Question
stringlengths 14
166
| Answer
stringlengths 3
13.1k
|
|---|---|
60% Downpayment on house?
|
Strictly by the numbers, putting more than 20% down is a losing proposition. With interest rates still near all time lows, you're likely able to get a mortgage for less than 4%. The real rate of a return on the market (subtracting inflation and taxes) is going to be somewhere around 5-6%. So by this math, you'd be best off paying the minimum to get out of PMI, and then investing the remainder in a low fee index fund. The question becomes how much that 1-2% is worth to you vs how much the job flexibility is worth. It boils down to your personal risk preference, life conditions, etc. so it is difficult to give good advice. The 1-2% difference in your rate of return is not going to be catastrophic. Personally, I would run the numbers with your fiance. Build a spreadsheet tracking your estimated net worth under the assumption that you make a 20% down payment and invest the rest. Then hold all other factors equal, and re-build the spreadsheet with the higher down payment. Factor in one of you losing your job for a few years, or one of you taking off for a while to raise the kids. You can make a judgement call based how the two of you feel about those numbers.
|
Beginner questions about stock market
|
If I bought 1 percent share of company X, Most countries company X, is treated as a separate legal entity than individual. So max loss is what you have invested. However certain types of companies, generally called partnerships are not separate entities and you have to pay back the said loss. However such companies are not traded on stock exchanges. Is there an age requirements to enter the stock market? Depends on country. Generally a minor can hold an account with a guardian.
|
Does this sound like a great idea regarding being a landlord and starting a real estate empire?
|
A lot of people do this. For example, in my area nice townhouses go for about $400K, so if you have $80,000 you can buy one and rent it. Here are the typical numbers: So you would make $350 per month or $4,200 per year on $80,000 in capital or about 5% profit. What can go wrong: (1) The property does not rent and sits vacant. You must come up with $2100 in mortgage payments, taxes, and insurance every month without fail or default. (2) Unexpected expenses. A new furnaces costs over $5,000. A new roof costs $7,000. A new appliance costs $600 to $2000 depending on how upscale your property is. I just had a toilet fixed for a leaky plunger. It cost me $200. As you can see maintenance expenses can quickly get a lot higher than the $50 shown above... and not only that, if you fix things as cheaply as possible (as most landlords do), not only does that decrease the rentability of the property, but it causes stuff to break sooner. (3) Deadbeats. Some people will rent your property and then not pay you. Now you have a property with no income, you are spending $2100 per month to pay for it, AND you are facing steep attorney fees to get the deadbeats evicted. They can fight you in court for months. (4) Damage, wear and tear. Whenever a tenant turns over there is always a lot of broken or worn stuff that has to be fixed. Holes in the wall need to be patched. Busted locks, broken windows, non-working toilets, stains on the carpet, stuck doors, ripped screens, leaky showers, broken tiles, painting exterior trim, painting walls, painting fences, etc. You can spend thousands every time a tenant changes. Other caveats: Banks are much more strict about loaning to non home owners. You usually have to have reserve income. So, if you have little or no income, or you are stretched already, it will be difficult to get commercial loans. For example, lets say your take-home pay is $7,000 and you have no mortgage at all (you rent), then it is fine, the bank will loan you the money. But lets say you only have $5,000 in take home pay and you have an $1,800 mortgage on your own home. In that case it is very unlikely a bank will allow you to assume a 2nd mortgage on a rental property. The more you try to borrow, the more reserve income the bank will require. This tends to set a limit on how much you can leverage.
|
How does my broker (optionsXpress) calculate probabilities that the stock will hit a certain price?
|
Their algorithm may be different (and proprietary), but how I would to it is to assume that daily changes in the stock are distributed normally (meaning the probability distribution is a "bell curve" - the green area in your chart). I would then calculate the average and standard deviation (volatility) of historical returns to determine the center and width of the bell curve (calibrating it to expected returns and implied volaility based on option prices), then use standard formulas for lognormal distributions to calculate the probability of the price exceeding the strike price. So there are many assumptions involved, and in the end it's just a probability, so there's no way to know if it's right or wrong - either the stock will cross the strike or it won't.
|
How can I buy and sell the same stock on the same day?
|
You should not have to wait 3 days to sell the stock after purchase. If you are trading with a cash account you will have to wait for the sale to settle (3 business days) before you can use those funds to purchase other stock. If you meet the definition of a pattern day trader which is 4 or more day trades in 5 business days then your brokerage will require you to have a minimum of $25,000 in funds and a margin account.
|
Is it okay to be married, 30 years old and have no retirement?
|
You aren't in trouble yet, but you are certainly on a trajectory to be later. The longer you wait the more painful it will be because you won't have the benefit of time for your money to grow. You may think you will have more disposable income at some point later when things are paid off, but trust me you wont. When college tuition kicks in for that kid, you are going to LAUGH at those student loan amounts as paltry. The wording of your question was confusing because you say in one place that you have no savings, but in another you claim to be putting away around $5k/year. The important point is how much you have saved at this point and how much you are putting in going forward. Some rules of thumb from Fidelity: (Based on your scenario) Take a look at your retirement account. Are you on track for that? It doesn't sound like it. Can you get away with your current plan? Sure, lots of people do, but unless you die young, hit the jackpot in the stock market or lottery, you are probably going to have to live WELL below your current standard of living to make that happen.
|
What are stock indexed funds and how do they lower taxes?
|
who computes the S&P 500? Standard and Poor's. Why are they sharing this information and Because that's what they do. This is a financial research company. how do they recuperate the costs inherent in computing the S&P 500? By charging clients for other information. The computing of the index itself is not all that complicated, its coming up with the index that's a problem. Once they've come up with the formula, and it became widely accepted, the computation itself is not an issue. But the fact that its so popular leads to the S&P brand recognition, and people come and pay good money for their other services (ratings and financial analysis of securities). They do more work for free. For example, the ratings of various government debts are being done by S&P for free (governments don't pay for that), while private bonds are rated for a fee (corporations pay to have their bonds rated). Also, as noted by JBKing, there are probably some licensing fees for using the index name in the fund name (and other users are probably paying the licensing fee, like the news agencies and the exchanges). S&P500 is a registered trademark, and as such cannot be used without the owner's permission. Why is then "active management" not required for indexed funds Because no research and stock picking is required. In fact, these funds don't really require a manager, they can be managed by a simple script. and how does it lower taxes? (perhaps this could be a different question if this has become too broad) Actively managed funds perform a lot more buy/sell operations, each leading to tax consequences to the fund (which rolls them over to the investors). Index funds only buy and sell to re-balance back to the index (or when the makeup of the index changes, usually once a year or half a year), leading to much lesser realized capital gains to the fund, thus much lesser tax consequences.
|
declaring payments to a credit card for a shared expense
|
If this is a business expense - then this is what is called reimbursement. Reimbursement is usually not considered as income since it is money paid back to you for an expense you covered for your employer with your after-tax money. However, for reimbursement to be considered properly executed, from income tax stand point, there are some requirements. I'm not familiar with the UK income tax law specifics, but I reason the requirements would not differ much from places I'm familiar with: before an expense is reimbursed to you, you should usually do this: Show that the expense is a valid business expense for the employer benefit and by the employer's request. Submit the receipt for reimbursement and follow the employer's procedure on its approval. When income tax agent looks at your data, he actually will ask about the £1500 tab. You and you'll employer will have to do some explaining about the business activity that caused it. If the revenue agent is not satisfied, the £750 that is paid to you will be declared as your income. If the required procedures for proper reimbursement were not followed - the £750 may be declared as your income regardless of the business need. Have your employer verify it with his tax accountant.
|
Is it better to buy this used car from Craigslist or from a dealership?
|
The 200K vehicle is likely the better deal. Get your own mechanic to check it out. If it doesn't have major issues, it will likely cost you less. Why? Because you've wisely included $6000 in expected maintenance. Yet it has the possibility of not needing more than $500 of maintenance during the 4 years you plan on owning it. It's a gamble, but you have the chance to save $5500 of that estimated cost with that vehicle. Note that you will also need to factor in tires for either vehicle, unless that is included in your maintenance estimate.
|
When is Cash Value Life Insurance a good or bad idea?
|
The standard answer I have heard is that if you were to purchase term life insurance and invest the difference between the cost of the policies, your investments would grow larger than the cash value of the insurance. Also when you take cash out of CVLI the insurance value drops by a like amount. So you can't have your cake and leave it to your heirs too. Either you get the cash value OR they get the insurance value. Hopefully, there could be some of both. Although I believe the philosophy of that answer I have two issues with it. First, you must be dedicated enough to invest the difference every month. I can imagine that might be tough to do consistently and if you take breaks from the investing will you still accumulate more than you would have with the insurance? Second, for the past couple of years all of my investments in mutual funds have lost value. My life insurance has continued to grow cash value over the same time period. Hmm, maybe there isn't a one size fits all solution. If you need a large amount of insurance, term life will certainly be more affordable. However, considering this as an investment I would not expect that to be a deciding factor. Good luck with your decision. It is great that at such a young age you are concerned about investments.
|
Why is the volume highest at the beginning and end of a trading day?
|
While volume per trade is higher at the open and to a lesser extent at the close, the overall volume is actually lower, on average. Bid ask spreads are widest at the open and to a lesser extent at the close. Generally, bid ask spreads are inversely proportional to overall volumes. Why this is the case hasn't been sufficiently clearly answered by academia yet, but some theories are that
|
Do Americans really use checks that often?
