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Is it common in the US not to pay medical bills? | In addition to the good answers already provided, I want to point out that many (most?) providers will handle filing your health insurance claim for you even though it's really your responsibility. So here's how medical bills "you don't have to pay" might come about: * It's possible that your balance is $4, or $20, or $65, or even still $100 depending on your particular insurance plan. Whatever is left at this step is what you pay. |
Can capital loss in traditional IRA and Roth IRA be used to offset taxable income? | No, you cannot. If you withdraw everything from all your Roth IRA's and end up with less than the total basis - you can deduct the difference on your schedule A (at the time of the last withdrawal) as an itemized deduction (as misc. deductions with 2% AGI cap). Regular IRA's are pre-tax, you cannot deduct anything from them. |
Freehold and Leasehold for Pub/Bar? | Freehold is simple - it's when you own the building and the land it's on. There's no rent to pay (but you will still have to pay taxes!). Leasehold is when the property is leased - rented out for a fixed period that could be anything from 6 months to 199 years. There will be a rent to pay. The person who owns the property is still the freeholder. There may be some confusion caused by what is being sold. You can buy out a lease from the current leaseholder. It's also possible to buy the freehold of a property that is currently leased to someone else. It is also possible to have a freehold building on leasehold land. |
Dispute credit card transaction with merchant or credit card company? | As a rule of thumb, go in the order of proximity to the transaction. This would typically mean: Side note: I own a website that provides an online service that accepts PayPal and credit cards (via PayPal), and I personally have experience with all 3 of the above options. I can tell you from the merchant's point of view that I would also prefer the same order. I've had people contact my customer service department asking for a refund and we always immediately comply. Some people never contact us and just file a dispute directly with PayPal, and although refunding through the PayPal dispute is just as easy as refunding directly, it always makes me ask, "Why didn't they just contact us first?" One time we had a customer skip us and PayPal, and filed a dispute directly with their Credit Card. The CC company contacted PayPal and PayPal contacted us. The process was the same from my point of view, I just clicked a button saying issue refund. But my $5 refund cost me an additional $20 due to the CC dispute. Now that I know this I will never approve a CC dispute again. Anytime one happens I would just issue a refund directly, and then notify the dispute that their CC has already been refunded, which should end the dispute. |
Can you beat the market by investing in double long ETFs? [duplicate] | See http://blogs.reuters.com/felix-salmon/2011/04/30/why-the-sec-should-look-at-levered-etfs/?dlvrit=60132, http://symmetricinfo.org/2011/04/are-investors-in-levered-short-treasury-etfs-a-disaster-waiting-to-happen-pt1/, and the articles linked from it: The issue with holding a levered ETF past 1 day is that investors expose themselves to path dependency in the underlying.... The reason for the difference in payouts comes from the fact that the manager of the levered ETF promises you a multiple of the daily returns of the underlying. To be able to promise you these daily returns, the ETF manager has to buy/sell some of the underlying every day to position himself to have a constant leverage ratio the next day. The short video below explains this process in detail for a 2x long ETF, but the same result holds for a 2x short ETF: the manager has to buy more of the underlying on a day when the underlying increases in value and sell more of the underlying when the underlying goes down in value . |
Can I place a stock limit order to buy above the current price? Can I place a stock limit order to sell below the current price? | buy above the current price in the stock market You can do that, but what is the purpose to do so ? Brokers take the limit price of your order as the highest price you are going to pay. So if an order can be fulfilled below the limit they will do so. can I sell below the current price You can put in a order to do so. But what I have seen with my current broker is that the order never reached the market and wasn't executed at all. The broker might have some safeguards or process in place to stop me from doing so. Not sure how other brokers deal with it. |
When applying for a mortgage, can it also cover outstanding debts? | That really depends on the lender, and in the current climate this is extremely unlikely. In the past it was possible to get a loan which is higher than the value of the house (deposit considered), usually on the basis that the buyer is going to improve the property (extend, renovate, etc.) and this increase the value of the property. Responsible lenders required some evidence of the plans to do this, but less responsible ones simply seem to have given the money. Here in the UK this was often based on the assumption that property value tends to rise relatively quickly anyway so a seemingly-reasonable addition to the loan on top of the current value of the property will quickly be covered. That meant that indeed some people have been able to get a loan which is higher than the cost of the purchase, even without concrete plans to actively increase the value of the property. Today the situation is quite different, lenders are a lot more careful and I can't see this happening. All that aside - had it been possible, is it a good idea? I find it difficult to come up with a blanket rule, it really depends on many factors - On the one hand mortgage interest rates tend to be significantly lower than shorter term interest rates and from that point of view, it makes sense, right?! However - they are usually very long term, often with limited ability to overpay, which means the interest will be paid over a longer period of time. |
APR for a Loan Paid Off Monthly | The periodic rate (here, the interest charged per month), as you would enter into a finance calculator is 9.05%. Multiply by 12 to get 108.6% or calculate APR at 182.8%. Either way it's far more than 68%. If the $1680 were paid after 365 days, it would be simple interest of 68%. For the fact that payment are made along the way, the numbers change. Edit - A finance calculator has 5 buttons to cover the calculations: N = number of periods or payments %i = the interest per period PV = present value PMT = Payment per period FV= Future value In your example, you've given us the number of periods, 12, present value, $1000, future value, 0, and payment, $140. The calculator tells me this is a monthly rate of 9%. As Dilip noted, you can compound as you wish, depending on what you are looking for, but the 9% isn't an opinion, it's the math. TI BA-35 Solar. Discontinued, but available on eBay. Worth every cent. Per mhoran's comment, I'll add the spreadsheet version. I literally copied and pasted his text into a open cell, and after entering the cell shows, which I rounded to 9.05%. Note, the $1000 is negative, it starts as an amount owed. And for Dilip - 1.0905^12 = 2.8281 or 182.8% effective rate. If I am the loanshark lending this money, charging 9% per month, my $1000 investment returns $2828 by the end of the year, assuming, of course, that the payment is reinvested immediately. The 108 >> 182 seems disturbing, but for lower numbers, even 12% per year, the monthly compounding only results in 12.68% |
Debt collector has wrong person and is contacting my employer | Request verification in writing of the debt. They are required to provide this by law. Keep this for your records. Send them a notice by certified mail stating that this is not your debt and not to contact you again. Indicate that you will take legal action if they continue to try and collect. Keep a log of if/when they continue to call or harass you. Contact counsel about your rights under the fair debt collection laws, but if they keep harassing you after being provided proof of your identity, they are liable. You could win a judgement in court if you have proof of bad behavior. If your identity is stolen, you are not legally responsible for the charges. However it is a mess to clean up, so pull your credit reports and review your accounts to be sure. |
If the co-signer on my car loan dies, can the family take the car from me like they're threatening to? | My family members, particularly my aunt (his daughter), are telling me that when my grandpa dies they are taking my car. Bring this up with Grandpa. If this is what he wants to have happen, then help him make it happen before you finish paying $12,000 on a car worth only $6,000. Let the Aunt and other relatives deal with the remaining $12,000. If that isn't what he wants to have happen, then work out how you and he can legally make sure that what he wants to have happen actually happens. If the Aunt or others bring it up, make sure they understand that you still owe $12,000 on the car, and if they get the car they also get the loan. If they refuse to pay the loan then make sure they know you will cooperate with the bank when they attempt to repossess the car - up to and including providing them with keys and location. This will hurt your credit, and you will be on the hook for the remaining portion of the loan, but you at least won't have to deal with all of it - they'll sell it at auction and your loan amount will fall a little. But the best course of action is to work with Grandpa, and make sure that he understands the family's threats, how that will affect you since you're on the loan, and what options you'd like to pursue. |
Must a company have a specific number of employees to do an IPO? | Working for a lot of startups, I have seen this cycle. Really it has little to do with making the IPO look good because of number of employees, and is more about making the IPO look good because of planning for the future. Many times an IPO is released, it will be valued at $1.00 (made up) and the market will soar and spike. Now stock shares are valued at $3.00. Great. Till after the dust settles a bit, and stocks are valued at $0.85. This is "normal" and good. It would be better if the stocks ended a little higher than their initial value, but... such is life. Now the initial value of the stock is made up of basically the value of the company's assets, and employees are part of those assets and its earning power. They are also a liability, but that has less impact on initial value than assets. Sales right after IPO are based on how well a company will do. Part of that is growth. So it looks nicer to say: "We have 500 employees and have been growing by 20% per month." than to say "We have 100 employees". In other words, before IPO, employees may be hired to make the company look like it is growing. They may be hired because the budget is projected based on expected growth and expected valuation. After IPO, you get a concrete number. You have your budget. It may be more than you thought, or it may be less. In our example, the real budget (from capital), is only 28% of the entire projected budget, and 85% of the initial value. It's time to make some budget cuts. Also, normally, there is a period of adjustment, company wide, as a company goes from VC funding, "here, have as much money as you want", to "real world" funding, with stricter limits and less wiggle room. |
Do I live in a state for tax purposes if my permanent home is in another state? | You're most likely required to file in both for 2013 - since you've lived in both. From 2014 and on you're definitely a NY resident (since you're renting a place there and live there), and you may very well continue being NJ resident (since you're essentially continue being domiciled there). I suggest talking to a EA/CPA licensed in NY and NJ to try and see what you can do to avoid being resident in both the states, or see if it is at all an issue other than filing everything double. |
What argument(s) support the claim that long-term housing prices trend upward? | The Shiller data is inflation adjusted. In effect, a flat line means that long term, housing rises with inflation, no more no less. There's no argument, just the underlying data to support his charts. This, among them. As much as I respect Nobel Prize winning Robert Shiller, his approach and analysis of the boom ignored interest rates. Say we look at a $50K earning couple. This is just below median income. At 9%, they qualify to borrow $145K. As rates fell to 4%, they qualify for $244K. Same fixed 30 term. Ignoring all other factors, the swing in rates will generate an oscillation around the long term trend. And my own data crunching suggests the equilibrium median home price will tend toward the price supported by the median income. A similar, but not identical question - Why can't house prices be out of tune with salaries? In response to Chan-Ho's comment - I'd imagine Shiller understood the interest impact. To clarify, the chart, as presented, ignores it. |
Should I get a personal loan to pay on my mortgage to go “above water” to qualify for a refinance? | Does it cost money to refi? I know there are quite a few deals out there, I refi'd in June for $500, not bad. But sometimes can cost couple grand. If so, you have up front costs, plus the cost of the personal loan, that probably would break even at some point after your refi, but at what point? Will you sell before then, or even think about it? Or would you break even next year, then its a no brainer. As mentioned by others, do the numbers. |
For what dates are the NYSE and U.S. stock exchanges typically closed? | The NYSE publishes a list of holidays at its website. New link: https://www.nyse.com/markets/hours-calendars Old link in the original answer that doesn't work now: http://www.nyse.com/about/newsevents/1176373643795.html Hope that helps! |
What is a “fiat” currency? Are there other types of currency? | There's two types of categories at play that define currency types - but I think the first is more like what you are after. The first is there are essentially three currency types now recognised - see them described here: http://finance.mapsofworld.com/money/types/ The second is currencies can be categorised by the type of economy from which they are generated (reserve/commodity/etc) - see them described here: http://www.forextraders.com/learn-forex-trading-course/major-currency-pairs.html |
