December for me) I don't look at every $1000 check as a $250 benefit back to me, although that's the effect. I care deeply about the charity's cause and have personally visited each of them. You want to drop $50 to some huge agency that's funding cancer research? No objection. But when I visit a Veteran's Center or School for the Blind, I can see the good work my money is doing. |
U.S. nonresident alien: Is my state tax refund taxable? | Federal income tax refunds received during 2016 are not taxable income for 2016 (or any other year) on either the Federal or the State tax return. The State income tax refund for 2015 received during 2016 is not taxable income on the State tax return for 2016. It is taxable income on the Federal tax return for 2016 only to the extent that you received a tax benefit (reduction in Federal income tax due) from deducting State income tax as an Itemized Deduction on your 2015 Federal return. If you didn't deduct State income tax because you deducted State sales tax instead, then the State income tax refund is not taxable income on the Federal tax return. |
Best way to invest money as a 22 year old? | The classic answer is simple. Aim to build up a a financial cushion that is the equivalent of 3 times your monthly salary. This should be readily accessible and in cash, to cover any unforeseen expenses that you may incur (car needs repairing, washing machine breaks down etc). Once you have this in place its then time to think about longer term investments. Monthly 'drip feeding' into a mutual stock based investment fund is a good place to start. Pick a simple Index based or fund with a global investment bias and put in a set amount that you can regularly commit to each month. You can get way more complicated but for sheer simplicity and longer term returns, this is a simple way to build up some financial security and longer term investments. |
Total price of (AAPL option strike price + option cost) decreases with strike price. Why? | Think about it this way. If the strike price is $200, and cost of the option is $0.05. $200 + $0.05 is $200.05. That does not mean that the price of buying the option is more. Neither is the option writer going to pay you $70 to buy the contract. When you are buying options, you can only have a limited downside and that is the premium that you pay for it. In case of the $115 contract, your total loss could be a maximum of $19.3. In case of the $130 contract, your total loss could be a maximum of $9.3. This is due to the fact that the chances of AAPL going to hit $130 is less than the chance of AAPL hitting $115. Therefore, option writers offer the lower probability contracts at a lower price. Long story short, you do not pay for the Strike price. You only pay the premium and that premium keeps getting lower with and increase in Strike price(Or decrease if it is a put option). Strike price is just a number that you expect the stock or index to break. I would suggest you to read up a little more on pricing from here |
Should I use Mint.com? Is it secure / trusted? [duplicate] | Yes, there is such possibility. Also, there's a possibility people made your computer, your operation system, your browser, etc. put there some code there that would intercept your communications and steal your money. So could bank clerks (and unlike all other examples, this really happened in real world, numerous times, though usually at smaller banks), ATM makers, etc. In the modern world, you rely on things made by thousands of people, this is a part of modern world's conveniences. You don't have to use it - you can store all your money in a big jar in your basement and nobody but occasional thief breaking in could take it. However, fraudulent unauthorized transactions in most banks can be rolled back, and any transaction is reported to you. So fraud from mint.com people would be quite low on my list of risks. Much bigger risk is that somebody could break into mint.com servers and steal information about your accounts from there or install some malicious code. I believe they have good protections, but no security system is perfect. You need to evaluate how the convenience of using mint.com compares to your personal feeling about this risk. If you feel you couldn't sleep at night knowing somewhere out there there is information about your money - don't use it. I don't worry about it too much as I know the chance of it happening is low and the chance of getting the money back if it happens is high, but if you feel differently - don't do it. |
Would it ever be a bad idea to convert a traditional IRA to a Roth IRA with the following assumptions? | Even if you're paying a lot of taxes now, you're talking marginal dollars when you look at current contribution, and average tax rate when making withdrawals. IE, if you currently pay 28% on your last dollar (and assuming your contribution is entirely in your marginal rate), then you're paying 28% on all of the Roth contributions, but probably paying a lower average tax rate, due to the lower tax rates on the first many dollars. Look at the overall average tax rate of your expected retirement income - if you're expecting to pull out $100k a year, you're probably paying less than 20% in average taxes, because the first third or so is taxed at a very low rate (0 or 15%), assuming things don't change in our tax code. Comparing that to your 28% and you have a net gain of 8% by paying the taxes later - nothing to shake a stick at. At minimum, have enough in your traditional IRA to max out the zero tax bucket (at least $12k). Realistically you probably should have enough to max out the 15% bucket, as you presumably are well above that bucket now. Any Roth savings will be more than eliminated by this difference: 28% tax now, 15% tax later? Yes please. A diversified combination is usually best for those expecting to have a lot of retirement savings - enough in Traditional to get at least $35k or so a year out, say, and then enough in Roth to keep your comfortable lifestyle after that. The one caveat here is in the case when you max out your contribution levels, you may gain by using money that is not in your IRA to pay the taxes on the conversion. Talk to your tax professional or accountant to verify this will be helpful in your particular instance. |
Beginner dividend investor - first steps | This has been answered countless times before: One example you may want to look at is DGRO. It is an iShares ETF that many discount brokers trade for free. This ETF: offers "exposure to U.S. stocks focused on dividend growth". |
Tax considerations for outsourcing freelance work to foreign country | If a person is not a U.S. citizen and they live and work outside the U.S., then any income they make from a U.S. company or person for services provided does not qualify as "U.S. Source income" according to the IRS. Therefore you wouldn't need to worry about withholding or providing tax forms for them for U.S. taxes. See the IRS Publication 519 U.S. Tax Guide for Aliens. |
How do I explain why debt on debt is bad to my brother? | I wouldn't try to tell him what he should do, nor would I provide any financial assistance. Invite him over and tell him how a Dave Ramsey book changed your life or something so that you aren't the one telling him what to do. People in fundamentally and persistently bad situations are like people with addiction problems... they tend to end up "killing the messenger" before internalizing that they are in a bad situation. They need to hit rock bottom before you can really help. |