|
When you start at a new job here in the U.S., the default means of payment is usually a paper check. Most folks will quickly set up direct deposit so that their employer deposits their paycheck directly into their personal bank account - the incentive to do so is that you receive your funds faster than if you deposit a paper check. Even if you set up direct deposit on your first day on the job, you may still receive your first paycheck as a paper check simply because the wheels of payroll processing turn slowly at some (large) companies. A counter example is a self-employed contractor - perhaps a carpenter or house painter. These folks are paid by their customers, homeowners and such. Many larger, well established contracters now accept credit card payments from customers, but smaller independents may be reluctant to set up a credit card merchant account to accept payment by card because of all the fees that are associated with accepting credit card payments. 3% transaction fees and monthly service fees can be scary to any businessman who already has very thin profit margins. In such cases, these contractors prefer to be paid by check or in cash for the simple reason that there are no fees deducted from cash payments. There are a few folks here who don't trust direct deposit, or more specifically, don't trust their employer to perform the deposit correctly and on time. Some feel uncomfortable giving their bank info to their employer, fearing someone at the company could steal money from their account. In my experience, the folks who prefer a paper paycheck are often the same folks who rush to the bank on payday to redeem their paychecks for cash. They may have a bank account (helps with check cashing) but they prefer to carry cash. I operate in a manner similar to you - I use a debit card or credit card (I only have one of each) for nearly all transactions in daily life, I use electronic payments through my bank to pay my regular bills and mortgage, and I receive my paycheck by direct deposit. There have been periods where I haven't written or received paper checks for so long that I have to hunt for where I put my checkbook! Even though I use a debit card for most store purchases, the bank account behind that debit card is actually a checking account according to the bank. Again, the system defaults to paper checks and you have the option of going electronic as well. Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day laborer who expect to work for a different person each day or week. I don't think this is all that unique to the US. There are people in every city and country who don't have long-term employment with a single employer and therefore prefer cash or paper check over electronic payments. I'd be willing to bet that this applies to the majority of people on the planet, actually.
|
New car: buy with cash or 0% financing
|
If you don't have other installment loans on your credit report, adding this one could help your credit. That could potentially help you get a better interest rate when you apply for a mortgage. There are positive and negative factors. Positive: Negative:
|
Is the MBA an overrated degree/qualification?
|
It depends on what you want it for If it is just salary then maybe not, for instance, some MBA programs may suggest their graduates make $100,000 per year, but you work in an oil field barely finishing high school and make $300,000 a year. If you go for the MBA right now, you may miss your chance to work in the oil industry for another few years (or weeks), but at the same time, the MBA lasts forever (although, real world experience is also relevant) and it may give you a leg up when you are 50 years old in the unemployment line (or maybe not, because you are overqualified) everything in life is a cost/benefit analysis Passing the GRE lasts for five years, so keep that in mind
|
Can I write off time I spent working on my business?
|
To expand a little on what littleadv said, you can only deduct what something cost you. Even if you had done volunteer work for a charity as a sole prop you could only deduct your actual costs. If you paid an employee to do charity work or to learn something related to the business that would be deductible as a normal business expense. Some common sense would show that if you could deduct something that didn't cost you anything (your time) you could deduct away all of your income and avoid paying taxes altogether. Back to your more nuanced question could 2 businesses you own bill each other for services? Yes, but you will still have to pay taxes for money earned under each of them. You will also need to be careful that the IRS does not construe the transactions as being done solely to lower your tax bill.
|
Should I make extra payments to my under water mortgage or increase my savings?
|
You say you are underwater by $10k-15k. Does that include the 6% comission that selling will cost you? If you are underwater and have to sell anyway, why would you want to give the bank any extra money? A loss will be taken on the sale. Personally i would want the bank to take as much of that loss as possible, rather than myself. Depending on the locale the mortgage may or may not be non-recourse, ie the loan contract implies that the bank can take the house from you if you default, but if 'non-recourse' the bank has no legal way to demand more money from you. Getting the bank to cooperate on a short sale might be massively painful. If you have $ in your savings, you might have more leverage to nego with the bank on how much money you have to give them in the event the loan is not 'non-recourse'. Note that even if not 'non-recourse', it's not clear it would be worth the banks time and money to pursue any shortfall after a sale or if you just walk away and mail the keys to the bank. If you're not worried about your credit, the most financially beneficial action for you might be to simply stop paying the mortgage at all and bank the whole payments. It will take the bank some time to get you out of the house and you can live cost-free during that time. You may feel a moral obligation to the bank. I would not feel this way. The banks and bankers took a ton of money out of selling mortgages to buyers and then selling securities based on the mortgages to investors. They looted the whole system and pushed prices up greatly in the process, which burned most home buyers and home owners. It's all about business -my advice is to act like a business does and minimize your costs. The bank should have required a big enough downpayment to cover their risk. If they did not, then they are to blame for any loss they incur. This is the most basic rule of finance.
|
What are the pros and cons of buying a house just to rent it out?
|
You should absolutely go for it, and I encourage you to look for multi-unit (up to 4) properties if there are any in your area. With nulti-unit properties it is far more common than not that the other units pay the mortgage. To comment on your point about slowly building an asset if the renter covers the payment; that's true, but you're also missing the fact that you get to write off the interest on your income taxes, that's another great benefit. If you intend to make a habit out of being a landlord, I highly encourage you to use a property management company. Most charge less than 10% and will handle all of the tough stuff for you, like: fielding sob stories from tenants, evicting tenants, finding new tenants, checking to make sure the property is maintained... It's worth it. There fees are also tax-deductible... It makes a boat load of sense. Just look at the world around you. How many wealthy people rent??? I've met one, but they own investment properties though...
|
What does it mean if “IPOs - normally are sold with an `underwriting discount` (a built in commission)”
|
When an IPO happens, the buyers pay some price (let's say $20 per share) and the seller (the company) receives a different price ($18.60). Who paid the commission? Well, the commission caused a spread between buyer and seller. It doesn't matter who technically pays the commission because it costs both parties. In an IPO, the company technically pays the commission, but they use buyers' money to do it and the buyer must pay more than he/she would if there was no commission. The same thing happens when you buy a home. Technically the seller pays both realtors' commissions but it came from money the buyer gave the seller and the commissions pushed up the price, so didn't the buyer pay the commission? They both did. The second paragraph suggests that if the investment bankers act as a simple broker, buying public securities instead of newly issued shares for their clients, then the commissions will be much lower. Obviously. I wonder if this is really the right interpretation, though, as no broker charges 4% to a large client for this service. I would need more context to be sure that's what's meant. The gyst is that IPOs generate a lot of money for the investment bankers who act as intermediaries. If you are participating in the transaction, that money is in some way coming out of your pocket, even if it doesn't show up as a "brokerage fee" on your statement.
|
Short term cutting losses in a long term investment
|
If you are investing for 10 years, then you just keep buying at whatever price the fund is at. This is called dollar-cost averaging. If the fund is declining in value from when you first bought it, then when you buy more, the AVERAGE price you bought in at is now lower. So therefore your losses are lower AND when it goes back up you will make more. Even if it continues to decline in value then you keep adding more money in periodically, eventually your position will be so large that on the first uptick you will have a huge percent gain. Anyway this is only suggested because you are in it for 10 years. Other people's investment goals vary.
|
I have about 20 000 usd. How can invest them to do good in the world?
|
One of the best things you can do for this purpose, while getting a modest ROI on a passive investment, is invest in a company that profitably does whatever you want to see more of. For example, you could invest in a for-profit company that sells needed goods to low-income people at lower prices. Something like Wal-Mart, which is one of the most effective anti-poverty engines in the US. You might also say the same of something like Aldi (owner of Aldi stores and Trader Joe's), which is a discount store chain. This is true even though a company like Wal-Mart is seeking to make money first. Its customer base tends to skew heavily towards low-income consumers, and historically to rural and elderly consumers. When Wal-Mart is able to provide food, clothing, appliances and the like to poor people at a lower cost, it is making it marginally less painful to have a low income. Peter Suderman can explain why Wal-Mart is a humanitarian enterprise: Walmart’s customer base is heavily concentrated in the bottom income quintile, which spends heavily on food. The bottom income quintile spends about 25 percent of income on food compared to just 3.5 percent for the top quintile. So the benefits of Walmart’s substantially lower prices to the lowest earning cohort are huge, especially on food. As Suderman points out, this view of Wal-Mart dramatically lowering prices that low-income people pay for food was corroborated by an Obama adviser. That's just one company. You can pick the industry and company that best suits your personal preferences. Alternatively, you could invest in something like Whole Foods, a company with multiple missions to improve the planet and the community, in addition to the more typical mission of being a prosperous retail chain. Of course, as a general proposition, a less than entirely altruistic, charity-inclined investment doesn't need to be targeted at those with low incomes or at saving the planet. You could invest in almost anything you think is good (yachts, yo-yos, violins, energy production, industrial inputs, music performances) and the company will take care of making more of that good thing. You didn't say whether your goal was to help the poor, the planet, arts, sciences, knowledge, community, or whatever. What I understand you to be saying is you are willing to accept a lower ROI in exchange for some warm-fuzzies from your investment. That seems perfectly valid and reasonable to me, but it makes it much more subjective and particular to your tastes. So you'll need to pick something that's meaningful to you. If you're going to trade ROI for positive feelings, then you should pick whatever gives you your optimal blend of emotions and returns. Alternatively, you could invest in something stable and predictable to beat inflation (some sort of index or fund) and then annually use some portion of those profits to simply give to the charity of your choice. Your investment and your charity do not necessarily need to be the same vehicle.
|
Bonds vs equities: crash theory
|
Cash would be the better alternative assuming both stocks take a major hit in ALL categories AND the Fed raise rates at the same time for some reason. Money market funds that may have relatively low yields at the moment would likely be one of the few securities not to be repriced downward as interest rates rising would decrease bond values which could be another crash as I could somewhat question how broad of a crash are you talking here. There are more than a few different market segments so that while some parts may get hit really hard in a crash, would you really want to claim everything goes down? Blackrock's graphic shows in 2008 how bonds did the best and only it and cash had positive returns in that year but there is something to be said for how big is a crash: 20%, 50%, 90%?
