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Should I sell my stocks when the stock hits a 52-week high in order to “Buy Low, Sell High”?
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You should sell all your stock immediately and reinvest the money in index funds. As of right now you're competing against prop trading shops, multinational banks, and the like, who probably know a teensy bit more about that particular stock than you do. I'm sorry, any other advice is missing the point that you shouldn't be picking stocks in the first place.
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Is there a law or regulation that governs the maximum allowable interest amount that can be charged on credit cards or in agreements where credit is extended?
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What are those maximums, and do all countries have them? Usury, lending money for any interest at all, used to be anti-biblical: it wasn't a Christian thing to do, and so in Christian countries it was Jews who did it (Jews who were money-lenders). Asking for interest on loans is still anti-Koranic: so Islamic banks don't lend money for interest. Instead of your getting a mortgage from the bank to buy a house, the bank will buy the house, which you then buy from bank on a rent-to-own basis. Further details:
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Should a retail trader bother about reading SEC filings
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There are many different kinds of SEC filings with different purposes. Broadly speaking, what they have in common is that they are the ways that companies publicly disclose information that they are legally required to disclose. The page that you listed gives brief descriptions of many types, but if you click through to the articles on individual types of filings, you can get more info. One of the most commonly discussed filings is the 10-K, which is, as Wikipedia says, "a comprehensive summary of a company's financial performance". This includes info like earnings and executive pay. One example of a form that some people believe has potential utility for investors is Form 4, which is a disclosure of "insider trading". People with a privileged stake in a company (executives, directors, and major shareholders) cannot legally buy or sell shares without disclosing it by filing a Form 4. Some people think that you can make use of this information in the sense that if, for instance, the CEO of Google buys a bunch of Twitter stock, they may have some reason for thinking it will go up, so maybe you should buy it too. Whether such inferences are accurate, and whether you can garner a practical benefit from them (i.e., whether you can manage to buy before everyone else notices and drives the price up) is debatable. My personal opinion would be that, for an average retail investor, readng SEC filings is unlikely to be useful. The reason is that an average retail investor shouldn't be investing in individual companies at all, but rather in mutual funds or ETFs, which typically provide comparable returns with far less risk. SEC filings are made by individual companies, so it doesn't generally help you to read them unless you're going to take action related to an individual company. It doesn't generally make sense to take action related to an individual company if you don't have the time and energy to read a large number of SEC filings to decide which company to take action on. If you have the time and energy to read a large number of SEC filings, you're probably not an average retail investor. If you are a wheeler dealer who plays in the big leagues, you might benefit from reading SEC filings. However, if you aren't already reading SEC filings, you're probably not a wheeler dealer who plays in the big leagues. That said, if you're a currently-average investor with big dreams, it could be instructive to read a few filings to explore what you might do with them. You could, for instance, allocate a "play money" fund of a few thousand dollars and try your hand at following insider trades or the like. If you make some money, great; if not, oh well. Realistically, though, there are so many people who make a living reading SEC filings and acting on them every day that you have little chance of finding a "diamond in the rough" unless you also make a living by doing it every day. It's sort of like asking "Should I read Boating Monthly to improve my sailing skills?" If you're asking because you want to rent a Hobie Cat and go for a pleasure cruise now and then, sure, it can't hurt. If you're asking because you want to enter the America's Cup, you can still read Boating Monthly, but it won't in itself meaningfully increase your chances of winning the America's Cup.
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What is the proper way to report additional income for taxes (specifically, Android development)?
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I think it depends on who is being paid for your app. Do you have a company the is being paid? Or is it you personally? If you have a company then that income will disappear by offsetting it through expenses to get the software developed. If they are paying you personally then you can probably still get the income to disappear by file home-office expenses. I think either way you need to talk to an accountant. If you don't want to mess with it since the amount of income is small then I would think you can file it as additional income (maybe a 1099).
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Dispute credit card transaction with merchant or credit card company?
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Most merchants (also in Europe) are reasonable, and typically are willing to work with you. credit card companies ask if you tried to work with the merchant first, so although they do not enforce it, it should be the first try. I recommend to give it a try and contact them first. If it doesn't work, you can always go to the credit card company and have the charge reversed. None of this has any effect on your credit score (except if you do nothing and then don't pay your credit card bill). For the future: when a transaction supposedly 'doesn't go through', have them write this on the receipt and give it to you. Only then pay cash. I am travelling 100+ days a year in Europe, using my US credit cards all the time, and there were never any issues - this is not a common problem.
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Fractional Reserve Banking and Insolvency
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You bet if it was so simple. This is when financial acumen comes into its true form. The bank would never ever want to go insolvent. What it does is, take insurance against the borrower defaulting. Remember the financial crisis of 2008 which was the outcome of borrowers defaulting. The banks had created derivatives based on the loans distributed. CDO, CDS are some of the simple derivatives banks sell to cover their backs in case of defaults. There are derivatives using these derivatives as underlyings which they then sold it across to other buyers including other banks. Google for Fabrice Tourre and you would realise how much deep the banks go to save themselves from defaulters. If everything fails then go to the government for help. That was what happened when the US government doled out $600 billion to save the financial sector.
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What happens when PayPal overdrafts a checking account (with an ample backup funding source available)?
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You should check directly with the seller. I suspect you will find they have not recieved any money. Paypal tend to hang on to money as long as possible in all transactions, and will do anything to avoid giving out cash before it has come in.
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VAT and duties payable when importing personal goods from Switzerland and the Channel Islands to the EU?
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http://www.hmrc.gov.uk/customs/tax-and-duty.htm#3 explains the Import VAT situation quite well. As for who enforces and collects it, if you're talking about buying online and having it shipped to you then you'll notice on the parcel a Customs sticker declaring the contents and value. It is the responsibility of the courier company to collect any duty due from you and pass it on to HMRC. In practice what this means is that you receive a card or note from the courier saying "we're impounding your package until you pay the import duty" and they usually charge a fee on top of the duty itself. Of course you can always go out there yourself and bring something back, but then it is your responsibility to declare it at the customs checkpoint when you enter the country.
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When is it better to rent and when is better buy in a certain property market?
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For US punters, the Centre for Economic and Policy Research has a Housing Cost Calculator you can play with. The BBC provides this one for the UK. For everyone else, there are a few rules of thumb (use with discretion and only as a ball-park guide): Your example of a Gross Rental Yield of 5% would have to be weighed up against local investment returns. Read Wikipedia's comprehensive "Real-estate bubble" article. Update: spotted that Fennec included this link at the NY Times which contains a Buy or Rent Calculator.
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Am I “cheating the system” by opening up a tiny account with a credit union and then immediately applying for a huge loan?
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Credit Unions turn a profit by lending money at a higher interest rate than their savings do, just like banks do. It is an amoral feat, completely parallel to any moral weights you have assigned to "the system". If the most favorable circumstance is you receiving access to capital, then you can easily achieve that with zero reservations about the system that granted it to you.
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Why is stock dilution legal?
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Theoretically, when a company issues more shares, it does not affect the value of your shares. The reason is that when a company issues and sells more shares, the proceeds from the sale of those shares goes back into the company. Using your example, you have 10 out of 100 shares of the company, for a 10% stake. Let's say that the shares are valued at $1,000 each, meaning that the market value of the company is $100,000, and your stake is worth $10,000. Now the company issues 100 more shares at $1,000 each. The company receives $100,000 from new investors, and now the company is worth $200,000. Your stake is now only 5% of the company, but it is still worth $10,000. The authorized share capital is the amount of shares that a company has already planned on selling. When you buy stock in a company, you can look up how many shares exist, so you know what your percent stake in the company is. When a company wants to sell more shares, this is called an increase of authorized share capital. In order to do this, the company generally needs the approval of a majority of the existing shareholders.
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Is there any US bank that does not charge for incoming wire transfers?
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Yes, a business account at Chase bank offers free incoming wire transfer fees when you keep a minimum balance of over 100k. It's the only one I have found.
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Why don't some places require a credit card receipt signature, and some do?
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This is basically done to reduce costs and overhead, with agreement of the credit card issuers. When the card is physically present and the charge is low, the burden of keeping the signed receipts and of additional delays at the cash register is not worth the potential risk of fraud. Depending on the location and the specific charge-back history of the business, the limit above which signature is required differs. In one supermarket in the area I live they require signatures only on charges above $50. In another, 10 miles away from the first one, they require signatures on charges above $25.
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How can I figure out how a stock's price would change after I buy shares?
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It depends on many factors, but generally, the bid/ask spread will give you an idea. There are typically two ways to buy (or sell) a security: With a limit order, you would place a buy for 100 shares at $30-. Then it's easy, in the worst case you will get your 100 shares at $30 each exactly. You may get lucky and have the price fall, then you will pay less than $30. Of course if the price immediately goes up to say $35, nobody will sell at the $30 you want, so your broker will happily sit on his hands and rake in the commission while waiting on what is now a hail Mary ask. With a market order, you have the problem you mention: The ticker says $30, but say after you buy the first 5 shares at $30 the price shoots up and the rest are $32 each - you have now paid on average $31.9 per share. This could happen because there is a limit order for 5 at $30 and 200 at $32 (you would have filled only part of that 200). You would be able to see these in the order book (sometimes shown as bid/ask spread or market depth). However, the order book is not law. Just because there's an ask for 10k shares at $35 each for your $30 X stock, doesn't mean that by the time the price comes up to $35, the offer will still be up. The guy (or algorithm) who put it up may see the price going up and decide he now wants $40 each for his 10k shares. Also, people aren't obligated to put in their order: Maybe there's a trader who intends to trade a large volume when the price hits a certain level, like a limit order, but he elected to not put in a limit order and instead watch the ticker and react in real time. Then you will see a huge order suddenly come in out of nowhere. So while the order book is informative, what you are asking is actually fundamentally impossible to know fully, unless you can read the minds of every interested trader. As others said, in "normal" securities (meaning traded at a major exchange, especially those in the S&P500) you simply can't move the price, the market is too deep. You would need millions of dollars to budge the price, and if you had that much money, you wouldn't be asking here on a QA site, you would have a professional financial advisor (or even a team) that specializes in distributing your large transaction over a longer time to minimize the effect on the market. With crazier stocks, such as OTC and especially worthless penny stocks with market caps of $1 mil or less, what you say is a real problem (you can end up paying multiples of the last ticker if not careful) and you do have to be careful about it. Which is why you shouldn't trade penny stocks unless you know what you're doing (and if you're asking this question here, you don't).
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Which dividend bearing stock should be chosen by price?
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In the scenario you describe, the first thing I would look at would be liquidity. In other words, how easy is it to buy and sell shares. If the average daily volume of one share is low compared to the average daily volume of the other, then the more actively traded share would be the more attractive. Low volume shares will have larger bid-offer spreads than high volume shares, so if you need to get out of position quickly you will be at risk of being forced to take a lowball offer. Having said that, it is important to understand that high yielding shares have high yields for a reason. Namely, the market does not think much of the company's prospects and that it is likely that a cut in the dividend is coming in the near future. In general, the nominal price of a share is not important. If two companies have equal prospect, then the percentage movement in their share price will be about the same, so the net profit or loss you realise will be about the same.