How can I find ISIN numbers for stock options? | Because an equity option can be constructed at essentially any price by two willing counterparties on an exchange, there are not enough ISINs to represent the entire (i.e. infinite) option chain for even a single stock on a single expiration date. As a result, ISINs are not generated for each individual possible options contract. Instead the ISIN is used only to refer to the "underlying" symbol, and a separate formula is used to refer to the specific option contract for that symbol: So that code you pasted is not an ISIN but rather the standard US equity option naming scheme that you need to provide in addition to the ISIN when talking to your broker. Note that ISINs and formulas for referring to option contracts in other countries can behave quite differently. Also, there are many countries and markets that don't need ISINs because the products in question only exist on a single exchange. In those cases the exchange is pretty much free to make up whatever ID scheme it wants. P.S. Now I'm curious how option chains are identified for strike prices above $99,999. I looked up the only stock I can think of that trades above that price (BRK.A), but it doesn't seem to have an option chain (or at least Google doesn't show it) ... |
Value of credit score if you never plan to borrow again? | Only reason I can think of is that having a credit card, or several, is handy for buying stuff on-line, or not having to haul around a fat wallet full of cash. Of course for some of us, getting the cash back and 0% interest periods are nice, too, even if we don't really need the money. Same as for instance trying to get good mpg when you're driving, even if you could easily afford to fill up a Hummer. It's a game, really. |
Why not just invest in the market? | Most of it is probably due to ignorance and disbelief. A few years ago, I started doing week-long trades with my IRA. For a while I would make money each time, and over the first year I had about a 20% rate of return. If you asked me if I thought I was smarter than other people in the market, I would've told you no - I just spent more time, and most people accepted a small financial penalty for not having to spend the time directly managing their portfolio. Then I made a few poor choices, and all my previous earnings disappeared quickly. In the short term, yeah, things were great, but that didn't extrapolate out. So now that I'm a few years into investing, I'm almost entirely in index funds. |
How can we determine how much income our savings could generate if we purchase an annuity? | Annuity calculation formulas can be found here. http://en.wikipedia.org/wiki/Annuity_(finance_theory). In addition, as suggested in the comments, there are many sites that have calculators. Having said that, a simple financial mechanism that is followed by many is to invest a portion of the fund in regular income instruments, for example Govt. or corporate bonds that pay a regular coupon/interest and some in diversified instruments like gold, stock etc. The exact proportion is dependent on may factors, like mortality, inflation, lifestyle, health care requirements, other expenses. The regular income provides the day to day expenses on a monthly/yearly basis, while the other instruments hedge against inflation and provide growth. |
Investing thought experiment | The market cap always reflect the company's equity. Except that you cannot fix a stock price in a free market. A company with such profit pattern would have stock price behave like present value of a perpetuity (future income stream discounted by risk free rate) Since your assumption is unachievable, there is no point in determining the logic. |
How to Deduct Family Health Care Premiums Under Side Business | No, not on schedule C, better. Its an "above the line" deduction (line 29 on your 1040). Here's the turbo tax article on it. The instructions for this line set certain limitations that you must take into the account, and yes - it is limited to the net profit from the business. One of the following statements must be true. You were self-employed and had a net profit for the year. You were a partner with net earnings from self-employment. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2. The insurance plan must be established under your business. Your personal services must have been a material income-producing factor in the business. If you are filing Schedule C, C-EZ, or F, the policy can be either in your name or in the name of the business. |
SEP-IRA doing 1099 work on the side of a W2 employee job | The limit on SEP IRA is 25%, not 20%. If you're self-employed (filing on Schedule C), then it's taken on net earning, which in your example would be 25% of $90,000. (https://www.irs.gov/retirement-plans/retirement-plans-for-self-employed-people) JoeTaxpayer is correct as regards the 401(k) limits. The elective deferrals are per person - That's a cap in sum across multiple plans and across both traditional and Roth if you have those. In general, it's actually across other retirement plan types too - See below. If you're self-employed and set-up a 401(k) for your own business, the elective deferral is still aggregated with any other 401(k) plans in which you participate that year, but you can still make the employer contribution on your own plan. This IRS page is current a pretty good one on this topic: https://www.irs.gov/retirement-plans/one-participant-401k-plans Key quotes that are relevant: The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both: •Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit: ◦$18,000 in 2015 and 2016, or $24,000 in 2015 and 2016 if age 50 or over; plus •Employer nonelective contributions up to: ◦25% of compensation as defined by the plan, or ◦for self-employed individuals, see discussion below It continues with this example: The amount you can defer (including pre-tax and Roth contributions) to all your plans (not including 457(b) plans) is $18,000 in 2015 and 2016. Although a plan's terms may place lower limits on contributions, the total amount allowed under the tax law doesn’t depend on how many plans you belong to or who sponsors those plans. EXAMPLE Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2015. He deferred $18,000 in regular elective deferrals plus $6,000 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2015 were $36,500. This is the maximum that can be contributed to the plan for Ben for 2015. A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that his limits on elective deferrals are by person, not by plan. He must consider the limit for all elective deferrals he makes during a year. Notice in the example that Ben contributed more that than his elective limit in total (his was $24,000 in the example because he was old enough for the $6,000 catch-up in addition to the $18,000 that applies to everyone else). He did this by declaring an employer contribution of $12,500, which was limited by his compensation but not by any of his elective contributions. Beyond the 401(k), keep in mind that elective contributions are capped across different types of retirement plans as well, so if you have a SEP IRA and a solo 401(k), your total contributions across those plans are also capped. That's also mentioned in the example. Now to the extent that you're considering different types of plans, that's a whole question in itself - One that might be worth consulting a dedicated tax advisor. A few things to consider (not extensive list): As for payroll / self-employment tax: Looks like you will end up paying Medicare, including the new "Additional Medicare" tax that came with the ACA, but not SS: If you have wages, as well as self-employment earnings, the tax on your wages is paid first. But this rule only applies if your total earnings are more than $118,500. For example, if you will have $30,000 in wages and $40,000 in selfemployment income in 2016, you will pay the appropriate Social Security taxes on both your wages and business earnings. In 2016, however, if your wages are $78,000, and you have $40,700 in net earnings from a business, you don’t pay dual Social Security taxes on earnings more than $118,500. Your employer will withhold 7.65 percent in Social Security and Medicare taxes on your $78,000 in earnings. You must pay 15.3 percent in Social Security and Medicare taxes on your first $40,500 in self-employment earnings and 2.9 percent in Medicare tax on the remaining $200 in net earnings. https://www.ssa.gov/pubs/EN-05-10022.pdf Other good IRS resources: |
Are there “buy and hold” passively managed funds? | Passive implies following an index. Your question seems to ask about a hypothetical fund that starts, say, as an S&P fund, but as the index is adjusted, the old stocks stay in the fund. Sounds simple enough, but over time, the fund's performance will diverge from the index. The slight potential gain from lack of cap gains will be offset by the fund being unable to market itself. Keep in mind, the gains distributed each year are almost exclusively long term, taxed at a favorable rate. |
Professional investment planning for small net-worth individual in bearish market | There is no magic bullet here. If you want professional management, because you think they know more about entry and exit points for short positions, have more time to monitor a position, etc... (but they might not) try a mutual fund or exchange traded fund that specializes in shorts. Note: a lot of these may not have done so well, your mileage may vary |
What US tax laws apply to a 13 year old game developer? | 13 or 30, the only real difference is that as a minor, you are claimed as a dependent on your parent's return, so you don't have you own exemption. But you do have a standard deduction of $6300 when it comes to earned income. Yes, you'll pay taxes, federal, state, and tax for social security. There's nothing wrong with paying taxes. In fact, I hope you have to pay a small fortune in tax! That would mean you've made a large fortune, and after taxes, still got to keep a good chunk of it. If your income is minimal, you'll actually pay very little in taxes, not enough to even think about wanting to give away what you can sell. |
What's a normal personal debt / equity ratio for a highly educated person? | Average person's life I'm going to say there is no normal debt level. Here's the standard life pattern: So it really depends on your situation, it's way too spread out to quote a "normal" figure. Cost of debt vs Gain from assets and Risk of income You need to strike a sweet spot based on: Someone who is more educated in finance will probably be able to run a tighter and more aggressive financial strategy, whereas someone who is educated in, say, creative media may not be able to do as good of a job. Running your life as a business Someone here mentioned this, I think it's very true. Unless you intend on living day to day, with no financial strategies, much of our lives parallel businesses. Both need to pay tax, both look for low risk high growth strategies, and both will (hopefully) have a purpose that goes beyond bringing in $$$. |
Who receives the money when one company buys another? | Shareholders of Monsanto will get the money from Bayer. Shareholders are independent people or entities. Think of Monsanto as a thing that shareholders had. This thing is now being purchased by Bayer |
I have an extra 1000€ per month, what should I do with it? | If I were you, I would save 200 euros for retirement each month and another 800 I would stash away with the hope to start investing soon. I think you have to invest a bigger lump sum, then 1000 euros. It makes sense to invest at least 30K to see any tangible results. My acquaintances started from 50K and now see pretty handsome returns. Investing is profitable, as long as you approach it smartly. Also, do not ever hire an overly expensive financial consultant - this expenses will never pay off. Of course, check their credentials and reputation... But never pay much to these guys. Not worth it. |
Hypothetical: can taxes ever cause a net loss on otherwise-profitable stocks? | This was the day traders dilemma. You can, on paper, make money doing such trades. But because you do not hold the security for at least a year, the earnings are subject to short term capital gains tax unless these trades are done inside a sheltered account like a traditional IRA. There are other considerations as well: wash sale rules and number of days to settle. In short, the glory days of rags to riches by day trading are long gone, if they were ever here in the first place. Edit: the site will not allow me to add a comment, so I am putting my response here: Possibly, yes. One big 'gotcha' is that your broker reports the proceeds from your sales, but does not report your outflows from your buys. Then there is the risk you take by the broker refusing to sell the security until the transaction settles. Not to mention wash sale rules. You are trying to win at the 'buy low, sell high' game. But you have a 25% chance, at best, of winning at that game. Can you pick the low? Maybe, but you have a 50% chance of being right. Then you have to pick the high. And again you have a 50% chance of doing that. 50% times 50% is 25%. Warren Buffet did not get rich that way. Buffet buys and holds. Don't be a speculator, be a 'buy and hold' investor. Buy securities, inside a sheltered account like a traditional IRA, that pay dividends then reinvest those dividends into the security you bought. Scottrade has a Flexible Reinvestment Program that lets you do this with no commission fees. |
Most common types of financial scams an individual investor should beware of? | In the case of an investment strategy, if you don't retain custodianship over your funds, or at least determine who is the custodian, then walk away. You should be able to get accurate account statements from a trustworthy third party at all times. |
