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Is it sensible to keep savings in a foreign currency? | Given that we live in a world rife with geopolitical risks such as Brexit and potential EU breakup, would you say it's advisable to keep some of cash savings in a foreign currency? Probably not. Primarily because you don't know what will happen in the fallout of these sorts of political shifts. You don't know what wi... |
Is it true that 90% of investors lose their money? | No, 90% of investors do not lose money. 90% or even larger percentage of "traders" lose money. Staying invested in stock market over the long term will almost always be profitable if you spread your investments across different companies or even the index but the key here is long term which is 10+ years in any emerging... |
A friend wants to use my account for a wire transfer. Is this a scam or is it legitimate? | In many countries it is a legal requirement or in some other way mandatory for the banks to ban the owner(s) of an account to allow a third party to use the account. In some countries if you willing give someone access in this way you get no compensation what so ever and you'll be lucky if they catch the crooks and eve... |
How much should a new graduate with new job put towards a car? | You are currently $30k in debt. I realize it is tempting to purchase a new car with your new job, but increasing your debt right now is heading in the wrong direction. Adding a new monthly payment into your budget would be a mistake, in my opinion. Here is what I would suggest. Since you have $7k in the bank, spend ... |
Are RSUs ever taxed as long term capital gains? | I don't know the legal framework for RSUs, so I'm not sure what is mandatory and what is chosen by the company issuing them. I recently reviewed one companies offering and it basically looked like a flat purchase of stock on the VEST date. So even if I got a zillion shares for $1 GRANTED to me, if it was 100 shares tha... |
Buying from an aggressive salesperson | He sounds like a very bad salesman and I should know, because I was a sales manager at a bike shop which sold bikes from $200 to $10k. Now I had a clear goal, which is to sell as many bikes at the highest price possible, but I didn't do that by making customers uncomfortable. Each customer received different treatment ... |
How do you find reasonably priced, quality, long lasting clothing? | According to this http://shine.yahoo.com/event/financiallyfit/cheapest-days-to-shop-online-2301854/ Tuesday is the best day of the week to buy men's apparel. |
Co-signer deceased | Co-signing is not the same as owning. If your elderly lady didn't make any payments on the loan, and isn't on the ownership of the car, and there was no agreement that you would pay her anything, then you do not owe either her or her daughter any money. Also the loan is not affecting the daughter's credit, and the moth... |
Why do financial institutions charge so much to convert currency? | All institutions, financial or otherwise, seek to maximize profits. In a free market, each bank would price its services to be competitive with the current state of the market. Since the currency conversion fee is generally a small part of the decision as to which bank to choose, banks can be non-competitive in this ar... |
Should I wait to save up 20% downpayment on a 500k condo? | I'm of the belief that you should always put 20% down. The lower interest rate will save you thousands over the life of the loan. Also PMI is no different then burning that much cash in the fireplace every month. From Wikipedia Lenders Mortgage Insurance (LMI), also known as Private mortgage insurance (PMI) in the US... |
Why is tax being paid on my salary multiple times? | Businesses do not pay income tax on money that they pay out as salary to their employees. Businesses generally only pay income tax on profit. Profit is the money that comes in (revenue) minus the business expenses. Payroll to the employees is a deductible business expense. |
How do I invest in the S&P 500? | Buy the ETF with ticker "SPY". This will give you exposure to exactly the S&P 500 stocks, This is similar to the mutual fund suggestion by Ben Miller, except that the ETF has several advantages over mutual funds, especially as regards taxes. You can find information on the difference between ETF and mutual fund in o... |
Is it wise to invest small amounts of money short-term? | This is slightly opinion based. Is it appropriate to invest small amounts for short periods of time? At your age and the time period, I would say NO. This is because although the index fund do return 6-7% on average, there are several times it blips and goes negative as well. Stock Markets in short periods like 6 mont... |
Advantages of paying more of your mortgage while you know you won't continue to live there your whole life | It's pretty simple - the less money you owe the less interest you pay. Paying down debt gives a guaranteed return of the interest rate of the debt. So paying off your starter loan is equivalent to a 4% return. That's not a bad return in the current environment so it makes sense to do it unless you can find an invest... |
Stocks taxed just for selling, or just when withdrawing? | Taxes are triggered when you sell the individual stock. The IRS doesn't care which of your accounts the money is in. They view all your bank and brokerage accounts as if they are one big account mashed together. That kind of lumping is standard accounting practice for businesses. P/L, balance sheets, cash flow ... |
