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Why do Dealers/Brokers hold Inventory in Stocks? | The difficulty is that you are thinking of a day as a natural unit of time. For some securities the inventory decisions are less than a minute, for others, it can be months. You could ask a similar question of "why would a dealer hold cash?" They are profit maximizing firms and, subject to a chosen risk level, will accept deals that are sufficiently profitable. Consider a stock that averages 1,000 shares per day, but for which there is an order for 10,000 shares. At a sufficient discount, the dealer would be crazy not to carry the order. You are also assuming all orders are idiosyncratic. Dividend reinvestment plans (DRIP) trigger planned purchases on a fixed day, usually by averaging them over a period such as 10 days. The dealer slowly accumulates a position leading up to the date whenever it appears a good discount is available and fills the DRIP orders out of their own account. The dealer tries to be careful not to disturb the market leading up to the date and allows the volume request to shift prices upward and then fills them. |
Resources on Buying Rental Properties | I would also suggest finding the training resource within your state for real estate agent license exam prep... When I was getting started, I took the "101" level course and it was worth the few hundred bucks for the overview I gleaned. |
What does it mean for a company to have its market cap larger than the market size? | If you are calculating: keep in mind that company A probably also sells washers, dryers, stoves, dish washers.... Each of which has their own market size. Also remember that people pay X times the value of earnings per share, so the value depends not on sales but on earnings, and expected growth. |
How long to wait after getting a mortgage to increase my credit limit? | 8 hard inquiries spread over two years is not a negative factor, with a score of 750. Real question #1: How much of your credit limits are you currently using? Less than 30% of your credit limits is good. Less than 15% is even better, 10% is great You don't need to wait X amount of days after applying for a mortgage or a card to increase your chances of getting approved for something else. You do need to be conscious of how many hard pulls you have done in a reporting period though, but again as I said, 8 spread over two years is not a whole lot. Real question #2: What negative things do you have in your credit history? Young age, income, delinquent payments, bankruptcies, low limits? Some of these negative factors are catch-22's (low limits, young age = low limits because of age and young credit history) but these contribute to how much institutions would be willing to lend you |
What's the process to buy an old house to tear it down and create a new one? | By process, I assume you mean the financial process. Financially, this doesn't look any different to me than buying an empty lot to build a rental unit, with the added expense (potentially significant) of doing the tear-down. Given your lack of experience and capital, I would be very hesitant to jump in like this. You are going to have to spend a lot of time managing the build process, or pay someone else to do it for you. And expect everything to take twice as long and cost twice as much as you expect. If you really want to get into the landlord business, I would suggest starting with a structurally sound building that needs some renovation work and start there. One you have that up and running, you can use the cash flow and equity to finance something more aggressive. If you still think you want to do this, the first thing to do is figure out if the financials make sense. How much will it cost to do the tear-down and rebuild, plus the typical rental expenses:ongoing maintenance, taxes, insurance, vacancy rates and compare that to the expected rental rates in the area to see how long it will take to 1) achieve a positive cash flow, and 2) break even. There are a lot of good questions on this site related to rentals that go into much more detail about how to approach this. |
Evidence for timing market in the short run? | Timing the market and by extension the efficient market hypothesis is one of the most hotly debated subjects in finance academia. If you are to believe the majority of finance professors and PHD's out there chances of timing a market like the NYSE, NASDAQ or LSE is not possible. If you are to take into account the huge amount of hedge funds and money managers who make it their job to prove the efficient market hypothesis wrong then you may have a chance. My opinion is that the EMH is true and that timing a highly efficient market like the NYSE is very difficult or impossible even for those who spend their whole lives trying to beat it. For someone whose primary job isn’t in investments I would put the idea of timing the markets out of your head. |
Finding a good small business CPA? | The first place to look for an accountant is the American Institute of Certified Public Accountants which has a directory of CPAs, accounting companies, and local accounting societies. I was also looking for one for my own small firm. It really helps. |
Will my Indian debit card work in the U.S.? | Debit cards with the Visa or Mastercard symbol on them work technically everywhere where credit cards work. There are some limitations where the respective business does not accept them, for example car rentals want a credit card for potential extra charges; but most of the time, for day-to-day shopping and dining, debit cards work fine. However, you should read up the potential risks. A credit card gives you some security by buffering incorrect/fraudulent charges from your account, and credit card companies also help you reverse incorrect charges, before you ever have to pay for it. If you use a debit card, it is your money on the line immediately - any incorrect charge, even accidential, takes your money from your account, and it is gone while you work on reversing the charge. Any theft, and your account can be cleaned out, and you will be without money while you go after the thief. Many people consider the debit card risk too high, and don't use them for this reason. However, many people do use them - it is up to you. |
Should I buy ~$2200 of a hot stock or invest elsewhere? | Forget investing, you need to focus on managing your debt. I would keep the 6k in a checking or savings account because you need that money in case of an emergency. If you save up more than 10k, use the excess to pay down the principal on your debt. Worry about investing when you have a positive net worth. |
Why does it take so long to refund to credit card? | The holdup is from the merchant. To protect themselves, a merchant requires payment before giving you your purchased item/service. That is why you are charged immediately. When getting a refund, the same reason applies. The merchant needs to ensure that you are returning the correct item, or that it is still good, or that you are not trying to defraud the merchant in some way. Once the merchant processes that refund, it is all over for them, and they have no recourse later if they find out they were cheated. That is why they wait a while: the delay gives them time to discover any problems. |
Dry cleaners lost $160 pants, what should I do? | Dude, it's your lucky day! You just won the lottery!! Do like this guy and sue them for $67 million :-) Pearson v. Chung, better known as the "pants lawsuit",1 is a civil case filed in 2005 by Roy L. Pearson, Jr., an administrative law judge in the District of Columbia in the United States, following a dispute with a dry cleaning company over a lost pair of trousers. Pearson filed suit against Soo Chung, Jin Nam Chung and Ki Y. Chung, the owners of Custom Cleaners in Washington, D.C., initially demanding $67 million for inconvenience, mental anguish and attorney's fees for representing himself, as a result of their failure, in Pearson's opinion, to live up to a "satisfaction guaranteed" sign that was displayed in the store. The case drew international attention[2][3] when it went to trial in 2007 and has been held up as an example of frivolous litigation and the need for tort reform in the United States. The entire story dragged on for years, with many appeals, and makes fascinating reading. |
Why divide by ask rate to get the spread? | Mathematically it's arbitrary - you could just as easily use the bid or the midpoint as the denominator, so long as you're consistent when comparing securities. So there's not a fundamental reason to use the ask. The best argument I can come up with is that most analysis is done from the buy side, so looking at liquidity costs (meaning how much does the value drop instantaneously purely because of the bid-ask spread) when you buy a security would be more relevant by using the ask (purchase price) as the basis. Meaning, if a stock has a bid-ask range of $95-$100, if you buy the stock at $100 (the ask), you immediately "lose" 5% (5/100) of its value since you can only sell it for $95. |
When filing taxes in Canada, in what cases does box 39 on the T4 get reported as half of box 38? | Here's the best explanation I found relating to why your T4 box 39 might not have an amount filled in, even when box 38 has one: Department of Finance – Explanatory Notes Relating to the Income Tax Act [...]. It's a long document, but here's the part I believe relevant, with my emphasis: Employee Stock Options ITA 110(1) [...] Paragraph 110(1)(d) is amended to include a requirement that the employee [...] exercise the employee’s rights under the stock option agreement and acquire the securities underlying the agreement in order for the deduction in computing taxable income to be available [...] ensures that only one deduction is available in respect of an employment benefit. In other words, if employee stock option rights are surrendered to an employer for cash or an in-kind payment, then (subject to new subsections 110(1.1) and (1.2)) the employer may deduct the payment but the employee cannot claim the stock option deduction. Conversely, where an employer issues securities pursuant to an employee’s exercise of stock options, the employer can not deduct an amount in respect of the issuance, but the employee may be eligible to claim a deduction under paragraph 110(1)(d). Did you receive real shares based on your participation in the ESPP, or did you get a cash payment for the net value of shares you would have been issued under the plan? From what I can tell, if you opted for a cash payment (or if your plan only allows for such), then the part I emphasized comes into play. Essentially, if conditions were such that your employer could claim a deduction on their corporate income tax return for the compensation paid to you as part of the plan, then you are not also able to claim a similar deduction on your personal income tax return. The money received in that manner is effectively taxed in your hands the same as any bonus employment income would be; i.e. it isn't afforded tax treatment equivalent to capital gains income. Your employer and/or ESPP administrator are best able to confirm the conditions which led to no amount in your box 39, but at least based on above you can see there are legitimate cases where box 38 would have an amount while box 39 doesn't. |
Should the poor consider investing as a means to becoming rich? | A cautionary tale: About 25 years ago I decided that I should try my hand at investing in some technology companies. I was in the computer biz but decided that I might suffer from myopia there, so I researched some medical startups. And I did some reasonably good research, given the available resources (the Internet was quite primitive). I narrowed things down to 4-5 companies, studying their technology plans, then researched their business plans and their personnel. In the end I picked a drug company. Not only did it have a promising business plan, but it had as it's CEO a hotshot from some other company, and the BOD was populated buy big names from tech companies and the like. AND the company had like $2 of cash for every $1 of outstanding share value, following their recent IPO. So I sold a bit of stock I had in my employer and bought like $3000 worth of this company. Then, taking the advice I'd seen several places, I forgot about it for about 6 months. When I went back to look their stock value had dropped a little, and the cash reserves were down about 20%. I wasn't too worried. 6 months later the cash was down 50%. Worrying a little. After I'd had the stock for about 2 years the stock price was about 10% of what I'd paid. Hardly worth selling, so I hung on for awhile longer. The company was eventually sold to some other company and I got maybe $50 in stock in the new company. |
