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Selling high, pay capital gains, re-purchase later
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Ignoring brokerage fees and the wash-sale rule (both of which are hazardous to your health), and since the 15% LTCG tax is only on the gain, the stock would have to drop 15% of the gain in price since you originally purchased it.
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Accepting high volatility for high long-term returns
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Modern portfolio theory dramatically underestimates the risk of the recommended assets. This is because so few underlying assets are in the recommended part of the curve. As investors identify such assets, large amounts of money are invested in them. This temporarily reduces measured risk, and temporarily increases measured return. Sooner or later, "the trade" becomes "crowded". Eventually, large amounts of money try to "exit the trade" (into cash or the next discovered asset). And so the measurable risk suddenly rises, and the measured return drops. In other words, modern portfolio theory causes bubbles, and causes those bubbles to pop. Some other strategies to consider:
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When and how should I pay taxes on ForEx trades?
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Legally speaking, when you convert that bit-coin onto something else, the Israeli Tax Authority will look into the value of that something else, compare it to the original value of the previous something else you used to buy bit-coins (USD, in your example), and charge you capital gain taxes for the difference. According to the Israeli law you're supposed to pay taxes when selling (converting the bit-coin to something else), and since you're not using any formal bank or stock broker which will automatically deduct the taxes, you have to pay the taxes yourself. By not doing so you're committing a tax fraud. The real question you're asking is whether they'll come after you. Well, that depends on the amounts. They might. Pay attention: there's no statute of limitation for tax fraud in Israel. They may come after you in 50 years from now. Another thing to keep in mind: if you used bit-coins to buy something (services or products of any kind), you probably didn't pay the VAT (מע"מ) - which is another case of tax fraud on your behalf. PS: I'm not a lawyer or accountant, so get a professional advice, but I have been dealing with the Tax Authority in Israel, so I've got a pretty good idea of what the rules are.
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How do freight derivatives like Forward Freight Agreements (FFAs) work?
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The product descriptions for FFA swaps and options can be found here: http://www.lchclearnet.com/freight/ffas/products.asp The index (e.g. the BFA) is based on the settlement prices of the P2, P2A, and C4 contracts and the panamax TC routes. As such it's just a performance index and replicates the returns you'd get from holding a portfolio of the constituents. I think from the clearing descriptions everything should be clear. The wording in the link on the Baltic Exchange website is a bit nebulous. I think they mean standardised instead of specified. Because that's what sets the FFABA apart from OTC agreements or OTC spot markets. Edit: For more information on financial instruments in general see the Handbook of Financial Instuments. I haven't got the latest edition but I doubt he will mention FFAs, CFSAs, or anything that's specific to maritime markets but after all they're just plain forward agreements over a not-so-common underlying.
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Will a credit card issuer cancel an account if it never incurs interest?
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Technically, yes but, in practice, no. I use a card for everything and pay it off every month. Sometimes, several times a month depending on how the month is going. In the last 10 years, I've paid a total of $8 in interest because I legitimately forgot to pay my balance before the statement came out when I was out of town. I wasn't late, I just didn't beat the statement and had a small interest charge that I couldn't successfully argue off. In the same time period, I've had one card cancelled at the banks request. The reason was that I hadn't used it in two years so they cancelled me. I never pay annual fees, I get cards with great rewards programs and I (almost) never pay interest. If your bank cancels your card because you're too responsible, find a better bank.
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Settling before T+3?
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It is possible but unlikely. Securities firms would prefer never to settle externally; rather, they prefer to wait until the liabilities can be netted. They are forced to make and take payment in three business days. The reason why is because settlement is costly in the same way as any other business would prefer to build trade credit instead of taking or making payment rapidly. The only circumstance where a financial firm would wish to take full delivery is when a counterparty is no longer trusted to be solvent.