What evidence or research suggests that mid- or small-capitalization stocks should perform better than large caps? | From Dimson, Elroy, Paul Marsh, and Mike Staunton. Triumph of the Optimists: 101 Years of Global Investment Returns. Princeton, N.J: Princeton University Press, 2002: Disappointingly, the small firm effect has not proved the road to great riches since soon after its discovery, the US size premium went into reverse.... |
What's a normal personal debt / equity ratio for a highly educated person? | Average person's life I'm going to say there is no normal debt level. Here's the standard life pattern: So it really depends on your situation, it's way too spread out to quote a "normal" figure. Cost of debt vs Gain from assets and Risk of income You need to strike a sweet spot based on: Someone who is more educated i... |
Why do Americans have to file taxes, even if their only source of income is from a regular job? | For two reasons: 1- People are entitled to deductions and credits that your employer cannot possibly know. Only you as an individual know about your personal situation and can therefore claim these deductions and credits by filing income tax returns. 2- Me telling you that you made $100,000 last year is not the same as... |
How to calculate PE ratios for indices such as DJIA? | The official source for the Dow Jones P/E is Dow Jones. Unfortunately, the P/E is behind a pay-wall and not included in the free registration. The easiest (but only approximate) solution is to track against an equivalent ETF. Here's a list of popular indexes with an equivalent ETF. Source |
Is it worth it to buy TurboTax Premier over Deluxe if I sold investments in a taxable account? | For tax year 2014, TurboTax Deluxe no longer supports Schedule D.* TurboTax Premier is required if you need to use Schedule D. Alternatively, H&R Block Tax Software Deluxe will handle Schedule D at a fraction of the cost of TurboTax Premier. Update: Beginning with tax year 2015, TurboTax has reversed their disastrous ... |
Is it wise to invest in bond fund when interest rates are low? | This is just a pedestrian (my) opinion: Yes, It is wise to invest in bond funds even in a low interest environment. Check out the lazy man's portfolio on bogleheads. The reason is: |
What are overnight fees? [duplicate] | From the etoro website: In the financial trading industry, rollover is the interest paid or earned for holding currency overnight. Each currency has an interest rate associated with it, and because currencies are traded in pairs, every trade involves two different interest rates. If the interest rate on the currency yo... |
Why don't banks print their own paper money / bank notes? | There is absolutely no logical reason why each nation does not own and control banking and thus the supply of money. Any system including the financial system works exactly the same way, regardless of ownership. Banking depends solely on the confidence of the customers/investors. Therefore when a sovereign nation/sta... |
Comparing IRA vs 401K's rate-of-return with dollar cost averaging | The number you are trying to calculate is called the Internal Rate of Return (IRR). Google Spreadsheets (and excel) both have an XIRR function that can do this for you fairly simply. Setup a spreadsheet with 1 column for dates, 1 column for investment. Mark your investments as negative numbers (payment to invest). Al... |
Are personal finance / money management classes taught in high school, anywhere? | Did a little bit of digging, and found this article, from Staples High School in Westport, Connecticut. Hopefully this will be a growing trend. They say: A personal financial management class will now be offered at the beginning of the upcoming school year (2011-2012). According to the course catalogue, the focus of ... |
Received a call to collect on a 17 year old, charged off debt. What do I do? | If they are a debt collector, they must follow the requirements of the Fair Debt Collection Practices Act. In particular, they must provide you with verification of the debt at your written request. If they won't give you a way to do this, they are in violation of the law, and you should contact proper authorities. If ... |
Why buy insurance? | It's not a betting game, insurance policy is not akin to a casino bet. While the odds are probably low, the damage of an event may be devastating. Insurance allows mitigating that potential devastating damage, if it occurs. |
Should I put more money down on one property and pay it off sooner or hold on to the cash? | I would go with option B. That is safer, as it would leave you with more options, in case of an unexpected job loss or an emergency. |
Strategy for investing large amount of cash | I think a larger issue is that you're trying to do market timing. Whether you had a large or small amount of money to invest, no one wants to put the money in to watch it go down. You can't really predict if prices in a market or security will go up in six months (in which case you want to put all your cash in now), o... |
