Question stringlengths 14 166 | Answer stringlengths 3 13.1k |
|---|---|
Must a company have a specific number of employees to do an IPO? | No, there is no minimum employee limit in order for a company to initiate an initial public offering. |
How does 83b election work when paying fair market value at time of grant? | The tax cost at election should be zero. The appreciation is all capital gain beyond your basis, which will be the value at election. IRC §83 applies to property received as compensation for services, where the property is still subject to a substantial risk of forfeiture. It will catch unvested equity given to employees. §83(a) stops taxation until the substantial risk of forfeiture abates (i.e. no tax until stock vests) since the item is revocable and not yet truly income. §83(b) allows the taxpayer to make a quick election (up to 30 days after transfer - firm deadline!) to waive the substantial risk of forfeiture (e.g. treat shares as vested today). The normal operation of §83 takes over after election and the taxable income is generally the value of the vested property minus the price paid for it. If you paid fair market value today, then the difference is zero and your income from the shares is zero. The shares are now yours for tax purposes, though not for legal purposes. That means they are most likely a capital asset in your hands, like other stocks you own or trade. The shares will not be treated as compensation income on vesting, and vesting is not a tax matter for elected shares. If you sell them, you get capital gain (with tax dependent on your holding period) over a basis equal to FMV at the election. The appreciation past election-FMV will be capital gain, rather than ordinary income. This is why the §83(b) election is so valuable. It does not matter at this point whether you bought the restricted shares at FMV or at discount (or received them free) - that only affects the taxes upon §83(b) election. |
I earn $75K, have $30K in savings, no debt, rent from my parents who are losing their home. Should I buy a home now or save? | For the vast majority, "buying" a house via a mortgage is not an investment. I use quotes around buying because from a technical perspective you don't own anything until you've paid it off; this is often an important point that people forget. It's highly unlikely you'll make more on it than the amount you put into it (interest, repairs, etc). Even with relatively low interest rates. The people who successfully invest in homes are those that use actual cash (not borrowed) to buy a home at well below market value. They then clean it up and make enough repairs to make it marketable and sell it shortly there after. Sometimes these people get hosed if the housing market tumbles to the point that the home is now worth less than the amount they put into it. This is especially problematic if they used bank loans to get the process going. They were actually the hardest hit when the housing bubble popped several years ago. Well, them and the people who bought on interest only loans or had balloon payments. Whereas the people who use a mortgage are essentially treating it like a bank account with a negative interest rate. For example, $180k loan on a 30 yr fixed at 4% will mean a total payout of around $310k, excluding normal repairs like roofs, carpet, etc. Due to how mortgage's work, most of the interest is collected during the first half of the loan period. So selling it within 2 to 5 years is usually problematic unless the local housing market has really skyrocketed. Housing markets move up and down all the time due to a hundred different things completely out of your control. It might be a regional depression, weather events, failed large businesses, failed city/local governments, etc. It could go up because businesses moved in, a new highway is built, state/local taxes decline, etc. My point is, homes are not long term investments. They can be short term ones, but only in limited circumstances and there is a high degree of risk involved. So don't let that be a driving point of your decision. Instead you need to focus on other factors. Such as: what is really going on with the house you are currently in? Why would they lose it? Can you help out, and, should you help out? If things are precarious, it might make more sense to sell that home now and everyone move into separate locations, possibly different rentals or apartments. If they are foreclosed on then they will be in a world of financial hurt for a long time. If we ignore your parents situation, then one piece of advice I would give you is this: Rent the cheapest apartment you can find that is still a "safe" place to live in. Put every dollar you can into some type of savings/investment that will actually grow. Stay there for 5+ years, then go pay cash for a nice home. Making $75k a year while single means that you don't need much to live on. In other words, live extremely cheap now so you can enjoy a fantastic living experience later that is free from financial fear. You should be able to put $30k+ per year aside going this route. edit: A bit of support data for those that somehow think buying a home on a mortgage is somehow a good investment: Robert Shiller, who won a Nobel prize in economics and who predicted the bursting of the housing bubble, has shown that a house is not a good investment. Why? First, home prices (adjusted for inflation) have been virtually unchanged for the past 100 years. (link 1, link 2) Second, after you add in the costs of maintenance alone then those costs plus what you've paid for the home will exceed what you get out of it. Adding in the cost of a mortgage could easily double or even triple the price you paid which makes things even worse. Maintenance costs include things like a new roof, carpet/flooring, water heater, appliances, etc. Yes, a home might cost you $100k and you might sell it for $200k after 15 years. However during that time you'll likely replace the roof ($10k to $20k), replace appliances ($2k to $5k), water heater ($1k), carpet/flooring ($5k to $20k), paint ($3k to $6k), and mortgage related costs (~$60k - assuming 30 yr fixed @4%). So your "costs" are between $180k and $200k just on those items. There are many more that could easily escalate the costs further. Like a fence ($5k+), air conditioner ($5k+), windows, etc. The above is assuming the home actually appreciates in value faster than inflation: which they historically haven't over the long term. So you have to consider all of the costs ultimately paid to purchase and maintain the home vs the costs of renting during the same time period. Point is: do your research and be realistic about it. Buying a home is a huge financial risk. |
Ways to establish credit history for international student | There's an excellent new service called SelfScore that offers US credit cards to international students. They work with students without a credit history and even without an SSN by using other qualifying factors such as major, financial resources in their home country, and employability upon graduation. Worth clarifying: it's neither a secured credit card nor a prepaid card. It's a proper US credit card with no annual fees and a relatively low APR designed to help students build US credit. The spending limit is relatively small but that probably doesn't matter for just building a credit history. |
How do you compare the sales of a company like Coca Cola against another company like JPMorgan Chase to figure out the best investment opportunity? | The question isn't sales but profits. Banks traditionally profit by making loans. Just as with a physical product, there are costs involved, income produced, and the difference between the two is gross profit. From there you can get net profit, and from there you can look at efficiency or profit per share or whatever other metric floats your boat. Or you can just buy index funds, get average rates of return, and not have to think about it. |
Can I invest in the London stock market when resident on a visa? | There are no legal restrictions on doing this. If you're living in the UK, just open an account like any other resident of the UK would. |
Settling before T+3? | It is possible but unlikely. Securities firms would prefer never to settle externally; rather, they prefer to wait until the liabilities can be netted. They are forced to make and take payment in three business days. The reason why is because settlement is costly in the same way as any other business would prefer to build trade credit instead of taking or making payment rapidly. The only circumstance where a financial firm would wish to take full delivery is when a counterparty is no longer trusted to be solvent. |
How can I invest in an index fund but screen out (remove) certain categories of socially irresponsible investments? | You could certainly look at the holdings of index funds and choose index funds that meet your qualifications. Funds allow you to see their holdings, and in most cases you can tell from the description whether certain companies would qualify for their fund or not based on that description - particularly if you have a small set of companies that would be problems. You could also pick a fund category that is industry-specific. I invest in part in a Healthcare-focused fund, for example. Pick a few industries that are relatively diverse from each other in terms of topics, but are still specific in terms of industry - a healthcare fund, a commodities fund, an REIT fund. Then you could be confident that they weren't investing in defense contractors or big banks or whatever you object to. However, if you don't feel like you know enough to filter on your own, and want the diversity from non-industry-specific funds, your best option is likely a 'socially screened' fund like VFTSX is likely your best option; given there are many similar funds in that area, you might simply pick the one that is most similar to you in philosophy. |
Deductions greater than Income : Traditional IRA to Roth Conversion? | Yes. A most emphatic yes. I suggest you look at your 2014 return and project what 2015 will look like. I'd convert enough to "top off" the 15% bracket. Note, if you overshoot it, and in April 2016, see that you are say $5K into the 25% rate, you can just recharacterize the amount you went over and nail the bracket to the dollar. If you have the time and patience, you can convert into 2 different Roth accounts. One account for one asset class, say large cap stocks/funds, the other, cash/bonds. In April, keep the account that outperformed, and only recharacterize the lagger. Roth Roulette is my name for this strategy. It's risk free, and has the potential to boost the value of your conversions. Edit - To be clear, you are permitted to recharacterize (undo) any or all of the converted amount. You actually have until tax time (4/15 or so) plus the 6 month extension. You can recharacterize for any reason - A personal anecdote - I manage my mother in law's money. She is well under the 25% bracket cutoff. Each year I convert, and each April, recharacterize just enough to be at the top of the 15% bracket. Over $100K has been shifted from Traditional IRA to Roth by now. Taxed at 15% so her daughters will 'not' pay 25% when they withdraw. $10K in tax saved from uncle sam, for my effort of filling out paper twice a year for 12 years now. Well worth my effort. |
What are some way to transfer money from Hong Kong to India on a monthly basis? | Western Union, Money to India, Remit to India are some of the services that specilize in remittance and would be cheaper than an International Wire. There is not tax for transfering your own money earner outside India into India. Edit: The business of Remittance is bought into the Service Tax Net by Govt. It is seen that Banks are offering this as a service and hence the tax to Banks which is passed on to customers. 0.12% of tax on the converted amount. IE if you transfer Rs 1,00,000/- you would need to pay a tax of Rs 120/-. Above Rs 1,00,000 the incremental rate is 0.06% |
Ghana scam and direct deposit scam? | Sadly, people with millions of dollars rarely give it away to complete strangers that they found at random on the Internet in exchange for trivial efforts. Anyone who claims to be willing to give you millions of dollars for just about nothing in return is almost certainly pulling a scam. It doesn't matter if you can't figure out how they're going to cheat you. They have plan. Just because your father has no money doesn't mean he can't be robbed. The scammer is almost surely planning to move some money around, and leave your father with a debt that he will be legally obligated to pay. She'll then take off with the money. (Of course you figured out that the picture is fake. It may not even be a pretty young girl -- that may well just be a persona the scammer created to appeal to your father. It might really be a fat, balding old man.) Your father would be smarter to sit in his back yard and wait for money to fall from the sky. |
Possible to purchase multiple securities on 1 transaction? | There is such a thing as a buy-write, which is buying a stock and writing a (covered) call simultaneously. But as far as I know brokers charge two commissions, one stock trade and one options trade so you're not going to save on commissions. |