How much is inflation? | To add to MrChrister's answer: Canada also has a Consumer Price Index (CPI) used to measure inflation that is distinct and separate from that maintained by the United States. There are differences in inflation between the U.S. and Canada because our currencies are different, and there may be different items in the "basket" of goods that constitutes the index. You can find current information on the Canadian CPI at Statistics Canada, here: Latest release from the Consumer Price Index. Also, the Bank of Canada – our central bank – maintains a free online Inflation Calculator. The BoC's inflation calculator is handy because you can enter a dollar amount for a past date and it will figure out what that would be in today's dollars. For instance, $100 in 1970 dollars had the same purchasing power (under the CPI) as $561.76 in 2009 dollars! And you're right – if you get a salary increase that is less than the rate of inflation, then in theory you have lost purchasing power. So, anybody really looking for a raise ought to make an effort to get more than the increase in CPI. Of course, some employers are counting on you not knowing that, because any increase that's less than CPI is effectively a salary decrease; which could mean more profit for them, if they are able to increase their prices / revenues at inflation or better. Finally, consider that salary & wage increases also contribute to inflation! Perhaps you've heard of the wage/price inflation spiral. If you haven't, there's more on that here and here. |
Foolish to place orders before the market opens? | More on a technical note, but the spread on an ETF tends to be worst at market open and near market close. (assuming the ETF constituents are traded on a synchronous basis.) If possible, it's often best to let market makers get up and running before allowing your order to flow into market. |
Is it possible for me to keep my credit card APR at 0% permanently? | Banks don't care that you are responsible cardholder. They care to make money. Interest rates are basically 0% by government policy and the banks charge their responsible cardholders 20% interest rates. Think about that for one second, and realize they really do not care about your ability to avoid paying interest, they only need you to 'slip up' one month during your entire lifetime to make a profit from you. It is in their interest for you to get into a spending habit, from 0% promo rates, so that eventually a frivolous purchase or life changing event causes a balance to stay on the card for over one month. |
Why do deep in the money options trade below their intrinsic value? | You made 94$ on an investment of 554.80 *100 = 55480$ for an approx holding period of 1 year. So the % return is ~0.16%, which is not much better than the short term us treasury rate. The current 1 year treasury rate is 0.27%: http://ycharts.com/indicators/1_year_treasury_rate So yes, you have a risk free portfolio, so you make the risk free rate. Remember this is an European option, so you are stuck for 1 year. if you found the same mispricing in an American option, then you found an arbitrage. |
Why is there so much variability on interest rate accounts | In answering your question as it's written: I don't think you're really "missing" something. Different banks offer different rates. Online banks, or eBanking solutions, such as CapitalOne, Ally, Barclays, etc., typically offer higher interest rates on basic savings accounts. There are differences between Money Market accounts and Standard Savings accounts, but primarily it comes down to how you can access your cash. This may vary based on bank, but Ally has a decent blurb about it: Regular savings accounts are easy to open and, when you choose an online bank like Ally Bank, you tend to get interest rates that are more competitive than brick-and-mortar counterparts, according to Bankrate.com. Additionally, as a member of the FDIC, Ally Bank gives you peace of mind knowing that the money in your Ally Bank Online Savings Account is insured to the maximum allowed by the law. Money market accounts are easy to open, too. And again, online banks may offer better rates than traditional banks. Generally, you have a bit more flexibility of access with a money market account than you do with a savings account. You can access funds in your Ally Bank Money Market Account through electronic fund transfers, checks, debit cards and ATM withdrawals. With savings accounts, your access is limited to electronic funds transfers or telephone withdrawals (and in-person withdrawals at traditional banks). Both types of accounts are subject to federal transaction limits. Here's a bit more information about a Money Market Account and why the rate might be a little bit higher (from thesimpledollar.com): A money market deposit account is a bit different. The restrictions on what a bank can do with that money are somewhat looser – they can often invest that money in things such as treasury notes, certificates of deposit, municipal bonds, and so on in addition to the tight restrictions of a normal savings accounts. In other words, the bank can take your money and invest it in other investments that are very safe. Now outside of your question, if you have $100K that you want to earn interest on, I'd suggest looking at options with higher rates of return rather than a basic savings account which will top out around 1% or so. What you do with that money is dependent on how quickly you need access to it, and there are a lot of Q&A's on this site that cover suggestions. |
Do I even need credit cards? | The key part of your question is the "so far". So you didn't need a credit card today, or yesterday, or last month - great! But what about tomorrow? The time may come when you really need to spend a little more than you have, and a credit card will let you do that, at a very modest cost if you pay it off promptly (no cost, if paid within 30 days). I learned this when I was traveling and stranded due to bad weather. I had almost nothing in my bank account at the time, and while I actually did have a small student-type credit card, I came really close to having to sleep at the train station when I didn't have enough for another night in a hotel. As an example, if you have close friends or family living across the country, and something tragic were to happen, would you be able to pay for a flight to attend the funeral? What if you'd recently had an accident and a big medical bill (it doesn't take much, a broken arm can cost $10,000)? Perhaps you have a solid nest egg, but breaking a CD ahead of schedule or taking short-term capital gains on a mutual fund will usually cost more than one or two months of interest payments. |
At what point should I begin paying off student loans? | If you have sufficient money to support yourself until you have a career, then paying off your student loan principal on unsubsidized, federal loans, is probably your best bet. This is because interest accumulates before you're actually required to pay. If they are private, make the payment on the highest interest rate loans. |
Why did I lose 2 cents more than the difference in the stock prices on my Robinhood trade? | Free, huh? From their Commission and Fee Schedule: So if you literally bought two shares, then the SEC added one penny in fees and FINRA added one penny as a "Trading Activity Fee" Note that there are several other fees on their schedule that may not apply to you. If you had bought 100 shares instead, your total fees would have still been only 2 cents, but you would have lost $4 on the trade. So the fees are minuscule when you start doing larger orders. However, That should not discourage you from experimenting and learning. I'd rather pay 2 cents in fees on a 4 cent loss than 2 cents in fees on a $400 loss. Just chalk it up to the cost of experience. |
How to rescue my money from negative interest? | You might want to talk with your financial planner about any or all of the following: as well as Some of these offer the guarantee of a minimal amount of interest, as well as the ability to take a loan out against the cash value, without lapsing the policy. They may also offer certain tax advantages depending upon your jurisdiction and situation. |
How can I live outside of the rat race of American life with 300k? | So my read on the question is "How do I invest 300k such that it earns me a 'living wage' without the ongoing grind inherent in most formal employment?" Reading the other answers to date it looks like most of them are thinking in terms of investment accounts and trying to live off of the earnings from such. I wanted to throw out a couple of alternative choices that may be worth considering... The first is real-estate investing. $300k should allow you to pick up 2 or 3 single family dwellings with little or no mortgage. Turning them into rentals placed with a good property management company should easily pay their expenses and provide a consistent income with minimal effort/attention from you. Similar story with buying into multifamily housing or commercial real-estate. Your key concern here is picking the right market in which to buy and finding a reputable manager to handle the day to day issues on your behalf. Note that you are not overly concerned with the potential resale value of the property(s), but the probable rental income they can generate, these are separate concerns that may not align with each other. Second is buying/founding a business that has a general manager other than yourself. Franchise ownership may be a potential option for you under the circumstances. The key concern here is picking the business, location, and manager that make you comfortable in terms of the risk involved. You need the place to make enough money to pay for itself and the salary of everyone working there, with enough left over for you to live on. Sounds easy enough, but not so much in practice. Generally you can expect at least a few years of being hands on and watching things very closely to make sure it is going the way you want it to. Finding a mentor who has done this type of transition before to walk you through it would be strongly advised. So would preparing yourself for a failure or two before you work out the exact combination of factors that work for you. |
Post tax versus pretax (ESPP versus straight investment) | This answer assumes that your purpose for using the ESPP is to generate a relatively safe 15% return on that portion of your income. Frequently before there were Roth 401K options the advice was: This advice was especially good for the younger workers because they wanted to have a Roth account but didn't want to miss the 401K match. As Roth 401K accounts were introduced that advice changed somewhat because it was possible to get the benefit of the Roth and still get the maximum match. for your situation what I would propose is: contribute to the 401K enough to get the maximum match. Contribute as much as you want or are allowed into the ESPP. Take the proceeds and contribute to an IRA or Roth IRA. If you reach the IRA max you have to decide if you will scale back the ESPP to contribute more to the 401K. |
How can I find if I can buy shares of a specific company? | Hmm... Well there are several ways to do that: Go to any bank (or at the very least major ones). They can assist you with buying and/or selling stocks/shares of any company on the financial market. They keep your shares safe at the bank and take care of them. The downside is that they will calculate fees for every single thing they do with your money or shares or whatever. Go to any Financial broker/trader that deals with the stock market. Open an account and tell them to buy shares from company "X" and keep them. Meaning they won't trade with them if this is what you want. Do the same as point 2, but on your own. Find a suitable broker with decent transaction fees, open an account, find the company's stock code and purchase the stocks via the platform the broker uses. |
Is it OK to use a credit card on zero-interest to pay some other credit cards with higher-interest? | The short answer is: it depends. The longer answer is that balance transfers are tricky, and often a bait-and-switch; they'll offer 0% interest, but charge a 3-4% "fee" (which isn't interest and is perfectly legal) on the amount transferred. If you transfer $5000, you now owe the new card company $5,200. Now, that could be fine with you; at an 18-20% APR on your old card you may have been charged that much in just one or two months, and by capitalizing this fee up front you lock in 0% for a year. However, there are other possible machinations behind the scenes. For instance, you may incur retroactive interest on the full balance if not paid off in the year (at 20% APR on $5000, that's an extra grand you will owe if there's even one dollar of the original transferred balance left in the account). Paying off the balance and thus avoiding these penalties has actually been made harder by the CARD Act, which required creditors to apply any payment made to the highest-interest portion of the balance first. As balance transfers are 0% they are the last on the list, so if you transfer a balance and then carry an additional balance you are setting yourself up for failure. You MUST have a zero-dollar balance for one month sometime during the year in order to be sure the balance transfer is paid off and no penalties will be incurred. That can be hard, because 5 grand is a lot to pay off. To pay off a $5000 balance in 12 months requires payments of $417. Miss one and you'll have to make it up over the remaining months. If you transferred a balance, you probably didn't have $420/mo to pay to the card in the first place. In summary, balance transfers can work, but you have to understand all of the terms and conditions, and what will happen should you violate any of them. If you don't understand what you're getting into, you could very well end up worse than you started. |
