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What prevents investors from buying high yield stocks and selling them as soon as their dividend is paid out? | The market is not stupid. It realises that a company is worth less after paying out dividends than before paying them. (It's obvious, since that company has just given out part of its earnings.) So after a company pays out dividends, its stock price normally drops approximately by the amount paid. Therefore if you buy, get the dividend, and immediately sell, under normal conditions you won't make any profit. |
What is the US Fair Tax? | The fair tax is a proposal to replace the US income tax with a sales tax. Pros of Fair Tax: It's a large change to the way the United States currently does things. The "Fair Tax Act of 2011" is H.R.25 in the US House and S.13 in the Senate. The full text of the bill is available at the links provided. There are some fairly large consequences of implementing a fair tax. For example, 401ks and Roth IRAs serve no benefit over non-retirement investments. Mortgages would no longer have a tax advantage. Luxury items would get far more expensive. |
How can I save on closing costs when buying a home? | As a buyer, one of the easiest ways to save on closing costs is to avoid title insurance. This will only apply if you are a cash buyer, as a mortgage writer will typically require title insurance. It is also one of the most ill-advised ways to save money. You need title insurance. For the most part, there is really no way to truly save on closing costs. Wrapping costs into a loan, saving on interest or taxes through timing don't truly save money. Sometimes you can obtain discounts on closing by using an targeted lender, but that may cost you in higher interest rates. By paying points on your loan, you may increase your costs at closing in order to save money on interest paid. Certainly you can't discount required, government imposed fees (like doc stamps). You may be able to shop around and find a bit lower fees for appraisal, credit reports, title company fees, and title insurance. However, that is a lot of work for not a lot of return. Title companies seem to be pretty tight lipped about their fees. The best yield of your time is to get the other party in the transaction to pay your costs. The market or local tradition may not allow this. An additional way to lower your costs is to ask the realtors involved to discount their commissions. However, they could always say "no". The bottom line is transacting real estate is very expensive. |
What are the benefits of investing to IRA/Roth IRA, 401(k) in comparison to investing in long term CDs? | First, you need to understand the difference in discussing types of investments and types of accounts. Certificate of Deposits (CDs), money market accounts, mutual funds, and stocks are all examples of types of investments. 401(k), IRA, Roth IRA, and taxable accounts are all examples of types of accounts. In general, those are separate decisions to make. You can invest in any type of investment inside any type of account. So your question really has two different parts: Tax-advantaged retirement accounts vs. Standard taxable accounts FDIC-insured CDs vs. at-risk investments (such as stock mutual funds) Retirement accounts are special accounts allowed by the federal government that allow you to delay (or, in some cases, completely avoid) paying taxes on your investment. The trade-off for these accounts is that, in general, you cannot access any of the money that you put into these accounts until you get to retirement age without paying a steep penalty. These accounts exist to encourage citizens to save for their own retirement. Examples of retirement accounts include 401(k) and IRAs. Standard taxable accounts have no tax advantages, but no restrictions, either. You can put money in and take money out whenever you like. However, anything that your investment earns is taxable each year. Inside any of these accounts, you can invest in FDIC-insured bank accounts, such as savings accounts or CDs, or you can invest in any number of non-insured investments, including money market accounts, bonds, mutual funds, stocks, precious metals, etc. Something you need to understand about investing in general is that your potential returns are directly related to the amount of risk that you take on. Investing in an insured investment, which is guaranteed by the government to never lose its value, will result in the lowest potential investment returns that you can get. Interest-bearing savings accounts are currently paying less than 1% interest. A CD will get you a slightly higher interest rate in exchange for you agreeing not to withdraw your money for a period of time. However, it takes a long time for your investments to grow with these investments. If you are earning 1%, it takes 72 years for your investment to double. If you are willing to take some risk, you can earn much more with your investments. Bonds are often considered quite safe; with a bond, you loan money to a government or corporation, and they pay you back with interest. The risk comes from the possibility that the government or corporation won't pay you back, so it is important to choose a bond from an entity that you trust. Stocks are shares in for-profit companies. Your potential investment gain is unlimited, but it is risky, as stocks can go down in value, and companies can close. However, it is important to note that if you take the largest 500 stocks together (S&P 500), the average value has consistently gone up over the long term. In the last 35 years, this average value has gone up about 11%. At this rate, your investment would double in less than 7 years. To avoid the risk of picking a losing stock, you can invest in a mutual fund, which is a collection of stocks, bonds, or other investments. The idea is that you can, with one investment, invest in many stocks, essentially earning the average performance of all the stocks. There is still risk, as the market can be down as a whole, but you are insulated from any one stock being bad because you are diversified. If you are investing for something in the long-term future, such as retirement, stock mutual funds provide a good rate of return at an acceptably-low level of risk, in my opinion. |
Should I use my non-tax advantaged investment account to pay off debt? | If what you are paying in interest on the debt is a higher percentage than what your investments are returning, the best investment you can make is to pay off the debt. If you're lucky enough to be paying historically low rates (as I am on my mortgage) and getting good returns on the investments so the latter is the higher percentage, the balance goes the other way and you'd want to continue paying off the debt relatively slowly -- essentially treating it as a leveraged investment. If you aren't sure, paying off the debt should probably be the default prefrence. |
Filling Balance sheet in ITR4 for freelancers | ITR-4 is for incorporated business. For freelancing, You can fill ITR 2 and declare the freelancing income as "income from other source". Refer to the Income Tax website for more details |
Pay off credit card debt or earn employer 401(k) match? | Agree with Randy, if debt and debt reduction was all about math, nobody would be in debt. It is an emotional game. If you've taken care of the reasons you're in debt, changed your behaviors, then start focusing on the math of getting it done faster. Otherwise, if you don't have a handle on the behaviors that got you there, you're just going to get more rope to hang yourself with. I.e., makes sense to take a low-interest home equity loan to pay off high-interest credit card debt, but more likely than not, you'll just re-rack up the debt on the cards because you never fixed the behavior that put you into debt. Same thing here, if you opt not to contribute to "pay off the cards" without fixing the debt-accumulating behaviors, what you're going to do is stay in debt AND not provide for retirement. Take the match until you're certain you have your debt accumulation habits in check. |
how to show income from paypal as export income | PayPal pays with service tax, where ever you have exported you would have given the invoice, and the statement should be shown. I am also an exporter, I know the rules some times a CA might not be aware of PayPal. Just show your statement from PayPal and the deduction. |
Why is the fractional-reserve banking not a Ponzi scheme? | The fundamental underlying difference between a bank and a Ponzi scheme: When a bank lends money and charges interest, people can do things with that borrowed money which are worth it. (Building factories, starting businesses, or just enjoying the comfort and warmth of a single-family home instead of paying rent). This is why fractional-reserve banking is able to work. People may also do things which do not necessarily turn a financial profit (financing large purchases on a credit card) but are worth it in terms of an expenditure. They may also do stupid things (financing useless purchases on a credit card and wasting their money) or otherwise dispose of the money poorly (the new business fails, the home's value plummets, etc). A Ponzi scheme never really bothered to do useful things with the money. Social Security has been mentioned. Part of social security's setup involves the current population of workers paying the current population of retirees; their own retirements will have to be financed by the next generation. This design is not intrinsically a Ponzi scheme: both the population and the economy ought to remain growing for the intermediate future, so there will be at least as much money (and probably much more) for them to pay those bills. Unlike a Ponzi scheme, the idea that it will continue to attract new money to pay out existing claims is a realistic one. The real questions of its sustainability are a matter of specifics: is it collecting enough money to remain functional in the future, or is it outpacing the growth of the economy and the population? |
Does the stock market create any sort of value? | It's not a ponzi scheme, and it does create value. I think you are confusing "creating value" and "producing something". The stock market does create value, but not in the same way as Toyota creates value by making a car. The stock market does not produce anything. The main way money enters the stock market is through investors investing and taking money out. The only other cash flow is in through dividends and out when businesses go public. & The stock market goes up only when more people invest in it. Although the stock market keeps tabs on Businesses, the profits of Businesses do not actually flow into the Stock Market. Earnings are the in-flow that you are missing here. Business profits DO flow back into the stock market through earnings and dividends. Think about a private company: if it has $100,000 in profits for the year then the company keeps $100,000, but if that same company is publicly traded with 100,000 shares outstanding then, all else being equal, each of those shares went up by $1. When you buy stock, it is claimed that you own a small portion of the company. This statement has no backing, as you cannot exchange your stock for the company's assets. You can't go to an Apple store and try to pay with a stock certificate, but that doesn't mean the certificate doesn't have value. Using your agriculture example, you wouldn't be able to pay with a basket of tomatoes either. You wouldn't even be able to pay with a lump of gold! We used to do that. It was called the barter system. Companies also do buy shares back from the market using company cash. Although they usually do it through clearing-houses that are capable of moving blocks of 1,000 shares at a time. |
Can I cover a short sale with the stock I already own? | Yes, you call the broker and tell him to use those shares to deliver to the short position. |
When is the best time to put a large amount of assets in the stock market? | The one thing we know for certain is that holding large amounts of cash isn't ideal - inflation will eat away at your wealth. It's understandable that you're hesitant to put all your wealth in common stock. The S&P 500's price/earnings is 18.7 right now - a little high by historical standards. But consider that the S&P 500 has given a CAGR of approximately 10% (not inflation-adjusted) since 1970. If you don't time the market correctly, you could miss out on considerable gains. So it's probably best to invest at least a portion of your wealth in common stocks, and just accept the risk of short-term losses. You'll likely come out ahead in the long run, compared to an investor who tries to time the market and ends up holding cash positions for too long. If you really think US stocks are overpriced, you could look at other markets, but you'll find similar P/Es in Europe and Japan. You could try an emerging market fund like VEMAX if you have the risk tolerance. Let's say you're not convinced, and don't want to invest heavily in stocks right now. In the current market, safe cash alternatives like Treasury bills offer very low yields - not enough to offset inflation tax. So I would invest in a diversified portfolio of long-term bonds, real estate, maybe precious metals, and whatever amount of stock you're comfortable with. |