|
How long can a company keep the money raised from IPO of its stocks?
|
Is it correct that there is no limit on the length of the time that the company can keep the money raised from IPO of its stocks, unlike for the debt of the company where there is a limit? Yes that is correct, there is no limit. But a company can buy back its shares any time it wants. Anyone else can also buy shares on the market whenever they want.
|
$200k in an IRA, unallocated. What's the safest investment?
|
Define "risk-sensitive": The point is, define Your risk, and your choices will narrow. Some investors worry more about what next months statement will show & lose sleep over it; some investors do not want to miss the average historical rates of return for equities (stocks) and are willing to tolerate fluctuations in monthly statements.
|
How to calculate new price for bond if yield increases
|
The duration of a bond tells you the sensitivity of its price to its yield. There are various ways of defining it (see here for example), and it would have been preferable to have a more precise statement of the type of duration we should assume in answering this question. However, my best guess (given that the duration is stated without units) is that this is a modified duration. This is defined as the percentage decrease in the bond price for a 1% increase in the yield. So, change in price = -price x duration (as %) x change in yield (in %) For your duration of 5, this means that the bond price decreases by a relative 5% for every 1% absolute increase in its yield. Using the actual yield change in your question, 0.18%, we find: change in price = -1015 x 5% x (4.87 - 4.69) = -9.135 So the new price will be 1015 - 9.135 = £1005.865
|
Why would a bank need to accept deposits from private clients if it can just borrow from the Federal Reserve?
|
Central Banks are essentially a cartel, designed to let banks in general borrow money from depositors at relatively low interest rates. They do this in two ways: By reassuring depositors that momentary cash flow problems at banks will not result in banks failing, they lower the interest rates that depositors demand. And by imposing strict regulations on banks that are borrowing from depositors at high interest rates. (People who move money to the banks offering the highest interest rates are especially likely to participate in bank runs.) Borrowing "too much" from the Central Bank is considered to be a sign of a bank that is too weak to attract deposits from depositors at "reasonable" interest rates. If a bank borrows "too much" (as a percentage of the bank's assets) from the Central Bank, the bank regulators will subject the bank to heavy scrutiny. If the bank fails to find ways to reduce its borrowing from the Central Bank, the bank regulators are likely to steal the bank from its shareholders, and sell the bank to a "stronger" bank that pays lower interest rates.
|
Why are real-term bond yields systematically declining, and what does it mean for investors?
|
On a longer time scale, the plot thickens: It almost looks random. A large drop in real rates in the mid-70s, a massive spike in the early 80s, followed by a slow multi-decade decline. The chaos doesn't seem to be due to interest rates. They steadily climbed and steadily fell: All that's left is inflation: First, real rates should be expected to pay a moderate rate, so nominal rates will usually be higher than inflation. However, interest rates are very stable over long time periods while inflation is not. Economists call this type of phenomenon "sticky pricing", where the price, interest rates in this case, do not change much despite the realities surrounding them. But the story is a little more complicated. In the early 1970s, Nixon had an election to win and tried to lessen the impacts of recession by increasing gov't spending, not raising taxes, and financing through the central bank, causing inflation. The strategy failed, but he was reelected anyways. This set the precedent for the hyperinflation of the 1970s that ended abruptly by Reagan at the beginning of his first term in the early 1980s. Again, interest rates remained sticky, so real rates spiked. Now, the world is not growing, almost stagnating. Demand for equity is somewhat above average, but because corporate income is decelerating, and the developed world's population is aging, demand for investment income is skyrocketing. As demand rises, so does the price, which for an investor is a form of inverse of the interest rate. Future demand is probably best answered by forecasters, and the monetarist over and undertones still dominating the Federal Reserve show that they have finally learned after 100 years that inflation is best kept "low and stable": But what happens if growth in the US suddenly spikes, inflation rises, and the Federal Reserve must sell all of the long term assets it has bet so heavily on quickly while interest rates rise? Inflation may not be intended, but it is not impossible.
|
How can all these countries owe so much money? Why & where did they borrow it from?
|
Others have pointed out that the entities loaning money to the government are typically people and institutions. Recently, however, the US federal government borrowings were largely funded by money printed by the Federal Reserve. The government had to borrow $1.1 trillion from October, 2010 through June, 2011. During this period the FED printed around $0.8 trillion new dollars to purchase US debt. Thus, the US government was not borrowing money from people, it was being funded by money printing. The central bankers call this "quantitative easing".
|
How do I go about finding an honest & ethical financial advisor?
|
If someone recommends a particular investment rather than a class of investments, assume they are getting a commission and walk away. If someone recommends whole life insurance as an investment vehicle, walk away. Find someone whose fiduciary responsibility is explicitly to you as their client. That legally obligated them to consider your best interests first. It doesn't guarantee they are good, but it's done protection against their being actively evil.
|
How to approach building credit without a credit card
|
Apply for a secured credit card (several financial institutions provide these, including most banks. WalletHub gives you a way to search/filter for these cards quite easily). You will need to deposit funds to cover your credit limit. Deposit as much as they allow, I believe it is 500.00. Pay for EVERYTHING with the card. Monitor your balance due and keep paying it off, to bring the balance due down so you can continue using your card. I know you mentioned your area requires you to be 19, not sure if that still applies if you are applying online, in another state. Also, there's no real reason to get a card with an annual fee in this case. The main reason for an annual fee would be a lower interest charge - simply don't get charged interest, and you'll be better off with not having to pay for a card annually. Good luck.
|
Is paying off your mortage a #1 personal finance priority?
|
It is one thing to take the advice of some numb-skulls on a web site, it is another thing to take the advice of someone who is really wealthy. For myself, I enjoy a very low interest rate (less than 3%) and am aggressively paying down my mortgage. One night I was contemplating slowing that down, and even the possibility of borrowing more to purchase another rental property. I went to bed and picked up Kevin O'Leary's book(Cold Hard Truth On Men, Women, and Money: 50 Common Money Mistakes and How to Fix Them), which I happened to be reading at the time. The first line I read, went something like: The best investment anyone can make is to pay off their mortgage early. He then did some math with the assumption that the person was making a 3% mortgage payment. Any conflicting advice has to be weighted against what Mr. O'Leary has accomplished in his life. Mark Cuban also has a similar view on debt. From what I heard, 70% of the Forbes richest list would claim that getting out of debt is a critical step to wealth building. My plan is to do that, pay off my home in about 33 (September '16) more weeks and see where I can go from there.
|
Should I switch to this high rate checking account for my emergency fund?
|
Check out the "rewards checking" accounts listed on this thread at fatwallet finance forums. You could easily get 3.5% - 4% right now if you are willing to do the rewards checking dance. If not, you should look into the 1-2% accounts at the top. I use Alliant CU and their website is nice (and they give you your credit score every six months).
|
How can I invest my $100?
|
Sure. For starters, you can put it in a savings account. Don't laugh, they used to pay noticeable interest. You know, back in the olden days. You could buy an I-bond from Treasury Direct. They're a government savings bond that pays a specified amount of interest (currently 0%, I believe), plus the amount of the inflation rate (something like 3.5% currently, I believe). You don't get paid the money -- the I-bond grows in value till you sell it. You can open a discount brokerage account, and buy 1 or more shares of stock in a company you like. Discount brokerages generally have a minimum of $500 or so, but will waive that if you set the account up as an IRA. Scot Trade, for instance. (An IRA, in case you didn't know, is a type of account that's tax free but you can't touch it till you turn 59 1/2. It's meant to help you save for retirement.) Incidentally, watch out of "small account" fees that some brokerages might charge you. Generally they're annual or monthly charges they'd charge you to cover their costs on your account -- since they're certainly not going to make it in commissions. That IRA at Scot Trade is no-fee. Speaking of commissions, those will be a big chunk of that $100. It'll be like $7-$10 to buy that stock -- a pretty big bite. However, many of these discount brokerages also offer some mutual funds for no commission. Those mutual funds, in turn, have minimums too, but once again if your account's an IRA many will waive the minimum or set it low -- like $100.
|
Where can I buy preferred stocks as opposed to common stocks?
|
Preferred stock is traded on the market, so you can just buy it like any other. The symbol for a preferred stock is the ticker symbol followed by a dash and a letter for each class of preferred stock. Examples: Generally speaking, you should buy Preferred stock with the intention of holding onto it for at least a couple of years. Often preferred shares are lightly traded and have wide spreads that made it difficult to make money in the short term.
|
Best Time to buy a stock in a day
|
The best thing to do is not worry about what time is best to buy but put in a conditional order before the market opens. If your conditions are met during the trading day your order will go through and you will buy the shares. This keeps your emotions out of your trading and will stop you from either chasing the market or buying when you consider the wrong time. As you have already done your analysis and made your decision before market open, thus you should place your conditional orders and stop losses before market opens as well.
|
Buying my first car out of college
|
You're looking at a used car, which is good, but I think you can still be much wiser with the type of car you're looking to purchase. Maybe I'm such a fuddy-duddy because I didn't own a car until I was 25, but let's break this down with a small comparison: If you drive 1,000 miles per month with gas at $4/gallon -- which is absurdly conservative, I think -- for five years, then you're looking at an extra $60/month for just gas, and probably twice the payment, compared with a perfectly reliable but more fuel-efficient car from the same year. (Disclosure: I own a 2004 Corolla and love it. I got mine in 2007 for under $10k, and I paid cash.) $300/month or so is a good chunk of change, no? I'd do even more, and pay that loan off (which will almost certainly be less than $500/month) faster by throwing $500/month at it. You'll save hundreds of dollars in interest. Edit based on your additions: There's one thing that you don't see yet that I have. It's only because you're in your early 20s and I'm pushing 40. It is far easier to sock money away when you're single and don't have a family to take care of. (I'm assuming you're not married yet and that you don't have kids. Hopefully it's not a poor assumption.) I would be saving like crazy now if I were in your position. You have a great job for fresh out of college. My first job started ten years ago after grad school at the same salary you're making. Man, it was so easy to save money back then. Now that I'm married with a daughter, a lot of that cushion goes away. I wouldn't trade it for the world, but that's the price of being head of household. If you have any intentions of not being a hermit for the rest of your life (and I hope you do) then you'd be wise to save as much as you can now.