What is the “point” (purpose) of the S&P 500? | I hate to point to Wikipedia as an answer, but it does describe exactly what you are looking for... The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock market exchanges; the New York Stock Exchange and the NASDAQ. The components of the S&P 500 are selected by committee... The committee selects the companies in the S&P 500 so they are representative of the industries in the United States economy. In addition, companies that do not trade publicly (such as those that are privately or mutually held) and stocks that do not have sufficient liquidity are not in the index. The S&P is a capitalization weighted index. If a stock price goes up, then it comprises more of the total index. If a stock goes down, it comprises less, and if it goes down too much, the committee will likely replace it. So to answer your question, if one stock were to suddenly skyrocket, nothing would happen beyond the fact that the index was now worth more and that particular stock would now make up a larger percentage of the S&P 500 index. |
Health insurance deduction on schedule C if also full time employee with w2? | Checkout the worksheet on page 20 of Pub 535. Also the text starting in the last half of the third column of page 18 onward. https://www.irs.gov/pub/irs-pdf/p535.pdf The fact that you get a W-2 is irrelevant as far as I can see. Your self-employment business has to meet some criteria (such as being profitable) and the plan needs to be provided through your own business (although if you're sole proprietor filing on Schedule C, it looks like having it in your own name does the trick). Check the publication for all of the rules. There is this exception that would prevent many people with full-time jobs on W-2 from taking the deduction: Other coverage. You cannot take the deduction for any month you were eligible to participate in any employer (including your spouse's) subsidized health plan at any time during that month, even if you did not actually participate. In addition, if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2014, do not use amounts paid for coverage for that month to figure the deduction. (Pages 20-21). Sounds like in your case, though, this doesn't apply. (Although your original question doesn't mention a spouse, which might be relevant to the rule if you have one and he/she works.) The publication should help. If still in doubt, you'll probably need a CPA or other professional to assess your individual situation. |
What are some good ways to control costs for groceries? | You may use an app called Flipp (or one that serves your area) to check fliers while in the store. If your preferred store has a price match policy, this can save you a few bucks every trip. Just look up at the app what you are buying and price match it over the cashier. It may or may not work on your store, always ask first. Try to learn some of the products you always buy regular prices. That way you can tell a real special from a fake one, like I write here about the 2/$5 specials. Buy generic brands for things you don't care that much, like bleach and other cleaning products that does not have a real quality difference from the branded ones. Try different cheaper brands until you find one that is ok for you. There are lots of ways to save money on groceries, you just need the will to do so ;) Good luck! |
I have more than $250,000 in a US Bank account… mistake? | Many brokerage accounts for trading stocks are covered under SIPC insurance, which is up to $500,000 You can also have multiple checking and savings accounts with the $250,000 balance split up. You can also check your bank's capital ratio on the FDIC website, somewhere. The FDIC won't move on them unless it falls under 3% and even then FDIC will force them into receivership and sell them to a bigger bank before they go bust and experience losses of customer deposits. This is what mostly happened when hundreds of banks failed during the crisis from 2008-2010. There were very isolated events where customers actually lost their cash balances, and that was mostly because those customers had completely uninsured accounts. As that was the most extreme moment in US and global financial history, you should be able to judge risk with the aforementioned information in mind. You can stay in a cash balance easily and be fully insured. |
Buying my first car out of college | nan |
Is an interest-only mortgage a bad idea? | If you took a fixed loan, but paid it off at the accelerated rate, you would ultimately pay less total dollars in interest. So compare the actual amount paid in interest over the course of the loan rather than the interest rate itself. That should be your answer. Also, plan on failing in your plan to pay it off and see how that will affect you. |
How to quickly track daily cash expenses that don't come with a receipt? | A pencil and a small notepad really work here, but if you have a smartphone then some way of using it makes sense as well. Try: Transcribe all of these onto a better record at the end of each day. Also record the amount of money in your wallet/purse/pocket every day, and check to see if the amounts you've recorded add up to the amount you've spent. It'll be easier to remember that newspaper you bought at the end of the day, rather than a week later. Or just record the difference as 'miscellaneous'. |
How do I choose 401k investment funds? | I disagree strongly with chasing expenses. Don't chase pennies until your are comfortable with an allocation that makes sense to you. Focus on building a diversified portfolio. Look at all of the funds, and put them in a portfolio in a tool like Google finance. Screen out funds with 1-3 stars. Search around on this site for questions about portfolios -- there's good advice there. If you're still not comfortable, look for a fee-based advisor. |
Option on an option possible? (Have a LEAP, put to me?) | There are options on options. Some derivative instruments assets ARE options (some ETFs), and you are able to buy shares of those ETFs OR options on those ETFs. Secondly, options are just a contract, so you just need to write one up and find someone to buy the contract. The only thing is that the exchange won't facilitate it, so you will have liquidity issues. What you want to do is a diagonal / calendar spread. Buy the back month option, sell the front month option, this isn't a foreign concept and nobody is stopping you. Since you have extra leverage on your LEAPS, then you just need to change the balancing of your short leg to match the amount of leverage the leaps will provide. (so instead of buying,selling 1:1, you need to buy one leap and perhaps sell 5 puts) |
What should I look at before investing in a start-up? | Turukawa's answer is quite good, and for your own specific situation, you might begin by being sceptical about what you are getting for investing a few thousand dollars. With the exception of Paul Graham's Y-Combinator, there are very few opportunities to invest at that type of level, and Y-Combinator provides a lot of other assistance besides their modest initial investment. I can tell from your post that you think like an investor. It is highly unlikely that the entrepreneurial programmers that you will be backing will be wired that way. From the modest amount that you are investing, you are unlikely to be the lead investor in this opportunity. If you are interested in proceeding, simply stick along for the ride, examining the terms and documents that more significant investors will be demanding. Remain positive and supportive, but simply wait to sign on the dotted line until others have done the heavy lifting. For more insights into startups themselves, see Paul Graham's essays at www.paulgraham.com. He's the real deal, and his recent essays will provide you with current insights about software startups. Good luck. |
Will I be liable for taxes if I work for my co. in India for 3 months while I am with my husband in UK | For information about the UK situation, check the government website at http://www.hmrc.gov.uk/incometax/tax-arrive-uk.htm It all depends on the time. If I read it right (but you should check yourself) you can stay almost six months at a time, but at most 3 months on average over 4 years. Above this limit, you should either avoid the situation, or get professional advice, because things will be complicated. |
What is the correct answer for percent change when the start amount is zero dollars $0? | A value of zero or a negative value makes the percent change meaningless. Saying 100% when going from 0 to some other value is simply wrong. I have seen a similar situation several times when looking at a public company with a loss last quarter. On Google Finance or some other service, the PE ratio will be blank, N/A, or something like that. If the company does not currently have earnings, then the PE ratio is meaningless. Likewise, if the company previously did not have earnings, then the percent change of the earnings is meaningless. Also consider the example where the previous value was negative. If the previous value was negative 1 and the current value is positive 99, then this happens: A negative change? But the value went up! Obviously that value does not make sense and should not be shown. |
If something is coming into my account will it be debit or credit in my account? | I agree with mbhunter's suggestion of labeling your columns, 'income' and 'expenses'. However, to answer your question, money coming in (a paycheque, for example) is credited to your account. Money going out (a utility bill, for example) is debited from your account. There's no real 'why'... this is simply the definition of the words. |
The U.S. National Debt: What is it, where did it come from, and how does it work? | For political reasons, almost all governments (including the US) spend more money than they get from taxes etc. There are a number of things a government can do to cover the difference: Most governments opt for selling bonds. The "National Debt" of a country can be thought of as being the sum of all the "Bonds" that are still paying interest, and that the Government hasn't Redeemed. It can all go horribly wrong. If the Government gets into a situation where it cannot pay the interest, or it cannot Redeem the Bonds it has promised to, then it may have to break its promise ("Default" on its payments). This makes the owners of the Bonds unhappy and means potential buyers of future Bond sales are less likely to want to buy the Governments new Bonds - effectively meaning the Government has to promise to pay more interest in the future. Recent examples of this include Argentina; and may include Greece soon. The US is in the fortunate position that not many people believe it will Default. Therefore the new Bonds it sells (which it does on a regular basis) are still in demand, even though its interest payments, and promises to Redeem Bonds are huge. |
Are there any hedged international funds in India? | No there aren't any such funds. |
ISA - intra year profits and switching process | An ISA is a much simpler thing than I suspect you think it is. It is a wrapper or envelope, and the point of it is that HMRC does not care what happens inside the envelope, or even about extractions of funds from the envelope; they only care about insertions of funds into the envelope. It is these insertions that are limited to £15k in a tax year; what happens to the funds once they're inside the envelope is your own business. Some diagrams: Initial investment of £10k. This is an insertion into the envelope and so counts against your £15k/tax year limit. +---------ISA-------+ ----- £10k ---------> | +-------------------+ So now you have this: +---------ISA-------+ | £10k of cash | +-------------------+ Buy fund: +---------ISA-------+ | £10k of ABC | +-------------------+ Fund appreciates. This happens inside the envelope; HMRC don't care: +---------ISA-------+ | £12k of ABC | +-------------------+ Sell fund. This happens inside the envelope; HMRC don't care: +---------ISA-------+ | £12k of cash | +-------------------+ Buy another fund. This happens inside the envelope; HMRC don't care: +---------ISA-----------------+ | £10k of JKL & £2k of cash | +-----------------------------+ Fund appreciates. This happens inside the envelope; HMRC don't care: +---------ISA-----------------+ | £11k of JKL & £2k of cash | +-----------------------------+ Sell fund. This happens inside the envelope; HMRC don't care: +---------ISA-------+ | £13k of cash | +-------------------+ Withdraw funds. This is an extraction from the envelope; HMRC don't care. +---------ISA-------+ <---- £13k --------- | +-------------------+ No capital gains liability, you don't even have to put this on your tax return (if applicable) - your £10k became £13k inside an ISA envelope, so HMRC don't care. Note however that for the rest of that tax year, the most you can insert into an ISA would now be £5k: +---------ISA-------+ ----- £5k ---------> | +-------------------+ even though the ISA is empty. This is because the limit is to the total inserted during the year. |