Do you know of any online monetary systems? | Edit: I discovered Bitcoin a few months after I posted this answer. I would strongly recommend anyone interested in this question to review it, particularly the myths page that dispels much of the FUD. Original answer: Although it is not online, as a concept the Totnes Pound may be of interest to you. I live quite close to this village (in the UK) and the system it promotes does work well. According to the Transition Town Totnes website this means that it is "a community in a process of imagining and creating a future that addresses the twin challenges of diminishing oil and gas supplies and climate change , and creates the kind of community that we would all want to be part of." If you are looking for a starting place to introduce a new type of currency, perhaps in response to over-dependence on oil and global trade, then reading about the Transition Towns initiative could provide you with the answers you're looking for. |
Real estate agent best practice | There are people that make up a small segment of the population that have an unsatisfied need to see the insides of other people's houses. There's also a segment of the population that don't quite understand the "big picture" of how service professions work... for example, any group of friends going into a restaurant and requesting a table and sitting at it for over an hour, but feel they don't need to leave a tip because they only ordered espressos or shared a desert. Sure, you're paying for the service of a service professional, but it should also include their time and resources you consume outside of the actual service but many don't have that perspective. Why should I pay you if you aren't providing your actual "service" to me even though I'm consuming your time and resources that would be earning you your expected salary otherwise, is their justification. So when you encounter an individual from both small segments of the population mentioned above, the result is the problem your wife faces with perspective buyers. I look at the Agent / Buyer relationship from a different perspective when I encounter these no-harm intended individuals. I don't see it as the buyer is hiring the agent... for if that was the case, a contract of some sorts would be involved detailing the menu of services provided by the agent with associated costs, the buyer would make selections from the menu, pay the costs, and services rendered. but that's not how it works. so its important to understand the perspective of the agent looking to hire the buyer.. you're not paying the buyer to be your client, but you are looking to select the prospective buyer that's going to generate cash flow. In a commissions based work force that is also your main source of income, you have to look at prospective clients as that.. simply prospects..but who are a vital component of your salary. So when allocating your time and resources, especially if you're dealing with several prospects, you literally have to turn away these cold leads who are just looking for design tips and paint color pattern suggestions and you as their escort. If I was in the shoe-making business, i wouldn't hire a walk-in, give him access to materials and work space with the assumption that if its to his liking, it'll generate profit towards my salary needs, if the only thing he's interested in doing is looking around at all the other shoes, a behavior that requires my presence, time, and resources. You almost can't even justify it as "looking at it as possible income in the future" if it's costing you revenue now, whether its in the form of having to neglect actual buyers or you could be investing your time in things that would impact salary needs, such as advance course work (attending optional trainings offered by your broker), or investing time finding more serious leads. |
New car price was negotiated as a “cash deal”. Will the price change if I finance instead? | as a used dealer in subprime sales, finance has to be higher than cash because every finance deal has a lender that takes a percentage "discount" on every deal financed. if you notice a dealer is hesitant to give a price before knowing if cash or finance, because every bit of a cash deal's profit will be taken by a finance company in order to finance the deal and then there's no deal. you might be approved but if you're not willing to pay more for a finance deal, the deal isn't happening if I have $5000 in a car, you want to buy it for $6000 and the finance lender wants to take $1200 as a "buy-fee" leaving me $4800 in the end. |
Why would analysts recommend buying companies with negative net income? | Most likely because they don't know what they're talking about. They all have a belief without evidence that information set X is internalised into the price but information set Y is not. If there is some stock characteristic, call it y, that belongs to set Y, then that moves the gauge towards a "buy" recommendation. However, the issue is that no evidence has been used to determine the constituents of X and Y, or even whether Y exists in any non-trivial sense. |
What are the basics of apartment rental finances? | Well for starters you want to rent it for more than the apartment costs you. Aside from mortgage you have insurance, and maintenance costs. If you are going to have a long term rental property you need to make a profit, or at a bare minimum break even. Personally I would not like the break even option because there are unexpected costs that turn break even into a severe loss. Basically the way I would calculate the minimum rent for an apartment I owned would be: (Payment + (taxes/12) + (other costs you provide) + (Expected annual maintenance costs)) * 100% + % of profit I want to make. This is a business arrangement. Unless you are recouping some of your losses in another manner then it is bad business to maintain a business relationship that is costing you money. The only thing that may be worth considering is what comparable rentals go for in your area. You may be forced to take a loss if the rental market in your area is depressed. But I suspect that right now your condo is renting at a steal of a rate. I would also suspect that the number you get from the above formula falls pretty close to what the going rate in your area is. |
I thought student loans didn't have interest, or at least very low interest? [UK] | If I recall correctly, the pay schedule is such that you initially pay mostly interest. As James Roth suggests, look at the terms of the loan, specifically the payment schedule. It should detail how much is being applied to interest and how much to the actual balance. |
Looking to buy a house in 1-2 years. Does starting a Roth IRA now make sense? | If you are going to be buying a house in 1-2 years, I would be putting my money into a short term holding area like a high interest (which isn't that high right now) or a CD (also low interest) because of your near-term need. I wouldn't use the Roth option for your down payment money. If you invest in something volatile (and stocks/mutual funds are very volatile in a 1-2 year term) I would consider it too risky for your need and time frame. |
Stocks given by company vest if I quit? | Vesting typically stops after you quit. So, if your plan vests 20% per year for 5 years, and you received a one-time stock grant as part of this plan (i.e., ignoring the fact that these often involve new grants each year that vest separately), and you were hired in 2014 and leave at the end of 2016, then you vested 20% in 2015 and 20% in 2016, so would have 40% of the stock vested when you quit, and would never have more than that. |
Is there a way to tell how many stocks have been shorted? | Generally the number of shares of a U.S. exchange-listed stock which have been shorted are tracked by the exchange and reported monthly. This number is usually known as the open short interest. You may also see a short interest ratio, which is the short interest divided by the average daily volume for the stock. The short interest is available on some general stock data sites, such as Yahoo Finance (under Key Statistics) and dailyfinance.com (also on a Key Statistics subpage for the stock). |
How should I value personal use television for donation? | IRS Pub 561 says you have to use fair market value. You cannot simply use a depreciated value. You should attempt to determine what people normally pay for comparable items, and be prepared to defend your determination with evidence in the event of an audit. |
If the co-signer on my car loan dies, can the family take the car from me like they're threatening to? | My family members, particularly my aunt (his daughter), are telling me that when my grandpa dies they are taking my car. Bring this up with Grandpa. If this is what he wants to have happen, then help him make it happen before you finish paying $12,000 on a car worth only $6,000. Let the Aunt and other relatives deal with the remaining $12,000. If that isn't what he wants to have happen, then work out how you and he can legally make sure that what he wants to have happen actually happens. If the Aunt or others bring it up, make sure they understand that you still owe $12,000 on the car, and if they get the car they also get the loan. If they refuse to pay the loan then make sure they know you will cooperate with the bank when they attempt to repossess the car - up to and including providing them with keys and location. This will hurt your credit, and you will be on the hook for the remaining portion of the loan, but you at least won't have to deal with all of it - they'll sell it at auction and your loan amount will fall a little. But the best course of action is to work with Grandpa, and make sure that he understands the family's threats, how that will affect you since you're on the loan, and what options you'd like to pursue. |
How are stock buybacks not considered insider trading? | Companies already have to protect themselves against employees trading the company's shares with insider information. They typically do that in a number of ways: Taken together, this tends to mostly mitigate the risk of employees trading with insider information, though it's probably not perfect. In practice, the company itself's knowledge of insider information is the same as that of its senior management. So it makes sense for a company to be allowed to trade under the same conditions as its senior management. From https://corpgov.law.harvard.edu/2013/03/14/questions-surrounding-share-repurchases/ : If the company is repurchasing outside of a Rule 10b5-1 trading plan, it should limit its purchases to open window periods when officers and directors are able to buy and sell securities of the company. In addition, the company also can choose to disclose any material non-public information prior to any share repurchase if it is in possession of material non-public information at a time when it is seeking to make a share repurchase outside of a Rule 10b5-1 trading plan. As mentioned in the quote, a company can also set up a trading plan in advance (at a time when it doesn't have inside information) to be executed unconditionally in the future. Then even if the company comes into possession of inside information, it won't be using this knowledge to direct trades. |
Definition of “U.S. source” for US non-resident alien capital gains tax | The examples you provide in the question are completely irrelevant. It doesn't matter where the brokerage is or where is the company you own stocks in. For a fairly standard case of an non-resident alien international student living full time in the US - your capital gains are US sourced. Let me quote the following text a couple of paragraphs down the line you quoted on the same page: Gain or loss from the sale or exchange of personal property generally has its source in the United States if the alien has a tax home in the United States. The key factor in determining if an individual is a U.S. resident for purposes of the sourcing of capital gains is whether the alien's "tax home" has shifted to the United States. If an alien does not have a tax home in the United States, then the alien’s U.S. source capital gains would be treated as foreign-source and thus nontaxable. In general, under the "tax home" rules, a person who is away (or who intends to be away) from his tax home for longer than 1 year has shifted tax homes to his new location upon his arrival in that new location. See Chapter 1 of Publication 463, Travel, Entertainment, Gift, and Car Expenses I'll assume you've read this and just want an explanation on what it means. What it means is that if you move to the US for a significant period of time (expected length of 1 year or more), your tax home is assumed to have shifted to the US and the capital gains are sourced to the US from the start of your move. For example: you are a foreign diplomat, and your 4-year assignment started in May. Year-end - you're not US tax resident (diplomats exempt), but you've stayed in the US for more than 183 days, and since your assignment is longer than 1 year - your tax home is now in the US. You'll pay the 30% flat tax. Another example: You're a foreign airline pilot, coming to the US every other day flying the airline aircraft. You end up staying in the US 184 days, but your tax home hasn't shifted, nor you're a US tax resident - you don't pay the flat tax. Keep in mind, that tax treaties may alter the situation since in many cases they also cover the capital gains situation for non-residents. |
What does volume and huge daily price increases say about stock prices? | Stock B could be considered to be more risky because it seems to be more volatile - sharp rises on large volume increases can easily be followed by sharp drops or by further rises in the start of a new uptrend. However, if both A and B are trading on low volume in general, they can both be more on the risky side due to having relatively low liquidity, especially if you buy a large order compared to the average daily volume. But just looking at the criteria you have included in your question is not enough to determine which stock is riskier than the other, and you should look at this criteria in combination with other indicators and information about each stock to obtain a more complete picture. |