Is it accurate to say that if I was to trade something, my probability of success can't be worse than random? | Don't compare investing with a roll of the dice, compare it with blackjack and the decision to stand or hit, or put more money on the table (double down or increase bet size) , based on an assessment of the state of the table and history. A naive strategy of say "always hitting to 16" isn't as awful as randomly hitting and standing (which, from time to to time will draw to 21 fair and square) , but there's a basic strategy that gets close to 50% and by increasing or decreasing bet based on counting face cards can get into positive expectations. Randomly buying and selling stock is randomly hitting. Buying a market index fund is like always hitting to 16. Determining an asset allocation strategy and periodically rebalancing is basic strategy. Adjusting allocations based on business cycle and economic indicators is turning skill into advantage. |
Why do shareholders participate in shorting stocks? | In short (pun intended), the shareholder lending the shares does not believe that the shares will fall, even though the potential investor does. The shareholder believes that the shares will rise. Because the two individuals believe that a different outcome will occur, they are able to make a trade. By using the available data in the market, they have arrived at a particular conclusion of the fair price for the trade, but each individual wants to be on the other side of it. Consider a simpler form of your question: Why would a shareholder agree to sell his/her shares? Why don't they just wait to sell, when the price is higher? After all, that is why the buyer wants to purchase the shares. On review, I realize I've only stated here why the original shareholder wouldn't simply sell and rebuy the share themselves (because they have a different view of the market). As to why they would actually allow the trade to occur - Zak (and other answers) point out that the shares being lent are compensated for by an initial fee on the transaction + the chance for interest during the period that the shares are owed for. |
Are my purchases of stock, mutual funds, ETF's, and commodities investing, or speculation? | I'd argue the two words ought to (in that I see this as a helpful distinction) describe different activities: "Investing": spending one's money in order to own something of value. This could be equipment (widgets, as you wrote), shares in a company, antiques, land, etc. It is fundamentally an act of buying. "Speculating": a mental process in which one attempts to ascertain the future value of some good. Speculation is fundamentally an act of attempted predicting. Under this set of definitions, one can invest without speculating (CDs...no need for prediction) and speculate without investing (virtual investing). In reality, though, the two often go together. The sorts of investments you describe are speculative, that is, they are done with some prediction in mind of future value. The degree of "speculativeness", then, has to be related to the nature of the attempted predictions. I've often seen that people say that the "most speculative" investments (in my use above, those in which the attempted prediction is most chaotic) have these sorts of properties: And there are probably other ideas that can be included. Corrections/clarifications welcome! P.S. It occurs to me that, actually, maybe High Frequency Trading isn't speculative at all, in that those with the fastest computers and closest to Wall Street can actually guarantee many small returns per hour due to the nature of how it works. I don't know enough about the mechanics of it to be sure, though. |
Is being a landlord a good idea? Is there a lot of risk? | Buying a property and renting it out can be a good investment if it matches your long term goals. Buying an investment property is a long term investment. A large chunk of your money will be tied up with the property and difficult to access. If you put your money into dividend producing stocks you can always sell the stock and have your money back in a matter of days this is not so with a property. (But you can always do a Home equity line of credit (HELOC)) I would also like to point out landlording is not a passive endeavor as JohnFx stated dealing with a tenant can be a lot of work. This is not work you necessarily have to deal with, it is possible to contract with a property management company that would place tenants and take care of those late night calls. Property management companies often charge 10% of your monthly rent and will eat a large portion of your profits. It could be worth the time and headache of tenant relations. You should build property management into you expenses anyway in case you decide to go that route in the future. There are good things about owning an investment property. It can produce returns in a couple of ways. If you choose this route it can be lucrative but be sure to do your homework. You must know the area you are investing very well. Know the rent, and vacancy rates for Single family homes, look at multifamily homes as a way of mitigating risk(if one unit is vacant the others are still paying). |
How can people have such high credit card debts? | I had $70K in credit card at one point. Limited income, starting a business - it's the only credit available. (yes, all paid off now). |
Should a high-school student invest their (relative meager) savings? | The advice to invest in yourself is good advice. But the stock market can be very rewarding over the long pull. You have about 45 years to retirement now and that is plenty long enough that each dollar put into the market now will be many dollars then. A simple way to do this might be to open a brokerage account at a reputable broker and put a grand into a very broad based all market ETF and then doing nothing with it. The price of the ETF will go up and down with the usual market gyrations, but over the decades it will grow nicely. Make sure the ETF has low fees so that you aren't being overcharged. It's good that you are thinking about investing at a young age. A rational and consistent investment strategy will lead to wealth over the long pull. |
What should I invest in to hedge against a serious crash or calamity? | Are you willing to risk the possibility of investing to prepare for these things and losing money or simply getting meager returns if those crises don't happen? Just invest in a well diversified portfolio both geographically and across multiple sectors and you should be fine. |
How to share income after marriage and kids? | Some basic thoughts, mostly on fairness. I guess the answer doesn't really fit this site, it's more about ethics, but this fits the question which isn't really just about money either. So when both work the same amount, it seems appropriate that both get the same mount of money, doesn't it? That is, the scheme of (as already contained in your question and in some other answers) is fair by this logic. Pay attention to hidden money: for example the one who works more for money might automatically get a pension funded this way. This is hidden money which already goes to only one partner, so when dividing equally, you'll need to take that into account (or just include "equal pensions for both" in the family's needs directly). |
Are there any investment strategies which take advantage of an in-the-money option price that incorporates no “time value”? | you asked for strategies which use deep in the money options: dividend mispricing can use deep in the money options, basically its an arbitrage play on ex-dividend dates. and any kind of spread can use deep in the money options, depending on how wide you want your spread to be |
Merits of buying apartment houses and renting them | I am not going to argue the merits of investing in real estate (I am a fan I think it is a great idea when done right). I will assume you have done your due diligence and your numbers are correct, so let's go through your questions point by point. What would be the type of taxes I should expect? NONE. You are a real estate investor and the US government loves you. Everything is tax deductible and odds are your investment properties will actually manage to shelter some of your W2(day job) income and you will pay less taxes on that too. Obviously I am exaggerating slightly find a CPA (certified public accountant) that is familiar with real estate, but here are a few examples. I am not a tax professional but hopefully this gives you an idea of what sort of tax benifits you can expect. How is Insurance cost calculated? Best advice I have call a few insurance firms and ask them. You will need landlord insurance make sure you are covered if a tenant gets hurt or burns down your property. You can expect to pay 15%-20% more for landlord insurance than regular insurance (100$/month is not a bad number to just plug in when running numbers its probably high). Also your lease should require tenants to have renters insurance to help protect you. Have a liability conversation with a lawyer and think about LLCs. How is the house price increase going to act as another source of income? Appreciation can be another source of income but it is not really that useful in your scenario. It is not liquid you will not realize it until you sell the property and then you have to pay capital gains and depreciation recapture on it. There are methods to get access to the gains on the property without paying taxes. This is done by leveraging the property, you get the equity but it is not counted as capital gains since you have to pay it back a mortgage or home equity lines of credit (HELOC) are examples of this. I am not recommending these just making sure you are aware of your options. Please let me know if I am calculating anything wrong but my projection for one year is about $8.4k per house (assuming no maintenance is needed) I would say you estimated profit is on the high side. Not being involved in your market it will be a wild guess but I would expect you to realize cash-flow per house per year of closer to $7,000. Maybe even lower given your inexperience. Some Costs you need to remember to account for: Taxes, Insurance, Vacancy, Repairs, CapEx, Property Management, Utilities, Lawn Care, Snow Removal, HOA Fees. All-in-all expect 50% or your rental income to be spent on the property. If you do well you can be pleasantly surprised. |
How to work around the Owner Occupancy Affidavit to buy another home in less than a year? | Although it may be a little late for you, the real answer is this: When you close on a mortgage for a primary residence you are affirming (in an affidavit), two intents: Now, these are affirming intentions — not guarantees; so if a homeowner has a change of circumstance, and cannot meet these affirmed intentions, there is almost always no penalty. Frankly, the mortgage holder's primary concern is you make payments on time, and they likely won't bother with any inquiry. That being said, should a homeowner have a pattern of buying primary residences, and in less than 1 year converting that primary to a rental, and purchasing a new primary; there will likely be a grounds for prosecution for mortgage fraud. In your specific situation, you cannot legally sign the owner-occupancy affidavit with the intention of not staying for 1 year. A solution would be to purchase the condo as a second home, or investment; both of which you can still typically get 80% financing. A second home is tricky, I would ask your lender what their requirements are for 2nd home classification. Outside that, you could buy the condo as a primary, stay in it for a year, then convert. If you absolutely had to purchase the 2nd property before 1 year, you could buy it as a primary with a 2 month rent back once you reach 10 months. Should you need it earlier, just buy the 2nd house as an investment, then once you move in, refinance it as a primary. This last strategy requires some planning ahead and you should explain your intention to the loan officer ahead of time so they can properly price the non-owner occupied loan. |
Would it make sense to buy a rental property as an LLC and not in my own name? | You need to first visit the website of whatever state you're looking to rent the property in and you're going to want to form the LLC in that particular state. Find the Department of Licensing link and inquire about forming a standard LLC to register as the owner of the property and you should easily see how much it costs. If the LLC has no income history, it would be difficult for the bank to allow this without requiring you to personally guarantee the loan. The obvious benefit of protecting yourself with the LLC is that you protect any other personal assets you have in your name. Your liability would stop at the loan. The LLC would file its own taxes and be able to record the income against the losses (i.e. interest payments and other operating expenses.). This is can be beneficial depening on your current tax situation. I would definitely recommend the use of a tax accountant at that point. You need to be sure you can really afford this property in the worst case scenario and think about market leasing assumption, property taxes, maintenance and management (especially if you've moved to another state.) |
What happens to public shareholders when a public stock goes private? | I can see two possibilities. Either a deal is struck that someone (the company itself, or a large owner) buys out the remaining shares. This is the scenario @mbhunter is talking about, so I won't go too deeply into it, but it simply means that you get money in your bank account for the shares in question the same as if you were to sell them for that price (in turn possibly triggering tax effects, etc.). I imagine that this is by far the most common approach. The other possibility is that the stock is simply de-listed from a public stock exchange, and not re-listed elsewhere. In this case, you will still have the stock, and it will represent the same thing (a portion of the company), but you will lose out on most of the "market" part of "stock market". That is, the shares will still represent a monetary value, you will have the same right to a portion of the company's profits as you do now, etc., but you will not have the benefit of the market setting a price per share so current valuation will be harder. Should you wish to buy or sell stock, you will have to find someone yourself who is interested in striking a deal with you at a price point that you feel comfortable with. |
