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Do “Instant Approved” credit card inquires appear on credit report? | Those two hard inquiries will only count as one on your score because you applied for the two cards immediately one after the other. Credit bureaus see this as just credit card shopping, so will hit your score only once as a single hard inquiry. If you had applied for these two cards days apart, then your score would have been hit with two hard inquiries. Find more details here, specifically under the "What to know about rate shopping" section. |
Can you recommend some good websites/brokers for buying/selling stocks in India? | Most of the Indian Brokers started offering API's to retail client these days. And NSE Exchange also supports algo trading at retail level. Currently two levels of API are offered. 1)Semi-automatic or one touch trading (Retail Traders) 2)Fully Automatic ( Dealers) I had tested the API with a discount broker www.tradejini.com and it is good at retail level. But to make your trading systems fully automatic you need to pass NISM Series VIII certification (Dealer Certification) and have to take dealer terminals from the broker. You also have to register as a dealer and have to take permission from exchange to run your algos fully automated. Without Exchange permission it is illegal to involve in algo trading. |
I have a 2008 HHR under finance it needs a new engine | I'm leaning more towards trading it in can anyone give me some pointers on how to get the best deal? Information is key to getting the best deal possible. That is why I would strongly suggest getting a second opinion on the repairs. A misfire could be caused by many things. From cheap (bad spark plugs or cables) to mid-range cost (timing is off) to expensive (not getting proper compression in the cylinders due to mechanical issues that could require an engine rebuild). Also, car diagnostics is not an exact science, so it is definitely worth checking with another mechanic. You trust the first place you took it too, which is great. You taking it to another place does not represent a lack of trust, it represents knowing that humans are fallible and car repair diagnostics are not perfect either. Once you have quotes from 2 or 3 places for the repair work, you are in a much better position to negotiate. The next step is to see how much it will cost to replace the thing. Get actual quotes for trade-in from dealers, and you must disclose the engine troubles to them when getting this quote. $8,000 minus this amount is how much you are under water. Add that to the price of the car you would like to purchase to know how much of a loan you will have to take out (minus any downpayment). The next thing to consider is how you manage your risk from there. Your new car will be under-water too. Can you even get a loan? Will you need additional collateral or gap insurance to get the loan? What happens if you get in an accident the next day and total this car? Once you have all of this information, you are ready to really start thinking about the decision to be made. Things to consider: How reliable has the HHR been up to now? You don't want to put $3,500 into it now only to have to spend a few grand more in a month to replace the transmission. It is hard for us to know this as we don't know how long you have had it, what troubles you have had in the past, how well you have taken care of it (regular oil changes and maintenance). Keshlam is right about asking mechanics to check for other problems and scheduled maintenance that has not been done (e.g., timing belts replaced). Once you have made your decision, remember that everything is negotiable if you are wiling to walk away. If you decide to keep the car, try to get a better deal on the repairs by checking out other repair shops. If you decide to buy another car and get rid of this one, both the sale price of the new car and the trade-in price of the HHR are negotiable. Shop around and put in the work to buy something that will last a at a good price. |
Why is the total 401(k) contribution limit (employee + employer) so high? | Some 401k plans allow you to make "supplemental post-tax contributions". basically, once you hit the pre-tax contribution limit (17.5k$ in 2014), you are then allowed to contribute funds on a post-tax basis. Because of this timing, they are sometimes called "spillover" contributions. Usually, this option is advertised as a way of continuing to get company match even if you accidentally hit the pre-tax limit. But if you actually pay attention to your finances, it is instead a handy way to put away additional tax-advantaged money. That said, you would only want to use this option if you already maxed out your pre-tax and Roth options since you don't get the traditional tax break on contributions or the Roth tax break on the earnings. However, when you leave the company, you can transfer the post-tax money directly into a Roth IRA when you transfer the pre-tax money, match, and earnings into a traditional IRA. |
Why are big companies like Apple or Google not included in the Dow Jones Industrial Average (DJIA) index? | That is a pretty exclusive club and for the most part they are not interested in highly volatile companies like Apple and Google. Sure, IBM is part of the DJIA, but that is about as stalwart as you can get these days. The typical profile for a DJIA stock would be one that pays fairly predictable dividends, has been around since money was invented, and are not going anywhere unless the apocalypse really happens this year. In summary, DJIA is the boring reliable company index. |
What are the advantages of a Swiss bank account? | For an American it nearly impossible to open a Swiss bank account. Even a Swiss person want to open a bank account, we have to fill out a document, which asks us if we have a greencard or other relationships with the united states. Some Swiss banks have transferred the money of Americans to Singapore to protect their clients. So you see, the Swiss banks do very much for their clients. And yes, we don't ask very much about money ;) And we are a politically neutral country, but we like the United States more than Russia and of course we have enemies, like the ISIS |
Currently sole owner of a property. My girlfriend is looking to move in with me and is offering to pay 'rent'. Am I at risk here? | I have been renting rooms out of my house for over 7 years now. When renting to non-family, the arrangement is usually successful. People leave for various reasons, an occasionally I will ask someone to move out if they are not working out. In the USA, this works well because by keeping things formal (rental agreements, etc) you actually have a great business with lots of deductions that end up reducing you net income quite a bit. However, US law makes a big distinction about whether or not you're renting to family/relatives, specifically around whether or not they are paying full-market rent for their room. If not, then you are subsidizing them which could disqualify your property (or at least the portion they are using) from being legitimately rented -- and thus no tax deductions for said activity. The other risk, -- again, in the USA -- is the possibility of a long-term relationship falling under rules of common-law marriage. This is rare unless children are involved. A couple who have children, married or not, may have the courts get involved to oversee the division of assets with regards to ensuring the children have a place to live and adequate financial support. For the UK, I would think the laws would be roughly similar. Check out this website for more a detailed review. https://www.citizensadvice.org.uk/family/living-together-marriage-and-civil-partnership/living-together-and-marriage-legal-differences/ |
Why invest for the long-term rather than buy and sell for quick, big gains? | Plenty of good answers here, but probably the best answer is that The Market relies on suckers...er...investors like you. The money has to come from somewhere, it might as well be you. So-called "day traders" or "short-term investors" are a huge part of the market, and they perform a vital function: they provide capital that flows to the large, well-equipped, institutional investors. Thing is, you can never be big enough, smart enough, well-informed enough, or quick enough to beat the big guys. You may have a run of good fortune, but over the long term aggregate, you're a PAYOR into the market, not a DIVIDEND reaper. |
Joint Account for Common Earnings | Short Answer: Go to the bank and ask them about your options for opening a business account. Talk to an attorney about the paperwork and company structure and taxes. Long Answer: You and your buddies jointly own an unincorporated business. This is called a partnership. Yes, there is paperwork involved in doing it properly and the fact that you guys are minors might complicate that paperwork a little bit. In terms of what type of account to open: A business account! Running a business through a personal account (joint or otherwise) is a sure way to get that account shut down. Your bank will want to know the structure of the business, and will require documentation to support that. For a partnership, they will probably want a copy of the partnership agreement. For an LLC, they'll probably want a copy of the filing with Ohio Secretary of State as well as the operating agreement etc. That said, pop into a local bank and ask a business banker directly what you should do. They deal with new businesses all the time, and would probably be best qualified to help you figure out the bank account aspect of it. Regarding business structure... this really impacts a lot more than just the type of bank account to open and how you file your taxes. It is something you guys should really discuss with an attorney. What happens if down the road one of you quits? What happens if you want to bring in a new partner later? What if there is a disagreement about something? These are all things that the attorney can help you address ahead of time - which is a heck of a lot easier (and cheaper) than trying to figure it out later. You're brining in enough that you should certainly be able to buy a couple hours of a lawyer's time. Getting the formation stuff right could save all of you a lot of money and heartache later. |
I'm upside down on my car loan and need a different car, what can I do? | Before buying a new car, determine whether you really need one! If there's an automotive discussion, you should ask there FIRST to get opinions on how much all-wheel-drive helps. You may not want to change cars at all. Remember, most of us in the Northeast are NOT driving all-wheel-drive vehicles, and all cars have all-wheel brakes. All-wheel drive is better at getting you moving from a stop if one of the drive wheels would otherwise be slipping. It makes less difference during actual driving. Traction control braking is much more important -- and much more common, hence much cheaper. And probably already present in your Camry. And good tires make a huge difference. (Top-of-the-line all-season tires are adequate, but many folks do switch to snow tires during the winter and switch back again in summer.) Tires -- even if you get a second set of rims to put them on -- are a heck of a lot cheaper than changing cars. Beyond everything else, driving in winter conditions is a matter of careful practice. Most of the time, simply avoiding making sudden starts/stops/turns and not driving like you're in a video arcade ("gotta pass three more or I lose my game!") will do the job. You'll learn the feel of how the car responds. Some basic instruction in how to handle a skid will prepare you for the relatively rare times when that happens. (Some folks actively learn by practicing skids in a nice open parking lot if they can find one; I never have but it makes some sense.) If in doubt about the driving conditions, wait until the roads have been plowed and salted. Remember, teenagers learn to do this, and they're certifiably non compos mentis; if they can do it, you can do it. Before buying a new car, determine whether you really need one! |
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home? | Yes, you are getting shafted. In the end, you will have paid the full price of the condo, but still own only 25% of it. Your parents' stake in the home should decrease as you repay the loan. The way it is now, they're getting 75% of your condo for free! |
I spend too much money. How can I get on the path to a frugal lifestyle? | Get on a written budget at the BEGINNING of the month. If you dont write down where your money goes BEFORE you spend it, you have no way of keeping track of it. I couldn't do a thing until I got on a written budget but now that I am, I've paid off $10,000 in 7 months. |
Does Apple have $0 of treasury stock? | Treasury stock is not really represented in the Balance Sheet as a "Treasury stock" line item in the assets. Some companies will break out Treasury Shares as a line item in the "Shareholders Equity" heading of the balance sheet but Apple hides it in the "Shares Issued and Outstanding" counts under the "Shareholders Equity" heading. As of the most recent Q2 2017 quarterly report There are 5,205,815,000 shares issued against 5,336,166,000 shares outstanding. This indicates that Apple is retaining about 130,351,000 shares in treasury. On the Q1 10-Q you can see that Apple had 5,255,423,000 shares issued which indicates roughly 49mm shares were repurchased by the end of Q2. You can roughly verify this by looking at page 18 of the Q2 filing in the summary of the share repurchase program. Repurchased as part of an Accelerated Share Repurchase arrangement bleeds between quarters but from February 2017 through May 2017 there have been 17.5mm shares repurchased. 31mm shares were also repurchased on the open market in Q2. The "shares issued" total is on a downward trend as part of Apple's share repurchase initiative that has been underway for the last couple of years. |