When to hire an investment professional? | Lifecycle funds might be a suitable fit for you. Lifecycle funds (aka "target date funds") are a mutual fund that invests your money in other mutual funds based on how much time is left until you need the money-- they follow a "glide-path" of reducing stock holdings in favor of bonds over time to reduce volatility of your final return as you near retirement. The ones I've looked at don't charge a fee of their own for this, but they do direct your portfolio to actively managed funds. That said, the ones I've seen have an "acquired" expense ratio of less than what you're proposing you'd pay a professional. FWIW, my current plan is to invest in a binary portfolio of cheap mutual funds that track S&P500 and AGG and rebalance regularly. This is easy enough that I don't see the point of adding in a 1 percent commission. |
Are underlying assets supposed to be sold/bought immediately after being bought/sold in call/put option? | When you can exercie your option depends on your trading style. In the american options trading style (the most popular) you're allowed to exercice your options and make profit (if any) whenever you want before the expiration date. Thus, the decision of exercising your option and make a profit out of it does not rely only on the asset price. The reason is, you already paid for the premium to get the option. So, if taken into account the underlying price AND your premium, your investment is profitable then you can exercice your contract anytime. |
What happens when there are no Limit Orders? | The obvious thing would happen. 10 shares change owner at the price of $100. A partially still open selling order would remain. Market orders without limits means to buy or sell at the best possible or current price. However, this is not very realistic. Usually there is a spread between the bid and the ask price and the reason is that market makers are acting in between. They would immediately exploit this situation, for example, by placing appropriately limited orders. Orders without limits are not advisable for stocks with low trading activity. Would you buy or sell stuff without caring for the price? |
What's the difference when asked for “debit or credit” by a store when using credit and debit cards? | Credit in debit way - the card simply functions like a debit card for that transaction - pulling cash from your checking account. No difference. You've simply discovered the fact that some banks are using the same piece of plastic for two functions, debit which draws funds directly from your checking, and credit which offers you time to pay a bill the comes in some time later. It's a personal choice. |
Why buying an inverse ETF does not give same results as shorting the ETF | The most fundamental answer is that when you short a stock (or an ETF), you short a specific number of shares on a specific day, and you probably don't adjust this much as the price wobbles goes up and down. But an inverse fund is not tied to a specific start date, like your own transaction is. It adjusts on an ongoing basis to maintain its full specified leverage at all times. If the underlying index goes up, it has to effectively "buy in" because its collateral is no longer sufficient to support its open position. On the other hand, if the underlying index goes down, that frees up collateral which is used to effectively short-sell more of the underlying. So by design it will buy high and sell low, and so any volatility will pump money out of the fund. I say "effectively" because inverse funds use derivatives and contracts, rather than actually shorting the underlying security. Which brings up the less fundamental issue. These derivatives and contracts are relatively opaque; the counter-parties are in it for their own benefit, not yours; and the people who run the fund get their expenses regardless of how you do, and they are hard for you to monitor. This is a hazardous combination. |
FTB sent refund check for 2011 during audit; Does this really mean that whole audit is over for 2011? | Not it doesn't, and yes they can. If the audit is closed, you should have received invitation to attend the closing conference, and get the summary of decisions from that meeting in writing. I suggest you check with your tax representative about this refund check before cashing it. |
Is the ESPP discount profit? | The difference is ordinary income. If the price drops and you sell for exactly what you paid, you have an income of D and a capital loss of D which usually cancel each other, but not always. For example, if you already have over $3000 in losses, this loss won't help you, it will carry forward. The above changes a bit if you hold the stock for 2 years after the beginning of the purchase period. If sold between your purchase price and fair market the day you bought, the gain is only the difference, no gain to fair market + loss. Pretty convoluted. Your company should have provided you with a brief FAQ / Q&A to explain this. My friends at Fairmark have an article that explains the ESPP process clearly, Tax Reporting for Qualifying Dispositions of ESPP Shares. |
If stock price drops by the amount of dividend paid, what is the use of a dividend | Their is no arbitrage opportunity with "buying dividends." You're buying a taxable event. This is a largely misunderstood topic. The stock always drops by the amount if the dividend on the ex date. The stock opens that day trading "ex" (excluding) the dividend. It then pays out later based in the shareholders on record. There is a lot of talk about price movement and value here. That can happen but it's from trading not from the dividend per se. Yes sometimes you do see a stock pop the day prior to ex date because people are buying the stock for the dividend but the trading aspect of a stock is determined by supply and demand from people trading the stock. The dividends are paid out from the owners equity section of the balance sheet. This is a return of equity to shareholders. The idea is to give owners of the company some of their investment back (from when they bought the stock) without having the owners sell the shares of the company. After all if it's a good company you want to keep holding it so it will appreciate. Another similar way to think of it is like a bonds interest payment. People sometimes forget when trading that these are actual companies meant to be invested in. Your buying an ownership in the company with your cash. It really makes no difference to buy the dividend or not, all other things constant. Though market activity can add or lose value from trading as normal. |
Retirement & asset allocation of $30K for 30 year old single guy | IMHO bonds are not a good investment at this present time, nor generally. Appreciate for a moment that the yield of an investment is DIRECTLY related to the face/trading value. If a thing (bond/stock) trades for $100 and yields 3%, it pays $3. In the case of a bond, the bond doesn't pay a % amount, it pays a $ amount. Meaning it pays $3. SO, for the yield to rise, what has to happen to the trading price? It has to decrease. As of 2013/14 bonds are trading at historically LOW yields. The logical implication of this is if a bond pays a fixed $ amount, the trading price of the bond has to have increased. So if you buy bonds now, you will see a decrease in its face value over the long term. You may find the first tool I built at Simple Stock Search useful as you research potential investments. |
Estimated Tax on Unplanned Capital Gains | I'm assuming your talking USA. There are two ways to look. If you know you should pay on the cap gains, the best way to handle that separately from your salary is to file a quarterly tax payment. That, I understand, is what the self-employed have to do. I'm in the situation where at some point, probably this year, the company that employs me will be bought out, and I will owe capital gains taxes on my shares gobbled up in the buy-out. It's a cash-for-stock transaction. So, in my case, I've just adjusted my W-4 to take advantage of the safe-harbor provision related to taxes I payed in 2016 and my salary. The details vary depending on your situation, but in my case, I've calculated what it will take in W-4 allowances to make sure I pay 110% of my 2016 tax payment (after refund). I'm not worrying about what the actual taxes on those shares of company stock will be, because I've met the rules for safe-harbor. Safe harbor just means that they can't penalize you for under-withholding or underpayment. It doesn't mean I won't have to write a check on april 15. |
How to save money for future expenses | My answer will suck but it comes from someone who has been married: You can't control another person or convince them to do something. What you can do is identify what they value and show how saving money increases their opportunities in what they value, but understand that the person could see what you're saying as invalid too. If you're single and reading this, this is why you verify that the person has similar values to you. Think of it like someone who wants good gas mileage: you show them a car that gets 60MPG, and immediately they say, "Well, but that's not a cool car." So their value isn't the miles per gallon, and you may find the same is true with your spouse. India is paying more interest than the US and Europe in their savings accounts (I believe the benchmark interest rate is 7.5%), so - assuming your spouse values more money - showing him how to use money in savings to passively earn money might be a technique that works. But it may mean nothing to him because it's (1) not his actual value or (2) isn't enough to matter in his mind. In other words, this is all sales and whatever you do (and this is regardless of gender), don't manipulate, as in the long run that tends to build resentment. If there is a specific problem that you know he sees as a major issue and saving money can help, I'd recommend showing how savings would help with that problem. People generally like solutions to problems; just remember, what you think he sees as a problem may not be what he sees as a problem. This is why I chuckle when I see single people give married people advice; you can't just "convince the person enough" because you are not that person; we have to speak their language and we should be careful to avoid creating resentment. The part that sucks (or doesn't depending on who you ask) is that if we can't convince others to do it, we should do it ourselves. Either (1) earn money independently yourself when applicable (realizing that you are about to have a child and may be limited), or (2) save the money that you and your spouse have agreed that you're allotted, if this applies to your situation (a few spouses divide income even when one is an earner). |
What are the financial advantages of living in Switzerland? | Companies, especially big ones, find in Switzerland a business-friendly environment and often benefit from a special tax regime. Don't mix the companies interests with yours. |
Self Assessment UK - Goods and services for your own use | Work on your own site is certainly not relevant here, that's just a part of your trade, not a service you provided to yourself. The business received the benefit of that work, not you. Suppose your business sold televisions. If you took a TV from stock for your own lounge, that would be included in this box because you have effectively paid yourself with a TV rather than cash. If you take a TV from stock to use as a demo model, that's part of your trade and not goods you have taken out of the business for your own use. For services provided to your dad it's less clear. As Skaty said, it depends whether it's your business providing the service, or you personally. If you gave your dad a free TV then it would be clear that you have effectively paid yourself with another TV and then given it to your dad as a gift. With services it's less clear whether you're receiving services from the business for free. You might consider how it would be treated by your employer if you weren't self-employed. If you were just applying your skills to help your dad in your free time, your employer wouldn't care. If you used your employer's equipment or facilities, or hosted his site on a server that your employer pays for, your employer would be more likely to discipline you for effectively stealing services from them, as they would if you took a TV from their warehouse for him. |
