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Zero volatility stocks in intraday trading in India | Find a stock screener that has data for the BSE and NSE. You may be able to look directly at volatility but a good stock screener will have the technical analysis indicator called "average true range", ATR for short. This will let you see the average range of price moves over several days. |
What should I do with my paper financial documents? | Here's my approach: As for Google Docs, I think that its safe enough for most people. If you in a profession that was subject to heavy regulatory scrutiny, of if you are cheating on your taxes, I would probably not use a cloud provider. Many providers will provide documents to government agencies without a subpoena or notice to you. |
Do “Instant Approved” credit card inquires appear on credit report? | Businesses you are already established with may do a soft pull to pre-qualify you for an offer. They store the information and if you accept, may instantly setup and account. You may also see language to the effect that they may do an inquiry (hard pull) - I guess if their data is old. When you went outside of Amazon to Chase, they did a hard pull on their side which is what you saw. |
Should I take a student loan to pursue my undergraduate studies in France? | Edit: lazy math The answer to this question depends on two things: How bad will it be if you cannot repay this loan in the way you expected? - How likely are you to actually get into a PhD program with a stipend? Is there a possibility that you will not get a stipend? What is the penalty for failure to repay? Will you have to support yourself after university? How much money could you expect to earn if you found a job after your undergraduate degree? How much could taking this loan improve your finances/life? - Could you get your degree at anther institution without going into debt? Would your career be better if you went to Ecole Polytechnique? I would take the loan if: |
Facebook buying WhatsApp for 19 Billion. How are existing shareholders affected? | Of course it is a dilution of existing shareholders. When you buy milk in the supermarket - don't you feel your wallet diluted a little? You give some $$$ you get milk in return. You give some shares, you get Watsapp in return. That's why such purchases must go through certain process of approval - board of directors (shareholders' representatives) must approve it, and in some cases (don't know if in this particular) - the whole body of the shareholders vote on the deal. |
Where to park money while saving for a car | Nothing's generating a whole lot of interest right now. But more liquid and stable is better (cash or cash-like). But a related question: Why a new car? You can knock thousands of dollars off of the price of a comparable vehicle by buying one that's one or two years old. Your new vehicle loses thousands of dollars in value the moment it goes off the lot. |
How do I determine ownership split on a franchise model? | There is no one solution to every project finance problem. Two models might make sense in this situation, however. In this case, you would count all the money that you give to your friend as a loan which he will pay back with interest. The interest rate and loan amounts will have to be agreed on by both of you. One one hand, the interest should be high enough to reward you in a successful outcome for the amount of risk that you take on if things don't work out. On the other, the interest rate needs to be low enough where his earnings after loan repayment justify your friend's effort, in addition to being competitive to ant rate your friend could secure from a bank. The downside to this plan is you don't directly benefit from the franchise's profits. In this model, you will record the cash that each of you invests. Since your friend is also adding "sweat equity" by setting up and operating the franchise, you will need to quantify the work that your friend and you invest into the franchise. Then you can determine how much each of you has invested in terms of dollars and split any franchise profits based on those proportions. The downside of this plan is that it is difficult to estimate how much time each of you invests and how much that time is worth. |
In US, is it a good idea to hire a tax consultant for doing taxes? | Good tax people are expensive. If you are comfortable with numbers and computers, you can do it better yourself. |
Does doing your “research”/“homework” on stocks make any sense? | Doing your homework means to perform what's more accurately called "fundamental analysis". According to proponents of fundamental analysis (FA), it is possible to accurately determine how much a stock should trade for and then buy or sell the stock based on whether it trades above or below this target price. This target price is based on the discounted anticipated future earnings of your stock, so "doing your homework" means that you figure out how much future earnings you can expect from the stock and then figuring out at what rate you want to discount those future earnings (Are 1000 dollars that you'll earn next year worth $800 today or $900 or only $500? That depends on the overall economic and political climate...) So does this make any sense? Depends. I'm aware that there are a lot of anecdotes of people researching a stock, buying that stock and doing well with that stock. But poor decisions can at times lead to good outcomes... EDIT: Due to some criticism, I want to expand on a few points. So, is homework completely for naught? No! |
Does settlement of second mortgage count as short sale? | No that will not count as a short sale although it may still affect your chances of getting a loan because some lenders wont want to see it on your credit if you are pursuing a new FHA loan. In the best case scenario you will need an explanation letter of why you did this. In the worst case scenario the lender will want you to wait to get financing. Try and find a lender with NO FHA overages which means they don't put additional restrictions on giving you an FHA insured loan. That type of lender will be your best choice because they just follow FHA rules and don't add any additional requirements. |
Pros and cons of using a personal assistant service to manage your personal finances? | Years ago I hired someone part time (not virtual however) to help me with all sorts of things. Yes it helps free up some time. However particularly with finances, it does take a leap of faith. If you have high value accounts that this person will be dealing with you can always get them bonded. Getting an individual with a clean credit history and no criminal background bonded usually costs < $600 a year (depending on $ risk exposure). I would start out small with tasks that do not directly put that person in control of your money. In my case I didn't have an official business, I worked a normal 9-5 job, but I owned several rental units, and an interest in a bar. My assistant also had a normal 9-5 job and worked 5-10 hours a week for me on various things. Small stuff at first like managing my calendar, reminding me when bills were due, shipping packages, even calling to set up a hair cut. At some point she moved to contacting tenants, meeting with contractors, showing apartments, etc... I paid her a fixed about each week plus expenses. I would pay her extra if I needed her more (say showing an apartment on a Saturday, or meeting a plumber). She would handled all sorts of stuff for me, and I gave her the flexibility when needed to fit things in with her schedule. After about a month I did get her a credit card for expenses. Obviously a virtual assistant would not be able to do some of these things but I think you get the point. Eventually when the trust had been built up I put her on most of my accounts and gave her some fiduciary responsibilities as well. I'm not sure that this level of trust would be possible to get to with a virtual assistant. However, with a virtual assistant you might be able to avoid one really big danger of hiring an assistant.... You see, several years later when I sold off my apartment buildings I no longer needed an assistant, so I married her. Now one good thing about that is I don't have to pay her now. ;) |
Accidentally opened a year term CD account, then realized I need the money sooner. What to do? | I did find this information from the US Department of the Treasury: What are the penalties for withdrawing money early from a Time Certificate of Deposit (CD)? Federal law stipulates that all time certificates of deposit (CD) that are cashed out early are subject to a minimum penalty. If you withdraw an amount within the first six days after deposit, the penalty consists of at least seven days' simple interest. Other than that, national banks can set their own penalties; there is no maximum. Additionally, you may want to review the Account Agreement that the bank provided when you opened the account, as it explains the early withdrawal penalties. Check the paperwork to see if there is a short period at the start where the penalty is minimal. Each bank can set their own rules for the maximum penalty. Some base it on x months interest, some as a percentage of the CD, others may use a more complex formula. |
Do I need to write the date on the back of a received check when depositing it? | Let me just add that while you don't need to write the date received on the back of the check, you could. Why? Let's say someone was late in paying you and you wanted to document the fact that they were late. I've had late-paying customers send me a check dated on the due date but really they just pre-dated the check and sent it 60 days past-due. So let's say I want to establish and document the pattern in case it becomes a future legal issue. When you deposit or cash a check, an image of the front and back is made and the person or company who issued the check will have those images stored as part of their transaction history. (It used to be that the original, physical, cancelled check was returned to the payer, but that was another era.) So write the date received on the back next to the endorsement, endorse the check, and take a photo of the front and back (along with the postmark on the envelope) to document that they are a late payer. This way, if it ever becomes a "he said she said" issue you can easily show they have a history of paying late. If the payer looks at their check images they'll see your received date note next to the endorsement. Granted, this is a lot of trouble for a unique situation. In 20+ years of running a business I've actually had the foresight to do this a handful of times with habitual offenders, and in (only) one case did it come in handy later on. But boy was I glad to have those photos when I needed them. |
Short term cutting losses in a long term investment | What might make more sense is to 'capture' your losses. Sell out the funds you have, move into something else that is different enough that the IRS won't consider it a wash sale, and you can then use those losses to offset gains (you can even carry them forward) You would still be in the market, just having made a sort of 'sideways move'. A month or two later (once you are clear of wash sale rules) you could shift back to your original choices. (this answer presumes you are in the US, or somewhere that lets you use losses to offset gains) |
What is quotational loss in stock market? | https://www.fool.com/investing/general/2013/07/30/2-types-of-risk-2-types-of-bubbles.aspx (mirror): The Wall Street Journal reviews: What Mr. Bernstein calls "shallow risk" is a temporary drop in an asset's market price; decades ago, the great investment analyst Benjamin Graham referred to such an interim decline as "quotational loss." "Deep risk," on the other hand, is an irretrievable real loss of capital, meaning that after inflation you won't recover for decades -- if ever. So quotational loss = loss not explained by change of actual value of a firm. |
Is there a good options strategy that has a fairly low risk? | Check out this site: http://www.m-x.ca/produits_options_actions_en.php (Under the Trading Strategies). If you have a background in math or eco or are comfortable with graphs, I suggest you graph the payoffs of each of these strategies. It will really help you understand it. If you need help with this, let me know and I can draw a couple out for you. Your question is rather vague but also complicated however I will try to answer it. First off, many investors buy options to hedge against a current position in a stock (already own the stock). But you can also try to make money off of options rather than protecting yourself. Let's suppose you anticipate that a stock will increase in value so you want to capitalize on this. Suppose further that you have a small amount of money to invest, say $100. Suppose the stock is currently at $100 so that you can only afford 1 share. Suppose there is a call option out there with strike $105 that costs you only $1. Let's compare two scenarios: The stock increases to $120 at the maturity date of the option. So, you made a lot more money with the same initial investment. The amount of money you put in is small (i.e. can be perceived as low risk). However, if the stock price ended up being $104.90 then your options are worthless (i.e. can be perceived as high risk). HTH. |