What is the best way to get a “rough” home appraisal prior to starting the refinance process? | If you're willing to pay a fee, you can probably just get a commercial appraiser to give you a valuation. In Australia I think it's around $100-200. |
What exactly is the profit and loss of a portfolio? | When we 'delta-hedge', we make the value of a portfolio 0. No - you make the risk relative to some underlying 0. The portfolio does have a value, but if whatever underlying you're hedging against changes slightly the value of your portfolio should not change. But, what is the derivative of a portfolio? It's the instantaneous rate of change of the portfolio) relative to some underlying phenomenon. With a portfolio of many stocks, there's not one single factor that drives the value of your portfolio. You have sensitivity to each underlying stock (price and volatility), interest rates, the market as a whole, etc. For simplicity, we might imagine a portfolio that has holdings in .... a call .... a stock .... and a bank account (to borrow and lend money). You will have a delta relative to the stock and a delta relative to the underlying instrument on the option, etc. Those can only be aggregated for each factor (e.g. if the call is an option on the same stock) Theta is the only one you can calculate for the portfolio as a whole - it will be the aggregate theta of all of your positions (since change in time is constant across all investments). All of the others are not aggregatable since they are measuring sensitivities to different phenomena. |
How to avoid maintenance fee when balance drops below minimum? | Looks like you have three options: Outside of this you might need to look for a different type of account. Hope that helps. |
Where can I buy preferred stocks as opposed to common stocks? | Preferred stock is traded on the market, so you can just buy it like any other. The symbol for a preferred stock is the ticker symbol followed by a dash and a letter for each class of preferred stock. Examples: Generally speaking, you should buy Preferred stock with the intention of holding onto it for at least a couple of years. Often preferred shares are lightly traded and have wide spreads that made it difficult to make money in the short term. |
Are lottery tickets ever a wise investment provided the jackpot is large enough? | Others have already explained why lotteries have negative expected value, so in that sense it is never wise to buy a lottery ticket. I will provide an alternative view, that it is not always unwise to buy a lottery ticket even though the expected value of the lottery ticket is lower than its cost (i.e. a loss). The question is what you mean with "wise" A (not completely unlikely) scenario is one where your life (financially) suck, and even if you saved the cost of the ticket (instead of buying it) your life would still suck. Even if you saved the cost for a ticket every week for 10 years, your live would not be essentially better. You could maybe afford a TV, or a new car in 40 years, but if you were to quantify the happiness of your life it would still be essentially crappy. But winning the lottery would significantly improve your life and make you happy. So in this scenario there are two choices, either save the money for 0% chance of a happy life, or spend it on a ticket for a (extremely) small chance of a good life. Yes, the expected value of saving the money is higher than when buying the ticket, but "expected happiness" is higher when buying the ticket (non-zero). This is clearly an extreme example, but variants of this might apply (the essence is that your valuation of the money is non-linear, 1 million will make you more than 1000 times as happy as 1000.) |
How to bet against the London housing market? | Well, Taking a short position directly in real estate is impossible because it's not a fungible asset, so the only way to do it is to trade in its derivatives - Investment Fund Stock, indexes and commodities correlated to the real estate market (for example, materials related to construction). It's hard to find those because real estate funds usually don't issue securities and rely on investment made directly with them. Another factor should be that those who actually do have issued securities aren't usually popular enough for dealers and Market Makers to invest in it, who make it possible to take a short position in exchange for some spread. So what you can do is, you can go through all the existing real estate funds and find out if any of them has a broker that let's you short it, in other words which one of them has securities in the financial market you can buy or sell. One other option is looking for real estate/property derivatives, like this particular example. Personally, I would try to computationally find other securities that may in some way correlate with the real estate market, even if they look a bit far fetched to be related like commodities and stock from companies in construction and real estate management, etc. and trade those because these have in most of the cases more liquidity. Hope this answers your question! |
How does one value Facebook stock as a potential investment? | You could try this experiment: pay for an Ad/banner on Facebook for 1 month. The Ad/banner should link to your ecommerce site. Then see if the Ad/banner does or does not convert into ecommerce orders ("converting" means that people coming to your eccomerce site from Facebook after having clicked on your Ad/banner really buy something on your site). If it does convert, you will go on paying for Ads/banners and other people will do the same for their sites, so FB might make cash in next years. But if it does NOT convert you and everybody else will soon discover and stop paying for Ads/banners, thus it will be hard for Facebook to make money with Advertising, thus Facebook might be just a big bubble (unless they find other ways of making money). I did the experiment I suggested above and the conversion rate was an absoulte ZERO!!! (Instead Google Adwords converted well for the same site). So IMHO I would stay away from FB. But remember that stock market is emotional (at least on short periods of time), so it might be that even if FB wil never become a cash cow, for the 1st few months people (expecially small investors tempeted by the brand) might go crazy for the stocks and buy buy buy, making the price go up up up. EDIT in reply to some comments below arguing that my answer was boiled down to one single experiment: General Motors said Tuesday that it will stop paid advertising on Facebook...the social media paid ads simply weren't delivering the hoped-for buyers... (CNN May/15/2012) A donkey can not fly either when it's me (with a single experiment) trying to make it fly or the entire GM workforce. |
What is the most common and profitable investment for a good retirement in Australia? | In Australia anyone thinking about retirement should be concentrating on superannuation. Contribution is compulsory (I think the current minimum contribution rate is 9.5% of salary) and both contributions and investment returns are very tax efficient. The Government site is quite comprehensive - http://www.australia.gov.au/topics/economy-money-and-tax/superannuation - have a read and come back with any specific questions. |
Transfer money from a real estate sale in India to the US | How would I go about doing this? Assuming you had purchased the house by funding from your NRE account, you can easily move back the 30K into NRE Account and out of India from NRI Account. The 30K profit would be taxed in India as per capital gains and can only be moved into NRO account. A CA would need to certify that appropriate taxes have been withheld before the bank will release the funds for repatriation out of India. There is also a limit [large 1 million USD] on how much funds can be moved out of India. Consult a CA who would help you with the formalities. If you have not funded the purchase from NRE account, the entire proceeds should be into NRO account and then move funds from there. |
To rebalance or not to rebalance | In theory, investing is not gambling because the expected outcome is not random; people are expecting positive returns, on average, with some relationship to risk undertaken and economic reality. (More risk = more returns.) Historically this is true on average, that assets have positive returns, and riskier assets have higher returns. Also it's true that stock market gains roughly track economic growth. Valuation (current price level relative to "fundamentals") matters - reversion to the mean does exist over a long enough time. Given a 7-10 year horizon, a lot of the variance in ending price level can be explained by valuation at the start of the period. On average over time, business profits have to vary around a curve that's related to the overall economy, and equity prices should reflect business profits. The shorter the horizon, the more random noise. Even 1 year is pretty short in this respect. Bubbles do exist, as do irrational panics, and milder forms of each. Investing is not like a coin flip because the current total number of heads and tails (current valuation) does affect the probability of future outcomes. That said, it's pretty hard to predict the timing, or the specific stocks that will do well, etc. Rebalancing gives you an objective, automated, unemotional way to take advantage of all the noise around the long-term trend. Rather than trying to use judgment to identify when to get in and out, with rebalancing (and dollar cost averaging) you guarantee getting in a bit more when things are lower, and getting out a bit more when things are higher. You can make money from prices bouncing around even if they end up going nowhere and even if you can't predict the bouncing. Here are a couple old posts from my blog that talk about this a little more: |
Source of income: from dividends vs sale of principal or security | The trend in ETFs is total return: where the ETF automatically reinvests dividends. This philosophy is undoubtedly influenced by that trend. The rich and retired receive nearly all income from interest, dividends, and capital gains; therefore, one who receives income exclusively from dividends and capital gains must fund by withdrawing dividends and/or liquidating holdings. For a total return ETF, the situation is even more limiting: income can only be funded by liquidation. The expected profit is lost for the dividend as well as liquidating since the dividend can merely be converted back into securities new or pre-existing. In this regard, dividends and investments are equal. One who withdraws dividends and liquidates holdings should be careful not to liquidate faster than the rate of growth. |
Why would you ever turn down a raise in salary? | This would never apply for tax "brackets". It's not as though making an extra dollar will put you into an entire separate bracket, the IRS isn't that bad. They bump up the "brackets" every $50, so you will never turn down a raise because it would cause you to lose income. However if your raise would preclude you from contributing to your IRA because it pushes you over $110,000 then yes, you could turn it down or explain to your boss that it would need to be just a little bit higher to cover your IRA contribution loss. |
Buy or sell futures contracts | Futures contracts are a member of a larger class of financial assets called derivatives. Derivatives are called such because their payoffs depend on the price of other assets (financial or real). Other kinds of derivatives are call options, put options. Fixed income assets that mimic the behavior of derivatives are callable bonds, puttable bonds etc. A futures contract is a contract that specifies the following: Just like with any other contract, there are two parties involved. One party commits to delivering the underlying asset to the other party on expiration date in exchange for the futures price. The other party commits to paying the futures price in exchange for the asset. There is no price that any of the two parties pay upfront to engage in the contract. The language used is so that the agent committing to receiving the delivery of the underlying asset is said to have bought the contract. The agent that commits to make the delivery is said to have sold the contract. So answer your question, buying on June 1 a futures contract at the futures price of $100, with a maturity date on August 1 means you commit to paying $100 for the underlying asset on August 1. You don't have to pay anything upfront. Futures price is simply what the contract prescribes the underlying asset will exchange hands for. |
Main source of the shares/stocks data on the web | To expand on keshlam's answer: A direct feed does not involve a website of any kind. Each exchange publishes its order/trade feed(s) onto a packet network where subscribers have machines listening and reacting. Let's call the moment when a trade occurs inside an exchange's matching engine "T0". An exchange then publishes the specifics of that trade as above, and the moment when that information is first available to subscribers is T1. In some cases, T1 - T0 is a few microseconds; in other (notorious) cases, it can be as much as 100 milliseconds (100,000x longer). Because it's expensive for a subscriber to run a machine on each exchange's network -- and also because it requires a team of engineers devoted to understanding each exchange's individual publication protocols -- it seems unlikely that Google pays for direct access. Instead Google most likely pays another company who is a subscriber on each exchange around the world (let's say Reuters) to forward their incoming information to Google. Reuters then charges Google and other customers according to how fast the customer wants the forwarded information. Reuters has to parse the info it gets at T1, check it for errors, and translate it into a format that Google (and other customers) can understand. Let's say they finish all that work and put their new packets on the internet at time T2. Then the slow crawl across the internet begins. Some 5-100 milliseconds later your website of choice gets its pre-processed data at time T3. Even though it's preprocessed, your favorite website has to unpack the data, store it in some sort of database, and push it onto their website at time T4. A sophisticated website might then force a refresh of your browser at time T4 to show you the new information. But this forced refresh involves yet another slow crawl across the internet from where your website is based to your home computer, competing with your neighbor's 24/7 Netflix stream, etc. Then your browser (with its 83 plugins and banner ads everywhere) has to refresh, and you finally see the update at T5. So, a thousand factors come into play, but even assuming that Google is doing the most expensive and labor-intensive thing it can and that all the networks between you and Google and the exchange are as short as they can be, you're not going to hear about a trade -- even a massive, market-moving trade -- for anywhere from 500 milliseconds to 5 seconds after T0. And in a more realistic world that time will be 10-30 seconds. This is what Google calls "Realtime" on that disclaimer page, because they feel they're getting that info to you as fast as they possibly can (for free). Meanwhile, the computers that actually subscribe to an exchange heard about the trade way back at time T1 and acted on that information in a few microseconds. That's almost certainly before T2 and definitely way way before T3. The market for a particular instrument could change direction 5 times before Google even shows the first trade. So if you want true realtime access, you must subscribe to the exchange feed or, as keshlam suggests, sign up with a broker that provides its own optimized market feeds to you. (Note: This is not an endorsement of trading through brokers.) |