How can I get a mortgage I can't afford? | You can ask the buyer to lower the price by the amount you are approved for and negation transferring the amount to him via a escrow.. |
Making higher payments on primary residence mortgage or rental? | I'll assume you live in the US for the start of my answer - Do you maximize your retirement savings at work, at least getting your employer's match in full, if they do this. Do you have any other debt that's at a higher rate? Is your emergency account funded to your satisfaction? If you lost your job and tenant on the same day, how long before you were in trouble? The "pay early" question seems to hit an emotional nerve with most people. While I start with the above and then segue to "would you be happy with a long term 5% return?" there's one major point not to miss - money paid to either mortgage isn't liquid. The idea of owing out no money at all is great, but paying anything less than "paid in full" leaves you still owing that monthly payment. You can send $400K against your $500K mortgage, and still owe $3K per month until paid. And if you lose your job, you may not so easily refinance the remaining $100K to a lower payment so easily. If your goal is to continue with real estate, you don't prepay, you save cash for the next deal. Don't know if that was your intent at some point. Disclosure - my situation - Maxing out retirement accounts was my priority, then saving for college. Over the years, I had multiple refinances, each of which was a no-cost deal. The first refi saved with a lower rate. The second, was in early 2000s when back interest was so low I took a chunk of cash, paid principal down and went to a 20yr from the original 30. The kid starts college, and we target retirement in 6 years. I am paying the mortgage (now 2 years into a 10yr) to be done the month before the kid flies out. If I were younger, I'd be at the start of a new 30 yr at the recent 4.5% bottom. I think that a cost of near 3% after tax, and inflation soon to near/exceed 3% makes borrowing free, and I can invest conservatively in stocks that will have a dividend yield above this. Jane and I discussed the plan, and agree to retire mortgage free. |
Repaying Debt and Saving - Difficult Situation | Like everybody else I'm picking up on the school loans - you're mother isn't exactly earning a massive amount of money given her cost of living, why is she taking out student loans that benefit you and your sister? I'm not trying to be offensive but it's fairly obvious that she can't afford it. As a first step I think you should at least take over paying your own student loans (you sound like you're out of college already and if you have $8k to "lend" to your mother you probably have enough money to pay the student loans that benefited you, after all) or as someone else also recommended, assume your loans. As to your sister, maybe it's time for her to get (another) job to pay for the tuition so her mother doesn't have to go further into debt. Again, I'm not trying to be mean here but your mother is digging herself deeper and deeper into a hole because of the tuition. Something's gotta give, and delivering pizza or getting a paper round is a small sacrifice here. Next, the car - unless she has a managed to work herself out of some of this mess, I would consider getting a much cheaper car instead. This is provided that she isn't upside down on the loan. Personally I wouldn't trade in a vehicle with an upside down loan, if anything that's another bad financial decision. Assuming that she isn't upside down on the loan and has some equity in the car, I would seriously consider selling the car and using the equity to buy something small and cheap. That should also hopefully reduce the cost of gas and maybe insurance somewhat. I think these points are probably the quickest steps that can be taken towards recovering this situation. You already mentioned the longer term plans like downsizing the apartment, but TBH I'm not sure that this is really necessary. The big elephant in the room are the college costs and removing those from the equation would give her a serious amount of breathing room. |
Home insurance score drastically decreases after car insurance claim? | Credit risk and insurance risk are highly correlated for a single legal party. Trouble with one could indicate trouble with another. Any increase in credit risk such as new borrowing will be perceived to be an increased likelihood of insurance risk, manifested as a fraudulent or subconsciously induced claim. Any claim of insurance will be perceived to be an increased likelihood of default, manifested as a default, voluntary or not. To a creditor/insurer, only the law applies; therefore, private arrangements between the borrower/insured and third parties do not factor because the creditor/insurer has no hope of recourse against such third parties in most places around the world. Regardless of whether there is a price ceiling on compensation for damages to assets, limiting an insurers costs, if a risk is realized then it can be presumed through sequential sampling as well as other reliable statistical techniques that future risk has risen. The aforementioned risk dominoes subsequently fall. Generally speaking, the lower one's financial variance, the lower the financial costs. In other words, uncertainty can be mostly quantified with variance and other mathematical moments as well. Any uncertainty is a cost to a producer thus a cost to the consumer. A consumer who is perfectly predictable with good outcomes will pay much lower costs on average than not, so one who keeps a tight financial ship, not exposing oneself to financial risks and better yet not realizing financial risks, will see less financial variance, thus will enjoy lower costs to financing, which includes insuring. |
What does this diagram from Robert Kiyosaki about corporations mean? | It looks like RK is encouraging tax fraud. Suggesting that one have their business cover personal expenses sounds like the advice that got Leona Helmsley in hot water. |
When a fund drops significantly, how can I research what went wrong? [duplicate] | Usually there are annual or semi-annual reports for a mutual fund that may give an idea for when a fund will have "distributions" which can cause the NAV to fall as this is when the fund passes the taxable liabilities to shareholders in the form of a dividend. Alternatively, the prospectus of the fund may also have the data on the recent distribution history that is likely what you want. If you don't understand why a fund would have a distribution, I highly suggest researching the legal structure of an open-end mutual fund where there more than a few rules about how taxes are handled for this case. |
Should I exclude bonds from our retirement investment portfolio if our time horizon is still long enough? | I've had the same thoughts recently and after reading Investing at Level 3 by James Cloonan I believe his thesis that for the passive investor you're giving up too much if you're not 100% in equities. He is clear to point out that you need to be well aware of your withdrawal horizons and has specific tactics for shifting the portfolio when you know you must have the money in the next five years and wouldn't want to pull money out when you're at a market low. The kicker for me was shifting your thought to a plotting a straight line of reasonable expectations on your return. Then you don't worry about how far down you are from your high (or up from your low) but you measure yourself against the expected return and you'll find some real grounding. You're investing for the long term so you're going to see 2-3 bear markets. That isn't the the time to get cold feet and react. Stay put and it will come back. The market gets back to the reasonable expectations very quickly as he confirms in all the bear markets and recessions of any note. He gives guidelines for a passive investing strategy to leverage this mentality and talks about venturing into an active strategy but doesn't go into great depth. So if you're looking to invest more passively this book may be enough to get you rolling with thinking differently than the traditional 70/30 split. |
Shared groceries expenses between roommates to be divided as per specific consumption ratio and attendance | For a personal finance forum, this is too complicated for sustained use and you should find a simpler solution. For a mathematical exercise, you are missing information required to do the split fairly. You have to know who overlaps and when to know how to do the splits. For an extreme example, take your dates given: Considering 100 days of calculation period, If Roommate D was the only person present for the last 10 days, they should pay 100% of the grocery bill as they are the only one eating. From your initial data set, you can't know who should be splitting the tab for any given day. To do this mathematically, you'd need: But don't forget "In Theory, Theory works. In Practice, Practice works." Good theory would say make a large, complicated spreadsheet as described above. Good practice would be to split up the costs in a much, much simpler way. |
Why do the 1 and 2 euro cent coins exist and why are they used? | I guess other than tradition and inflation, probably because the merchants want them. In the US, what currently costs $2.00 used to cost $0.10. So 75 years ago, those individual cents made a pretty bid difference. Inflation causes prices to go up, but doesn't get us to just change our currencies patterns. In your example, you are assuming that in an average day, the rounding errors you are willing to accept happen a couple of times. 2 or 3 cents here and there mean nothing to you. However to the merchant, doing hundreds or thousands of transactions per day, those few cents up and down mean quite a bit in terms of profit. To an individual, looking at a time frame more than a single day (because who only participates in economies for a single day) there are potentially millions of transactions in a lifetime, mean potentially giving away millions of dollars because they didn't want to wait. And as for the comment that people working each 3 cents every 10 seconds, I would assume at least some of the time when they are waiting for rounding errors, they are not at work getting paid. That concept is assuming that somebody is always willing to pay them for their time regardless of where that person is in the world; I have no facts and wild assumptions, but surely that can't be true for even a majority of workers. Finally, you should be happy if you happy to have an income high enough that you don't care about individual cents. But there are those business people who see opportunity in folks like you and profit greatly from it. I personally worry very much about who has my money; gov't gets paid to the penny and I expect returns to the penny. A super polite service employee who smiled a lot serving me a beer is getting all the rounding errors I have. |
Bringing money to UK for investment purposes | Transfers of money to the UK for any purpose are not generally taxed, so you can just transfer it here and invest. Once the money is here, you'll be taxed on the business activity like anyone else - the company will have to pay corporation tax, and depending on your own residency you might have to pay income tax on any distributions from the company. |
What is the tax levied against stock portion cashed out of 401k? | You pay tax on the entire amount, not just the capital gains. When cashing out such a plan you would pay the top marginal tax rate on the full amount plus another 10% in penalties. It is very likely that the additional income, of the balance withdrawal, will increase your top marginal rate. It is impossible to come up with a precise answer as we don't know the following: However, you can take a concept away from this that is important: You will be taxed and penalized on the entire 401K balance, not just the capital gain. In the "best case" scenario, that is you had little or no income in a given year. Under current tax law you would owe about 31% of your 401K balance in taxes. As this is such an inefficient use of money most authors recommend against it except in the case of extreme circumstances. |