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What are my chances at getting a mortgage with Terrible credit but High income
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I also am paying roughly twice as much in rent as a mortgage payment would be on the type of house I have been looking at, so I'd really like to purchase a house if possible. Sounds like I need to rain on your parade a bit: there's a lot more to owning a house than the mortgage. Property tax, insurance, PMI, and maintenance are things that throw this off. You'll also be paying more interest than normal given your recent credit history. It's still possible that buying is better than renting, but one really should run the detailed math on this. For example, looking at houses around where I live, insurance, property tax and special assessments over the course of a year roughly equal the mortgage payments annually. You probably won't be able to get a loan just yet. If you've just started your new job it will take a while to build a documentable income history sufficient for lenders. But take heart! As you take the next year to save up a down payment / build up an emergency fund you'll discover that credit score improves with time. However, it's crucial that you don't do anything to mess with the score. Pay all your bills on time. Don't take out a car loan. Don't close your old revolving accounts. But most of all, don't worry. Rent hurts (I rent too) but in many parts of the US owning hurts more, as your property values fall. A house down the street from my dear old mother has been on the market for several months at a price 33 percent lower than her most recent appraisals. I'm comfortable waiting until markets stabilize / start rising before jumping on real estate.
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Is it possible to make money by getting a mortgage?
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yes. you can take out 500,000 form your paid of house. you pay back 500,000 at 3.5. percent. you do get a tax break for not owning your house. it is less then 3.5 you are paying back the back. about one forth of that, BUT you take the 500,000 in invest. Now cd low 1 percent, stock is risky. You can do REIT, with are about 8 to 12 every year. so even at 8 - tax 1.5 is 6.5 - 3.5 bank loan. that 3 percent on your 500,000 thousand, plus tax break, but that only at 8 percent. or 500,000 and buy a apartment building, again about 7 to 10 percent, so that 2 to 3 percent profit, but the building goes up over years.
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I received $1000 and was asked to send it back. How was this scam meant to work?
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OK, there is no way in hell that a stranger should have your contact details. there is no way in hell that a stranger should be able to determine your name from that account number unless you are previously known to them. Have they explained to your satisfaction how any previous relationship was established? It was correct to direct them back to their own bank or their branch manager if they bank with the CBA. There are procedures in place for this, and you are in the clear if the bank handles it. Even there is a previous relationship, and you are in their address book, think long and hard about their "bona fides". It may not have been a scam they may have had fat fingers and be genuinely out of pocket now. It is SOP that if you refuse to refund the money the banks will become less helpful. (EDIT - you have consented to retrun the money). EDIT - IF you had not consented... Disclosure: I am a former CBA employee and a 20 year veteran of NetBank, and these are my own opinions.
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How do small cap stocks perform vs. large cap stocks (like Dow constituents) during bear trends?
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To a certain extent, small cap companies will in general follow the same trends as large cap companies. The extent of this cointegration depends on numerous factors, but a prime reason is the presence of systemic risk, i.e. the risk to the entire market. In simple terms, sthis is the risk that your portfolio will approach asymptotically as you increase its diversification, and it's why hedging is also important. That being said, small cap businesses will, in general, likely do worse than large cap stocks, for several reasons. This was/is certainly the case in the Great Recession. Small cap businesses have, on average, higher betas, which is a measure of a company's risk compared to the overall market. This means that small cap companies, on average outperform large cap companies during boom times, but it also means that they suffer more on average during bear times. The debate over whether or not the standard beta is still useful for small cap companies continues, however. Some economists feel that small cap companies are better measured against the Russell 2000 or similar indexes instead of the S&P 500. Small cap companies may face problems accessing or maintaining access to lines of credit. During the Great Recession, major lenders decreased their lending to small businesses, which might make it harder for them to weather the storm. On a related point, small businesses might not have as large an asset base to use as collateral for loans in bad times. One notable large cap company that used its asset base to their advantage was Ford, which gave banks partial ownership of its factories during hard times. This a) gave Ford a good amount of cash with which to continue their short-term operations, and b) gave the banks a vested interest in keeping Ford's lines of credit open. Ford struggled, but it never faced the financial problems of GM and Chrysler. Despite political rhetoric about Main Street vs. Wall Street, small businesses don't receive as much government aid in times of crisis as some large cap companies do. For example, the Small Business Lending Fund, a brilliant but poorly implemented idea in 2010, allocated less than $30 billion to small businesses. (The actual amount loaned was considerably less). Compare that to the amounts loaned out under TARP. Discussions about corporate lobbying power aside, small businesses aren't as crucial to the overall stability of the financial system Small businesses don't always have the manpower to keep up with changes in regulation. When the Dodd-Frank Act passed, large banks (as an example), could hire more staff to understand it and adapt to it relatively easily; small banks, however, don't always have the resources to invest in such efforts. There are other reasons, some of which are industry-specific, but these are some of the basic ones. If you want visual confirmation that small cap businesses follow a similar trend, here is a graph of the Russell 2000 and S&P 500 indexes: Here is a similar graph for the Russell 2000 and the Dow Jones Industrial Average. If you wanted to confirm this technically and control for the numerous complicated factors (overlap between indexes, systemic risk, seasonal adjustment, etc.), just ask and I'll try to run some numbers on it when I have a chance. Keep in mind, too, that looking at a pretty picture is no substitute for rigorous financial econometrics. A basic start would be to look at the correlation between the indexes, which I calculate as 0.9133 and 0.9526, respectively. As you can see, they're pretty close. Once again, however, the reality is more complicated technically, and a sufficiently detailed analysis is beyond my capabilities. Just a quick side note. These graphs show the logarithm of the values of the indexes, which is a common statistical nuance that is used when comparing time series with radically different magnitudes but similar trends. S&P500 and Russell 2000 data came from Yahoo! Finance, and the Dow Jones Industrial Average data came from Federal Reserve Economic Data (FRED) Per usual, I try to provide code whenever possible, if I used it. Here is the Stata code I used to generate the graphs above. This code assumes the presence of russell2000.csv and sp500.csv, downloaded from Yahoo! Finance, and DJIA.csv, downloaded from FRED, in the current directory. Fidelity published an article on the subject that you might find interesting, and Seeking Alpha has several pieces related to small-cap vs. large-cap returns that might be worth a read too.
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Strategic countermeasures to overcome crisis in Russia
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You could do nothing for a while longer. Foreign exchange simply means your services are cheaper and imports and more expensive, local transactions are otherwise unaffected. Your main worry is whether the government's attempts to revert these issues will create inflation within Russia. Local clients will likely not care to pay you in Euros, Dollars, or Pounds (as it will cost them significantly more, they'd have to acquire the currency to pay you with) but does it matter if they pay in Roubles? The financial crisis in more an international thing, not a local one. Now it is possible there will be inflation setting in but I doubt the powers that be will allow that to happen... If you are concerned about it, buying non-liquid assets are the thing to do - a house will still be worth "1 house" no matter what a 1-million rouble note will buy you in a year's time. Similarly, you can invest in 'blue-chip' stocks that should be a good hedge against any further inflation (the rich don't tend to turn poor in difficult times!) In the meantime, get some international clients - as the Rouble is so low, relatively speaking, your services are very competitive. The rest of the time, is to wait it out a little - nobody knows what will happen, but in my knowledge of history interest rates like this drop back to something much closer to normal quite quickly.
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Why is Dell currently trading above the buyout price?
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Dividends would be a possible factor you are ignoring. If Dell has another quarter or two to pay out dividends that could account for some of the difference there. I don't think there is a confirmed date of when the deal is done yet other than around the end of Dell's second quarter which was in the LA Times link you cited. There is also the potential for the terms of the deal to be revised that is another possibility here. Have you examined other deals where a public company went private to see how the stock performed in the last few months before the deal closed?
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As an investing novice, what to do with my money?
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A lot of people on here will likely disagree with me and this opinion. In my opinion the answer lies in your own motives and intentions. If you'd like to be more cognizant of the market, I'd just dive in and buy a few companies you like. Many people will say you shouldn't pick your own stocks, you should buy an index fund, or this ETF or this much bonds, etc. You already have retirement savings, capital allocation is important there. You're talking about an account total around 10% of your annual salary, and assuming you have sufficient liquid emergency funds; there's a lot of non-monetary benefit to being more aware of the economy and the stock market. But if you find the house you're going to buy, you may have to liquidate this account at a time that's not ideal, possibly at a loss. If all you're after is a greater return on your savings than the paltry 0.05% (or whatever) the big deposit banks are paying, then a high yield savings account is the way I'd go, or a CD ladder. Yes, the market generally goes up but it doesn't ALWAYS go up. Get your money somewhere that it's inured and you can be certain how much you'll have tomorrow. Assuming a gain, the gain you'll see will PALE in comparison to the deposits you'll make. Deposits grow accounts. Consider these scenarios if you allocate $1,000 per month to this account. 1) Assuming an investment return of 5% you're talking about $330 return in the first year (not counting commissions or possible losses). 2) Assuming a high yield savings account at 1.25% you're talking about $80 in the first year. Also remember, both of these amounts would be taxable. I'll admit in the event of 5% return you'll have about four times the gain but you're talking about a difference of ~$250 on $12,000. Over three to five years the most significant contributor to the account, by far, will be your deposits. Anyway, as I'm sure you know this is not investment advice and you may lose money etc.
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Snowball debt or pay off a large amount?
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You've already received good advice here, pay off the highest rate card first, in this case the Best Buy card. I completely agree. To answer your question about the minimum payment, I can't guarantee that this is how Citi does it on your particular card, but several online calculators seem to use the following formula. Minimum Payment = Fees + (APR / 12) x Balance + 1% x Balance. I plugged in your numbers and got really close to the minimum payment you mentioned. I ran calculations for balances of 8,500 and 6,500 and got payments of $184 and $141. You can use this calculator to plug in some numbers for yourself. I found the formula on this page along with a reference stating that Citi uses the formula. Edited to Add: As Bruce Alderman mentioned in his answer, it's probably not a good idea to just pay the minimum. That calculator I linked to shows the difference between paying the minimum and even a small amount ($50 or so) more than the minimum every month. Something like the difference between 3 and 10 years.
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What is the tax treatment of scrip dividends in the UK?
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The HMRC website would explain it better to you. There is a lot of factors and conditions involved, so refer to the HMRC website for clarification. If your question had more details, it could have been easy to pinpoint the exact answer. Do I declare the value of shares as income Why would you do that ? You haven't generated income from that yet(sold it to make a profit/loss), so how can that be declared as income.
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Should market based health insurance premiums be factored into 6 months emergency fund savings?