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Understanding the symbols next to the Ticker
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I don't understand what the D, to the right of APPLE INC, means. This means the graph below is for the "D". There is selection at top and you can change this to Minutes [5,20,60,etc], Day, Week [W], Month [M] I'm not understanding how it can say BATS when in actuality AAPL is listed on the NASDAQ. Do all exchanges have info on every stock even from other exchanges and just give them to end-users at a delayed rate? BATS is an exchange. A stock can be listed on multiple exchange. I am not sure if AAPL is also listed on BATS. However looks like BATS has agreement with major stock exchanges to trade their data and supplies this to trading.com
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How can I investigate historical effect of Rebalancing on Return and Standard Deviation?
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To answer your question directly.. you can investigate by using google or other means to look up research done in this area. There's been a bunch of it Here's an example of search terms that returns a wealth of information. effect+of+periodic+rebalancing+on+portfolio+return I'd especially look for stuff that appears to be academic papers etc, and then raid the 'references' section of those. Look for stuff published in industry journals such as "Journal of Portfolio Management" as an example. If you want to try out different models yourself and see what works and what doesn't, this Monte Carlo Simulator might be something you would find useful The basic theory for those that don't know is that various parts of a larger market do not usually move in perfect lockstep, but go through cycles.. one year tech might be hot, the next year it's healthcare. Or for an international portfolio, one year korea might be doing fantastic only to slow down and have another country perform better the next year. So the idea of re-balancing is that since these things tend to be cyclic, you can get a higher return if you sell part of a slice that is doing well (e.g. sell at the high) and invest it in one that is not (buy at the low) Because you do this based on some criteria, it helps circumvent the human tendency to 'hold on to a winner too long' (how many times have you heard someone say 'but it's doing so well, why do I want to sell now"? presuming trends will continue and they will 'lose out' on future gains, only to miss the peak and ride the thing down back into mediocrity.) Depending on the volatility of the specific market, and the various slices, using re balancing can get you a pretty reasonable 'lift' above the market average, for relatively low risk. generally the more volatile the market, (such as say an emerging markets portfolio) the more opportunity for lift. I looked into this myself a number of years back, the concensus I came was that the most effective method was to rebalance based on 'need' rather than time. Need is defined as one or more of the 'slices' in your portfolio being more than 8% above or below the average. So you use that as the trigger. How you rebalance depends to some degree on if the portfolio is taxable or not. If in a tax deferred account, you can simply sell off whatever is above baseline and use it to buy up the stuff that is below. If you are subject to taxes and don't want to trigger any short term gains, then you may have to be more careful in terms of what you sell. Alternatively if you are adding funds to the portfolio, you can alter how your distribute the new money coming into the portfolio in order to bring up whatever is below the baseline (which takes a bit more time, but incurs no tax hit) The other question is how will you slice a given market? by company size? by 'sectors' such as tech/finance/industrial/healthcare, by geographic regions?
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stock option grant being cancelled because strike price greater than FMV and replaced with a new grant at a higher strike price
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What could the tax issues with the IRS be? I thought (but not totally certain) that the tax treatment of an ISO option was based on difference between exercise price and FMV at the time of the sale. This is an accounting issue. There were times not so long ago that companies actually did these things on purpose, to boost the stock grant values for their employees (especially senior employees). They would give a grant but date it with an earlier date with a more favorable valuation. This is called "backdating", and it brought companies down and CEOs into criminal courts. In addition, only reasonable compensation is allowed as a deduction for the company, and incorrectly set strike price may be deemed unreasonable. Thus, the deduction the company would take for your compensation can be denied, leading to loss of tax benefit (this was also a weapon used by the IRS at the time against companies doing backdating). Last but not least, company that has intentions of going public cannot allow itself such a blatant disregard of the accounting rules. Even if the mistake was not made on purpose (as it sounds), it is a mistake that has to be corrected. What should I take into consideration to determine whether a 27% increase in shares is a fair exchange for an increase in 270% increase in strike price. Did you know the strike price when you signed the contract? Was it a consideration for you? For most people, the strike price is determined at the board approval, since the valuations are not public and are not disclosed before you actually join, which is already after you've agreed to the terms. So basically, you agreed to get 100 sheets of toilet paper, and instead getting 127 sheets. So you're getting 27 sheets more than you initially agreed to. Why are you complaining? In other words, options are essentially random numbers which are quite useless. By the time you get to exercise them, they'll be diluted through a bunch of additional financing rounds, and their value will be determined for real only after the IPO, or at least when your company's stocks are trading OTC with some reasonable volume. Until then - it's just a number with not much of a meaning. The FMV does matter for early exercise and 83(b) election, if that is an option, but even then - I doubt you can actually negotiate anything.