How does 1099 work with my own company | Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not. If you have LLC, unless you elected to tax it as a corporation, you need neither 1099 nor W2. For tax purposes the LLC is disregarded. So it is, from tax perspective, a sole proprietorship (or partnership, if multiple members). Being a W2 employee of your own LLC is a bad idea. For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card? It would be better to always use a business account for business purposes. Doesn't matter much for tax per se, but will make your life easier in case of an audit or a legal dispute (limited liability protection may depend on it). If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax? Unless you're a W2 employee, you need to do quarterly estimate payments using form 1040-ES. If you are a W2 employee (even for a different job, and even if it is not you, but your spouse with whom you're filing jointly) - you can adjust your/spouse's withholding using form W4 to cover the additional tax liability. This is, IMHO, a better way than paying estimates. There are numerous questions on this, search the site or ask another one for details. |
Buying a small amount (e.g. $50) of stock via eToro “Social Trading Network” using a “CFD”? | Is eToro legitimate? If you have any doubts about eToro or other CFD providers (or even Forex providers, which are kind of similar), just type eToro scam in Google and see the results. |
Why does Warren Buffett say his fund performance, relatively, is likely to be better in a bear market than in a bull market? | To understand his comments about bear-market performance it's important to take them in context. (My research method was Crtl+F: bear; read around the highlights. This is not a complete survey of 60+ years of letters.) In his earlier letters, statements about bull market performance are always made in reference to Buffet's belief that many of BH's current holdings are in undervalued securities. Ex: To the extent possible, therefore, I am attempting to create my own work-outs by acquiring large positions in several undervalued securities. Such a policy should lead to the fulfillment of my earlier forecast – an above average performance in a bear market. It is on this basis that I hope to be judged (p 6; emphasis mine). Similar statements are made throughout the earlier letters, along with this interesting note: In a year when the general market had a substantial advance I would be well satisfied to match the advance of the Averages (p 6). So to your question of why BH fund performance is likely to be better in a bear market than in a bull market, I believe the implicit assertion is that undervalued securities are more resilient in a bear market (presumably because they don't have as far to fall, and are also less likely to be subject to a bubble). Buffet is also explicitly asserting that when facing a choice to either (a) position BH to weather a possible downturn or (b) position BH to enjoy a bullish stock that is outpacing the market, he would choose the former over the later. As to your assertion that he always says this, I can find no reference to bear market's in the letters past 1960. |
Where should I park my rainy-day / emergency fund? | I would suggest your local credit union or local bank for security and liquidity. Liquidity is probably the most important issue for a emergency fund. |
What's the point of a benchmark? | One reason it matters whether or not you're beating the S&P 500 (or the Wilshire 5000, or whatever benchmark you choose to use) is to determine whether or not you'd be better off investing in an index fund (or some other investment vehicle) instead of pursuing whatever your current investment strategy happens to be. Even if your investment strategy makes money, earning what the S&P 500 has averaged over multiple decades (around 10%) with an index fund means a lot more money than a 5% return with an actively managed portfolio (especially when you consider factors like compound interest and inflation). I use the S&P 500 as one of my criteria for judging how well (or poorly) my financial adviser is doing for me. If his recommendations (or trading activity on my behalf, if authorized) are inferior to the S&P 500, for too long, then I have a basis to discontinue the relationship. Check out this Wikipedia entry on stock market indices. There are legitimate criticisms, but on the whole I think they are useful. As an aside, the reason I point to index funds specifically is that they are the one of the lowest-cost, fire-and-forget investment strategies around. If you compare the return of the S&P 500 index over multiple decades with most actively managed mutual funds, the S&P 500 index comes out ahead. |
Why does Warren Buffett say his fund performance, relatively, is likely to be better in a bear market than in a bull market? | Buffett is a value investor. His goal is to buy good companies when the market is overly worried and prices them below intrinsic value. When the market is highly priced it is much more difficult for him to find things that he thinks are at an attractive price. When people are very worried and the market has crashed, stocks are then priced below their intrinsic value and he can use the cash he keeps in the company to make attractive purchases. Remember that Buffett is not concerned with the ups and downs of the price of Berkshire Hathaway stock, he is concerned with the economic value of the assets that the company owns. So if all stock prices crash and he can buy things that are at bargain prices, he is happy no matter what Berkshire stock price does in the short run. One consequence of value investing is that because you are buying assets at bargain prices, the total value of your assets drops less in a bear market than the highly priced stuff that drives the major indexes. |
Mortgage refinancing fees | tl;dr: I agree with Pete B.'s assertion that you should continue shopping. That's not the whole story though; there are other factors that can raise your rate, and affect your closing costs. The published rate is typically the best rate you can get. Here are some other factors that can raise your rate: You should have received a loan estimate which will itemize the fees you will pay. On that document you will see if you are paying a price to "buy down" the rate, and all the other fees. How are you calculating the 2.5%? Note that some fees are fixed. An appraisal on a $40K home may cost the same as an appraisal for a $400K home. If you add up the total closing costs and view it as a percentage of the loan, the smaller loan may have a higher percentage than the larger loan, even though the total cost of the smaller loan is less. |
A friend wants to use my account for a wire transfer. Is this a scam or is it legitimate? | 100% scam. This is classic of mixing real (Exxon) with fiction. This gives credibility to story. Don't give any thing, there is no damage yet. If you take the bait, there are multiple ways to get money from you. |
Do I need another health insurance policy? | Most of the points by MrChrister are valid. I can't say much for Philippines, however there is a reason for one to go with individual insurance from my experience in India. |
Is it unreasonable to double your investment year over year? | Nobody has consistently doubled their investment year after year, not even the "greats" like George Soros and Warren Buffett. Mr. Buffett's average annual returns have been over 20% for over 50 years. That's about twice the American average of 10%-11% a year. So Mr. Buffett has been "twice as good as average" for his adult life. That's like having a 200 IQ. And in a poll taken in 2000, he was rated the greatest portfolio manager of all time. No lesser person could hope to do better. What has happened is that people may double their investment in ONE year, then "give some back" the following year. Or else go through several years of "average" 10%-15% returns. The reason is that they will have an investment style that works for one particular market, but not for all markets, so they will have to wait for their "best" market, to have their "best" year. |
Why would a company care about the price of its own shares in the stock market? | Why do companies exist? Well, the corporate charter describes why the company exists. Usually the purpose is to enrich the shareholders. The owners of a company want to make money, in other words. There are a number of ways that a shareholder can make money off a stock: As such, maintaining the stock price and dividend payouts are generally the number one concern for any company in the long term. Most of the company's business is going to be directed towards making the company more valuable for a future buyout, or more valuable in terms of what it can pay its shareholders directly. Note that the company doesn't always need to be worried about the specifics of the day-to-day moves of the stock. If it keeps the finances in line - solid profits, margins, earnings growth and the like - and can credibly tell people that it's generally a valuable business, it can usually shrug off any medium-term blips as market craziness. Some companies are more explicitly long-term about things than others (e.g. Berkshire Hathaway basically tells people that it doesn't care all that much about what happens in the short term). Of course, companies are abstractions, and they're run by people. To make the people running the company worry about the stock price, you give them stock. Or stock options, or something like that. A major executive at a big company is likely to have a significant amount of stock. If the company does well, he does well; if it does poorly, he does poorly. Despite a few limitations, this is really a powerful incentive. If a company is losing a lot of money, or if its profits are falling so it's just losing a lot of its value as a business, the owners (stockholders) tend to get upset, and may vote in new management, or launch some sort of shareholder lawsuit. And, as previously noted, to raise funds, a company can also issue new shares to the market as a secondary offering as well (and they can issue fewer shares if the price is high - meaning that whatever the company is worth afterward, the existing owners own proportionally more of it). |
Can I donate short-stock to charity? | No. There is no asset associated with your short position, so there's nothing to gift. The short position in the stock is purely a liability. When you note that you have a profit in the position, what you mean is that the cash you made when you shorted the stock is more than enough to cover the short position. The only asset in this picture, then, is the cash you made when you entered the short position. |
looking for research tool to plug in and evaluate theoretical historical returns | The professional financial advisors do have tools which will take a general description of a portfolio and run monte-carlo simulations based on the stock market's historical behavior. After about 100 simulation passes they can give a statistical statement about the probable returns, the risk involved in that strategy, and their confidence in these numbers. Note that they do not just use the historical data or individual stocks. There's no way to guarantee that the same historical accidents would have occurred that made one company more successful than another, or that they will again. "Past performance is no guarantee of future results"... but general trends and patterns can be roughly modelled. Which makes that a good fit for those of us buying index funds, less good for those who want to play at a greater level of detail in the hope of doing better. But that's sorta the point; to beat market rate of return with the same kind of statistical confidence takes a lot more work. |
Can I calculate stock value with Williams%R if I know the last set? | William %R is a momentum indicator used for measuring overbought and oversold levels, it is not used to predict the price of a stock. In fact, William %R, like all momentum indicators, is a lagging indicator - meaning the indicator level changes as the price of the stock changes. It ranges from 0 to -100. Usually when a reading is less than -80 the stock can be considered to be oversold, and when the reading is above -20 the stock can be considered overbought. When viewed together with the price chart, this can help provide a trader with entry and exit points into and out of a trade. |
Most common types of financial scams an individual investor should beware of? | If some one ever offers High returns and low risk they are either extremely stupid or scamming you. If they did find a high return low risk investment a smart person would buy it then repackage it as a low return low risk investment and then sell it to you. People would still buy and they would make a ton. Either they are lying (scam) or a fool(about as bad) |