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The guideline for the size of an emergency fund is just a guideline. I've usually heard it expressed as "3 to 6 months," but everyone has a different idea of exactly how big it should be. The purpose of the fund is to give you enough cash to be able to pay for unexpected expenses that have come up that you have not budgeted for without you having to borrow money to pay for them. To figure out how big this fund should be, we look at the worst case scenario. Suppose that you lost your job tomorrow. What would you do? Cut your expenses. You'd probably be much more careful how you spend money. Secure health insurance. This would be done by either continuing your employer's policy with COBRA, or by purchasing your own insurance, likely through the Obamacare/ACA market. Keep in mind that most likely your employer is paying for a portion of your insurance now, so this expense will go up quite a bit no matter which option you choose. Look for another job. You'd probably begin your search for a new job immediately. The size of your emergency fund determines how long you will be able to go without income before you need to start a new job. Regarding cutting your expenses, it is up to you how much you would cut. There are things that are easy to cut temporarily (or permanently), such as restaurants, entertainment expenses, vacations, etc. You would probably stop retirement investing until you have income again. The more you cut, the longer your emergency fund would last. Things you don't want to cut are necessities, like housing, groceries, utilities, transportation, etc. I would also include health insurance in this list. Certainly, if you have a pre-existing condition, you do not want to let your health insurance coverage lapse. Your employability is also a factor. If you believe that you would have an easy time finding similar employment to what you have now, your emergency fund might not need to be quite as big as someone who believes they would have a harder time finding another job.
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Are tax deductions voluntary?
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There are many people who have deductions far above the standard deduction, but still don't itemize. That's their option even though it comes at a cost. It may be foolish, but it's not illegal. If @littleadv citation is correct, the 'under penalty of perjury' type issue, what of those filers who file a Schedule A but purposely leave off their donations? I've seen many people discuss charity, and write that they do not want to benefit in any way from their donation, yet, still Schedule A their mortgage and property tax. Their returns are therefore fraudulent. I am curious to find a situation in which the taxpayer benefits from such a purposeful oversight, or, better still, a cited case where they were charged with doing so. I've offered advice on filings return that wasn't "truthful". When you own a stock and cannot find cost basis, there are times that you might realize the basis is so low that just entering zero will cost you less than $100 in extra tax. You are not truthful, of course, but this kind of false statement isn't going to lead to any issue. If it gets noticed within an audit, no agent is going to give it more than a moment of time and perhaps suggest, "you didn't even know the year it was bought?" but there would be no consequence. My answer is for personal returns, I'm sure for business, accuracy to the dollar is actually important.
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Is there any online personal finance software without online banking?
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PocketSmith is another tool you might like to consider. No personal banking details are required, but you can upload your transactions in a variety of formats. Pocketsmith is interesting because it really focus on your future cash flow, and the main feature of the interface is around having a calendar(s) where you easily enter one off or repetitive expenses/income. http://www.pocketsmith.com/
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If you want to trade an equity that reflects changes in VIX, what is a good proxy for it?
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I'd look at VXX, I believe it closely tracks what you are looking to do. http://www.ipathetn.com/product/VXX/ However, as already noted in other responses, this isn't trading VIX itself (in fact it is impossible to do so). Instead, this ETF gives exposure to short-term SP500 futures contracts, which in theory should be very correlated to market volatility.
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I'm upside down on my car loan and need a different car, what can I do?
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There are a few things you should keep in mind when getting another vehicle: DON'T use dealership financing. Get an idea of the price range you're looking for, and go to your local bank or find a local credit union and get a pre-approval for a loan amount (that will also let you know what kind of interest rates you'll get). Your credit score is high enough that you shouldn't have any problems securing a decent APR. Check your financing institution's rules on financing beyond the vehicle's value. The CU that refinanced my car noted that between 100% and 120% of the vehicle's value means an additional 2% APR for the life of the loan. Value between 120% and 130% incurred an additional 3% APR. Your goal here is to have the total amount of the loan less than or equal to the value of the car through the sale / trade-in of your current vehicle, and paying off whatever's left out of pocket (either as a down-payment, or simply paying off the existing loan). If you can't manage that, then you're looking at immediately being upside-down on the new vehicle, with a potential APR penalty.
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Unable to understand logic behind why there is no exit load on liquid fund
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I think you are having trouble understanding what 'liquid' means. Liquidity refers to how easily an asset can be converted to cash. More liquid = more easily converted to cash, less liquid, less so. Any kind of exit load is going to make an asset less liquid due to the penalties associated with making the sale. So, the whole point of liquid funds is to give people the option of selling quickly if they need to. Since an exit load is meant to discourage this behavior, liquid funds tend not to have one. The point isn't what the financial institution 'gets', it's about offering a service to clients with a particular investment need.
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Is there legal reason for restricting someone under 59-1/2 from an in-service rollover from a 401K to an IRA?
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Yes, this is restricted by law. In plain language, you can find it on the IRS website (under the heading "When Can a Retirement Plan Distribute Benefits?"): 401(k), profit-sharing, and stock bonus plans Employee elective deferrals (and earnings, except in a hardship distribution) -- the plan may permit a distribution when you: •terminate employment (by death, disability, retirement or other severance from employment); •reach age 59½; or •suffer a hardship. Employer profit-sharing or matching contributions -- the plan may permit a distribution of your vested accrued benefit when you: •terminate employment (by death, disability, retirement or other severance from employment); •reach the age specified in the plan (any age); or •suffer a hardship or experience another event specified in the plan. Form of benefit - the plan may pay benefits in a single lump-sum payment as well as offer other options, including payments over a set period of time (such as 5 or 10 years) or a purchased annuity with monthly lifetime payments. Source: https://www.irs.gov/retirement-plans/plan-participant-employee/when-can-a-retirement-plan-distribute-benefits If you want to actually see it in the law, check out 26 USC 401(k)(2)(B)(i), which lists the circumstances under which a distribution can be made. You can get the full text, for example, here: https://www.law.cornell.edu/uscode/text/26/401 I'm not sure what to say about the practice of the company that you mentioned in your question. Maybe the law was different then?
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Withdrawing cash from investment: take money from underperforming fund?
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I think that Bob has good reasons for his planned spending and should follow his plan, not the dubious advice from an account rep.
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Canadian personal finance software with ability to export historical credit card transactions?
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Yodlee is the back-end which communicates with the banks, and Mint just provide a pretty layer on top. You can sign up for an account with Yodlee directly, which may give you the flexibility you need.
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If I have a lot of debt and the housing market is rising, should I rent and slowly pay off my debt or buy and roll the debt into a mortgage?
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Buy and Hope is a common investment strategy. It's also one that will keep you poor. Instead of thinking about saving money to put against a credit card or line of credit using your own job and hard-earned dollars, why not use someone else's money? If you have enough of a down payment for a property of your own, consider a duplex, triplex, or 4-plex where you live in one of the units. Since you will be living there you only need 5% down as opposed to 20% down if you do not live there. This arrangement gives you a place to live while you have other people paying your mortgage and other debts. If done properly, you can find a place that is cash-flow positive so you basically live rent-free. This all assumes you have a down payment and a bank that will work with you. Your best bet is to discuss your situation with a mortgage broker. They know all the rules, and which banks have the best deal for you. A mortgage broker works on your behalf and is paid by the lending institution, not you. There are various caveats with this strategy, and they all revolve around knowing what to do and how to execute the plan. I suggest Googling Robert Kiyosaki and reading "Rich Dad Poor Dad" before taking this journey. He offers a number of free and paid seminars that teach people how to purchase real estate and make it pay. I have taken the free evening seminar and the $500 weekend seminar on how to purchase properties and make money with them. Note that I have no affiliation with Kiyosaki, and I do find his methods to work.
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Is it worth working at home to earn money? Can I earn more money working at home?
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It completely depends on what type of work you intend to do. Are you intending to run/setup your own business? Or stay with your current employer, but work from home instead of going to the office? If thats the case, then yes it is a good idea, since you will save on commuting costs amongst other things If you are asking about working from home under one of those "work from home piecework" schemes, I would be wary. Many of them require you do an insane amount of piecework, for literally peanuts, so it might not be worth the effort (since you could earn 2, 3x as much in a supermarket shift of the same duration)
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How does cash ISA & share ISA mix together
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There are two different types of ISA; the "Cash ISA" for cash savings, and the "Stocks and Shares ISA" for stock market investing. You can transfer funds between these two different types of ISA. If your current cash ISA provider does not provide stocks and shares ISAs, then there may be a fee involved when transferring funds between two different providers. If I am reading your notation correctly, you have contributed the full allowance of GBP15,240 in both the current tax year and the previous tax year. Each year you can contribute GBP15,240 (currently) to your ISAs and this can be done in any combination of cash ISA and stocks and shares ISA. For example, you could put GBP5,240 into your cash ISA and GBP10,000 into your stocks and shares ISA. Regarding your questions : It is also important to understand that once you withdraw money from an ISA, it does not affect your previous contributions or allowances. For example, if you have used your full contribution allowance for the current year and chose to withdraw some funds, then you have still used your full contribution allowance and so you cannot redeposit these funds.
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Optimal down payment amount
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The optimal down payment is 100%. The only way you would do anything else when you have the cash to buy it outright is to invest the remaining money to get a better return. When you compare investments, you need to take risk into account as well. When you make loan payments, you are getting a risk free return. You can't find a risk-free investment that pays as much as your car loan will be. If you think you can "game the system" by taking a 0% loan, then you will end up paying more for the car, since the financing is baked into the sales [price in those cases (there is no such thing as free money). If you pay cash, you have much more bargaining power. Buy the car outright (negotiating as hard as you can), start saving what you would have been making as a car payment as an emergency fund, and you'll be ahead of the game. For the inflation hedge - you need to find investments that act as an inflation hedge - taking a loan does not "hedge" against inflation since you'll still be paying interest regardless of the inflation rate. The fact that you'll be paying slightly less interest (in "real" terms) does not make it a hedge. To answer the actual question, if your "reinvestment rate" (the return you can get from investing the "borrowed" cash) is less than the interest rate, then the more you put down, the greater your present value (PV). If your reinvestment rate is less than the interest rate, then the less you put down the better (not including risk). When you incorporate risk, though, the additional return is probably not worth the risk. So there is no "optimal" down payment in between those mathematically - it will depend on how much liquid cash you need (knowing that every dollar that you borrow is costing you interest).
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Why are American-style options worth more than European-style options?
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An option gives you an option. That is, you aren't buying any security - you are simply buying an option to buy a security. The sole value of what you buy is the option to buy something. An American option offers more flexibility - i.e. it offers you more options on buying the stock. Since you have more options, the cost of the option is higher. Of course, a good example makes sense why this is the case. Consider the VIX. Options on the VIX are European style. Sometimes the VIX spikes like crazy - tripling in value in days. It usually comes back down pretty quick though - within a couple of weeks. So far out options on the VIX aren't worth just a whole lot more, because the VIX will probably be back to normal. However, if the person could have excercised them right when it got to the top, they would have made a fortune many times what their option was worth. Since they are Euroopean style, though, they would have to wait till their option was redeemable, right when the VIX would be about back to normal. In this case, an American style option would be far more valuable - especially for something that is difficult to predict, like the VIX.