Why do some symbols not have an Options chain for specific expiration dates? | The answer is actually very simple: the cost of data. Seriously. Call the CBOE tomorrow and ask yourself. They have two big programs: 1) the penny pilot program, where options trade at penny increments instead of 5 cent increments. This is only extended to a select few symbols because of the amount of data this can generate is too much for the data vendors. Data vendors store and sell historical data. The exchanges themselves often have a big data vending business too. 2) the weekly options program, where only select symbols get these chains because of the amount of data they will generate. Liquidity and demand are factors in determining if the CBOE will consider enabling those series on new issues. (although they have to give the list of which symbols are on these programs to the SEC) |
What are 'business fundamentals'? | From http://financial-dictionary.thefreedictionary.com/Business+Fundamentals The facts that affect a company's underlying value. Examples of business fundamentals include debt, cash flow, supply of and demand for the company's products, and so forth. For instance, if a company does not have a sufficient supply of products, it will fail. Likewise, demand for the product must remain at a certain level in order for it to be successful. Strong business fundamentals are considered essential for long-term success and stability. See also: Value Investing, Fundamental Analysis. For a stock the basic fundamentals are the second column of numbers you see on the google finance summary page, P/E ratio, div/yeild, EPS, shares, beta. For the company itself it's generally the stuff on the 'financials' link (e.g. things in the quarterly and annual report, debt, liabilities, assets, earnings, profit etc. |
Why does FlagStar Bank harass you about payments within grace period? | A quick Google search for FlagStar Bank shows that this is their standard practice. Quite a few people are complaining about the robo-calls they start receiving on the 5th of every month and FlagStar's response is usually something along the lines of "we're required to do so". First and foremost, confirm the terms of your mortgage. Based on your story and information provided so far, it sounds like you're legally in the clear to pay as you have been. It appears that they have an internal policy of firing off robo-caller on the 5th for anyone who hasn't paid their mortgage yet. With the number of individuals defaulting on loans over the past decade, this was probably a simple business decision to aid in reminding people to pay up. Your 3.5 choices as I see it are: 2a. A variation of #2: set up a phone number just for that bank using a service like Google Voice and filter your calls so you don't have to deal with them on your primary line. |
I thought student loans didn't have interest, or at least very low interest? [UK] | If I recall correctly, the pay schedule is such that you initially pay mostly interest. As James Roth suggests, look at the terms of the loan, specifically the payment schedule. It should detail how much is being applied to interest and how much to the actual balance. |
How can I trade in U.S stock exchange living in India by choosing the broker in U.S? | OptionsXpress includes India in the list of countries where is possible to open an international account to invest in the US Stock Market. They just merged with Charles Schwab and they have a nice online trading platform. Stocks and ETFs are little bit pricey.. Get in touch with them to get more information. |
What is the best way to invest in gold as a hedge against inflation without having to hold physical gold? | Definitely look at CEF. They have tax advantages over GLD and SLV, and have been around for 50 years, and are a Canadian company. They hold their gold in 5 distributed vaults. Apparently tax advantage comes because with GLD, if you supposedly approach them with enough money, you can take out a "bar of gold". Just one problem (well, perhaps more): a bar of gold is an enormous sum of money (and as such not very liquid), and apparently gold bars have special certifications and tracking, which one would mess up if one took it to there personal collection, costing additional sums to re-certify. many, many articles on the web claiming that the gold GLD has is highly leveraged, is held by someone else, and tons of other things that makes GLD seem semi-dubious. I've used CEF for years, talked to them quite a few times; to me, and short of having it my possession, they seem the best /safest / easiest alternative, and are highly liquid/low spread betwen bid and ask. The do also have a pure gold "stock" and a pure silver "stock", but these often trade at higher premiums. CEF's premium varies between -2% and +4%. I.e. sometimes it trades at a premium to the gold and silver it holds, sometimes at a discount. Note that CEF generally shoots to have a 50/50 ratio of gold / silver holdings in their possession/vaults, but this ratio has increased to be heavier gold weighted than silver, as silver has not performed quite as well lately. You can go to their web-site and see exactly what they have, e.g. their NAV page: http://www.centralfund.com/Nav%20Form.htm |
Starting long-term savings account as a college student | Where is the money coming from? If you already have the money (inheritance, gifts or similar) sitting in your account, you can just buy e.g. index funds from Vanguard, Robinhood or other low-cost brokerages. But first you should estimate how much money you need for your studies - it is a bit of a gamble to invest money that you'll need to withdraw in a few years time. Even though the average return may be quite high (12% sounds like an overestimate, more commonly quoted figure is 7%), over short timespans your stocks will go up and down randomly. Once you actually have a job and have income from it, then the 401k and IRA and similar retirement accounts start to make sense. There is no need to have all your savings in the same account, so you can start saving now already. |
When do I sell a stock that I hold as a long-term position? | For what it's worth -- and I realize this isn't directly an answer to the question -- one of the advantages of sticking with mutual funds, beyond their being inherently diversified, is that it removes a lot of the temptation to try to time the market. When you need money, you sell shares in such a way that it maintains your preferred investment ratio, and simply don't worry about which stocks are actually involved. (I've gotten 15% APR this year across all my investments, for absolutely minimal effort. That's quite good enough for me.) |
What is the best way to make a bet that a certain stock will go up in the medium term? | Specific stock advice isn't permitted on these boards. I'm discussing the process of a call spread with the Apple Jan 13 calls as an example. In effect, you have $10 to 'bet.' Each bet you'd construct offers a different return (odds). For example, If you bought the $750 call at $37.25, you'd need to look to find what strike has a bid of $27 or higher. The $790 is bid $27.75. So this particular spread is a 4 to 1 bet the stock will close in January over $790, with a $760 break even. You can pull the number from Yahoo to a spreadsheet to make your own chart of spread costs, but I'll give one more example. You think it will go over $850, and that strike is now ask $18.85. The highest strike currently listed is $930, and it's bid $10.35. So this spread cost is $850, and a close over $930 returns $8000 or over 9 to 1. Again, this is not advice, just an analysis of how spreads work. Note, any anomalies in the pricing above is the effect of a particular strike having no trades today, not every strike is active so 'last trade' can be days old. Note: My answer adds to AlexR's response in that once you used the word bet and showed a desire to make a risky move, options are the answer. You acknowledged you understand the basic concept, but given the contract size of 100 shares, these suggestions are ways to bet under your $1000 limit and profit from the gain in the underlying stock you hope to see. |
Friend was brainwashed by MLM-/ponzi investment scam. What can I do? | Your friend is investing time & money in a business that does not list an address or phone number on its website, not even in its 'press kit'. Even when they make a press release about moving into a new building, it does not list the address or even the street! C'mon, this is obviously a scam. No real business acts like this. |
15 year mortgage vs 30 year paid off in 15 | If the interest rate in both mortgages is the same, then yes, you will end up paying the same amount in interest if both are paid off in 15 years. However, in practice, almost always a 15-year mortgage will have a much lower interest rate that a 30-year mortgage. Also, if you are thinking of taking out a 30-year mortgage with the intention of paying it off early, make sure it does not have an early payment penalty; this is a penalty the bank will charge you if you pay back the loan early. |
Why do people buy new cars they can not afford? | Two reasons: Many people make lots of financial decisions (and other kinds of decisions) without actually running any numbers to see what is best (or even possible). They just go with their gut and buy things they feel like buying, without making a thoroughgoing attempt to assess the impact on their finances. I share your bafflement at this, but it is true. A sobering example that has stuck with me can be found in this Los Angeles Times story from a few years ago, which describes a family spending $1000 more than their income every month, while defaulting on their mortgage and dipping into their 7-year-old daughter's savings account to cover the bills --- but still spending $275 a month on "beauty products and services" and $200 a month on pet expenses. Even to the extent that people do take finances into account, finances are not the only thing they take into account. For many people, driving a car that is new, looks nice and fresh, has the latest features, etc., is something they are willing to pay money for. Your question "why don't people view a car solely as a means of transportation" is not a financial question but a psychological one. The answer to "why do people buy new cars" is "because people do not view cars solely as a means of transportation". I recently bought a used car, and while looking around at different ones I visited a car lot. When the dealer heard which car I was interested in, he said, "So, I guess you're looking for a transportation car." I thought to myself, "Duh. Is there any other kind?" But the fact that someone can say something like that indicates that there are many people who are looking for something other than a "transportation car". |
How should I pay off my private student loans that have a lot of restrictions? | Are there any (monthly) administrative fees on those loans that are charged separately? If not, you should just pay as much as you can as quick as you can to get the loan amount down on those loans with the highest interest rate. If there are no separate fees on the loans, then it's just a lump of money with some interest rate. The smaller loans will eventually drop away one by one, have a celebration to remark the occasion when that happens. I assume the payment is split evenly between the loans? Restructure if you get a better deal from someplace. Delay buying new stuff until you get the loan amount down. Pay as much as you can as quickly as you can, but keep enough money in your pocket to survive a month or two, so that you don't need to get any more loans in case something unexpected happens. |
Can a self-employed person have a Health Savings Account? | Whether you can establish an HSA has nothing to do with your employment status or your retirement plan. It has to do with the type of medical insurance you have. The insurance company should be able to tell you if your plan is "HSA compatible". To be HSA compatible, a plan must have a "high deductible" -- in 2014, $1250 for an individual plan or $2500 for a family plan. It must not cover any expenses before the deductible, that is, you cannot have any "first dollar" coverage for doctor's visits, prescription drug coverage, etc. (There are some exceptions for services considered "preventive care".) There are also limits on the out-of-pocket max. I think that's it, but the insurance company should know if their plans qualify or not. If you have a plan that is HSA compatible, but also have another plan that is not HSA compatible, then you don't qualify. And all that said ... If you are covered under your husband's medical insurance, and your husband already has an HSA, why do you want to open a second one? There's no gain. There is a family limit on contributions to an HSA -- $6,550 in 2014. You don't get double the limit by each opening your own HSA. If you have two HSA's, the combined total of your contributions to both accounts must be within the limit. If you have some administrative reason for wanting to keep separate accounts, yes, you can open your own, and in that case, you and your husband are each allowed to contribute half the limit, or you can agree to some other division. I suppose you might want to have an account in your own name so that you control it, especially if you and your husband have different ideas about managing finances. (Though how to resolve such problems would be an entirely different question. Personally, I don't think the solution is to get into power struggles over who controls what, but whatever.) Maybe there's some advantage to having assets in your own name if you and your husband were to divorce. (Probably not, though. I think a divorce court pretty much ignores whose name assets are in when dividing up property.) See IRS publication 969, http://www.irs.gov/publications/p969/index.html for lots and lots of details. |