Choosing the “right” NAPFA advisor, and whether fees are fair, etc.? | Some sample prices for straightforward pay-for-hours-or-deliverables planners: I think I've seen some similar rates elsewhere, too. I'd feel like you might get something perfunctory and boilerplate for too much less than $1000 - how could the person afford to spend much time? - and I'd feel like lots more than $1000 for just a standard straightforward plan might be a ripoff. Basically you're paying $1000 for a day or two of work, you don't want just a couple hours of work, but you don't need a week of work either. Anyway, extracting the general guideline (since prices may vary regionally or over time), you could figure it takes a day or two to do a decent job on a basic complete financial plan without a lot of complexities in it. From there you can decide what's fair, adding or subtracting time if you need less than a complete plan or have complex issues. This is assuming you're paying for time and deliverables, which is not a given. The biggest factor in how much you pay is probably how they charge; a couple of the most common models, (There are other models but these are the ones I've seen most.) The difference between these two models is a lot of money over time. Hourly is going to be much cheaper, because it's a one-time cost instead of ongoing, and unrelated to what you have in assets. However, you won't get investment management, which can be valuable if you aren't the kind to stick to an investment plan or you want someone else to completely take care of it for you. The investment-management planners have the potential to make a lot more money (and are more likely to be in it for the money). Hourly planners don't really have as good a business from a business owner's perspective, but they are cheaper from a customer perspective, as long as you're happy to DIY a bit. One thing I like about hourly planners is that I don't really feel investments are the main place planners can add value, so it makes me nervous to have the compensation based on that. Insurance, estate planning, taxes, etc. are where it's harder for a layperson to know all the ins and outs and DIY. From what I've seen, the cheapest planners are the ones that you can get free or discounted from companies like USAA or Vanguard if you have an account with them. However, they will only recommend products from the company in question, so that's a downside, and you probably won't get to meet them in person. This question may be useful too: What exactly can a financial advisor do for me, and is it worth the money? |
Why not just invest in the market? | Let me start by giving you a snippet of a report that will floor you. Beat the market? Investors lag the market by so much that many call the industry a scam. This is the 2015 year end data from a report titled Quantitive Analysis of Investor Behavior by a firm, Dalbar. It boggles the mind that the disparity could be this bad. A mix of stocks and bonds over 30 years should average 8.5% or so. Take out fees, and even 7.5% would be the result I expect. The average investor return was less than half of this. Jack Bogle, founder of Vanguard, and considered the father of the index fund, was ridiculed. A pamphlet I got from Vanguard decades ago quoted fund managers as saying that "indexing is a path to mediocrity." Fortunately, I was a numbers guy, read all I could that Jack wrote and got most of that 10.35%, less .05, down to .02% over the years. To answer the question: psychology. People are easily scammed as they want to believe they can beat the market. Or that they'll somehow find a fund that does it for them. I'm tempted to say ignorance or some other hint at lack of intelligence, but that would be unfair to the professionals, all of which were scammed by Madoff. Individual funds may not be scams, but investors are partly to blame, buy high, sell low, and you get the results above, I dare say, an investor claiming to use index funds might not fare much better than the 3.66% 30 year return above, if they follow that path, buying high, selling low. Edit - I am adding this line to be clear - My conclusion, if any, is that the huge disparity cannot be attributed to management, a 6.7% lag from the S&P return to what the average investor sees likely comes from bad trading. To the comments by Dave, we have a manager that consistently beats the market over any 2-3 year period. You have been with him 30 years and are clearly smiling about your relationship and investing decision. Yet, he still has flows in and out. People buy at the top when reading how good he is, and selling right after a 30% drop even when he actually beat by dropping just 22%. By getting in and out, he has a set of clients with a 30 year record of 6% returns, while you have just over 11%. This paragraph speaks to the behavior of the investor, not managed vs indexed. |
Where to Park Proceeds from House Sale for 2-5 Years? | Individual municipal bonds (not a fund) that will come to term in 2017 from your state. This satisfies 1, 2, 4 and 5. It doesn't satisfy #2. These are not insured, and there can be details in each state about whether the municipal bonds are backed up by state general revenues in the event of a municipal bankruptcy; there are two general kinds, "general obligation" backed by the political will to raise taxes if needed; and "revenue bonds" backed by cash flow such as toll revenue, water utility bills and so forth. Municipal bankruptcies are rare but not impossible. http://www.bankrate.com/finance/investing/avoid-municipal-bonds-that-default-2.aspx |
How to account for personal baby sitter? | You should check several things: How your business can deduct your child care expenses is beyond me. If your mother-in-law starts a business as a neighborhood babysitter, she might get some deductions for her related expenses though. |
What cost basis do I report on the 1099? | You wouldn't fill out a 1099, your employer would or possibly whoever manages the stock account. The 1099-B imported from E-Trade says I had a transaction with sell price ~$4,500. Yes. You sold ~$4500 of stock to pay income taxes. Both the cost basis and the sale price would probably be ~$4500, so no capital gain. This is because you received and sold the stock at the same time. If they waited a little, you could have had a small gain or loss. The remainder of the stock has a cost basis of ~$5500. There are at least two transactions here. In the future you may sell the remaining stock. It has a cost basis of ~$5500. Sale price of course unknown until then. You may break that into different pieces. So you might sell $500 of cost basis for $1000 with a ~$500 capital gain. Then later sell the remainder for $15,000 for a capital gain of ~$10,000. |
What is the point of owning a stock without dividends if it cannot be resold? | Shares often come associated with a set of rights, such as ability to vote in the outcome of the company. Some shares do not have this right, however. With your ability to vote in the outcome of the company, you could help dictate that the company paid dividends at a point in time. Or many other varieties of outcomes. Also, if there were any liquidity events due to demand of the shares, this is typically at a much higher price than the shares are now when the company is private/closely held. |
When does Ontario's HST come into effect? | In general you must charge HST on and after July 1, 2010. However, in the case of delivered sales, you must charge HST if the transfer of goods will happen on or after July 1,2010. Example: A person comes into my hypothetical store on June 29, 2010 and buys a couch. They opt to have it delivered by my truck on July 2, 2010. I should charge HST on this purchase, not GST/PST. References: |
Extra cash - go towards mortgage, or stock? | It's six of one a half dozen of another. Investing the cash is a little more risky. You know exactly what you'll get by paying down your mortgage. If you have a solid emergency fund it's probably most advisable to pay down your mortgage. If your mortgage is 3% and your investment makes 3.5% you're talking about a taxable gain of 0.5% on the additional cash. Is that worth it to you? Sure, the S&P has been on a tear but remember, past results are not a guarantee of future performance. |
Taxes on selling stock | @BlackJack does a good answer of addressing the gains and when you are taxed on them and at what kind of rate. Money held in a brokerage account will usually be in a money-market fund, so you would own taxes on the interest it earned. There is one important consideration that must be understood for capitol Losses. This is called the Wash Sale Rule. This rule comes into affect if you sell a stock at a LOSS, and buy shares of the same stock within 30 days (before or after) the sale. A common tactic used to minimize taxes paid is to 'capture losses' when they occur, since these can be used to offset gains and lower your taxes. This is normally done by selling a stock in which you have a LOSS, and then either buying another similar stock, or waiting and buying back the stock you sold. However, if you are intending to buy back the same stock, you must not 'trigger' the Wash Sale Rule or you are forbidden to take the loss. Examples. Lets presume you own 1000 shares of a stock and it's trading 25% below where you bought it, and you want to capture the loss to use on your taxes. This can be a very important consideration if trading index ETF's if you have a loss in something like a S&P500 ETF, you would likely incur a wash sale if you sold it and bought a different S&P500 ETF from another company since they are effectively the same thing. OTOH, if you sold an S&P500 ETF and bought something like a 'viper''total stock market' ETF it should be different enough to not trigger the wash sale rule. If you are trying to minimize the taxes you pay on stocks, there are basically two rules to follow. 1) When a gain is involved, hold things at least a year before selling, if at all possible. 2) Capture losses when they occur and use to offset gains, but be sure not to trigger the wash sale rule when doing so. |
Should I participate in a 401k if there is no company match? | I believe @Dilip addressed your question alread, I am going to focus on your second question: What are the criteria one should use for estimating the worth of the situation? The criteria are: I hope this helps. |
What could be the harm in sharing my American Express statements online? | As a person who has had several part time assistants in the past I will offer you a simple piece of advise that should apply regardless of what country the assistant is located. If you have an assistant, personal or business, virtual or otherwise, and you don't trust that person with this type of information, get a different assistant. An assistant is someone who is supposed to make your life easier by off loading work. Modifying your records before sending them every month sounds like you are creating more work for yourself not less. Either take the leap of faith to trust your assistant or go somewhere else. An assistant that you feel you have to edit crucial information from is less than useful. That being said, there is no fundamental reason to believe that an operation in the Philippines or anywhere else is any more or less trustworthy than an operation in your native country. However, what is at issue is the legal framework around your relationship and in particular your recourse if something goes wrong. If you and your virtual assistant are both located in the US you would have an easier time collecting damages should something go wrong. I suggest you evaluate your level of comfort for risk vs. cost. If you feel that the risk is too high to use an overseas service versus the savings, then find someone in the states to do this work. Depending on your needs and comfort you might want to seek out a CPA or other licensed/bonded professional. Yes the cost might be higher however you might find that it is worth it for your own piece of mind. As a side note you might even consider finding a local part-time assistant. This can often be more useful than a virtual assistant and may not cost as much as you think. If you can live without someone being bonded. (or are willing to pay for the bonding fee) yourself, depending on your market and needs you may be able to find an existing highly qualified EA or other person that wants some after hours work. If you are in a college town, finance, accounting or legal majors make great assistants. They will usually work a couple hours a week for "beer money", they have flexible schedules and are glad to have something pertinent to their degree to put on their resume when they graduate. Just be prepared to replace them every few years as they move on to real jobs. |
Should I keep most of my banking, credit, and investment accounts at the same bank? | I've had all my account with the same bank for all my life. Generally, the disadvantage is that if I want some kind of product like a credit extension or a mortgage, I have the one bank to go to and if they don't want to help me I'm out of luck. However, occasionally there are also perks like the bank spontaneously offering you increased credit or even a whole line of credit. They can do this because they have your whole history and trust you. |