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Should I use a credit repair agency?
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I've kind of been there myself. I stretched my finances for the deposit on a house, and lived off my credit card for a few months to build up what I was short on the deposit. Add some unexpected car repairs, and I ended up with £10k on the card. The problem I had then was that interest on the card ran at around 20%, and although I could meet the interest payments I couldn't clear the £10k. I simply went and talked to my bank. In the UK there are some clear rules about banks giving customers a chance to restructure their debts. That's the BANK doing it, not some shady loan-shark. We went through my finances and established that in principle it was repayable. So I got a 2-year unsecured loan at around 5%, cleared the card, and spent the next 2 years paying off a loan that I could afford. My credit score is still aces. Forget the loan-sharks. Talk to your bank. If they're crap, talk to another bank. If no bank is going to help you, consider bankrupcy as per advice above. Debt restructuring companies are ALWAYS a con, no exceptions.
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Pay off debt with RRSPs, or refinance and roll into Mortgage?
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I would personally look at consolidating your debt at a lower interest rate by refinancing your mortgage. I would leave any retirement funds alone unless it was absolutely necessary to touch it with no other avenues available. However, once you have consolidated your debt into the mortgage I would pay more than the minimum amount so that you don't take too long to pay it off. I would put about 50% of the freed-up cash flow back into the repayments, that way you will be paying more debt off quicker and you will have additional cash flow to help your monthly budget. Another good point would be to go through your monthly budget to see if there is any expenses you could reduce or eliminate.
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When's the best time to sell the stock of a company that is being acquired/sold?
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Here is one "other consideration": don't, don't, don't sell based on insider information. Insider trading can land you in jail. And it's not restricted to top executives. Even overhearing a discussion about the current status of the acquisition talks can mean that you have insider information that you legally cannot act on in many jurisdictions. If you are just a regular employee, the SEC will likely not subject your dealings to special scrutiny, especially since lots of your colleagues will likely trade your company's shares at this point in time. And if you definitely hold insider info (for example, if you are intimately involved with the acquisition talks), you will likely have had a very serious warning about insider trading and know what you can and what you cannot do. Nevertheless, it's better to be careful here.
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What is market capitalization? [duplicate]
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Market Capitalization is the value the market attributes to the company shares calculated by multiplying the current trading price of these shares by the total amount of shares outstanding. So a company with 100 shares trading at $10 has a market cap of $1000. It is technically not the same as the value of a company (in the sense of how much someone would need to pay to acquire the company), Enterprise value is what you want to determine the net value of a company which is calculated as the market capitalization + company debt (as the acquirer has to take on this debt) - company cash (as the acquirer can pocket this for itself). The exact boundary for when a company belongs to a certain "cap" is up for debate. For a "large cap" a market capitalization of $10 billion+ is usually considered the cutoff (with $100+ billion behemoths being called "mega caps"). Anything between $10 billion and ~$1 billion is considered "mid cap", from ~$1billion to ~$200 million it's called a "small cap" and below $200 million is "nano cap". Worth noting that these boundaries change quite dramatically over time as the overall average market capitalization increases as companies grow, for example in the 80s a company with a market cap of $1 billion would be considered "large cap". The market "determines" what the market cap of company should be based (usually but certainly not always!) on the historical and expected profit a company makes, for a simple example let's say that our $1000 market cap company makes $100 a year, this means that this company's earnings per share is $1. If the company grows to make $200 a year you can reasonably expect the share price to rise from $10 to ~$20 with the corresponding increase in market cap. (this is all extremely simplified of course).
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Are lottery tickets ever a wise investment provided the jackpot is large enough?
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The billion dollar jackpot is a sunk cost, a loss for prior bettors. If you had $250M and could buy every ticket combination, you'd be betting that not more than 4 other tickets will win on the next drawing. Even if 5 won, you'd have all the second place, third place, etc tickets, and would probably break even at worst. Forget this extreme case. If I gave you a game where you had a chance to bet $100,000 for a 1 in 9 chance to win a million dollars, would you do it? Clearly, the odds are in your favor, right? But, for this kind of money, you'd probably pass. There's a point where the market itself seems to reflect a set of probable outcomes and can be reduced to gambling. I've written about using options to do this very thing, yet, even in my writing, I call it gambling. I'm careful not to confuse the two (investing and gambling, that is.)
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Is there a good rule of thumb for how much I should have set aside as emergency cash?
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How to start is pretty simple. With your next pay check set aside an amount and open a separate savings account. Since this is an emergency fund - you want it someplace where you can get to the money quickly (so a CD or mutual fund is not good), but you want it in a separate account so that you don't accidentally use it. Once the account is opened I'd recommend setting up an automatic transfer, or make it part of the direct deposit if you do that, so that you put in some money regularly (every pay check). By adding to it regularly and not using it, you'll more quickly achieve your goal. I'd recommend stopping, or slowing any retirement savings or other investing, until you get the emergency fund in place. If you have an emergency, the money in the retirement fund isn't going to do you much good as it costs too much to do an early withdrawal. The whole point of the emergency fund is to have liquidity when you need it so that you don't incur the costs of unplugging your longer term investments. Also don't worry overly much about making money on this money. This isn't an investment it is there for emergencies.
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Will a stop order get triggered if the floor is hit and trading is halted?
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During a circuit breaker, no trading occurs. These policies have been implemented to maintain exchange liquidity since the NYSE nearly went bankrupt during the 1987 crash because many members had become insolvent. If an order is filled before the halt, it will stand unless busted. During the Flash Crash, many orders were busted.
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How to sell a stock in a crashing market?
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What is essential is that company you are selling is transparent enough. Because it will provide additional liquidity to market. When I decide to sell, I drop all volume once at a time. Liquidation price will be somewhat worse then usual. But being out of position will save you nerves for future thinking where to step in again. Cold head is best you can afford in such scenario. In very large crashes, there could be large liquidity holes. But if you are on upper side of sigmoid, you will be profiting from selling before that holes appear. Problem is, nobody could predict if market is on upper-fall, mid-fall or down-fall at any time.
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Tax intricacies of MLP in a Roth IRA
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You seem to have it right. Unless you have a big position, having MLP shares in your IRA will not cause you any tax hassles. Your IRA will get a Schedule K from the MPL (which may be mailed to you), but you won't need to do anything with that unless you're over the UBI limit. Last I checked, that was $1000, and you probably won't exceed that. UBI in principle needs to be evaluated every year, so it's not necessarily a "one-time" event. If your IRA does go over the UBI limit, your IRA (not you) needs to file a return. In that case, contact your custodian and tell them about the Schedule K that you got. See also my answer here: Tax consequences of commodity ETF The question is about commodity ETFs in IRAs, but the part of my answer about UBI applies equally well.
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Is there any instrument with real-estate-like returns?
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Similarly to buying property on your own, REITs cannot get to good returns without leveraging. If you buy an investment property 100% cash only - chances are that 10% ROI is a very very optimistic scenario. If you use leveraging (i.e.: take out a mortgage) - you're susceptible to interest rate changes. REITs invest in properties all around all the time. They invest in mortgages themselves as well (In the US, that's the only security REITs can hold without being disqualified). You can't expect all that to be cash-only, there have to be loans and financing involved. When rates go up - financing costs go up. That brings net income down. Simple math. In the US, there's an additional benefit to investing in REIT vs directly holding real estate: taxes. REITs pay dividends, which have preferential (if qualified) taxation. You'll pay capital gains taxes on the dividends if you hold the fund long enough. If you own a rental property directly, your income after all the expenses is taxed at ordinary rates, which would usually be higher. Also, as you mentioned, you can use them as margin, and they're much much more liquid than holding real estate directly. Not to mention you don't need to deal with tenants or periods where you don't have any, or if local real-estate market tanks (while REITs are usually quite diversified in kinds of real estate they hold and areas). On the other hand, if you own real estate, you can leverage it at lower rates than margin (with HELOCs etc), and it provides some safety net in case of a stock market crash (which REITs are somewhat susceptible to). You can also live in your property, if needed, which is something that's hard to do with REITs....
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Cash-basis accounting and barter
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If you don't track the accrued costs involved, then it means that the valuation of the deal will be somewhat arbitrary, but it still can be made by looking at the value of equivalent or similar goods or services. It's rather similar to accounting treatment of (noncash) gifts, for example. You make up a valuation, and as there are obvious tax reasons to make it as low as possible, the valuation should be justifiable or you risk the wrath of IRS. If you sell the same goods or services for cash, then the value of the barter deal is obvious. If this barter is the only time you're handling this particular type of goods, a wholesale price of similar items (either of your items, or the items that you're receiving in barter) could work.
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Basic mutual fund investment questions
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@JoeTaxpayer gave a great response to your first question. Here are some thoughts on the other two... 2) Transaction fees for mutual funds are tied to the class of shares you're buying and will be the same no matter where you buy them. A-shares have a front-end 'load' (the fee charged), and the lowest expenses, and can be liquidated without any fees. B-shares have no up-front load, but come with a 4-7 year period where they will charge you a fee to liquidate (technically called Contingent Deferred Sales Charge, CDSC), and slightly higher management fees, after which they often will convert to A-shares. C-shares have the highest management fees, and usually a 12- to 18-month period where they will charge a small percentage fee if you liquidate. There are lots of other share classes available, but they are tied to special accounts such as managed accounts and 401-K plans. Not all companies offer all share classes. C-shares are intended for shorter timeframes, eg 2-5 years. A and B shares work best for longer times. Use a B share if you're sure you won't need to take the money out until after the fee period ends. Most fund companies will allow you to exchange funds within the same fund family without charging the CDSC. EDIT: No-load funds don't charge a fee in or out (usually). They are a great option if they are available to you. Most self-service brokerages offer them. Few full-service brokerages offer them. The advantage of a brokerage versus personal accounts at each fund is the brokerage gives you a single view of things and a single statement, and buying and selling is easy and convenient. 3) High turnover rates in bond funds... depending on how actively the portfolio is managed, the fund company may deliver returns as a mix of both interest and capital gains, and the management expenses may be high with a lot of churn in the underlying portfolio. Bond values fall as interest rates rise, so (at least in the USA) be prepared to see the share values of the fund fall in the next few years. The biggest risk of a bond fund is that there is no maturity date, so there is no point in time that you have an assurance that your original investment will be returned to you.
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Found an old un-cashed paycheck. How long is it good for? What to do if it's expired?
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In the UK the official rule is that a cheque is valid for 3 years from the date it was wrote. However after 3 months some banks can choose to turn them down. I had a cheque once that was a year old which is when I looked it up to see whether it was stil valid, and I found the laws regarding it then. I was actually quite surprised it was 3 years! Btw if it does bounce your quite entitled to ask your employer for a replacement cheque. They owe it you and it's just sat in their account assigned to you anyway.
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What to do when a job offer is made but with a salary less than what was asked for?