Are lottery tickets ever a wise investment provided the jackpot is large enough? | Lotteries are like the inverse of insurance policies. Instead of paying money to mitigate the impact of an unlikely event which is extremely negative, you are paying money to obtain a chance of experiencing an unlikely event which is extremely positive. One thing to keep in mind regarding lotteries is the diminishing m... |
Is there a good rule of thumb for how much I should have set aside as emergency cash? | If you are still paying off debt, then you should have about $1000 in savings and put all you can towards non-mortgage debt. If you don't have any debt besides your mortgage, then add up all of your monthly expenses including food, gas, utilities and keep 3-6 months in liquid savings. Whether you keep 3 or 6 months dep... |
Can you explain “time value of money” and “compound interest” and provide examples of each? | The fundamental concept of the time value of money is that money now is worth more than the same amount of money later, because of what you can do with money between now and later. If I gave you a choice between $1000 right now and $1000 in six months, if you had any sense whatsoever you would ask for the money now. Th... |
I have $100,000 in play money… what to do? | As you have already good on your retirement kitty. Assuming you have a sufficient cash for difficult situations, explore the options of investing in Shares and Mutual Funds. As you are new to Stock Market, begin slowly by investing into Mutual Funds and ETF for precious metals. This will help you understand and give yo... |
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home? | It depends on the selling price, but if we can assume the property will be sold at a profit, they are getting a pretty sweet deal at your expense. They are both getting about 5.2% interest on their money, plus the lion's share of any property appreciation. I would say that fair would be either of: |
Any experience with maxing out 401(k)? | Don't forget to also build up an emergency fund - retirement saving is important, but you don't want to be caught in a situation where you need money for an emergency (lose your job, get hit by a bus, etc.) and it's all locked away in your 401(k). |
Buying and selling the same stock | No, you can not cheat the IRS. This question is also based on the assumption that the stock will return to $1 which isn't always a safe assumption and that it will continue to cycle like that repeatedly which is also likely a false assumption. |
Is the MBA an overrated degree/qualification? | For some situations, an MBA can be overrated in the sense that given the cost of time and money, it isn't going to be a great return in some cases. There can be tens of thousands of dollars and a couple of years to get an MBA that some people believes should automatically make them worth $x more in their salary and lif... |
If banks offer a fixed rate lower than the variable rate, is that an indication interest rates may head down? | Usually that is the case that when fixed rates are lower than the variable rates, it is an indication that the banks feel the next movement in rates could be down. You also need to look at the fixed rates for different periods, for example 1 year fixed compared to 3 year fixed and 5 year fixed rates. If you find the 3 ... |
Can you sell stocks/commodities for any price you wish (either direct or market)? | I think for this a picture is worth a thousand words. This is a "depth chart" that I pulled from google images, specifically because it doesn't name any security. On the left you have all of the "bids" to buy this security, on the right you have the "asks" to sell the security. In the middle you have the bid/ask spr... |
Can I save our credit with a quickie divorce? | If you're not insolvent, doing something like this is both a moral and legal hazard: When you are insolvent, the tax and moral hazard issues can be a non-issue. Setting up a scenario that makes you appear to be insolvent is where the fraud comes in. If you decide to go down this road, spend a few thousand dollars on co... |
What is the difference between “good debt” vs. “bad debt”? | In general, all forms of debt are bad, as they keep you tied to a financial institution and can be an emotional burden for many. In the book Payback (by Margaret Atwood), debt is even described as a sin. However some forms of debt are necessary and some can help create wealth. "Good" debt: a mortgage - to purchase a ho... |
Options vs Stocks which is more profitable | First, to mention one thing - better analysis calls for analyzing a range of outcomes, not just one; assigning a probability on each, and comparing the expected values. Then moderating the choice based on risk tolerance. But now, just look at the outcome or scenario of 3% and time frame of 2 days. Let's assume your inv... |
Online service that computes implied volatility | remember that IV is literally the volatility that would be present to equate to the latest price of a particular option contract, assuming the Black-Scholes-Merton model. Yahoo's free finance service lists the IV for all the options that it tracks. |
Given a certain yearly savings, how much can I spend on a capital improvement? NPV of future cash flow | The question states :- Our insurance company is offering a 30% discount on an $8200/year commercial policy, if we install sprinklers. The insurance is paid in two installments. ... This appears to mean six-monthly payments, so I'll make some comparison calculations using six-monthly loan repayments to keep things s... |