How can I borrow in order to improve a home I just bought? | Be careful that pride is not getting in the way of making a good decision. As it stands now what difference does it make to have 200K worth of debt and a 200K house or 225K of debt and a 250K house? Sure you would have a 25K higher net worth, but is that really important? Some may even argue that such an increase is not real as equity in primary residence might not be a good indication of wealth. While there is nothing wrong with sitting down with a banker, most are likely to see your scheme as dubious. Home improvements rarely have a 100% ROI and almost never have a 200% ROI, I'd say you'd be pretty lucky to get a 65% ROI. That is not to say they will deny you. The banks are in the business of lending money, and have the goal of taking as much of your hard earned paycheck as possible. They are always looking to "sheer the sheep". Why not take a more systematic approach to improving your home? Save up and pay cash as these don't seem to cause significant discomfort. With that size budget and some elbow grease you can probably get these all done in three years. So in three years you'll have about 192K in debt and a home worth 250K or more. |
Do I even need credit cards? | People have credit cards for various reasons depending upon their personal situation and uses You don't need to have a Credit Card if you don't have a reason to. But most people do. |
Dormant company, never paid taxes, never traded in UK - should I have notified the HMRC? | You don't have to register for corporation tax until you start doing business: After you’ve registered your company with Companies House, you’ll need to register it for Corporation Tax. You’ll need to do this within 3 months of starting to do business. Since you haven't needed to do that yet, there also shouldn't be any need to tell HMRC you've stopped trading. So it should just be a question of telling Companies House - I guess it's possible they'll first want you to provide the missing accounts. |
Is it better to buy a computer on my credit card, or on credit from the computer store? | Since you have a credit card, I recommend you use it for the purchase. It gets you two things at the very least: Gets the purchases reported as credit utilization. If you handle that correctly, you can improve your score Most card vendors give free extended warranty and return policies that a retailer or manufacturer does not without extra fees. I buy all my electronics using my cards and not only does that optimize my scores but I have been able to enjoy painless/better RMAs for defective products just because my AmEx card would have refunded me the money anyways and the retailers knew it (AmEx would have recovered it from them in the end so it was in their interest to resolve the matter within 30 days) |
What are my risks of early assignment? | The put vs call assignment risk, is actually the reverse: in-the-money calls are more likely to be exercised early than puts. Exercising a call locks in profit for the option holder because they can buy the shares at below market price, and immediately sell them at the higher market price. If there are dividends due, the risk is even higher. By contrast, exercising an in-the-money put locks in a loss for the holder, so it's less common. |
What are the best software tools for personal finance? | I just switched (from the abandoned, but good MS Money) to Moneydance 2010 |
On paper I have 1 share in my company. How can I sell a smaller percentage of my company to another party? | There are 2 basic ways to have someone buy partial ownership of your company: OR If they buy shares that you already own, then their shares will have the same rights as yours (same voting rights, same dividend rights, etc.). If they buy shares newly created from the company, they could be either identical shares to what you already own, or they could be a new class of shares [you may need to adjust the articles of incorporation if you did not plan ahead with multiple share classes]. You really need to talk to a lawyer & tax accountant about this. There are a lot of questions you need to consider here. For example: do you want to use the money in the business, or would you rather have it personally? Are you concerned about losing some control of how the business is run? What are the short term and long-term tax consequences of each method? What does your new partner want in terms of their share class? The answers to these questions will be highly valuable, and likely worth much more than the fees you will need to pay. At the very least, you will likely need a lawyer and accountant anyway to ensure the filings & taxes are done correctly, so better to involve them now, rather than later. There are many other situations to consider here, and an online forum is not the best place to get advice that might put you in a sticky legal situation later on. |
Legal restrictions for EU-foreigners to setup bank account in Czech republic | It depends on what exactly do you mean by "seat of residence". That term has different meanings (legally) in different countries and different contexts. If you're foreigner (even from within the EU), any czech bank will most likely ask you to provide a residence permit. Here are some details: http://www.mvcr.cz/mvcren/article/third-country-nationals-long-term-residence.aspx http://www.czech.cz/en/Business/How-it-works-here/Making-business/How-to-open-a-bank-account-%E2%80%93-Part-1 |
If a stock has only buyers and no sellers how does its price go up? | Depending on what currency the price is quoted in and is originally sold, currency fluctuation can also carry over onto the price in your currency. An example for that would be bitcoin prices which sometimes show heavy ups and downs in one currency, but seem totally stable in another and can be tracked back to changed exchange rates between currencies. Also like others have said, prices on stocks are not actually fixed. You can offer to buy or sell at any price. Only if 2 people want to buy or sell for the same price there will actually be a transaction. |
Questrade - What happens if I buy U.S. stock with Canadian money? | I don't believe from reading the responses above that Questrade is doing anything 'original' or 'different' much less 'bad'. In RRSPs you are not allowed to go into debt. So the costs of all trades must be covered. If there is not enough USD to pay the bill then enough CAD is converted to do so. What else would anyone expect? How margin accounts work depends on whether the broker sets up different accounts for different currencies. Some do, some don't. The whole point of using 'margin' is to buy securities when you don't have the cash to cover the cost. The result is a 'short' position in the cash. Short positions accrue interest expense which is added to the balance once a month. Every broker does this. If you buy a US stock in a USD account without the cash to cover it, you will end up with USD margin debt. If you buy US stock in an account that co-mingles both USD and CAD assets and cash, then there will be options during the trade asking if you want to settle in USD or CAD. If you settle in CAD then obviously the broker will convert the necessary CAD funds to pay for it. If you settle in US funds, but there is no USD cash in the account, then again, you have created a short position in USD. |
Is there ACH analogue in Asia? | ACH as offered in US is a very broad and versatile network used for a range of business case. There is no other network as versatile. In Europe UK has BACS as equivalent about 50-70% of what US-ACH offers. Most European countries also have ACH [Collectively Called ACH, have 90% of the layouts that are identical, called by different names domestically, different business capabilities and rules]. Most countries in Asia also have similar networks. For example in India there is ECS now replaced by NACH. In Singapore/Indonesia/Thailand/Malaysia they have Giro's. China has CNAPS and BEPS. So essentially every country has addressed the business need differently and bis.org has a decent over-view country wise on the clearing systems available. |
What can I do with “stale” checks? Can I deposit/cash them? | You should write a demand letter immediately, send the letter by certified mail, and then wait 30 days. Here is a sample demand letter for the state of california that you can send: http://www.courts.ca.gov/11151.htm It seems like most of the demand letters assumed that you tried to cash the check and incurred a service fee. Personally, I wouldn't risk incurring even most cost. Instead, after 30 days, I would take him to small claims court and show all the evidence you have (checks, receipts, and letters of correspondence). |
What is the incentive for a bank to refinance a mortgage at a lower rate? | In a lot of cases, the bank has already made their money. Shortly after you get your mortgage is sold to investors though the bank is still servicing it for a fee. Therefore, if you refinance, they get to sell it again. |
Do I even need credit cards? | There are numerous reasons that go beyond the immediate requirement for access to credit. Many people just plain don't like carrying cash. Before electronic debit cards became mainstream about the only way to pay for online services was with a credit card. This has now changed just about everywhere except a large number of airlines which still only sell online tickets via a credit card payment. And then there are all those countries where governments (and some banks) have decided to charge merchants more when customers use debit cards. If you don't like carrying cash then you may find that the only card you can use is a credit card. These concerns are gradually disappearing and at some stage someone is likely to offer a combined debit-credit card. At which point you'll probably get credit whether you like it or not. |
Is there such a thing as a deposit-only bank account? | Do you write checks? You are giving your bank account and routing number to anybody you have ever given a check to. Your employer is paying taxes on your behalf, so they need your social security number so they can pay your social security taxes. Account and routing numbers are how deposits are made. If you are concerned, create a free checking account, collect the direct deposit and each payday go to the bank and withdraw your money to put it where you like. Nothing is deposit only because you will want your money back. Finally, you would be shocked at how little it takes to make a draft on your account in the US. Certainly not your SSN, Address, or even your name. |
Claiming business expense from personal credit card | or just input it in my accounting software along with receipts, and then when I'm doing taxes this would go under the investment or loses (is it somewhere along that line)? Yes, this. Generally, for the long term you should have a separate bank account and charge card for your business. I started my business (LLC) by filing online, and paying a fee for a registration, and that makes it a business cost right? Startup cost. There are special rules about this. Talk to your tax adviser. For the amounts in question you could probably expense it, but verify. |
What prevents interest rates from rising? | There do not appear to be any specific legal measures to prevent bankruptcies. In fact, they seems to be part of the means for which rates are raised, for the consequent aim of lowering inflation. See: The Budgetary Implications of Higher Federal Reserve Board Interest Rates by Dean Baker, Center for Economic and Policy Research. The Federal Reserve Board (Fed) is widely expected to start raising interest rates some time in 2015. The purpose of higher interest rates is to slow the economy and prevent inflation. This is done by reducing the rate of job creation and thereby reducing the ability of workers to achieve wage gains. |
How much should I be contributing to my 401k given my employer's contribution? | First - yes, take the 2.5%. It could be better, but it's better than many get. Second - choosing from "a bunch" can be tough. Start by looking at the expenses for each. Read a bit of the description, if you can't tell your spouse what the fund's goal is, don't buy it. |
Why do shareholders participate in shorting stocks? | When I have stock at my brokerage account, the title is in street name - the brokerage's name and the quantity I own is on the books of the brokerage (insured by SIPC, etc). The brokerage loans "my" shares to a short seller and is happy to facilitate trades in both directions for commissions (it's a nice trick to get other parties to hold the inventory while you reap income from the churn); by selecting the account I have I don't get to choose to not loan out the shares. |