How much does it cost to build a subdivision of houses on a large plot of land? | The basic answer is that you are comparing apples and oranges. On the one hand, you are considering a case where someone buys a single already-built house. On the other hand, you are considering a case where someone buys a large piece of land, builds 10 houses, and (presumably) sells or rents the 9 they're not living in. Those are two totally different endeavors. It might be reasonable to compare the cost of a plot of land sized for a single house to the cost of a similar plot with a house already on it. But you can't directly compare the cost of buying 10 houses worth of land to the cost of one house. As other answers have mentioned, building 10 houses involves a massive amount of work: an architect has to design a house, somebody has to get permits to build it, someone may have to get water/power/sewage hookups, somebody has to physically build it -- then multiply all that by 10 for 10 houses. Once you're done, you still haven't recouped your investment. You just have 10 houses. Now you have to sell them, which is a whole other job in itself. Because the things you're comparing are so different, the potential buyers for the two cases are also completely different. This explains the "inconsistency" between the asking price and your perception of its value. The two kinds of properties are in two different markets. The people looking to buy a single home are just regular people looking for a place to live (or maybe trying to get a rental property). The people looking to buy a 10-house plot are real estate developers with a whole different set of concerns. There could be many reasons why the land hasn't been purchased yet, but you can't compare it to the cost of comparable houses, because almost no one who is looking for a house is going to consider buying 2 acres of land instead. It's like asking why filling up your car with gas is so much more expensive per gallon than buying a gas station and giving yourself free gas. They're just not the same thing. But given the size of the land, I can join forces with other people which are also in the market and totally bring down the land price per piece to say 100k? You can do that, but basically what you'll be doing is forming a real estate development company of some sort. This opens a whole other world of possible snafus (for instance, how ownership is to be divided, and what happens if the owners disagree on appropriate development of their portions). It is absolutely possible to make money by buying land and building houses on it, especially in California. People do it all the time. But it's not something you should attempt if you don't know what you're doing, and it's definitely not the same thing as just buying a house to live in. |
What is the proper way to report additional income for taxes (specifically, Android development)? | You would report it as business income on Schedule C. You may be able to take deductions against that income as well (home office, your computer, an android device, any advertising or promotional expenses, etc.) but you'll want to consult an accountant about that. Generally you can only take those kinds of deductions if you use the space or equipment exclusively for business use (not likely if it's just a hobby). The IRS is pretty picky about that stuff. |
How dividend payout happens | You will need to buy a stock before the ex-dividend date to receive the dividends. You can sell a stock on the ex-dividend date or after and you will receive the dividends. So if the ex-dividend date is the 5th August, you need to buy before the 5th and you can sell on the 5th or after, to receive the dividends. Definitions from the ASX: Record date The Record Date is 5.00pm on the date a company closes its share register to determine which shareholders are entitled to receive the current dividend. It is the date where all changes to registration details must be finalised. Ex dividend date The ex dividend date occurs two business days before the company's Record Date. To be entitled to a dividend a shareholder must have purchased the shares before the ex dividend date. If you purchase shares on or after that date, the previous owner of the shares (and not you) is entitled to the dividend. A company's share price may move up as the ex dividend date approaches and then fall after the ex dividend date. |
Large BUY LIMIT orders' effect on a stock's price | If an offered price is below what people are willing to sell for, it is simply ignored. (What happens if I offer to buy lots of cars as long as I only have to pay $2 each? Same thing.) |
New to Stock Trading | Investopedia got some good tutorials on stocks and a good simulator to play around without loosing hard earned money. http://www.investopedia.com/university/stocks/ http://www.investopedia.com/simulator/ |
How can I make a one-time income tax-prepayment to the US Treasury? | You can make estimated tax payments on Form 1040-ES. Most people who make such payments need to do it quarterly because the typical reasons for making estimated payments is something like self-employment income that a person will get throughout the year. If you have a one-time event like a single, large sale of stock, however, there's nothing wrong with doing it just one quarter out of the year. When it comes time to file your taxes, part of the calculate is whether you were timely quarter-by-quarter not just for the entire year, so if you do have a big "one-time" event mid-year, don't wait until the end of the year to file an estimated payment. Of course, if the event is at the end of the year, then you can make it a 4th quarter estimated payment. |
Who puts out buy/sell orders during earnings reports or other scheduled relevant information? | The early bird catches the worm. The first person who makes use of the information gains! That is why hedge funds pay billions of dollars to place their routers right at the center of wall street. Moreover, the information is not always correct. The article you are reading may be a rumor spread by someone on wall street.Then there is speculation and that is factored into the price. For example:- In spite of all the bad news from Greece, the market still continued to rise. This was because, everyone had an idea about what was going to happen and the price was factored in way before Greece actually defaulted. The game is way more complicated than it seems. If everyone sat down and read reports, opportunities to make millions of dollars would have been lost in those few seconds. (Please note:- I do not mean reading reports is bad) |
How to deduct operational loss from my personal income tax? | I'm not an accountant, and you should probably get the advice of one to be sure about what to do. However, if the business is a sole-proprietorship, you'd complete a Schedule C for the business, and you'd end up with a loss at the end. If the investment you made in the business is considered to be entirely or partially "at risk" per the IRS definition, you'd get to claim all or part of the loss as a reduction in your income. If the business was an LLC, then you're beyond my already limited knowledge. There may be some other considerations based on whether this was really a business vs a hobby, and whether or not you're going to try to continue with the business, or whether you've shut it down. I'm not sure about those parts, but they'd be worth exploring with an accountant. |
How can I deposit a check made out to my business into my personal account? | Depending on where you are, you may be able to get away with filing a "Doing Business As" document with your local government, and then having the bank call the county seat to verify this. There is generally a fee for processing/recording/filing the DBA form, of course. But it's useful for more purposes than just this one. (I still need to file a DBA for my hobby work-for-pay, for exactly this reason.) |
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. |
How does stabilization work during an IPO? | There are no "rules" about how the price should act after an IPO, so there are no guarantee that a "pop" would appear at the opening day. But when an IPO is done, it's typically underpriced. On average, the shares are 10% up at the end of the first day after the IPO (I don't have the source that, I just remember that from some finance course). Also, after the IPO, the underwriter can be asked to support the trading of the share for a certain period of time. That is the so called stabilizing agent. They have few obligations like: This price support in often done by a repurchase of some of the shares of poorly performing IPO. EDIT: Informations about the overallotment pool. When the IPO is done, a certain number of client buy the shares issued by the company. The underwriter, with the clients, can decide to create an overallotment pool, where the clients would get a little more shares (hence "overallotment"), but this time the shares are not issued by the company but by the underwriter. To put it another way, the underwriter oversell and becomes short by a certain number of shares (limited to 15% of the IPO). In exchange for the risk taken by this overallotment, the underwriter gets a greenshoe option from the clients, that will allows the underwriter to buy back the oversold shares, at the price of the IPO, from the clients. The idea behind this option is to avoid a market exposure for the underwriter. So, after the IPO: If the price goes down, the underwriter buys back on the market the overshorted shares and makes a profits. If the price goes up, the company exercise the greenshoe option buy the shares at the IPO prices (throught the overallotment pool, that is, the additional shares that the clients wanted ) to avoid suffering a loss. |
Buying a small amount (e.g. $50) of stock via eToro “Social Trading Network” using a “CFD”? | As many people here have pointed out, a CFD is a contract for difference. When you invest in stock at eToro, you buy a CFD reflecting a bid on the price movement of the underlying stock, however, you do not actually own the stock or hold any rights shareholders have. The counterparty to the CFD is eToro. When you close your position, eToro shall pay you the amount representing the difference between your buy and sell price for each stock. I suggest you read the following article about CFDs, it explains everything clearly and thoroughly: http://www.investopedia.com/articles/stocks/09/trade-a-cfd.asp#axzz2G9ZsmX3A As some of the responders have pointed out, and as is mentioned in the article, a broker can potentially misquote the prices of underlying assets in order to manipulate CFDs to their advantage. However, eToro is a highly reputable broker, with over 2 million active accounts, and we guarantee accurate stock quotes. Furthermore, eToro is regulated in Europe (Germany, UK, France, etc.) by institutions that exact strict regulations on the CFD trading sector, and we are obligated to comply with these regulations, which include accurate price quoting. And of course, CFD trading at eToro has tremendous benefits. Unlike a direct stock investment, eToro allows you to invest as much or as little as you like in your favorite stocks, even if the amount is less than the relevant stock price (i.e. fraction stocks). For example: if you invest $10 in Microsoft, and on the day of execution eToro’s average aggregated price was $30 after a spread of 0.1%, you will then have a CFD representing 0.33 stocks of Microsoft in your eToro account. In addition, with eToro you can invest in stock in the context of a social trading network, meaning that you can utilize the stock trading expertise of other trader to your advantage by following them, learning their strategies, and even copying their stock investments automatically. To put it briefly, you won’t be facing the stock market alone! Before you make a decision, I suggest that you try stock trading with an eToro demo account. A free demo account grants you access to all our instruments at real market rates, as well as access to our social network where you can view and participate in trader discussions about trading stocks with eToro, all without risking your hard earned money. Bottom line – it’s free, there are no strings attached, and you can get a much firmer idea of what trading stocks with eToro is like. If you have any further questions, please don’t hesitate to contact us through our site: www.etoro.com. |
How to calculate P/E ratio for S&P500 sectors | To calculate a sector (or index) P/E ratio you need to sum the market caps of the constituent stocks and divide it by the sum of the total earnings of the constituent stocks (including stocks that have negative earnings). There are no "per share" figures used in the calculation. Beware when you include an individual stock that there may be multiple issues associated with the company that are not in the index.... eg. Berkshire Hathaway BRK.B is in the S&P 500 but BRK.A is not. In contrast, Google has both GOOGL and GOOG included in the S&P 500 index but not its unlisted Class B shares. All such shares need to be included in the market cap and figuring out the different share class ratios can be tricky. |
Effect of Quantitative Easing on Price of Bonds | QE is artificial demand for bonds, but as always when there are more buyers than sellers the price of anything goes up. When QE ends the price of bonds will fall because everyone will know that the biggest buyer in the market is no longer there. So price of bonds will fall. And therefore the interest rate on new bonds must increase to match the total return available to buyers in the secondary market. |
What are the differences between an investment mortgage and a personal mortgage? | If you are going to live in the house for awhile, you can probably use a regular mortgage. Shop around and look for a mortgage program that works. Look at local banks/credit unions, particularly those with community development programs. Usually an investment mortgage is higher rate, higher payment and has higher underwriting standards. |
Does the profit of a company directly affect its stock or indirectly by causing people to buy or sell? | The short answer to your question is yes. Company performance affects stock price only through investors' views. But note that selling for higher and lower prices when the company is doing well or poorly is not an arbitrary choice. A stock is a claim on the future cash flows of the firm, which ultimately come from its future profits. If the company is doing well, investors will likely expect that there will large cash flows (dividends) in the future and be willing to pay more to hold it (or require more to sell it). The price of a stock is equal what people think the future dividends are worth. If market participants started behaving irrationally, like not reacting to changes in the expected future cash flows, then arbitrageurs would make a ton of money trading against them until the situation was rectified. |