Do I pay a zero % loan before another to clear both loans faster? | Keep in mind that by fully paying off one of your loans, you will reduce your minimum repayments. This will make you feel richer than you actually are. This will make you buy stuff that it seems like you can afford, probably putting some of it on credit. As you can't actually afford this, this will leave you, in a years time, with the same amount of debt you have now or more, but with a slightly bigger tv. Assuming your home loan has no penalties for paying off extra, then put all 11k into there to keep your monthly repayments as high as possible. |
How to get a credit card as a minor? | I have a job and would like to buy equipment for producing music at home and it would be easier for me to pay for the equipment monthly I just want to address your contention that it would be easier to pay monthly, with an interest calculation. Lets say you get a credit card with a very reasonable rate of 12% and you buy $2,500 of equipment. A typical credit card minimum payment is interest charges + 1% of the principle. You can see how this is going. You've paid nearly $200 to clear about $100 off your principle. Obviously paying the minimum payment will take forever to wipe out this debt. So you pay more, or maybe you get 0% interest for a while and take advantage of that. Paying $100 per month against $2,500 at 12% per year will take 29 months and cost about $390 in interest. At $200 per month it'll take 14 months and cost $184 in interest. Also note, you'll probably get an interest rate closer to 16 or 17%. It's always easier to pay small amounts frequently than it is to pay a lot of money all at once, that ease has a cost. If you're buying the gear to start a little business, or you already have a little business going and want to upgrade some gear, great; disciplined debt handling is a wonderful skill to have in business. If you want to start yourself in to a new hobby, you should not do that with debt. If interest rates are low enough financing something can make sense. 0.9% apr on a car, sure; 15% apr on a mixing board, no. Credit card interest rates are significant and really should not be trifled with. |
Distribution vs withdrawal for an investment account | A mutual fund makes distributions of its dividends and capital gains, usually once a year, or seminanually or quarterly or monthly etc; it does not distribute any capital losses to its shareholders but holds them for offsetting capital gains in future years, (cf, this answer of mine to a different question). A stock pays dividends; a stock neither has nor does it distribute capital gains: you get capital gains (or losses) when you sell the shares of the stock, but these are not called distributions of any kind. Similarly, you incur capital gains or losses when you redeem shares of mutual funds but these are not called distributions either. Note that non-ETF mutual fund shares are generally not bought and sold on stock exchanges; you buy shares directly from the fund and you sell shares back (redeem them) directly to the fund. All of the above transactions are taxable events for the year to you unless the shares are being held in a tax-deferred account or are tax-free for other reasons (e.g. dividends from a municipal bond fund). |
For a car, would you pay cash, finance for 0.9% or lease for 0.9%? | If you want the new car, pay cash for it. Here's why: By paying cash for the car, you immediately save $2,500 off the price of the car. That is not insignificant, it's 8.3% off. By paying cash, you'll never be upside down on the car, and you can sell the car anytime you want. You said that all you need to do is beat the 0.9% interest rate with your investment to come out ahead. That doesn't take into account the discount you would have gotten by paying cash. $30,000 invested for 5 years at 1.6% (rough estimate) would get you $2,500 (the discount), so the rate you need to beat to come out ahead is actually 2.5%. Still doable, but it is much less of a sure thing on a 5 year investment, and much less worth the trouble. New cars are an expensive luxury. If you are wealthy enough, a new car certainly can be appropriate for you. However, if you don't like the idea of paying $30k in cash all at once, that is a strong indication that perhaps the new car is a luxury you aren't in a position to buy at this time. Borrowing the money and paying for it over time makes it psychologically easier to over spend on transportation. |
Would I qualify for a USDA loan? | I'd like to suggest a plan. First, I know you want to buy a house. I get that, and that is an awesome goal to work for. You need to really sit down and decide why you want a house. People often tell we that they want a house because they are throwing their money away renting. This is just not true. There is a cost of renting, that is true, but there is also a cost of owning. There are many things with a house that you will have to pay for that will add little or no equity/value. Now that equity is nice to have, but make no mistake under no circumstance does every dime you put into your house increase its value. This is a huge misconception. There is interest, fees, repairs, taxes, and a bunch of other stuff that you will spend money on that will not increase the value of your home. You will do no harm, waiting a bit, renting, and getting to a better place before you buy a house. With that out of the way, time for the plan. Note: I'm not saying wait to buy a house; I am saying think of these as steps in the large house buying plan. Get your current debt under control. Your credit score doesn't suck, but it's not good either. It's middle of the road. Your going to want that higher if you can, but more importantly than that, you want to get into a pattern of making debt then honoring it. The single best advise I can give you is what my wife and I did. Get a credit card (you have one; don't get more) and then get into a habit of not spending more on that credit card than you actually have in the bank. If you have $50 in the bank, only spend that on your credit card. Then pay it in full, 100%, every payday (twice a month). This will improve your score quite a bit, and will, in time, get you in the habit of buying only what you can afford. Unless there has been an emergency, you should not be spending more on credit than you actually have. Your car loan needs to get under control. I'm not going to tell you to pay it off completely, but see point 2. Your car debt should not be more than you have in the bank. This, again is a credit building step. If you have 7.5k in the bank and own 7.5k on your car, your ability to get a loan will improve greatly. Start envelope budgeting. There are many systems out there, but I like YNAB a lot. It can totally turn your situation around in just a few months. It will also allow you to see your "house fund" growing. Breaking Point So far this sounds like a long wait, but it's not. It also sounds like I am saying to wait to actually buy a house, and I'm not. I am not saying get your debt to 0, nor do I think you should wait that long. The idea is that you get your debt under control and build a nice solid set of habits to keep it under control. A look at your finances at this point Now, at this point you still have debt, but your credit cards are at 0 and have been, every payday for a few months. Your car loan still exists, but you have money in the bank to cover this debt, and you could pay it off. It would eat your nest egg, but you could. You also have 15k set aside, just for the house. As you take longer looking for that perfect house, that number keeps growing. Your bank account now has over $25,000 in it. That's a good feeling on its own, and if you stick with your plan, buy your house and put down $15k, you still have plenty of wiggle room between credit cards that are not maxed out, and a $7.5k "padding" in case the roof falls in. Again it sounds like I'm saying wait. But I'm not, I'm saying plan better. All of these goals are very doable inside one year, a rough year to be sure, but doable. If you want to do it comfortably, then take two years. In that time you're looking, searching and learning. |
Saving for retirement without employer sponsored plan | Variable Annuities would be one option though there are SEC warnings about them, for an option that is tax-deferred and intended to be used for long-term investing such as retirement. There is a bit of a cost to gain the tax-deferral which may not always make them worthwhile. |
Is buying a home a good idea? | It certainly seems like you are focusing on the emotional factors. That's your blind spot, and it's the surest path to a situation where your husband gets to say "I told you so". I recommend you steer straight into that blind spot, and focus your studies on the business aspects of buying and owning homes. You should be able to do spreadsheets 6 ways from Sunday, be able to recite every tax deduction you'll get as a homeowner, know the resale impacts of 1 bathroom vs 2, tell a dirty house from a broken house, etc. Everybody's got their favorites, mine are a bit dated but I like Robert Irwin and Robert Allen's books. For instance: a philosophy of Allen's that I really like: never sell. This avoids several problems, like the considerable costs of money, time and nerves of actually selling a house, stress about house prices, mistaking your house's equity for an ATM machine, and byzantine rules for capital gains tax mainly if you rent out the house, which vary dramatically by nation. In fact the whole area of taxes needs careful study. There's another side to the business of home ownership, and that's renting to others. There's a whole set of economics there - and that is a factor in what you buy. Now AirBNB adds a new wrinkle because there's some real money there. Come to understand that market well enough to gauge whether a duplex or triplex will be a money maker. Many regular folk like you have retired early and live off the rental income from their properties. JoeTaxpayer has an interesting way of looking at the finances of housing: if a house doesn't make sense as a a rental unit, maybe it doesn't make sense as a live-in either. So learn how to identify those fundamentals - the numbers. And get in the habit of evaluating houses. Work it regularly until it's second nature. Then, yes, you'll see houses you fall in love with, partly because the numbers work. It also helps to be handy. It really, really changes the economics if you can do your own quality work, because you don't need to spend any money on labor to convert a dirty house into a clean house. And lots of people do, and there's a whole SE just for that. There is a huge difference between going down to the local building supply and getting the water pipe you need, vs. having to call a plumber. And please deal with local businesses, please don't go to the Big Box stores, their service is abominable, they will cheerfully sell you a gadget salad of junk that doesn't work together, and I can't imagine a colder and less inviting scene to come up as a handy person. |
I earn $75K, have $30K in savings, no debt, rent from my parents who are losing their home. Should I buy a home now or save? | To be honest, if it's a home all of you share you should try and save the home for your parents. your 26, you will have plenty of time to make 30k again. Having a home headquarters will bring some security to the family. Not only that your parents are old now, it could be hard for them to get another home. They have sacrificed for you, so maybe you should sacrifice for them? Thank god i have no family. |
Digital envelope system: a modern take | If psychologically there is no difference to you between cash and debit (you should test this over a couple of months on yourself and spouse to make sure), then I suggest two debit cards (one for you and spouse) on your main or separate checking account. If you use Mint you can set budgets for each category (envelope) and when a purchase is made Mint will automatically categorize that transaction and deduct that amount from the correct budget. For example: If you have a "Fast Food" budget set at $100 per month and you use the debit at McDonalds, Mint should automatically categorize it as "Fast Food" and deduct the amount from the "Fast Food" budget that you set. If it can't determine a category or gets it wrong, you can just select the proper category. Mint has an iPhone (also Android and Windows phone) app that I find very easy to use. Many people state that they don't have this psychologically difference between spending cash and debit/credit, but I would say that most actually do, especially with small purchases. It doesn't have anything to do with intellect or knowing that you are actually spending money. It has more to do with tangibility, and the physical act of handing over cash. You may not add that soda and candy bar to your purchase if you have visible cash in your wallet that will disappear more quickly. I lived in Germany for 2 years before debit cards were around or common. I'm a sharp guy and even though I knew that I paid $100 for the 152 DM, it still kind of felt like spending Monopoly money, especially considering that in the US we are used to coins normally being 25 cents or less and in Germany coins are up to 10 DM (almost $10) and are used more frequently than paper. |