Paying Off Principal of Home vs. Investing In Mutual Fund | Excellent answers so far, so I will just add one additional consideration: liquidity. Money invested in a mutual fund (exclusive of retirement accounts with early withdrawal penalties) has a relatively high liquidity. Whereas excess equity in your home from paying down early has very low liquidity. To put it simply: If you get in a desperate situation (long term unemployment) it is better to have to cash in a mutual fund than try to sell your house on the quick and move in with your mother. Liquidity becomes less of an issue if you also manage to fund a decent sized rainy-day fund (6-9 months of living expenses). |
Is inflation inapplicable in a comparison of paying off debt vs investing? | I'd agree, inflation affects the value of the dollar you measure anything in. So, it makes your debt fade away at the same rate it eats away at dollar denominated assets. I'd suggest that one should also look at the tax effect of the debt or assets as well. For example, my 3.5% mortgage costs me 2.625% after tax. But a 4% long term cap gain in stocks, costs me .6% in tax for a net 3.4%. |
Does keeping 'long-term' safety net in bonds make sense? | I am understanding the OP to mean that this is for an emergency fund savings account meant to cover 3 to 6 months of living expenses, not a 3-6 month investment horizon. Assuming this is the case, I would recommend keeping these funds in a Money Market account and not in an investment-grade bond fund for three reasons: |
Quarterly dividends to monthly dividends | Technically you should take the quarterly dividend yield as a fraction, add one, take the cube root, and subtract one (and then multiple by the stock price, if you want a dollar amount per share rather than a rate). This is to account for the fact that you could have re-invested the monthly dividends and earned dividends on that reinvestment. However, the difference between this and just dividing by three is going to be negligible over the range of dividend rates that are realistically paid out by ordinary stocks. |
What are Vanguard's Admiral Shares? | Vanguard's Admiral shares are like regular ("investor") shares in their funds, only they charge lower expense ratios. They have higher investment minimums, though. (For instance, the Vanguard Total Stock Market Index Fund has a minimum of $3,000 and an expense ratio of .18% for the Investor Shares class, but a minimum of $10,000 and an expense ratio of .07% for Admiral Shares). If you've bought a bunch of investor shares and now meet the (recently-reduced) minimum for Admiral shares, or if you have some and buy some more investor shares in the future and meet the minimums, you will qualify for a free, no-tax-impact conversion to the Admiral Shares and save yourself some money. For more information, see the Vanguard article on their recent changes to Admiral Shares minimums. Vanguard also offers institutional-class shares with even lower expense ratios than that (with a minimum of $5 million, .06% expense ratios on the same fund). A lot of the costs of operating a fund are per-individual, so they don't need to charge you extra fees for putting in more money after a certain point. They'd rather be competitive and offer it at cost. Vanguard's funds typically have very low expense ratios to begin with. (The investor shares I've been using as an example are advertised as "84% lower than the average expense ratio of funds with similar holdings".) In fact, Vanguard's whole reason for existing is the premise (stated in founder John C Bogle's undergraduate thesis at Princeton) that individuals can generally get better returns by investing in a cheap fund that tracks an index than by investing in mutual funds that try to pick stocks and beat the index and charge you a steep markup. The average real return of the stock market is supposedly something like 4%; even a small-looking percentage like 1% can eat a big portion of that. Over the course of 40 years waiting for retirement, saving 1% on expenses could leave you with something like 50% more money when you've retired. If you are interested in the lower expense ratios of the Admiral share classes but cannot meet the minimums, note that funds which are available as ETFs can be traded from Vanguard brokerage accounts commission-free and typically charge the same expense ratios as the Admiral shares without any minimums (but you need to trade them as individual shares, and this is less convenient than moving them around in specific dollar amounts). |
How can this be enough to fund a scholarship in perpetuity? | The Trinity study looked at 'safe' withdrawal rates from retirement portfolios. They found it was safe to withdraw 4% of a portfolio consisting of stocks and bonds. I cannot immediately find exactly what specific investment allocations they used, but note that they found a portfolio consisting largely of stocks would allow for the withdrawal of 3% - 4% and still keep up with inflation. In this case, if you are able to fund $30,000, the study claims it would be safe to withdraw $900 - $1200 a year (that is, pay out as scholarships) while allowing the scholarship to grow sufficiently to cover inflation, and that this should work in perpetuity. My guess is that they invest such scholarship funds in a fairly aggressive portfolio. Most likely, they choose something along these lines: 70 - 80% stocks and 20 - 30% bonds. This is probably more risky than you'd want to take, but should give higher returns than a more conservative portfolio of perhaps 50 - 60% stocks, 40 - 50% bonds, over the long term. Just a regular, interest-bearing savings account isn't going to be enough. They almost never even keep up with inflation. Yes, if the stock market or the bond market takes a hit, the investment will suffer. But over the long term, it should more than recover the lost capital. Such scholarships care far more about the very long term and can weather a few years of bad returns. This is roughly similar to retirement planning. If you expect to be retired for, say, 10 years, you won't worry too much about pulling out your retirement funds. But it's quite possible to retire early (say, at 40) and plan for an infinite retirement. You just need a lot more money to do so. $3 million, invested appropriately, should allow you to pull out approximately $90,000 a year (adjusted upward for inflation) forever. I leave the specifics of how to come up with $3 million as an exercise for the reader. :) As an aside, there's a Memorial and Traffic Safety Fund which (kindly and gently) solicited a $10,000 donation after my wife was killed in a motor vehicle accident. That would have provided annual donations in her name, in perpetuity. This shows you don't need $30,000 to set up a scholarship or a fund. I chose to go another way, but it was an option I seriously considered. Edit: The Trinity study actually only looked at a 30 year withdrawal period. So long as the investment wasn't exhausted within 30 years, it was considered a success. The Trinity study has also been criticised when it comes to retirement. Nevertheless, there's some withdrawal rate at which point your investment is expected to last forever. It just may be slightly smaller than 3-4% per year. |
What exactly happens during a settlement period? | During the settlement period, the buyer transfers payment to the seller and the seller transfers ownership to the buyer. This is really a holdover from the days when so much of stock trading was done by individual human traders, and computers were still not a huge part of the operation. Back then, paper tickets for trades exchanged hands, and the time period was actually 5 days, so 3 days is an improvement. A settlement period was necessary for everyone to figure out their trades and do what was necessary to make the settlements happen, so it was not always a quick process, mainly because of smaller trading firms that didn't have technology to help them along. Nowadays, technology makes settlements easy, and they usually occur at the end of the trading day. The trading firms sum up their trades, figure out who they owe, and send lump sum settlements to the counterparties to their trades. If anything, the 3-day period may just be used now to let parties verify trades before settling. I hope this helps. Good luck! |
Ask for credit decrease | Aside from an annual fee, if any, the card issuer makes money 2 ways, the transaction fee, about 1.5%-2% charged to the merchant, and interest from you if you leave a balance month to month. Obviously, the bank has some cost in processing statements and maintaining your account. If up front you are saying you will not have any chance of providing a certain profit level, they may have no interest in your business. (As you updated.) Other card issuers (almost surely with fees) might. Put the cards on ice. A bag of water in freezer. Don't be so hasty that you ding your report this way. By trashing the history as well as utilization, you may impact your score enough to do some harm if you actually need credit in the near future. I know this is a game with the credit agencies, a "how good a borrower am I" game, but it can really impact your bottom line if you don't play along. In reply to Michael's comment 1/5/15, if I have one card and am budgeted for $1000/mo in spending, in order to keep utilization down to less than 20%, I'd need a line of more than $5000. Even if I ignore utilization, my January spending is $1000, but the bill is cut on the 31st and not due till Feb 25th. So a line of nearly $2000 is required unless you wish to make mid cycle payments on an ongoing basis. |
How to calculate the closing price percentage change for a stock? | The previous day's close on Thursday 10th October was 5,000.00 The close on Friday 11th October is 5,025.92 So the gain on Friday was 25.92 (5025.92 - 5000) or 0.52% (25.92/5000 x 100%). No mystery! |
Is an investor of a startup subjected under a vesting schedule? | Recently, I asked about what the company valuation is and how many shares does my 4% represent.CFO told me that there is no point to talk about "shares" or "stock" since the company is not public. Is it right? No, it is wrong. Shares and stocks exist regardless of how they can be traded. Once a company is formed, there are stocks that belong to the owners in the proportion of the ownership. They may not exist physically, but they do exist on paper. As an owner of 5% of the company, you own 5% of the company stocks. I asked if my investor portion equity will be subjected under a vesting schedule, CFO said yes. That doesn't make sense to me, because I bought those 4%? Aren't those supposed to be fully vested? I agree to my employee equity to be vested. Doesn't make sense to me either, since your money is already in their pocket. But I'm not sure if its illegal. If that's what is written in the signed contract - then may be its possible to have that situation. But it doesn't make much sense, because these shares are granted to you in return to your money, not some potential future work (as the 1% employee's portion). You already gave the money, so why wouldn't they be vested? Best to read the contract upon which you gave them your money, I really hope you have at least that and not just gave them a check.... |
Reducing taxable income in US in December | My first question to you is if you itemize? If not the charitable contributions will not do any good. Along these lines, donating unused items to Goodwill or similar can help boost your charitable giving. The bottom line is that the 401K is one of the few real deductions high earners have. If you anticipate earning similarly next year, you could both contribute the max. You still have some time before the end of the year, can you get more in your wife's account? Does your state have income tax? You might be able to deduct sales tax for larger purchases if you made any. However, I would not justify a large purchase just to write off the sales tax. Conventional wisdom will tell you that you should have a large mortgage in order to deduct the interests. However, it does not make sense to pay the bank 10K so you can get 3K back from the government. That seems pretty dumb. If you did not do additional withholding, you probably will have to pay a significant amount plus penalty if you owe more than $1000. You still have time to make one more quarterly payment, so you may want to do so by January 15th. For next year I would recommend the following: The funny thing about giving is that it rarely helps the recipient, it does so much more for the giver. It helps you build wealth. For myself I like to give to charities that have a bent to helping people out of poverty or homelessness. We have two excellent ones here in Orlando, FL: Orlando Rescue Mission and Christian Help. Both have significant job training and budgeting programs. |
Will getting a second credit card help my credit rating? | No. Getting more credit lowers your credit utilization ratio (if you don't use it), which raises your credit rating, this can also be done by asking for a higher limit on your existing credit card. Also, there is a chance that the company you got your first card from won't pull your credit a second time when they go to the underwriter. As any extensions of credit lower your credit score, although the credit utilization ratio is weighted more heavily. |