What does “Yield Curve” mean? | Yield is the term used to describe how much income the bond will generate if the bond was purchased at a particular moment in time. If I pay $100 for a one year, $100 par value bond that pays 5% interest then the bond yields 5% since I will receive $5 from a $100 investment if I held the bond to maturity. If I pay $90 for the same one year bond then the bond yields 17% since I will receive $15 from a $90 investment if I held the bond to maturity. There are many factors that affect what yield creditors will accept: It is the last bullet that ultimately determines yield. The other factors feed into the creditor’s desire to hold money today versus receiving money in the future. I desire money in my hand more than a promise to receive money in the future. In order to entice me to lend my money someone must offer me an incentive. Thus, they must offer me more money in the future in order for me to part with money I have. A yield curve is a snapshot of the yields for different loan durations. The x-axis is the amount of time left on the bond while the y-axis is the yield. The most cited yield curve is the US treasury curve which displays the yields for loans to the US government. The yield curve changes while bonds are being traded thus it is always a snapshot of a particular moment in time. Short term loans typically have less yield than longer term loans since there is less uncertainty about the near future. Yield curves will flatten or slightly invert when creditors desire to keep their money instead of loaning it out. This can occur because of a sudden disruption in the market that causes uncertainty about the future which leads to an increase in the demand for cash on hand. The US government yield curve should be looked at with some reservation however since there is a very large creditor to the US government that has the ability to loan the government an unlimited amount of funds. |
Returning to the UK after working in Switzerland, What to do with my Swiss Francs? | If you "have no immediate plans for the money and will probably not return to Switzerland for a long time or at all" then it might be best just to exchange the money so then you can use/invest it in the UK. Maybe keep a bill or two for memory-sake - I do that whenever I travel to a foreign country. |
What is the equation for an inflation adjusted annuity held in perpetuity? | Let P denote the amount of the investment, R the rate of return and I the rate of inflation. For simplicity, assume that the payment p is made annually right after the return has been earned. Thus, at the end if the year, the investment P has increased to P*(1+R) and p is returned as the annuity payment. If I = 0, the entire return can be paid out as the payment, and thus p = P*R. That is, at the end of the year, when the dust settles after the return P*R has been collected and paid out as the annuity payment, P is again available at the beginning of the next year to earn return at rate R. We have P*(1+R) - p = P If I > 0, then at the end of the year, after the dust settles, we cannot afford to have only P available as the investment for next year. Next year's payment must be p*(1+I) and so we need a larger investment since the rate of return is fixed. How much larger? Well, if the investment at the beginning of next year is P*(1+I), it will earn exactly enough additional money to pay out the increased payment for next year, and have enough left over to help towards future increases in payments. (Note that we are assuming that R > I. If R < I, a perpetuity cannot be created.) Thus, suppose that we choose p such that P*(1+R) - p = P*(1+I) Multiplying this equation by (1+I), we have [P(1+I)]*(1+R) - [p*(1+I)] = P*(1+I)^2 In words, at the start of next year, the investment is P*(1+I) and the return less the increased payout of p*(1+I) leaves an investment of P*(1+I)^2 for the following year. Each year, the payment and the amount to be invested for the following year increase by a factor of (1+I). Solving P*(1+R) - p = P*(1+I) for p, we get p = P*(R-I) as the initial perpetuity payment and the payment increases by a factor (1+I) each year. The initial investment is P and it also increases by a factor of (1+I) each year. In later years, the investment is P*(1+I)^n at the start of the year, the payment is p*(1+I)^n and the amount invested for the next year is P*(1+I)^{n+1}. This is the same result as obtained by the OP but written in terms that I can understand, that is, without the financial jargon about discount rates, gradients, PV, FV and the like. |
Can a company donate to a non-profit to pay for services arranged for before hand? | Donations need to be with no strings attached. In this case, you make the cash donation, a deduction, and then they pay you, in taxable income. It's a wash. Why not just give them the service for free? Otherwise this is just money going back and forth. |
I have a horrible 401k plan, with high expenses. Should I stay with it or move my money elsewhere? | 2%? I would put in just what it takes to share in the profit sharing, not a dime more. My S&P fund cost is .02% (edited, as it dropped to .02 since original post), 1/100 of the cost of most funds you list. Doesn't take too many years of this fee to negate the potential tax savings, and not many more to make this a real loser. |
Short selling - lender's motivation | As the other answer said, the person who owns the lent stock does not benefit directly. They may benefit indirectly in that brokers can use the short lending profits to reduce their fees or in that they have the option to short other stocks at the same terms. Follow-up question: what prevents the broker lending the shares for a very short time (less than a day), pocketing the interest and returning the lenders their shares without much change in share price (because borrowing period was very short). What prevents them from doing that many times a day ? Lack of market. Short selling for short periods of time isn't so common as to allow for "many" times a day. Some day traders may do it occasionally, but I don't know that it would be a reliable business model to supply them. If there are enough people interested in shorting the stock, they will probably want to hold onto it long enough for the anticipated movement to happen. There are transaction costs here. Both fees for trading at all and the extra charges for short sale borrowing and interest. Most stocks do not move down by large enough amounts "many" times a day. Their fluctuations are smaller. If the stock doesn't move enough to cover the transaction fees, then that seller lost money overall. Over time, sellers like that will stop trading, as they will lose all their money. All that said, there are no legal blocks to loaning the stock out many times, just practical ones. If a stock was varying wildly for some bizarre reason, it could happen. |
What prevents interest rates from rising? | There do not appear to be any specific legal measures to prevent bankruptcies. In fact, they seems to be part of the means for which rates are raised, for the consequent aim of lowering inflation. See: The Budgetary Implications of Higher Federal Reserve Board Interest Rates by Dean Baker, Center for Economic and Policy Research. The Federal Reserve Board (Fed) is widely expected to start raising interest rates some time in 2015. The purpose of higher interest rates is to slow the economy and prevent inflation. This is done by reducing the rate of job creation and thereby reducing the ability of workers to achieve wage gains. |
How safe is a checking account? | In the case of bank failures You are protected by FDIC insurance. At the time I wrote this, you are insured up to $250,000. In my lifetime, it has been as high as $1,000,000 and as low as $100,000. I attached a link, which is updated by FDIC. In the case of fraud It depends. If you read this story and are horrified (I was too), you know that the banking system is not as safe as the other answers imply: In February 2005, Joe Lopez, a businessman from Florida, filed a suit against Bank of America after unknown hackers stole $90,000 from his Bank of America account. The money had been transferred to Latvia. An investigation showed that Mr. Lopez’s computer was infected with a malicious program, Backdoor.Coreflood, which records every keystroke and sends this information to malicious users via the Internet. This is how the hackers got hold of Joe Lopez’s user name and password, since Mr. Lopez often used the Internet to manage his Bank of America account. However the court did not rule in favor of the plaintiff, saying that Mr. Lopez had neglected to take basic precautions when managing his bank account on the Internet: a signature for the malicious code that was found on his system had been added to nearly all antivirus product databases back in 2003. Ouch. But let's think about the story for a second - he had his money stolen because of online banking and he didn't have the latest antivirus/antimalware software. How safe is banking if you don't do online banking? In the case of this story, it would have prevented keyloggers, but you're still susceptible to someone stealing your card or account information. So: In the bank's defense, how does a bank not know that someone didn't wire money to a friend (which is a loss for good), then get some of that money back from his friend while also getting money back from the bank, which had to face the loss. Yes, it sucks, but it's not total madness. As for disputing charges, from personal experience it also depends. I don't use cards whatsoever, so I've never had to worry, but both of my parents have experienced banking fraud where a fake charge on their card was not reversed. Neither of my parents are rich and can't afford lawyers, so crying "lawsuit" is not an option for everyone. How often does this occur? I suspect it's rare that banks don't reverse the charges in fraudulent cases, though you will still lose time for filing and possibly filling out paperwork. The way to prevent this: As much as I hate to be the bearer of bad news, there is no absolutely safe place to keep your money. Even if you bought metals and buried them in the ground, a drifter with a metal detector might run across it one day. You can take steps to protect yourself, but there is no absolute guarantee that these will work out. Account Closures I added this today because I saw this question and have only seen/heard about this three times. Provided that you get the cashier's check back safely, you should be okay - but why was this person's account closed and look at how much funds he had! From his question: In the two years I banked with BoA I never had an overdraft or any negative marks on my account so the only thing that would stick out was a check that I deposited for $26k that my mom left me after she passed. Naturally, people aren't going to like some of my answers, especially this, but imagine you're in an immediate need for cash, and you experience this issue. What can you do? Let's say that rent is on the line and it's $25 for every day that you're late. Other steps to protect yourself Some banks allow you to use a keyword or phrase. If you're careful with how you do this and are clever, it will reduce the risk that someone steals your money. |
23 and on my own, what should I be doing? | You are doing Great! But you might want to read a couple of books and do some studying on budgeting and personal finance - education yourself now and you will avoid pain in the future. I learned a lot from reading Dave Ramsey's Total Money Makeover, and I have found some great advice from the simple budgeting guidelines on LearnVest. Budget in these three categories with these percentages, You may find that your "essentials" lower than 50%, because you are sharing room and utilities. You want to put as much into "financial" as you can for the first 1-2 years, to reduce (or eliminate) your student loan debt. Many folks will recommend you save six months (salary/expenses) for emergencies and unexpected situations. But understand that you are in debt now, and you have a unique opportunity to pay off your debt before your living expenses creep up (as they so often do). Since you are a contractor, put aside 2 months expenses (twice what I would normally advise), and then attack paying off your debts with passion. Since you have a mix of student loans, focus on paying them off by picking one at a time, paying the minimum against the others while you pay off the one you picked, then proceed to the next. Dave Ramsey advises a Debt Snowball, paying the smallest one first (psychological advantage, early wins), while others advise paying the highest interest off first. Since you have over $2400/month available to pay down debt, you could plan on reducing your student loan debt substantially in a year. But avoid accumulating other debt along the way. Save for larger purchases. Your bedroom purchase may have been premature, but you needed some basics. But check your contract. Since many 0% furniture loan deals retroactively charge interest if you don't pay them off in full - you might want to make regular payments, and pay the debt off a month early (avoid any 'gotcha's). You might want to open a retirement account - many folks recommend a Roth account for folks your age - it is after tax, but you don't pay tax when you withdraw money. Roth is better when you have lots of deductions (think mortgage, kids). But some retirement account would be great to get started. Open a credit union account (if you can), that will make getting a credit card or personal loan (installment) easier. You want to build a credit file, but you don't want credit card debt (seems contradictory), so opening 2 credit cards over the next year will help your credit. You want a good credit mix (student loans, revolving, installment, and mortgage - wait on that one). |