Is it common in the US not to pay medical bills? | Is it common in the US not to pay medical bills? Or do I misunderstood what had been said? I would feel comfortable saying that most people who face medical bills don't pay them. They are unable. If they were able, they would have gotten medical insurance. In America, something like 55% of individuals do not have even $500 of savings, so when a big medical bill rolls in especially on top of lost work hours, they don't have a lot of options. Hospitals charge reasonable prices to insurance companies and Medicare. These fees are negotiated in advance and reflect the hospital's actual costs. This is called "usual, reasonable and customary". Hospitals charge a wildly inflated, criminally outrageous "cash price" to the uninsured. For instance back when Medicare paid about $175 for an ambulance ride, a friend was billed $1100 for the exact same thing. The hospital aims to scare the living daylights out of the patient (caring nothing about what that does to their health!) Perfect world, the patient pays them the $1100 instead of paying their rent. If the patient puts up a fight, they hope to haggle them down to something like $400, remember it really costs $175. This tactic is a huge profit-center for hospitals, even the "charity" hospitals, and they feel justified because so many uninsured don't pay at all (the hospital considers them "deadbeats".) Well, patients don't pay because cash prices are unreachable, so they just give up. Anyway, your friends are correct, don't even think of paying those cash billing amounts. Research and find out what Medicare pays, offer 60% of that, and haggle it to 100%. And sleep well knowing you paid what is fair. Not all services are as overpriced as my example, but most are at least 50% too high. The hospital does send you all the bills as a formality, even while they submit them to your insurance company. And then the insurance company usually pays them, so it is correct to "not pay that bill". A lot of medical offices will check with your insurance company even before you leave the office, and ask you to immediately pay anything the insurance won't cover. For instance they often have "co-pays" where you pay $20 and they pay the rest. To be clear: if your insurance company negotiates a rate with the hospital, say $185 for the ambulance ride, that is your price, which you are entitled to as a member of that insurance system. A lot of people get their livelihood from the inefficiency in medical insurance and billing. Their political power is why it's so hard for America to install a simpler system (or even replace Obamacare in an ideal political environment). It is also a big part of why America spends 18% of GDP on healthcare instead of 7-11% like our European peers who do not have to account for every gauze or rebill multiple insurers. Sorting out "who pays" would be expensive even if everyone did pay. |
InteractiveBrokers: How to calculate overnight commissions for CFD? | IB's overnight financing cost for US CFDs below $100,000 is the Benchmark Rate + 1.5% for long positions and the Benchmark Rate -1.5% for short positions. You can check the IB CFD Contract Interest for their full list of financing costs for share CFDs. IB's commissions for an executed trade (where your monthly volume is below $300,000) is $0.005 per share with a minimum per order of $1.00. Commissions and overnight financing are 2 different fees, the overnight financing is charged because CFDs are leveraged. An order is just that, it is not a trade. It means your order has not been executed yet and is still an active order which you have not paid any commissions for yet. Regarding the orders that persist overnight, an example might be, you place an order to buy to open 200 CFDs. If only 100 CFDs are traded on that day, and the remaining 100 CFDs of your order remains active overnight, it will be considered a new order for the purposes of determining commission minimums. |
What happened to buyers of ABT right before the split? | The trades after that date were Ex-DIV, meaning after 5 pm Dec 12, new trades did not include the shares that were to be spun out. The process is very orderly, no one pays $60 without getting the spinoff, and no one pays $30 but still gets it. The real question is why there's that long delay nearly three weeks to make the spinoff shares available. I don't know. By the way, the stock options are adjusted as well. Someone owning a $50 put isn't suddenly in the money on 12/13. Edit - (I am not a hoarder. I started a fire last night and realized I had a few Barron's in the paper pile) This is how the ABT quote appeared in the 12/24 issue of Barron's. Both the original quote, and the WI (when issued) for the stock less the spin off company. |
Yahoo finance vs SEC filings fundamentals | Sure, Yahoo Finance makes mistakes from time to time. That's the nature of free data. However, I think the issue here is that yahoo is aggregating several line items into one. Like maybe reporting cash equivalents plus total investment securities minus loans as "cash equivalents." This aggregation is done by a computer program somewhere and may or may not be appropriate for a particular purpose and firm. For this reason, if you are trying to do top quality research, it's always better to go to the original SEC filings, if you can. Then you will know for sure which items you are looking at. The only mistakes will be the ones made by the accountants at the firm in question. If there's a reason you prefer to use yahoo, like if it's easier for your code to scrape, then spend a little time comparing to the SEC filing to ensure you know where the numbers really come from before using it. |
What is the meaning of realization in finance? | Realization is, literally, when something is made real. For example, let's say that you own some stock. You bought the stock for $1000, and after many years the stock is worth $10,000. Your investment has gained $9,000. However, you don't actually have this $10,000; you just own stock that is supposedly worth $10,000 on paper. Tomorrow, the value of the stock could plummet and only be worth $8,000. But if you sell your stock today and obtain this $10,000, the gain has now become real. You have realized a $9,000 gain. In investing, realization of a gain or loss occurs when an asset that you own has been sold for more or less than what you purchased it for. Before the asset is sold, you only have a theoretical gain or loss based on what you might receive if you sold the asset today. And tomorrow, that theoretical gain or loss could change. |
Advice for college student: Should I hire a financial adviser or just invest in index funds? | Though @mehassee mentioned it in a comment, I would like to emphasize the point that the financial planner (CFP) you talked to said that he was a fiduciary. A fiduciary has an obligation to act in your best interests. According to uslegal.com, "When one person does agree to act for another in a fiduciary relationship, the law forbids the fiduciary from acting in any manner adverse or contrary to the interests of the client, or from acting for his own benefit in relation to the subject matter". So, any of these Stack Exchange community members may or may not have your best interest at heart, but the financial advisor you talked to is obligated to. You have to decide for yourself, is it worth 1% of your investment to have someone legally obligated to have your best financial interest in mind, versus, for example, someone who might steer you to an overpriced insurance product in the guise of an investment, just so they can make a buck off of you? Or versus wandering the internet trying to make sense of conflicting advice? In my opinion, a fiduciary (registered CFP) is probably the best person to answer your questions. |
Why does quantitative easing negatively affect stocks? | Can you isolate the market impact to just the Fed's quantitative easing? Can you rule out the future economic predictions of low growth and that there are reasons why the Fed has kept rates low and is trying its best to stimulate the economy? Just something to consider here. The key is to understand what is the greater picture here as well as the question of which stock market index are you looking at that has done so badly. Some stocks may be down and others may be up so it isn't necessarily bad for all equally. |
Why do so many people trade a bankrupt company's stock? | It may have some value! Investopedia has a well-written quick article on how stock holders may still get some portion of the liquidated assets. While there is generally little left for common shareholders if the price of those shares is tiny and some money does come back to shareholders there can still be significant profit to be made. As to why the trading volume is so high... there are many firms and hedge funds that specialize in calculating the value of and buying distressed debt and stock. They often compete with each other to by the stock/debt that common shareholders are trying to get rid of. In this particular case, there is a lot of popular interest, intellectual property at stake and pending lawsuits that probably boosts volume. |
buying a stock while the price is going down, and buy it at a lower price | In the US, it is perfectly legal to execute what you've described. However, since you seem to be bullish on the stock, why sell? How do you KNOW the price will continue downwards? Aside from the philosophical reasoning, there can be significant downside to selling shares when you're expecting to repurchase them in the near future, i.e. you will lose your cost basis date which determines whether or not your trade is short-term (less than 1 year) or long-term. This cost basis term will begin anew once you repurchase the shares. IF you are trying to tax harvest and match against some short-term gains, tax loss harvesting prior to long-term treatment may be suitable. Otherwise, reexamine your reasoning and reconsider the sale at all, since you are bullish. Remember: if you could pick where stock prices are headed in the short term with any degree of certainty you are literally one of a kind on this planet ;-). In addition, do remember that in a tax deferred account (e.g. IRA) the term of your trade is typically meaningless but your philosophical reasoning for selling should still be examined. |
Should you diversify your bond investments across many foreign countries? | The Vanguard Emerging Market Bond Index has a SEC yield of 4.62%, an expense ratio of 0.34%, a purchase fee of 0.75%, and an average duration of 6.7 years. The Vanguard Emerging Market Bond Index only invests in US Dollar denominated securities, so it is not exposed to currency risk. The US Intermediate Term Bond Index Fund has a SEC yield of 2.59%, an expense ratio of 0.1% and an average duration of 6.5 years. So after expenses, the emerging market bond fund gives you 1.04% of extra yield (more in subsequent years as the purchase fee is only paid once). Here are the results of a study by Vanguard: Based on our findings, we believe that most investors should consider adding [currency risked] hedged foreign bonds to their existing diversified portfolios. I think a globally diversified bond portfolio results in a portfolio that's more diversified. |
Multi-year profit/tax question | This is called "Net Operating Loss", and it is in fact applicable for individuals as well. You can, under certain circumstances, have NOL even as an individual. But it is far more common in the corporate world. What happens is that you can carry it back or forward, and get refund on taxes paid or adjust income for taxes to pay. In your example, you could carry the $75 NOL back and deduct it from the prior year earnings, reducing the taxable income from $100 to $25, getting $18.75 of the $25 paid as taxes - back. The link is for individual NOL, corporate rules are different, but the principle is the same. |
How can I get the most value from my employer's ESPP? | A 15% discount is a 17.6% return. (100/85 = 1.176). For a holding period that's an average 15.5 days, a half month. It would be silly to compound this over a year as the numbers are limited. The safest way to do this is to sell the day you are permitted. In effect, you are betting, 12 times a year, that the stock won't drop 15% in 3 days. You can pull data going back decades, or as long as your company has been public, and run a spreadsheet to see how many times, if at all, the stock has seen this kind of volatility over 3 day periods. Even for volatile stocks, a 15% move is pretty large, you're likely to find your stock doing this less than once per year. It's also safest to not accumulate too many shares of your company for multiple reasons, having to do with risk spreading, diversification, etc. 2 additional points - the Brexit just caused the S&P to drop 4% over the last 3 days trading. This was a major world event, but, on average we are down 4%. One would have to be very unlucky to have their stock drop 15% over the specific 3 days we are discussing. The dollars at risk are minimal. Say you make $120K/yr. $10K/month. 15% of this is $1500 and you are buying $1765 worth of stock. The gains, on average are expected to be $265/mo. Doesn't seem like too much, but it's $3180 over a years' time. $3180 in profit for a maximum $1500 at risk at any month's cycle. |