Ideal investments for a recent college grad with very high risk tolerance? | I'd suggest you start by looking at the mutual fund and/or ETF options available via your bank, and see if they have any low-cost funds that invest in high-risk sectors. You can increase your risk (and potential returns) by allocating your assets to riskier sectors rather than by picking individual stocks, and you'll be less likely to make an avoidable mistake. It is possible to do as you suggest and pick individual stocks, but by doing so you may be taking on more risk than you suspect, even unnecessary risk. For instance, if you decide to buy stock in Company A, you know you're taking a risk by investing in just one company. However, without a lot of work and financial expertise, you may not be able to assess how much risk you're taking by investing in Company A specifically, as opposed to Company B. Even if you know that investing in individual stocks is risky, it can be very hard to know how risky those particular individual stocks are, compared to other alternatives. This is doubly true if the investment involves actions more exotic than simply buying and holding an asset like a stock. For instance, you could definitely get plenty of risk by investing in commercial real estate development or complicated options contracts; but a certain amount of work and expertise is required to even understand how to do that, and there is a greater likelihood that you will slip up and make a costly mistake that negates any extra gain, even if the investment itself might have been sound for someone with experience in that area. In other words, you want your risk to really be the risk of the investment, not the "personal" risk that you'll make a mistake in a complicated scheme and lose money because you didn't know what you were doing. (If you do have some expertise in more exotic investments, then maybe you could go this route, but I think most people -- including me -- don't.) On the other hand, you can find mutual funds or ETFs that invest in large economic sectors that are high-risk, but because the investment is diversified within that sector, you need only compare the risk of the sectors. For instance, emerging markets are usually considered one of the highest-risk sectors. But if you restrict your choice to low-cost emerging-market index funds, they are unlikely to differ drastically in risk (at any rate, far less than individual companies). This eliminates the problem mentioned above: when you choose to invest in Emerging Markets Index Fund A, you don't need to worry as much about whether Emerging Markets Index Fund B might have been less risky; most of the risk is in the choice to invest in the emerging markets sector in the first place, and differences between comparable funds in that sector are small by comparison. You could do the same with other targeted sectors that can produce high returns; for instance, there are mutual funds and ETFs that invest specifically in technology stocks. So you could begin by exploring the mutual funds and ETFs available via your existing investment bank, or poke around on Morningstar. Fees will still matter no matter what sector you're in, so pay attention to those. But you can probably find a way to take an aggressive risk position without getting bogged down in the details of individual companies. Also, this will be less work than trying something more exotic, so you're less likely to make a costly mistake due to not understanding the complexities of what you're investing in. |
How to make money from a downward European market? | Not a day goes by that someone isn't forecasting a collapse or meteoric rise. Have you read Ravi Batra's The Great Depression of 1990? The '90s went on to return an amazing 18.3%/yr compound growth rate for the decade. (The book sells for just over $3 with free Amazon shipping.) In 1987, Elaine Garzarelli predicted the crash. But went years after to produce unremarkable results. Me? I saw that 1987 was up 5% or so year on year (in hindsight , of course), and by just staying invested, I added deposits throughout the year, and saw that 5% return. What crash? Looking back now, it was a tiny blip. You need to be diversified in a way that one segment of the market falling won't ruin you. If you think the world is ending, you should make peace with your loved ones and your God, no investment advice will be of any value. (Nor will gold for that matter.) |
My tenant wants to pay rent through their company: Should this raise a red flag? | Maybe you should consider setting up a Taxpayer Identification Number (TIN) for your business dealings as a landlord and consider providing that instead of your SSN for this type of thing. I am assuming (if this is legitimate) they want it so they can send you a 1099 as they might be obligated to do if they are claiming the rent as a business expense. Also, I'd suggest having the tenant tell their employer to contact you directly. There is no need for the tenant in this situation to also get your SSN/TIN. |
What factors should I consider in picking a bond? | just pick a good bond and invest all your money there (since they're fairly low risk) No. That is basically throwing away your money and why would you do that. And who told you they are low risk. That is a very wrong premise. What factors should I consider in picking a bond and how would they weigh against each other? Quite a number of them to say, assuming these aren't government bonds(US, UK etc) How safe is the institution issuing the bond. Their income, business they are in, their past performance business wise and the bonds issued by them, if any. Check for the bond ratings issued by the rating agencies. Read the prospectus and check for any specific conditions i.e. bonds are callable, bonds can be retired under certain conditions, what happens if they default and what order will you be reimbursed(senior debt take priority). Where are interest rates heading, which will decide the price you are paying for the bond. And also the yield you will derive from the bond. How do you intend to invest the income, coupon, you will derive from the bonds. What is your time horizon to invest in bonds and similarly the bond's life. I have invested in stocks previously but realized that it isn't for me Bonds are much more difficult than equities. Stick to government bonds if you can, but they don't generate much income, considering the low interest rates environment. Now that QE is over you might expect interest rates to rise, but you can only wait. Or go for bonds from stable companies i.e. GE, Walmart. And no I am not saying you buy their bonds in any imaginable way. |
What can a CPA do that an EA cannot, and vice versa? | Although they may have some similar functions, CPAs and Enrolled Agents operate in two rather different areas of the accounting "space." CPAs deal with financial statements, usually of corporations. They're the people you want to go to if you are making an investment, or if you own your own business, and need statements of pretax profit and loss prepared. Although a few of them are competent in taxation, the one thing many of them are weak at is tax rules, and this is where enrolled agents come in. Enrolled agents are more concerned with personal tax liability. They can 1) calculate your income taxes, and 2) represent you in hearings with the IRS because they've taken courses with IRS agents, and are considered by them to be almost "one of us." Many enrolled agents are former IRS agents, actually. But they are less involved with corporate accounting, including things that might be of interest to stock holders. That's the CPA's province. |