How to split stock earnings? | Let's suppose your friend gave your $100 and you invested all of it (plus your own money, $500) into one stock. Therefore, the total investment becomes $100 + $500 = $600. After few months, when you want to sell the stock or give back the money to your friend, check the percentage of profit/loss. So, let's assume you get 10% return on total investment of $600. Now, you have two choices. Either you exit the stock entirely, OR you just sell his portion. If you want to exit, sell everything and go home with $600 + 10% of 600 = $660. Out of $660, give you friend his initial capital + 10% of initial capital. Therefore, your friend will get $100 + 10% of $100 = $110. If you choose the later, to sell his portion, then you'll need to work everything opposite. Take his initial capital and add 10% of initial capital to it; which is $100 + 10% of $100 = $110. Sell the stocks that would be worth equivalent to that money and that's it. Similarly, you can apply the same logic if you broke his $100 into parts. Do the maths. |
Can the beta of a stock be used as a lagging indicator for the stock w.r.t the market | Just to be clear to start, beta is a statistical property. So if your beta is 0.8 over a period of time. Stock X moved on average 0.8 for a point move in the index. We might hope this property is persistent and it seems to be fairly persistent (predictable) but it doesn't have to be. Also it is important to note this is not a lag in time. Beta is a measure of the average size of a move in the stock at the same time as a move in the index. In your example both the stock and index are measured at end of day. You can say that the stock "lags" behind the index because it doesn't grow as quickly as the market when the market is growing, but this is not a lag in time just a lag in magnitude. People do occasionally calculate betas between a stock and lagged in time market prices, but this is not the commonly used meaning of beta. This might actually be a more useful measure as then you could bet on the future of the stock given what happened today in the market, but these "betas" tend to be much more unstable than the synchronized version and hard to trade on. When you calculated beta you choose a time scale, in this case daily. So if your calculation is on a day-to-day basis then you have only tested the relationship on a day-to-day basis not, for instance, on a week-to-week basis. Now day-to-day and week-to-week betas are often related and are generally reasonably close but they do not have to be. There can be longer term effects only picked up on the longer scale. Stock X could day-to-day with a (average) beta of 1 to the stock market, but could have even a negative beta year-to-year with the market if the stock is counter-cyclical to longer scale trends on the market. So beta can change with the time scale used in the calculation. |
How to read Google Finance data on dividends | The dividend is for a quarter of the year, three months. 80 cents is 3.9% of $20.51. Presumably the Div/yield changes as the stock price changes. On Yahoo, they specify that the yield is based on a particular stated date. So it's only the exact number if the stock trades at the price on that date. |
Comprehensive tutorial on double-entry personal finance? | I found this book to be pretty decent: It is a workbook, and full of little exercises. |
Query regarding international transaction between governments | $USD, electronic or otherwise, are not created/destroyed during international transactions. If India wants to buy an F-16s, at cost $34M USD, they'll have to actually acquire $34M USD, or else convince the seller to agree to a different currency. They would acquire that $34M USD in a few possible ways. One of which is to exchange INR (India Rupees) at whatever the current exchange rate is, to whomever will agree to the opposite - i.e., someone who has USD and wants INR, or at least is willing to be the middleman. Another would be to sell some goods or services in the US (for USD), or to someone else for USD. Indian companies undoubtedly do this all the time. Think of all of those H1B workers that are in the news right now; they're all earning USD and then converting those to INRs. So the Indian government can just buy their USD for INR, directly or more likely indirectly (through a currency exchange market). A third method would be to use some of their currency stores. Most countries have significant reserves of various foreign currencies on hand, for two reasons: one to simplify transactions like this one, and also to stabilize the value of their own currency. A less stable currency can be stabilized simply by the central bank of that country owning USD, EUR, Pounds Sterling, or similar stable-value currencies. The process for an individual would be essentially the same, though the third method would be less likely available (most individuals don't have millions in cash on hand from different currencies - although certainly some would). No government gets involved (except for taxes or whatnot), it's just a matter of buying USD in exchange for INRs or for goods or services. |
Why is it rational to pay out a dividend? | Actually, share holder value is is better maximised by borrowing, and paying dividends is fairly irrelevant but a natural phase on a mature and stable company. Company finance is generally a balance between borrowing, and money raised from shares. It should be self evident with a little thought that if not now, then in the future, a company should be able to create earnings in excess of the cost of borrowing, or it's not a very valuable company to invest in! In fact what's the point of borrowing if the cost of the interest is greater than whatever wealth is being generated? The important thing about this is that money raised from shares is more expensive than borrowing. If a company doesn't pay dividends, and its share price goes up because of the increasing value of the business, and in your example the company is not borrowing more because of this, then the proportion of the value of the company that is based on the borrowing goes down. So, this means a higher and higher proportion of the finance of a company is provided by the more expensive share holders than the less expensive borrowing, and thus the company is actually providing LESS value to share holders than it might. Of course, if a company doesn't pay a dividend AND borrows more, this is not true, but that's not the scenario in your question, and generally mature companies with mature earnings may as well pay dividends as they aren't on a massive expansion drive in the same way. Now, this relative expense of share holders and borrowing is MORE true for a mature company with stable earnings, as they are less of a risk and can borrow at more favourable rates, AND such a company is LIKELY to be expanding less rapidly than a small new innovative company, so for both these reasons returning money to share holders and borrowing (or maintaining existing lending facilities) maintains a relatively more efficient financing ratio. Of course all this means that in theory, a company should be more efficient if it has no share holders at all and borrows ALL of the money it needs. Yes. In practise though, lenders aren't so keen on that scenario, they would rather have shareholders sharing the risk, and lending a less than 100% proportion of the total of a companies finance means they are much more likely to get their money back if things go horribly wrong. To take a small start up company by comparison, lenders will be leary of lending at all, and will certainly impose high rates if they do, or ask for guarantors, or demand security (and security is only available if there is other investment besides the loan). So this is why a small start up is likely to be much more heavily or exclusively funded by share holders. Also the start up is likely not to pay a dividend, because for a start it's probably not making any profit, but even if it is and could pay a dividend, in this situation borrowing is unavailable or very expensive and this is a rapidly growing business that wants to keep its hands on all the cash it can to accelerate itself. Once it starts making money of course a start up is on its way to making the transition, it becomes able to borrow money at sensible rates, it becomes bigger and more valuable on the back of the borrowing. Another important point is that dividend income is more stable, at least for the mature companies with stable earnings of your scenario, and investors like stability. If all the income from a portfolio has to be generated by sales, what happens when there is a market crash? Suddenly the investor has to pay, where as with dividends, the company pays, at least for a while. If a company's earnings are hit by market conditions of course it's likely the dividend will eventually be cut, but short term volatility should be largely eliminated. |
What emergencies could justify a highly liquid emergency fund? | Emergency funds are defined in terms of months of tightened-belt living -- that's according to the usual gurus such as Suze Orman, Dave Ramsey etc. They aren't for short-term emergencies like a blown transmission. Use other money for those. Why? People with bad financial habits have short-term emergencies all the time, and that emergency fund doesn't have a chance of lasting. This is just their financial habits manifesting. Here's what an emergency fund is for. Scenario: big economic bubble bursts. Stock market drops 50%. Credit dries up. This happened in 2007 by the way. The dominoes start falling boom, boom, boom: I'm exaggerating a bit here, but a lot of people lived at least half this stuff in 2007-11. Nothing starts those dominoes falling like lack of cash at a key moment. That's what an emergency fund is all about - keeping things tight-normal for long enough to get back on your feet. If you want to keep your emergency fund in something risky -- keep a lot more of it! |
Can a non dividend-paying product (say ETF) suddenly start paying dividends? | Yes, absolutely. Consider Microsoft, Updated Jan. 17, 2003 11:59 p.m. ET Software giant Microsoft Corp., finally bowing to mounting pressure to return some of its huge cash hoard to investors, said it will begin paying a regular annual dividend to shareholders. From Wall Street Journal. Thus, for the years prior to 2003, the company didn't pay dividends but changed that. There can also be some special one-time dividends as Microsoft did the following year according to the Wall Street Journal: The $32 billion one-time dividend payment, which comes to $3 for each share of Microsoft stock, could be a measurable stimulus to the U.S. economy -- and is expected to arrive just in time for holiday shopping. Course companies can also reduce to stop dividends as well. |
When shorting a stock, do you pay current market price or the best (lowest) available ask price? | In terms of pricing the asset, this functions in exactly the same way as a regular sell, so bids will have to be hit to fill the trade. When shorting an equity, currency is not borrowed; the equity is, so the value of per share liability is equal to it's last traded price or the ask if the equity is illiquid. Thus when opening a short position, the asks offer nothing to the process except competition for your order getting filled. Part of managing the trade is the interest rate risk. If the asks are as illiquid as detailed in the question, it may be difficult even to locate the shares for borrowing. As a general rule, only illiquid equities or those in free fall may be temporarily unable for shorting. Interactive Brokers posts their securities financing availabilities and could be used as a proxy guide for your broker. |
Identifying “Dividend Stocks” | How do you find good quality dividend stocks? That is an easy one. Past performance has always been my key to this answer. also remember why you are investing in the first place. Do you want cash flow, security or capital growth. Also let's not forget... how much time do you want to devote to this venture. There is going to be a balance in your investing and your returns. More time in... the higher returns you get. As for finding good dividend stocks, look to the Dividend Aristocrats or the Dividend Contenders. These companies have consistently increased their payouts to their investors for years. There is a trading strategy that could escalate your returns. Dividend Capturing, simply put... You buy the stock before the ex-date and sell after date of record. Thus collecting a dividend and moving on to the next one. Warning: though this is a profitable strategy, it only works with certain stocks so do your research or find a good source. |
What does “no adjustments” mean? | Typically that applies if the broker Form 1099-B reports an incorrect basis to the IRS. If the Form 1099-B shows incorrect basis relative to your records, then you can use 8949, column (g) to report the correct basis. The 8949 Instructions provide a brief example. http://www.irs.gov/pub/irs-prior/i8949--2013.pdf Although you have an obligation to report all income, and hence to report the true basis, as a practical matter this information will usually be correct as presented by the broker. If you have separate information or reports relating to your investments, and you are so inclined, then you can double-check the basis information in your 1099-B. If you aren't aware of basis discrepancies, then the adjustments probably don't apply to you and your investments can stick to Schedule D. |