What were the main causes of the spike and drop of DRYS's stock price? | Because it's a declining company and used as an institutional sized pump and dump with a new toxic financing every week. Look up Kalani Investments - they're behind it all. |
Is there any way to know how much new money the US is printing? | This chart summarizes the FED's balance sheet (things the FED has purchased - US treasuries, mortgage backed securities, etc.) nicely. It shows the massive level of "printing" the FED has done in the past two years. The FED "prints" new money to buy these assets. As lucius has pointed out the fractional reserve banking process also expands the money supply. When the FED buys something from Bank A, then Bank A can take the money and start lending it out. This process continues as the recipients of the money deposit the newly printed money in other fractional reserve banks. FYI....it took 95 years for the FED to print the first $900 billion. It took one year to print the next $900 billion. |
How to invest 100k | How to spend the money is up to you. That includes spending money on your house. (This is a safer way to look at it than an "investment". Not that it can't ever be treated as such, but that doing so often makes it easy to justify bad decisions and overspending on the house.) So with regards to the mortgage: So if it's not a monstrously huge deal, you might prefer to avoid default. Now, how to invest the rest while waiting to spend it, now... |
Reporting software subscriptions | Generally prepaid services should be capitalized over the period prepaid. But if it is up to a year - you can just expense them. As to the technicalities - you can contact Intuit support, but you should be able to put it in the same area where you put all your other business expenses. If you're a sole proprietor - that would be Schedule C. |
What should I do with $4,000 cash and High Interest Debt? | If we're including psychological considerations, then the question becomes much more complicated: will having a higher available credit increase the temptation to spend? Will eliminating 100% of a small debt provide more positive reinforcement than paying off 15% of a larger debt? Etc. If we're looking at the pure financial impact, the question is simpler. The only advantage I see to prioritizing the lower interest card is the float: when you buy something on a credit card, interest is often calculated for that purchase starting at the beginning of the next billing cycle, rather than immediately from the purchase date. I'm not clear on what policies credit card companies have on giving float for credit cards with a carried balance, so you should look into what your card's policy is. Other than than, paying off the higher interest rate card is better than paying off the lower interest rate. On top of that, you should look into whether you qualify for any of the following options (presented from best to worst): |
What does investment bank risk during IPO? | Investment banks don't have to buy anything. If they don't think the stock is worth buying - they won't. If they think it is - others on the secondary market will probably think so too. Initial public offering is offering to the public - i.e.: theoretically anyone can participate and purchase stocks. The major investment firms are not buying the stocks for themselves - but for their clients who are participating in this IPO. I, for example, receive email notifications from my brokerage firm each time there's another IPO that they have access to, and I can ask the brokerage to buy stocks from the IPO on my behalf. When that happens - they don't buy the stocks themselves and then sell to me. No, what happens is that I buy a stock, through them, and they charge me a commission for the service. Usually IPO participation commissions are higher than regular trading commissions. Most of the time those who purchase stocks at IPO are institutional investors - i.e.: mutual funds, pension plans, investment banks for their managed accounts, etc. Retail investors would probably not participate in the IPO because of the costs, limited access (not all the brokerage firms have access to all the IPOs), and the uncertainty, and rather purchase the stocks later on a secondary market. |
How can I escalate a credit dispute when the bureau “confirms” the item? | I was I a similar position as you, and sometimes credit bureaus might be difficult to deal with, especially when high amounts of money are involved. To make the long story short, someone opened a store credit card under my name and made a charge of around 3k. After reporting this to the bureaus, they did not want to remove the account from my credit report citing that the claim was "frivolous". After filing a police report, the police officer gave me the phone number for the fraud department of this store credit card, and after they investigated, they removed the account from my credit. I would suggest to do the following: Communicating with Creditors and Debt Collectors You have the right to: Stop creditors and debt collectors from reporting fraudulent accounts. After you give them a copy of a valid identity theft report, they may not report fraudulent accounts to the credit reporting companies. Get copies of documents related to the theft of your identity, like transaction records or applications for new accounts. Write to the company that has the documents, and include a copy of your identity theft report. You also can tell the company to give the documents to a specific law enforcement agency. Stop a debt collector from contacting you. In most cases, debt collectors must stop contacting you after you send them a letter telling them to stop. Get written information from a debt collector about a debt, including the name of the creditor and the amount you supposedly owe. If a debt collector contacts you about a debt, request this information in writing. I know that you said that the main problem was that your credit account was combined with another. But there might be a chance that identity theft was involved. If this is the case, and you can prove it, then you might have access to more tools to help you. For example, you can file a report with the FTC, and along with a police report, this can be a powerful tool in stopping these charges. Feel free to go to the identitytheft.gov website for more information. |
How to reduce mortgage rate with low income but high assets | In your shoes, I would pay off the mortgage with the after tax investments and be done. You have different goals than I do in that you want to keep the debt. So, I would start calling mortgage brokers and asking for someone who does "manual underwriting". Manual underwriting essentially means they use common sense and look at your situation for what it is instead of saying "income=10K means disapprove mortgage". It may be that your situation is different enough from mortgage guidelines that you can't now get a conforming mortgage (i.e. one that is readily re-sellable to another mortgage holder). If that is the case, you can look for a small bank or credit union that would be interested in adding your loan to their portfolio and not reselling it. |
Paid cash for a car, but dealer wants to change price | Your son is in the right. But he broke the "unwritten" rules, which is why the car dealer is upset. Basically, cars are sold in the United States at a breakeven price. The car company makes ALL its money on the financing. If everyone bought "all cash," the car companies would not be profitable. No one expected anyone, least of all your son, a "young person," to pay "all cash." When he did, they lost all the profit on the deal. On the other hand, they signed a contract, your son met all the FORMAL requirements, and if there was an "understanding" (an assumption, actually), that the car was supposed to be financed, your son was not part of it. Good for him. And if necessary, you should be prepared to back him up on court. |
When to sell a stock? | I am a believer in stocks for the long term, I sat on the S&P right though the last crash, and am 15% below the high before the crash. For individual stocks, you need to look more closely, and often ask yourself about its valuation. The trick is to buy right and not be afraid to sell when the stock appears to be too high for the underlying fundamentals. Before the dotcom bubble I bought Motorola at $40. Sold some at $80, $100, and out at $120. Coworkers who bought in were laughing as it went to $160. But soon after, the high tech bubble burst, and my sales at $100 looked good in hindsight. The stock you are looking at - would you buy more at today's price? If not, it may be time to sell at least some of that position. |
A little advice please…car loan related | Let's assess the situation first, then look at an option: This leaves you with about $1,017/mo in cash flow, provided you spend money on nothing else (entertainment, oil changes, general merchandise, gifts, etc.) So I'd say take $200/mo off that as "backup" money. Now we're at $817/mo. Question: What have you been doing with this extra $800/mo? If you put $600/mo of that extra towards the 10% loan, it would be paid off in 12 months and you would only pay $508 in interest. If you have been saving it (like all the wisest people say you should), then you should have plenty enough to either pay for a new transmission or buy a "good enough" car outright. 10% interest rate on a vehicle purchase is not very good. Not sure why you have a personal loan to handle this rather than an auto loan, but I'll guess you have a low credit score or not much credit history. Cost of a new transmission is usually $1,700 - $3,500. Not sure what vehicle we're talking about, so let's make it $3,000 to be conservative. At your current interest rate, you'll have paid another $1,450 in interest over the next 33 months just trying to pay off your underwater car. If you take your old car to a dealership and trade it in towards a "new to you" car, you might be able to roll your existing loan into a new loan. Now, I'm not sure when you say personal loan if you mean an official loan from a bank or a personal loan from a friend/family-member, so that could make a difference. I'm also not sure if a dealership will be willing to recognize a personal loan in the transaction as I'd wager there's no lien against the vehicle for them to worry about. But, if you can manage it, you may be able to get a lower overall interest rate. If you can't roll it into a new financing plan, then you need to assess if you can afford a new loan (provided you even get approved) on top of your existing finances. One big issue that will affect interest rates and approvals will be your down payment amount. The higher it is, the better interest rate you'll receive. Ultimately, you're in a not-so-great position, but if your monthly budget is as you describe, then you'll be fine after a few more years. The perils of buying a used car is that you never know what might happen. What if you don't repair your existing car, buy another car, and it breaks down in a year? It's all a bit of a gamble. Don't let your emotions get in the way of making a decision. You might be frustrated with your current vehicle, but if $3,000 of repairs makes it last 3 more years, (by which time your current loan should be paid off), then you'll be in a much better spot to finance a newer vehicle. Of course it would be much better to save up cash over that time and buy something outright, but that's not always feasible. Would you rather fix up your current car and keep working to pay down the debt, or, would you rather be rid of the car and put $3,000 down on a "new to you" car and take on an additional monthly debt? There's no single right answer for you. First and foremost you need to assess your monthly cash flow and properly allocate the extra funds. Get out of debt as soon as reasonably possible. |
Hearing much about Dave Ramsey. Which of his works is best in describing his “philosophy” about money? | Actually, Trent Hamm of The Simple Dollar, wrote a "book club" series that basically reads like cliff notes for Dave's The Total Money Makeover starting with this blog post. So that might be a really good place to start. Also of note is Trent's Article "Five Ways I Disagree With Dave Ramsey". |