Reinvesting dividends and capital gains | I have found The DRiP Investing Resource Center to be a useful resource for more information about DRIP investing. Moneypaper.com offers a list of companies offering both direct purchase options and dividend reinvestment plans. For those offering dividend reinvestment plans, but not direct purchase, you have the option of using a service to purchase your first shares to enroll in the DRIP program. The tax paperwork for DRIPs is a pain due to the partial shares purchased over time when you have to figure out your own cost basis upon sale of shares , but a spreadsheet and a FIFO (first in first out) approach makes it not too much of a headache. -MU |
Why is the stock market price for a share always higher than the earnings per share? | First, the earnings are per year, not per quarter. Why would you expect to get a 100% per year return on your money? The earnings can go one of two ways. They can be retained, reinvested in the company, or they can be distributed as a dividend. So, the 'return' on this share is just over 5%, which is competitive with the rate you'd get on fixed investments. It's higher, in fact, as there's the risk that comes with holding the stock. |
Why can I see/trade VIX but not S&P/TSX 60 VIX? | You can trade VXX, but VIX is only an index. http://www.marketwatch.com/investing/stock/VXX?CountryCode=US |
What is a decent rate of return for investing in the markets? | If someone is guaranteeing X%, then clearly you can borrow money for less than X% (otherwise his claim wouldn't be remotely impressive). So why not do that if his 4% is guaranteed? :) Anyway, my answer would be that beating the market as a whole is a "decent" rate of return. I've always used the S&P 500 as a benchmark but you can use other indices or funds. |
Visitor Shopping in the US: Would I get tax refund? Would I have to pay anything upon departure? | The US doesn't have a Value Added Tax, which is the one usually refundable upon departing the country... so sales taxes you pay in this country stay in this country and you don't get a refund. Just remember to treat the tax as an implied part of the price. (And be aware that state and local taxes may vary, so the total price may be higher in one place than in another. New York City adds a few percent on top of the state sales tax, for example.) If you aren't sure how much tax would be, don't be afraid to ask. |
High expense ratio funds - are they worth it? | In almost every circumstance high expense ratios are a bad idea. I would say every circumstance, but I don't want backlash from anyone. There are many other investment companies out there that offer mutual funds for FAR less than 1.5% ratio. I couldn't even imagine paying a 1% expense ratio for a mutual fund. Vanguard offers mutual funds that are significantly lower, on average, than the industry. Certainly MUCH lower than 1.5%, but then again I'm not sure what mutual funds you have, stock, bonds, etc. Here is a list of all Vanguard's mutual funds. I honestly like the company a lot, many people haven't heard of them because they don't spend nearly as much money on advertisements or a flashy website - but they have extremely low expense ratios. You can buy into many of their mutual funds with a 0.10%-0.20% expense ratio. Some are higher, but certainly not even close to 1.5%. I don't believe any of them are even half of that. Also, if you were referring to ETF's when you mentioned Index Fund (assuming that since you have ETFs in your tag), then 0.20% for ETF's is steep, check out some identical ETFs on Vanguard. I am not a Vanguard employee soliciting their service to you. I'm just trying to pass on good information to another investor. I believe you can buy vanguard funds through other investment companies, like Fidelity, for a good price, but I prefer to go through them. |
Sage Instant Accounts or Quickbooks? | The company I work with uses Intuit QuickBooks Online and have had zero problems with it. The functionality is effective and it fits the size of our company as well. (Not huge, but I wouldn't consider it a 'small business') Also, you can try a 30 day free trial. QuickBooks Simple Start focuses on small business accounting, so for this reason it has a cleaner interface and is simple to use. QuickBooks Simple Start compared to Quicken Home This article doesn't exactly have a bright light shining on Quickbooks, but I think it's fair to show you other alternatives: http://www.pcmag.com/article2/0,2817,2382514,00.asp [Note that it is from 2011] |
Home owners association for houses, pro/cons | I think it depends a lot on your idea of how you should relate to your neighbors. Personally, I think that I should be allowed to do just about whatever I want with my property, and I grant my neighbor the same right. If my neighbor wants to paint his house purple with orange stripes and fill his front lawn with pink flamingos, I think that's his right. If I don't like it, I don't have to look at his house. (I would draw the line at things that I cannot avoid by simply looking the other way, like running jet engines in his back yard at 2 in the morning, as I could not avoid the noise. Or dumping toxic waste on the street, as it will cause health problems. Etc.) Others think it IS their business what their neighbor does with his property and want to be able to control it. They want someone who has the authority to force everyone in the neighborhood to paint their house in colors deemed acceptable, to meet certain requirements for yard work. And that's what Home Owners Associations are for: to require that everyone in the neighborhood maintain their property according to a standard set by the HOA, which should theoretically represent the wishes of the majority. Of course the price you pay for giving you the right to tell your neighbor what kind of fence he is allowed to have is that now your neighbors can tell you what kind of fence you can have. Advocates of HOAs often say that they are necessary to protect property values. Personally I think this is something of a circular argument: I must have the right to prevent my neighbor from doing something that, in my opinion, makes his house ugly, not because I necessarily have no choice but to stare out my window at his house all day and be repulsed by it, but because someday I may want to sell my house to someone who will have no choice but to stare out the window at his house all day and be repulsed by it and so will not want to buy my house. Of course if we all just minded our own business, this wouldn't be an issue. Okay, this was pretty much an anti-HOA post, but I did TRY to state the other side of it. |
How to make an investment in a single company's stock while remaining market-neutral? | For the type of market neutrality you desire, free from crash risk, it's best to hedge the shares with covered calls when implied volatility is expensive and puts when implied volatility is cheap with the nearest at the money expirations. A put only strategy can be very expensive and should only be used with the longest term options available since they can cost many tens of % per year. Securities become almost perfectly correlated during a crash; therefore, market crash risk of one security is essentially equal to the market crash risk, so hedging the security itself makes a position market neutral for crash risk. This strategy will have intermittent opportunity cost risk in the form of slower returns during market expansion to pay for smaller losses during a crash; however, the expected long run return hedged this way should be greater than the underlying's expected long run return with less volatility. |
What happens to my savings if my country defaults or restructures its debt? | The danger to your savings depends on how much sovereign debt your bank is holding. If the government defaults then the bank - if it is holding a lot of sovereign debt - could be short funds and not able to meet its obligations. I believe default is the best option for the Euro long term but it will be painful in the short term. Yes, historically governments have shut down banks to prevent people from withdrawing their money in times of crisis. See Argentina circa 2001 or US during Great Depression. The government prevented people from withdrawing their money and people could do nothing while their money rapidly lost value. (See the emergency banking act where Title I, Section 4 authorizes the US president:"To make it illegal for a bank to do business during a national emergency (per section 2) without the approval of the President." FDR declared a banking holiday four days before the act was approved by Congress. This documentary on the crisis in Argentina follows a woman as she tries to withdraw her savings from her bank but the government has prevented her from withdrawing her money.) If the printing press is chosen to avoid default then this will allow banks and governments to meet their obligations. This, however, comes at the cost of a seriously debased euro (i.e. higher prices). The euro could then soon become a hot potato as everyone tries to get rid of them before the ECB prints more. The US dollar could meet the same fate. What can you do to avert these risks? Yes, you could exchange into another currency. Unfortunately the printing presses of most of the major central banks today are in overdrive. This may preserve your savings temporarily. I would purchase some gold or silver coins and keep them in your possession. This isolates you from the banking system and gold and silver have value anywhere you go. The coins are also portable in case things really start to get interesting. Attempt to purchase the coins with cash so there is no record of the purchase. This may not be possible. |
How can I build up my credit history when I have nearly none | You're going to have a huge problem getting approved for anything as long as you have an unpaid bill on your report. Pay it and make sure its reported as paid in full - ASAP. Once that settled, your credit will start to improve slowly. Can't do anything about that, it will take time. You can make the situation improve a bit faster by lending money to yourself and having it reported regularly on your report. How? Easy. Get a secured credit card. What does it mean? You put X amount of money in a CD and the bank will issue you a credit card secured by that CD. Your credit line will be based on the amount in that CD, and you'll probably pay some fees to the bank for the service (~$20-50/year, shop around). You might get lucky and find a secured card without fees, if you look hard enough. Secured cards are reported as revolving credit (just as any other credit card) and are easy to get because the bank doesn't take the risk - you do. If you default on your payments - your CD goes to cover the debt, and the card gets cancelled. But make absolutely sure that you do not default. Charge between 10% and 30% of the credit limit each month, not more. Pay the balance shown on your credit card statement in full every month and by the due date shown on your monthly statement. It will take a while, but you would typically start noticing the improvement within ~6-12 months. Stop applying for stuff. Not store cards, not car loans, you're not going to get anything, and will just keep dragging your scores down. Each time you have a pull on your report, the score goes down. A lot of pulls, frequent pulls - the score goes down a lot. Lenders can see when one is desperate, and no-one wants to lend money to desperate people. Optimally lenders want to lend money to people who doesn't need loans, but in order to keep the business running they'll settle for slightly less - people who don't usually need loans, and pay the loans they do have on time. You fail on both, as you're desperate for a loan and you have unpaid bills on your report. |
Buying my first car out of college | Read "Stop Acting Rich" by Dr Thomas Stanley. I'm concerned that even before you've earned your first paycheck you want a flashy car. $4800/yr on $63K/yr income is just about half what I'd recommend to someone who starts working. 10% is the minimum, if and only if, the employer matches 5, for a total 15% saved. Do it in a pretax account and when you go back to grad school convert to Roth. |
Why does low interest rate prevent bankruptcy and foreclosure? | Most of the bankruptcy is due to taking [or building over a period of time] a loan that one cannot service, if the interest rates rise, then the amount of money to repay the loan increases, when one doesnt pay the revised amount and keeps paying less, the over all debt keeps shooting through the roof ... a lower interest rate means that one can continue to pay the same amount ... and few missed payments do not cause as much as damage as it does when the rates are high. |
Could there be an interest for a company to make their Share price fall? | Not directly Nintendo, but: A company would want its share price to be high if it wants to sell its stock, e.g. on IPO or on subsequent offerings. However, if they want to buy back some shares, it would be in their interest to get more stock for the buck. There may of course be derivative values associated with a high share price, e.g. if they bet on the price or have agreements with investors for particular milestones to be reached. Employees might hold shares and be motivated by share price increases, so a decrease may not be desired, unless they are into some kind of insider trading (buy low, sell high). And last, over-valued share prices may undermine trust in a company, and failing to inform shareholders sufficiently may be outright illegal. Besides those reasons related to law, funding, sales, public relations and company image, companies should be pretty much independent from their own share prices, in contrast to share distribution. |