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What I do in those cases - assuming I like the job - is ask for a review in 3-months. They usually take this to mean I want a raise-review and give me a raise. What I really want to know is how I'm doing. Some managers will only give feedback in a review instead of every day.
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Are there any viable alternatives to Paypal for a small site?
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While I've never used the service, there's also Amazon Flexible Payments Services (AFPS): (emphasis below is mine) Amazon Flexible Payments ServiceTM (Amazon FPS) is the first payments service designed from the ground up for developers. It is built on top of Amazon’s reliable and scalable payments infrastructure and provides developers with a convenient way to charge Amazon’s tens of millions of customers (with their permission, of course!). Amazon customers can pay using the same login credentials, shipping address and payment information they already have on file with Amazon. [...] Considering Amazon.com is an e-commerce heavyweight, it might be worth a look.
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Can i short securities in a normal(non-margin) account
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The broker will charge borrowing fees and sometimes a charge called "hard-to-borrow fee". Other than that you will earn interest on the cash you get from selling the stocks, but you will have to pay dividends. This is because someone else (the party you sold the stocks off to) will now get the dividends and the party who lent you the stocks will miss out on these, that's why you have to remunerate them. The type of account you need is entirely up to your broker (and besides, it depends on what a 'normal' account for you is, you should at least mention your country or your broker).
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Why is the buy price different from the sell price of a stock? [duplicate]
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When there is a difference between the two ... no trading occurs. Let's look at an example: Investor A, B, C, and D all buy/sell shares of company X. Investor A wants to sell 10 shares at $20 a share (Ask price $20 x10). Investor B wants to buy 15 shares at $10 a share (Bid price $10 x15). Since the bid price and ask price are different, no sale is made. Next Investor C comes along and wants to sell 5 shares at $14 (Ask price $14 x5). Still no sale. Investor D comes along and wants to buy 5 shares for $14 each. So a sale is finally made. At this point, the stock quote moves to $14. The ask price is $20 x10 and the bid price is $10 x15. No further trading will occur until another investor is willing to buy at $20 or sell at $10. Another discussion of this topic is shown on this post.
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How can I detect potential fraud in a company before investing in them?
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Given that such activities are criminal and the people committing them have to hide them from the law, it's very unlikely that an investor could detect them, let alone one from a different country. The only things that can realistically help is to keep in mind the adage "If something sounds too good to be true, it probably is", and to stick to relatively large companies, since they have more auditing requirements and fraud is much harder to hide at scale (but not impossible, see Enron). Edit: and, of course, diversify. This kind of thing is rare, and not systematic, so diversification is a very good protection.
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What are some tips for getting the upper hand in car price negotiations?
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JohnFX and TTT provide excellent answers. Researching prices others have paid, being up front that you'll go buy a junker car to hold you over if they won't meet your price, and playing a few dealerships off of each other are all great tactics. In addition, I've got a few points about timing your purchase. If you're not desperate for a car, these can really help give you the upper hand in negotiations: Wait until the end of the month. Dealerships and individual salespeople usually have quotas that they're trying to clear, and the month is usually the standard cutoff. The last time I bought a car, the salesman made the mistake of mentioning, "I don't usually work Thursdays, but I'll be in this Thursday." Thursday was the 31st - I inferred from this information that he hadn't made his quota for the month yet. So I came back on the 31st to negotiate, and managed to hammer out a pretty good deal. Wait until about an hour before the dealership closes to show up and shop. This gives you enough time to not be obvious about the tactic, but you'll definitely be holding them past their normal quitting time if you do much negotiating. The salesman will be a little more inclined to make a deal so he can get home and have dinner. Bonus points if you can wait until a month that ends on a Friday!
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How do I choose between buying a car or buying a plot of land in Pakistan?
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Your question has an interesting mix of issues. ASAP and 3-4 years doesn't feel like the same thing. ASAP results in bad decisions made in haste. Four years of living very frugally can create a nice down payment on a house. A car is only an investment for Uber drivers and those who are directly financially benefitting from a car's use. For everyone else, it's a necessary expense. What I'd focus on is the decision of buying a plot of land. Unless this is a very common way to do it in your country, I don't recommend that order. Having land and then trying to finance the building of a house has far more complexity than most people need in their lives. In my opinion, the better way is to save the 20% down, and buy a new or existing home you can afford. In the end, spending is a matter of priority. If you truly want to get out in the least time, I'd save every dime I can and start looking for a house that your income can support.
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What's a Letter of Credit? Are funds held in my bank for the amount in question?
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In a domestic setting, Letters of Credit are often used to build public works needed to support a development. So if you're bulldozing a few 3 story buildings to build a 50 story tower, the municipality will build appropriate water/sewer/gas/road infrastructure, and draw from the developer's letter of credit to fund it. The 'catch' to the developer is that these things usually aren't revokable -- once the city/town/etc starts work, the developer cannot cut-off the funding, even if the project is cancelled. A letter of credit definitely isn't a consumer financing vehicle. The closest equivalent is a "line of credit" tied to an asset like a home.
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What can I replace Microsoft Money with, now that MS has abandoned it?
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MoneyDance Is the way to go. I've been using it for years and it works well. It keeps getting better, and best of all, it's completely cross platform! Mac, Windows and linux!
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Purchasing a home using collateral
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Since you only own half of the house, you would most likely need the cooperation of whoever owns the other half in order to use it as collateral for a loan, but if you can do that, there's no reason you couldn't do what you're talking about. The complication is that if you default on the loan, the bank isn't going to seize half of the house. They'll repossess the entire house, sell it, and take what they're owed out of the proceeds, leaving you and whoever owns the other 50% to fight over the remnants. Even if the owner of the other half is family, they may be hesitant to risk losing the house if you don't pay your mortgage, so this could be a dicey conversation.
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Should I finance rental property or own outright?
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In general you do not want to show a taxable gain on rental properties if you can avoid it. One of the more beneficial advantages of owning cash flowing rental properties, is that the income is tax deferred because of the depreciation. I say deferred, because depreciation affects the cost basis of your property. Also since you are considering financing, it sounds like you don't need the cash flow currently. You usually can get better returns by financing and buying more rental properties, especially with investment mortgages at historical lows (Win via inflation over time)
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Live in Oregon and work in Washington: Do I need to file Oregon state taxes?
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Unfortunately, you are required, but most states do have agreements with neighboring states that let the states share the collected taxes without the person having to pay double taxes. So being as this is your first tax return in your current situation, you might be wise to have a professional fill it out for you this year and then next year you can use it as a template. Additionally, I really would like to see someone challenge this across state lines taxation in court. It sure seems to me that it is a inter-state tariff/duty, which the state's are expressly forbidden from doing in the constitution.
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Good yield vs. safer route (Checking vs. Savings)
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In personal finance, most of your success is determined by personal habit rather than financial savvy. Getting in the habit of making regular deposits to your savings account will have a much larger effect on your situation than worrying about which account pays the highest interest rate (particularly as neither one of them matches the current inflation rate, which is over 3%). So go ahead and put your money in a savings account, but not because of the interest or safety, but because it's a "savings" account.
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Why would my job recruiter want me to form an LLC?
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This sounds very like disguised employment. You act like an employee of the company, but your official relationship with them is as a contractor. You gain none of the protection you get from being an employee, and this may make you cheaper, less risky and more desirable for the company who is hiring you. Depending on your country you may also pay corporation tax rather than income tax, which may represent a very significant saving. Also, the company hiring you may not have to pay PAYE, national insurance, stakeholder pension, etc. This arrangement is normal and legal providing you genuinely are acting as a subcontractor. However if you are behaving as an employee (desk at the company, company email, have to work specific hours in a specific location, no ability to subcontract, etc.) you may be classified as a disguised employee. In the UK it used to be common practice for highly paid employees to set up shell companies to avoid tax. This will now get you into hot water. Google IR35 It sounds like your relationship in this case is directly with the recruiter. You will have to consider if the recruiter is acting as your employer, or if you remain a genuinely independent agent. The duration of your contract with the recruiter will have a bearing on this. In the UK there are a whole series of tests for disguised employment. This is a good arrangement provided you go in with your eyes open and an awareness of the legislation. However you should absolutely check the rules that apply in your country before entering into this agreement. You could potentially be stung very badly indeed.
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Flexplan - a company is taking over another, do I pay the balance?
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This is only one of a series of questions your friend needs to understand. They will also need to know what happens to: vacation balances; the vacation earning schedule; retirement fund matching; the pension program; all the costs and rules regarding health, dental and vision;life insurance amounts. Some of these can be changed immediately. Some will not be changed this year because of IRS regulations. Everything can be changed by the next year. But there is no way to know if they will change a little a possible or as much a possible. It will depend on if they are buying the company, or if the company is going out of business and the new company is buying the remnants. They may also be essentially terminating the employees at the old place, and giving them the first opportunity for interviews. If they are essentially quitting they will not have to continue paying into the plan. The bad news is that their last day of work is also probably their last day to incur expenses that they can pay for with the flexible plan. If They are being purchased or absorbed the company will likely make no changes to the current plan, and fold them into the plan next year. I have been involved with company purchases and company splits, and this is how it was handled.
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How big of a mortgage can I realistically afford?
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$260k mortgage is pretty high for $80k salary alone -- if you have expensive tastes, be prepared to tune them down. The make or break for you will be taxes and other recurring fees. If property taxes are trending higher than inflation in your area, you'll have trouble down the line. Decisions like this are really market driven, and I don't know much about Salt Lake City. In general, condo values get punished relative to single-family homes during bad market conditions. So if this is a really nice condo in a good building in a desirable part of the city you're probably going to see the value of the property increase as the general economy improves. If the property is good, go for it.
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What happened when the dot com bubble burst?
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Well basically a lot of dot-com companies that had no real plans for having actual profit's, self-destructed. I had worked for a company called VarsityOnline.com which was depending on endless money from investor's, and had never really made any kind of profit, for which it had ample opportunity. People lost sight of reality, that just because it wasn't a real brick and mortar store, that common sense, good service and good products didn't matter. We were so clueless back then.
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Investment strategies for young adults with entrepreneurial leanings?
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I talk about this subject on my blog on investing, I share everything that has worked for me personally and that makes sense. I would say the ideal investment would be to continue the entrepreneur route. Just make sure you have a clear plan and exit strategy. For me it's all about passion, I love blogging about personal experiences with life, money, and anything that affects our lives. Find something that you would talk about whether you were paid or not and create a business off of it. You'll never work a day in your life because you love it.
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Does a market maker sell (buy) at a bid or ask price?
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I think your confusion has arisen because in every transaction there is a buyer and a seller, so the market maker buys you're selling, and when you're buying the market maker is selling. Meaning they do in fact buy at the ask price and sell at the bid price (as the quote said).
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Will depositing $10k+ checks each month raise red flags with the IRS?