|
How does one interpret financial data for stocks listed on multiple exchanges?
|
First and foremost you need to be aware of what you are comparing. In this case, HSBC as traded on the NYSE exchange is not common shares, but an ADR (American Depository Receipt) with a 5:1 ratio from the actual shares. So for most intents and purposes owning one ADR is like owning five common shares. But for special events like dividends, there may be other considerations, such as the depository bank (the institution that created the ADR) may take a percentage. Further, given that some people, accounts or institutions may be required to invest in a given country or not, there may be some permanent price dislocation between the shares and the ADR, which can further lead to discrepancies which are then highlighted by the seeming difference in dividends.
|
If someone gives me cash legally, can my deposit trigger an audit for them?
|
Yes you should worry and take care not to violate the law or provide any appearance of impropriety. Every bank in the USA is required under the Bank Secrecy Act to report cash transactions over $10,000 the same day to the IRS -- and here's the fun secret part -- without notification to the depositor. But splitting the deposits up into smaller amounts is also a crime, called "structuring". On occasion there is a news story where a retail business that naturally must deposit cash from customers will be (falsely?) accused of structuring, e.g.: Feds seize grocery store's entire bank account -- Institute for Justice defends grocer Under the legal doctrine of civil asset forfeiture, your money can be accused of a crime, seized, and tried separately from its owner. The actual cases indicate the money as defendant, i.e. "US v $124,700" In this somewhat bizarre system of "justice", the owner need not be charged with a crime, and is not in immediate peril of going to prison (about the only upside in this, but might be temporary because the authorities haven't charged the owner yet). When only the money is charged with a crime, there is no requirement for the government to supply a public defender for the owners who can not afford a lawyer.... can not afford a lawyer, because the government took all their money....
|
Buy the open and set a 1% limit sell order
|
One should also point out that you make a major assumption in that the high of the day doesn't occur on a gap up in morning trading. It's unlikely that you'd fill at a reasonable price, thereby throwing your strategy into disarray.
|
Can I withdraw from my Roth IRA retirement account to fund a startup?
|
Yes, it is possible to withdraw money from your Roth IRA before retirement (but I wouldn't necessarily advise you to do so.) Here's the good news, and the bad news: The good news: Unlike a traditional IRA, money contributed to a Roth IRA is done so on an after-tax basis, meaning you don't benefit from a tax deduction on contributions. So, the money you withdraw from your Roth IRA will not be taxed entirely as ordinary income. In fact, you are allowed to withdraw the amount of your original contributions (also known as basis) without any taxes or penalties. Let's imagine you originally deposited $9000 of that current $10K total value – then in such a case, $9000 could be withdrawn tax and penalty free. The bad news: When it comes to the investment earnings – the other $1000 in my example – it's a different story: Since you wouldn't be age 59 1/2 at the time of withdrawal, any money taken out beyond your original contributions would be considered a non-qualified withdrawal and subject to both ordinary income taxes plus a 10% early withdrawal penalty. Ouch! Perhaps you might want to restrict your withdrawal to your original contributions. I would imagine if you've had the account for such a short period of time that much or all of your account value is original contributions anyway. A good article about the rules for early IRA withdrawals is About.com's Tax Penalty for Early Distribution of Retirement Funds. Note: If your Roth IRA funds were the result of a rollover from another account type, other rules may apply. See Roth IRA (Wikipedia) for more detail; search for "rollover". Regarding the withdrawal process itself and the timing, you should check with your account custodian on how to proceed.
|
Freelancer in India working for Swiss Company
|
I am a freelancer based in Europe and I want to tell you: - if you are a freelancer, then you INVOICE your Swizzerland based client The word salary is improper. - So your client will DEDUCE the invoice from its taxes, and NOT pay income tax on top of that invoice. Because invoice = expense. So, ONLY YOU pay income tax in India. Your client pays no tax at all, not in India, not in Swizzerland. As you are a freelancer and not employee, the company has no obligation to pay employer taxes for you. A company has financial benefits from working with a freelancer.
|
Is investing in housing considered an adequate hedge against inflation?
|
Becoming a landlord is a pretty roundabout way to hedge against inflation. Why don't you research TIPs (Treasury Inflation Protected Securities (?)) Over the very long term, a house will just about match inflation, but no more. I observe that it (median home price) has remarkably tight correlation to the mortgage one can buy with a week's worth of median income based on the 30 year rate. In other words, strip out inflation, wage gains, and the effect of the 30 year rate peaking at 18%, then dropping to 4%, and home prices have flatlined for a century. I agree with mhoran. My answer is for the median, theoretical home. As they say, YMMV, your mileage may vary. As in, you can't have one.
|
What choices should I consider for investing money that I will need in two years?
|
If you ever need the money in three years, imagine that today is 2006 and you need the money in 2009. Keep it in savings accounts, money-markets, or CDs maturing at the right time.
|
How do the wealthy pay for things?
|
This is second hand information as I am not a millionaire, but I work with such people everyday and have an understanding of how they handle cash: The wealthy people don't. Simple. Definitely not if they don't have to. Cash is a tool to them that they use only if they get benefit of it being a cash transaction (one of my friends is a re-seller and he gets a 10% discount from suppliers for settling lines using cash). Everything else they place on a line of credit. For people who "dislike" credit cards and pay using ATM or debit cards might actually have a very poor understanding of leverage. I assure you, the wealthy people have a very good understanding of it! Frankly, wealthy people pay less for everything, but they deserve it because of the extreme amount of leverage they have built for themselves. Their APRs are low, their credit limits are insanely high, they have longer billing periods and they get spoiled by credit card vendors all the time. For example, when you buy your groceries at Walmart, you pay at least a 4% markup because that's the standardized cost of processing credit cards. Even if you paid in cash! A wealthy person uses his credit card to pay for the same but earns the same percentage amount in cash back, points and what not. I am sure littleadv placed the car purchase on his credit card for similar reasons! The even more wealthy have their groceries shipped to their houses and if they pay cash I won't be surprised if they actually end up paying much less for fresh (organic) vegetables than what equivalent produce at Walmart would get them! I apologize for not being able to provide citations for these points I make as they are personal observations.
|
What name is given to a value such as this?
|
This is called "change" or "movement" - the change (in points or percentage) from the last closing value. You can read more about the ticker tape on Investopedia, the format you're referring to comes from there.
|
A friend wants to use my account for a wire transfer. Is this a scam or is it legitimate?
|
This is another version of an old scam -- "let me have a check deposited in your account because I can't open one for some reason, and I'll share some of the money with you." Here the scammer is promising to "start a business" with you as a way to gain your confidence and trust. The first danger sign is that you only know this person from online. They are not someone you are friends with in the "real" world. They could be anybody. They used the name of a big company as a way to make what they're doing sound legitimate, but it's all a fraud. They could be depositing a faked Exxon check into your account, which could land YOU in huge trouble. Here's the thing -- The only way Exxon (or any other company) can deposit money in a bank under someone's name is if that person provides the account and routing numbers to an account that already exists. No company can just create an account in another person's name. That's Hollywood movie stuff, but it's not how banking works. To open an account, the bank would need identification on the account holder, so your "friend" already has an account if Exxon has allegedly deposited money. Further, Exxon isn't going to take back money that has already been deposited. In fact, they can't take it back. If the account is in his name, they can't do anything to the account or with the account. This is a situation you should run away from and never look back. Nothing about this story sounds right or legitimate, but this is one of the oldest scams out there since the beginning of the Internet. You would be well advised to stay VERY far away from your supposed friend, because they're anything but your friend. You are being SCAMMED. Don't be a victim. Stop communicating with this person immediately, and DON'T give them any personal information of any kind. They're crooks! I hope this helps. Good luck!
|
Visitor Shopping in the US: Would I get tax refund? Would I have to pay anything upon departure?
|
Sales tax and luxury tax is what you will have to pay tax wise, and they are non-refundable (in most cases but the rules vary area to area). This really tripped up some friends of mine I had come from England. The rules are complicated and regional. Sales tax is anywhere from 0% to 10.25% and are not usually applied to raw foods. Luxury taxes are usually state level and only apply to things most people consider a large purchase. Jewelry, cars, houses, etc. Not things your likely to buy. (Small, "normal" jewelry usually doesn't count. Diamond covered flava-flav clock ... probably has a luxury tax.) For sales tax, it can change a lot. Don't be afraid to ask. People ask all the time. It's normal. I personally add 10% to what I buy. Sales tax in my city is 7%, county is 6.5%, state is 6%. So you can get different rates depending on what side of the street you shop on some times. Under normal circumstances you do not get a refund on these taxes. Some states do give refunds. Usually however the trouble of getting that refund isn't worth it unless making a large purchase. You are not exempt from paying sales tax. (Depending on where you go you may get asked). Business are exempt if they are purchasing things to re-sell. Only the end customer pays sales tax. Depending on where you go, online purchases may not be subject to sales tax. Though they might. That, again, depends on city, county, and state laws. Normally, you will have to pay sales tax at the register. It will be calculated into your total, and show as a line item on your receipt. http://3.bp.blogspot.com/-yAvAm2BQ3xs/TudY-lfLDzI/AAAAAAAAAGs/gYG8wJeaohw/s1600/great%2Boutdoors%2Breceipt%2BQR-%2Bbefore%2Band%2Bafter.jpg Also some products have other non-refundable taxes. Rental car taxes, fuel taxes and road taxes are all likely taxes you will have to pay. Areas that have a lot of tourists, usually (but not always) have more of these kinds of taxes. Friendly note. DON'T BUY DVDs HERE! They won't work when you get home. I know you didn't ask but this catches a lot of people. Same for electronics (in many cases, specially optical drives and wireless).