Car financed at 24.90% — what can I do? | You could look into refinancing with a bank or credit union. But to weed out options quickly, use a service like LendingTree, which can vet multiple options for you a whole lot more quickly than you could probably do yourself. (I don't work for, or get any benefit from LendingTree.) Whatever you do, try to do all the applying within a short span of time, as to not negatively affect your credit score (read here) by creating extraneous inquiries. Then again, if your credit sucks, you might not qualify for a re-fi. If you are turned down, make your payments on time for six months or so, and try again. |
Currently a Microsoft Money user on PC, need a replacement suitable for Mac | I switched from Quicken for Mac to Moneydance, and have not regretted it. I see only one weakness in MD compared with Quicken: its reporting is not very good. Your information is all there and well organized, but sometimes it's hard work to extract it in a convenient form. Of course a lot depends on what you need from the application, but I strongly recommend you take a look at MD before deciding. |
Buy a parking spot and rent it out, or invest savings in an interest-bearing account? | From strictly a gross revenue point of view, the parking spot is going to yield a higher rate (5.4%) versus a 3% savings account, assuming you have it rented all year. Your break-even point (not considering other expenses) is 7-8 months of rent per year. So, what are things to consider? Here's a few to start with. The parking spot is a nice investment in that you get a decent return, and the potential for appreciation. The savings account/CD will give you a fixed return with no risk. To support your decision, make sure you understand all of the costs and understand all of the downside risk. If you're 50 and this is alot of money to you, be conservative. If you're 25 and have a good job, you can afford to chase the yield. |
Does a failed chargeback affect my credit score? | I think your confusion comes from the negative impact when a creditor writes off your bad credit and ceases attempting to collect it. "Chargebacks" as you call them are an attempt to undo fraudulent charges on your card, whether from stolen credit card info or from a merchant who is using shady business practices. For what it's worth, if you joined on December 20, January 20 seems like a reasonable date for the next billing cycle, with the December 31 date reflecting the fact that their system couldn't automatically bill you the day you joined. I also think it's reasonable for you to ask them to refund the bill for the second month if you do not plan to use their gym further. So the dispute seems like a reasonable one on both sides. Good luck. |
I need a car for 2 years. Buy or lease (or something else)? | Your short-term time frame makes buying used the best option, but it seems you already are aware of that. Look into a certified pre-owned model if you are concerned about lemons. You will usually get some sort of warranty. However, be aware that any car can be a headache with repairs. I would not recommend a lease because basically you are still paying for the depreciation on the car plus interest. Generally, this is the most expensive way to drive a car. You may find the numbers look good for a lease but beware of the 'gotchas' in the terms that can put you way over budget (over mileage, wear and tear, etc.). My best recommendation is to buy gently used with cash. This gives you the most flexibility and best resale value. If you finance a late-model vehicle, be aware that depreciation can leave you upside-down on your loan. That would put you in the position of having to shell out cash just to get rid of the car. |
What happens if one brings more than 10,000 USD with them into the US? | The $10,000 mark is not a ceiling in importing cash, but rather a point where an additional declaration needs to be made (Customs Form 4790). At 1 million, I suspect you might be in for a bit of an interview and delay. Here's an explanation of what happens when the declaration isn't made: https://www.cbp.gov/newsroom/local-media-release/failure-declare-results-seizure-24000-arrest-two |
Interactive Brokers Margin Accounts | Scenario 1 - When you sell the shares in a margin account, you will see your buying power go up, but your "amount available to withdraw" stays the same until settlement. Yes, you can reallocate the same day, no need to wait until settlement. There is no margin interest for this scenario. Scenario 2 - If that stock is marginable to 50%, and all you have is $10,000 in that stock, you can buy another $10,000. Once done, you are at 50% margin, exactly. |
Should I pay more than 20% down on a home? | A few thoughts off the top of my head: Advantages of more than 20% down: Disadvantages of more than 20% down: |
What's a good free checking account? | Check with a small local bank or credit union, they might offer better terms. That said, my local credit union still charges $6/month for a checking account if you don't have a direct deposit into it. |
W-8BEN? What's the tax from selling my software to a U.S. company, from abroad? | I realize this is a stale topic, but to anybody who may swing by looking for an answer to this question (on the recently revised W-8BEN), a foreign taxpayer can get an individual taxpayer identification number (ITIN) without being resident in the US. However, an ITIN will often not be necessary for W-8BEN purposes if you have a tax number from your local jurisdiction. Check the Form W-8BEN instructions for your specific situation, but some taxpayers will need neither a US-issued ITIN nor a foreign-issued TIN. Forming a Delaware or Nevada LLC would be expensive and generally subject to federal and state tax and filing obligations. It would also moot the need for a W-8BEN, which only applies to foreign taxpayers; the equivalent form for domestic taxpayers is Form W-9. |
How are investment funding valued when invested in a company before it goes public? | This is a question of how does someone value a business. Typically, it is some function of how much the company owns, how much the company owes, how risky is the company's business, and how much the company makes in profit. For example if a company (or investment) make $100/year, every year no matter what, how much would you pay for that? If you pay $1,000 you'll make 10% each year on your investment. Is that a good enough return? If you think the risk of the company requires a 20% payoff, you shouldn't pay more than $500 for the company. |
Why does the Fed use PCE over CPI? | Consumers aren't the only economic participants impacted by a change in the Fed rate.... Inflation has WIDE ranging implications from the future liabilities of pension funds to the ongoing cost of our national debt. It doesn't make sense to consider only consumer inflationary experience. PCE is considered because it relates to consumption, which includes things paid for by other entities, like employer healthcare spend. |
Borrow money to invest in a business venture with equity? | It's clearly a risk, but is it any different than investing in your own business? Yes, it is different. If you own a business, you determine the path of the business. You determine how much risk the business takes. You can put in extra effort to try to make the business work. You can choose to liquidate to preserve your capital. If you invest without ownership, perhaps the founder retains a 50% plus one share stake, then whomever controls the business controls all those things. So you have all the risks of owning the business (in terms of things going wrong) without the control to make things go right. This makes investing in someone else's business inherently riskier. Another problem that can occur is that you could find out that the business is fraudulent. Or the business can become fraudulent. Neither of those are risks if you are the business owner. You won't defraud yourself. Angel investing, that is to say investing in someone else's startup, is inherently risky. This is why it is difficult to find investors, even though some startups go on to become fabulously wealthy (Google, YouTube, Facebook, Twitter, etc.). Most startups fail. They offer the possibility of great returns because it's really hard to determine which ones will fail and which will succeed. Otherwise the business would just take out the same loan that Jane's getting, and leave Jane out of it. |
Is it possible to trade CFD without leverage? | You can but there is no point trading CFD's seeing you may still lose more than your investment due to slippage |
Does payment in goods count as “income” for tax purposes? | The IRS defines income quite specifically. On the topic What is Taxable and Nontaxable Income, they note: You can receive income in the form of money, property, or services. This section discusses many kinds of income that are taxable or nontaxable. It includes discussions on employee wages and fringe benefits, and income from bartering, partnerships, S corporations, and royalties. Bartering, or giving someone wages (or similar) in something other than currency (or some other specifically defined things, like fringe benefits), is taxed at fair market value: Bartering Bartering is an exchange of property or services. You must include in your income, at the time received, the fair market value of property or services you receive in bartering. For additional information, Refer to Tax Topic 420 - Bartering Income and Barter Exchanges. Bartering is more specifically covered in Topic 420 - Bartering Income: You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X (PDF), Amended U.S. Individual Income Tax Return. Refer to Topic 308 for information on filing an amended return. More details about income in general beyond the above articles is available in Publication 525, Taxable and Nontaxable Income. It goes into great detail about different kinds of income. In your example, you'd have to calculate the fair market value of an avocado, and then determine how much cash-equivalent you were paid in. The IRS wouldn't necessarily tell you what that value was; you'd calculate it based on something you feel you could justify to them afterwards. The way I'd do it would be to write down the price of avocados at each pay period, and apply a dollar-cost-averaging type method to determine the total pay's fair value. While the avocado example is of course largely absurd, the advent of bitcoins has made this much more relevant. Publication 525 has this to say about virtual currency: Virtual Currency. If your employer gives you virtual currency (such as Bitcoin) as payment for your services, you must include the fair market value of the currency in your income. The fair market value of virtual currency (such as Bitcoin) paid as wages is subject to federal income tax withholding, Federal Insurance Contribution Act (FICA) tax, and Federal Unemployment Tax Act (FUTA) tax and must be reported on Form W-2, Wage and Tax Statement. Gold would be fundamentally similar - although I am not sure it's legal to pay someone in gold; assuming it were, though, its fair market value would be again the definition of income. Similarly, if you're paid in another country's currency, the US dollar equivalent of that is what you'll pay taxes on, at the fair market value of that currency in US dollars. |
How is taxation for youtube/twitch etc monetization handled in the UK? | Unless your video does very well, it's unlikely that your income from it will exceed your expenses incurred in making it, such as the purchase prices of your computer and video camera and the cost of your broadband connection, so there shouldn't be any tax to pay. |
What to make of historical stock market volatility? | The first thing to realize is that the type of chart you saw is not appropriate for long-term comparisons. The vertical axis uses a linear scale, where each unit occupies the same amount of space. This is visually misleading because the relevant information at any point in the chart is "how much is the value going up or down?" and "how much" change depends on how much the value of the investment is at that moment. For example, if you buy something at $10 and the price changes $1, that is significant, 10%. If you buy something at $1000 and the price changes $1, that is not so significant, only 0.1%. The problem in that chart is that 100 Dow points occupy the same space whether the Dow is at 870 or 10800. To get a better feel for the volatility, you should use a log (logarithmic) scale. Google has an option for this. Using it shows: In this chart you can see that the volatility appears much less extreme in recent years. True, the 2006-2009 change is the largest drop, and there might be slightly higher volatility generally, but it is not nearly as extreme-looking. The drops in 1974 and 1987 can be seen to be significant. |