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Your main concern seems to be to be accused of something called 'smurfing' or structuring. http://en.wikipedia.org/wiki/Structuring Depositing money amounts (cash or checks) under the 10k limit to circumvent the reporting requirement. People have been investigated for depositing under the limit, e.g. small business owners. If you're always above 10k you should be fine, as your deposits are reported and shouldn't raise IRS or FBI suspicions.
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Why is it good to borrow money to buy a house?
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You can explore the scenarios in which it is better to rent or to buy using this application: http://demonstrations.wolfram.com/BuyOrRentInvestmentReturnCalculator/ In the possibly unlikely scenario shown below, at the term of the mortgage (20 years) the tenant and the buyer have practically the same return on investment. At this point the tenant's savings would be sufficient to buy a house equivalent to the buyer's, and this would be the advisable course of action (based on the figures alone).
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Price Earnings Ratio
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Your question asks us to explain why a false statement is true. From the point of view of an investor, a high price to earnings ratio is not necessarily desirable. From the point of view of an investor, a desirable stock is one that is likely to provide future dividends or price increases that more than compensates for the risk of the stock. This information cannot be inferred from the P/E ratio. So what does the P/E ratio tell us? The P/E ratio measures a stock's current price (i.e., the market's belief about its future earnings) divided by its recent past earnings. A high ratio means the market thinks earnings in the future will be higher than they are now and have therefore bid the price up. These can thought of as expensive stocks, and are often called "growth" stocks because their price is driven by the market's belief in future growth. Some individual high P/E stocks do live up to or exceed the market's expectation, but there's no evidence that this happens enough that they are more desirable as a group than low P/E stocks. If anything, the empirical evidence goes the other way.
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When do I need to return short stock to the lender
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If the owner of the stock wants it back, they "call" it back. There are no guarantees of how long you can keep it for your short, or the cost involved to hold it. Usually, everyone knows about a particular set-up (e.g. a warrant or convertible bond mispricing) that is attractive for arbitrage. This causes the associated stock to be in high demand thus expensive to borrow for shorting, or impossible to find for any price at all.
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How safe is a checking account?
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In the case of bank failures You are protected by FDIC insurance. At the time I wrote this, you are insured up to $250,000. In my lifetime, it has been as high as $1,000,000 and as low as $100,000. I attached a link, which is updated by FDIC. In the case of fraud It depends. If you read this story and are horrified (I was too), you know that the banking system is not as safe as the other answers imply: In February 2005, Joe Lopez, a businessman from Florida, filed a suit against Bank of America after unknown hackers stole $90,000 from his Bank of America account. The money had been transferred to Latvia. An investigation showed that Mr. Lopez’s computer was infected with a malicious program, Backdoor.Coreflood, which records every keystroke and sends this information to malicious users via the Internet. This is how the hackers got hold of Joe Lopez’s user name and password, since Mr. Lopez often used the Internet to manage his Bank of America account. However the court did not rule in favor of the plaintiff, saying that Mr. Lopez had neglected to take basic precautions when managing his bank account on the Internet: a signature for the malicious code that was found on his system had been added to nearly all antivirus product databases back in 2003. Ouch. But let's think about the story for a second - he had his money stolen because of online banking and he didn't have the latest antivirus/antimalware software. How safe is banking if you don't do online banking? In the case of this story, it would have prevented keyloggers, but you're still susceptible to someone stealing your card or account information. So: In the bank's defense, how does a bank not know that someone didn't wire money to a friend (which is a loss for good), then get some of that money back from his friend while also getting money back from the bank, which had to face the loss. Yes, it sucks, but it's not total madness. As for disputing charges, from personal experience it also depends. I don't use cards whatsoever, so I've never had to worry, but both of my parents have experienced banking fraud where a fake charge on their card was not reversed. Neither of my parents are rich and can't afford lawyers, so crying "lawsuit" is not an option for everyone. How often does this occur? I suspect it's rare that banks don't reverse the charges in fraudulent cases, though you will still lose time for filing and possibly filling out paperwork. The way to prevent this: As much as I hate to be the bearer of bad news, there is no absolutely safe place to keep your money. Even if you bought metals and buried them in the ground, a drifter with a metal detector might run across it one day. You can take steps to protect yourself, but there is no absolute guarantee that these will work out. Account Closures I added this today because I saw this question and have only seen/heard about this three times. Provided that you get the cashier's check back safely, you should be okay - but why was this person's account closed and look at how much funds he had! From his question: In the two years I banked with BoA I never had an overdraft or any negative marks on my account so the only thing that would stick out was a check that I deposited for $26k that my mom left me after she passed. Naturally, people aren't going to like some of my answers, especially this, but imagine you're in an immediate need for cash, and you experience this issue. What can you do? Let's say that rent is on the line and it's $25 for every day that you're late. Other steps to protect yourself Some banks allow you to use a keyword or phrase. If you're careful with how you do this and are clever, it will reduce the risk that someone steals your money.
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How can I pay for school to finish my degree when I can't get a student loan and have bad credit?
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When considering such a major life decision, with such high potential costs and high potential rewards, I encourage you to consider multiple different potential options. Even if loans were available, they might not be the best option. Less debt and an engineering degree is better than more debt and an engineering degree, both of which are likely better than your current debt and no engineering degree. I encourage you to consider: revisit your aid (which is not just loans), cut expenses, consider alternative aid sources, use your engineering student status to get a better paying job (including more profitable summer employment), check for methods to cut down the cost of your degree, and double-check your plans to make sure you have a long-term plan that makes sense. The first issue, raised in the comments, is whether or not you are getting appropriate financial aid. This does not just mean loans, it includes grants and other forms of assistance. You should be getting in-state tuition, and by searching the tuition of UNC I believe you are. But for future readers, you should make sure you are getting in-state rates, and it not there are options to return to a state where you would get in-state tuition rates, or look into the possibility of pausing your study for one year until you meet in-state funding requirements. You should also ensure your FAFSA information is correct, including your income, family situation (whether or not you are an independent study, as it sounds like you probably are), etc. This effects how many grants you get, and if you are independent this changes maximum federal loan amounts (see website for details). While you don't say what your pay is, the fact that you are working two jobs and having trouble making ends-meet suggests either that you have a spending issue, or that your jobs pay sucks, and possibly both. I've been in both situations, and there are methods for dealing with both. If your spending is not very carefully controlled, that's a big issue. I won't try to rehash all the personal finance advice about this, but I will just warn that when you are desperate and you know there isn't enough money even if you spend perfectly, there is a strong tendency to just give up and not even try because what's the point? Learned helplessness is hell, but it can be overcome with effort and tightly holding on to any glimmer of hope you find to do better each day. If you are in a field like engineering or computing (and some other fields, though I am less personally familiar with the current employment climate in those), there are usually companies who want to hire you as a paid intern or part-time employee in the hopes of getting you when you graduate. Those last two semesters of undergrad are a technicality to employers, they know it doesn't really change your skill set much. Many companies are actually more interesting in hiring someone on who hasn't finished the degree yet than getting someone recently post-degree, because they can get you cheaper and learn if this is a good match before they have to take the big risk of full-time hiring. You need to use this system to your advantage. Its hard when you feel destitute, but talk with career councilors in your school, your department advisor, and/or main administrative staff in your main academic department. Make sure you are on the right mailing lists to see the job offers (many schools require you to subscribe to one because at a school like UNC it easily gets way too much traffic each day). You need field-relevant experience, not just to finish the degree, but to be able to really open up your job opportunities and earning potential. Do not be shy about directly calling/emailing a contact who reaches out to your school looking for "recent graduates", and especially any mention of flexibility on early start for those who are almost finished. You can say you are in your final year (you are), and even ask if they are open to working around a light school schedule while you finish up. Most can end up to be "no", but it doesn't matter - the recruiting contacts want to hire people, so just reaching out early means you can follow up later once you get your degree and finances sorted out and you will have an even easier time getting that opportunity. In technology and engineering, the importance of summer internships cannot be understated, especially as you are now technically at the end of your degree. In engineering and tech fields, internships pay - often very well. Don't worry about it being the job of your dreams. Depending on your set of skills, apply to insurance companies, IT departments in hospitals and banks (even if you thought your coding skills in engineering were minimal), and of course any paying position that might be more directly in your field of interest. Consider ones outside your immediate area or even the more national internships from the bigger name companies, where possible. It is not at all uncommon for tech and engineering internships for undergraduate students to pay $15-$25+ per hour, even where most non-degree jobs might only pay $8 (and I've seen as high as $40 per hour+ in the high cost of living markets, depending on your skill set). I know many people who were paid more as a student intern than they were previously paid as a full-time professional employee. Many schools - including UNC - charge different tuition for distance learning and satellite campuses, and often also offer University-approved online classes. While this is not always a possibility for every student, you should consider the options. It could be that one of the final classes you need towards your degree can be taken at one of these other options, with reduced tuition. This is not always possible with all courses, but is certainly true if you have any of those general education requirements to knock out. Also consider if any of those final requirements have test-out options, such as CLEP test alternatives. Again, not always available, but sometimes you can get class credit for a general education class for Finally, make sure you aren't paying unnecessarily for text books, once you do get the money for tuition. You can sometimes get hand-me-down copies, rent ebooks or physical books from online companies, creative searches for PDF copies, get your book from off-campus local stores, etc. It isn't tuition, but money is money. Attend Part-Time While Working Look into the option of being a half-time student, which is usually 6-8 credit hours, if you can't afford full-time tuition. There is generally a greatly reduced rate, you still qualify for aid programs, and you are still working towards the degree - so you still get access to student resources like internships and job listings that may not be publicly posted. Inquire About Scholarships and School Emergency Assistance While this varies hugely by institution, make sure you check into scholarships you can apply to (even if they are just a few hundred bucks, it helps a lot) in your school (I don't believe the big online searches help, ask the school - but YMMV). Also inquire about any sort of possible help the school provides to students who've had life emergencies, such as your medical issues. Many have programs that are not advertised, designed to help students finish their degree and recover from personal hard times. It's worth the inquiry if you are willing to ask. Any little bit of assistance can help. Don't be afraid to talk with an institution's mental health councilors either, who can help you deal with the psychological difficulty of your situation as well as often being able to connect you to other potential support resources. The pressure can take its tole, and you'll have better long-term opportunities if you build up your support network and options. Student Loan Forbearance While In School If you are trying to save up every last dollar for tuition to finish the degree, but you have to pay loans now, call up the provider to ask about temporary delays on your student loan payments. Many have time-limited hardship allowances, and between the medical bills, low income, and returning to school, they may be willing to give you a few months break until you get back to school and the in-school provisions kick in. Skip a Semester If Necessary To Save Money If you can only raise enough for one semester, then need to skip a semester to build up more funds, that happens, it's OK. Be strategic, and check on loan forbearance. Usually being out for one semester is allowed by student loan companies before you owe them payment, and if you re-enroll you don't have to start making payments yet. Double-check on Credit Expiration and Degree Requirements Make sure you talk to someone who knows what they are talking about, especially in terms of credit expiration. Policies vary, and sometimes an advisor is able to put in a special request to waive you through some of these issues. Academia is heavily, heavily reliant on developing a good relationship and clear communication with an advisor who is willing to work with you to achieve your goals. Written policies are sometimes very firm, and