How much does it cost to build a subdivision of houses on a large plot of land? | Obviously you're missing that there is no house on the land so the cost comparison between a house and land isn't terribly valid. The land might not have connections to the municipal sewage/power/electrical and may need zoning changes and permits for those connections. You're missing that you don't know how to desi... |
What does the Fed do with the extra money it is printing? | Usually the FED uses newly printed money to buy US treasuries from Goldman Sachs, JP Morgan, etc.. These banks then lend out the new cash which expands the money supply. During the height of the crisis the FED printed over $1.0 Trillion and bought....well...almost anything the banks couldn't offload elsewhere. Mortga... |
Was this bill forgotten by a medical provider, and do notices need to be sent before collections? | check the DATE OF SERVICE on all your invoices carefully. It's possible you actually DID pay already. Sometimes when a medical provider gets "mostly" paid by a third party insurer, they just drop the (small) remainder, as it's more cost than it's worth if it is a trivial amount. Alternatively, they wait until you sho... |
How should I calculate the opportunity cost of using a 401(k) loan? | Make sure that when you have the loan you still contribute enough to get the company match. For example: An inability to maximize the match might need to be figured into the opportunity cost of the loan. Some companies will suspend your contributions for a specific number of months for a hardship withdraw. Make sure ... |
Can you please explain what the information in this stock quote means? | Yes, that's what it means. Also, it tells you that the share price went up by $0.39 yesterday, which was an increase of 1.43% from the previous day's price, and that the total value of all of Microsoft's shares is $232.18 billion (from which we can deduce that there are a bit less than 10 billion Microsoft shares in to... |
What are the marks of poor investment advice? | (1) I think the phrase "Variable Annuity" is a glowing red flag. A corollary to that is that any strategy that uses insurance for a purpose (e.g. tax avoidance) other than protecting against loss rates at least a yellow flag. (2) The other really obvious indicator is a return that is completely out of whack with the le... |
Quote driven and order driven financial markets | - In a quote driven market, must every investor trade with a market maker? In other words, two parties that are both not market makers cannot trade between themselves directly? In a way yes, all trades go through a market maker but those trades can be orders put in place by a "person" IE: you, or me. - Do... |
How and where can I deposit money to generate future payments / income? | Reversing your math, I am assuming you have $312K to work with. In that case, I would simply shop around your local banks and/or credit unions and have them compete for your money and you might be quite surprised how much they are willing to pay. A couple of months ago, you would be able to get about 4.25% from Israel... |
Should we buy a house, or wait? | You are very young, you make a huge amount of money, and you have (from what information you provide) very little debt. If you simply want to buy a house for whatever reason, sure, but be honest with yourself about why you want to buy it. I see a lot of people who think they're doing it for smart financial reasons, but... |
Can an unmarried couple buy a home together with only one person on the mortgage? | There is no issue whatsoever, getting a mortgage this way as an unmarried couple. This is very similar to what I did while my wife and I were engaged. We we're on the title as joint tenants. I would expect them to have her as a signee to the mortgage. She won't be able to claim 50% ownership and make things hard on th... |
How can I stop wasting food? | Most basic tip: Don't go to the grocery store hungry. What we do to minimize food waste: On Sunday when my wife and I go grocery shopping, we figure out what meals we are going to have for dinner that week, and we only buy what we need for those meals. We also try to decide in advance what night(s) we are going out fo... |
Money limit to pay tax for Patreon | If you are in the US, you legally must file taxes on any income whatsoever. How much you will pay in taxes, if any, will depend on your total taxable income. Now, for small transactions, the payments are often not reported to the IRS so some people do not file or pay. The threshold at which they payer is required to ... |
Rental Property - have someone look for you | Actually sounds like an interesting concept for a business, potentially! (grin) You know, depending on where you live and how big the market is, you might see if there's a local "concierge" service. These are companies that will act like personal shoppers/assistants for you in all kinds of ways. I can't speak to the ... |
How can this be enough to fund a scholarship in perpetuity? | Some historical and mathematical insights as a complement to existing answers. History. I found it astonishing that already in Ancient Roman they investigated the issue of perpetuity of 30'000 (almost). Columella writes in De re rustica (3, 3, 7–11.) in 1-st century AD about a perpetuity of 32480 sesterces principal u... |