What's a good free checking account? | Capital One 360. No minimums balance, no fees. Everything's online. Make deposits using an app or an image of the check. ATMs are free almost everywhere. |
Online tools for monitoring my portfolio gains/losses in real time? | This functionality is widely available, not only on brokerage sites, but also financial management and even financial information sites. For instance, two of the latter are Google Finance and Yahoo Finance. If you are logged in, they let you create "portfolios" listing your stocks and, optionally, the size of your holdings in that stock (which you don't need if you are just "watching" a stock). Then you can visit the site at any time and see the current valuations. |
What does “netting” mean in this passage? | netting means to combine cash inflows and outflows (e.g. debits/credits, payments/receipts, income/expense) by subtracting the sum of all outflows from the sum of all inflows, creating one transaction. For example, if you make two trades in one day with your broker - one to buy a security for $100 and one to sell it for $110 - rather then you sending your broker $100 and them sending you $110, the transactions are "netted" - meaning they will send you the "net" amount of $10 ($110 inflow - $100 outflow). In a more general sense ("netting of instructions") it would mean to combine all instructions and only apply the "net" effect - e.g. one step forward, two steps back would combine to a "net" one step back. Most likely it will apply to the exchange of money, but it could be applied more broadly. Note that there doesn't have to be both inflows and outflows. You can also "net" multiple inflows (or outflows) into one transaction by just adding them all up, but typical business usage is to reduce the number of transactions by combining inflows and outflows. |
How can a 529 plan help me save for my child's college education? | If you're ready to start a 529 account, it makes a big difference which state you choose (some states have excessive fees). It doesn't have to be your own state, but some states give you tax incentives to stay in-state. What you need to do is check out Clark Howard's 529 Guide and check to see if your state is in the "good" list. If not, then pick out a good state. |
Margin Calculations Question | The setup is a purchase of 200 shares at $40 with a cash deposit of $4000 and margin loan of $4000 which a year later grew to $4240. With a margin requirement of 30%, the loan can be 70% or a total stock value of $6057. 1) $30.29 2) -24.3% (The stock fell to $30.29 from $40) 3) -54.6% (Your $4000 fell to $1817) |
How to get started with savings, paying off debt, and retirement? | Communicate. I would recommend taking a course together on effective communications, and I would also suggest taking a course on budgeting and family financial planning. You need to be able to effectively communicate your financial plans and goals, your financial actions, and learn to both be honest and open with your partner. You also need to be certain that you come to an agreement. The first step is to draft a budget that you both agree to follow. The following is a rough outline that you could use to begin. There are online budgeting tools, and a spreadsheet where you can track planned versus actuals may better inform your decisions. Depending upon your agreed priorities, you may adjust the following percentages, Essentials (<50% of net income) Financial (>20%) Lifestyle (<30%) - this is your discretionary income, where you spend on the things you want Certain expense categories are large and deserve special advice. Try to limit your housing costs to 25% of your income, unless you live in a high-cost/rent area (where you might budget as high as 35%). Limit your expenses for vehicles below 10% of income. And expensive vehicle might be budgeted (partly) from Lifestyle. Limiting your auto payment to 5% of your income may be a wise choice (when possible). Some families spend $200-300/month on cable TV, and $200-300/month on cellphones. These are Lifestyle decisions, and those on constrained budgets might examine the value from those expenses against the benefit. Dining out can be a budget buster, and those on constrained budgets might consider paying less for convenience, and preparing more meals at home. An average family might spend 8-10% of their income on food. Once you have a budget, you want to handle the following steps, Many of the steps are choices based upon your specific priorities. |
Do Fundamentals Matter Anymore in Stock Markets? | All you have to do is ask Warren Buffet that question and you'll have your answer! (grin) He is the very definition of someone who relies on the fundamentals as a major part of his investment decisions. Investors who rely on analysis of fundamentals tend to be more long-term strategic planners than most other investors, who seem more focused on momentum-based thinking. There are some industries which have historically low P/E ratios, such as utilities, but I don't think that implies poor growth prospects. How often does a utility go out of business? I think oftentimes if you really look into the numbers, there are companies reporting higher earnings and earnings growth, but is that top-line growth, or is it the result of cost-cutting and other measures which artificially imply a healthy and growing company? A healthy company is one which shows year-over-year organic growth in revenues and earnings from sales, not one which has to continually make new acquisitions or use accounting tricks to dress up the bottom line. Is it possible to do well by investing in companies with solid fundamentals? Absolutely. You may not realize the same rate of short-term returns as others who use momentum-based trading strategies, but over the long haul I'm willing to bet you'll see a better overall average return than they do. |
What is the best way to invest in gold as a hedge against inflation without having to hold physical gold? | Investing in gold without having physical gold is not really a hedge against inflation. GLD is really more for speculation, not protection against serious inflation. If there is any kind of inflation worth really protecting yourself against then one thing you will notice at its onset is a divergence in the price of physical and GLD; with GLD offering very little protection if any against inflation. Ultimately holders of GLD will demand physical metal and the physical price will rise and the paper price will fall. I would advise you to study physical gold before you purchase GLD for that reason. EDIT: Just adding this to my answer - I don't know why I didn't put it in before, and I hasten to add that I'm not an expert though a little investigation will show you that this is at least one option for owning gold. If you think of having the physical gold yourself at one end of the spectrum and buying GLD at the other; so that you don't need to take physical delivery, there is another scenario which I understand is in between (and sorry I don't actually know what it's referred to as) but it's where you buy the physical gold but instead of taking delivery the bars are stored for you in a vault - these bars are numbered and you actually own what you have paid for and theoretically you could go and visit your gold and actually remove it because it's your gold - as opposed to having paper GLD which in my understanding is a "right to take physical delivery" of gold - and this is slightly different - of course unlike GLD you actually have to pay a storage fee and of course unlike having the physical gold buried in your garden or something you are not entirely secure against say a robbery of the vault, and you are also depending on the company not to sell the same bar to more than one person - but that's the only think that their reputation is built on, and a company like that would live or die by the reputation - ( and of course you might lose the proverbial gold buried in the garden either, so nothing's 100% secure anyway really ) |
Self Employed, but not required to pay estimated taxes? | The annualized method allows you to take a look at each quarter independently and pay the tax in the quarter that you earned it. -- According to Linda Durand, a certified public accountant with Drolet & Associates PLLC in Washington, D.C., from the Bankrate article "Paying quarterly estimated taxes" And after paying annualized quarterly estimates, you can still owe up to $1000 at tax time without penalty. |
How to convince someone they're too risk averse or conservative with investments? | Let the man be. If you've tried again and again to convince him, and haven't, maybe he doesn't want to be convinced. It's his money, and he has every right to manage it as he sees fit. You can advise him, but its his call whether he accepts your advice or not, and for what reasons. And suppose you push and push and it gets through? Now either he has more money than he would otherwise, and he's happy he has such a smart friend. Or he loses 30% of his money, and you're trying to tell him that he's going to earn it back in due time, but you can't, because he's not talking to you. Ever. What do you think is the mean benefit to your friendship? |
Why should I trust investment banks' ratings? | Investment banks will put out various reports and collect revenues from that along with their banking activity. I don't read them or care to read them myself. If banks can make money from something, they will likely do it, especially if it is legal. To take the Tesla stock question for a moment: Aren't you ruling out that yesterday was the day that Tesla was included in the Nasdaq 100 and thus there may be some people today exiting because they tried to cash in on the index funds having to buy the stock and bid it up in a sense? Or as @littleadv points out there could be those tracking the stocks not in the index that would have been forced to sell for another idea here. The Goldman note is a possible explanation but there could well be more factors in play here such as automated trading systems that seek to take advantage of what could be perceived as arbitrage opportunities. There can be quick judgments made on things which may or may not be true in the end. After all, who knows exactly what is causing the sell-off. Is it a bunch of stop orders being triggered? Is it people actually putting in sell order manually? Is it something else? There are lots of questions here where I'm not sure how well one can assign responsibility here. |
Debit cards as bad as credit cards? | How about just stop buying stuff? |
What do people mean when they talk about the central bank providing “cheap money”? What are the implications for the stock market? | Companies with existing borrowings (where borrowings are on variable interest rates) or in the case with fixed interest rates - companies that get new borrowings - would pay less interest on these borrowings, so their cost will go down and profits up, making them more attractive to investors. So, in general lower interest rates will make the share market a more attractive investment (than some alternatives) as investors are willing to take on more risk for potentially higher returns. This will usually result in the stock market rising as it is currently in the US. EDIT: The case for rising interest rates A central bank's purpose when raising interest rates is to slow down an economy that is booming. As interest rates rise consumers will tighten up their spending and companies will thus have less revenue on top of higher costs for maintaining existing borrowing (with variable rates) or new borrowing (with fixed rates). If rates are higher companies may also defer new borrowings to expand their business. This will eventually lead to lower profits and lower valuation for these companies. Another thing that happens is that as banks start increasing interest for saving accounts investors will look for safety where they can get a higher return (than before) without the risk of the stock market. With lowering profits and valuations, and investor's money flowing out of shares and into the money market, so will company share prices drop (although this may lag a bit with the share market still booming due to greed. But once the boom stops watchout for the crash). |
How does the value of an asset (valued in two different currencies) change when the exchange rate changes? | Gold is traded on the London stock exchange (LSE) and the New York stock exchange (NYSE) under various separate asset tickers, mainly denominated in sterling and US dollars respectively. These stocks will reflect FX changes very quickly. If you sold LSE gold and foreign exchanged your sterling to dollars to buy NYSE gold you would almost certainly lose on the spreads upon selling, FX'ing and re-buying. In short, the same asset doesn't exist in multiple currencies. It may have the same International Securities Identification Number (ISIN), but it can trade with different Stock Exchange Daily Official List (SEDOL) identifiers, reflecting different currencies and/or exchanges, each carrying a different price at any one time. |