How do you declare an interest free loan? | I am neither a lawyer nor a tax accountant, and if you're dealing with serious money I suggest you consult a professional. But my understanding is: If you make a loan at zero interest or at below-market rates, the IRS will consider the difference between the interest that you do charge and the market rate to be a gift. That is, if someone could get a loan from a bank and he'd pay $1000 in interest for the year, but instead you loan him the money as a friend interest free, than as far as the IRS is concerned you have given him a $1000 gift, and you could potentially have to pay gift tax. Or they might "impute" the interest to you and tax you on $1000 of additional income. If you have no agreement on repayment terms, if it's all, "Hey Joe, just pay me back when you can", then the IRS is likely to consider the entire "loan" to be a gift. There's an annual exclusion on gifts -- I think it's now $13,000 -- so if you loan your buddy fifty bucks to tide him over until next pay day, the IRS isn't going to get involved in that. They're worried about more serious money. And yes, the IRS does "police loan rates". The IRS examines exact numbers for all sorts of things. If, say, you go on a 100-mile overnight business trip, and the company gives you $10,000 for travel expenses, the IRS is likely to say that this is not a tax-deductible travel expense at all but a sham to hide part of your salary from taxes. Or if you donate a pair of old socks to charity and declare a $500 charitable contribution deduction, the IRS will say that that is not a realistic value for a pair of old socks and disallow the deduction. Etc. A small discrepancy from market rates can be justified for any number of reasons. If the book value of a used car is $5000 and you sell it to your neighbor for $4900, the IRS is unlikely to question it, there are any number of legitimate business reasons why you had to give a discount to make the sale. But if you sell it to him for $50, they may declare that this is not a sale but a gift. Etc. |
Are there any statistics that support the need for Title Insurance? | The point of title insurance is that when you buy a house, it is possible that you may eventually find out that the seller didn't actually own the property - either because they were trying to deceive you, or some transfer of ownership in the past wasn't carried out properly. If that happens you can find yourself with no house, and still owing the mortgager the purchase price. Hardly anybody can afford to take that kind of hit, which is why you need some form of protection against it. The traditional way of doing this was to get a lawyer to do a title search, in which they check that everything in order. However this costs tens of dollars at least to do the work for every sale, and hardly ever finds anything. Title Insurance is a company volunteering to take the hit for you if there turns out to be a problem, in return for a payment of less than the title search would cost. In essence they are saying that it's cheaper to take the risk than do the work. What are the statistics? This report seems to indicate that payout is around 5% of premium, but title insurance is a one-off premium and the payout can theoretically happen many years down the line. However it is almost certain that the insurance companies have done the math and believe that selling this insurance will be profitable for them, so they believe that payouts are going to be substantially less than 100%. Is title insurance worth it for you? If the payout is 5% of premiums, the in a purely statistical sense it is not worth it. You would on average gain more by not taking it. However that is true of almost all insurance. The policy is there to protect you in the unlikely but not impossible event where you would otherwise lose a huge amount of money. Unless you can afford to lose the value of your house, you need some form of protection. We've already seen that the only other form of protection is a title search, and they cost more. The other issue is that if you are taking a mortgage, your mortgager will absolutely insist that you have either a title search or title insurance. There is no other way - and title insurance is the cheaper of the two. In this case it is best to look on the title insurance as simply a cost of doing business. It's irrelevant whether it's worth it or not - you can't do the transaction without it. |
How decreasing the prime interest rate helps to offset decreasing oil prices | You may be missing how countries like Canada may have oil be more of the GDP than countries like the US. In Canada, the lower oil prices may mean more of an economic slowdown with oil companies laying off staff, canceling projects and some companies probably going under as some provinces like Alberta are highly dependent on oil prices to drive most of the economy. In contrast, the US isn't quite as rich in Energy sources and thus may not have the same issues would be my guess. Context matters here. If the rate change helps everybody, doesn't that include the oil producing companies? I'd like to think so using basic logic. What if the main reason for lowering rates was the economic fallout of the decrease in oil prices? Consider that the there would be the question of, "Why do this now?" that has to be answered and the only main change is lower oil prices on a macroeconomic level. |
Is it true that more than 99% of active traders cannot beat the index? | That is such a vague statement, I highly recommend disregarding it entirely, as it is impossible to know what they meant. Their goal is to convince you that index funds are the way to go, but depending on what they consider an 'active trader', they may be supporting their claim with irrelevant data Their definition of 'active trader' could mean any one or more of the following: 1) retail investor 2) day trader 3) mutual fund 4) professional investor 5) fund continuously changing its position 6) hedge fund. I will go through all of these. 1) Most retail traders lose money. There are many reasons for this. Some rely on technical strategies that are largely unproven. Some buy rumors on penny stocks in hopes of making a quick buck. Some follow scammers on twitter who sell newsletters full of bogus stock tips. Some cant get around the psychology of trading, and thus close out losing positions late and winning positions early (or never at all) [I myself use to do this!!]. I am certain 99% of retail traders cant beat the market, because most of them, to be frank, put less effort into deciding what to trade than in deciding what to have for lunch. Even though your pension funds presentation is correct with respect to retail traders, it is largely irrelevant as professionals managing your money should not fall into any of these traps. 2) I call day traders active traders, but its likely not what your pension fund was referring to. Day trading is an entirely different animal to long or medium term investing, and thus I also think the typical performance is irrelevant, as they are not going to manage your money like a day trader anyway. 3,4,5) So the important question becomes, do active funds lose 99% of the time compared to index funds. NO! No no no. According to the WSJ, actively managed funds outperformed passive funds in 2007, 2009, 2013, 2015. 2010 was basically a tie. So 5 out of 9 years. I dont have a calculator on me but I believe that is less than 99%! Whats interesting is that this false belief that index funds are always better has become so pervasive that you can see active funds have huge outflows and passive have huge inflows. It is becoming a crowded trade. I will spare you the proverb about large crowds and small doors. Also, index funds are so heavily weighted towards a handful of stocks, that you end up becoming a stockpicker anyway. The S&P is almost indistinguishable from AAPL. Earlier this year, only 6 stocks were responsible for over 100% of gains in the NASDAQ index. Dont think FB has a good long term business model, or that Gilead and AMZN are a cheap buy? Well too bad if you bought QQQ, because those 3 stocks are your workhorses now. See here 6) That graphic is for mutual funds but your pension fund may have also been including hedge funds in their 99% figure. While many dont beat their own benchmark, its less than 99%. And there are reasons for it. Many have investors that are impatient. Fortress just had to close one of its funds, whose bets may actually pay off years from now, but too many people wanted their money out. Some hedge funds also have rules, eg long only, which can really limit your performance. While important to be aware of this, that placing your money with a hedge fund may not beat a benchmark, that does not automatically mean you should go with an index fund. So when are index funds useful? When you dont want to do any thinking. When you dont want to follow market news, at all. Then they are appropriate. |
Technical Analysis: the concepts of overbought / oversold don't make sense | Some technical indicators (e.g. Williams %R) indicate whether the market is overbought or oversold. ... Every time a stock or commodity is bought, it is also sold. And vice versa. So how can anything ever be over-bought or over-sold? But I'm sure I'm missing something. What is it? You're thinking of this as a normal purchase, but that's not really how equity markets operate. First, just because there are shares of stock purchased, it doesn't mean that there was real investor buyer and seller demand for that instrument (at that point in time). Markets have dedicated middlemen called Market Makers, who are responsible to make sure that there is always someone to buy or sell; this ensures that all instruments have sufficient liquidity. Market Makers may decide to lower their bid on a stock based on a high number of sellers, or raise their ask for a high number of buyers. During an investor rush to buy or sell an instrument (perhaps in response to a news release), it's possible for Market Makers to accumulate a large number of shares, without end-investors being involved on both sides of the transaction. This is one example of how instruments can be over-bought or over-sold. Since Williams %R creates over-bought and over-sold signals based on historical averages of open / close prices, perhaps it's better to think of these terms as "over-valued" and "under-valued". Of course, there could be good reason for instruments to open or close outside their expected ranges, so Williams %R is just a tool to give you clues... not a real evaluation of the instrument's true value. |
Offered a job: Should I go as consultant / independent contractor, or employee? | Linkedlinked, You might want to seriously take another look at the links that Chris provided you. Specifically the ones on the IRS website: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html From the IRS website: Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another. The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination. Perhaps more importantly... pay attention to what happens if you're WRONG: Consequences of Treating an Employee as an Independent Contractor If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker (the relief provisions, discussed below, will not apply). See Internal Revenue Code section 3509 for more information. I would STRONGLY recommend that you and your partners give your accountant a call and discuss the matter. They will be able to help you make the right decision. One of biggest mistakes businesses make in this are is to classify their employees as independent contractors. The IRS (who happens to be hungry for money right now) comes in and says, "Nooooooooo... those are employees." ...and the COMPANY gets to pay the employment taxes. I actually have person experience with this as I worked for a company this happened to. Every contractor was re-classified as an employee except for two (myself and one other). The key reason in that case was that none of the other contractors had any other clients. While I understand that you have other clients, I would still recommend talking to your accountant for an hour or so... just to be 100% sure. Sincerely, Andrew Smith TaxQueries.com |
Could capital gains from a stock sale impact my IRA eligibility? | Yes, eligibility for contributing to a Roth IRA is determined by your Modified Adjusted Gross Income (MAGI) which is based on your Adjusted Gross Income (AGI). Now, AGI includes the net capital gains from your transactions and MAGI adds back in things that were subtracted off (e.g. tuition deductions, foreign earned income exclusion) in arriving at the AGI. There is a worksheet in Publication 590 that has the details. You are always entitled to contribute to a Traditional IRA. The MAGI affects how much of your contribution is tax-deductible on that year's tax return, but not your eligibility to contribute. Both the above paragraphs assume that you have enough compensation (wages, salary, self-employment income) to contribute to an IRA: the contribution limit is $5500 or total compensation, whichever is smaller. (If you earned only $2K as wages, you can contribute all of it; not just your take-home pay which is what is left after Social Security and Medicare taxes, Federal taxes etc have been withheld from that $2K). If your entire income is from capital gains and stock dividends, you cannot contribute to any kind of IRA at all. |
How to spend more? (AKA, how to avoid being a miser) | Time is money. If those hours spent researching to save $3 made you a better profit than you would have otherwise had buying the more expensive product and using the rest of the time to make more than $3, then you came out on top. If you consider this general premise in every spending decision you make, you should always feel that you made the right choice. |
Does the USA have a Gold reserve? | According to the US Mint, the Government does still have a gold reserve stored mostly in Fort Knox in Kentucky, but there is some in New York and Colorado too. Some facts from their site: That last point is an interesting one. They are basically saying, yes we have it, and no you can't see it. Some conspiracy buffs claim no one has been allowed in there to audit how much they have in over 50 years leading them to speculate that they are bluffing. Although the dollar is no longer tied to the gold standard, throwing that much gold into the market would definitely add fuel the volatility of the finance world, which already has it's share of volatility and isn't hungry for more.The impact on the price of the dollar would be quite complicated and hard to predict. |