What gives non-dividend stocks value to purchasers? [duplicate] | Most companies are taken over. One can reasonably guess that company X will be taken over for a price P, at some future point in time. Then the company has a value today, that is less than price P, by a large enough margin so that the investor will likely "make out" when the company finally is taken over at some unknow... |
Should I make more conservative investments in my company 401(K) if I'm going to leave the job in a couple of years? | It doesn't make a difference if you will be keeping it in the 401K or transferring it to an IRA, it is still retirement money that you plan on investing for decades. Pre-Enron many employees invested significant amounts of their retirement funds with the employer. One of the risks was that if a single stock was down a... |
How do I apply for a mortgage after a cash closing on a property? | Is she correct in that you generally can't even apply until the cash transaction is complete? Probably. How can you commit to mortgage something you do not own? Makes sense for them to wait not even until the transaction is complete - but until the transaction is recorded. Is 45 days reasonable to complete the financ... |
Rollover 401k into Roth IRA? | For #1, I see no advantage in putting money from your non-retirement savings into a Roth just for the purpose of using it as a down payment on your house. Why not just put the $5.5K directly toward the down payment? For #2, dollars converted from a traditional 401K or IRA to a Roth are considered income, and will be t... |
What is the meaning of “writing put options”? | Writing options means "selling" options and "put" options are contracts to sell a defined security (the underlying), at a specific date (expiration date) and at a specific price (strike price). So, writing put options simply mean selling to others contracts to sell. Your profit is limited to the premium but your loss m... |
Will the ex-homeowner still owe money after a foreclosure? | Generally, yes, although not in all states. According to this article in Time: But in non-recourse states — Alaska, Arizona, California, Connecticut, Florida, Idaho, Minnesota, North Carolina, North Dakota, Texas, Utah, and Washington — the bank has no recourse beyond the repossession of the property. As for the quest... |
What's the point of a benchmark? | Some years your portfolio may perform better than the benchmark, and some years it may be the other way around. Without a benchmark you will never know. And by the way if you choose poorly, you will never beat the benchmark. If the benchmark goes up 20% but your fund/investment only went up 3% you did make money, but ... |
As a Canadian, what should I invest in if I'm betting that the Canadian real estate will crash? | If you believe you can time the crash, then We all know what comes after a crash… just as we know what comes after the doom, we just don’t know when…. |
Can I place a stock limit order to buy above the current price? Can I place a stock limit order to sell below the current price? | buy above the current price in the stock market You can do that, but what is the purpose to do so ? Brokers take the limit price of your order as the highest price you are going to pay. So if an order can be fulfilled below the limit they will do so. can I sell below the current price You can put in a order to do so.... |
How to build a U.S. credit history as a worker on a visa? | Credit is important for many reasons. Establishing credit is an important step and should be no challenge for someone who already has good habits. The same lessons and advice that you would find for a student to establish credit would be applicable to your case as well. Factors that influence credit score, Since you a... |
Insurance for a house which is not homeowners insurance? | What you need will depend on a number of factors that aren't clear from the question. This coverage is simply called "Vacant home insurance", but not all companies are willing to offer this coverage. Unfortunately, in New York, insurers can also legally drop your standard homeowners' coverage if they become aware that ... |
How can contractors recoup taxation-related expenses? | They are already indirectly paying these expenses. They should be built into your rates. The amount per job or per hour needs to cover what would have been your salary, plus the what would have been sick, vacation, holidays, health insurance, life insurance, disability, education, overhead for office expenses, cost of... |
Feasibility of using long term pattern on short term investments | When structures recur at different scales, they're called "fractals", and there is something called the "fractal markets hypothesis" which attempts to analyse stock market movements as fractals and in terms of (related) chaos theory. Whether you can profit from it I have no idea. If it was easy, everyone would be doin... |
Buy home and leverage roommates, or split rent? | what I should think about. If you decide to do this - get everything in writing. Get lease agreements to enforce the business side of the relationship. If they are not comfortable with that much formality, it's probably best not to do it, I'm not saying that you should not do this - but that you need to think about t... |