Simultaneous long/short India | I know its not legal to have open long and short position on specific security (on two stock exchanges - NSE/BSE) There is nothing illegal about it. There are prescribed ways on how this is addressed. In Cash Segment / Intra Day trades: One can short sell a security. If by end of day he does not buy the security; it goes into Auction. The said security is purchased on your behalf. Any profit or loss arising out of this is charged to you. Similarly one can buy a security; if one does not pay the amount by end of day; it would go into auction and sold. Any profit or loss arising out of this is charged to you. If you short sell a security on one exchange; you have to buy it on same exchange. If you buy on other exchange; it will not be adjusted against this short position. Also is it legal to have long position on stock and short its derivative (future/option)? There are no restrictions. Edit: @yety Party A shorts 10 shares of HDFC today in Intra-Day Cash Segment purchased by Party B. Rather than buying back 10 shares or allowing it to go into auction... Party A borrows 10 HDFC Shares from "X" via SLB for a period of say 6 months [1 month to 1 year]. This is recorded as Party A obligation to "X". These 10 borrowed shares are transferred to Party B. So Party "X" doesn't have any HDFC shares at this point in time. However in exchange, Party X receives fees for borrowing from Party A. If there is dividend, are declared, Company pays Party B. However SLB recovers identical amount from Party A and pays Party X. If there is 1:1 split, now party A owes Party X 20 HDFC Shares. On maturity [after 6 months], Party A has to buy these from market and given back the borrowed shares to Party X. If there are some other corporate actions, i.e. mergers / amalgamations ... the obligation of Party A to Party X is closed immediately and position settled. Of course there are provisions whereby party A can pay back the shares earlier or party X can ask for shares earlier and there are rules/trades/mechanisms to facilitate this. |
Malaysian real estate: How to know if the market is overheated or in a bubble? | The Motley Fool suggested a good rule of thumb in one of their articles that may be able to help you determine if the market is overheating. Determine the entire cost of rent for a piece of property. So if rent is $300/month, total cost over a year is $3600. Compare that to the cost of buying a similar piece of property by dividing the property price by the rent per year. So if a similar property is $90,000, the ratio would be $90,000/$3600 = 25. If the ratio is < 20, you should consider buying a place. If its > 20, there's a good chance that the market is overheated. This method is clearly not foolproof, but it helps quantify the irrationality of some individuals who think that buying a place is always better than renting. P.S. if anyone can find this article for me I'd greatly appreciate it, I've tried to use my google-fu with googling terms with site:fool.com but haven't found the article I remember. |
File Taxes: US Expat, now married to foreign national | When I was in this situation, I always did Married Filing Separately. In the space for spouse you just write "non resident alien". I'm assuming you don't make more than the Foreign Earned Income exclusion (about $100k), so the fact that you don't qualify for certain exemptions is probably irrelevant for you. As a side note, now that you are married you have "a financial interest in" all her bank accounts so if her and your foreign bank accounts had an aggregate value of over $10k at any point in 2015 you have until June 30th to file an FBAR, listing both her and your accounts. If you have a decent amount of assets you might need to fill out form 8938 with your tax return too. Here is a link with the reporting thresholds. https://www.irs.gov/Businesses/Corporations/Summary-of-FATCA-Reporting-for-U.S.-Taxpayers |
What is the Difference between Life Insurance and ULIP? | I would refer you to this question and answers. Here in the US we have two basic types of life insurance: term and whole life. Universal life is a marketing response to whole life being such a bad deal, and is whole life just not quite as bad. I am not familiar with the products in India, but given the acronym (ULIP), it is probably universal life, and as you describe is variable universal life. Likely Description "Under the hood", or in effect, you are purchasing a term life policy and investing excess premiums in a collection of stock mutual funds. This is a bad deal for a few reasons: A much better option is to buy "level term insurance" and invest on your own. You won't necessarily lose money, but you can make better financial decisions. It is good to invest, it is good to have life. A better decision would not to combine the two into a single product. |
Financial implications of purchasing a first home? | Congrats! Make sure you nail down NOW what happens to the house should you eventually separate. I know lots of unmarried couples who have stayed together for decades and look likely to do so for life; I've also seen some marriages break up that I wouldn't have expected to. Better to have this discussion NOW. Beyond that: Main immediate implications are that you have new costs (taxes, utilities, maintenance) and new tax issues (mortgage interest and property tax deductability) and you're going to have to figure out how to allocate those between you (if there is a between; not sure whether unmarried couples can file jointly these days). |
First 401K portfolio with high expense ratios - which funds to pick? (24yo) | If it was me, I would withdraw money from savings and be debt free today. I would then pour the $500 into building back your savings. Then of course, never again carry a balance on your CC. At your age MSFRX is a losing game. You can handle the volatility of better performing funds, I would have zero in there. If it was me, I would do something totally different then you are doing: Keep in mind you are doing very good as is. The best way to win with money is to make good moves overtime, and given your debt level, savings, and willingness to contribute to a 401K your moves are pretty darn good. Keep in mind you will probably want to start saving a down payment for a house. This should be done outside of your 401K. Overall good work! |
How are shares used, and what are they, physically? | If you are particularly interested in the share certificate artifacts themselves, there is a collection hobby in paper share certificates and bonds, called scripophily. This can include both active share certificates (for instance, think about giving your kid or grandkid a frameable paper share of Hasbro, Disney or McDonalds?), inactive certificates from famous bankruptcies or famous companies of the past, or just the visual interest in scrollwork and engraved vignettes. |
How to get started with savings, paying off debt, and retirement? | I agree with the other answers here. You need to pay off your debts first, so that you can take the money you would have been spending on debt payments and make retirement contributions instead. The longer they hang around, the more you pay in interest and the more they are a risk to you. Imagine if you or your spouse were laid off, which is better scenario: having to pay for your necessities plus debts or your necessities alone? Just focus on one goal at a time, and you will do well. And the best way for you and your new spouse is to have the same financial goals and a huge part of that agreeing on a budget each month and being flexible. Don't use it to control your spouse, you each have a vote. I have not used Vangaurd, but have heard good things about them. I would do some research before investing with them or anyone else for that matter. What you want to find when it comes to investing is someone with the heart of a teacher, not a product peddler. If you have someone who is pushing financial products, without explaining (A) how they work, and (B) how they fit your situation, then RUN AWAY and find someone else who will do those two things. |
Safe method of paying for a Gym Membership? | Shady isn't quite the right word. They know that most of their customers are going to quit soon after they begin -- as in "before the end of January" -- so they lock you in while you're motivated. And of course they're going to make it difficult for you to quit. No choice but to read their contract, understand it completely, follow their rules, and meet their deadlines. There's lots of freedom for them and lots of restrictions for you. It's like this if you're not the one writing up the contract. However ... do you have a YMCA around? Our YMCA has an initiation fee, but beyond that it's month to month. Most flexible gym membership I've heard of. If you lapse for too long they'll make you pay another initiation fee to rejoin, but there's no penalty for canceling. Not all Y's are like that, but check around to see. |
Turning 30 and making the right decision with my savings and purchasing home | I love the idea of #1, keep that going. I don't think #2 is very realistic. Given the short time frame putting money at risk for a higher yield may not work in your favor. If it was me, I'd stick to a "high interest" savings account (around 1%). I don't mind #3 either, however, I'd be socking whatever you could to mortgage principle so you can get out of PMI sooner rather than later. That would be my top priority. Given the status of interest rates, you may end up saving money in the long run. I doubt it, but you may. If you choose to go with #3, don't settle for a house that you really don't like. Get something that you want. Who knows it may take you a year or so to find something! |
How can I save on closing costs when buying a home? | As a buyer, one of the easiest ways to save on closing costs is to avoid title insurance. This will only apply if you are a cash buyer, as a mortgage writer will typically require title insurance. It is also one of the most ill-advised ways to save money. You need title insurance. For the most part, there is really no way to truly save on closing costs. Wrapping costs into a loan, saving on interest or taxes through timing don't truly save money. Sometimes you can obtain discounts on closing by using an targeted lender, but that may cost you in higher interest rates. By paying points on your loan, you may increase your costs at closing in order to save money on interest paid. Certainly you can't discount required, government imposed fees (like doc stamps). You may be able to shop around and find a bit lower fees for appraisal, credit reports, title company fees, and title insurance. However, that is a lot of work for not a lot of return. Title companies seem to be pretty tight lipped about their fees. The best yield of your time is to get the other party in the transaction to pay your costs. The market or local tradition may not allow this. An additional way to lower your costs is to ask the realtors involved to discount their commissions. However, they could always say "no". The bottom line is transacting real estate is very expensive. |
I'm thinking about selling some original artwork: when does the government start caring about sales tax and income tax and such? | First - get a professional tax consultation with a NY-licensed CPA or EA. At what point do I need to worry about collecting sales taxes for the city and state of New York? Generally, from the beginning. See here for more information on NYS sales tax. At what point do I need to worry about record-keeping to report the income on my own taxes? From the beginning. Even before that, since you need the records to calculate the costs of production and expenses. I suggest starting recording everything, as soon as possible. What sort of business structures should I research if I want to formalize this as less of a hobby and more of a business? You don't have to have a business structure, you can do it as a sole proprietor. If you're doing it for-profit - I suggest treating it as a business, and reporting it on your taxes as a business (Schedule C), so that you could deduct the initial losses. But the tax authorities don't like business that keep losing money, so if you're not expecting any profit in the next 3-4 years - keep it reported as a hobby (Misc income). Talk to a licensed tax professional about the differences in tax treatment and reporting. You will still be taxed on your income, and will still be liable for sales tax, whether you treat it as a hobby or as a business. Official business (for-profit activity) will require additional licenses and fees, hobby (not-for-profit activity) might not. Check with the local authorities (city/county/State). |
Trader Fostering Program on Futures Day Trading | a) Contracts are for future delivery of said underlying. So if you are trading CL (crude oil) futures and don't sell before delivery date, you will be contacted about where you want the oil to be delivered (a warehouse presumably). 1 contract is the equivalent of 1000 barrels. b) 600 contracts depends entirely on what you are trading and how you are trading. If you are trading ES (S&P 500 e-Mini), you can do the 600 contracts in less than a second. c) No fees does not make particular sense. It's entirely possible that you are not trading anything, it's just a fake platform so they can judge your performance. d) The catch typically is that when it's time to pay you, they will avoid you or worst case, disappear. e) Trading is a full-time job, especially for the first 4-5 years when you're only learning the basics. Remember, in futures trading you are trading against all the other professionals who do only this 24/7 for decades. If you are only risking your time with the reward being learning and possibly money, it seems like a good deal. There's typically a catch with these things - like you would have to pay for your data which is very expensive or withdrawing funds is possible only months later. |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.