Vanguard Target Retirement Fund vs. Similar ETF Distribution (w/ REIT) | Your approach sounds solid to me. Alternatively, if (as appears to be the case) then you might want to consider devoting your tax-advantaged accounts to tax-inefficient investments, such as REITs and high-yield bond funds. That way your investments that generate non-capital-gain (i.e. tax-expensive) income are safe from the IRS until retirement (or forever). And your investments that generate only capital gains income are safe until you sell them (and then they're tax-cheap anyway). Of course, since there aren't really that many tax-expensive investment vehicles (especially not for a young person), you may still have room in your retirement accounts after allocating all the money you feel comfortable putting into REITs and junk bonds. In that case, the article I linked above ranks investment types by tax-efficiency so you can figure out the next best thing to put into your IRA, then the next, etc. |
What is the “Bernanke Twist” and “Operation Twist”? What exactly does it do? | So "Operation Twist" is actually a pretty simple concept. Here's the break down: The Fed sells short-term treasury bonds that it already holds on its books. Short-term treasury bonds refer to - bonds that mature in less than three years. Then: Uses that money to buy long term treasury bonds. Long-term treasury bonds refer to - bonds that mature in six to 30 years The reason: The fed buys these longer-term treasuries to lower longer-term interest rates and encourage more borrowing and spending. Diving deeper into how it works: So the Fed can easily determine short-term rates by using the Federal funds rate this rate has a direct effect on the following: However this does not play a direct role in influencing the rate of long-term loans (what you might pay on a 30-year fixed mortgage). Instead, long-term rates are determined by investors who buy and sell bonds in the bond market, which changes daily. These bond yields fluctuate depending on the health of the economy and inflation. However, the Fed funds rate does play an indirect role in these rates. So now that we know a little more about what effects what rate, why does lower long-term rates in treasuries influence my 30yr fixed mortgage? Well when you are looking for a loan you are entering a market and competing against other people, by people I mean anyone looking for money (e.g: my grandmother, companies, or the US government). The bank that lends you money has to decide weather the deal you are offering them is better then another deal on the market. If the risk of lending to one person is the same as the risk of lending to another, the bank will make whichever loan yields the higher interest rate. The U.S. government is considered a very safe borrower, so much so that government bonds are considered almost “risk free”, but because of the lower risk the rate of return is lower. So now the bank has to factor in this risk and make its decision weather to lend you money, or the government. So, if the government were to go to the market and buy its own long-term bonds it is adding demand in the market causing the price of the bond to rise in effect lowering the interest rate (when price goes up, yield goes down). So when you go back and ask for a loan it has to re-evaluate and decide "Is it worth giving this money to Joe McFreeBeer instead and collecting a higher yield?" (After all, Joe McFreeBeer is a nice guy). Here's an example: Lets say the US has a rating of 10 out of 10 and its bonds pay a 2% yield. Now lets say for each lower mark in rating the bank will lend at a minimum of 1% higher and your rating is 8 of 10. So if you go to market, the lowest rate you can get will be 4%. Now lets say price rises on the US treasury and causes the rate to go down by 1%. In this scenario you will now be able to get a loan for 3% and someone with a rating of 7 of 10 would be able to get that 4% loan. Here's some more info and explinations: Why is the Government Buying Long-Term Bonds? What Is 'Operation Twist'? A Q&A on US Fed Program Federal Reserve for Beginners Federal Open Market Committee |
Should I sell my individual stocks and buy a mutual fund | I would normally take a cautious, "it depends" approach to answering a question like this, but instead I'm going to give you a blunt opinionated answer based solely on what I would do: Even the crap. Get rid of them and get into the boring low fee mutual funds. I was in a similar situation a few years ago, almost. My retirement accounts were already in funds but my brokerage account was all individual stocks. I decided I didn't really know what I was doing despite being up by 30+% (I recognize that it was mostly due to the market itself being up, I was lucky basically). The way I cashed out was not to sell all at once. I just set up trailing stops on all of them and waited until they hit the stops. The basic idea was that if the market kept going up, the point at which they got sold also went up (it was like a 10% trail I think), and once things started to turn for that stock, they would sell automatically. Sure I sold some at very temporary dips so I missed out on some gains but that's always a risk with a trailing stop and I really didn't care at that point. If I had to do it again, I might forget all that and just sell all at once. But I feel a lot better not being in individual stocks. |
How do I fold side-income into our budget so my husband doesn't know? | These earnings will likely have tax implications, depending on where in the world you are. So, your budget concerns not nearly as important as having an honest conversation about money with your husband. Better for him to be mad about the truth than to continue the lie, and potentially have this become a much larger legal, not just marital, problem. |
What's the most conservative split of financial assets for my portfolio in today's market? | If you can afford the time and are looking for more deep, and fun, investment tips, check out http://gurufocus.com. Great for more fundamental analysis of "Intelligent Investor" type Benjamin Graham-style businesses. No use scatter-shooting the stock exchange hoping to find good value businesses. Even blue-chips have an increasingly uncertain future (except IMHO certain world dominators like KO, WMT, XO and MCD). |
Pay off entire mortgage or put into investments | At the moment the interest rate... implies a variable rate mortgage. I believe rates are only going to go up from here. So, if I were in your position, I would pay off the mortgage first. If you don't have 3-6 months in savings for an emergency, I would invest that much money in low risk investments. Anything remaining I would invest in a balanced portfolio of mutual funds. The biggest benefit to this is the flexibility it gives you. Not being burdened by a monthly mortgage frees you up to invest. This may be in your stock portfolio each month or it may be in your community or charitable causes. You have financial margin. |
Is selling only shares you bought with margin on a margin/unsettled cash purchase free ride? | I'm not 100% sure, but I don't think it would be considered a free ride. The idea of a free ride is that you are engaging in a transaction when you do not actually have the money available to cover it, since the broker is technically giving you a 3 day loan whenever you purchase your stock (3 day rule to settle.) However, if you are using a margin account, and you have enough credit available, then you are not actually using unsettled assets, but rather an additional line of credit which was granted to you. You would just need to make sure that your total transactions are less than your purchasing power. That's my take on it anyway. I hope that helps, and hopefully someone can confirm or reject what I have said. |
End-of-season car sales? | Manufacturers sometimes give incentives to car dealers to ensure that the prior year models are sold out before the year is up. However, dealers are usually pretty smart on only ordering the cars they know they can sell before this happens. Also, manufacturers are usually pretty good about only producing enough vehicles to cover demand. Honestly, you aren't likely to see these incentives materialize unless the manufacturer really screwed up. If that happens then three things occur. First is that manufacturers give a hidden incentive to the dealers. Dealers won't publicize this, even internally. If the cars are still not moving after a month, then the dealers will tell the salespeople that those cars have a specific "bonus" on them. If those cars still don't sell, then the bonus inflates quite a bit and dealers begin advertising that car at a deep discount on the radio. It's pretty much guaranteed to sell at that point. Barring those circumstances, the deal you get on a brand new car, late in the model year, is likely to be the same you could have gotten early in the model year. Honestly, if you want the best deal possible, look at the date of the inspection sticker on the car. If it is close to the 3 month mark then the dealer will bend over backwards to sell the car as the finance costs are racking up on it. They'll often sell that one at heavy discounts. |
Are the stocks of competitor companies negatively correlated? | Not especially. It depends on why sales have changed. If it's just consumer demand, that affects everyone in parallel rather than pushing in opposite direactions. If it's changes other than sales, that may have no effect on other companies. If it's because someone introduced the next must-have-it device and they're selling rapidly and drawing customers from the competing brands, maybe. And that's all neglecting the fact that this may already have been incorporated into the competitor's share price long ago, in anticipation of this news. Sorry, but the market just ain't simple. |
Take car loan out of mortgage to improve equity | I guess I don't understand how you figure that taking out a car loan for $20k will result in adding $20k in equity. A car loan is a liability, not an asset like your $100k in cash. Besides, you don't get a dollar-for-dollar consideration when figuring a car's value against the loan it is encumbered by. In other words, the car is only worth what someone's willing to pay for it, not what your loan amount on it is. Remember that taking on a loan will increase your debt-to-income ratio, which is always a factor when trying to obtain a mortgage. At the same time, taking on new debt just prior to shopping for a mortgage could make it more difficult to find a lender. Every time a credit report (hard inquiry) is run on you, it temporarily impacts your credit score. The only exception to this rule is when it comes to mortgages. In the U.S., the way it works is that once you start shopping for a mortgage with lenders, for the next 30 days, additional inquiries into your credit report for purposes of mortgage funding do not count against your credit score, so it's a "freebie" in a way. You can't use this to shop for any other kind of credit, but the purpose is to allow you a chance to shop for the best mortgage rate you can get without adversely impacting your credit. In the end, my advice is to stop looking at how much house you can buy, and instead focus on a house with payments you can live with and afford. Trying to buy the most house based on what someone's willing to lend you leaves no room in the near-term for being able to borrow if the property has some repair needs, you want to furnish/upgrade it, or for any other unanticipated need which may arise that requires credit. Don't paint yourself into a corner. Just because you can borrow big doesn't mean you should borrow big. I hope this helps. Good luck! |
Standardized loan options to purchase employee stock options | What you want is a cashless transaction. It's part of the normal process. My employer gives me 1000 options at $1, I never need to come up with the money, the shares are bought and sold in one set of transactions, and if the stock is worth $10, I see $9000 less tax withholding, hit the account. No need for me to come up with that $1000. |