Do precious metals and mining sector index funds grow as much as the general stock market? | Metals and Mining is an interesting special case for stocks. It's relationship to U.S. equity (SPX) is particularly weak (~0.3 correlation) compared to most stocks so it doesn't behave like equity. However, it is still stock and not a commodities index so it's relation to major metals (Gold for instance) is not that strong either (-0.6 correlation). Metals and Mining stocks have certainly underperformed the stock market in general over the past 25years 3% vs 9.8% (annualized) so this doesn't look particularly promising. It did have a spectacularly good 8 year period ('99-'07) though 66% (annualized). It's worth remembering that it is still stock. If the market did not think it could make a reasonable profit on the stock the price would decrease until the market thought it could make the same profit as other equity (adjusted slightly for the risk). So is it reasonable to expect that it would give the same return as other stock on average? Yes.. -ish. Though as has been shown in the past 25 years your actual result could vary wildly both positive and negative. (All numbers are from monthly over the last 25 years using VGPMX as a M&M proxy) |
Tax benefits of recycling | They are certainly only suggesting that the money you pay to recycle the bulbs is tax deductible as a donation, assuming that they are indeed a 501(c)(3) non-profit. Donations of goods are only deductible at fair market value. Light bulbs that no longer light up have no market value, so only the payment could possibly be deductible. |
What to consider before buying (exercising) a family member's private company employee stock options, about to expire? | First, you mentioned your brother-in-law has "$100,000 in stock options (fully vested)". Do you mean his exercise cost would be $100,000, i.e. what he'd need to pay to buy the shares? If so, then what might be the estimated value of the shares acquired? Options having vested doesn't necessarily mean they possess value, merely that they may be exercised. Or did you mean the estimated intrinsic value of those options (estimated value less exercise cost) is $100,000? Speaking from my own experience, I'd like to address just the first part of your question: Have you treated this as you would a serious investment in any other company? That is, have you or your brother-in-law reviewed the company's financial statements for the last few years? Other than hearing from people with a vested interest (quite literally!) to pump up the stock with talk around the office, how do you know the company is: BTW, as an option holder only, your brother-in-law's rights to financial information may be limited. Will the company share these details anyway? Or, if he exercised at least one option to become a bona-fide shareholder, I believe he'd have rights to request the financial statements – but company bylaws vary, and different jurisdictions say different things about what can be restricted. Beyond the financial statements, here are some more things to consider: The worst-case risk you'd need to accept is zero liquidity and complete loss: If there's no eventual buy-out or IPO, the shares may (effectively) be worthless. Even if there is a private market, willing buyers may quickly dry up if company fortunes decline. Contrast this to public stock markets, where there's usually an opportunity to witness deterioration, exit at a loss, and preserve some capital. Of course, with great risk may come great reward. Do your own due diligence and convince yourself through a rigorous analysis — not hopes & dreams — that the investment might be worth the risk. |
Filing taxes on stocks | You need to talk to an accountant who practices tax accounting, preferaby someone who is an Enrolled Agent (EA) with the IRS, and possibly an attorney who specializes in tax law. There are multiple issues here, and the executor of your father's estate might need to be involved here too. Presumably you were a minor in 2007 since the transactions took place in a custodial account, and perhaps you were a dependent of your father in 2007. So, were the transactions reported on your father's 2007 income tax return? or did he file a separate income tax return in your name? You say you have a W2 for 2007. So you were earning some income in 2007? This complicates matters. It is necessary to determine who has the responsibility to file income tax returns for a minor with earned income. Above all, I urge you to not file income tax returns on your own or using a tax return preparation program, or after talking to a tax return preparation service (where you will likely get someone who works on a seasonal basis and is unlikely to be familiar with tax law as of 2007). |
What expenses do most people not prepare for that turn into “emergencies” but are not covered by an Emergency Fund? | Some things are nearly universal, and have been mentioned already. My "favorite" forseeable expenses in this category are: However, I also advocate saving for expenses that are specific to you. Look back on your expenses for the last 12 months, minimum (18 or 24 may be better). Ask yourself these questions: I ask about large expenditures because you may make enough that you can "eat" these lapses in budgeting, as I did for many years. It is not an emergency now, but it turned into an emergency down the road as my spending went out of control. Look at all expenditures over a certain level, say $100 or $200. Some personal examples of expenses that aren't quite so universal, but turned into small emergencies: This last one was rather unexpected. It is the reason why I ask the question "why didn't I budget for it?" These fees and dues are for my professional-level certifications. In my industry, they are "always" paid for by the company. A year ago, they weren't paid by my former employer because they planned to lay me off. This year, they weren't paid by my present employer because I am technically a temporary worker (4 years is temporary?). So, from now on, I plan to save for this expense. If my employer pays my dues, then I stop saving for the expense, but keep the money I've saved. |
Can an unmarried couple buy a home together with only one person on the mortgage? | I will expand on Bacon's comment. When you are married, and you acquire any kind of property, you automatically get a legal agreement. In most states that property is owned jointly and while there are exceptions that is the case most of the time. When you are unmarried, there is no such assumption of joint acquisition. While words might be said differently between the two parties, if there is nothing written down and signed then courts will almost always assume that only one party owns the property. Now unmarried people go into business all the time, but they do so by creating legally binding agreements that cover contingencies. If you two do proceed with this plan, it is necessary to create those documents with the help of a lawyer. Although expensive paying for this protection is a small price in relation to what will probably be one of the largest purchases in your lives. However, I do not recommend this. If Clayton can and wants to buy a home he should. Emma can rent from Clayton. That rent could any amount the two agree on, including zero. If the two do get married, well then Emma will end up owning any equity after that date. If they stay together until death, it is likely that she (or her heirs) will own half of it anyway. Also if this house is sold, the equity pass into larger house they buy after marriage, then that will be owned jointly. If they do break up, the break up is clean and neat. Presumably she would have paid rent anyway, so nothing is lost. Many people run into trouble having to sell at a bad time in a relationship that coincides with a weak housing market. In that case, both parties lose. So much like Bacon's advice I would not buy jointly. There is no upside, and you avoid a lot of downside. Don't play "house" by buying a home jointly when you are unmarried. |
What should I do with the change in my change-jar? | Are you in an occupation that regularly collects change or is this change left in your pocket at the end of the day? Here in the US it is typically worth it to invest in some automatic coin counters if you are in an occupation that regularly collects coins. In your case you can collect the little baggies from the bank, use your coin counters and then make a deposit. Here is an example of US coin counters. If it is just pocket change then in the morning, make it a habit of taking some with you. This way you are less likely to break larger bills. Also if you are making a deposit at the bank, add some change to the deposit without making it to annoying. |
Auto Insurance: Adding another car to the existing policy (GEICO) | They'll refund your money (though maybe with a small service charge). I'm sure they regularly deal with new car sales gone wrong. |
Is the MBA an overrated degree/qualification? | There is a distinct difference between 'having a degree' and 'being genuinely smart and business savvy'. If you're genuinely smart and business savvy you could theoretically break into the business world with no degree and make a decent salary. The trouble there is that many people aren't smart and business savvy until they get a degree. On the other hand, it's very possible to get a degree and be completely oblivious about how to conduct your career (poor resume / interviewing skills, no business sense etc). In that case an MBA might not be totally useful (but probably still will be to a degree). However, if you ARE smart about how you conduct your career, an MBA should help you immensely. |
How can a credit card company make any money off me? I have a no-fee card and pay my balance on time | Of course they make money. They double dip in a lot of instances they make 2 - 3% plus $0.30 per transaction from the merchant and then whatever interest you pay on your card. So let's just say in one day you make stops at Starbucks for a $4 Latte, then at Wendy's for lunch for about $8, then you put about $20 worth of gas in your tank, then you stop at Kroger for some $40 groceries and may you pick up some dinner for about $15. That's 5 transactions at $0.30 which is a $1.50 then at 3% starbucks is $0.12, Wendy's $0.24, gas is $0.60 then kroger $1.20 then dinner $0.45 so the total that they get is $4.11 multiply this by about a million people per day that is about $4.1 million per day that they get. That is a nice penny! just from the merchant so you are making them a lot of money by just using it. |
Is there an advantage to keeping a liquid emergency fund if one also has an untapped line of credit? | People treat an emergency fund as some kind of ace-in-the-hole when it comes to financial difficulty, but it is only one of many sources of money that you can utilize. What is an emergency? First, you have to define what an emergency is. Is it a lost job? Is it an unplanned event (pregnancy, perhaps)? Is it a medical emergency? Is it the death of you or your spouse? Also, what does it mean to be unplanned? Is being so unhappy with your job that you give a 2-week notice an emergency? Is one month of planning an emergency? Two? Only you can answer these questions for yourself, but they significantly shape your financial strategy. Planning is highly dependent on your cashflow, and, for some people, it may take them a year to build enough savings to enable them to take 3 months off work. For others, they may be able to change their spending to build up enough for 3 months in 1 month. Also, you have to consider the length of the emergency. Job-loss is rarely permanent, but it's rarely short as well. The current average is 30.7 weeks: that's 7 months! Money in an Emergency There are six main places that people get money during a financial emergency: A good emergency strategy takes all six of these into account. Some emergencies may lean more on one source than the other. However, some of these are correlated. For example, in 2008, three things happened: the stock market crashed, unsecured debt dried up, and people faced financial emergency (lost jobs, cut wages). If you were dependent on a stock portfolio and/or a line of credit, you'd be up a creek, because the value of your investments suddenly decreased, and you can't really tap your now significantly limited line of credit. However, if you had a one or more of cash savings, unemployment income, and unemployment insurance, you would probably have been OK. Budgeting for an emergency When you say "financial emergency", most people think job loss. However, the most common cause of bankruptcy in the US is medical debt. Depending on your insurance situation, this could be a serious risk, or it may not be. People say you should have 3x-6x of your monthly income in savings because it's an easy, back-of-the-envelope way to handle most financial emergency risk, but it's not necessarily the most prudent strategy for you. To properly budget for an emergency, you need to fully take into account what emergencies you are likely to face, and what sources of financing you would have access to given the likely factors that led to that emergency. Generally, having a savings account with some amount of liquid cash is an important part of a risk-mitigation strategy. But it's not a panacea for every kind of emergency. |