I'm 13. Can I buy supplies at a pet store without a parent/adult present? | As long as your money is green and you aren't buying something prohibited to youngsters (booze, cigarettes, etc.) I doubt any store is going to refuse your business. |
Should I make more conservative investments in my company 401(K) if I'm going to leave the job in a couple of years? | Your retirement PLAN is a lifelong plan and shouldn't be tied to your employer status. Max out your 401(k) contribution to the maximum that your employer matches (that's a 100% ROI!) and as much as you can afford. When you leave the work force rollover your 401(k) to an IRA account (e.g.: you can create an IRA account with any of the online brokerage firms Schwab, E-Trade, Sharebuilder, or go with a brick-and-mortar firm like JP Morgan, Stifel Nicolaus, etc.). You should have a plan: How much money do you need/month for your expenses? Accounting for inflation, how much is that going to be at retirement (whatever age you plan to retire)? How much money do you need to have so that 4.5% of that money will provide for your annual living expenses? That's your target retirement amount of savings. Now figure out how to get to that target. Rule #1 Invest early and invest often! The more money you can sock away early in your career the more time that money has to grow. If you aren't comfortable allocating your investments yourself then you could go with a Targeted Retirement Fund. These funds have a general "date" for retirement and the assets are allocated as appropriate for the amount of risk appropriate for the time to retirement. |
Can a high down-payment on a house offset the need for proof of income? | It's difficult to provide an exact answer as this will very much depend on the bank & the local regulatory scheme. However as a business owner you should be able to provide incorporation docs, some proof of ownership of the company and last years' financial statements or tax returns, many banks would accept this as a proof of income for the purposes of granting credit. In general in most jurisdictions I can think of, a high downpayment will not remove the need to verify income as the bank needs to feel comfortable that you have the ability to pay the remaining 25% (e.g. how do they know you're not a serially unemployed lottery winner) and if the downpayment is quite large they may want some assurance that you got the money legally (e.g. how do they make sure you're not a drug dealer). So probably regardless of how large a downpayment most banks would probably want some additional proofs of income however what proofs are needed may be more flexible than just a salary stub. I suggest taking a look at what sort of documents you may have on hand that can serve to validate your revenue in some way and contacting a few banks directly to see what options they can provide and whether some custom-tailored arrangement can be made. |
How can I get free or discounted checks for my bank account? | Although not required, #2 would work best if you used magnetic ink... That is an extra cost which you may or may not want to pay for. You can often get a free checking account and a free set of checks if you can meet the minimum requirements. This often means a higher average daily balance, direct deposit, or some combination of multiple requirements. The bank is taking a risk that a client meeting those minimum requirements while likely earn the bank more in fees and services than what they give out for "free" such as the account and checks. My wife and I opened a Wells Fargo checking account two years ago. Back then, we were able to open the account for free along with a free set of 250 checks. I think the requirement now requires $7,500 average daily balance. |
Do people tend to spend less when using cash than credit cards? | I'd like to know if there is any reliable research on the subject. Intuitively, this must be true, no? Is it? First, is it even possible to discover the correlation, if one exists? Dave Ramsey is a proponent of "Proven study that shows you will spend 10% more on a credit card than with cash." Of course, he suggests that the study came from an otherwise reliable source, Dun & Bradstreet. A fellow blogger at Get Rich Slowly researched and found - Nobody I know has been able to track down this mythical Dun and Bradstreet study. Even Dun and Bradstreet themselves have been unable to locate it. GRS reader Nicole (with the assistance of her trusty librarian Wendi) contacted the company and received this response: “After doing some research with D&B, it turns out that someone made up the statement, and also made up the part where D&B actually said that.” In other words, the most cited study is a Myth. In fact, there are studies which do conclude that card users spend more. I think that any study (on anything, not just this topic. Cigarette companies buy studies to show they don't cause cancer, Big Oil pays to disprove global warming, etc.) needs to be viewed with a critical eye. The studies I've seen nearly all contain one of 2 major flaws - My own observation - when I reviewed our budget over the course of a year, some of the largest charges include - I list the above, as these are items whose cost is pretty well fixed. We are not in the habit of "going for a drive," gas is bought when we need it. All other items I consider fixed, in that the real choice is to pay with the card or check, unlike the items some claim can be inflated. These add to about 80% of the annual card use. I don't see it possible for card use to impact these items, and therefore the "10% more" warning is overreaching. To conclude, I'll concede that even the pay-in-full group might not adhere to the food budget, and grab the $5 brownie near the checkout, or over tip on a restaurant meal. But those situations are not sufficient to assume that a responsible card user comes out behind over the year for having done so. A selection of the Studies I am referencing - |
When to convert employee shares in an RRSP into cash, even if there is a penalty? | The cost to you for selling is 3/8% of a years salary, this is what you won't get if you sell. Tough to calculate the what-if scenarios beyond this, since I can't quantify the risk of a price drop. Once the amount in he stock is say,10%, of a years salary, if you know a drop is coming, a sale is probably worth it, for a steep drop. My stronger focus would be on how much of your wealth is concentrated in that one stock, Enron, and all. |
Personal “Profit & Loss Statement” required for mortgage? | The bank is asking for a P & L because as a contractor you are in essence running your own business. Its kind of a technicality, all you need to do is look at any expenses that you paid out of pocket while working there that were job or "business" related. Write a list of those expenses such as "Gas", "Materials", "Legal Expenses", etc. and then show your total income from that job or "contract" subtract the expenses and show your total profit or loss hence Profit / Loss Statement. I realize that you may not have any real expenses tied to that job although I don't know and if you don't, then simply write in your income, say no expenses and show your "profit/pay" at the bottom of your P & L! Viola! Your Done! Good luck with the closing! |