What financial data are analysed (and how) to come up with a stock recommendation? | Let me start with a somewhat sarcastic statement: There are probably as many things done to analyze a stock as there are people doing the analysis! That said, at a general level an analyst researches the historical performance of the company at a fairly detailed level (operations within divisions of the company, product development cycles within divisions, expenses vs income trends for each division and product, marketing costs, customer acquisition costs, etc); gathers information about what the company is doing now AND planning to do in the future -- often by a discussion with principles at the company; establishes a view on related macro-economic trends, sector and industry trends, demographic trends, etc.; and combines it all to forecast a change in revenues, margins, free cash flow, dividends, etc. over a period of time. They then apply statistics that relate those numbers to stock price in order to imply stock prices and price ranges over those same periods. Finally, depending on how those stock prices compare to the current stock price, they'll classify the stock as Buy, Sell, Hold, etc. This sounds like alot of work. And it generally is if you get detailed about it, which is what professionals or significant money managers are doing. However, there are also lots of arm-chair analysts posting their output on any number of financial sites (Seeking Alpha, Motley Fool, etc.) if you'd like to really explore the range of detail some people consider as a "stock analysis". That sounds more negative than I intended it to be, so let me clarify that I think some of these write-ups are really quite good IMO. |
If the co-signer on my car loan dies, can the family take the car from me like they're threatening to? | The lead story here is you owe $12,000 on a car worth $6000!! That is an appalling situation and worth a lot to get out of it. ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.) I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period. Now comes an "adversary", who is threatening to snatch the car away from you. I have to imagine they are emotionally motivated. How convenient :) Let them take it. But it's important to fully understand their motivations here. Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down. Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers. Let them win the battle; you win the war: make sure the legal details put you in the clear of it. Ideally, do this with consent with the grandfather "in response to his direct family's wishes", but keep up the theater of being really mad about it. Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it. Eventually they'll figure out they took a $6000 loss taking the car from you, and want to talk with you about that. Stay with blind rage at how they took my car. If they try to explain what "upside down" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go? If they ask for money, say they're swindling. "You forced me, I didn't have a choice". (which happens to be a good defense. They wanted it so bad; they shoulda done their homework. Since they were coercive it's not your job to disclose, nor your job to even know.) If they want you to take the car back, say "can't, you forced me to buy another and I have to make payments on that one now." |
In US, is it a good idea to hire a tax consultant for doing taxes? | I've been highly compensated for a while now, and I have never used a tax professional. My past complications include the year that my company was bought by a VC firm and my stock options and stock held were bought out to the tune of 5x my salary. And now I have two kids in college, with scholarships, and paying the remainder out of 529 accounts. Usually, I don't even use tax software. My typical method is to use the online software -- like turbotax online -- and let it figure out where I am. Then I use the "Free File Fillable forms" online to actually complete the process. Search for "Free File Fillable Forms" -- it's not the same as using turbotax or TaxAct for free. My suggestion to you: download the PDF form of 1040EZ and 1040A from the IRS. Print the EZ, and fill it out. This will give you a better feel for what exactly is going on. With your income, I don't think you can file the EZ, but it's a good way to get your feet wet. The way income taxes work here in the US: According to the IRS, the Personal Exemption this year is worth $4,050, and the Standard Deduction $6,300, assuming you're single. Lets assume that your salary will be in fact 75,000, and you don't pay for any benefits, but you do make a 401k contribution of 15% of your salary. Then your W-2 at the end of the year should tell you to put 63,750 in a particular box on your 1040 form. (63,750 is 85% of 75,000). Lets then assume 63,750 is your AGI after other additions and subtractions. 63,750 - 4,050 - 6,300 == 53,400. The federal Tax system is graduated, meaning there are different ranges (brackets) with different percentages. The term tax people use for taxable income of 53,400 is "marginal tax rate"...so the last dollar they tax at 25%. Other dollars less. According to the IRS, if you're single, then on 53,400, you pay "$6,897.50 plus 25% of the amount over $50,400" Or 6897.50 + 750, or 7647.50. Note this is only Federal Income Tax. You will also be paying Social Security and Medicare payroll Tax. And I'm guessing you'll also be paying colorado state income tax. Each state has its own forms and methods for figuring out the taxes and stuff. By the way, when you start, you'll fill out a "W-4" form to "help" you figure out how much to withhold from every paycheck. (I find the W-4 is not helpful at all). Your company will withhold from your paycheck some mysterious amount, and the process of filling out your 1040A or 1040EZ or whatever will be, likely, to get the over-withheld amount back. |
Most effective Fundamental Analysis indicators for market entry | Fundamental Analysis can be used to help you determine what to buy, but they won't give you an entry signal for when to buy. Technical Analysis can be used to help you determine when to buy, and can give you entry signals for when to buy. There are many Technical Indicator which can be used as an entry signal, from as simple as the price crossing above a moving average line and then selling when the price crosses back below the moving average line, to as complicated as using a combination of indicators to all line up for an entry signal to be valid. You need to find the entry signals that would suit your investing or trading and incorporate them as part of your trading plan. If you want to learn more about entry signals you are better off learning more about Technical Analysis. |
Tenant wants to pay rent with EFT | In Britain it's standard practice to use an electronic bank transfer, otherwise known as a "standing order" for the monthly rent payment. Many letting agents insist on it here in Britain. It's rare to hear of fraud. It is possible to setup a Direct Debit with the account numbers, as happened in a famous case where Jeremy Clarkson claimed losing account numbers wasn't a problem. If a direct debit is taken from your account, then you are protected by the the Direct Debit guarantee which means that you get a full and immediate refund if there is any fraud or unexpected payments spotted. Some landlords, particularly of bedsits accept plain old cash, however that's not recommended as there is no trace of it being paid, which could lead to legal disputes. |
In a competitive market, why is movie theater popcorn expensive? | You're looking at this too rationally. People can not resist eating junk food, especially when they have to sit for 2-3 hours to watch a movie. It's pure biology, not economics. People don't always act according to economic logic. |
What choices should I consider for investing money that I will need in two years? | Books such as "The Pocket Idiot's Guide to Investing in Mutual Funds" claim that money market funds and CDs are the most prudent things to invest in if you need the money within 5 years. More specifically: |
What's the connection between P/E ratio and growth? | So, the price-earnings ratio is price over earnings, easy enough. But obviously earnings are not static. In the case of a growing company, the earnings will be higher in the future. There will be extra earnings, above and beyond what the stock has right now. You should consider the future earnings in your estimate of what the company is worth now. One snag: Those extra earnings are future money. Future-money is an interesting thing, it's actually worth less than present-money- because of things like inflation, but also opportunity cost. So if you bought $100 in money that you'll have 20 years from now, you'd expect to pay less than $100. (The US government can sell you that money. It's called a Series EE Savings Bond and it would cost you $50. I think. Don't quote me on that, though, ask the Treasury.) So you can't compare future money with present-money directly, and you can't just add those dollars to the earnings . You need to compute a discount. That's what discounted cash-flow analysis is about: figuring out the future cash flow, and then discounting the future figuring out what it's worth now. The actual way you use the discount rate in your formula is a little scarier than simple division, though, because it involves discounting each year's earnings (in this case, someone has asserted a discount of 11% a year, and five years of earnings growth of 10%). Wikipedia gives us the formula for the value of the future cash flow: essentially adding all the future cash flows together, and then discounting them by a (compounded) rate. Please forgive me for not filling this formula out; I'm here for theory, not math. :) |
How do I find an ideal single fund to invest all my money in? | Though a fan of ETFs (esp. high volume commission-free ones) recently a single, new fund VQT appeared on my radar of interest. It's based on dynamic hedging that has sort of build-in diversification and adapts to the market climate, pulling in and out varying amounts from cash, the S&P 500 and volatility futures based on VIX. I've been Long VQT and it's followed the S&P500 during good times, though not at far, but crucially disconnected with much milder losses when the general market was nose diving. You can lookup and compare to SPY at http://finance.google.com Not trying to give investment advice, in case that upsets some rules. |
Would I qualify for a USDA loan? | How realistic is it that I will be able to get a home within the 250,000 range in the next year or so? Very unlikely in the next year. The debt/income ratio isn't good enough, and your credit score needs to show at least a year of regular payments without late or default issues before you can start asking for mortgages in this range. You don't mention how long you've been employed at these incomes, this can also count against you if you haven't both been employed for a full year at these incomes. They will look even more unfavorably on the employment situation if they aren't both full time jobs, although if you have a full year's worth of paychecks showing the income is regular then that might mitigate the full time/part time issue. next year or so? If you pay down your high interest debt (car, credit cards), and maintain employment (keep your check stubs and tax returns, the loan officer will want copies), then there's a slight chance. And, from this quick snap shot of our finances, does it look like we would be able to qualify for a USDA loan? Probably not. Mostly for the same reasons - the only time a USDA loan helps is when you would be able to get a regular loan if you had the down payment. Even with an available down payment of 50k, you wouldn't be able to get a regular loan, therefore it's unlikely that you'd qualify for a USDA loan. If you are anxious to get into a house, choose something much smaller, in the 100k-150k range. It would improve your debt/loan ratio enough that you might then qualify for a USDA loan. However, I think you'd still have issues if you haven't both been employed at this rate of income for at least a year, and have made regular payments on all your debts for at least a year. I'll echo what others have suggested, though, strengthen your credit, eliminate as much of your high interest debt as you can (car, credit cards), and keep your jobs for a year or two. Start a savings plan so you can contribute a small down payment - at least 3-5% of the desired home price - when you are in a better position to buy. During this time keep track of your paycheck stubs, you may need them to prove income over the time period your loan officer will request. Note that even with a USDA loan you still have to pay closing costs, and those can run several thousand dollars, so don't expect to be able to come to the table with no cash. Lastly, there's good reason to be very conservative regarding house cost and size. If you can, consider buying the house as if you only had the 46k per year. Move the debt to the person making the lower income, and if you buy the house in the name of the person only making 46k per year, then the debt/loan ratio looks very positive. Further it may be that the credit history of that person is better, and the employment history is better. If one of you has better history in these ways, then you might have a better chance if only one of you buys the house. Banks can't tell you about this, but it does work. Keep in mind, though, that if you two part ways it could be very unhappy since one would be left with all the debt and the house would be in the other's name. Not a great situation to be in, so make sure that you both carefully consider the risks associated with the decisions made. |
Why do stocks go up? Is it due to companies performing well, or what else? [duplicate] | Remember that shares represent votes at the shareholders' meeting. If share price drops too far below the value of that percentage of the company, the company gets bought out and taken over. This tends to set a minimum share price derived from the company's current value. The share price may rise above that baseline if people expect it to be worth more in the future, or drop s bit below if people expect awful news. That's why investment is called speculation. If the price asked is too high to be justified by current guesses, nobody buys. That sets the upper limit at any given time. Since some of this is guesswork, the market is not completely rational. Prices can drop after good news if they'd been inflated by the expectation of better news, for example. In general, businesses which don't crash tend to grow. Hence the market as a whole generally trends upward if viewed on a long timescale. But there's a lot of noise on that curve; short term or single stocks are much harder to predict. |