How to resolve imbalances and orphan transactions in Gnucash? | The GnuCash manual has a page with examples of opening new accounts. The tl;dr is: use the Equity:Opening Balance to offset your original amounts. The further explanation from the GnuCash page is: As shown earlier with the Assets:Checking account, the starting balances in an account are typically assigned to a special account called Equity:Opening Balance. To start filling in this chart of account, begin by setting the starting balances for the accounts. Assume that there is $1000 in the savings account and $500 charged on the credit card. Open the Assets:Savings account register. Select View from the menu and check to make sure you are in Basic Ledger style. You will view your transactions in the other modes later, but for now let’s enter a basic transaction using the basic default style. From the Assets:Savings account register window, enter a basic 2 account transaction to set your starting balance to $1000, transferred from Equity:Opening Balance. Remember, basic transactions transfer money from a source account to a destination account. Record the transaction (press the Enter key, or click on the Enter icon). From the Assets:Checking account register window, enter a basic 2 account transaction to set your starting balance to $1000, transferred from Equity:Opening Balance. From the Liabilities:Visa account register window, enter a basic 2 account transaction to set your starting balance to $500, transferred from Equity:Opening Balance. This is done by entering the $500 as a charge in the Visa account (or decrease in the Opening Balance account), since it is money you borrowed. Record the transaction (press the Enter key, or click on the Enter icon). You should now have 3 accounts with opening balances set. Assets:Checking, Assets:Savings, and Liabilities:Visa. |
A friend wants to use my account for a wire transfer. Is this a scam or is it legitimate? | As a woman who was once married to someone who worked offshore in the North Sea, in the Gulf of Mexico, off the coast of Nova Scotia, in fact all over the world...and my husband's rig was contracted through Exxon (by the way, Exxon contracts rigs, but doesn't own any), this is most certainly a scam. Even if you do not believe all the above information, I will tell you this. Offshore oil companies will either have schedules consisting of two weeks on/two weeks off or one month on/one month off. If he is in the Gulf of Mexico, it is almost certainly two weeks on/two off. Which means this "person" who is your "friend" is lying to you, because contract or not, no employer holds any employee on the rig for an entire year. In addition, he can leave the rig anytime he wants to, due to a personal emergency. And no, once a paycheck is deposited in an employee's account, they cannot take it back. LOL!! I would like to see them try!! Don't do this. It will only cause you heartbreak. And since all of the posters recommending that you NOT fall for this POS line of bull have nothing to gain, guess who is telling the truth? It's not your "FRIEND"! |
Can I send a money order from USPS as a business? | Sure you can. You can fill in whatever you want in the From section of a money order, so your business name and address would be fine. The price only includes the money order itself. You can hand deliver it yourself if you want, but if you want to mail it, you'll have to provide an envelope and a stamp. Note that, since you won't have a bank record of this payment, you'll want to make sure you keep other records, such as the stub of the money order. You should probably also ask the contractor to give you a receipt. |
Looking for good investment vehicle for seasonal work and savings | Most online "high yield" savings accounts are paying just above 1%. That would be 1.05% for American Express personal savings, or 1.15% for Synchrony Bank (currently). Depending on the length of the season, you might want to work in some CD's. Six months CDs can be had at 1.2%, and 9 month at 1.25%. So if you know you won't need some of your earnings for 9 months, you could earn 1.25% on your money. However, I would proceed with caution on anything other than the high yield savings account. With your one friend having such a low emergency fund, there is very little room for error. Perhaps until that amount is built up into something significant, it is just best to stick with the online savings. Of course, one solution would be to find a way to create income during the off season. That will go a long way into helping one build wealth. |
Layman's guide to getting started with Forex (foreign exchange trading)? | I definitely can recommend you a site called babypips. Their beginner course section is great to get a good overview what you "could" do in FOREX trading. For starting out I definitely recommend a dummy account! (NEVER use real money in the beginning!) |
How do I factor dividends and yield into the performance of a security? | Usually I've seen people treat the dividend like a separate cash flow, which is discounted if the company doesn't have a well-established dividend history. I've never really seen dividends rolled into a total return chart (except in the context of an article), probably because dividend reinvestment is a nightmare of record-keeping in a taxable account, and most folks don't do it. One of my brokers (TD Ameritrade) does allow you to plot dividend yield historically on their charts. |
Paid cash for a car, but dealer wants to change price | I'm sorry to hear you've made a mistake. Having read the contract of sale we signed, I do not see any remedy to your current situation. However, I'm interested in making sure I do not take advantage of you. As such, I'll return the vehicle, you can return my money plus the bank fees I paid for the cashiers check, tax, title, and registration, and I will look at buying a vehicle from another dealership. This seems to be the most fair resolution. If I were to pay for your mistake at a price I did not agree to, it would not be fair to me. If you were to allow this vehicle to go to me at the price we agreed to, it wouldn't be fair to you. If I were to return the car and begin negotiations again, or find a different car in your lot, it would be difficult for us to know that you were not going to make a similar mistake again. At this point I consider the sale final, but if you'd prefer to have the vehicle back as-is, returning to us the money we gave you as well as the additional costs incurred by the sale, then we will do so in order to set things right. Chances are good you will see them back down. Perhaps they will just cut the additional payment in half, and say, "Well, it's our mistake, so we will eat half the cost," or similar, but this is merely another way to get you to pay more money. Stand firm. "I appreciate the thought, but I cannot accept that offer. When will you have payment ready so we can return the car?" If you are firm that the only two solutions is to keep the car, or return it for a full refund plus associated costs, I'd guess they'd rather you keep the car - trust me, they still made a profit - but if they decide to have it returned, do so and make sure they pay you in full plus other costs. Bring all your receipts, etc and don't hand over the keys until you have the check in hand. Then go, gladly, to another dealership that doesn't abuse its customers so badly. If you do end up keeping the car, don't plan on going back to that dealership. Use another dealership for warranty work, and find a good mechanic for non-warranty work. Note that this solution isn't legally required in most jurisdictions. Read your contract and all documentation they provided at the time of sale to be sure, but it's unlikely that you are legally required to make another payment for a vehicle after the sale is finalized. Even if they haven't cashed the check, the sale has already been finalized. What this solution does, though, is put you back in the driver's seat in negotiating. Right now they are treating it as though you owe them something, and thus you might feel an obligation toward them. Re-asserting your relationship with them as a customer rather than a debtor is very important regardless of how you proceed. You aren't legally culpable, and so making sure they understand you aren't will ultimately help you. Further, dealerships operate on negotiation. The primary power the customer has in the dealership is the power to walk away from a deal. They've set the situation up as though you no longer have the power to walk away. They didn't threaten with re-possession because they can't - the sale is final. They presented as a one-path situation - you pay. Period. You do have many options, though, and they are very familiar with the "walk away" option. Present that as your chosen option - either they stick with the original deal, or you walk away - and they will have to look at getting another car off the lot (which is often more important than making a profit for a dealership) or selling a slightly used car. If they've correctly pushed the title transfer through (or you, if that's your task in your state) then your brief ownership will show up on carfax and similar reports, and instantly reduces the car's worth. Having the title transfer immediately back to the dealership doesn't look good to future buyers. So the dealership doesn't want the car back. They are just trying to extract more money, and probably illegally, depending on the laws in your jurisdiction. Reassert your position as customer, and decide now that you'll be fine if you have to return it and walk away. Then when you communicate that to them, chances are good they'll simply cave and let the sale stand as-is. |
New or Used Car Advice for Recent College Grad | Never buy a new car if cost is an issue. A big chunk of the price will disappear to depreciation as you drive it off the lot. If you want a shiny new car with the latest equipment (and if you can afford it!), buy a lightly-used car. Normally I would recommend a 1-3 year old car. 95% of the value, with a big cost savings. But this depends on your financial situation. Given that you just need a commuter car for mostly highway driving, in a place where the weather is easier on cars, you could be fine with a 5-6 year old import. Camry's, Accords, Civics, etc are all well-built, reliable, and affordable due to their numbers. As for financing, shop around. Don't blindly use dealer financing. Check with banks and especially local credit unions and see what rate they can offer you. Then, when you are ready to go, get pre-approved (this is when they pull your credit) and get the car. |
In the event of a corporate spin-off, how can I calculate the correct cost basis for each company's shares? | From my understanding: Original Holding: Siemens - 10,000 units at 80 Euros/unit Cost = 800,000 euros Spin-off: Every 10 Siemens get 1 OSRAM On July 5th, 2013: Siemens closing - 78 Euros On Monday, July 8th: Ex-date (opening) - 75 Euros Hence: Market value for:- 1. Siemens: 75 * 10,000 = 750,000 euros 2. OSRAM: (10,000 / 10) * (78 - 75) = 3,000 euros Total Market value = 780,000 + 3,000 = 753,000 euros Ratio for: 1. Siemens = 750,000 / 753,000 = 0.996015936 2. OSRAM = 3,000 / 753,000 = 0.003984063 Cost for: 1. Siemens = 800,000 * 0.996015936 = 796,812.75 2. OSRAM = 3,187.25 |
I received $1000 and was asked to send it back. How was this scam meant to work? | This is a very trivial scam. Flow is like this: Send money to Mr. X (you, in this case). Call Mr. X and ask for the money back, because mistake. Usually they ask for a wire transfer/cash/gift cards/prepaid cards or something else irreversible/untraceable. Mr. X initiates transfer back to Scammer. Accept the transfer from Mr. X Dispute the original transfer or otherwise cancel it through the netbank Mr. X cannot dispute his transfer to the Scammer, since it was genuinely and intentionally initiated by Mr. X. End up with twice the money, at the expense of Mr. X In other countries this is usually done with forged checks, but transfers can work just as well. As long as the transfer can be retroactively canceled or reversed - the scam works. You mentioned money laundering - this is definitely a possibility as well. They transfer dirty money to you from unidentified sources, and you send a "gift" to them with a clear paper trail. When the audit comes - the only proof is that you actually sent them the gift, and no-one will believe your story. You'll have to explain why the Mr. Z who's now in jail sent you a $1K of his drug money. However, in this case I think it is more likely a scam, and the scammer didn't really know what he was doing... |
Why are U.S. credit unions not open to everyone? | It's required by law. 12 USC 1759 (b) requires that membership in a credit union be limited to one or more groups with a "common bond", or to people within a particular geographic area. For lots more gory details on how this is interpreted and enforced, you can read the manual given to credit unions by the National Credit Union Administration, which is their regulatory agency. |
Is there any reason not to put a 35% down payment on a car? | Makes sense so long as you can afford it while still maintaining at least six months living reserves. The sooner you own outright a decreasing asset the better which should be considered when selecting your loan term. However, with today's low rates and high performing stock market you may want to consider allowing that money to be put to better use. It all depends how risk adverse you are. That emotional aide of this decision and emotions have value, but only you can determine what that value is. So - generally speaking, the sooner you own an asset of decreasing value the better off you are, but in exceptionally low interest rate environments such as today there are, as mentioned, other things you may want to consider. Good luck and enjoy your new ride. Nothing better then some brand new wheels aye. |