Are there any other investing methods I should look into? | To expand on mhoran's answer - Once you mention the 401(k), we're compelled to ask (a) what is the match, if any, and (b) what are the expenses within the funds offered. Depositing to get the full match is going to get you the biggest return on your money. It's common to get a dollar for dollar match on the first 5 or 6% of your income. If the fees are high, you stop at the match, and move to an IRA for the next money you wish to save. At 22, I'd probably focus on the Roth. If you have access to a Roth 401(k), that's great, the match will be pre tax dollars and you'll get started with a decent tax status mix. These accounts can form the core of your investing. Most people have little left over once their retirement accounts are fully funded. And yes, reading to understand stocks is great, but also to understand why stock indexing is the best choice for most investors. |
What are the best software tools for personal finance? | Money Manager Ex PROS: CONS |
Is it possible for US retail forex traders to trade exotic currencies? | The vast majority of retail Forex brokers are market makers, rather than ECNs. With that said, the one that fits your description mostly closely is Interactive Brokers, is US-based, and well-respected. They have a good amount of exoitcs available. Many ECNs don't carry these because of the mere fact that they make money on transactions, versus market makers who make money on transactions and even more on your losses. So, if the business model is to make money only on transactions, and they are as rarely traded as exotics are, there's no money to be made. |
Is an interest-only mortgage a bad idea? | Normally interest only mortgages are taken incase one planning to sell off the property after a few years and purchase of the property is for investment. In such a case instead of burdening oneself with a huge EMI, one opts for an interest only mortgage, and towards the end of the term, sell off the house at profit and repay back the entire principal. I am not to sure if interest only mortgages are encouraged for properties you plan to live in. Although I do not know about the ING scheme, normally there is no prepayment option on interest only mortgages, its Bank way of earning a fixed income for the contracted period and thats the reason why the interest rates are lower than a regular mortgage. If you do the math, you may be paying more in total interest than on a regular mortgage. |
Receiving important daily wires from abroad? | You can receive all the Money in your Bank. By Problem if you mean whether it will raise any alarms at the Bank. Most likely yes, such kind of activity would trigger AML. Bank would flag this off to regulators and questions would be asked. If you are doing a Legitimate business, its not an issue. Maintain a proper record of the transaction and pay your taxes. As funds are large 80 K a month, it makes sense to seek to advice of a Laywer and CA to help you keep thing in order. |
Should I set a stop loss for long term investments? | Stop loss orders are the exact opposite of what you should be doing if you are implementing a long term buy-and-hold strategy. The motivation of a buy-and-hold strategy is that in the long term, the market rises even despite the occasional crash or recession. Setting a stop loss simply increases the probability that you will sell for a low price in a temporary market downturn. Unless you are likely to need near-term liquidity (in which case you're not a long term investor), that makes no sense. |
Better to rent condo to daughter or put her on title? | @Pete B.'s answer is good, but there's an important note to consider for tax purposes. It's too large for a comment, so I'm adding it as an answer. And that is: you cannot claim the property as a rental property under certain conditions. This affects things like claiming mortgage interest (which you don't have), and depreciation in value (which a rental is allowed). See IRS topic 415 for details, but I've included an important excerpt below with emphasis added: If you rent a dwelling unit to others that you also use as a residence, limitations may apply to the rental expenses you can deduct. You're considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for more than the greater of: ... A day of personal use of a dwelling unit is any day that it's used by: Talk to a tax accountant to better understand the ramifications of this, but it's worth noting that you can't just rent it to her for a paltry sum and be able to take tax advantages from this arrangement. |
Can you explain “time value of money” and “compound interest” and provide examples of each? | Time Value of Money - The simple calculation for this is FV = PV * (1+r)^N which reads The Future Value is equal to the Present Value times 1 plus the interest rate multiplied by itself by the number of periods that will pass. A simple way to look at this is that if interest rates were 5%/yr a dollar would be worth (1.05)^N where N is the number of years passing. The concept of compound interest cannot be separated from the above. Compounding is accounting for the interest on the interest that has accrued in prior periods. If I lend you a dollar at 6% simple interest for 30 years, you would pay me back $1 + $1.80 or $2.80. But - 1.06^30 = 5.74 so that dollar compounded at 6% annually for 30 years is $5.74. Quite a difference. Often, the time value of money is discussed in light of inflation. A dollar today is not the same dollar as 30 years ago or 30 years hence. In fact, inflation has eroded the value of the dollar by a factor of 3 over the past 30 years. An average item costing $100 would now cost $300. So when one invests, at the very least they try to stay ahead of inflation and seek additional return for their risk. One quirk of compounding is the "rule of 72." This rule states that if you divide the interest rate into the number 72 the result is the number of years to double. So 10% per year will take about 7.2 years to double, 8%, 9 years, etc. It's not 100% precise, but a good "back of napkin" calculation. When people talk about the total payments over the thirty year life of a mortgage, they often ignore the time value of money. That payment even ten years from now has far less value than the same payment today. |
Withdraw funds with penalty or bear high management fees for 10 years? | To me, it depends. How much are their total assets? Having 10% of your money in something like that isn't crazy. having it all in? That IS crazy. Can they reduce their exposure to this account without paying a penalty (say pull out 10%?) The Manager should be taking direction from them. If they aren't able to get the manager to re-allocate to something more suitable, under your friends direction, they should then pursue whether or not the manager is operating lawfully. |
Why do companies have a fiscal year different from the calendar year? | I know some companies or entities have large incomes or expenses at certain times of the year, and like to close their books after these large events. For example where I work, the primary seasonal income comes after summer, so our fiscal year ends at the last days of October. This gives the accountants enough time to collect all the funds, reconcile whatever they have to, pay off whatever they have to and get working on a budget for the next year sooner than a calendar year would. There also might be tax reasons. To get all of your income at the beginning of your fiscal year, even if that is in the middle of the calendar year would allow a company to plan large deductible investments with more certainty. I am not to sure of the tax reasons. |