Filing Form 7004 if an LLC's only members are husband and wife | Since you both are members of the LLC - it is not a single-member LLC, thus you have to file the tax return on behalf of the LLC (I'm guessing you didn't elect corporate treatment, so you would be filing 1065, which is the default). You need to file form 4868 on behalf of yourselves as individuals, and form 7004 on behalf of the LLC as the partnership. Since the LLC is disregarded (unless you explicitly chose it not to be, which seems not to be the case) the taxes will in fact flow to your individual return(s), but the LLC will have to file the informational return on form 1065 and distribute K-1 forms to each of you. So you wouldn't pay additional estimated taxes with the extension, as you don't pay any taxes with the form 1065 itself. If you need a help understanding all that and filling the forms - do talk to a professional (EA or CPA licensed in your state). Also, reconsider not sending any payment. I suggest sending $1 with the extension form even if you expect a refund. |
How can I have credit cards without having a credit history or credit score? | For instance and to give a comparison to the US - in Austria, almost everybody gets a credit card (without a credit history (e.g. a young person) / with a bad credit history & with a good credit history). The credit history is in the USA much more important than in Austria. In future, the way to assess a credit history will change due to analysis of social networks for instance. This can be considered in addition to traditional scoring procedures. Is your credit history/score like a criminal record? Nope. I mean is it always with you? Not really cause a criminal record will be retained on a central storage (to state it abstract) and a credit history can be calculated by private companies. Also, are there other ways to get credit cards besides with a bank? That depends on the country. In Austria, yes. |
Is there a website with options chain charts? | http://dailyfinance.com Enter a stock ticker, then click on the Chain link to the left. Then, click on the option tickers to see their charts. EDIT: the site has changed, and there are no more option charts. So why are option charts so tough to find? Options are derivatives of the stock. Option prices are defined by a formula. The inputs are stock pricxe, strike, days to expiration, dividend, risk-free interest rate, and volatility. Volatility is the only thing that cannot be easily looked up. With a Black-Scholes calculator, and some reasonable volatility selections, it's possible to make your own fairly accurate option chart. I don't think it's very enlightening, though. The interesting things are: the stock price movement (as always), and the nature of option pricing behavior in general (understanding how the formula represents crowd behavior). |
Why are options created? | The main reason is that you move from the linear payoff structure to a non-linear one. This is called convexity in finance. With options you can design a payoff structure in almost any way to want it to be. For example you can say that you only want the upside but not the downside, so you buy a call option. It is obvious that this comes at a price, the option premium. Or equivalently you buy the underlying and for risk management reasons buy a put option on top of it as an insurance. The price of the put could be seen as the insurance premium. You can of course combine options in more complicated ways so that you e.g. profit as long as the underlying moves strongly enough in either direction. This is called a straddle. |
Is there any circumstance in which it is necessary to mark extra payments on a loan as going to “principal and not interest”? | The mortgage I got last year through Wells Fargo explicitly indicates in its terms that excess payment will be considered against future payments (i.e., pay $500 extra in January and you owe $500 less in February) unless indicated otherwise. It goes on to state that with electronic payments you do not get to specify where excess payment goes, so excess payment made electronically always goes toward future payments. If you want to make excess payments toward principal, you must actually send them a check and your payment stub, with the appropriate box ticked. This won't be very different for other major banks, I wouldn't imagine. |
How do I know if refinance is beneficial enough to me? | It would help if we had numbers to walk you through the analysis. Current balance, rate, remaining term, and the new mortgage details. To echo and elaborate on part of Ben's response, the most important thing is to not confuse cash flow with savings. If you have 15 years to go, and refinance to 30 years, at the rate rate, your payment drops by 1/3. Yet your rate is identical in this example. The correct method is to take the new rate, plug it into a mortgage calculator or spreadsheet using the remaining months on the current mortgage, and see the change in payment. This savings is what you should divide into closing costs to calculate the breakeven. It's up to you whether to adjust your payments to keep the term the same after you close. With respect to keshlam, rules of thumb often fail. There are mortgages that build the closing costs into the rate. Not the amount loaned, the rate. This means that as rates dropped, moving from 5.25% to 5% made sense even though with closing costs there were 4.5% mortgages out there. Because rates were still falling, and I finally moved to a 3.5% loan. At the time I was serial refinancing, the bank said I could return to them after a year if rates were still lower. In my opinion, we are at a bottom, and the biggest question you need to answer is whether you'll remain in the house past your own breakeven time. Last - with personal finance focusing on personal, the analysis shouldn't ignore the rest of your balance sheet. Say you are paying $1500/mo with 15 years to go. Your budget is tight enough that you've chosen not to deposit to your 401(k). (assuming you are in the US or country with pretax retirement account options) In this case, holding rates constant, a shift to 30 years frees up about $500/mo. In a matched 401(k), your $6000/yr is doubled to $12K/year. Of course, if the money would just go in the market unmatched, members here would correctly admonish me for suggesting a dangerous game, in effect borrowing via mortgage to invest in the market. The matched funds, however are tough to argue against. |
I'm only spending roughly half of what I earn; should I spend more? | Aside from what everyone else has said about your money (saving, investing, etc.), I'd like to comment on what else you could spend it on: Spend it all on small/stupid things that, while stupid, would make me happier. For example take taxis more often, eat often in nice restaurants, buy designer clothes, etc. I'll be young only one time. You could also put the money towards something more... productive? Like a home project. Convert a room in your living space into an office or a theater-like room. Install hardwood floors yourself. Renovate a bathroom. Plant a garden of things you would enjoy eating later. Something that you would enjoy having or doing and can look back at and be proud of putting your money towards something that you accomplished. |
Can gold prices vary between two places or country at the same time? | I don't know about an actual example now, but in the past, India had restrictions on how much gold you could bring into the country from abroad, and there were heavy customs duties. Thus, gold smuggling was a huge business, because by avoiding the duties, people could stand to make a lot of money. At some point in 90s, India made changes in these laws so that smuggling was not as profitable. |
How can I get the car refinanced under my name if my girlfriend signed for the loan? | Your best bet would be to add your name to the title through the bank or have her sell it to you for the amount she owes then you get a loan for that amount like they said before. If you guys split up at this point she'll legally get to keep the car you've been paying for. You could apply for a new loan and have her cosign but it'll make your monthly payments higher. Have her sell you the car for the amount owed them you get a loan for that amount. Since you are together and you've been paying for it you won't lose any money and your monthly payments won't be expensive if you don't owe that much on the car. Pretty much having her sell it to you would be the smartest idea cause keeping Her name on the title will allow Her to legally drive away in your car if you split and you don't want that lol |
Unusual real estate market with seemingly huge rental returns | The way to resolve your dilemma is to consult the price-to-rent ratio of the property. According to smartasset.com: The price-to-rent ratio is a measure of the relative affordability of renting and buying in a given housing market. It is calculated as the ratio of home prices to annual rental rates. So, for example, in a real estate market where, on average, a home worth $200,000 could rent for $1000 a month, the price-rent ratio is 16.67. That’s determined using the formula: $200,000 ÷ (12 x $1,000). Smartasset.com also goes on to give a table comparing different cities' price-to-rent ratio and then claim that the average price-to-rent ratio is currently 19.21. If your price-to-rent ratio is lower than 19.21, then, yes, your rents are more expensive than the average house. Smartasset.com claims that a high price-to-rent ratio is an argument in favor of tenants "renting" properties while a low price-to-rent ratio favors people "buying" (either to live in the property or to just rent it out to other people). So let's apply the price-to-rent ratio formula towards the properties you just quoted. There's a specific house I could buy for 190 (perhaps even less) that rents for exactly 2000 / month. 190K/(2000 * 12) = 7.92 There's a house for sale asking 400 (been on the market 2 yrs! could probably get for 350) which rents for 2800 /month. (400K)/(2800*12) = 11.90 (350K)/(2800*12) = 10.42 One can quite easily today buy a house for 180k-270k that would rent out for 1700-2100 / month. Lower Bound: (180K)/(1700*12) = 8.82 Upper Bound: (270K)/(2100*12) = 10.71 Even so, the rental returns here seem "ridiculously high" to me based on other markets I've noticed. Considering how the average price-to-rent ratio is 19.21, and your price-to-rent ratio ranges from 7.92 to 11.90, you are indeed correct. They are indeed "ridiculously high". Qualification: I was involved in real estate, and used the price-to-rent ratio to determine how long it would take to "recover" a person's investment in the property. Keep in mind that it's not the only thing I care about, and obviously the price-to-rent ratio tends to downplay expenses involved in actually owning properties and trying to deal with periods of vacancy. There's also the problem of taking into account demand as well. According to smartasset.com, Detroit, MI has the lowest price-to-rent ratio (with 6.27), which should suggest that people should buy properties immediately in this city. But that's probably more of a sign of people not wanting to move to Detroit and bid up the prices of properties. EDIT: I should also say that just because the properties are "ridiculously expensive" right now doesn't mean you should expect your rents to decrease. Rather, if rents keep staying at their current level, I'd predict that the property values will slowly increase in the future, thereby raising the price-to-rent ratio to 'non-ridiculous' mode. |
Why do 10 year Treasury bond yields affect mortgage interest rates? | yield on a Treasury bond increases This primarily happens when the government increases interest rates or there is too much money floating around and the government wants to suck out money from the economy, this is the first step not the other way around. The most recent case was Fed buying up bonds and hence releasing money in to the economy so companies and people start investing to push the economy on the growth path. Banks normally base their interest rates on the Treasury bonds, which they use as a reference rate because of the probability of 0 default. As mortgage is a long term investment, so they follow the long duration bonds issued by the Fed. They than put a premium on the money lent out for taking that extra risk. So when the governments are trying to suck out money, there is a dearth of free flowing money and hence you pay more premium to borrow because supply is less demand is more, demand will eventually decrease but not in the short run. Why do banks increase the rates they loan money at when people sell bonds? Not people per se, but primarily the central bank in a country i.e. Fed in US. |