Money put down on home | You should have drafted a contract of purchase that stipulated out equity stake in the home based of his down payment and yours, along with future monthly payments. But morally, if the house sells, yielding 100,000 profit (after fees/taxes/etc), you should get ( To Calculate Your Cut: (20,000 + Your Total Mortgage Payments Applied to Principle) / (1,900 + His Total Mortgage Payments Applied to Principle Only) * Profit on Sale of House After All Fees = Your Cut His would be: (1,900 + His Total Mortgage Payments Applied to Principle Only) / (20,000 + Your Total Mortgage Payments Applied to Principle) * Profit on Sale of House After All Fees = His Cut You'd then take mortgage payment totals for each; and calculate the payments made towards interest; and claim the correct amount each of you paid on payments for the mortgage interest deduction when you file your taxes. Although, depending on how the loan is written, the banks may issue 1099s which dont reflect actual payments made... Talk to an accountant. |
Can't the account information on my checks be easily used for fraud? | That's accurate. Here is another risk with the current checking system, which many people are not aware of: Anyone who knows your checking account number can learn what your balance in that account is. (This is bank-specific, but it is possible at the major banks I've checked.) How does that work? Many banks have a phone line where you can dial up and interact with an automated voice response system, for various customer service tasks. One of the options is something like "merchant check verification". That option is intended to help a merchant who receives a check to verify whether the person writing the check has enough money in their account for the check to clear. If you select that option in the phone tree, it will prompt you to enter in the account number on the check and the amount of the check, and then it will respond by telling you either "there are currently sufficient funds in the account to cash this check" or "there are not sufficient funds; this check would bounce". Here's how you can abuse this system to learn how much someone has in their bank account, if you know their account number. You call up and check whether they've enough money to cash a $10,000 check (note that you don't actually have to have a check for $10,000 in your hands; you just need to know the account number). If the system says "nope, it'd bounce", then you call again and try $5,000. If the system says "yup, sufficient funds for a $5,000 check", then you try $7,500. If it says "nope, not enough for that", you try $6,250. Etcetera. At each step, you narrow the range of possible account balances by a factor of two. Consequently, after about a dozen or so steps, you will likely know their balance to within a few dollars. (Computer scientists know this procedure by the name "binary search". The rest of us may recognize it as akin to a game of "20 questions".) If this bothers you, you may be able to protect your self by calling up your bank and asking them how to prevent it. When I talked to my bank (Bank of America), they told me they could put a fraud alert flag on your account, which would disable the merchant check verification service for my account. It does mean that I have to provide a 3-digit PIN any time I phone up my bank, but that's fine with me. I realize many folks may terribly not be concerned about revealing their bank account balance, so in the grand scheme of things, this risk may be relatively minor. However, I thought I'd document it here for others to be aware of. |
Offered a job: Should I go as consultant / independent contractor, or employee? | To be honest I don't know how any of this work in the US so my answer will be of very limited value to yourself, I suspect, but when it comes to the UK if you're going to get the same pay gross either way than being independent makes very little sense. Running your own business is hassle, is generally more risky (although possibly not in your case) and costs money. Some of the most obvious costs are the added NI, probably the need for an accountant, at around £1200 p/a for basic accountancy service, you are obliged by law to have liability insurance and you probably want professional indemnity insurance, this will be around £600 p/a minmum, and so on and so forth. On top of that, oficially anyway, as a contractor, you really shouldn't be getting any benefits from the client, and so health insurance, company car, even parking are all meant to be arranged by, and paid by, your company, and can't (or rather - shouldn't) be charged to the client. So - I would say - if you're seriously thinking about setting up a consultancy company, and this client is first of many - set up a company, but take into account the sums you need to earn. If you're really thinking about employment - be an employee. |
Why does financial investor bother to buy derivatives and then hedge the position? | Sometimes hedging is used if you have a position and you feel the market is going against your position, so one would hedge that position in order to protect their capital and possible profits instead of closing the position and incurring capital gains tax. Personally if the market was going against a position I had open I would get out of that position and protect my capital/profits instead of using more capital to hedge against my position. I would rather take a profit and pay some capital gains tax than watch my profits turn into a loss or use up more capital to try and protect a bad position. Hedging can be useful in certain circumstances but I think if you feel the market is going against your position/s for the medium to long term you should just get out of your positions instead of hedging against them. |
How do I determine how much rent I could charge for a property or location? | Check out the property websites to get an idea of how much, the property in question, could yield as rent. Most give a range and you can get a good idea of it. Just one example from zoopla. Likewise you can refer mouseprice or rightmove and get yourself an idea. Property websites do a lot of data crunching to do an update, but their figure is only a guide. |
Brokerage account for charity | If the charity accepts stock, you can avoid the tax on the long term cap gain when you donate it. e.g. I donate $10,000 in value of Apple. I write off $10,000 on my taxes, and benefit with a $2500 refund. If I sold it, I'd have nearly a $1500 tax bill (bought long enough ago, the basis is sub $100). Any trading along the way, and it's on you. Gains long or short are taxed on you. It's only the final donation that matters here. Edit - to address Anthony's comment on other answer - I sell my Apple, with a near $10,000 gain (it's really just $9900) and I am taxed $1500. Now I have $8500 cash I donate and get $2125 back in a tax refund. By donating the stock I am ahead nearly $375, and the charity, $1500. |
Are car buying services worth it? | I went through the Costco program for the so-called "no-hassle" bargain price when I bought my Prius. According to other Prius owners that I've met on forums and TrueCar's web site, I paid "average." Lots of people in my area managed to negotiate a better price by $1-2k. So much for getting a deal. I do not plan to use Costco to buy another vehicle again. |
What is the purpose of property tax? | Property taxes are levied by the local authorities to pay for their services. Since the services are continuous - so are the charges. You need someone to pave a road to your house, to build infrastructure, to maintain the police force, fire department, local schools etc. That's what your property taxes are going to. However, at times the property taxes become more than what the owners have actually paid for the house. Think of a house bought in the midst of a recession at a bargain price of $20K, but at the top of the market bubble costs $2M. The poor guy who bought it for $20K should pay as if he had ever had $2M? It can certainly be the case that the property taxes change drastically over the years and sometimes people have to give up their property because they cannot afford the taxes. That is exactly the thought that had led Californians to amend the Constitution in Prop 13. |
Is it prudent to sell a stock on a 40% rise in 2 months | Did you buy near the bottom? Suppose you did then the price is still 16% below. 50% fall and then 40% increase leaves a 16% gap. So there could still be upside. However, it appears that you are talking about a small-cap that is volatile. I wouldn't hold it. I would take the money and invest elsewhere. If you have a lot of shares and brokerage is less then sell 60% now and the remaining 40% on either 10-15% jump in price or if it falls by 5% from now. Too risky to hold longer-term. |
Is it smart to only invest in mid- and small-cap stock equity funds in my 401(k)? | The benefit of the 401K and IRAs are that reallocating and re balancing are easy. They don't want you to move the funds every day, but you are not locked in to your current allocations. The fact that you mentioned in a comment that you also have a Roth IRA means that you should look at all retirements as a whole. Look at what options you have in the 401K and also what options you have with the IRA. Then determine the overall allocation between bonds, stocks, international, REIT, etc. Then use the mix of funds in the IRA and 401K to meet that goal. Asking if the 401K should be small and mid cap only can't be answered without knowing not just your risk tolerances but the total money in the 401K and IRA. Pick an allocation, map the available funds to that allocation. Rebalance every year. But review the allocation in a few years or after a life event such as: change of job, getting married, having kids, or buying a house. |
Calculating Future Value: Initial deposit and recurring deposits of a fixed but different Value | But how do I bring the initial deposit into the equation? Basically, you can't. Unless you combine two different formulas from Math of Finance into a single expression. The single initial deposit of $1000 will compound for 20 years at 5% compounded annually. The final amount for this part of the deposit will be: V1 = 1000 x (1.05)^20 In addition the series of 20 payments will be an ordinary annuity with a regular payment of $100, with the value on the occasion of the 20th payment given by: So the final total amount in the account at the end of 20 years will be the sum of these two values... |
Do credit ratings (by Moody's, S&P, and Fitch) have any relevance? | I like Muro questions! No, I don't think they do. Because for me, as a personal finance investor type just trying to save for retirement, they mean nothing. If I cannot tell what the basic business model of a company is, and how that business model is profitable and makes money, then that is a "no buy" for me. If I do understand it, they I can do some more looking into the stock and company and see if I want to purchase. I buy index funds that are indexes of industries and companies I can understand. I let a fund manager worry about the details, but I get myself in the right ballpark and I use a simple logic test to get there, not the word of a rating agency. If belong in the system as a whole, I could not really say. I could not possibly do the level of accounting research and other investigation that rating agencies do, so even if the business model is sound I might lose an investment because the company is not an ethical one. Again, that is the job of my fund manager to determine. Furthermore and I mitigate that risk by buying indexes instead of individual stock. |
How much of a down payment for a car should I save before purchasing it? | Do you need the car, or is this an optional purchase for you? Do you currently have a car that is in good working order? If you can continue to save for the car instead of buying now, you'll be getting interest on what you've saved -- and that's a lot better than 0% financing. |
Investing small amounts at regular intervals while minimizing fees? | I was going to comment on the commission-free ETF answer, which I agree with, but I don't have enough reputation. TD Ameritrade has a list of commission-free ETFs and has no minimum deposit required to open an account. Another idea is to keep gifts in cash until a certain threshold is reached. For instance, $100 for birthday, $100 for Christmas, $100 for next birthday, $100 for next Christmas, now execute the trade. Sharebuilder has $4 scheduled trades, so you'd be at about 1% overhead for that. If other people give money, you'll reach the threshold faster of course. For what it's worth, I do something similar for my 2 nieces. I combined their account and prepay Christmas plus birthday, so I do 1 trade a year. I have my account at Sharebuilder because my idea predated the commission-free ETFs that are now pretty popular. I should really transfer the account... hm. |