Source(s) for hourly euro/usd exchange rate historic data? | See the FX section of the quantitative finance SE data wiki. |
Return of value to shareholders in an ISA | You will receive a combination of Verizon shares and cash whether you chose option B or C. Option B means that your "Return of Value" will be treated as capital - ie: as a capital gain. Option C means that your "Return of Value" will be treated as income - ie: as a dividend. As your ISA has favourable tax status, you don't end up paying any capital gain tax or income tax on dividend income. So it won't matter which option you chose. |
Should I always pay my credit at the last day possible to maximize my savings interest? | Mostly ditto to Dillip Sarwate. Let me just add: I don't know how you're making your payments, whether through the biller's web site, your bank's web site, by mail, in person, etc. But whatever the mechanism, if there is a chance that waiting until the due date to pay may mean that you will miss the due date: don't. The cost of a late payment charge is likely to far exceed any interest you would collect on your savings. Bear in mind that we are talking pennies here. I don't know how much the monthly bills that we are discussing here come to. Say it's $3,000. I think that would be a lot for most people. You say you're getting 3.6% on your savings. So if, on the average, you pay a bill 2 weeks later than you might have, you're getting an extra 2 / 52 x 3.6% x $3,000 in interest, or $4 per month. I think the last time I paid a late fee on a credit card it was $35, so if you make one mistake every 8 months and end up getting a late fee it will outweigh any savings. Personally, I pay most of my bills through either my bank's web site or the biller's web site. I schedule all payments when I get a paycheck, and I generally try to schedule them for 1 week before the due date, so there's plenty of breathing room. |
Clarify Microsoft's explanation of MIRR | The value does change from 12.61% to 13.48%. The difference between re-investing cashflows at 14% vs 12% is not big enough to change the rounded value. Edit: The initial cashflow is discounted at t0, meaning it's already equal to its present value and the finance rate doesn't have an effect. It does impact future outgoing cashflows, as you've noted. |
Can my employer limit my maximum 401k contribution amount (below the IRS limit)? | Congratulations on your raise! Is my employer allowed to impose their own limit on my contributions that's different from the IRS limit? No. Is it something they can limit at will, or are they required to allow me to contribute up to the IRS limit? The employer cannot limit you, you can contribute up to the IRS limit. Your mistake is in thinking that the IRS limit is 17K for everyone. That is not so. You're affected by the HCE rules (Highly Compensated Employees). These rules define certain employees as HCE (if their salary is significantly higher than that of the rest of the employees), and limit the ability of the HCE's to deposit money into 401k, based on the deposits made by the rest of the employees. Basically it means that while the overall maximum is indeed 17K, your personal (and other HCE's in your company) is lowered down because those who are not HCE's in the company don't deposit to 401k enough. You can read more details and technical explanation about the HCE rules in this article and in this blog post. |
Are stories of turning a few thousands into millions by trading stocks real? | 10k in taser stock at $1.00 per share made those who held into the hundreds per share made millions. But think about the likelihood of you owning a $1 stock and holding it past $10.00. They (taser millionaires) were both crazy and lucky. A direct answer, better off buying a lottery ticket. Stocks are for growing wealth not gaining wealth imho. Of course there are outliers though. To the point in the other answer, if it was repeatable the people teaching the tricks (if they worked) would make much more if they followed their own advice if it worked. Also, if everyone tells you how good gold is to buy that just means they are selling to get out. If it was that good they would be buying and not saying anything about it. |
Why do people buy insurance even if they have the means to overcome the loss? | There are a couple of reasons that a person might choose to use insurance even if they could handle the financial loss if something went wrong. They know their risk better than the insurance company. While it might seem odd at first glance that an individual can be better at assessing risk than a large company with thousands of actuaries. There are limits to the amount of knowledge that an insurance company can have or use to price their insurance products. For instance if you were a very aggressive driver but didn't have any recent tickets or accidents because you were in college and didn't have a car on a regular basis, but now you have a job and drive 30 miles to work every day. You know your risk is relatively high but the insurance company sees you as relatively low risk and aren't able to price that extra risk into your premium. Just because a person can survive financial after losing something like a car or a house doesn't mean it isn't desirable to pay a small price to mitigate that risk. If you are using your savings to pay for an emergency then that money needs to be semi liquid in case you need it limiting your investment options. Where as if you purchase insurance you pay a small amount of money to be able to invest the rest of your money. Liquidity is a big deal particularly if you are a small business and investing into your business where your money can make your more money but you may or may not be able to access that money very easily. |
Oversimplify it for me: the correct order of investing | It isn't always clear cut that you should pay off a debt at all, particularly a mortgage. In simple terms, if you are making a better return than what the bank is charging you, and the investment meets your risk criteria, then you should not pay back the debt. In the UK for example, mortgage rates are currently quite low. Around 2.5 - 3% is typical at the moment. On the other hand, you might reasonably expect a long run average return of around 9 - 11% on property (3 - 5% rental yield, and the rest on capital gains). To make the decision properly you need take into account the following: |
How come the government can value a home more than was paid for the house? | The property tax valuation and the fair market price are NOT one and the same. They track each other, correlate to each other, but are almost NEVER the same number. In some parts of the USA, a municipality has to re-assess property tax values every ten years. In these places, the tax value of a property is on something like a 10-year moving average, NOT on the volatile daily market price. EDIT: It is easy to fall into the "trap" of thinking that property tax valuation is intended to represent fair market value. It's INTENT is to provide an accurate (or, as accurate as possible) RELATIVE VALUATION of your property compared to the other properties in the municipality. The sum of all the property values is the tax base of the municipality. When the town budget (which is paid in part via property taxes) is set, the town simply divides the tax base into the budget total to arrive at the ratio of tax-to-collect, to the tax base, also called the "tax rate per thousand dollars of valuation." i.e. if the town tax base is US$10,000,000, and the town budget is US$500,000, then the ratio is 