Do I pay a zero % loan before another to clear both loans faster? | Allen, welcome to Money.SE. You've stumbled into the issue of Debt Snowball, which is the "low balance" method of paying off debt. The other being "high interest." I absolutely agree that when one has a pile of cards, say a dozen, there is a psychological benefit to paying off the low balances and knocking off card after card. I am not dismissive of that motivation. Personal Finance has that first word, personal, and one size rarely fits all. For those who are numbers-oriented, it's worth doing the math, a simple spreadsheet showing the cost of the DS vs paying by rate. If that cost is even a couple hundred dollars, I'll still concede that one less payment, envelope, stamp, etc, favors the DS method. On the other hand, there's the debt so large that the best payoff is 2 or 3 years away. During that time, $10000 paid toward the 24% card is saving you $2400/yr vs the $500 if paid toward 5% debt. Hard core DSers don't even want to discuss the numbers, strangely enough. In your case, you don't have a pile of anything. The mortgage isn't even up for discussion. You have just 2 car loans. Send the $11,000 to the $19K loan carrying the 2.5%. This will save you $500 over the next 2 years vs paying the zero loan down. Once you've done that, the remaining $8000 will become your lowest balance, and you should flip to the Debt Snowball method, which will keep you paying that debt off. DS is a tool that should be pulled out for the masses, the radio audience that The David (Dave Ramsey, radio show host) appeals to. They may comprise the majority of those with high credit card debt, and have greatest success using this method. But, you exhibit none of their symptoms, and are best served by the math. By bringing up the topic here, you've found yourself in the same situation as the guy who happens to order a white wine at a wedding, and finds his Mormon cousin offering to take him to an AA meeting the next day. In past articles on this decision, I've referenced a spreadsheet one can download. It offers an easy way to see your choice without writing your own excel doc. For the situation described here, the low balance total interest is $546 vs $192 for the higher interest. Not quite the $500 difference I estimated. The $350 difference is low due to the small rate difference and relatively short payoffs. In my opinion, knowledge is power, and you can decide either way. What's important is that if you pay off the zero interest first, you can say "I knew it was a $350 difference, but I'd rather have just one outstanding loan for the remain time." My issue with DS is when it's preached like a religion, and followers are told to not even run the numbers. I wrote an article, Thinking about Dave Ramsey a number of years back, but the topic never gets old. |
Possibility to buy index funds and individual funds in a Canadian TFSA | This page from the CRA website details the types of investments you can hold in a TFSA. You can hold individual shares, including ETFs, traded on any "designated stock exchange" in addition to the other types of investment you have listed. Here is a list of designated stock exchanges provided by the Department of Finance. As you can see, it includes pretty well every major stock exchange in the developed world. If your bank's TFSA only offers "mutual funds, GICs and saving deposits" then you need to open a TFSA with a different bank or a stock broking company with an execution only service that offers TFSA accounts. Almost all of the big banks will do this. I use Scotia iTrade, HSBC Invest Direct, and TD, though my TFSA's are all with HSBC currently. You will simply provide them with details of your bank account in order to facilitate money transfers/TFSA contributions. Since purchasing foreign shares involves changing your Canadian dollars into a foreign currency, one thing to watch out for when purchasing foreign shares is the potential for high foreign exchange spreads. They can be excessive in proportion to the investment being made. My experience is that HSBC offers by far the best spreads on FX, but you need to exchange a minimum of $10,000 in order to obtain a decent spread (typically between 0.25% and 0.5%). You may also wish to note that you can buy unhedged ETFs for the US and European markets on the Toronto exchange. This means you are paying next to nothing on the spread, though you obviously are still carrying the currency risk. For example, an unhedged S&P500 trades under the code ZSP (BMO unhedged) or XUS (iShares unhedged). In addition, it is important to consider that commissions for trades on foreign markets may be much higher than those on a Canadian exchange. This is not always the case. HSBC charge me a flat rate of $6.88 for both Toronto and New York trades, but for London they would charge up to 0.5% depending on the size of the trade. Some foreign exchanges carry additional trading costs. For example, London has a 0.5% stamp duty on purchases. EDIT One final thing worth mentioning is that, in my experience, holding US securities means that you will be required to register with the US tax authorities and with those US exchanges upon which you are trading. This just means fill out a number of different forms which will be provided by your stock broker. Exchange registrations can be done electronically, however US tax authority registration must be submitted in writing. Dividends you receive will be net of US withholding taxes. I am not aware of any capital gains reporting requirements to US authorities. |
Joint Account for Common Earnings | Do not use a shared bank account. One of you can cash/deposit the check in your personal account and then either pay the others in the group cash or write them a check. You open yourself up to many, many problems sharing a bank account and/or money. Treat it like a business as far as income goes, but I would not recommend any type of formal business, LLC, partnership, sole proprietorship, etc. For federal taxes, you just keep track of how much "you" personally are paid and report that at the end of the year as income, most likely on a 1040EZ 1040SE, along with any other income you have. |
Personal finance web service with account syncing in Germany | I don't think there is a law against it. For example comdirect offers multi banking so you can access your accounts from other banks through the comdirect website. My guess would be: Germans are very conservative when it comes to their money (preferring cash above cards, using "safe" low interest saving accounts instead of stocks) so there just might be no market for such a tool. There are desktop apps with bank syncing that offer different levels of personal finance management. Some I know are MoneyMoney, outbank, numbrs, GNUCash and StarMoney. |
How can online trading platforms be trustworthly? | Most investors vote with their wallets. I expect ZERO glitches from a trading platform. If someone was actually causing trades to fail maliciously, their reputation would immediately suffer and their business would dry up over night. You can't just play dumb and not respond to a button click. I can watch and replay the traffic I'm sending out to their server and see if they are responding to verify this. If their system goes down and has no redundancy, that is their fault and opens them to lawsuits. No trading platform could withstand scrutiny from its users if it was dishonest in the scenario you imagine. |
How does unemployment insurance work? | Unemployment insurance provides a temporary safety net to workers who lose their jobs by replacing a portion of their salary for certain periods. Each state administers its own unemployment insurance program so some rules may vary from state to state. To receive unemployment insurance payments, you must have lost your job through no fault of your own. If you quit your job or lost it because of poor performance or another justifiable reason, you are not eligible for unemployment insurance benefits. State unemployment insurance programs require claimants to have worked sufficiently before they can claim benefits. As soon as you apply for unemployment insurance, an agency with the state in which you live will verify that you were a victim of a layoff by contacting your previous employer and making sure you lost your job due to lack of work and not an action within your control. After the state verifies you were indeed the victim of a layoff, your weekly payment is calculated. Your payment will be a percentage of what you made in your previous job, generally between 20 percent and 50 percent, depending on your state. Unemployment insurance replaces only a portion of your previous pay because it is intended to pay only for the essentials of living such as food and utilities until you find new employment. Before you begin receiving benefits, you must complete a waiting period of typically one or two weeks. If you find a new job during this period, you will not be eligible for unemployment benefits, even if the job does not pay you as much as your previous job. After the waiting period, you will begin to receive your weekly payments. Employers pay for unemployment insurance through payroll taxes. So, while employees' work and earnings history are important to funding their unemployment benefits, the money does not come from their pay. Employer unemployment insurance contributions depend on several factors, including how many former employees have received benefits. Employers pay taxes on an employee's base wages, which vary by state. California, for example taxes employers on the first $7,000 of an employee's annual earnings, while neighboring Oregon taxes up to $32,000 of wages. Employers must set aside funds each payroll period and then report taxes and pay their states quarterly. States have several categories of tax rates they charge employers. New businesses and those first adding employees pay the "new rate," which is typically lower and geared toward small businesses. Established businesses who haven't paid their taxes recently or properly are usually assessed the "standard rate" --- the highest possible tax rate, which in 2010 ranged from 5.4 percent in several states including Georgia, Hawaii and Alaska to 13.56 percent in Pennsylvania. Businesses in good standing may receive discounts under the "experienced rate." Depending on the number of employees a business has and how many former employees have claimed unemployment, states can give sizable rate reductions. The fewer claims, the lower the rate a business pays in unemployment insurance taxes. As a result of the economic crisis legislation has been passed to extend Unemployment benefits. Regular unemployment benefits are paid for a maximum of 26 weeks in most states. However, additional weeks of extended unemployment benefits are available during times of high unemployment. The unemployment extension legislation passed by Congress in February 2012 changed the way the tiers of Emergency Unemployment Compensation (EUC) are structured. A tier of unemployment is an extension of a certain amount of weeks of unemployment benefits. There are currently four tiers of unemployment benefits. Each tier provides extra weeks of unemployment in addition to basic state unemployment benefits. Emergency Unemployment Compensation (EUC) Tiers June - August 2012: Source and further information can be found here - Unemployment Tiers - About.com Sources: Unemployment Insurance(UI) - US Dept. of Labor How Does Unemployment Insurance Work? - eHow Percentage of Pay That Goes to Unemployment Insurance - eHow Additional Info: You can file for UI over the internet here are some useful resources. OWS Links State Unemployment Offices - About.com How to Apply for Unemployment Over the Internet - eHow |
Optimal way for withdrawing vested company match from my 401k? | You can borrow against a 401k for 5 years. This defers any penalty fees that the IRS mandates. Put the cash back in your 401k within those 5 years. you can also solo administer 401k plans even if you have an unincorporated business, so you can start one of those if you have any other form of cashflow, and there may be a way to get the other plan rolled into your solo one. http://www.irs.gov/publications/p560/ch04.html#en_US_publink10009053 |
Saving $1,000+ per month…what should I do with it? | In your situation I suggest: In terms of what to spend it on, one tax preparer I knew said he would ask his wealthy clients (ones with real net worth) what they spent their money on, and it was almost always travel. We agree, memories from our trips are ones that last a lifetime. I can't say much else you buy gives you the same long term payback in your personal life. |
Home Renovations are expensive.. Should I only pay cash for them? | Is it a safety thing? If the heat pump goes out you replace it immediately, if your floor looks bad but you aren't tripping, I would suggest saving. Use the extra time to find a great deal and educate yourself on your options. Maybe even take a class and learn to do it yourself. In these rough times, anything I can save for and pay cash I would. The exception is if you can finance with 0% interest for a period of time and you have enough money to pay that off. The last consideration I can think of is if you plan to sell the home soon? For that you might be getting more value than the loan and a real estate agent would be probably know best. |
What are the common income tax deductions used by “rich” salaried households? | As was stated, households earning over $250k/yr don't all get their income one way. Below that threshold, even in the six figure range, most households are in one of two categories; salary/wage/commission workers, and those living off of nest eggs/entitlements (retired, disabled, welfare). Above $250k, though, are a lot of disparate types of incomes: Now, you specifically mentioned wage earners above $250k. Wage earners typically have the same "tax havens" that most of us do; the difference is usually that they are better able to make use of them: In other words, there are many ways for a high-end wage earner to live the good life and write a lot of it off. |