|
how much of foreign exchange (forex/fx) “deep liquidity” is really just unbacked leverage and what is the effect?
|
I'd think that liquidity and speed are prioritized (even over retail brokers and in come cases over PoP) for institutional traders who by default have large positions. When the going gets tough, these guys are out and the small guys - trading through average retail brokers - are the ones left holding the empty bag.
|
What are the tax liabilities or impact for selling gold?
|
For reporting purposes, I would treat the purchase and sale of gold like a purchase and sale of a stock. The place to do so is Schedule D. (And if it's the wrong form, but you reported it, there is might not be a penalty, whereas there is a penalty for NOT reporting.) The long term gain would be at capital gains rates. The short term gain would be at ordinary income rates. And if you have two coins bought at two different times, you get to choose which one to report (as long as you report the OTHER one when you sell the second coin).
|
How should I pay off my private student loans that have a lot of restrictions?
|
It doesn't make a whole lot of sense to save up and wait to make a payment on any of these loans. Any dollar you pay today works better than saving it and waiting months to pay it, no matter which loan it will be applied to. Since your lender won't let you choose which loan your payment is being applied to, don't worry about it. Just make as big a payment as you can each month, and try to get the whole thing out of your life as soon as possible. The result of this will be that the smaller balance loans will be paid off first, and the bigger balance loans later. It is unfortunate that the higher interest rate loans will be paid later, but it sounds like you don't have a choice, so it is not worth worrying about. Instead of thinking of it as 5 loans of different amounts, think of it as one loan with a balance of $74,000, and make payments as quickly and as often as possible. For example, let's say that you have $1000 a month extra to throw at the loans. You would be better off paying $1000 each month than waiting until you have $4000 in the bank and paying it all at once toward one loan. How the lender divides up your payment is less significant than when the lender gets the payment.
|
Is a 10 year old uncashed paycheck still good?
|
You probably can't deposit the check directly, but there are mechanisms in place to get your money through other means. In the US, all states and territories have an unclaimed property registry. Before you contact the company that wrote the check, you should check that registry in your state. You will have to provide proof that you are the intended recipient, having the original check in your possession should make that considerably easier.
|
Why I cannot find a “Pure Cash” option in 401k investments?
|
My 401k allows cash holdings to 100% if desired. I'm not sure why some won't, they are making money on your money after all. If you are looking to the funds vehicles for investing suggestions however, they will never allow cash. I found you must go into "Invest on my own" vehicle to make that change. I have beaten and timed this market several times by sitting with cash on the sidelines. The only time I missed it was when I talked to a fund administrator in 2008 dot com crash and stayed in at this suggestion. I told him I didn't see where the market could go much higher as I had made 12-28% on some funds. He was dead wrong of course and I lost 50% that year. Now, trust me, in 2017, assets are grossly overvalued. If they won't let you deposit to cash, don't invest and just save your money until the next crash.
|
Alternatives to Intuit's PayTrust service for online bill viewing and bill payment?
|
An old question... but the recent answer for me turned out to be Check (formerly Pageonce) https://check.me/ (NOTE: Check was recently purchased by Intuit and is now MintBills) The only thing Check doesn't do that PayTrust did was accept paper bills from payees that couldn't do eBill... but that's a rare problem anymore (for me anyways). I went through each of my payees in PayTrust and added them into Check, it found almost all of them... I added my security info for their logins, and it was setup. The few that Check couldn't find, it asked me for the details and would contact them to try and get it setup... but in the meantime I just added them to my bank's billpay system with automatic payment rules (my mortgage company was the only one it couldn't find, and I know what my mortgage is every month so it's easy to setup a consistent rule) Check does so much more than PayTrust will ever do... Check has a MOBILE APP, and it is really the centerpiece of the whole system... you never really log into the website from your desktop (except to setup all the payees)... most of the time you just get alerts on your phone when a bill is due and you just click "pay" and choose a funding source, and bam you're done. It's been awesome so far... I highly recommend dumping PayTrust for it! FYI: Check is clearly winning at this point, but some of the competition are are http://manilla.com (not sure if you can pay your bills through them though) and DoxoPay ( https://www.doxo.com/posts/pay-your-bills-on-the-go-with-mobile-doxopay-new-android-app-and-an-updated-iphone-app/ )
|
Probablity of touching In the money vs expiring in the money for an american option
|
Conceptually, yes, you need to worry about it. As a practical matter, it's less likely to be exercised until expiry or shortly prior. The way to think about paying a European option is: [Odds of paying out] = [odds that strike is in the money at expiry] Whereas the American option can be thought of as: [Odds of paying out] = [odds that strike price is in the money at expiry] + ( [odds that strike price is in the money prior to expiry] * [odds that other party will exercise early] ). This is just a heuristic, not a formal financial tool. But the point is that you need to consider the odds that it will go into the money early, for how long (maybe over multiple periods), and how likely the counterparty is to exercise early. Important considerations for whether they will exercise early are the strategy of the other side (long, straddle, quick turnaround), the length of time the option is in the money early, and the anticipated future movement. A quick buck strategy might exercise immediately before the stock turns around. But that could leave further gains on the table, so it's usually best to wait unless the expectation is that the stock will quickly reverse its movement. This sort of counter-market strategy is generally unlikely from someone who bought the option at a certain strike, and is equivalent to betting against their original purchase of the option. So most of these people will wait because they expect the possibility of a bigger payoff. A long strategy is usually in no hurry to exercise, and in fact they would prefer to wait until the end to hold the time value of the option (the choice to get out of the option, if it goes back to being unprofitable). So it usually makes little sense for these people to exercise early. The same goes for a straddle, if someone is buying an option for insurance or to economically exit a position. So you're really just concerned that people will exercise early and forgo the time value of the American option. That may include people who really want to close a position, take their money, and move on. In some cases, it may include people who have become overextended or need liquidity, so they close positions. But for the most part, it's less likely to happen until the expiration approaches because it leaves potential value on the table. The time value of an option dwindles at the end because the implicit option becomes less likely, especially if the option is fairly deep in the money (the implicit option is then fairly deep out of the money). So early exercise becomes more meaningful concern as the expiration approaches. Otherwise, it's usually less worrisome but more than a nonzero proposition.
|
I'm 20 and starting to build up for my mortgage downpayment, where should I put my money for optimal growth?
|
The highest growth for an investment has historically been in stocks. Investing in mature companies that offer dividends is great for you since it is compound growth. Many oil and gas companies provide dividends.
|
If I have some old gold jewellery, is it worth it to sell it for its melt value?
|
Avoid gold brokers who do business through the mail. Video Full Article
|
What economic growth rate is required to halve U.S. unemployment?
|
Two points.
|
What do these options trading terms mean?
|
The two dimensions are to open the trade (creating a position) and to buy or sell (becoming long or short the option). If you already own an option, you bought it to open and then you would sell it to close. If you don't own an option, you can either buy it to open, or sell it (short it) to open. If you are already short an option, you can buy it back to close. If you sell to open covered, the point is you're creating a "covered call" which means you own the stock, and then sell a call. Since you own the stock, the covered call has a lot of the risk of loss removed, though it also subtracts much of the reward possible from your stock.
|
Is Investments by Bodie just an expanded version of Essentials of Investments?
|
They are actually both undergraduate texts; however, Investments is FAR more complex. Essentials of Investments really waters down the statistical and mathematical notation while Investments does not. Investments also has an entire section (4-5 chapters) called options, futures, and other derivatives while Essentials of Investments does not. [Of course, if you want to learn about options, futures, and other derivatives, there is a seminal book by John Hull with that exact title.] That notwithstanding, neither book is sophisticated enough to be considered a true graduate school textbook in quantitative investment theory. No grad schools worth their salt are going to rely too heavily on Investments in a specialized finance curriculum. It's a great book to start out, though.
|
Peer to peer lending in Canada?
|
Yes and no, P2P Capital Markets is similar concept but is more geared towards business loans. Community Lend used to offer this service but has stopped.
|
How to prevent misusing my Account details
|
This is more legal and less personal finance question. You should immediately lodge a police complaint mentioning that some persons are using your PAN card details for activities not authorized by you. In the meantime also engage the services of a CA and reply back to income tax authorities. Do not ignore the notice.
|
Opening a bank account with cash: How should bills be presented?
|
I currently have the twenties in 6 rolls of 5 I don't know what "roll" means to you (perhaps it's another word for grouping). I think of it as money rolled into a circular shape. Do not do that. Place all the money flat and together. Possibly hand them the hundred and twenties separately if you want to emphasize that. An envelope with the amount on it is a good idea. Flat, not folded, not rolled, not separated by paperclips or rubber bands. A simple pile of money is best. Folding the money once to put in your pocket is fine but unfold it to hand it to the teller. The reason for flat money is that it will most easily go through the money counters. Rolling makes the money curved and increases the chance of a jam. And I apologize if that was just a turn of phrase. But I can easily envision some poor teller sighing with exasperation on being handed rolled money that then needs to be flattened to go through the machine. Particularly if the person handing it over grouped it that way in an attempt to be helpful.
|
I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment?
|
Ignore sunk costs and look to future returns. Although it feels like a loss to exit an investment from a loss position, from a financial standpoint you should ignore the purchase price. If your money could be better invested somewhere else, then move it there. You shouldn't look at it as though you'll be more financially secure because you waited longer for the stock to reach the purchase price. That's psychological, not financial. Some portion of your invested wealth is stuck in this particular stock. If it would take three months for the stock to get back to purchase price but only two months for an alternate investment to reach that same level, then obviously faster growth is better. Your goal is greater wealth, not arbitrarily returning certain investments to their purchase price. Investments are just instrumental. You want more wealth. If an investment is not performing, then ignore purchase price and sunken costs. Look at the reasonable expectations about an investment going forward.