How do I know if a dividend stock is “safe” and not a “dividend yield trap”? | Great answers. Here's my two cents: First, don't forget to look at the overall picture, not just the dividend. Study the company's income statement, balance sheet and cash flow statement for the last few years. Make sure they have good earnings potential, and are not carrying too much debt. I know it's dull, but it's better to miss an opportunity than to buy a turkey and watch the dividends and the share price tank. I went through this with BAC (Bank of America) a couple of years ago. They had a 38-year history of rising dividends when I bought them, and the yield was about 8%. Then the banking crisis happened and the dividend went from $2.56/share to $0.04, and the price fell from $40 to $5. (I stuck with it, continuing to buy at lower and lower prices, and eventually sold them all at $12 and managed to break even, but it was not a pleasant experience) Do your homework. :) Still, one of the most reliable ways to judge a company's dividend-paying ability is to look at its dividend history. Once a company has started paying a dividend there is a strong expectation from shareholders that these payments will continue, and the company's management will try very hard to maintain them. (Though sometimes this doesn't work out, e.g. BAC) You should see an uninterrupted stream of non-decreasing payments over a period of at least 5 years (this timeframe is just a rule of thumb). Well-established, profitable companies also tend to increase their dividends over time, which has the added benefit of pushing up their share price. So you're getting increasing dividends and capital gains. Next, look at the company's payout ratio over time, and the actual cost of the dividend. Can the projected earnings cover the dividend cost without going above the payout ratio? If not, then the dividend is likely to get reduced. In the case of CIM, the dividend history is short and erratic. The earnings are also all over the place, so it's hard to predict what will happen next year. The company is up to its eyeballs debt (current ratio is .2), and its earnings have dropped by 20% in the last quarter. They have lost money in two of the last three years, even though earning have jumped dramatically. This is a very young company, and in my opinion it is too early for them to be paying dividends. A very speculative stock, and you are more likely to make money from capital gains than dividends. AAE is a different story. They are profitable, and have a long dividend history, although the dividend was cut in half recently. This may be a good to buy them hoping the dividend comes back once the economy recovers. However, they are trading at over 40 times earnings, which seems expensive, considering their low profit margins. Before investing your money, invest in your education. :) Get some books on interpretation of financial staments, and learn how to read the numbers. It's sort of like looking at the codes in The Matrix, and seeing the blonde in the red dress (or whatever it was). Good luck! |
How do I manage my portfolio as stock evaluation criteria evolve? | Unfortunately I believe there is not a good answer to this because it's not a well posed problem. It sounds like you are looking for a theoretically sound criteria to decide whether to sell or hold. Such a criteria would take the form of calculating the cost of continuing to hold a stock and comparing it to the transactions cost of replacing it in your portfolio. However, your criteria for stock selection doesn't take this form. You appear to have some ad hoc rules defining whether you want the stock in your portfolio that provide no way to calculate a cost of having something in your portfolio you don't want or failing to have something you do want. Criteria for optimally rebalancing a portfolio can't really be more quantitative than the rules that define the portfolio. |
How do you find reasonably priced, quality, long lasting clothing? | Use resources like Consumer Reports and recommendations from like-minded friends to figure out brands which have a reputation for making quality clothes. Then trust, but verify. Ideally have a friend who sews a lot go with you on a clothing expedition if you don't know how to determine quality in clothing. People who sew knew their fabrics, and this could be very helpful to you. Start at places that are known for quality clothing, but make sure the reputation hasn't outlived reality. I'd look for: Once you've identified places that you can trust, wait for sales at those stores. I've found that shopping sales at department stores (or better, places like L. L. Bean) is cheaper than a discount retailer and much easier. Even cheaper, go to a thrift store and look for those brands in timeless styles. Your mileage will vary in terms of the what people throw out in your area. Thrift stores work extremely well in high cost of living areas where people give away nearly new items. |
Why Demat/Stock Market Brokers don't support Credit Card Payin | Most credit cards allow you to take "cash advances", but the fees and limits for cash advances are different than for regular purchases. You can buy stock after taking a cash advance from your credit card. When you make a cash advance, you normally pay the credit card company a fee. When you make a regular purchase, the merchant (ie, the stockbroker) pays a fee. Additionally, credit card companies can make merchants wait up to 3 months to actually receive the money, in case the transaction is disputed. Your stockbroker is unlikely to want to pay the fee, accept the delay in receiving the funds, and risking that you will dispute the transaction. Having said that, many FOREX brokers will accept credit card deposits (treated as purchases), although FOREX can be considerably riskier than the stock market. Of course, if you max out your credit cards and lose all your money, you can normally negotiate to pay back the debt for less than the original amount, especially since it's unsecured debt. |
What to do when a job offer is made but with a salary less than what was asked for? | In my experience of doing software development for a little longer than I care to remember, salaries are always assumed to be negotiable. I know you said you don't like haggling (a lot of people don't) but you'll have to get used to that and you might have to be a little more flexible. Being able to negotiate something as important as your salary is a very important skill. That said, there might be several reasons why they're not willing to offer more: Here's what I would do: |
How can an Indian citizen get exposure to global markets? | It isn't just ETFs, you have normal mutual funds in India which invest internationally. This could be convenient if you don't already have a depository account and a stockbroker. Here's a list of such funds, along with some performance data: Value Research - Equity: International: Long-term Performance. However, you should also be aware that in India, domestic equity and equity fund investing is tax-free in the long-term (longer than one year), but this exemption doesn't apply to international investments. Ref: Invest Around the World. |
Would I qualify for a USDA loan? | All the above advices plus this: For you first house, you should start smaller. Buy a 100k or less condo if possible, then grow from there. You sell every 5 years or so when the market is favorable and you will slowly get to that nice 250k house. |
Best way to buy Japanese yen for travel? | Check whether you're being charged a "Cash advance" fee with your withdrawals, because it's being withdrawn from your credit card account. If that's happening to you, then having a positive balance on your credit card account will dramatically reduce the fees. Quoting from my answer to a similar question on Travel Stack Exchange: It turns out that even though "Cash advance fee - ATM" has "ATM" in it, it doesn't mean that it's being charged by the ATM you're withdrawing from. It's still being charged by the bank of your home country. And depending on your bank, that fee can be minimized by having a positive balance in your credit card account. This isn't just for cards specially marketed at globehoppers and globeshoppers (mentioned in an answer to a similar question), but even for ordinary credit cards: Help minimise and avoid fees An administrative charge of 2% of the value of the transaction will apply to each cash advance made on your card account, where your account has a negative (debit) balance after the transaction has been posted to it. A minimum charge of $2.50 and a maximum charge of $150 will apply in these circumstances. Where your account has a positive (credit) balance after the transaction has been posted to it, a charge of $2.50 will apply to the transaction. Any such charge will appear on your credit card statement directly below the relevant cash advance. A $2.50 charge if your account is positive, versus $20 if the account is negative? That's a bit of a difference! |
What's the fuss about Credit Score / History? | Simply staying out of debt is not a good way of getting a good credit score. My aged aunt has never had a credit card, loan or mortgage, has always paid cash or cheque for everything, never failed to pay her utility bills on time. Her credit score is lousy because she has never had any debts to pay off so there is no credit history data for her. To the credit checking agencies she barely exists. To get a good score (UK) then get a few debts and pay them off on time. |
The life cycle of money | Echoing JohnF, and assuming you mean the physical, rather than abstract meaning of money? The abstract concept obviously isn't replaced (unless the currency is discredited, or like the creation of the Euro which saw local currencies abandoned). The actual bits of paper are regularly collected, shredded (into itty-bitty-bits) and destroyed. Coinage tends to last a lot longer, but it also collected and melted down eventually. Depends on the country, though. No doubt, many people who took a gap year to go travelling in points diverse came across countries where the money is a sort of brown-grey smudge you hold with care in thick wadges. The more modern economies replace paper money on a dedicated cycle (around three years according to Wikipedia, anyway). |
Recommendation for learning fundamental analysis? | Definition: Fundamental analysis involves analyzing financial statements and health, management and competitive advantages, and competitors and markets. Books are a great way to learn fundamental analysis but can be time consuming for something that really isn't very difficult. So the internet might be a better way to get started. When using fundamental analysis all you are doing is trying to figure out how much a company is worth. The vocabulary and huge range of acronyms can be intimidating but really its a fairly simple task. You can use (investopedia) for definitions and simple examples when you do not fully understand something. IE: (PEG) You can search for definitions using the search bar on the top right (google also is a good source to look for additional definitions). I recommend starting out by doing an independent analysis on a well known name such as Proctor & Gamble or Mcdonald's. Then you can compare your analysis to a professionals and see how they stack up. Books and Resources: Getting Started in Fundamental Analysis Fundamental Analysis For Dummies Fundamental analysis Wiki What Is Fundamental Analysis? - Video tut from Investopedia Fundamental Analysis: Introduction Step by Step example of fundamental analysis - It's a pretty in depth forum post. Side Notes: Personally when I first began using fundamental analysis I found it difficult to understand why something is considered undervalued or overvalued. I couldn't figure out who was the "authority" on saying this. Well in short the "authority" basically is the market. You can say you believe XYZ is undervalued but you are only proven correct if the market agrees with you over long period of time. Some key facts you should know: Many times a stock can be "broken" for many reasons. The price can go far beyond what would be considered a "normal valuation" (this is considered a bubble, e.g. the tech bubble of 1999-2000). It can also go far below a "normal valuation". In most cases these types of valuations are short lived and in the end a stock should return to "normal valuation" or at least this is the theory behind fundamental analysis. |
Where can I find closed dates for the New York Stock Exchange for the coming year? | The NYSE holidays are listed online here: https://www.nyse.com/markets/hours-calendars |
Why don't forced buy-ins of short sold stock happen much more frequently? | For the lenders to sell their positions they need buyers on the other side. For a large brokerage that means they should always be able to find another lender. For many contracts the client may have no idea they are a lender as lending is part of their agreement with the broker |