Why does a stock's price fluctuate so often, even when fresh news isn't available? | News about a company is not the only thing that affects its stock's price. There is also supply and demand. That, of course, is influenced by news, but it is not the only actor. An insider, with a large position in their company's stock, may want to diversify his overall portfolio and thus need to sell a large amount of stock. That may be significant enough to increase supply and likely reduce the stock's price somewhat. That brings me to another influence on stock price: perception. Executives, and other insiders with large positions in their company's stock, have to be careful about how and when they sell some of that stock as to not worry the markets. Many investors watch insider selling to gauge the health of the company. Which brings me to another important point. There are many things that may be considered news which is material to a certain company and its stock. It is not just quarterly filings, earnings reports and such. There is also news related to competitors, news about the economy or a certain sector, news about some weather event that affects a major supplier, news about a major earthquake that will impact the economy of a nation which can then have knock-on effects to other economies, etc... There are also a lot of investors with varying needs which will influence supply and demand. An institutional investor, needing to diversify, may reduce their position in a stock and thus increase supply enough that it impacts the stock's price. Meanwhile, individual investors will make their transactions at varying times during the day. In the aggregate, that may have significant impacts on supply and demand. The overall point being that there are a lot of inputs and a lot of actors in a complicated system. Even if you focus just on news, there are many things that fall into that category. News does not come out at regular intervals and it does not necessarily spread evenly. That alone could make for a highly variable environment. |
What differentiates index funds and ETFs? | Index Funds & ETFs, if they are tracking the same index, will be the same in an ideal world. The difference would be because of the following factors: Expense ratio: i.e. the expense the funds charge. This varies and hence it would lead to a difference in performance. Tracking error: this means that there is a small percentage of error between the actual index composition and the fund composition. This is due to various reasons. Effectively this would result in the difference between values. Demand / Supply: with ETFs, the fund is traded on stock exchanges like a stock. If the general feeling is that the index is rising, it could lead to an increase in the price of the ETF. Index funds on the other hand would remain the same for the day and are less liquid. This results in a price increase / decrease depending on the market. The above explains the reason for the difference. Regarding which one to buy, one would need to consider other factors like: a) How easy is it to buy ETFs? Do you already hold Demat A/C & access to brokers to help you conduct the transaction or do you need to open an additional account at some cost. b) Normally funds do not need any account, but are you OK with less liquidity as it would take more time to redeem funds. |
What are the pitfalls of loaning money to friends or family? Is there a right way to do it? | There are two levels to consider here: That said, before loaning/giving anyone money ask yourself if it is good for them. If they have problems managing their money, or holding down a job, and you give them money, they are just going to come back for more later. In this type of situation, you shouldn't give/loan them money. But on the other hand, if a friend or family member has hit a rough patch and you know they are the kind of person that will be on their feet again soon, and you have nothing to lose, give them the money. |
What is a reasonable salary for the owner and sole member of a small S-Corp? | The answer depends on this: If you had to hire someone to do what you are doing in the S-corp, what would you pay them? If you are doing semi-unskilled work part-time, then $20k might be reasonable. If you are a professional working full time, it's too low. Don't forget that, in addition to "billable" work, you are also doing office tasks, such as invoicing and bookkeeping, that the IRS will also want to see you getting paid for. There was an important court ruling on this subject recently: Watson v. Commissioner. Watson owned an S-Corp where he was the sole employee. The S-Corp itself was a 25% owner in a very successful accounting firm that Watson worked through. All of the revenue that Watson generated at the accounting firm was paid to the S-Corp, which then paid Watson through salary and distributions. Watson was paying himself $24k a year in salary and taking over $175k a year in distributions. For comparison, even first-year accountants at the firm were making more than $24k a year in salary. The IRS determined that this salary amount was too low. To determine an appropriate amount for Watson's salary, the IRS did a study of the salaries of peers in firms of the same size as the firm Watson was working with, taking into account that owners of firms earn a higher salary than non-owners. The number that the IRS arrived at was $93k. Watson was allowed to take the rest ($80k+ each year) as distributions. Again, this number was based on a study of the salaries of peers. It was far short of the $200k+ that the S-Corp was pulling in from the accounting firm. Clearly, Watson was paying himself far too low of a salary. But even at this extreme example, where Watson's S-Corp was directly getting all of its revenue from one accounting firm in which Watson was an owner, the IRS still did not conclude that all of the revenue should have been salary and subject to payroll taxes. You should ask an accountant or attorney for advice. They can help you determine an appropriate amount for your salary. Don't be afraid of an audit, but make sure that you can defend your choices if you do get audited. If your choices are based on professional advice, that will help your case. See these articles for more information: |
When a company liquidates, are earlier investors paid back first? | This would be governed by bankruptcy law... there is no reason a healthy company would take such action. This would be a long drawn process generally amongst debtor the taxes have higher claim, then Sunday debtors (payable), then bank loans... This is followed by loan raised by company deposits then debentures... even among share holders there can be special shares... More often most shares are equal and the balance is distributed to all. |
Why are interbank payment (settlement) systems closed for weekends and holidays? | The second part of your question is the easiest to answer, how much manual work is involved in settlement processes? Payment systems which handle low value (i.e. high volume) transactions work on the basis of net settlement. Each of the individual payments are netted across all of the participant banks, so that only one "real" payment is made by each bank. Some days banks will receive money, others they will pay money. This is arbitrary and depends on whether their outbound payments exceed their inbound payments for that day. The payment system will notify each Bank how much it owes/will receive for the day. The money is then transferred between all of the banks simultaneously by the payment system to remove the risk that some pay and others don't. If you're going to make or receive a very large payment, you're going to want to make certain that its correct. This means that if there's a discrepancy, you need operations people available to find out why its wrong. When dealing with this many payments, answering that question can be hard. Did we miss a payment? Is there a duplicate? Etc. The vast majority of payments will process without any human involvement, but to make the process work, you always need human brains there to fix problems that occur. This brings me to your first question. On every day that settlement happens, a bank will receive (or pay) a very large sum of money. As a settlement bank you must settle that money - the guarantee that every bank will pay is one of the main reasons these systems exist. For settlement to happen, every bank has to agree to participate, and be ready to verify the data on their side and deliver the funds from their account. So there is no particular reason that this doesn't happen on weekends and holidays other than history. But for any payment system to change, it would require the support of (at least) a majority of participants to pay staff to manage the settlement process on weekends. This would increase costs for banks, but the benefits would only really be for you and me (if at all). That means it's unlikely to happen unless a government forces the issue. |
Why do stock prices of retailers not surge during the holidays? | That's a pretty good question for a six-year-old! In addition to the good answers which point out that expectations are priced in, let's deny the premises of the question: Sales do not increase the value of a company; a company could be, for example, losing money on every sale. Share prices are (at least in theory) correlated with profits. So let's suppose that company X is unprofitable 320 days a year and is relying upon sales in late November and December to be in the black for the year. (Hence "black Friday".) Carefully examine the supposition of this scenario: we have a company that is so unprofitable that it must gamble everything on successfully convincing bargain hunting consumers in a weak economy to buy stuff they don't actually need from them and not a competitor. Why would this inspire investor confidence? There are plenty of companies that fail to meet their sales targets at Christmas, for plenty of reasons. |
Why are prices in EUR for consumer items often the same number as original USD price, but the GBP price applies the actual exchange rate? | The simplest answer would be: Because they can. Why charge less for something if people will pay more? One example are Apple products. While there the price number is not exactly the same in EUR and USD, they are so close that, effectively, the EUR product is more expensive. Many things go into a price. There might be reasons for products in the EU being more expensive to produce or distribute. Or people in the EU might be in general more willing to pay more for a certain product. In that case, a company would forgo profits when they offered it cheaper. Also, prices are relative. Is the USD price the "correct" one and the exchange rate should dictate what the EUR price is? Or vice versa? |
Where can I find the dividend history for a stock? | I second @DumbCoder, every company seems to have its own way of displaying the next dividend date and the actual dividend. I keep track of this information and try my best to make it available for free through my little iphone web app here http://divies.nazabe.com |
Is it wise to invest in a stock with a large Div yield? | BHP Billiton has room to answer doubters as commodities rout batters debt notes in part: There has been speculation that the company could cut its shareholder dividend, while Liberum Capital analyst Richard Knights has suggested BHP might look to raise as much as $US10 billion ($14.3 billion) in new equity capital. If the dividend is cut, you won't see 11% and the share price may well decline further. There is a possibility of big losses here given the change in the prices of the products the company sells. To add from another source The only reason BHP trades on a yield of more than 8% is because the market is pricing in a cut to the dividend. According to consensus earnings estimates for 2016 and 2017, earnings per share will be $0.86 and $1.27 respectively. Dividends per share forecasts are $1.83 and $1.81 respectively. |
How can one get their FICO/credit scores for free? (really free) | As of 2014, this answer is deprecated. Read answer here for recent developments up to January 2015. You can get a free credit report yearly, but you don't get your credit score, just the content of your report. This is useful to make sure your credit history is correct, etc. To get that, visit annualcreditreport.com. Another site which will give you your score for free, really free with no strings attached, is creditkarma.com, which gives you your TransUnion credit score and full TransUnion credit report. The site is run by TransUnion and supported via advertising. At this point Equifax and Experian offer similar services via subscription, but not for free. Update 8/14/2015: CreditKarma now offers the Equifax information as part of their service. |
Did my salesman damage my credit? What can I do? | This shows the impact of the inquiries. It's from Credit Karma, and reflects my inquiries over the past two years. In my case, I refinanced 2 properties and the hit is after this fact, so my score at 766 is lower than when approved. You can go to Credit Karma and see how your score was impacted. If in fact the first inquiry did this, you have cause for action. In court, you get more attention by having sufficient specific data to support your claim, including your exact damages. |