Interaction between health exchange and under-65 Medicare coverage | First off, you should contact your health plan administrator as soon as possible. Different plans may interact differently with Medicare; any advice we could provide here would be tentative at best. Some of the issues you may face: A person with both Medicare and a QHP would potentially have primary coverage from 2 sources: Medicare and the QHP. No federal law addresses this situation. Under state insurance law an individual generally cannot collect full benefits from each of 2 policies that together pay more than an insured event costs. State law usually specifies how insurance companies will coordinate health benefits when a person has primary coverage from more than one source. In that situation, insurance companies determine which coverage is primary and which is secondary. It’s important to understand that a QHP is not structured to pay secondary benefits, nor are the premiums calculated or adjusted for secondary payment. In addition, a person with Medicare would no longer receive any premium assistance or subsidies under the federal law. While previous federal law makes it illegal for insurance companies to knowingly sell coverage that duplicates Medicare’s coverage when someone is entitled to or enrolled in Medicare Part A or Part B, there has been no guidance on the issue of someone who already has individual health insurance and then also enrolls in Medicare. We and other consumer organizations have asked state and federal officials for clarification on this complicated situation. As such, it likely is up to the plan how they choose to pay - and I wouldn't expect them to pay much if they think they can avoid it. You may also want to talk to someone at your local Medicare branch office - they may know more about your state specifically; or someone in your state's department of health/human services, or whomever administers the Exchanges (if it's not federal) in your state. Secondly, as far as enrolling for Part B, you should be aware that if she opts not to enroll in Part B at this time, if your wife later chooses to enroll before she turns 65 she will be required to pay a penalty of 10% per 12 month period she was not enrolled. This will revert to 0 when she turns 65 and is then eligible under normal rules, but it will apply every year until then. If she's enrolling during the normal General Enrollment period (Jan-March) then if she fails to enroll then she'll be required to pay that penalty if she later enrolls; if this is a Special Enrollment Period and extends beyond March, she may have the choice of enrolling next year without penalty. |
As a 22-year-old, how risky should I be with my 401(k) investments? | Current evidence is that, after you subtract their commission and the additional trading costs, actively managed funds average no better than index funds, maybe not as well. You can afford to take more risks at your age, assuming that it will be a long time before you need these funds -- but I would suggest that means putting a high percentage of your investments in small-cap and large-cap stock indexes. I'd suggest 10% in bonds, maybe more, just because maintaining that balance automatically encourages buy-low-sell-high as the market cycles. As you get older and closer to needing a large chunk of the money (for a house, or after retirement), you would move progressively more of that to other categories such as bonds to help safeguard your earnings. Some folks will say this an overly conservative approach. On the other hand, it requires almost zero effort and has netted me an average 10% return (or so claims Quicken) over the past two decades, and that average includes the dot-bomb and the great recession. Past results are not a guarantee of future performance, of course, but the point is that it can work quite well enough. |
What's the smartest way to invest money gifted to a child? | American Century has their Heritage Fund: https://www.americancentury.com/sd/mobile/fund_facts_jstl?fund=30 It has a good track record. Here are all the mutual funds from American Century: https://www.americancentury.com/content/americancentury/direct/en/fund-performance/performance.html A mutual fund is a good wayway to go as it is not subject to fluctuations throughout the day whereas an ETF is. |
Bollinger Bands and TRENDING market | Bollinger Bands are placed standard deviations away from the moving average. Therefore if the price is volatile, the bands diverge from the mean. During consolidation the bands would converge. They do not provide a clear indication of whether the price is trending or not. |
How much does it cost to build a subdivision of houses on a large plot of land? | The estimated cost of $200 sqft of living space is achievable by builders who are following one the their standard plans. They build hundreds of homes each year across the region using those standard plans. They have detailed schedules for constructing those homes, and they know exactly how many 2x4s are need to build house X with options A, F, and P. They buy hundreds of dishwashers and get discounts. That price also includes the cost of the raw land and the required improvements of the property. You need to know the zoning for that land. You need to know what you can build by right, and what you can get exceptions for. You don't want to pay $600 K and then find out you can only build a 1 level house and you can only use 1/4 acre. You would need to start with a design and then have the architect and the builder and a real estate lawyer look over the property. Then they can give you an estimate of what it would cost to put that design on that property. 83k sqft? I mean it can accommodate at least 10 houses. It depends on what is the minimum lot size. If the maximum allowable density is three houses per acre you can get 6 in 2.2 acres, but if the minimum lot size is supposed to be 5 acres, then you will need an exception just to build one house. And exceptions involve paperwork, hearings and lawyers. |
stock option grant being cancelled because strike price greater than FMV and replaced with a new grant at a higher strike price | Both you and the Company were probably benefitted by this decision. Specifically an option grant that was not FRV or more would require you to recognize the option as income whether you had exercised it or not. Additionally a host of other 409A tax issues/penalties could have been levied against you as an employee recipient. I certainly appreciate your concern about a change in compensation, but this is one where Corporate America likely saved your bacon. |
What will happen when a bid price is higher than an ask price? | The situation you're proposing is an over-simplification that wouldn't occur in practice. Orders occur in a sequence over time. Time is an important part of the order matching process. Orders are not processed in parallel; otherwise, the problem of fairness, already heavily regulated, would become even more complex. First, crossed and locked markets are forbidden by regulators. Crossed orders are where one exchange has a higher bid than another's ask, or a lower ask than another's bid. A locked market is where a bid on one exchange is equal to the ask on another. HFTs would be able to make these markets because of the gap between exchange fees. Since these are forbidden, and handling orders in parallel would ensure that a crossed or locked market would occur, orders are serialized (queued up), processed in order of price-time priority. So, the first to cross the market will be filled with the best oldest opposing order. Regulators believe crossed or locked markets are unfair. They would however eliminate the bid ask spread for many large securities thus the bid-ask cost to the holder. |
Choosing the limit when making a limit order? | Never. Isn't that the whole idea of the limit order. You want a bargain, not the price the seller wants. And when the market opens it is volatile at the most, just an observation mayn't be correct. Let it stabilize a bit. The other thing is you might miss the opportunity. But as an investor you should stick to your guns and say I wouldn't buy any higher than this or sell any lower than this. As you are going long, buying at the right price is essential. You aren't going to run away tomorrow, so be smart. Probably this is what Warren Buffet said, it is important to buy a good stock at the right price rather than buying a good stock at the wrong price. There is no fixed answer to your question. It can be anything. You can check what analysts, someone with reputation of predicting correctly(not always), say would be the increase/decrease in the price of a stock in the projected future. They do quite a lot of data crunching to reach a price. Don't take their values as sacrosanct but collate from a number of sources and take an average or some sorts of it. You can then take an educated guess of how much you would be willing to pay depending the gain or loss predicted. Else if you don't believe the analysts(almost all don't have a stellar reputation) you can do all the data crunching yourself if you have the time and right tools. |
What is the difference between a 'trader' and a 'stockbroker'? | Traders trade for a living, stockbrokers tell people to get involved in trades for a living. To be employed as a trader, you need a proven track record of being able to consistently make money. To be employed as a stockbroker, you need to get licensed but you don't need to prove you can consistently make money. |
Freehold and Leasehold for Pub/Bar? | You should be aware that many pubs in the London (indeed, the UK as a whole) are sold as a leasehold with a beer tie. This typically means you pay less rent for the building and premises, but must enter a contract with the Pub Company to buy their beer and day-to-day supplies. You have the legal option to instead pay market rent for some (but not all) Pub Cos, under certain conditions. If you go with leasehold, the landlord can usually close your pub at their will. This is becoming a quite common occurrence in the booming real estate market of London. While your interest will be in running a pub, the Pub Co's interest will be in getting change of use planning permission and selling it to a real estate developer. |
How to help a financially self destructive person? | I'm afraid your best recourse may be legal. I don't know that internet is a necessity, but the court would frown upon anyone paying $4K for rent but not being able to afford to heat the water or turn the lights on. $48K a year net should be enough for her to at least keep the kids with these things. I don't know that you can educate her. Her issue is very deep-seated and far beyond a good financial planning type session. |
How are option contracts enforced? | By their agreements with the central counterparty - in the US, the exchange or the Options Clearing Corporation, which interposes itself between the counterparties of each trade and guarantees that they settle. From the CCP article: A clearing house stands between two clearing firms (also known as member firms or participants). Its purpose is to reduce the risk a member firm failing to honor its trade settlement obligations. A CCP reduces the settlement risks by netting offsetting transactions between multiple counterparties, by requiring collateral deposits (also called "margin deposits"), by providing independent valuation of trades and collateral, by monitoring the credit worthiness of the member firms, and in many cases, by providing a guarantee fund that can be used to cover losses that exceed a defaulting member's collateral on deposit. Exercisers on most contracts are matched against random writers during the assignment process, and if the writer doesn't deliver/buy the stock, the OCC does so using its funds and goes after the defaulting party. |
Why do people buy insurance even if they have the means to overcome the loss? | Insurance isn't a product designed to protect against financial loss. The product is designed to allow people to pay a small fee (the premium) for peace of mind. This allows the insured to feel as if their purchase was worthy (they see the potential of loss as a concern and the premiums small enough to allow them to not worry about having a loss). Insurance companies will then seek out insurable risks where the perceived losses far out weight the actual losses (risk assessment). So, you answer is that your friends are paying for peace of mind. |
Why is the price of my investment only updated once per day? | Mutual funds are collections of investments that other people pay to join. It would be simpler to calculate the value of all these investments at one time each day, and then to deem that any purchases or sales happen at that price. The fund diversifies rather than magnifies risk, looking to hold rather than enjoy a quick turnaround. Nobody really needs hourly updated price information for an investment they intend to hold for decades. They quote their prices on a daily basis and you take the daily price. This makes sense for a vehicle that is a balanced collection of many different assets, most of which will have varying prices over the course a day. That makes pricing complicated. This primer explains mutual fund pricing and the requirements of the Investment Company Act of 1940, which mandates daily price reporting. It also illustrates the complexity: How does the fund pricing process work? Mutual fund pricing is an intensive process that takes place in a short time frame at the end of the day. Generally, a fund’s pricing process begins at the close of the New York Stock Exchange, normally 4 p.m. Eastern time. The fund’s accounting agent, which may be an affiliated entity such as the fund’s adviser, or a third-party servicer such as the fund’s administrator or custodian bank, is usually responsible for calculating the share price. The accounting agent obtains prices for the fund’s securities from pricing services and directly from brokers. Pricing services collect securities prices from exchanges, brokers, and other sources and then transmit them to the fund’s accounting agent. Fund accounting agents internally validate the prices received by subjecting them to various control procedures. For example, depending on the nature and extent of its holdings, a fund may use one or more pricing services to ensure accuracy. Note that under Rule 22c-1 forward pricing, fund shareholders receive the next daily price, not the last daily price. Forward pricing makes sense if you want shareholders to get the most accurate sale or purchase price, but not if you want purchasers and sellers to be able to make precise calculations about gains and losses (how can you be precise if the price won't be known until after you buy or sell?). |