Is it better to pay an insurance deductible, or get an upgrade? | I would go for the upgrade and cancel the insurance. It's been 5 years since I left the post paid subsidized phone world and I'm WAY better off. I use ATT GoPhone and I buy my phones in cash. If I shatter my phone, I replace the screen or simply buy a new one. Sites like swappa.com make buying and selling phones a b... |
Joining a company being acquired | Is there anything I need to ask or consider during my negotiation process based on the fact that they probably will soon be own by another company? Very tricky situation. You are being hired by one company, and one hiring manager. But you already know that there are big changes ahead. What you don't know is how all... |
Why do I not see goods and services all change their price when inflation is high? | How high is high? In countries that suffered hyperinflation such as the Weimar Republic around 1923 and Zimbabwe around the late 1990s this certainly did happen on a daily basis. E.g. One boy, who was sent to buy two bread buns, stopped to play football and by the time he got to the shop, the price had gone up, so he c... |
Buying my first car out of college | DO NOT buy this car. First, I want to say I love BMW's. There's a reason why they call them "ultimate driving machine" and why other car manufacturers compare their new models to BMWs. I own 330i and I absolutely love it. Every time you get into the car, it just begs you to push and abuse it. Everything from steeri... |
In the UK, could low-income pensioners (or those near a low-income retirement) find a student loan useful for boosting their finances? | As noted in richardb's comment buried in the comments/debate on the other answer (and all credit for this answer should be due to him): a significant issue with the scheme as originally envisaged in the question (up to £11K pa) is that there is actually a cap on the maintenance part for over 60s: On page 28 of this "St... |
Why invest for the long-term rather than buy and sell for quick, big gains? | The stock market's principal justification is matching investors with investment opportunities. That's only reasonably feasible with long-term investments. High frequency traders are not interested in investments, they are interested in buying cheap and selling expensive. Holding reasonably robust shares for longer ... |
Advice for a college student interested in investment opportunities. | 2.5 years is a short period in the stock market. That means there is a significant chance it will be lower in 2.5 years, whereas it is very likely to be higher over a longer time period like 5-10 years. So if you want the funds to grow for sure then consider an online savings account, where you might earn 1-2%. If you... |
Is it better to buy U.S ADRs or stock in native stock exchange for a foreigner? | It depends. An ADR might be exposed to a larger market (let's say American) with more volume and thus lower spreads, and thus cheaper. But it can also be the other way around, that the ADR serves a smaller market than the home market. I would go for the largest market, with the most volume so it's quicker and cheaper t... |
Does my net paycheck decrease as the year goes on due to tax brackets filling up? | Most countries with income tax, including the USA, design their withholding system so that in straightforward cases, tax is withheld from each month's paycheck on an annualized basis: tax for a month is calculated on the assumption that you will keep earning the same monthly amount for the rest of the year, and the wit... |
Received an unexpected cashiers check for over $2K from another state - is this some scam? | This is a variation of a very common scam. The principle of the scam is this: I give you a check for a huge amount of money which you pay in your account. Then I ask you to pay some money from your account into a third account. Two months later the bank detects that my check was forged / stolen / cancelled / whatever a... |
The doctor didn't charge the health insurance in time, am I liable? | I was in a similar situation years back and I refused to pay the bill. My point of view was that I provided the hospital with all information needed to submit the claim in a timely matter and that I should not be held responsible for their failure to do so. In the end they waived the charges. So while technically I mig... |
Should I buy ~$2200 of a hot stock or invest elsewhere? | Can you afford to lose the $2200? If not, the answer is don't buy the stock. No one can tell you if a stock will continue to go up. But the general rule is that the more hype there is on a stock, the more likely it is that it's reached a top and is due for a downward correction soon. Also note that the more expectation... |
How to properly do background check for future tenant in my own house? | I am a realtor. For our rental business, we use a service that offers a background check. It costs us about $25, and it is passed along in the form of an application fee. I suggest you contact a local real estate agent who you know does rentals. Have a conversation about what you are doing, and see if they will help p... |
what are the benefits of setting up an education trust fund for children? | Well, first off, if your children are NZ citizens, they can borrow money at 0% interest for tertiary education and I don't see any benefit to not taking free money. A saving account is your money, and will accrue a little bit of interest and you will pay tax on that. A family trust (I hope this is what you mean by trus... |