Why can't I short a stock that sells for less than $5? Is there another way to “go short” on them? | Timothy Sykes specializes in this type of trade, according to his website. He has some recommendations for brokers that allow shorting low-priced stocks: |
Personal checks instead of business ones | I'll assume you are asking about a check for some kind of work or service that you provided them, that they hired your company to do. No large business will do that. In their records they have a contract with your company to provide services. If they write you a personal check it won't match with the contract, and when the auditors see that they will scream blue murder. Whoever wrote the check will have to prove that you are legitimately the same thing as the company (that doesn't mean taking your word for it). They may also have to show they weren't conspiring with you to commit tax fraud ( that wasn't your intention of course, was it?) . |
Which Earnings Figure for Graham's “Stock Selection for the Defensive Investor”? | In the Income Statement that you've linked to, look for the line labeled "Net Income". That's followed by a line labeled "Preferred Dividends", which is followed by "Income Available to Common Excl. Extra Items" and "Income Available to Common Incl. Extra Items". Those last two are the ones to look at. The key is that these lines reflect income minus dividends paid to preferred stockholders (of which there are none here), and that's income that's available to ordinary shareholders, i.e., "earnings for the common stock". |
Why naked call writing is risky compare to Covered call? | A covered call risks the disparity between the purchase price and the potential forced or "called" sale price less the premium received. So buy a stock for $10.00 believing it will drop you or not rise above $14.00 for a given period of days. You sell a call for a $1.00 agreeing to sell your stock for $14.00 and your wrong...the stock rises and at 14.00 or above during the option period the person who paid you the $1.00 premium gets the stock for a net effective price of $15.00. You have a gain of 5$. Your hypothecated loss is unlimited in that the stock could go to $1mil a share. That loss is an opportunity loss you still had a modest profit in actual $. The naked call is a different beast. you get the 1.00 in commission to sell a stock you don't own but must pay for that right. so lets say you net .75 in commission per share after your sell the option. as long as the stock trades below $14.00 during the period of the option you sold your golden. It rises above the strike price you must now buy that stock at market to fill the order when the counter party choses to exercise the option which results in a REAL loss of 100% of the stocks market price less the .75 a share you made. in the scenarios a 1000 shares that for up $30.00 a share over the strike price make you $5,000 in a covered call and lose you $29,250 in a naked call.Naked calls are speculative. Covered calls are strategic. |
Should an IRA be disclaimed to allow it to be distributed according to a will? | There are two different possible taxes based on various scenarios proposed by the OP or the lawyer who drew up the OP's father's will or the OP's mother. First, there is the estate tax which is paid by the estate of the deceased, and the heirs get what is left. Most estates in the US pay no estate tax whatsoever because most estates are smaller than $5.4M lifetime gift and estate tax exemption. But, for the record, even though IRAs pass from owner to beneficiary independent of whatever the will might say about the disposition of the IRAs, the value of the deceased's IRAs is part of the estate, and if the estate is large enough that estate tax is due and there is not enough money in the rest of the estate to pay the estate tax (e.g. most of the estate value is IRA money and there are no other investments, just a bank account with a small balance), then the executor of the will can petition the probate court to claw back some of the IRA money from the IRA beneficiaries to pay the estate tax due. Second, there is income tax that the estate must pay on income received from the estate's assets, e.g. mutual fund dividends paid between the date of death and the distribution of the assets to the beneficiaries, or income from cashing in IRAs that have the estate as the beneficiary. Now, most of OP's father's estate is in IRAs which have the OP's mother as the primary beneficiary and there are no named secondary beneficiaries. Thus, by default, the estate is the IRA beneficiary should the OP's mother disclaim the IRAs as the lawyer has suggested. As @JoeTaxpayer says in a comment, if the OP's mother disclaims the IRA, then the estate must distribute all the IRA assets to the three beneficiaries by December 31 of the year in which the fifth anniversary of the death occurs. If the estate decides to do this by itself, then the distribution from the IRA to the estate is taxable income to the estate (best avoided if possible because of the high tax rates on trusts). What is commonly done is that before December 31 of the year following the year in which the death occurred, the estate (as the beneficiary) informs the IRA Custodian that the estate's beneficiaries are the surviving spouse (50%), and the two children (25% each) and requests the IRA custodian to divide the IRA assets accordingly and let each beneficiary be responsible for meeting the requirements of the 5-year rule for his/her share. Any assets not distributed in timely fashion are subject to a 50% excise tax as penalty each year until such time as these monies are actually withdrawn explicitly from the IRA (that is, the excise tax is not deducted from the remaining IRA assets; the beneficiary has to pay the excise tax out of pocket). As far as the IRS is concerned, there are no yearly distribution requirements to be met but the IRA Custodial Agreement might have its own rules, and so Publication 590b recommends discussing the distribution requirements for the 5-year rule with the IRA Custodian. The money distributed from the IRA is taxable income to the recipients. In particular, the children cannot roll the money over into another IRA so as to avoid immediate taxation; the spouse might be able to roll over the money into another IRA, but I am not sure about this; Publication 590b is very confusing on this point. All this is assuming that the deceased passed away before well before his 70.5th birthday so that there are no issues with RMDs (the interactions of all the rules in this case is an even bigger can of worms that I will leave to someone else to explicate). On the other hand, if the OP's mother does not disclaim the IRAs, then she, as the surviving spouse, has the option of treating the inherited IRAs as her own IRAs, and she could then name her two children as the beneficiaries of the inherited IRAs when she passes away. Of course, by the same token, she could opt to make someone else the beneficiary (e.g, her children from a previous marriage) or change her mind at any later time and make someone else the beneficiary (e.g. if she remarries, or becomes very fond of the person taking care of her in a nursing home and decides to leave all her assets to this person instead of her children, etc). But even if such disinheritances are unlikely and the children are perfectly happy to wait to inherit till Mom passes away, as JoeTaxpayer points out, by not disclaiming the IRAs, the OP's mother can delay taking distributions from the IRAs till age 70.5, etc. which is also a good option to have. The worst scenario is for the OP's mother to not disclaim the IRAs, cash them in right away (huge income tax whack on her) or at least 50% of them, and gift the OP and his sibling half of what she withdrew (or possibly after taking into account what she had to pay in income tax on the distribution). Gift tax need not be paid by the OP's mother if she files Form 709 and reduces her lifetime combined gift and estate tax exemption, and the OP and his sibling don't owe any tax (income or otherwise) on the gift amount. But, all that money has changed from tax-deferred assets to ordinary assets, and any additional earnings on these assets in the future will be taxable income. So, unless the OP and his sibling need the cash right away (pay off credit card debt, make a downpayment on a house, etc), this is not a good idea at all. |
Is it a good idea to get an unsecured loan to pay off a credit card that won't lower a high rate? | Take the consolidation loan and pay it off. Don't close the card. Opening a new account will have no bearing on your mortgage a year or two down the road. Keep paying on time -- that will make a big difference! JohnFX's suggestion to open a new card and do a transfer is a great idea if you have good credit. Just read the fine print -- most cards charge a 3-5% transfer fee and some cards accrue interest if you don't pay within the promotional period. |
Does it make sense to take out student loans to start an IRA? | Depending on the student loan, this may be improper usage of the funds. I know the federal loans I received years ago were to be used for education related expenses only. I would imagine most, if not all, student loans would have the same restrictions. Bonus Answer: You must have earned income to contribute to an IRA (e.g. money received from working (see IRS Publication 590 for details)). So, if your earmarked money is coming from savings only, then you would not be eligible to contribute. As far as whether you can designate student loans for the educational expenses and then used earned income for an IRA I would imagine that is fine. However, I have not found any documentation to support my assumption. |
What happens to an options contract during an all stock acquisition? | According to this article: With an all-stock merger, the number of shares covered by a call option is changed to adjust for the value of the buyout. The options on the bought-out company will change to options on the buyer stock at the same strike price, but for a different number of shares. Normally, one option is for 100 shares of the underlying stock. For example, company A buys company B, exchanging 1/2 share of A for each share of B. Options purchased on company B stock would change to options on company A, with 50 shares of stock delivered if the option is exercised. This outcome strongly suggests that, in general, holders of options should cash out once the takeover is announced, before the transactions takes place. Since the acquiring company will typically offer a significant premium, this will offer an opportunity for instant profits for call option holders while at the same time being a big negative for put option holders. However, it is possible in some cases where the nominal price of the two companies favours the SML company (ie. the share prices of SML is lower than that of BIG), the holder of a call option may wish to hold onto their options. (And, possibly, conversely for put option holders.) |
How can I get the car refinanced under my name if my girlfriend signed for the loan? | The best solution is to "buy" the car and get your own loan (like @ChrisInEdmonton answered). That being said, my credit union let me add my spouse to a title while I still had a loan for a title filing fee. You may ask the bank that holds the title if they have a provision for adding someone to the title without changing the loan. Total cost to me was an afternoon at the bank and something like $20 or $40 (it's been a while). |
How to decide on limits when purchasing/selling stocks? | You said your strategy was to put it into a index fund. But then you asked about setting stock limits. I'm confused. Funds usually trade at their price at the end of the day, so you shouldn't try to time this at all. Just place your order. If you are buying ETFs, there is going to be so much volume on the market that your small trade is going to have no impact on the price. You should just place a market order. A market order is an order to buy or sell a stock at the current market price. A limit order is an order to buy or sell a security at a specific price. In the US, when you place a trade with any broker, you can either place a limit order or a market order. A market order just fills your order with the next best sellers in line. If you place an order for 100 shares, the sellers willing to sell 100 shares at the lowest price will be matched with your order (sometimes you may get 50 shares at one price and 50 shares at a slightly different price). If your stock has a lot of volatility and you place a market order for a small amount of shares, you will get the best price. If you place a limit order, you specify the price at which you want to buy shares. Your order will then only be filled with sellers willing to sell at that price or lower (i.e. they must be at least as good as you specified). This means you could place an order at a limit that does not get filled (the stock could move in a direction away from your limit price). If you really want to own the stock, you shouldn't use a limit order. You shouldn't only use a limit order if you want to tell your broker "I will only buy this stock at this price or better." p.s. Every day that passes is NOT a waste. It's just a day that you've decided investing in cash is safer than investing in the market. |
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