I need a car for 2 years. Buy or lease (or something else)? | Any one of your three options is viable and has its advantages and disadvantages. Personally, I would go for the used option, but I am can-do kind of person. If you don't like micro-managing a car, you may prefer leasing. A new car is sort of the middle of the road option. Leasing will be most expensive and most liability. If you have an accident, the leasing arrangements are designed to extract money from you... heavily. Even a minor accident can require you to pay for expensive repairs, usually much more expensive than if you had your own car fixed. So, not only will you pay more per month, but your accident liability will be a lot higher. With your own car, you will need to sell it (or bring it back to the UK) obviously. A used car will be the cheapest option. A non-descript used car from the local area can also make you "blend in" and be less like to be targeted by a criminal as an outsider. As long as you stay away from dealers and buy the car from a private person of good reputation, you have an odds-on chance of getting a decent car. Make sure you check out the person and make sure they are "real". Some dealers, called "curbstoners", try to pretend to be original owners. You can always spot such frauds because the title will be new. Make sure the same owner has had the car for at least 3-4 years and that it says that on the title. Also, try to buy from somebody who is financially well off--they have less reason to try to screw you. Students, people under 30 and working class are bad people to buy from. Married professionals over age 35 are the right kind of person to buy from. |
Why do consultants or contractors make more money than employees? | The benefits and taxes thing, in my opinion is the biggie. Most people don't realize that the cost to the company for a full-time employee with benefits can be 2x or even 3x the amount they see in their paycheck. Health plans are extremely expensive. Even if you are having money taken from your check for health insurance, it is often just a fraction of the total cost, and the employer is subsidizing the rest. More expensive benefits that contractors don't typically get are 401K matches and paid vacation days. When contractors call in sick or don't work because it is a national holiday, they don't get paid for that day. Also, see that line on your paycheck deducting for Social security and Medicare? That is only half of the tax. The employer pays an equal amount that is not shown on that statement. Also, they pay taxes that go towards unemployment benefits , and may be required to pay higher taxes if they churn through a lot of full-time employees. You can usually let contractors go with relative impunity . For the unemployment tax reasons, not paying for people's days off or benefits, a lot less paperwork, and less risk to the business associated with committing to full-time employees all provide value to the company. Thus companies are willing to pay more because they are getting more. Think of it like a cell phone-contract. If you commit to a three year contract it can be a pain/expensive to get out of the deal early, but you will probably get a better rate in exchange for the risk being shifted to your end of the deal. |
Isn't an Initial Coin Offering (ICO) a surefire way to make tons of money? | My big gripe with the ICO name and corresponding mania is that it has no similarity to an IPO. At best an ICO is a seed stage investment in a wholly unproven technology/idea/theoretical use. A developer team gets together to write a fancy whitepaper, then build out a nifty website to display the idea they are working on. Generally this idea has no practical immediate use. Generally this idea is still nothing more than an idea. At best the idea will be realized by substantially reusing the open source codebase of a different coin with slight tweaks. The developers then go get an exchange or two involved to begin trading the tokens. One exchange even goes so far as to begin trading IOUs for the tokens before the ICO takes place. It's shear insanity driven by this mania to have the next bitcoin for $0.00001 each. When a real organization goes through the real, regulated, IPO process it has already had its seed funding then subsequent equity financing rounds, THEN once the company has demonstrated that it has a valuable product or service and a competent management team shares are allowed to be sold to the public. By US law, seed stage companies are forbidden from seeking investment from unaccredited investors (this doesn't mean unaccredited investors are forbidden from investing). An accredited investor is someone with over $200,000 per year of income or a net worth of over $1,000,000. Seed stage organizations have an exceptionally high rate of failure, no matter the proposed business. These ICOs are little more than developers fleecing naive "investors" by selling them the pipe dream of being on the ground floor of the next bitcoin. It's really appalling. You should stay away from them, everyone should stay away from them, and the people running them should be punished. |
Equity or alternative compensation in an LLC? | I'm not sure 1099-MISC is what you should expect. Equity means ownership, and in LLC context it means membership. As an LLC member, you'll get distributions and should receive a K-1 form for tax treatment, not 1099 or W2. If the CEO is talking about 1099 it means he's going to hire you as a contractor which contradicts the statement about equity allocation. That's an entirely different situation. 1) Specifically, would the 1099-MISC form be used in this case? 1099-MISC is used to describe various payments. Depending on which box is filled, the tax treatment may be as of employment income (subject to SE taxes) or passive income (royalties, rents, etc - subject to various limitations in the tax code). 3) If this is the only logical method of compensation (receiving a % of real estate sales), how would it be taxed? That would probably be a commission and taxed as employment income. I suggest to get a professional tax adviser consultation on this issue, with specific details, numbers, and kinds of deals involved. You can get gain or lose a lot of money just because you're characterized as a contractor and not LLC member or employee (each has its own benefits and disadvantages, and you have to consider them all). 4) Are there any advantages/disadvantages to acquiring and selling properties through the company as opposed to receiving a % of sales? Yes. There are advantages and there are disadvantages. For example, if you're using a corporation, you can get salary, if you're a contractor you cannot. There are a lot of issues hidden in this distinction (which I've just discussed with KeithS in this argument). |
Selling property outside the US - gains are taxable, but how do they convert? | Since you did not treat the house as a QBU, you have to use USD as your functional currency. To calculate capital gains, you need to calculate the USD value at the time of purchase using the exchange rate at the time of purchase and the USD value at the time of sale using the exchange rate at the time of sale. The capital gain / loss is then the difference between the two. This link describes it in more detail and provides some references: http://www.maximadvisors.com/2013/06/foreign-residence/ That link also discusses additional potential complications if you have a mortgage on the house. This link gives more detail on the court case referenced in the above link: http://www.uniset.ca/other/cs5/93F3d26.html The court cases references Rev. Rul 54-105. This link from the IRS has some details from that (https://www.irs.gov/pub/irs-wd/0303021.pdf): Rev. Rul. 54-105, 1954-1 C.B. 12, states that for purposes of determining gain, the basis and selling price of property acquired by a U.S. citizen living in a foreign country should be expressed in United States dollars at the rates of exchange prevailing as of the dates of purchase and sale of the property, respectively. The text of this implies it is for U.S. citizen is living in a foreign country, but the court case makes it clear that it also applies in your scenario (house purchased while living abroad but now residing in the US): Appellants agree that the 453,374 pounds received for their residence should be translated into U.S. dollars at the $1.82 exchange rate prevailing at the date of sale. They argue, however, that the 343,147 pound adjusted cost basis of the residence, consisting of the 297,500 pound purchase price and the 45,647 pounds paid for capital improvements, likewise should be expressed in U.S. dollar terms as of the date of the sale. Appellants correctly state that, viewed “in the foreign currency in which it was transacted,” the purchase generated a 110,227 pound gain as of the date of the sale, which translates to approximately $200,000 at the $1.82 per pound exchange rate. ... However fair and reasonable their argument may be, it amounts to an untenable attempt to convert their “functional currency” from the U.S. dollar to the pound sterling. ... Under I.R.C. § 985(b)(1), use of a functional currency other than the U.S. dollar is restricted to qualified business units ("QBU"s). ... appellants correctly assert that their residence was purchased “for a pound-denominated value” while they were “living and working in a pound-denominated economy,” ... And since appellants concede that the purchase and sale of their residence was not carried out by a QBU, the district court properly rejected their plea to treat the pound as their functional currency. |
Is giving my girlfriend money for her mortgage closing costs and down payment considered fraud? | With the standard "I am not a lawyer" disclaimer, consider this question: If you and your girlfriend split up sometime after purchasing the house but before getting married, would you expect her to repay you for the closing costs and downpayment? That is, if you write her a check for $5k, and 6 months after she signs the papers for the house one of you decides to break up with the other, would you expect her to write you a check for $5k in return? That is the difference between "a gift" and "a loan disguised as a gift". If the answer is no, you don't expect it back, then everything is fine and you're in the clear - it's perfectly legal to give someone money. If the answer is yes, you would want to be "paid back", then it's not a gift and you run the risk of running afoul of the regulations. With respect to a previous answer about "gifting money that is not taxed", in the US one person can give another up to $14,000 without worrying about gift taxes, and even in the event that you exceed that amount, the excess would simply eat into the lifetime exemption of $5,250,000. (Individual states may have different rules and exempt amounts that would apply to state taxes.) Please also consider the income issue for your "rental agreement". Your GF would be expected to declare that amount and pay income tax on it as a business. She might also declare part of that amount as expected income for purposes of securing the loan, but that may run into its own issues (you're not a roommate, and presumably the home is not a duplex or set up as apartments, and presumably she would not offer a similar deal to someone other than you). |
Covered call when stock position is at a loss | An expired option is a stand-alone event, sold at $X, with a bought at $0 on the expiration date. The way you phrased the question is ambiguous, as 'decrease toward zero' is not quite the same as expiring worthless, you'd need to buy it at the near-zero price to then sell another covered call at a lower strike. Edit - If you entered the covered call sale properly, you find that an in-the-money option results in a sale of the shares at expiration. When entered incorrectly, there are two possibilities, the broker buys the option back at the market close, or you wake up Sunday morning (the options 'paperwork' clears on Saturday after expiration) finding yourself owning a short position, right next to the long. A call, and perhaps a fee, are required to zero it out. As you describe it, there are still two transactions to report, the option at $50 strike that you bought and sold, the other a stock transaction that has a sale price of the strike plus option premium collected. |
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