|
Buying non-qualified employee stock options that are going to expire?
|
Options granted by an employer to an employee are generally different that the standardized options that are traded on public stock option exchanges. They may or may not have somewhat comparable terms, but generally the terms are fairly different. As a holder of an expiring employee option, you can only choose to exercise it by paying the specified price and receiving the shares, or not. It is common that the exercise system will allow you to exercise all the shares and simultaneously sell enough of the acquired shares to cover the option cost of all the shares, thus leaving you owning some of the stock without having to spend any cash. You will owe taxes on the gain on exercise, regardless of what you do with the stock. If you want to buy publicly-traded options, you should consider that completely separately from your employer options other than thinking about how much exposure you have to your company situation. It is very common for employees to be imprudently overexposed to their company's stock (through direct ownership or options).
|
What happens to options after a stock split?
|
It will be similar to what you have said -- the options price will adjust accordingly following a stock split - Here's a good reference on different scenarios - Splits, Mergers, Spinoffs & Bankruptcies also if you have time to read Characteristics & Risks of Standardized Options
|
selling apple stock limit order
|
Your order may or may not be executed. The price of stock can open anywhere. Often yesterday's close is a good indication of today's open, but with a big event overnight, the open may be somewhere quite different. You'll have to wait and see like the rest of us. Also, even if it doesn't execute at the open, the price could vary during the day and it might execute later.
|
Events that cause major movement in forex?
|
Trading Speeches can be difficult, 1 comment can be bullish then next phrase bearish. However language algorithms can process the tone of the entire message before you can read the first word or have even finished downloading the text of the statement. The biggest news is the 1st Friday of the month, the non-farm payrolls out of the USA. You used to be able to get the news before the price moved, but high-frequency algos changed all that, essentially the exchanges get quote stuffed, so good luck unless you are using a bucketshop. Better to wait for a pull back from the initial reaction if the numbers are good, otherwise you will get a fill at the peak. If the numbers are a big deviation from expectations then you can just jump in. Back in 2006 the Bank of England raised interest rates when it wasn't expected and the GBPUSD flew 500 pips. This Forex calendar has charts of every news release, so you can see what to expected based on what has happened in the past with a certain bit of economic news. http://www.fasteconomicnews.com/fx_calendar.aspx
|
Take advantage of rock bottom oil prices
|
As others have alluded to but haven't said due to the lack of reputation points to spare, you can take advantage of oil prices by leveraging up and using as much credit and margin as the banks and brokerages (respectively) will lend you. People assume that the correct answer on this forum has to masquerade as conservative financial advice, and this is not advice nor conservative. Futures contracts are readily available, but they are expensive to obtain (like a minimum entry of $4,450). But if this expense is no such object to you then you can then obtain this contract which is actually worth 20x that and experience the price appreciation and depreciation of the whole contract. The concept is similar to a downpayment on a mortgage. You assume "rock bottom" oil prices, but fortunately for you, futures contracts will allow you to quickly change your bets from future price appreciation and allow you to speculate on future price depreciation. So although the union workers will be protesting full time after the drilling company lays them off, you will still be getting wealthier. Long Options. These are the best. The difference with options, amongst other speculation products, is that options require the least amount of capital risk for the greatest reward. With futures, or with trading shares of an ETF (especially on margin), you have to put up a lot of capital, and if the market does not go your desired direction, then will lose a lot. And on margin products you can lose more than you put in. Being long options does not come with these dilemmas. A long march 2015 call option on USO ETF can currently be bought for less than $200 of actual cash (ie. the trading quote will be less than $2.00, but this will cost you less than $200), and will be worth $1000 on a very modest rebound in prices. The most you can lose is the $200 for the contract. Compared to $4450 on the futures, or $100,000 (that you don't have) in the futures market if oil really moves against you, or compared to whatever large amount of cash needed to actually buy shares of an ETF needed to make any decent return. These are the most lucrative (and fun and exhilarating and ) ways to take advantage of rock bottom oil prices, as an individual.
|
How can I determine how much my car insurance will cost me?
|
Accidents and tickets more than 3 years old generally won't affect you. I use an insurance broker who shops a bunch of different companies and buys me the best policy. (He gets a cut as a middle-man, but saves me more than going direct and gives great advice when I have a question.) Since you haven't been only your own policy lately, it will cost you more than someone with a 3 year history with a perfect record, but if you shop around, you will find something at a fair price. Also, your credit score often factors into the price you pay for car insurance also.
|
Ethics and investment
|
Domini offers such a fund. It might suit you, or it might include things you wish to avoid. I'm not judging your goals, but would suggest that it might be tough to find a fund that has the same values as you. If you choose individual stocks, you might have to do a lot of reading, and decide if it's all or none, i.e. if a company seems to do well, but somehow has an tiny portion in a sector you don't like, do you dismiss them? In the US, Costco, for example, is a warehouse club, and treats employees well. A fair wage, benefits, etc. But they have a liquor store at many locations. Absent the alcohol, would you research every one of their suppliers?
|
Is it a good investment for a foreigner to purchase a flat/apartment in China?
|
I think a greater problem would be the protection of your property right. China hasn't shown much respect for the property rights of its own citizens - moving people off subsistence farms in order to build high-rise apartments - so I'm not certain that a foreigner could expect much protection. A first consideration in any asset purchase should always be consideration of the strength of local property law. By all accounts, China fails.
|
Qualified Stock Options purtchased through my Roth IRA
|
No, you cannot. ISO are given to you in your capacity as an employee (that's why it is "qualified"), while your IRA is not an employee. You cannot transfer property to the IRA, so you cannot transfer them to the IRA once you paid for them as well. This is different from non-qualified stock options (discussed in this question), which I believe technically can be granted to IRA. But as Joe suggests in his answer there - there may be self-dealing issues and you better talk to a licensed tax adviser (EA/CPA licensed in your State) if this is something you're considering to do.
|
Saving tax for long term stock investment capital gain by quiting my current job?
|
Reducing your income by 20k is guaranteed to lower your tax bill by less than 20k (because there are no tax rates greater than 100%). Your goal shouldn't be to minimize taxes but to maximize total net income.
|
What are the differences between gold/siver “coin” vs. “round”?
|
Coins are legal tender. They're authorized by governments and have a face value. Rounds are simply coined pieces of metal minted by private manufacturers. They do not have any face value and are not legal tender. Rounds are used to own metal, they have no value other than the value of the metal in them. Any premium you pay over the price of the metal is the mint's profit. Coins are also used as bulions (i.e.: to own metal and create profits for the government), but many times coins have limited issue and become valuable because of the rarity, specific issues with a specific coin (mistakes, impurities, exclusive designs), etc. So they also may have some numismatic value (depends on the specific coin). Coins also have the assurance of quality of the authorizing government (and fakes are dealt with by the law as forgery of coins is illegal and is a crime), rounds however do not enjoy such protection, and any one can mint them (only copyright/trademark protections apply, where the enforcement is by the owner and not the government). Re the advantages - coins (if you pick the right ones...) appreciate much more than the metal. However, this is mostly in hindsight, and most of the "bulion" coins do not appreciate significantly beyond the price of the metal unless there's something else significant about them (first year of issue, high quality certification, etc). Rounds on the other hand are cheaper (1 oz round will be significantly cheaper than 1 oz coin), and monitor more closely the price of the metal. It is unlikely for rounds to significantly deviate from the spot price (although this does happen occasionally, for specific designs or if a mint goes out of business).
|
Sell a stock and buy a new one
|
It depends on the broker. The one I use (Fidelity) will allow me to buy then sell or sell then buy within 3 days even though the cash isn't settled from the first transaction. But they won't let me buy then sell then buy again with unsettled cash. Of course not waiting for cash to settle makes you vulnerable to a good faith violation.
|
15 year mortgage vs 30 year paid off in 15
|
Your calculations are correct if you use the same mortgage rate for both the 15 and 30 year mortgages. However, generally when you apply for a 15 year mortgage the interest rate is significantly less than the 30 year rate. The rate is lower for a number of reasons but mainly there is less risk for the bank on a 15 year payoff plan.
|
Am I entitled to get a maintenance loan?
|
I think you're eligible for the tuition fee loan but not the maintenance loan. I think that SFE were suggesting that you'd be eligible under point 4 here 4: People with the right of permanent residence in the UK If you satisfy all the conditions under this category, you will be eligible for full Student Support. To be eligible: (a) you have the right of permanent residence in the UK; and (b) you are ordinarily resident in England on the first day of the first academic year of your course; and (c) you were ordinarily resident in the UK and Islands for three years before the first day of the first academic year of the course; and (d) if your three-year residence in the UK and Islands was at any time mainly for the purpose of receiving full-time education, you must have been ordinarily resident in the UK or elsewhere in the EEA and/or Switzerland immediately prior to the three-year period of ordinary residence in the UK and Islands. It does not matter if you were in the EEA and/or Switzerland mainly in order to receive full-time education during this earlier period. Point (b) would be the reason for asking you to prove you were in England on 1 September, but since you were under three years old when you left the UK, you wouldn't satisfy point (c). You should be eligible for the tuition fee loan under point 2 2: EU nationals, and family If you satisfy all the conditions under this category only, you are eligible only for a loan to pay your tuition fees. To be eligible: (a) on the first day of the first academic year of the course, you must be: a UK national; or a non-UK EU national who is in the UK as a self-sufficient person or as a student; the relevant family member of such a person above; and (b) you must have been ordinarily resident in the EEA and/or Switzerland for three years before the first day of the first academic year of the course; and (c) the main purpose for your residence in the EEA and/or Switzerland must not have been to receive full-time education during any part of the three year period.