If I had no income due to a net operating loss, will I be refunded the Social Security and Medicare taxes withheld? | If you have a CPA working for you already - this is a question you should be asking that CPA. Generally, NOL only affects the tax stemming from the Internal Revenue Code (Title 26 Subtitle A of the US Code). Social Security and Medicare, while based on income, are not "income tax", these are different taxes stemming from different laws. Social Security and Medicare withheld from your salary are FICA taxes (Title 26 Subtitle C of the US Code). They're deducted at source and not on your tax return, so whatever changes you have in your taxable income on the tax return - FICA taxes are not affected by it. Self Employment tax (Schedule SE) on your Schedule C earnings in the carry-back years will also not be affected, despite being defined in the IRC, because the basis of the tax is the self-employment income while the carryback reduces the AGI. |
Pros and cons of bond ETF versus traditional bond mutual fund? | Bond ETFs are just another way to buy a bond mutual fund. An ETF lets you trade mutual fund shares the way you trade stocks, in small share-size increments. The content of this answer applies equally to both stock and bond funds. If you are intending to buy and hold these securities, your main concerns should be purchase fees and expense ratios. Different brokerages will charge you different amounts to purchase these securities. Some brokerages have their own mutual funds for which they charge no trading fees, but they charge trading fees for ETFs. Brokerage A will let you buy Brokerage A's mutual funds for no trading fee but will charge a fee if you purchase Brokerage B's mutual fund in your Brokerage A account. Some brokerages have multiple classes of the same mutual fund. For example, Vanguard for many of its mutual funds has an Investor class (minimum $3,000 initial investment), Admiral class (minimum $10,000 initial investment), and an ETF (share price as initial investment). Investor class has the highest expense ratio (ER). Admiral class and the ETF generally have much lower ER, usually the same number. For example, Vanguard's Total Bond Market Index mutual fund has Investor class (symbol VBMFX) with 0.16% ER, Admiral (symbol VBTLX) with 0.06% ER, and ETF (symbol BND) with 0.06% ER (same as Admiral). See Vanguard ETF/mutual fund comparison page. Note that you can initially buy Investor class shares with Vanguard and Vanguard will automatically convert them to the lower-ER Admiral class shares when your investment has grown to the Admiral threshold. Choosing your broker and your funds may end up being more important than choosing the form of mutual fund versus ETF. Some brokers charge very high purchase/redemption fees for mutual funds. Many brokers have no ETFs that they will trade for free. Between funds, index funds are passively managed and are just designed to track a certain index; they have lower ERs. Actively managed funds are run by managers who try to beat the market; they have higher ERs and tend to actually fall below the performance of index funds, a double whammy. See also Vanguard's explanation of mutual funds vs. ETFs at Vanguard. See also Investopedia's explanation of mutual funds vs. ETFs in general. |
Retirement Options for Income | If you withdraw all (or most) of your pension 25% is tax free but the rest is treated as income upon which you will pay income tax at the usual UK rates. Withdrawing a lump sum to buy property is therefore unlikely to be 10% per annum as you'll spend years making up lost ground on the initial capital investment. If your pension is a self invested personal pension (a SIPP) you could buy property within the pension wrapper itself which would avoid the income tax hit. if you don't have a SIPP you may be able to convert your pension to a SIPP but you would be wise to seek professional advice about that. The UK government is also introducing an additional 3% stamp duty on properties which are not your first home so this may further impact your returns. This would apply whether you withdraw your pension as cash or buy the property within a SIPP. One other alternative to an annuity in the UK is called drawdown where you keep the money invested in your pension as it is now and withdraw an annual income. This means your tax bill is reduced as you get to use your annual allowance each year and will also pay less higher rate tax. The government provides more details on its website. |
What is the correct answer for percent change when the start amount is zero dollars $0? | In computing, you'd generally return naa%, for 'not a number'. Could you not put '-%' to show there is no value at this point? Surely the people seeing this aren't idiots and understand the charge on 0 is 0? |
Online tutorials for calculating DCF (Discounted Cash Flow)? | Here's a link to an online calculator employing the Discounted Cash Flow method: Discounted Cash Flows Calculator. Description: This calculator finds the fair value of a stock investment the theoretically correct way, as the present value of future earnings. You can find company earnings via the box below. [...] They also provide a link to the following relevant article: Investment Valuation: A Little Theory. Excerpt: A company is valuable to stockholders for the same reason that a bond is valuable to bondholders: both are expected to generate cash for years into the future. Company profits are more volatile than bond coupons, but as an investor your task is the same in both cases: make a reasonable prediction about future earnings, and then "discount" them by calculating how much they are worth today. (And then you don't buy unless you can get a purchase price that's less than the sum of these present values, to make sure ownership will be worth the headache.) [...] |
Is it okay to be married, 30 years old and have no retirement? | First, I would recommend getting rid of this ridiculous debt, or remember this day and this answer, "you will be living this way for many years to come and maybe worse, no/not enough retirement". Hold off on any retirement savings right now so that the money can be used to crush this debt. Without knowing all of your specifics (health insurance deductions, etc.) and without any retirement contribution, given $190,000 you should probably be taking home around $12,000 per month total. Assuming a $2,000 mortgage payment (30 year term), that is $10,000 left per month. If you were serious about paying this off, you could easily live off of $3,000 per month (probably less) and have $7,000 left to throw at the student loan debt. This assumes that you haven't financed automobiles, especially expensive ones or have other significant debt payments. That's around 3 years until the entire $300,000 is paid! I have personally used and endorse the snowball method (pay off smallest to largest regardless of interest rate), though I did adjust it slightly to pay off some debts first that had a very high monthly payment so that I would then have this large payment to throw at the next debt. After the debt is gone, you now have the extra $7,000 per month (probably more if you get raises, bonuses etc.) to enjoy and start saving for retirement and kid's college. You may have 20-25 years to save for retirement; at $4,000 per month that's $1 million in just savings, not including the growth (with moderate growth this could easily double or more). You'll also have about 14 years to save for college for this one kid; at $1,500 per month that's $250,000 (not including investment growth). This is probably overkill for one kid, so adjust accordingly. Then there's at least $1,500 per month left to pay off the mortgage in less than half the time of the original term! So in this scenario, conservatively you might have: Obviously I don't know your financials or circumstances, so build a good budget and play with the numbers. If you sacrifice for a short time you'll be way better off, trust me from experience. As a side note: Assuming the loan debt is 50/50 you and your husband, you made a good investment and he made a poor one. Unless he is a public defender or charity attorney, why is he making $60,000 when you are both attorneys and both have huge student loan debt? If it were me, I would consider a job change. At least until the debt was cleaned up. If he can make $100,000 to $130,000 or more, then your debt may be gone in under 2 years! Then he can go back to the charity gig. |
What are the advantages of doing accounting on your personal finances? | Everyone should keep track of what they spend. When you see how much you are spending on each category of expense, you can make good decisions about how much your life is improved by something vs. how much you spend on that thing. Everyone makes better decisions when they are informed by accurate information about those decisions. There's no reason why personal finances are different from any other decision you make in life. This remains true whether you make very little or very much. Some people define rich as being able to live on less money than you earn. |
Is it legal if I'm managing my family's entire wealth? | You are opening up a large can of worms with how you are doing this. In very positive years, you'll have taxes based on your income, potential Alternative Minimum Tax (AMT), etc. Each of the family members may be in a lower bracket, perhaps even needing to pay zero on capital gains. Even if you are 100% honest, if you are subject to a lawsuit, these funds are all in your name, and you'd be in a tough situation explaining to a court that these assets aren't "really" yours, but belong to family. And last, the movement of large chunks of money needs to be accounted for, and can easily run afoul of gifting rules. As mhoran stated, a Power of Attorney (POA) avoids this. When my father-in-law passed, I took over my mother-in-law's finances, via POA. I sign in to my brokerage account, and her accounts are there. I can trade, deal with her Individual Retirement Account (IRA) Required Minimum Distributions (RMDs) each year, and issue checks to her long term care facility. It's all under her social security number - our money isn't intermingled. |
Where can I buy stocks if I only want to invest a little bit at a time, and not really be involved in trading? | I don't want to get involved in trading chasing immediate profit That is the best part. There is an answer in the other question, where a guy only invested in small amounts and had a big sum by the time he retired. There is good logic in the answer. If you put in lump sum in a single stroke you will get at a single price. But if you distribute it over a time, you will get opportunities to buy at favorable prices, because that is an inherent behavior of stocks. They inherently go up and down, don't remain stable. Stock markets are for everybody rich or poor as long as you have money, doesn't matter in millions or hundreds, to invest and you select stocks with proper research and with a long term view. Investment should always start in small amounts before you graduate to investing in bigger amounts. Gives you ample time to learn. Where do I go to do this ? To a bank ? To the company, most probably a brokerage firm. Any place to your liking. Check how much they charge for brokerage, annual charges and what all services they provide. Compare them online on what services you require, not what they provide ? Ask friends and colleagues and get their opinions. It is better to get firsthand knowledge about the products. Can the company I'm investing to be abroad? At the moment stay away from it, unless you are sure about it because you are starting. Can try buying ADRs, like in US. This is an option in UK. But they come with inherent risk. How much do you know about the country where the company does its business ? Will I be subject to some fees I must care about after I buy a stock? Yes, capital gains tax will be levied and stamp duties and all. |
One of my stocks dropped 40% in 2 days, how should I mentally approach this? | From some of your previous questions it seems like you trade quite often, so I am assuming you are not a "Buy and Hold" person. If that is the case, then have you got a written Trading Plan? Considering you don't know what to do after a 40% drop, I assume the answer to this is that you don't have a Trading Plan. Before you enter any trade you should have your exit point for that trade pre-determined, and this should be included in your Trading Plan. You should also include how you pick the shares you buy, do you use fundamental analysis, technical analysis, a combination of the two, a dart board or some kind of advisory service? Then finally and most importantly you should have your position sizing and risk management incorporated into your Plan. If you are doing all this, and had automatic stop loss orders placed when you entered your buy orders, then you would have been out of the stock well before your loss got to 40%. If you are looking to hang on and hoping for the stock to recover, remember with a 40% drop, the stock will now need to rise by 67% just for you to break even on the trade. Even if the stock did recover, how long would it take? There is the potential for opportunity loss waiting for this stock to recover, and that might take years. If the stock has fallen by 40% in a short time it is most likely that it will continue to fall in the short term, and if it falls to 50%, then the recovery would need to be 100% just for you to break even. Leave your emotions out of your trading as much as possible, have a written Trading Plan which incorporates your risk management. A good book to read on the psychology of the markets, position sizing and risk management is "Trade your way to Financial Freedom" by Van Tharp (I actually went to see him talk tonight in Sydney, all the way over from the USA). |