0.05, or $50 per thousand dollars of valuation. If your property is assessed at US$100,000, then you would pay 100 x $50, or $5000 in property taxes that year. Since this is the goal of the property tax valuation, NOT deciding what your house is worth on the open market, then we are left with the question of "why use the market value of a house for property assessment?" and the answer is that of all the various schemes and algorithms you can try, "fair market value" is the easiest and most accurate...IF TIME FLUCUTATIONS ARE TAKEN OUT. For example, if I buy a house in a development for $250,000 today, and next summer the housing market crashes, and you buy the identical house next door to me for $150,000, it does NOT stand to reason that you should pay less taxes than me, because your house is "worth" $100,000 less. In fact, BOTH our houses are worth $100,000 less. What matters most in property tax valuation isn't the actual number, but rather, is YOUR valuation the same as other essentially similar properties in your tax base? Getting the RELATIVE ratio of value between you and your neighbors correct is the goal of property tax valuation. |
How do cashier's checks work and why are they good for scams? | Ok, few things to understand first: Secondly, think about the way a scam usually flows. A person (scammer) with an actual bank account with money issues a valid cashiers check, trick someone else (victim) into receiving it (typically in exchange for a percent) and passing along a portion to another account (back to the scammer). The scammer then reports the first transaction as fraudulent and the bank takes back that transaction. Now the victim is stuck with the second transaction, and without the funds from the first. Meanwhile the scammer has both the original funds and the percentage from the second one. In a way they're attractive for scammers because they're so trusted. |
Where can I find accurate historical distribution data for mutual funds? | If you want to go far upstream, you can get mutual fund NAV and dividend data from the Nasdaq Mutual Fund Quotation Service (MFQS). This isn't for end-users but rather is offered as a part of the regulatory framework. Not surprisingly, there is a fee for data access. From Nasdaq's MFQS specifications page: To promote market transparency, Nasdaq operates the Mutual Fund Quotation Service (MFQS). MFQS is designed to facilitate the collection and dissemination of daily price, dividends and capital distributions data for mutual funds, money market funds, unit investment trusts (UITs), annuities and structured products. |
Why is being “upside down” on a mortgage so bad? | Here's a real-life example of why being underwater can be a tad annoying: Your options are: You must choose one. |
What are the reasons to get more than one credit card? | Another reason is that the amount of unused credit you have is a positive factor on your credit score. It's generally easier to open several different accounts for $X dollars each with different banks than to get your current bank to raise your limit severalfold in a single go. Your current bank has to worry about why you suddenly are asking for a large additional amount of credit; while other banks will be willing to offer you smaller amounts of credit in the hope that you transfer your business from your current bank to them. |
Free service for automatic email stock alert when target price is met? | Hey guys, I found this website, it seems to do it for free, and they have many options. If let me know if you find something better than this. http://members.zignals.com/main/ |
What is the process of getting your first share? | Let's handle this as a "proof of concept" (POC); OP wants to buy 1 share of anything just to prove that they can do it before doing the months of painstaking analysis that is required before buying shares as an investment. I will also assume that the risks and costs of ownership and taxes would be included in OP's future analyses. To trade a stock you need a financed broker account and a way to place orders. Open a dealing account, NOT an options or CFD etc. account, with a broker. I chose a broker who I was confident that I could trust, others will tell you to look for brokers based on cost or other metrics. In the end you need to be happy that you can get what you want out of your broker, that is likely to include some modicum of trust since you will be keeping money with them. When you create this account they will ask for your bank account details (plus a few other details to prevent fraud, insider trading, money laundering etc.) and may also ask for a minimum deposit. Either deposit enough to cover the price of your share plus taxes and the broker's commission, plus a little extra to be on the safe side as prices move for every trade, including yours, or the minimum if it is higher. Once you have an account the broker will provide an interface through which to buy the share. This will usually either be a web interface, a phone number, or a fax number. They will also provide you with details of how their orders are structured. The simplest type of order is a "market order". This tells the broker that you want to buy your shares at the market price rather than specifying only to buy at a given price. After you have sent that order the broker will buy the share from the market, deduct the price plus tax and her commission from your account and credit your account with your share. |
Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building? | The most succinct answer is "Banks are in the Money business". Not construction, not real estate, not any of the other things they may find find themselves sometimes being dragged (foreclosure) or tempted (construction) into. "Money" is their core competence, and as good business people they recognize that straying outside that just dilutes their focus. |
How to measure the cost/value of an Asset in the Financial Statement | Does the friend fix your electrical wiring and the engine of your car? If you need a professional advice - ask a professional. In this case - an accountant (not necessarily a CPA, but at least an experienced bookkeeper). Financial Statements (official documents, that is) must be signed by a public accountant (CPA in the US) or the principle (you). I wouldn't take chances and would definitely have an accountant do that. You need to consider the asset useful life, and the depreciation. The fact that you use it for non-business purposes may be recorded in various ways. One that comes to mind is accounting as a supplement for depreciation: You depreciate the percentage that is used for business, and record as a distribution to owner the rest (which is accounting for the personal use). This way it would also match the tax reporting (in the US, at least). Bottom line: if you're preparing an official financial statement (that you're going to submit to anyone other than yourself) - get a professional advice. |
Which forex brokerage should I choose if I want to fund my account with over a million dollars? | Oanda.com is a very respectable broker. They don't offer ridiculous leverage options of 200 to 1 that prove the downfall of people starting out in Forex. When I used them a few years back, they had good customer service and some nice charting tools. |