If I plan to buy a car in cash, should I let the dealer know? | Yes you tell them. I can say that I pay cash for all my cars and always get cars for lower than the TrueCar low-end. There are basically two steps: go test drive, negotiate fully, leave (unless you are given a mind-blowing offer). This may take you one to many dealerships. It depends on how well you know what car you want and how much a dealership will negotiate. you pick a night that another dealership that specifically has the car you want (or multiple - even better) is open and you go in 30-45 mins before they close. Paying cash is key for this to work. By the time you get to numbers they will be almost closed. Their finance guy might be gone so you will get your salesman and a manager. I will use my last car as an example. Toyota Highlander 2015 with MSRB 32,995. TrueCar at 29,795 with a good deal at 29,400. I simply talked to my sales guy said I would like to walk out with the car tonight. I have already talked to XYZ dealership and they offered me 28,500 - which is already below TrueCar low price. I asked for $27,900. Boom 10 minutes later car bought at 28,100. Cash is king. The sales guy and manager will bite the bullet on profit for ease of sale. Going in late is the key to using the cash. You don't have the finance guys jumping in and you have less people to move through. Also they know they have limited time to deal and if you walk off the lot there is less than 10% chance of you coming back - they want to close. They are making minimal profit but doing minimal work. With cash your sales guy is on your side because you are basically throwing him a couple hundred dollars at the end of a shift (where most would just be sitting around watching TV). Some other tips: be fair. If they would have said 28,300 is our lowest that we can go and that's it. I probably would have still got the car. Dealerships will tell you their lowest price if you are close and you are still below it. since they didn't show me their lowest price I didn't budge much but still budged a bit to show good sport. They brought their invoice number out to show that at 28,100 that they were going to lose $1500 on the car. I made the manager laugh because my response was to bring up KBB and show the used car price for the car, which was minus $2000. So I just said, "Well you lost $1500 but I lose $2000 driving this off the lot." I then went back to $27,850 to meet in the middle of "losing" money. This actually closed the deal. Anyway don't ever believe any piece of paper they show you with numbers. These dealerships get monthly bonuses on sales and that is a lot of their profit past selling your trade-in. If you actually value your money you would never be trading in a car to a dealer so if you are paying cash, sell your own car or at least take it to a place like CarMax which I don't endorse but better than dealer. |
Difference between Edward Jones or Betterment | Instead of saying which one is better, which is too subjective, I think it is more important to understand what these institutions are. They are kind of different animals. Edward Jones pretty much a full service wealth manager. They meet with you in person, advise you on what retirement and savings accounts to get, they talk to you to evaluate your risk preferences. They will talk to you about planning for your kids' college and about your insurance situation. They will probably attend your kids' bar mitzvahs and stuff too. Of course, this isn't free. With Edward Jones you will pay a fixed percentage of your managed wealth to them every year. And they will likely put your money in expensive mutual funds. And those mutual funds will charge a special 12b-1 fee, which is a kickback to the wealth manager. Plan on giving 2% or so of your total wealth to the manager per year, plus whatever the mutual funds charge. I don't have experience with Betterment, but they appear to be a robo advisor. Robo advisors attempt to do the same kinds of things as wealth managers, but rely on computer algorithms and web pages to give you advice whenever possible. This makes some sense because most people aren't actually that special in terms of their financial situation. I don't know their cost structure, but presumably it will be significantly cheaper than Edward Jones. They will almost certainly put you in cheaper funds (index funds and ETF's). Think of it as a cost-conscious alternative to Edward Jones. Vanguard is a discount broker and a mutual fund family. Their funds are among the biggest and cheapest in the world. Fees on many of these funds will be a fraction of the equivalent funds Edward Jones will put you in. They will charge you nothing at all to manage your money. They will give you some assistance and advice if you call them but don't expect any house calls. They aren't particularly in the business of giving advice. If you know what you want to invest in, this is the cheapest way to do it by far. Basically you won't have to pay anything at all except the actual cost of the assets you are investing in. Which is the best? Depends on your own preferences and ability. If you do not want to learn about personal finance and don't particularly care about whether you are getting the best return--if you don't mind paying for a personal touch--Edward Jones might be a good choice. For most people who are comfortable asking this type of question online and interested in learning about finance even a little bit, I'd expect that Betterment or Vanguard will be a better choice. For people who are willing to learn a bit of finance and manage their own affairs, using Vanguard (or a close competitor, like Fidelity) will ultimately result in the most wealth generated (the least given away to the financial industry). |
In Canada, are options available to subsidize conversion of a house into an energy efficient house? | There may be more, but a good starting point would be the ecoENERGY Retrofit Grants and Incentives. Natural Resources Canada's ecoENERGY Retrofit program provides financial support to implement energy-saving projects. There are different application processes for homes, commercial and institutional buildings and industrial facilities. Together we can reduce energy-related greenhouse gases and air pollution, leading to a cleaner environment for Canada. Also, there was a temporary home renovation tax credit about a year back, but that no longer exists and nothing has replaced it yet. |
My bank often blocks my card during purchases - what is the most reliable bank card? (UK) | Having worked in the financial industry, I can say 9:10 times a card is blocked, it is not actually the financial industry, but a credit/credit card monitoring service like "Falcon" for VISA. If you have not added travel notes or similar, they will decline large, our of country purchases as a way to protect you, from what is most likely fraud. Imagine if you were living in Sweden and making regular steady purchases, then all of a sudden, without warning your card was used in Spain. This would look suspicious on paper, even it was obvious to you. This is less to do with your financial institution, and more to do with increased fraud prevention. Call your bank. They will help you. |
Buying insurance (extended warranty or guarantee) on everyday goods / appliances? | One important issue that has yet to be covered is the cost (to you) in terms of paperwork, lost time, and phone calls that you have to make to claim the insurance. Such insurance claims often are very low priority on their customer service queues (for obvious reasons, since they have already made the sale). Therefore, you might have to spend up to a few hours of your time calling or writing emails to claim the warranty, which may often not be much ( Therefore, many people end up not claiming the warranty during the hassle. Much like non-scam mail-in rebates, more often than not you would either forget to or decide it is not worth your time to claim the warranty. Before buying such policies, other than the obvious cost-benefit calculations, you should also take this additional factor into account. Therefore, many people end up not claiming the warranty during the hassle. Much like non-scam mail-in rebates, more often than not you would either forget to or decide it is not worth your time to claim the warranty. Before buying such policies, other than the obvious cost-benefit calculations, you should also take this additional factor into account. |
Splitting Hackathon Prize Money to minimize tax debt | A simple option is to ask your teammates to send you their portion of the tax bill. This option makes everyone's taxes easier, especially since it is very likely that they have already sent in their tax returns. |
Net income correlation with Stock Price | Ideally, stock price reflects the value of the company, the dividends it is expected to pay, and what people expect the future value of the company to be. Only one of those (maybe one and a half) is related to current sales, and not always directly. Short-term motion of a stock is even less directly linked, since it also reflects previous expectations. A company can announce disappointing sales and see its stock go up, if the previous price was based on expecting worse news. |
Is it bad etiquette to use a credit or debit card to pay for single figure amounts at the POS | Etiquette or not, it is hurting the seller. The transaction fees have usually minimums, so if the actual transaction is below the minimum - they'll pay larger fee on the transaction (relatively). As an example, assume minimum fee for a debit card swipe is 20 cents, or 2% of the transaction. For a transaction of $10 and above, the fee will be 2% of the transaction. But for $1.67, the fee becomes 12% of the transaction. 6 times more expensive for the seller. Basically, the sale was most likely at a loss for them (they usually have very low margins, especially for a "dollar" store). So take that into account as well. |
What types of receipts do I need to keep for itemized tax deductions? | I err on the side of saving all of mine for a while. Just toss them in a box at least. A years' worth is about the size of a shoebox. I started doing this because one year, about a week after I tossed my receipts for the year, I realized that I had a fair bit of allotment left on my flexible savings account to use up. I could have used those to substantiate over-the-counter medicines I purchased. Even if you don't use them for tax purposes, you can use them for budget-tracking purposes. |
Does an Executed Limit Order Imply a Spot Price? | Think of all the limit orders waiting in line, first organized by price, and then by the time the order was placed (earlier orders are closer to the front of the line). In order for your buy order to trade, there must be no other limit orders of 10.01 or higher, or the sellers order would have matched with them instead. So once your order is filled, the price is 10.00, even if just for a millisecond, because there was a trade at 10.00, even though the price might go right back up after the trade. |
How to evaluate stocks? e.g. Whether some stock is cheap or expensive? | Its like anything else, you need to study and learn more about investing in general and the stocks you are looking at buying or selling. Magazines are a good start -- also check out the books recommended in another question. If you're looking at buying a stock for the mid/long term, look at things like this: Selling is more complicated and more frequently screwed up: |
Stocks taxed just for selling, or just when withdrawing? | Outside of a tax sheltered IRA or 401(k) type of account your transactions may trigger tax liability. However, transactions are not taxed immediately at the time of the transaction; and up to a certain limits capital gains can be offset by capital losses which can mitigate your liability at tax time. Also, remember that dividend receipts are taxable income as well. As others have said, this has nothing to do with whether or not money has been moved out of the account. |
If there's no volume discount, does buying in bulk still make sense? | As with everything else, it's a question of trade-offs. Pros For Buying In Bulk Cons For Buying In Bulk Inventory cost. You need to purchase more shelving/cupboards to stock the goods. This is a real cost. The psychological effect of having more means you are more likely to use more, thus costing you more. Deflation of the cost of the item should occur over time in a well-functioning market economy. A $10 item today might be $9.50 in one year in real terms. There is a real opportunity cost associated with overbuying. Granted, an extra $100 in your bank account won't be earning too much if you have to spend it one month later, but it does mean you have less financial independence for that month. Risk of spoilage. There is a nonzero risk that your goods could be ruined by flood/fire/toddler/klutz damage. You need to decide which of these pros and cons are more important to you. Financially, you should only buy what you need between shopping trips. In reality the convenience of holding goods in storage for when you need them may outweigh the costs. |
What is the standard deviation and mean return of oil? | Oil as a commodity or investing in oil companies as a stock? As a commodity, I'd recommend none. The article Commodities – They Have (Almost) No Place in Your Portfolio and The Case Against Commodities explain why commodities are not good investments. |