Buying car from rental business without title | I would steer well clear of this. The risk is that they take your money but don't pay the bank. This wouldn't require dishonesty - what if they run into financial trouble? Any money of yours that they have that hasn't gone on to the bank yet might end up paying off other debts instead of yours. It's not clear if the idea is that you are paying them all the money up front or will be making payments over time, but either way if they don't clear the lien with the bank then the bank can come after the car no matter who is in physical possession of it. That would leave you without either the money or the car. In theory you'd have a legal claim against the seller, but in reality you'd probably find it hard to collect. |
Double-entry bookkeeping: When selling an asset, does the money come from, Equity or Income? | There are basically two approaches, based on how detailed you want to be in your own personal accounting: Obviously the more like a business or like "real" accounting you want to be, the more complex you can make it, but in general I find that the purpose of personal accounting is (1) to track what I own, and (2) to ensure I have documented anything I need to for tax purposes, and as long as you're meeting those goals any reasonable approach is workable. |
Are bonds really a recession proof investment? | That depends on how you're investing in them. Trading bonds is (arguably) riskier than trading stocks (because it has a lot of the same risks associated with stocks plus interest rate and inflation risk). That's true whether it's a recession or not. Holding bonds to maturity may or may not be recession-proof (or, perhaps more accurately, "low risk" as argued by @DepressedDaniel), depending on what kind of bonds they are. If you own bonds in stable governments (e.g. U.S. or German bonds or bonds in certain states or municipalities) or highly stable corporations, there's a very low risk of default even in a recession. (You didn't see companies like Microsoft, Google, or Apple going under during the 2008 crash). That's absolutely not the case for all kinds of bonds, though, especially if you're concerned about systemic risk. Just because a bond looks risk-free doesn't mean that it actually is - look how many AAA-rated securities went under during the 2008 recession. And many companies (CIT, Lehman Brothers) went bankrupt outright. To assess your exposure to risk, you have to look at a lot of factors, such as the credit-worthiness of the business, how "recession-proof" their product is, what kind of security or insurance you're being offered, etc. You can't even assume that bond insurance is an absolute guarantee against systemic risk - that's what got AIG into trouble, in fact. They were writing Credit Default Swaps (CDS), which are analogous to insurance on loans - basically, the seller of the CDS "insures" the debt (promises some kind of payment if a particular borrower defaults). When the entire credit market seized up, people naturally started asking AIG to make good on their agreement and compensate them for the loans that went bad; unfortunately, AIG didn't have the money and couldn't borrow it themselves (hence the government bailout). To address the whole issue of a company going bankrupt: it's not necessarily the case that your bonds would be completely worthless (so I disagree with the people who implied that this would be the case). They'd probably be worth a lot less than you paid for them originally, though (possibly as bad as pennies on the dollar depending on how much under water the company was). Also, depending on how long it takes to work out a deal that everyone could agree to, my understanding is that it could take a long time before you see any of your money. I think it's also possible that you'll get some of the money as equity (rather than cash) - in fact, that's how the U.S. government ended up owning a lot of Chrysler (they were Chrysler's largest lender when they went bankrupt, so the government ended up getting a lot of equity in the business as part of the settlement). Incidentally, there is a market for securities in bankrupt companies for people that don't have time to wait for the bankruptcy settlement. Naturally, people who buy securities that are in that much trouble generally expect a steep discount. To summarize: |
I received $1000 and was asked to send it back. How was this scam meant to work? | There are three possibilities. This is a scam, as others have pointed out, it works by you sending money, then them stopping the original transfer, meaning you sent them your money and not theirs. They make money cause a stop payment only costs $50 (or around there) but you sent $1,000. So they profit $950. You lose $1,000 and maybe some processing fees. This is money hiding, or money laundering. They send you $1,000 in drug money, you send them $1,000 in "clean" money. You don't lose any money. But they gain a clear paper trail. With large sums of money (in the U.S. anything over $5k) you have to prove a paper trail. They just did. You gifted it to them. On your end, it looks like you just profited from illegal activity, which in the worst case ends in confiscation of ALL your assets and jail time. It might not come to that, but it could. This was an honest mistake, by an idiot. It is possible to wire a complete stranger money. If you make a mistake on the wire transfer forms, and the account number exists, it will go through. Now what makes the sender an idiot is not the mistake. We all do that. It's the fact that banks have a built in system for handling these mistakes. Simply put, you can make a stop payment. It's around $50 (varies by bank and sometimes amount transferred), it's easy to do, and almost automatic. If you tell a bank rep that you made a mistake they will likely have you fill out a paper, and in many cases will "just take care of it". If "the idiot" didn't want to tell the bank of the mistake, or didn't ask for help, or didn't want to pay the fee. Then maybe they would contact the receiving party. But that's pretty dumb. Resolution The resolution in all cases is the same. Visit your local branch, or send in writing, an explanation: "I found $1,000 in my bank account that I didn't put there, and got this email (see attached print out). Please advise." They will "freeze" the $1,000 (or maybe the account but I have never seen that) while they investigate. You won't be able to spend it, they might even remove it pending the investigation. They will contact the bank that issued the transfer and attempt to sort things out. You shouldn't be charged anything. You also won't get to keep the money. Eventually the bank will send you a letter stating what happened with the investigation. And the money will vanish from your account. Specific questions I wanted to state the information above even though it doesn't address your concerns directly because it is important. To address your specific questions: Question 1) Surely bank account numbers have a checksum, which make it relatively difficult for a typo to result in a payment going to the wrong person? Nope, that's up to each bank. Usually the account numbers are not sequential, but there is no "checksum" either. Just like credit cards, there are rules, but once you know those rules you can generate fake ones all day long. In some cases, account numbers 5487-8954-7854 and 5487-8945-7854 are both valid. It happens. Question 2) What are likely sources of them being able to find my phone number to call me? Phone numbers are not private. Not even close. Phone books, Google, Websites, etc etc. if you think your phone number is in any way a secret then your totally misinformed. Account numbers are not a secret either. Especially bank account numbers. You could totally just call a bank, and say "What is the name on account 12345?" and they would tell you. Checks have your name and account number on them, as do MANY documents from a bank. So anything from asking the bank, to finding a copy of a check or document in the trash are valid ways to make the link. Question 3) How were they expecting to benefit? See options 1 and 2 above. If is is really option 3, then your bank should have directed the money back. But if the person was so messed up as you say, the account may have been closed and "written off". When that happens a lot of weird stuff can happen. Essentially the bank is "taking a loss" of money and doesn't want the money back even if the account was closed with a negative balance. Usually though contract with debt collectors, they may have already been "paid" for that debt, and are not allowed to take the money back. These things happen, but it seems like a pretty odd set of things that need to line up for #3 to be valid. About your Length of time Usually these things resolve in less then 90 days. Usually far less. At the 90 day mark, it gets really hard to reverse a transaction. It's possible that it was a scam and so many people fell for it that the scammers just let you keep the money instead of "highlighting" their scam. The fact that your using a "net bank" means that your can't go in person, but you should get details in writing. State the transaction number (it should be in your account records) and ask them for a "letter of resolution" or some form of official document stating the outcome of their investigation. I suspect that no one every really investigated the issue and the rep you spoke to never did anything then ask you to ask them to fill out a stop payment. You need a record of trying to sort this out. You don't want to up for some legal battle 10 years from now because someone found out that the money was part of a pool that was used to fund some terrorist group or some such. So get a paper trail, then go with what the bank says. |
How to systematically find sideways stocks? | You can likely use bollinger band values to programmatically recognize sideways trending stocks. Bollinger band averages expand during periods of volatility and then converge on the matched prices the longer there is little volatility in the asset prices. Also, look at the bollinger band formula to see if you can glean how that indicator does it, so that you can create something more custom fit to your idea. |
How can I know the minimum due credit card payment and date for an ANZ Visa card? | You are in luck, I have an ANZ credit card as well. I have just checked my paper statement with online, and was able to find a matching online statement in less than a minute. You simply click on your credit card account from the list of accounts. Under Date Range it will have the Current incomplete statement period. You simply click on the down arrow and select the last complete date range ending sometime in late April (depending on your credit card cycle). You then press on View next to the drop down box. This should provide you with a list of purchases and payment/credits for that period, followed by a line with your Credit Limit, Available Funds and Closing Balance. The line below that then shows your Due Date, and Overdue/Overlimit, the Minimum Payment and Amount Due Now If you are after paying only the minimum amount then you pay this amount by the due date (you will be charged interest if you only pay this amount). If, on the otherhand, you wish to avoid paying any interest then you need to pay the full Closing Balance before the due date. You should also be able to get electronic statements sent to your email address. |
How safe is a checking account? | While Rocky's answer is correct in the big picture there is another factor here to keep in mind: The disruption while you're waiting to resolve it. If a fraudster gets your card and drains your account you'll get your money back--but there will be a period while they are investigating that it won't be available. For this reason I avoid debit card transactions and only use credit cards. If the fraudster gets your credit card you might lose access while they investigate but you don't lose access to your bank account. |
I want to invest in Gold. Where do I go and buy it? | You can buy from any of the well known jewelry shops. Or you can even buy it from banks. For a 24carat gold purchase, you would normally also get a certificate attesting the quality of the gold item. Also while selling your gold, you can sell to above mentioned jewellers or any decent jeweller as a matter of fact. |
Taxes for citizen of EU country #1 living in EU country #2 and working from home for non-EU country #3? | There are just too many variables here... Will you legally be considered a permanent resident from the moment you move? Will you work from home as a contractor or as an employee? Those are not questions you can answer yourself, they really depend on your circumstances and how the tax authorities will look at them. I strongly encourage you to speak to an advisor. Very generally spoken, at your place of residence you pay taxes for your worldwide income, at the place of your work base (which is not clear if this really would be Turkey) you pay taxes on the income generated there. If it's one and the same country, it's simple. If not, then theoretically you pay twice. However, most countries have double taxation treaties to avoid just that. This usually works so that the taxes paid abroad (in Turkey) would be deducted from your tax debt at your place of residence. But you might want to read the treaty to be sure how this would be in your specific case (all treaties are publicly available), and you should really consider speaking to a professional. |
How much money do I need to have saved up for retirement? | One opinion related to savings is to save 30% of your take home salary every month, split the amount into two parts depending on your age (29) one part would be 30% of 30% and another 70% of 30%. Take the 70% and buy blue chip stock and take the 30% and buy govt. bonds. Each 10 years adjust the percentages at 40, 40% on bonds and 60% on stock. Only cash out on the day you retire, otherwise ignore all market/economic movements. With this and the statutory savings (employment retirement) you should be ok. |
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