sometimes all you have to do is ask the right person and poof, suddenly the rules change. It's a weird system, but don't be afraid to explain your situation and ask what can be done. Don't assume a written policy is 100% ironclad - sometimes it is, but it often isn't. Inquire About Other Government and Community-based Assistance Being destitute is awful, and having to ask for help can feel terrible in it's own way, but doing what you have to do to have a better future can mean pushing through and being willing to ask for help. This can mean asking parents and close family if they can contribute to help you finish your degree, but this also means checking with your local community programs to see if you qualify for anything. Many communities have food pantries and related programs that will help you even if you don't qualify for something like SNAP (aka food stamps), because they know times can get hard for anyone and they want you to spend what little money you have on building a better life. Your university may even run a food pantry for students in need - use it. Get what assistance you can, minimize spending in any way you can manage, put all the money towards doing what you need to do to get to a better place. It's even nicely reciprocal - once you work through your hard times and get things on track, you can return the favor and help give back to programs like the ones that helped you. Make Sure Your Long-Term Goal Makes Sense Finally, this is all predicated on pulling out all the stops to finish your degree. But this assumes that this is a good plan. Not all degrees are helpful for all people in all areas of the country. Do your own research to make sure you aren't throwing good money after bad, and are pursuing a goal that will make sense for you and what you want. The cost of a degree keeps going up, but it remains true that many sets of skills and degree-holding candidates are in demand and can command high salaries that blow away the cost of college in comparison. If you actually have a good chance of going from struggling to make $8/hour to making $50k-90k a year, based on your developed skills, experience, and professional network, then reasonable student loan debt is a worthy investment. If, on the other hand, you wrack up tens of thousands of more dollars in debt just to say you did and still have to work the same kinds of jobs, that's not really much of an investment at all. Good luck on your journey, and best wishes towards better days - regardless of what path you choose. Finally, make sure you aren't paying unnecessarily for text books, once you do get the money for tuition. You can sometimes get hand-me-down copies, rent ebooks or physical books from online companies, creative searches for PDF copies, get your book from off-campus local stores, etc. It isn't tuition, but money is money. Look into the option of being a half-time student, which is usually 6-8 credit hours, if you can't afford full-time tuition. There is generally a greatly reduced rate, you still qualify for aid programs, and you are still working towards the degree - so you still get access to student resources like internships and job listings that may not be publicly posted. While this varies hugely by institution, make sure you check into scholarships you can apply to (even if they are just a few hundred bucks, it helps a lot) in your school (I don't believe the big online searches help, ask the school - but YMMV). Also inquire about any sort of possible help the school provides to students who've had life emergencies, such as your medical issues. Many have programs that are not advertised, designed to help students finish their degree and recover from personal hard times. It's worth the inquiry if you are willing to ask. Any little bit of assistance can help. Don't be afraid to talk with an institution's mental health councilors either, who can help you deal with the psychological difficulty of your situation as well as often being able to connect you to other potential support resources. The pressure can take its tole, and you'll have better long-term opportunities if you build up your support network and options. If you are trying to save up every last dollar for tuition to finish the degree, but you have to pay loans now, call up the provider to ask about temporary delays on your student loan payments. Many have time-limited hardship allowances, and between the medical bills, low income, and returning to school, they may be willing to give you a few months break until you get back to school and the in-school provisions kick in. If you can only raise enough for one semester, then need to skip a semester to build up more funds, that happens, it's OK. Be strategic, and check on loan forbearance. Usually being out for one semester is allowed by student loan companies before you owe them payment, and if you re-enroll you don't have to start making payments yet. Make sure you talk to someone who knows what they are talking about, especially in terms of credit expiration. Policies vary, and sometimes an advisor is able to put in a special request to waive you through some of these issues. Academia is heavily, heavily reliant on developing a good relationship and clear communication with an advisor who is willing to work with you to achieve your goals. Written policies are sometimes very firm, and sometimes all you have to do is ask the right person and poof, suddenly the rules change. It's a weird system, but don't be afraid to explain your situation and ask what can be done. Don't assume a written policy is 100% ironclad - sometimes it is, but it often isn't. Being destitute is awful, and having to ask for help can feel terrible in it's own way, but doing what you have to do to have a better future can mean pushing through and being willing to ask for help. This can mean asking parents and close family if they can contribute to help you finish your degree, but this also means checking with your local community programs to see if you qualify for anything. Many communities have food pantries and related programs that will help you even if you don't qualify for something like SNAP (aka food stamps), because they know times can get hard for anyone and they want you to spend what little money you have on building a better life. Your university may even run a food pantry for students in need - use it. Get what assistance you can, minimize spending in any way you can manage, put all the money towards doing what you need to do to get to a better place. It's even nicely reciprocal - once you work through your hard times and get things on track, you can return the favor and help give back to programs like the ones that helped you. Finally, this is all predicated on pulling out all the stops to finish your degree. But this assumes that this is a good plan. Not all degrees are helpful for all people in all areas of the country. Do your own research to make sure you aren't throwing good money after bad, and are pursuing a goal that will make sense for you and what you want. The cost of a degree keeps going up, but it remains true that many sets of skills and degree-holding candidates are in demand and can command high salaries that blow away the cost of college in comparison. If you actually have a good chance of going from struggling to make $8/hour to making $50k-90k a year, based on your developed skills, experience, and professional network, then reasonable student loan debt is a worthy investment. If, on the other hand, you wrack up tens of thousands of more dollars in debt just to say you did and still have to work the same kinds of jobs, that's not really much of an investment at all. Good luck on your journey, and best wishes towards better days - regardless of what path you choose.
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Why exercise ISO/QSO early?
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You are thinking about it this way: "The longer I wait to exericse, the more knowledge and information I'll have, thus the more confidence I can have that I'll be able to sell at a profit, minimizing risk. If I exercise early and still have to wait, there may never be a chance I can sell at a profit, and I'll have lost the money I paid to exercise and any tax I had to pay when I exercised." All of that is true. But if you exercise early: The fair market value of the stock will probably be lower, so you may pay less income tax when you exercise. (This depends on your tax situation. Currently, ISO exercises affect your AMT.) If the company goes through a phase where the value is unusually high, you'll be able to sell and still get the tax benefits because you exercised earlier. You avoid the nightmare scenario where you leave the company (voluntarily or not) and can't afford to exercise your options because of the tax implications. In many realistic cases, exercising earlier means less risk. Imagine if you're working at a company that is privately held and you expect to be there for another year or so. You are very optimistic about the company, but not sure when it will IPO or get acquired and that may be several years off. The fair market value of the stock is low now, but may be much higher in a year. In this case, it makes a lot of sense to exercise now. The cost is low because the fair market value is low so it won't result in a huge tax bill. And then when you leave in a year, you won't have to choose between forfeiting your options or borrowing money to pay the much higher taxes due to exercise them then.
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Shorting versus selling to hedge risk
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The word 'hedge' emerges from early agriculture when farmers would ask the market for a minimum buy price for each crop they planted. They used this method to stop loss against any major losses. Investors today use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge).
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What does the average log-return value of a stock mean?
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Knowing the log return is useful - the log return can help you to work out the annual return over the period it was estimated - and this should be comparable between stocks. One should just be careful with the calculation so that allowance for dividends is made sensibly.
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Is it worth buying real estate just to safely invest money?
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No one has addressed the fact that your loan interest and property taxes are "deductible" on your taxes? So, for the first 2/3 years of your loan, you will should be able to deduct each year's mortgage payment off your gross income. This in turn reduces the income bracket for your tax calculation.... I have saved 1000's a year this way, while seeing my home value climb, and have never lost a down payment. I would consider trying to use 1/2 your savings to buy a property that is desirable to live in and being able to take the yearly deduction off your taxes. As far as home insurance, most people I know have renter's insurance, and homeowner's insurance is not that steep. Chances are a year from now if you change your mind and wish to sell, unless you're in a severely deflated area, you will reclaim at minimum your down payment.
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Want to buy above market price?
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Buy and sell orders always include the price at which you buy/sell. That's how the market prices for stocks are determines. So if you want to place a buy order at 106, you can do that. When that order was fulfilled and you have the stock, you can place a sell order at 107. It will be processed as soon as someone places a buy order at 107. Theoretically you can even place sell orders for stocks you haven't even bought yet. That's called short selling. You do that when you expect a stock to go down in the future. But this is a very risky operation, because when you mispredict the market you might end up owing more money than you invested. No responsible banker will even discuss this with you when you can not prove you know what you are doing.
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Why would a company with a bad balance sheet be paying dividends?
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Ford paid off a tremendous amount of debt prior to reinstating the dividend. While they still have a sizable amount of debt on the balance sheet, they've been able to refinance this debt to a much more affordable point. Their free cash flow + cash on the balance could enable them to pay it off in the very near future (12 - 16 months). Most auto companies have debt on their balance sheet if they choose to offer financial services. Their overall credit rating (if you really think such things are valid) has also improved. Generally speaking, I agree its a poor idea to give money back to shareholders if you have high-interest bearing debt.
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Why would people sell a stock below the current price?
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People in this case, are large institutional investors. The "bid ask" spread is for "small traders" like yourself. It is put out by the so-called specialists (or "market makers") and is typically good for hundreds or thousands of shares at a time. Normally, 2 points on a 50 stock is a wide spread, and the market maker will make quite a bit of money on it trading with people like yourself. It's different if a large institution, say Fidelity, wants to sell, say 1 million shares of the stock. Depending on market conditions, it may have trouble finding buyers willing to buy in those amounts anywhere near 50. To "move" such a large block of stock, they may have to put the equivalent of K-Mart's old "Blue Light Special" on, several points below.
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What one bit of financial advice do you wish you could've given yourself five years ago?
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Get an advanced degree. This should increase your earning power. Also learn how to use a computer, this should also tend to increase your earning power.
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Why does the calculation for percentage profit vary based on whether a position is short vs. long?
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There are different perspectives from which to calculate the gain, but the way I think it should be done is with respect to the risk you've assumed in the original position, which the simplistic calculation doesn't factor in. There's a good explanation about calculating the return from a short sale at Investopedia. Here's the part that I consider most relevant: [...] When calculating the return of a short sale, you need to compare the amount the trader gets to keep to the initial amount of the liability. Had the trade in our example turned against you, you (as the short seller) would owe not only the initial proceeds amount but also the excess amount, and this would come out of your pocket. [...] Refer to the source link for the full explanation. Update: As you can see from the other answers and comments, it is a more complex a Q&A than it may first appear. I subsequently found this interesting paper which discusses the difficulty of rate of return with respect to short sales and other atypical trades: Excerpt: [...] The problem causing this almost uniform omission of a percentage return on short sales, options (especially writing), and futures, it may be speculated, is that the nigh-well universal and conventional definition of rate of return involving an initial cash outflow followed by a later cash inflow does not appear to fit these investment situations. None of the investment finance texts nor general finance texts, undergraduate or graduate, have formally or explicitly shown how to resolve this predicament or how to justify the calculations they actually use. [...]