What part of buying a house would make my net worth go down? | One way to think of net worth is to think if you sold everything you owned, how big of a pile of money would be standing next to you (assuming your net worth is positive). If you started with $100K and then bought a house worth $100K you would have $0 in the bank and a house. If you sold that house for $100K you woul... |
Health Insurance and Disability Question | Sorry to hear about your spouse's health issues. May he have a speedy and, as far as possible, full recovery. The Patient Protectection and Affordable Care Act (PPACA, aka Obamacare) is now the law of the land. Among its many provisions are that insurers may no longer deny coverage for pre-existing conditions, they may... |
What evidence exists for claiming that you cannot beat the market? | The reason for this is arbitrage. In an free and open market, investments that are certain to generate above-average profits would do so by being sold cheaply, while having a high return on investment after that. But in a free market, prices are set by supply and demand. There is a high demand and little supply for inv... |
Is there a term for the risk of investing in an asset with a positive but inferior return? | Opportunity cost is the term you're looking for. I.e. (quoting from link) Definition of 'Opportunity Cost' 1. The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action. |
In Canada, how bad must your credit be for a denial of a Secured Credit Card? | Although now there are "welcome" banking packages when I landed in 2008 I couldn't find any and Vancity gave me a secured visa nonetheless. Let me emphasize: I didn't have a credit history, score at all. I doubt this changed much. The bank has zero risk. |
Will there always be somebody selling/buying in every stock? | Will there be a scenario in which I want to sell, but nobody wants to buy from me and I'm stuck at the brokerage website? Similarly, if nobody wants to sell their stocks, I will not be able to buy at all? You're thinking of this as a normal purchase, but that's not really how US stock markets operate. First, just becau... |
How does the currency between countries relate | Firstly currency prices, like any asset, depend on supply and demand. Meaning how many people want to exchange a currency to another one vs. wanting to buy that currency using another currency. Secondly, it really depends on which country and economy you are talking about. In emerging economies, currencies are very oft... |
Why is the dominant investing advice for individuals to use mutual funds, exchanged traded funds (ETFs), etc | Funds - especially index funds - are a safe way for beginning investors to get a diversified investment across a lot of the stock market. They are not the perfect investment, but they are better than the majority of mutual funds, and you do not spend a lot of money in fees. Compared to the alternative - buying individu... |
Why would anyone want to pay off their debts in a way other than “highest interest” first? | One reason to not do that is if you consider that one of the loans is at risk of being called in early. e.g. You have a line of credit which is close to its limit, and the bank decides to reduce that limit, forcing you to quickly come up with the money to pay it down below the new limit, which can really throw a wren... |
Not paying cash for a house | The common opinion is an oversimplification at best. The problem with buying a house using cash is that it may leave you cash-poor, forcing you to take out a home equity loan at some point... which may be at a higher rate than the mortgage would have been. On the other hand, knowing that you have no obligation to a len... |
Can the Standard Deduction still apply to a Traditional IRA early withdrawal? | IRA distributions are reported on line 15b on the standard form 1040. That is in the same Income section as most of your other income (including that 1099 income and W2 income, etc.). Its income is included in the Line 22 "Total Income", from which the Personal Exemption (calculated on 6d, subtracted from the total i... |
Is keeping old credit cards and opening new credit cards with high limits and never using an ideal way to boost credit scores? | Your plan will work to increase your total credit capacity (good for your credit score) and reduce your utilization (also good). As mentioned, you will need to be careful to use these cards periodically or they will get closed, but it will work. The question is whether this will help you or not. In addition to credit... |
New to investing — I have $20,000 cash saved, what should I do with it? | Another thought: Higher education in the US is frightfully expensive with the sticker price for a 4-year undergraduate degree at a decent private college us sitting at around $250,000 and rising fast. Consider starting a 529 savings plan especially if you planning on more kids. |
Prices go up and salary doesn't: where goes delta? | One of the byproducts of free trade is that there is now a global labor market. So companies routinely review their operations and think strategically about where the company is going. Standard options are: Because the disincentives that once existed in the past are gone (the need for humans to do work, tariffs, regula... |
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