Can one use dollar cost averaging to make money with something highly volatile? | Dollar cost averaging is beneficial if you don't have the money to make large investments but are able to add to your holding over time. If you can buy the same monetary amount at regular intervals over time, your average cost per share will be lower than the stock's average value over that time. This won't necessarily get you the best price, but it will get you, on the whole, a good price and will enable you to increase your holdings over time. If you're doing frequent trading on a highly volatile stock, you don't want to use this method. A better strategy is to buy the dips: Know the range, and place limit orders toward the bottom of the range. Then place limit orders to sell toward the high end of the range. If you do it right, you might be able to build up enough money to buy and sell increasing numbers of shares over time. But like any frequent trader, you'll have to deal with transaction fees; you'll need to be sure the fees don't eat all your profit. |
What happens to the original funds when a certified bank check is not cashed? | The answer probably varies with local law, and you haven't said where you're located. In most or all US states, it appears that after some statutory length of time, the bank would transfer the money to the state government, where it would be held indefinitely as "unclaimed property" in the name of the recipient (technically, the payee, the person to whom the check is made payable). This process is called escheatment. Most states publish a list of all unclaimed property, so at some later date the payee could find their name on this list, and realize they were entitled to the funds. There would then be a process by which the payee could claim the funds from the state. Usually the state keeps any interest earned on the money. As far as I know, there typically wouldn't be any way for you, the person who originated the payment, to collect the money after escheatment. (Before escheatment, if you have the uncashed check in your possession, you can usually return it to the bank and have it refunded to you.) I had trouble finding an authoritative source explaining this, but a number of informal sources (found by Googling "cashier check escheatment") seem to agree that this is generally how it works. Here is the web site for a law firm, saying that in California an uncashed cashier's check escheats to the state after 3 years. Until escheatment occurs, the recipient can cash the check at any time. I don't think that cashier's checks become "stale" like personal checks do, and there isn't any situation in which the funds would automatically revert to you. |
Purchasing options between the bid and ask prices, or even at the bid price or below? | I frequently do this on NADEX, selling out-of-the-money binary calls. NADEX is highly illiquid, and the bid/ask is almost always from the market maker. Out-of-the-money binary calls lose value quickly (NADEX daily options exist for only ~21 hours). If I place an above-ask order, it either gets filled quickly (within a few minutes) due to a spike in the underlying, or not at all. I compensate by changing my price hourly. As Joe notes, one of Black-Scholes inputs is volatility, but price determines (implied) volatility, so this is circular. In other words, you can treat the bid/ask prices as bid/ask volatilities. This isn't as far-fetched as it seems: http://www.cmegroup.com/trading/fx/volatility-quoting-fx-options.html |
How does the debt:GDP ratio affect the country's economy? | Is it not that bad? Depends how bad is bad. The problems causes by a government having large debt are similar to those caused by an individual having large debt. The big issue is: More and more of your income goes to paying interest on the debt, and is thus not available for spending on goods and services. If it gets bad enough, you find you cannot make payments, you start defaulting on loans, and then you have to make serious sacrifices, like selling your property to pay the debt. Nations have an advantage over individuals in that they can sometimes repudiate debt, i.e. simply declare that they are not going to pay. Lenders can then refuse to give them more money, but that doesn't get their original loans paid back. In theory other nations could send in troops to seize property to pay the loan, but this is a very extreme solution. Totally aside from any moral considerations, modern warfare is very expensive, it's likely the war would cost you more than you'd recover on the debt. How much debt is too much? It's hard to give a number, any more than one could give a "maximum acceptable debt" for an individual. American banks have a rule of thumb that they won't normally loan you money if your total debt payments would be more than 1/3 of your income. I've never come close to that, that seems awfully high to me. But, say, a young person just starting out so he's not making a lot of money, and he lives someplace with high housing prices, might find this painful but acceptable. Etc. |
Does anyone offer no interest loans? | This is very much possible and happens quite a lot. In the US, for example, promotional offers by credit card companies where you pay no interest on the balance for a certain period are a very common thing. The lender gains a new customer on such a loan, and usually earns money from the spending via the merchant fees (specifically for credit cards, at least). The pro is obviously free money. The con is that this is usually for a short period of time (longest I've seen was 15 months) after which if you're not careful, high interest rates will be charged. In some cases, interest will be charged retroactively for the whole period if you don't pay off the balance or miss the minimum payment due. |
Previous owner of my home wants to buy it back but the property's value is less than my loan… what to do? | A short-sale seems like an extreme and unethical course to take. You should read your mortgage documents or work with your attorney to read the mortgage and determine whether it is an "assumable" mortgage. If so, you might be able to get the former owner to take over the mortgage. |
What is the best asset allocation for a retirement portfolio, and why? | You're right, the asset allocation is one fundamental thing you want to get right in your portfolio. I agree 110%. If you really want to understand asset allocation, I suggest any and all of the following three books, all by the same author, William J. Bernstein. They are excellent – and yes I've read each. From a theory perspective, and being about asset allocation specifically, the Intelligent Asset Allocator is a good choice. Whereas, the next two books are more accessible and more complete, covering topics including investor psychology, history, financial products you can use to implement a strategy, etc. Got the time? Read them all. I finished reading his latest book, The Investor's Manifesto, two weeks ago. Here are some choice quotes from Chapter 3, "The Nature of the Portfolio", that address some of the points you've asked about. All emphasis below is mine. Page 74: The good news is [the asset allocation process] is not really that hard: The investor only makes two important decisions: Page 76: Rather, younger investors should own a higher portion of stocks because they have the ability to apply their regular savings to the markets at depressed prices. More precisely, young investors possess more "human capital" than financial capital; that is, their total future earnings dwarf their savings and investments. From a financial perspective, human capital looks like a bond whose coupons escalate with inflation. Page 78: The most important asset allocation decision is the overall stock/bind mix; start with age = bond allocation