If accepting more than $10K in cash for a used boat, should I worry about counterfeiting? | I'd be a bit concerned about someone who wanted to transact that large of a transaction in cash. Also consider what you are going to do with the funds, if you deposit it, you will need to tell the bank where it comes from. Why does the bank want to know, because most legal businesses don't transact business with large sums of currency.. What does that tell you about the likelihood the person you are about to do business with is a criminal or involved in criminal affairs? The lower bill of sale price might be more than just to dodge taxes, it could be part of money laundering.. If they can turn right around and 'sell' the boat for $10K, or trade it in on a bigger boat for the same amount, and have a bill than says $4K, then they have just come up with a legal explanation for how they made 6 grand. and you could potentially be considered an accomplice if someone is checking up on their finances. Really, is it worth the risk. |
How might trading volume affect future share price? | There tends to be high volume around big changes in stock price. The volume of a stock does not remain constant and the term "fat fingers" can influence price.--> http://www.bloomberg.com/news/2014-10-01/that-japanese-fat-finger-can-absolutely-happen-in-u-s-.html That being said keshlam is 99% right when it comes to a stock moving when their is no news or earnings announcements. Check out these papers. http://onlinelibrary.wiley.com/doi/10.1111/j.1475-6803.2010.01285.x/full They do a time series analysis to try and predict future prices off of past demand during news events. They forecast using auto-regressive models. google "forecasting autoregressive model" and the upenn lecture will be helpful. I would post another link but I cannot because I do not have enough rep/ This is more of a quant question. Hope this helps. JL |
Should I pay off my mortgage, begin retirement savings, or build my emergency fund? | Welcome to Money.SE. I will say upfront, Personal Finance is just that, personal, and you are likely to get multiple, perhaps conflicting, answers. Are you sure the PMI will drop off after 2 years? The rules are specific, and for PMI, when prepayments put you at that 78/80% LTV, your bank can require an appraisal, not automatically drop it. Talk to the banks, get confirmation, and depending what they say, keep hacking away at the mortgage. After this, I suggest jumping on Roth IRAs. You are in the 15% bracket, and the Roth will let you deposit $5500 for each you and your wife. A great way to kickstart a higher level of retirement savings. After this, I'm not comfortable with the emergency savings level. If you lose your job tomorrow (Funny story, my wife and I lost our's on the same day 3 years ago) and don't have enough savings (Our retirement accounts were good to just retire that day) you can easily run out of money and be late on the mortgage. It's great to prepay the mortgage to get rid of that PMI, but once there, I'd do the Roth and then focus on savings. 6 months expenses minimum. We have a great Q&A here titled Oversimplify it for me: the correct order of investing in which I go in to more detail, as do 4 other members. I am not getting on the "investments will return more than your mortgage cost" soapbox. A well-funded emergency fund is a very conservative bit of advice. With no matched 401(k), I suggest a balance of the Roth savings and prepayments. From another great post, Ideal net worth by age X? Need comparison references you should have nearly 1 year's salary (90K) saved toward retirement. Any question on my advice, add a comment and I will edit in more details. |
find stock composition of a publicly traded fund | The big websites, Yahoo and the like, only give the 10 biggest positions of any fund. Download the annual report of the fund, go to page 18, you will find the positions on the 31st of December. However the actual positions could be different. The same applies to all funds. You need the annual report. |
Why do people invest in mutual fund rather than directly buying shares? | There are several reasons. One, mutual funds provide instant diversification. To build a diverse portfolio "manually" (by buying individual shares) requires a lot of time and effort. If your portfolio is not diverse, then it is wrong to say "buying shares gives higher return"; in many cases diversification will increase your returns. Two, mutual funds reduce transactions costs. If you buy individual shares, you pay transactions costs every time you buy or sell. If you buy and sell the shares of many companies, you must perform many transactions and thus incur heavy fees. With mutual funds, a single transaction gets you access to many companies. In addition, it is often possible to buy mutual funds without paying transactions costs at all (although you will still pay fund expenses). Three (sort of a combination of the previous two) it is just easier. Many people can easily buy mutual funds with no cost and little effort through their bank. It is also simple to set up auto-investment plans so that you automatically save money over time. All of these things are much more complicated if you try to buy many individual shares. Four, if you buy the right kinds of funds (low-cost index funds), it is probably more lucrative than buying individual shares. The odds that, through carefully selected stock-buying, you will earn more than the market average are small. Even professional stock-pickers consistently underperform broad market indexes. In short, it is not true that "buying shares gives higher return", and even if it were, the convenience and diversification of mutual funds would still be good reasons to use them. |
Why can't house prices be out of tune with salaries | The three basic needs are food, clothing, and shelter. Housing falls into the third category. Because it is "basic," housing takes up a large part of one's disposable income. The rule of thumb is that you shouldn't spend more than 25% of your income on rent or mortgages. And that is income BEFORE taxes. Anything much more than that takes up too much of one's budget. You simply CAN'T double housing's share of the budget from 25% to 50%. Whereas, it's easy to go from 1% to 2% for say, a cellphone upgrade. In the long run, housing prices are constrained by the size of people's housing budgets, which in turn are tied to incomes. Nowadays, that includes FOREIGN buyers. So there may be a case where west coast housing prices are driven up by Asian buyers, or Florida housing by buyers from Latin America, driving Americans out of local markets. |
Selecting between investment vehicles for income | It sounds like you are interested in investing in the stock market but you don't want to take too much risk. Investing in an Index EFT will provide some diversification and can be less risky than investing in individual stocks, however with potentially lower returns. If you want to invest your money, the first thing you should do is learn about managing your risk. You are still young and you should spend your time now to increase your education and knowledge. There are plenty of good books to start with, and you should prepare an investment plan which incorporates a risk management strategy. $1000 is a little low to start investing in the stock market, so whilst you are building your education and preparing your plan, you can continue building up more funds for when you are ready to start investing. Place your funds in an high interest savings account for now, and whilst you are learning you can practice your strategies using virtual accounts. In fact the ASX has a share market game which is held 2 or 3 times per year. The ASX website also has some good learning materials for novices and they hold regular seminars. It is another good source for improving your education in the subject. Remember, first get educated, then plan and practice, and then invest. |
What happens if someone destroy money? | Depending on the country, nothing. For example, the US has about $1.3 trillion dollars of cash in circulation. Which means that if you were to burn a million dollars of it, that would be 0.000077% of the circulating cash. But cash is a small portion of the actual money in the US. Only about 8% of all money is in cash, the rest is in other forms of value, which means that you'd only be destroying 0.0000062% of the US's money if you burned a full $1,000,000. |
Precious metal trading a couple questions | Limited Price is probably equivalent to the current par value of a "limit order". Markets move fast, and if the commodity is seeing some volatility in the buy and sell prices, if you place an ordinary buy order you may not get the price you were quoted. A "limit order" tells your broker or whomever or whatever is making the order on your behalf that you will pay no more than X yuan. While the market is below that price, the trader will attempt to get you the quantity you want, but if they can't get you your full order for an average price less than the limit, the whole thing is rolled back. You can set a limit at any price, but a limit order of 1 yuan for a pound of sterling silver will likely never be executed as long as the market itself is functioning. So, you are being provided with a "par value" that they can guarantee will be executed in the current market. Entrustment prices are probably prices offered to the managers of trust funds. A trust is simply a set of securities and/or cash which is placed under the nominal control of a third party, who then must in good faith attempt to fulfill the goals of the actual owner of the securities with regards to growth or retention of value. Trustees almost never speculate with the money they control, but when they do move money it's often a sizeble chunk (hundreds of thousands or millions of dollars instead of a few thousand dollars here and there). So, in return for the long-term holdings, large buys and sells, and thus the reduced cost of maintaining a business relationship with the broker, the broker may offer better prices to trust fund managers. |
In what cases can a business refuse to take cash? | Apartment complexes have had a long history of not accepting cash for payment of rent. This eliminates the problem of robbery and strongly reduces the risks of embezzlement. THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE Article 1, Section 10 of the US Constitution states: No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts Previous editions of banknotes stated that the notes were redeemable in gold or in lawful money. The Mint Act of 1792 set gold and silver as legal currency (and that one did not have to accept "base metal coins" for more than $10 which is why coin rolls only go up to $10). The Coinage Act of 1873 dropped silver and made gold the legal standard for currency. In 1933, the "redeemable in gold" was changed by federal statute and the legend you mention was added. Prior to 1933, someone could demand that you pay them in gold and not with a bank note. Legislation in 1933 ended that. This clause in the Constitution leads some political groups to wish to return to a gold standard. I recommend reading the book Greenback as it describes how our currency got the way it did and why that clause appears on currency. |
What investments work for these goals? | Assuming this will be a taxable account (since you want to pull income off of it, although this will lower wealth growth), you could open a brokerage account at some place like Vanguard (free on their ETFs) and look at tax efficient index fund ETFs (such as total stock market or their 500 fund), including some international (foreign tax credit is nice in taxable) and muni funds for the (tax advantaged) income, although CDs are likely better for the income at this point. |
Do I have to pay taxes on income from my website or profits? | Being a tax professional, my understanding is that the threshold limit is a single limit for all your source(s) of income. Now many people who already draw salary which is liable to tax, develop application for mobile and generate some income. Such income is liable to tax, if along with other income they exceed the threshold limit. Income will have surely related expenses. And the expenses which are related to earning of the income are allowed to be deducted. |
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