|
Do algorithmic traders make money from short-term or long-term gains?
|
Algorithmic trading essentially banks on the fact that a price will fluctuate in tiny amounts over short periods of time, meaning the volatility is high in that given time frame. As the time frame increases the efficiency of algorithmic trading decreases and proper investment strategies such as due diligence, stock screening, and technical analysis become the more efficient methods. Algorithms become less effective as the time frame increases due to the smoothing effect of volatility over time. Writing an algorithm that could predict future long-term prices would be an impossible feat because as the time frame is scaled up there are far less price fluctuations and trends (volatility smooths out) and so there is little to no benchmark for the formulas. An algorithm simply wouldn't make sense for a long-term position. A computer can't predict, say, the next quarter, an ousted CEO, a buyout, or anything else that could effect the price of the security, never mind the psychology behind it all. Vice versa, researching a company's fundamentals just to bank on a 0.25% daily swing would not be efficient. Tax advantages or not, it is the most efficient methods that are preferred for a given time-scale of trading.
|
Bank statements - should I retain hardcopies for tax or other official purposes (or keep digital scanned copies)?
|
Digital records are fine, but record-keeping practices are important. Be consistent.
|
Investing $50k + Real Estate
|
My spouse will only be entering medical school within 2 years at the earliest, and will likely be there for about 4-5 years. If she get's into the school she wants we would not have to move This is probably the biggest return on investment that you can get. Sure, you could invest what you have in the market and take out tens or hundreds of thousands of dollars on "cheap" medical school loans, but consider this: Figure out how much you need for all 4-5 years, and develop a plan to make sure you can cash-flow the entire education. Bootstrapping a software company has potential for high rewards, but a much greater risk. you could get 10X back or you could lose it all. With your income, you've got plenty of time to save for college, so I don't see that as a huge win now. I would also dump the lease - you can probably get a much better car for $16k that the five-year old one you have when the lease is up. (or get a similar car for less money). With no debt and a good income you do not need a credit score. The lease probably didn't help it that much anyways - you're paying more for the lease than any benefit you would get by a higher score.
|
Do I have to pay taxes in the US if my online store sells to US customers even though I don't live in the US?
|
You're not physically present in the US, you're not a US citizen, you're not a green card holder, and you don't have a business that is registered in the US - US laws do not apply to you. You're not in any way under the US jurisdiction. Effectively connected income is income effectively connected to your business in the US. You're not in the US, so there's nothing to effectively connect your income to. Quote from the link: You usually are considered to be engaged in a U.S. trade or business when you perform personal services in the United States. You ask: If I form an LLC or C corp am I liable for this withholding tax? If you form a legal entity in a US jurisdiction - then that entity becomes subjected to that jurisdiction. If you're physically present in the US - then ECI may become an issue, and you also may become a resident based on the length of your stay.
|
Suitable Vanguard funds for a short-term goal (1-2 years)
|
1-2 years is very short-term. If you know you will need the money in that timeframe and cannot risk losing money because of a stock market correction, you should stay away from equities (stocks). A short-term bond fund (like VBISX) will pay around 1%, maybe a bit more, and only has a small amount of risk. Money Market funds are practically risk-free (technically speaking they can lose money, but it's extremely rare) but rates of return are dismal. It's hard to get bigger returns without taking on more risk.
|
Rate of change of beta
|
This is a useful metric in that it gives you a trust factor on how reliable the beta is for future expectations It is akin to velocity and acceleration First and second order derivatives of distance / time. Erratic acceleration implies the velocity is less trustworthy Same idea for beta
|
Question about data from FTSE 100
|
Open, high, low, close, volume. The hint is that volume on new years day is 0. DC's comment is actually a better answer than mine - when given any data set, you should really know the meaning of each cell/number.
|
Why can I refinance my recent car loan at a lower rate than I had received originally?
|
The simple answer might just be that the increased credit score you mentioned was enough to suddenly make you eligible for this lenders better rate, so maybe that's why you weren't able to get that low a rate before. Another option I can think of is that this particular bank offers these loans as a "teaser rate" to hopefully get more of your business later on. It's not exactly a loss leader I would think, given the non-existing deposit rates they're probably still able to make money on the spread but they might be able to undercut other banks enough to get their hooks into you. Figuratively speaking, of course. Of course in order to evaluate if it's worth switching to this deal, you'll also have to look at prepayment penalties and fees on your current loan. These extra costs might be enough to make the switch uneconomic.
|
How can I find a high-risk, high-reward investment that is not strongly correlated with the U.S. economy?
|
High risk, high reward doesn't really mean anything. The reason that investments are risky is that the investor is clueless. As you gain more information and experience, you reduce the risk. To answer your question, you can consider BRIC ETF's (Brazil, Russia, India and China). They are correlated to the U.S. economy. However, over the long term (say, 40 years), they may make sense. It depends on your outlook. Do you think India and China will have bigger economies in than the U.S. in 40 years? Many people do. Do you think that countries that are rich in commodity resources like oil will do well in the next 5 years? If so, then those countries may do better than the U.S. It's not a clear answer to your question, but maybe it can help lead to a good solution for you.
|
Am I considered in debt if I pay a mortgage?
|
I think you're thinking that "in debt" doesn't just mean "owes a debt" but somehow means "owes more debt in total than the assets". That condition, owing money without offsetting assets, is "having a negative net worth". If you have a mortgage then you have a debt and you are in debt. You may have a positive net worth, if you have equity in the house and your car and such like, and have cash in the bank. You may have a negative net worth if you owe more than you own. But either way you are technically in debt. Knowing that, it's not surprising that 75% of Americans are in debt. It's surprising that 25% are not. They have no credit card, no car loan, no mortgage, no line of credit, no student loans. Is it because they've paid all that off? Or because they are deadly poor and own nothing and can't be lent anything? You can't just say it's bad to have debt. It's bad to have too much debt, to have a negative net worth, to be in the habit of borrowing to finance a lifestyle you can't actually afford, and so on. But it's perfectly normal to have a debt or two. That's how our system mostly works.
|
Do credit checks affect credit scores?
|
I've seen my score dip a little bit after every hard pull. (Admittedly, a fako score.) You apply for credit or for a credit increase and your score is going to dip. Any check that is not intended to grant credit (either an existing creditor rechecking, or when you check your own credit) has no effect on your score. Likewise, a check done to screen for a solicitation have no effect as you are not trying to borrow. (Taking them up on the offer will normally cause a hit, though.)
|
Is it legal if I'm managing my family's entire wealth?
|
I am not going to discuss legality, because with family members you are able to give a lot of guidance and assistance without running into legal issues. The biggest problem is that when they transfer the funds to you and you invest the money, all the tax rates and tax limits are determined by your situation; plus you have more investments than you should have so you hit those limits and brackets quicker. For example: In the United states a person can put $5,500 or $6,500 into a IRA or Roth IRA each year. If you combine the funds for three with your funds then you are giving up three quarters of the amount that you can invest in that type of account. The decision regarding Roth or not depends on age and income level. But now their decision is related to what is best based on your situation. The ability to even deduct IRA deposits would be based on your situation. Of course for taxable accounts the tax rate is determined by your income, not theirs. If they want you to have the ability to make investment decisions for them, then power of attorney is the way to go. The money is deposited in their name, and all the rules and tax rates are determined by their situation. You make sure they have all the information they need to login and review the accounts, but you make the all the moves within and between accounts.
|
Why does the calculation for percentage profit vary based on whether a position is short vs. long?
|
The problem with rate of return calculation on short positions is, that the commonly used approach assumes an initial investment creating a cash outflow. If we want to apply this approach to short selling, we should look at the trade from another perspective. We buy money and pay for this money with stock. Our investment to buy 50$ in your example is 1 share. When closing the short position, we effectively sell back our money (50$) and receive 2 shares. Our profit on this position is obviously 1 share. Setting this in relation to our investment of 1 share yields a performance of 100% in reality, we do not sell back the entire cash but only the amount needed to get back our investment of 1 share. This is actually comparable to a purchase of stock which we only partially close to get back our invested cash amount and keep the remaining shares as our profit
|
Opening 5 credit cards at once with no history to ruin, is it a good idea?
|
I would not call this a "good" idea. But I wouldn't necessarily call it a bad idea either. Before you even consider it, you need to do a little bit of soul searching. If there is ANY chance that having multiple credit cards could entice you to spend more than you otherwise would, then this is definitely a bad idea. Avoiding temptation is the key to preventing regrettable actions (in all aspects of life). Psychoanalysis aside, let's take a mathematical approach to the question. I believe your conclusion is correct if you add some qualifiers to it: A few years from now, then your credit score will probably be higher than if you just had 1 credit card. Here are some other things to consider: And, saving the best for last: As for the hard inquiries, they should only have an effect on your credit score for 1 year (though they can be seen on your report for 2 years). Final thought: if you decide to do this (and I personally don't recommend it), I would keep the number of applications smaller (3-5 instead of 10-15). I also would only choose cards that have no annual fee. Try to choose 1 card that has 1-2% cash back and make that your regular card.
|
What's the general principle behind choosing saving vs. paying off debt?
|
Debt creates risk. Plain and simple. Comparing interest rates of debt vs. possible investing. To me, it is all meaningless. When you are in debt, you options are limited. If you are not in debt, you have more freedom. To me, it is a no brainer. Become debt free ASAP.
|
It is worth using a discount stock broker? I heard they might not get the best price on a trade?