Mutual fund capital gain on my 1099-DIV : no cost basis? | The capital gain is either short-term or long-term and will be indicated on the 1099-DiV. You pay taxes on this amount as the capital gain was received in a taxable account (assuming since you received a 1099-DIV). More info here: https://www.mutualfundstore.com/brokerage-account/capital-gains-distributions-taxable |
Emerging markets index fund (VDMIX) for an inexperienced investor | In this environment, I don't think that it is advisable to buy a broad emerging market fund. Why? "Emerging market" is too broad... Look at the top 10 holdings of the fund... You're exposed to Russia & Brazil (oil driven), Chinese and Latin American banks and Asian electronics manufacturing. Those are sectors that don't correlate, in economies that are unstable -- a recipie for trouble unless you think that the global economy is heading way up. I would recommend focusing on the sectors that you are interested in (ie oil, electronics, etc) via a low cost vehicle like an index ETF or invest using a actively managed emerging markets fund with a strategy that you understand. Don't invest a dime unless you understand what you are getting into. An index fund is just sorting companies by market cap. But... What does market cap mean when you are buying a Chinese bank? |
Interest charges on balance transfer when purchases are involved | Its called a "Grace Period" and you are not paying interest on the 0% BT, you are paying interest on the amount you spent in purchases If you do not pay your balance in full by the due date your grace period ends. This means that you have to pay interest on the purchased amount from the day it is made. This is why when you do a balance transfer the card should be put in the Sock Drawer until the BT is paid off. In order to restore the grace period you must pay the balance in full and the grace period will start during the Next Payment Cycle. Lets Assume: Statement cuts on the 1st and Due date is the 20th. you make the minimum payment of $10 Balance now is $100 Since you have a balance of $100 from the previous statement and a new purchase of $50.00, when the next statement cuts you will have to pay interest according to the terms on the $50.00 portion. In order to get the grace period back you will have to pay in full and wait for the next cycle In case I did not explain it well here is a quote from creditcards dot com website: The cost of carrying a balance This is because carrying a balance of any size into the next billing cycle means there is no grace period on your purchases during that cycle. The card company will begin charging interest on your purchases the day you make them. So leaving even $1 in unpaid balance on your card will cost you considerably more than the measly finance charges on that dollar. To see how this works let's consider an imaginary card user named Sally. She's so happy she got a new credit card that she charges $1,500 in purchases on the first day of her monthly billing cycle. After the cycle ends, Sally pays off the entire $1,500 by the due date, wiping her balance to zero. As a result, her purchases during the second month are also free of interest. She has used her grace period wisely to avoid finance charges. What happens if Sally leaves just $1 of her balance from the first month unpaid? That $1 begins to accrue interest starting the first day of the billing cycle. It's just $1, so the interest is not a big deal -- but because she used up her grace period without paying off her entire debt, her new purchases during the second month also start to get hit with interest charges immediately, starting the day of the transaction. Assuming she makes another $1,500 in purchases at the average annual interest rate of about 13 percent, that means $16 in finance charges for the month. If Sally repeats this pattern, the interest costs add up to $190 over the course of a year. |
Is it safe to take a new mortgage loan in Greece? | Please clarify your question. What do you mean by "..loan in Greece"? If you are referring to taking a mortgage loan to purchase residential property in Greece, there are two factors to consider: If the loan originates from a Greek bank, then odds are likely that the bank will be nationalized by the government if Greece defaults. If the loan is external (i.e. from J.P. Morgan or some foreign bank), then the default will certainly affect any bank that trades/maintains Euros, but banks that are registered outside of Greece won't be nationalized. So what does nationalizing mean for your loan? You will still be expected to pay it according to the terms of the contract. I'd recommend against an adjustable rate contract since rates will certainly rise in a default situation. As for property, that's a different story. There have been reports of violence in Greece already, and if the country defaults, imposes austerity measures, etc, odds are there will be more violence that can harm your property. Furthermore, there is a remote possibility that the government can attempt to acquire your private property. Unlikely, but possible. You could sue in this scenario on property rights violations but things will be very messy from that point on. If Greece doesn't default but just exits the Euro Zone, the situation will be similar. The Drachma will be weak and confidence will be poor, and unrest is a likely outcome. These are not statements of facts but rather my opinion, because I cannot peek into the future. Nonetheless, I would advise against taking a mortgage for property in Greece at this point in time. |
Can increasing my tax withholding from my full-time job cover FICA taxes for my freelance work? | Technically you owe 'self-employment' taxes not FICA taxes because they are imposed under a different law, SECA. However, since SE taxes are by design exactly the same rates as combining the two halves of FICA (employer and employee) it is quite reasonable to treat them as equivalent. SE taxes (and income tax also) are based on your net self-employment income, after deducting business expenses (but not non-business items like your home mortgage, dependent exemptions, etc which factor only into income tax). You owe SE Medicare tax 2.9% on all your SE net income (unless it is under $400) adjusted down by 7.65% to compensate for the fact that the employer half of FICA is excluded from gross income before the employee half is computed. You owe SE Social Security tax 12.4% on your adjusted SE net income unless and until the total income subject to FICA+SECA, i.e. your W-2 wages plus your adjusted SE net income, exceeds a cap that varies with inflation and is $127,200 for 2017. OTOH if FICA+SECA income exceeds $200k single or $250k joint you owe Additional Medicare tax 0.9% on the excess; if your W-2 income (alone) exceeds this limit your employer should withhold for it. However the Additional Medicare tax is part of 'Obamacare' (PPACA) which the new President and Republican majorities have said they will 'repeal and replace'; whether any such replacement will affect this for TY 2017 is at best uncertain at this point. Yes SE taxes are added to income tax on your 1040 with schedule SE attached (and schedule C/CEZ, E, F as applicable to your business) (virtually so if you file electronically) and paid together. You are supposed to pay at least 90% during the year by having withholding increased on your W-2 job, or by making 'quarterly' estimated payments (IRS quarters are not exactly quarters, but close), or any combination. But if this is your first year (which you don't say, but someone who had gone through this before probably wouldn't ask) you may get away with not paying during the year as normally required; specifically, if your W-2 withholding is not enough to cover your increased taxes for this year (because of the additional income and SE taxes) but it is enough to cover your tax for the previous year and your AGI that year wasn't over $150k, then there is a 'safe harbor' and you won't owe any form-2210 penalty -- although you must keep enough money on hand to pay the tax by April 15. But for your second year and onwards, your previous year now includes SE amounts and this doesn't help. Similar/related: |
Are there any risks from using mint.com? | Mint.com uses something called OFX (Open Financial Exchange) to get the information in your bank account. If someone accessed your mint account they would not be able to perform any transactions with your bank. All they would be able to do is view the same information you do, which some of it could be personal <- that's up to you. Generally the weakest point in security is with the user. An "attacker" is far more likely to get your account information from you then he is from the site your registered with. Why you're the weakest point: When you enter your account information, your password is never saved exactly how you enter it. It's passed through what is called a "one way function", these functions are easy to compute one way but given the end-result is EXTREMELY difficult to compute in reverse. So in a database if someone looked up your password they would see it something like this "31435008693ce6976f45dedc5532e2c1". When you log in to an account your password is sent through this function and then the result is checked against what is saved in the database, if they match you are granted access. The way an attacker would go about getting your password is by entering values into the function and checking the values against yours, this is known as a brute force attack. For our example (31435008693ce6976f45dedc5532e2c1) it would take someone 5 million years to decry-pt using a basic brute force attack. I used "thisismypassword" as my example password, it's 12 characters long. This is why most sites urge you to create long passwords with a mix of numbers, uppercase, lowercase and symbols. This is a very basic explanation of security and both sides have better tools then the one explained but this gives you an idea of how security works for sites like these. You're far more likely to get a virus or a key logger steal your information. I do use Mint. Edit: From the Mint FAQ: Do you store my bank login information on your servers? Your bank login credentials are stored securely in a separate database using multi-layered hardware and software encryption. We only store the information needed to save you the trouble of updating, syncing or uploading financial information manually. Edit 2: From OFX About Security Open Financial Exchange (OFX) is a unified specification for the electronic exchange of financial data between financial institutions, businesses and consumers via the Internet. This is how mint is able to communicate with even your small local bank. FINAL EDIT: ( This answers everything ) For passwords to Mint itself, we compute a secure hash of the user's chosen password and store only the hash (the hash is also salted - see http://en.wikipedia.org/wiki/Sal... ). Hashing is a one-way function and cannot be reversed. It is not possible to ever see or recover the password itself. When the user tries to login, we compute the hash of the password they are attempting to use and compare it to the hashed value on record. (This is a standard technique which every site should use). For banking credentials, we generally must use reversible encryption for which we have special procedures and secure hardware kept in our secure and guarded datacenter. The decryption keys never leave the hardware device (which is built to destroy the key material if the tamper protection is attacked). This device will only decrypt after it is activated by a quorum of other keys, each of which is stored on a smartcard and also encrypted by a password known to only one person. Furthermore the device requires a time-limited cryptographically-signed permission token for each decryption. The system (which I designed and patented) also has facilities for secure remote auditing of each decryption. Source: David K Michaels, VP Engineering, Mint.com - http://www.quora.com/How-do-mint-com-and-similar-websites-avoid-storing-passwords-in-plain-text |
401(k) not fully vested at time of acquisition | Unfortunately, the money that is not vested is not yours. It belongs to your employer. They have promised to give it to you after you have been with the company for a certain length of time, but if you aren't still with the company after that time, no matter what the reason, the money never becomes yours. Sorry to hear about this. It would have been nice if your company had waived the vesting requirement like this guy's employer did, but I don't think they are required to do so, unfortunately. If it's a lot of money, you could ask an attorney, but as @JoeTaxpayer said, AT&T and IBM probably know what they are doing. |