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Related Hedges (How do they work?)
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In this type of strategy profit is made when the shares go down as your main position is the short trade of the common stock. The convertible instruments will tend to move in about the same direction as the underlying (what it can be converted to) but less violently as they are traded less (lower volatility and lower volume in the market on both sides), however, they are not being used to make a profit so much as to hedge against the stock going up. Since both the bonds and the preference shares are higher on the list to be repaid if the company declares bankruptcy and the bonds pay out a fixed amount of interest as well, both also help protect against problems that may occur with a long position in the common stock. Essentially the plan with this strategy is to earn fixed income on the bonds whilst the stock price drops and then to sell both the bonds and buy the stock back on the market to cover the short position. If the prediction that the stock will fall is wrong then you are still earning fixed income on the debt and are able to convert it into stock at the higher price to cover the short sale eliminating, or reducing, the loss made on the short sale. Effectively the profit here is made on the spread between the price of the bond, accounting for the conversion price, and the price of the stock and that fixed income is less volatile (except usually in the junk market) than stock.
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After Market Price change, how can I get it at that price?
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If the price used to be 2.50 but by the time you get in an order it's 2.80, you're going to have to pay 2.80. You can't say, "I want to buy it at the price from an hour ago". If you could, everybody would wait for the price to go up, then buy at the old price and have an instant guaranteed profit. Well, except that when you tried to sell, I suppose the buyer could say, "I want to pay the lower price from last July". So no, you always buy or sell at the current price. If you submit an order after the markets close, your broker should buy the stock for you as soon as possible the next morning. There's no strict queue. There are thousands of brokers out there, they don't take turns. So if your broker has 1000 orders and you are number 1000 on his list, while some other broker has 2 orders and number 1 is someone else wanting to buy the same stock, then even if you got your order in first, the other guy will probably get the first buy. LIFO and FIFO refer to any sort of list or queue, but don't really make sense here. When the market opens a broker has a list of orders he received overnight, which he might think of as a queue. He presumably works his way down the list. But whether he follows a strict and simple first-in-first-out, or does biggest orders first, or does buys for stocks he expects to go up today and sells for stocks he expects to go down today first, or what, I don't know. Does anybody on this forum know, are there rules that say brokers have to go through the overnight orders FIFO, or what is the common practice?
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How do I screen for stocks that are near to their 52 weeks low
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There is a great 3rd party application out there that I use (I am a broker) along with my internal analysts and other 3rd party sources. VectorVest has a LOT of technical information, but is very easy to use. It will run any kind of screen you like, including low 52 week numbers. (No, I don't get anything for recommending them.)
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What are the alternatives to compound interest for a Muslim?
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I cannot tell you what is or is not allowed under Islamic law. What I can tell you is that when most investors talk about the "power of compound interest," they are not actually necessarily talking about interest! The idea of the magic of compound interest is that when you receive an interest payment on your investment, you now have a larger investment, earning more interest. Your investment grows exponentially. This doesn't just apply to interest payments, however, but can apply to any type of investment where the profits of the investment cause the investment to get larger. For example, if you invest in a company's stock, and the value of the stock goes up 10% in a year, after that year your investment is worth more than it was at the beginning. If it goes up another 10% the following year, you have gained more money in the second year than you did in the first. Your gains are compounding, even though interest payments are not involved at all. The same is true if you reinvest dividends or if you use business profit to expand your business, for example. The term "power of compound interest" is so named for historical reasons, but really applies to any type of investment where the investment itself is growing.
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How can I detect potential fraud in a company before investing in them?
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Even without fraud, a company can get into serious trouble overnight, often through no fault of their own. That's part of the hazard of being part owner of a company -- which is what a share of stock is. As a minority owner not involved in actually running the business, there really isn't a lot you can do about that excep to play the odds and think about how that risk compares to the profit you're taking (which is one reason the current emphasis on stock price rather than dividends is considered a departure from traditional investing) and, as everyone else has said, avoid putting too much of your wealth in one place.
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Can paying down a mortgage be considered an “investment”?
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It very much comes down to question of semantics and your particular situation. Some people do not view a house (and most upgrades) as an investment, but rather an expense. I certainly agree that this is probably the case if you pay someone else to make the repairs and upgrades. However, if you are a serious DIYer, that may not be the case. Of course, if the house is a money pit and/or you were unfortunate to buy when prices where ridiculously high, you'll have a hard time making any money on this "investment." To continue this game of semantics, you may also consider the value you extract from your home while you are living in it. On to the mortgage itself. Chances are that it is a long term, relatively low rate loan and that the interest is deductible. So, there are some disadvantages to paying it down early, even without early payment penalties. Paying down early on the principal is a disadvantage from a tax perspective. How much of a disadvantage hinges on the rate. Now, a debt is a liability on your personal balance sheet. It drags down any returns you may have from investing. However, a home lone is not generally subject to the cardinal rule of paying off your high interest debt before investing. It should not be relatively high and it pays for something necessary. It may be that any credit card debt you have may have paid for something considered necessary. However, with the relatively high interest rates, you have to question just how necessary any credit card debt really is. Not to mention that there is no tax advantage. So, it comes down to the fact that a home loan should be relatively low interest, paying for something you must have and that you hopefully have some tax advantage from the interest you pay on it.
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Personal finance software for Mac that can track stocks and mutual funds? (Even manual updating of share prices will do.)
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Quicken for Mac will track stocks and mutual funds and allows you to set the "home" currency.
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Do I have to repay the First-Time Homebuyers tax credit if I refinance?
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No. As long as you live in the house for 3 years, it's yours to keep. Financing has nothing to do with that.
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What are the benefits of opening an IRA in an unstable/uncertain economy?
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Even Gold lost 1/2 of it's value between 1980 and 2000. You would not have fared well if you retired during that period heavily invested in Gold. http://www.usagold.com/reference/prices/history.html You said yourself that one can not foresee what the future will bring. At least IRA's force you to into dollar cost averaging, whereas if your money was outside of a retirement account, you might be tempted to speculate. -Ralph Winters
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Why do put option prices go higher when the underlying stock tanks (drops)?
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There are two components of option valuation, the value that's "in the money" and the "time value." In the case of the $395 put, that option was already in the money and it will move less than the stock price by a bit as there will still be some time value there. $22.52 is intrinsic value (the right word for 'in the money') and the rest is time. The $365 strike is still out of the money, but as jldugger implied, the chance of it going through that strike is better as it's $6.66 closer. Looking at the options chain gives you a better perspective on this. If Apple went up $20 Monday, and down $20 Tuesday, these prices would be higher as implied volatility would also go higher. Now, I'd hardly call a drop of under 2% "tanking" but on the otherhand, I'd not call the 25% jump in the option price skyrocketing. Options do this all the time. Curious what prompted the question, are you interested in trading options? This stock in particular?
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At what age should I start or stop saving money?
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As AskAboutGadgets notes, there's no lower age limit. You current age (24) is a pretty good one; you'll have four decades or so for your money to grow and compound, allowing it to become a veritable fortune when you're ready to retire if you invest it fairly aggressively.
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Should Emergency Funds be Used for Infrequent, but Likely, Expenses?
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Which of these categories are emergency funds meant to cover? Emergency funds are for emergencies, which to me means expenses that are unanticipated and can't be covered out of "normal" cash-flow. Oil changes are not an "emergency" and should be part of your normal budget. Car/house repairs and doctor visits might be an emergency depending on the severity and the urgency (e.g. do I need to fix this now or can I save up and fix it?) For known, predictable expenses that are infrequent (Christmas, birthdays, car insurance, home insurance/taxes if it's not part of your mortgage payment), I use an escrow account. I calculate how much I'll need for all of those things put together over the year and set aside a fixed amount each paycheck to ensure that I have enough to cover each item. You could do something similar for minor doctor visits, car repairs, etc. Estimate how much you might spend and set aside some money each month. If you find you're spending more than you thought, just increase the amount. You can use envelopes for each type of expense, have a separate checking account for those, whatever. The point is to set it aside and make sure you have enough left over to cover your known expenses. The whole point of an emergency fund is to be able to pay cash for emergencies rather than borrowing to pay them and dealing with interest, late fees, etc.
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Books, Videos, Tutorials to learn about different investment options in the financial domain
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Those are some very broad questions and I don't think I can answer them completely, but I will add what I can. Barron's Finance and Investment Handbook is the best reference book I have found. It provides a basic description/definition for every type of investment available. It covers stocks, preferred stocks, various forms of bonds as well as mortgage pools and other exotic instruments. It has a comprehensive dictionary of finance terms as well. I would definitely recommend getting it. The question about how people invest today is a huge one. There are people who simply put a monthly amount into a mutual fund and simply do that until retirement on one side and professional day traders who move in and out of stocks or commodities on a daily basis on the other.
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How to read bond yield quotes? What do the time, coupon, price, yield, and time mean?
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The first thing that it is important to note here is that the examples you have given are not individual bond prices. This is what is called the "generic" bond price data, in effect a idealised bond with the indicated maturity period. You can see individual bond prices on the UK Debt Management Office website. The meaning of the various attributes (price, yield, coupon) remains the same, but there may be no such bond to trade in the market. So let's take the example of an actual UK Gilt, say the "4.25% Treasury Gilt 2019". The UK Debt Management Office currently lists this bond as having a maturity date of 07-Mar-2019 and a price of GBP 116.27. This means that you will pay 116.27 to purchase a bond with a nominal value of GBP 100.00. Here, the "nominal price" is the price that HM Treasury will buy the bond back on the maturity date. Note that the title of the bond indicates a "nominal" yield of 4.25%. This is called the coupon, so here the coupon is 4.25%. In other words, the treasury will pay GBP 4.25 annually for each bond with a nominal value of GBP 100.00. Since you will now be paying a price of GBP 116.27 to purchase this bond in the market today, this means that you will be paying 116.27 to earn the nominal annual interest of 4.25. This equates to a 3.656% yield, where 3.656% = 4.25/116.27. It is very important to understand that the yield is not the whole story. In particular, since the bond has a nominal value of GBP100, this means that as the maturity date approaches the market price of the bond will approach the nominal price of 100. In this case, this means that you will witness a loss of capital over the period that you hold the bond. If you hold the bond until maturity, then you will lose GBP 16.27 for each nominal GBP100 bond you hold. When this capital loss is netted off the interest recieved, you get what is called the gross redemption yield. In this case, the gross redemption yield is given as approximately 0.75% per annum. NB. The data table you have included clearly has errors in the pricing of the 3 month, 6 month, and 12 month generics.
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Historic prices for currencies, commodities,
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My guess it's a legal agreement between Yahoo and data provider on what data can be stored, displayed and for how long. Check out this list of data providers
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