rule of thumb. [i.e. because the younger you are, you already have bond-like income from anticipated employment earnings; the older you get, the less bond-like income you have in your future, so buy more bonds in your portfolio.] He also mentions adjusting that with respect to one's risk tolerance. If you can't take the ups-and-downs of the market, adjust the stock portion down (up to 20% less); if you can stomach the risk without a problem, adjust the stock portion up (up to 20% more). Page 86: [in reference to a specific example where two assets that zig and zag are purchased in a 50/50 split and adjusted back to targets] This process, called "rebalancing," provides the investor with an automatic buy-low/sell-high bias that over the long run usually – but not always – improves returns. Page 87: The essence of portfolio construction is the combination of asset classes that move in different directions at least some of the time. Finally, this gem on pages 88 and 89: Is there a way of scientifically picking the very best future allocation, which offers the maximum return for the minimum risk? No, but people still try. [... continues with description of Markowitz's "mean-variance analysis" technique...] It took investment professionals quite a while to realize that limitation of mean-variance analysis, and other "black box" techniques for allocating assets. I could go on quoting relevant pieces ... he even goes into much detail on constructing an asset allocation suitable for a large portfolio containing a variety of different stock asset classes, but I suggest you read the book :-) |
Is it practical to take actual delivery on a futures contract, and what is the process? | Here's a good link that can answer your question: How to take delivery of a futures contract The relevant part states: Prior to delivery day, they inform customers who have open long positions that they must either close out the position or prepare to take delivery and pay the full value of the underlying contract. By the same token traders with short positions are informed that they must close out their trades or prepare to deliver the underlying commodity. In this case, they must have the required quantity and quality of the deliverable commodity on hand. On the few occasions that a buyer accepts delivery against his futures contract, he is usually not given the underlying commodity itself (except in the case of financials), but rather a receipt entitling him to fetch the hogs, wheat, or corn from warehouses or distribution points. I hope this helps. Good luck! |
What is an ideal number of stock positions that I should have in my portfolio? | Honestly? The maximum number really doesn't matter. If you're investing long-term, you buy in when it looks like an OK deal (still undervalued but looks like it'll grow), and you sell when it looks like the stock has reached a peak it won't reach again for a while if ever. However many stocks you can keep track of on those kinds of terms is how many stocks should be in your portfolio. |
Where can I find definitive terms for a preferred share? | This site has the best information I could find, other than a Bloomberg terminal: Quantumonline.com QUANTUMONLINE.COM SECURITY DESCRIPTION: SCANA Corp., 2009 Series A, 7.70% Enhanced Junior Subordinated Notes, issued in $25 denominations, redeemable at the issuer's option on or after 1/30/2015 at $25 per share plus accrued and unpaid interest, and maturing 1/30/2065 which may be extended to 1/30/2080. Interest distributions of 7.70% ($1.925) per annum are paid quarterly on 1/30, 4/30, 7/30 & 10/30 to holders of record on the record date which is the business day prior to the payment date (NOTE: the ex-dividend date is at least 2 business days prior to the record date). Distributions paid by these debt securities are interest and as such are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders. Units are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. The Notes are unsecured and subordinated obligations of the company and will rank equally with all existing and future unsecured and subordinated indebtedness of the company. See the IPO prospectus for further information on the debt securities by clicking on the ‘Link to IPO Prospectus’ provided below. |
I thought student loans didn't have interest, or at least very low interest? [UK] | nan |
Is there a NY tax form to use when one is missing a K-1 (or 1065) from an LLC? | Form 10-K is filed by corporations to SEC. You must be thinking of form 1065 (its schedule K) that a partnership (and multi-member LLC) must file with the IRS. Unless the multi-member LLC is legally dissolved, it must file this form. You're a member, so it is your responsibility, with all the other members, to make sure that the manager files all the forms, and if the manager doesn't - fire the manager and appoint another one (or, if its member managed - chose a different member to manage). If you're a sole member of the LLC - then you don't need to file any forms with the IRS, all the business expenses and credits are done on your Schedule C, as if you were a sole propriator. |
How to invest Rs.10k in India | Rs 10,000 is a small but good amount to begin with. I would suggest you start by investing in some good mutual funds. Do some research, a balance mutual fund is less risky less returns compared to a equity mutual fund. The other option is directly investing in stock market, however this needs some experience and you would need to open demat and trading accounts that would cost money to open and maintain. |
How come the government can value a home more than was paid for the house? | When a house is sold at a foreclosure auction, the selling bank usually does not provide the guarantees that a normal house seller provides. Furthermore, the previous owner may have neglected the property, and/or spitefully damaged the property. Bank-owned properties are often neglected and/or vandalized. Banks are usually too short-sighted to properly market the real estate they own, and do a poor job of making it easy to buy the property. Thus, foreclosure sales usually happen at a price that is significantly below the "fair market value" of sales between competent households. It is common for a house that is worth $ 125,000 (even in a depressed market) to sell for only $ 100,000 in a short sale or foreclosure. It is possible that this property sold for an even larger discount. It is also possible that the tax assessor is (inadvertently) comparing a run-down property with well-maintained properties that have extra expensive features, without fully adjusting for the properties' conditions and features. In the latter scenario, the property owner can ask the tax assessor to re-consider the assessment. Usually this request is called an "appeal". |
Should I pay more than 20% down on a home? | One big factor that no one has mentioned yet is whether you believe in a deflationary or inflationary future. Right now, we are leaning towards a deflationary environment so it makes sense to pay off more of the debt. (If you make just one extra payment a year, you will have paid off your house 7 years early). However, should this change (depending on government and central bank policy) you may be better off putting down the very minimum. In a year or three from now, you should have a clearer picture. In the meanwhile, here is a recent Business Week article discussing both sides of the argument. http://www.businessweek.com/magazine/content/10_28/b4186004424615.htm |
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