I cosigned for a friend who is not paying the payment | You promised to pay the loan if he didn't. That was a commitment, and I recommend "owning" your choice and following it through to its conclusion, even if you never do that again. TLDR: You made a mistake: own it, keep your word, and embrace the lesson. Why? Because you keep your promises. (Nevermind that this is a rare time where your answer will be directly recorded, in your credit report.) This isn't moralism. I see this as a "defining moment" in a long game: 10 years down the road I'd like you to be wise, confident and unafraid in financial matters, with a healthy (if distant) relationship with our somewhat corrupt financial system. I know austerity stinks, but having a strong financial life will bring you a lot more money in the long run. Many are leaping to the conclusions that this is an "EX-friend" who did this deliberately. Don't assume this. For instance, it's quite possible your friend sold the (car?) at a dealer, who failed to pay off this note, or did and the lender botched the paperwork. And when the collector called, he told them that, thinking the collector would fix it, which they don't do. The point is, you don't know: your friend may be an innocent party here. Creditors generally don't report late payments to the credit bureaus until they're 30 days late. But as a co-signer, you're in a bad spot: you're liable for the payments, but they don't send you a bill. So when you hear about it, it's already nearly 30 days late. You don't get any extra grace period as a co-signer. So you need to make a payment right away to keep that from going 30 late, or if it's already 30 late, to keep it from going any later. If it is later determined that it was not necessary for you to make those payments, the lender should give them back to you. A less reputable lender may resist, and you may have to threaten small claims court, which is a great expense to them. Cheaper to pay you. They say France is the nation of love. They say America is the nation of commerce. So it's not surprising that here, people are quick to burn a lasting friendship over a temporary financial issue. Just saying, that isn't necessarily the right answer. I don't know about you, but my friends all have warts. Nobody's perfect. Financial issues are just another kind of wart. And financial life in America is hard, because we let commerce run amok. And because our obsession with it makes it a "loaded" issue and thus hard to talk about. Perhaps your friend is in trouble but the actual villain is a predatory lender. Point is, the friendship may be more important than this temporary adversity. The right answer may be to come together and figure out how to make it work. Yes, it's also possible he's a human leech who hops from person to person, charming them into cosigning for him. But to assume that right out of the gate is a bit silly. The first question I'd ask is "where's the car?" (If it's a car). Many lenders, especially those who loan to poor credit risks, put trackers in the car. They can tell you where it is, or at least, where it was last seen when the tracker stopped working. If that is a car dealer's lot, for instance, that would be very informative. Simply reaching out to the lender may get things moving, if there's just a paperwork issue behind this. Many people deal with life troubles by fleeing: they dread picking up the phone, they fearfully throw summons in the trash. This is a terrifying and miserable way to deal with such a situation. They learn nothing, and it's pure suffering. I prefer and recommend the opposite: turn into it, deal with it head-on, get ahead of it. Ask questions, google things, read, become an expert on the thing. Be the one calling the lender, not the other way round. This way it becomes a technical learning experience that's interesting and fun for you, and the lender is dreading your calls instead of the other way 'round. I've been sued. It sucked. But I took it on boldly, and and actually led the fight and strategy (albeit with counsel). And turned it around so he wound up paying my legal bills. HA! With that precious experience, I know exactly what to do... I don't fear being sued, or if absolutely necessary, suing. You might as well get the best financial education. You're paying the tuition! |
Why do moving average acts as support and resistance? | As you point out, the moving average is just MA(k)t = (Pt-1 + … + Pt-k )/k and is applied in technical analysis (TA) to smooth out volatile (noise) price action. If it has any logic to it, you might want to think in terms of return series (Pt - Pt-1 / Pt-1) and you could hypothesize that prices are in fact predictable and will oscillate below and above a running moving average. Below is a link to a study on MA trading rules, published in the Journal of Finance, with the conclusion of predictive power and abnormal returns from such strategies. As with any decision made upon historical arguments, one should be aware of structural changes and or data mining. Simple technical trading rules and the stochastic properties of stock returns Brock, W., J. Lakonishok and B. Le Baron, 1992, Simple technical trading rules and the stochastic properties of stock returns, Journal of Finance, 47, 1731-64. MA rules betterthan chance in US stock market, 1897-1986 I don't know whether you are new to TA or not, but a great commercial site, with plenty of computer-generated signals is FinViz. |
Why do stock prices of retailers not surge during the holidays? | Your explanation is nearly perfect and not "hand wavy" at all. Stock prices reflect the collective wisdom of all participating investors. Investors value stocks based on how much value they expect the stock to produce now and in the future. So, the stability of the stock prices is a reflection of the accuracy of the investors predictions. Investor naivity can be seen as a sequence of increasingly sophisticated stock pricing strategies: If investors were able to predict the future perfectly, then all stock prices would rise at the same constant rate. In theory, if a particular investor is able to "beat the market", it is because they are better at predicting the future profits of companies (or they are lucky, or they are better at predicting the irrational behavior of other investors......) |
F-1 student investing in foreign markets | You cannot have off-campus employment in your first year, but investments are considered passive income no matter how much time you put into that effort. Obviously you need to stay enrolled full-time and get good enough grades to stay in good standing academically, so you should be cautious about how much time you spend day trading. If the foreign market is also active in a separate time zone, that may help you not to miss class or otherwise divert your attention from your investment in your own education. I have no idea about your wealth, but it seems to me that completing your degree is more likely to build your wealth than your stock market trades, otherwise you would have stayed home and continued trading instead of attending school in another country. |
Where can I trade FX spot options, other than saxobank.com? | If you have a big pocket there are quite a few.. not sure if they take us clients though. Vcap, Barclays, Icap, Fixi, Fc Stone, Ikon.. Then there are probably a few banks that have x options also but i don't know if a private investor can trade them. A few im not sure if they have fx options or if they are "good": GFTFOREX, Gain capital, XTB, hmslux, Ifx Markets, Alpari, us.etrade.com Betonmarkets might be something if you are interested in "exotic options" maybe? |
I've tracked my spending and have created a budget, now what do I do with it? | I'm reminded of a conversation I had regarding food. I used the word 'diet' and got pushback, as I meant it in sense of 'what one eats'. That's what a diet is, what you eat in an average week, month, year. That list has no hidden agenda unless you want it to. If your finances are in good shape, debt under control, savings growing, etc, a budget is more of an observation than a constraint. In the same way that my bookshelf tells you a lot about who I am, books on finance, math, my religion, along with some on English and humor, my budget will also tell you what my values are. Edit - In a recent speech, regarding Joe Biden, Hillary Clinton said "He has a saying: ‘Don’t tell me what you value. Show me your budget and I will tell you what you value.’ " - nearly exactly my thoughts on this. For the average person, a budget helps to reign in the areas where spending is too high. $500/mo eating out? For the couple hacking away at $30k in credit card debt, that would be an obvious place to cut back. If this brings you happiness, there's little reason to cut back. The budget becomes a reflection of your priorities, and if, at some point in the future, you need to cut back, you'll have a good understanding of where the money is going. |
501(3)(c) to donators for trophy party | The good news is that your parent organization is tax exempt and your local organization might be. The national organization even has guidelines and even more details. Regarding donations they have this to say: Please note: The law requires charities to furnish disclosure statements to donors for such quid pro quo donations in excess of $75.00. A quid pro quo contribution is a payment made partly as a contribution and partly for goods or services provided to the donor by the charity. An example of a quid pro quo contribution is when the donor gives a charity $100.00 in consideration for a concert ticket valued at $40.00. In this example, $60.00 would be deductible because the donor’s payment (quid pro quo contribution) exceeds $75.00. The disclosure statement must be furnished even though the deductible amount does not exceed $75.00. Regarding taxes: Leagues included under our group exemption number are responsible for their own tax filings with the I.R.S. Leagues must file Form 990 EZ with Schedule A if gross receipts are in excess of $50,000 but less than $200,000. Similar rules also apply to other youth organizations such as scouts, swim teams, or other youth sports. |
What is a good 5-year plan for a college student with $15k in the bank? | I disagree with the IRA suggestion. Why IRA? You're a student, so probably won't get much tax benefits, so why locking the money for 40 years? You can do the same investments through any broker account as in IRA, but be able to cash out in need. 5 years is long enough term to put in a mutual fund or ETF and expect reasonable (>1.25%) gains. You can use the online "analyst" tools that brokers like ETrade or Sharebuilder provide to decide on how to spread your portfolio, 15K is enough for diversifying over several areas. If you want to keep it as cash - check the on-line savings accounts (like Capitol One, for example, or Ally, ING Direct that will merge with Capitol One and others) for better rates, brick and mortar banks can not possible compete with what you can get online. |
How should I pay off my private student loans that have a lot of restrictions? | It doesn't make a whole lot of sense to save up and wait to make a payment on any of these loans. Any dollar you pay today works better than saving it and waiting months to pay it, no matter which loan it will be applied to. Since your lender won't let you choose which loan your payment is being applied to, don't worry about it. Just make as big a payment as you can each month, and try to get the whole thing out of your life as soon as possible. The result of this will be that the smaller balance loans will be paid off first, and the bigger balance loans later. It is unfortunate that the higher interest rate loans will be paid later, but it sounds like you don't have a choice, so it is not worth worrying about. Instead of thinking of it as 5 loans of different amounts, think of it as one loan with a balance of $74,000, and make payments as quickly and as often as possible. For example, let's say that you have $1000 a month extra to throw at the loans. You would be better off paying $1000 each month than waiting until you have $4000 in the bank and paying it all at once toward one loan. How the lender divides up your payment is less significant than when the lender gets the payment. |
Looking to buy a house in 1-2 years. Does starting a Roth IRA now make sense? | First, look at the local housing market, and the price to rent ratios. If you are comfortable that a house can be had for near to the cost of renting, and are not still dropping is price, then focus on the down-payment. I don't imagine housing prices to start picking up any time soon, so you don't be too rushed. If you feel like you have a longer time to save before you want to buy, I would focus as much money as I can into a retirement account while still saving for a down payment. Since you are young, you really want your retirement accounts working for you as soon as possible. You should not be investing in 3% stable funds, but the stock market index funds. Retirement is for 40 years in the future. Using funds for a down-payment from a retirement account should be a last resort. Remember this money is to provide you security later in life, not to get you into a house. When you take out money and put it into a house, it will not be appreciating nearly as fast. It is easy to say you will save later, but the money you save early in life will make up 50% or more of your funds when you retire. That is why it is critical to save for retirement as soon as possible. |
Offshore bank account with online International wire-transfer facility for Indians | All Indian Banks are offering USD accounts known as multicurrency account, where you can hold your fund, this account also permits you to book the USD to INR rates in advance if you require. You can keep your money in this account and also can remit the same back to source or other destination country. |
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