|
Always use limit orders never market orders. Period. Do that and you will always pay what you said you would when the transaction goes through. Whichever broker you use is not going to "negotiate" for the best price on your trade if you choose a market order. Their job is to fill that order so they will always buy it for more than market and sell it for less to ensure the order goes through. It is not even a factor when choosing between TradeKing and Scottrade. I use Trade King and my friend uses ScottTrade. Besides the transaction fee (TK is a few $$ cheaper), the only other things to consider are the tools and research (and customer service if you need it) that each site offers. I went with TK and the lower transaction fee since tools and research can be had from other sources. I basically only use it when I want to make a trade since I don't find the tools particularly useful and I never take an analyst's opinion of a stock at face value anyway since everybody always has their own agenda.
|
P/E multiples for privately held companies?
|
You're indeed right, this cannot be answered affirmatively. I will try, without going too deep in details, to brush a shallow portrait In its simplest form, a going concern company could be valued by the present value of a growing perpetuity (Cash Flow/(Required return - growth)), assuming compounding perpetual growth. That's a massive assumption for a yet to turn a dime company. That's why comparable transactions are usually used as benchmark. In this case, your PE can be thought as the inverse of a growing perpetuity, and it's size will be determined by the difference between return and growth. So when you're pre-revenue, you're basically trying to value a moonshot with everything to prove, no matter how genius the idea. Considering the high levels of financial risks due to failure, VCs will require biblical levels of returns (50% to 90% is not unheard of). Hence why they usually leave with a good chunk of the company in seed rounds. When you've had a few sales, you got to know your customer and you've tested the markets, your direction gets clearer and your prospects improve. Risks moves down a notch and the next round of financing will be at much lower rates. Your growth rate, still high but nowhere as crazy as before, can be estimated with relatively more precision. Companies turning a recurrent level of profits are the easiest to value (all else being equal). The financial mathematics are more appropriate now, and their value will be derived by current market conditions as well as comparable transactions. With unlimited resources and perfect markets, the value of the company will be the same wether the founder is at the helm or the VCs are in the place. But considering many founders need the VCs' resources to extract the value of their company and markets are imperfect, the value of the company can change significantly depending on the decisions. Hope that helps!
|
Investing in hemp producers in advance of possible legalization in Canada?
|
Hemp is already pretty easily grown by farmers here. Canada had 50,000 acres of legal hemp in 2006, but it's been in decline the last 3 years due to the cost, lack of demand, and the high values of some other crops. It's also difficult to harvest due to its size. It's possible that the demand for hemp products will increase, but given that many Asian countries (Russia, China and Korea, for example) never banned it in the first place, there's a pretty ready supply already in place. In Canada, the big reason to grow it is as an alternative crop for use in rotation that has some commercial demand, but it's certainly not as valuable as crops like canola, oats or soy beans.
|
Withdrawing cash from investment: take money from underperforming fund?
|
Bob should treat both positions as incomplete, and explore a viewpoint which does a better job of separating value from volatility. So we should start by recognizing that what Bob is really doing is trading pieces of paper (say Stocks from Fund #1 or Bonds from Fund #2, to pick historically volatile and non-volatile instruments.*) for pieces of paper (Greenbacks). In the end, this is a trade, and should always be thought of as such. Does Bob value his stocks more than his bonds? Then he should probably draw from Fund #2. If he values his bonds more, he should probably draw from Fund #1. However, both Bob and his financial adviser demonstrate an assumption: that an instrument, whether stock bond or dollar bill, has some intrinsic value (which may raise over time). The issue is whether its perceived value is a good measure of its actual value or not. From this perspective, we can see the stock (Fund #1) as having an actual value that grows quickly (6.5% - 1.85% = 4.65%), and the bond (Fund #2) as having an actual value that grows slower (4.5% - 1.15$ = 3.35$). Now the perceived value of the stocks is highly volatile. The Chairman of the Fed sneezes and a high velocity trader drives a stock up or down at a rate that would give you whiplash. This perspective aligns with the broker's opinion. If the stocks are low, it means their perceived value is artificially low, and selling it would be a mistake because the market is perceiving those pieces of paper as being worth less than they actually are. In this case, Bob wins by keeping the stocks, and selling bonds, because the stocks are perceived as undervalued, and thus are worth keeping until perceptions change. On the other hand, consider the assumption we carefully slid into the argument without any fanfare: the assumption that the actual value of the stock aligns with its historical value. "Past performance does not predict future results." Its entirely possible that the actual value of the stocks is actually much lower than the historical value, and that it was the perceived value that was artificially higher. It may be continuing to do so... who knows how overvalued the perceived value actually was! In this case, Bob wins by keeping the bonds. In this case, the stocks may have "underperformed" to drive perceptions towards their actual value, and Bob has a great chance to get out from under this market. The reality is somewhere between them. The actual values are moving, and the perceived values are moving, and the world mixes them up enough to make Scratchers lottery tickets look like a decent investment instrument. So what can we do? Bob's broker has a smart idea, he's just not fully explaining it because it is unprofessional to do so. Historically speaking, Bobs who lost a bunch of money in the stock market are poor judges of where the stock market is going next (arguably, you should be talking to the Joes who made a bunch of money. They might have more of a clue.). Humans are emotional beings, and we have an emotional instinct to cut ties when things start to go south. The market preys on emotional thinkers, happily giving them what they want in exchange for taking some of their money. Bob's broker is quoting a well recognized phrase that is a polite way of saying "you are being emotional in your judgement, and here is a phrasing to suggest you should temper that judgement." Of course the broker may also not know what they're doing! (I've seen arguments that they don't!) Plenty of people listened to their brokers all the way to the great crash of 2008. Brokers are human too, they just put their emotions in different places. So now Bob has no clear voice to listen to. Sounds like a trap! However, there is a solution. Bob should think about more than just simple dollars. Bob should think about the rest of his life, and where he would like the risk to appear. If Bob draws from Fund #1 (liquidating stocks), then Bob has made a choice to realize any losses or gains early... specifically now. He may win, he may lose. However, no matter what, he will have a less volatile portfolio, and thus he can rely on it more in the long run. If Bob draws from Fund #2 (liquidating bonds) instead, then Bob has made a choice not to realize any losses or gains right away. He may win, he may lose. However, whether he wins or loses will not be clear, perhaps until retirement when he needs to draw on that money, and finds Fund #1 is still under-performing, so he has to work a few more years before retirement. There is a magical assumption that the stock market will always continue rewarding risk takers, but no one has quite been able to prove it! Once Bob includes his life perspective in the mix, and doesn't look just at the cold hard dollars on the table, Bob can make a more educated decision. Just to throw more options on the table, Bob might rationally choose to do any one of a number of other options which are not extremes, in order to find a happy medium that best fits Bob's life needs: * I intentionally chose to label Fund #1 as stocks and Fund #2 as bonds, even though this is a terribly crude assumption, because I feel those words have an emotional attachment associated to them which #1 and #2 simply do not. Given that part of the argument is that emotions play a part, it seemed reasonable to dig into underlying emotional biases as part of my wording. Feel free to replace words as you see fit to remove this bias if desired.
|
Put idle savings to use while keeping them liquid
|
I suppose it depends on how liquid you need, and if you're willing to put forth any risk whatsoever. The stock market can be dangerous, but there are strategies out there that will allow you to insure yourself against significant loss, while likely earning you a decent return. You can buy and sell options along with stocks so that if the stock drops, your loss is limited, and if it goes up or even stays where it's at, you make money (a lot more than 1% annually). Of course there's risk of loss, but if you plan ahead, you can cap that risk wherever you want, maybe 5%, maybe 10%, whatever suits your needs. And as far as liquidity goes, it should be no more than a week or so to close your positions and get your money if you really need it. But even so, I would only recommend this after putting aside at least a few thousand in a cash account for emergencies.
|
Why would a tender offer be less than the market price?
|
Rational shareholders wouldn't accept such an offer. The company making the offer is simply trying to get a deal with questionable — though not illegal — tactics. Your answer is actually in the link you provided. Quoting from the fourth paragraph [emphasis is mine]: The SEC has cautioned investors about mini-tender offers, noting that "[s]ome bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price." The SEC's tips for investors regarding mini-tender offers may be found on the SEC's Web site at http://www.sec.gov/investor/pubs/minitend.htm. There's a lot more information at the SEC web page mentioned. One part I'll highlight from the SEC web page mentions another reason for a mini-tender: Investors need to scrutinize mini-tender offers carefully. Some bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price. Others make mini-tender offers at a premium – betting that the market price will rise before the offer closes and then extending the offer until it does or improperly canceling if it doesn't. You'll also find a lot more information at Wikipedia - Mini-tender offer.
|
Does a US LLC owned by a non-resident alien have to pay US taxes if it operates exclusively online?
|
As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question "Does a US LLC owned by a non-resident alien have to pay US taxes" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice.
|
1.4 million cash. What do I do?
|
For what it's worth, the distribution I'm currently using is roughly ... with about 2/3 of the money sitting in my 401(k). I should note that this is actually considered a moderately aggressive position. I need to phone my advisor (NOT a broker, so they aren't biased toward things which are more profitable for them) and check whether I've gotten close enough to retirement that I should readjust those numbers. Could I do better? Maybe, at higher risk and higher fees that would be likely to eat most of the improved returns. Or by spending far more time micromanaging my money than I have any interest in. I've validated this distribution using the various stochastic models and it seems to work well enough that I'm generally content with it. (As I noted in a comment elsewhere, many of us will want to get up into this range before we retire -- I figure that if I hit $1.8M I can probably sustain my lifestyle solely on the income, despite expected inflation, and thus be safely covered for life -- so this isn't all that huge a chunk of cash by today's standards. Cue Daffy Duck: "I'm rich! I'm wealthy! I'm comfortably well off!" -- $2M, these days, is "comfortably well off.")
|
Found an old un-cashed paycheck. How long is it good for? What to do if it's expired?
|
The typical rule in the US is 180 days, but some banks do it differently. However, even if the check is dead, you should be able to call the payroll department for your old job. They can stop payment on the old check and issue you another one.
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.