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Why people still look for “naked” short-sellng stocks instead of short selling CFDs
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Investopedia has a nice article on this here The Key benefit looks like better returns with lower capital. The disadvantage is few brokers offering that can be trusted. Potentially lower return due to margins / spreads. Higher leverage and can become an issue.
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Why do I see multiple trades of very small quantities?
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It looks more like someone is trying to pocket the spread. The trades are going off at the bid then the ask (from what I can tell without any L1 and L2 data, but the spread could be bigger than what the prices show, since the stock looks pretty volatile given the difference between current price and VWAP...). Looking through the JSE rule books I didn't find any special provisions on how they handle odd lots in their Central Order Book, but the usual practice in other markets is to display only round lot orders. So these 4 share orders would remain hidden from book participants and could be set there to trigger executions from those who are probing for limit orders. Or to make a market with very limited risk.
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Recent college grad. Down payment on a house or car?
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Not long after college in my new job I bought a used car with payments, I have never done that since. I just don't like having a car payment. I have bought every car since then with cash. You should never borrow money to buy a car There are several things that come into play when buying a car. When you are shopping with cash you tend to be more conservative with your purchases look at this Study on Credit card purchases. A Dunn & Bradstreet study found that people spend 12-18% more when using credit cards than when using cash. And McDonald's found that the average transaction rose from $4.50 to $7.00 when customers used plastic instead of cash. I would bet you if you had $27,000 dollars cash in your hand you wouldn't buy that car. You'd find a better deal, and or a cheaper car. When you finance it, it just doesn't seem to hurt as bad. Even though it's worse because now you are paying interest. A new car is just insanity unless you have a high net worth, at least seven figures. Your $27,000 car in 5 years will be worth about $6500. That's like striking a match to $340 dollars a month, you can't afford to lose that much money. Pay Cash If you lose your job, get hurt, or any number of things that can cost you money or reduce your income, it's no problem with a paid for car. They don't repo paid for cars. You have so much more flexibility when you don't have payments. You mention you have 10k in cash, and a $2000 a month positive cash flow. I would find a deal on a 8000 - 9000 car I would not buy from a dealer*. Sell the car you have put that money with the positive cash flow and every other dime you can get at your student loans and any other debt you have, keep renting cheap keep the college lifestyle (broke) until you are completely out of debt. Then I would save for a house. Finally I would read this Dave Ramsey book, if I would have read this at your age, I would literally be a millionaire by now, I'm 37. *Don't buy from a dealer Find a private sale car that you can get a deal on, pay less than Kelly Blue Book. Pay a little money $50 - 75 to have an automotive technician to check it out for you and get a car fax, to make sure there are no major problems. I have worked in the automotive industry for 20 + years and you rarely get a good deal from a dealer. “Everything popular is wrong.” Oscar Wilde
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Why can it be a bad idea to buy stocks after hours?
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There are several reasons it is not recommended to trade stocks pre- or post-market, meaning outside of RTH (regular trading hours). Since your question is not very detailed I have to assume you trade with a time horizon of at least more than a day, meaning you do not trade intra-day. If this is true, all of the above points are a non-issue for you and a different set of points becomes important. As a general rule, using (3) is the safest regardless of what and how you trade because you get price guarantee in trade for execution guarantee. In the case of mid to longer term trading (1 week+) any of those points is viable, depending on how you want to do things, what your style is and what is the most comfortable for you. A few remarks though: (2) are market orders, so if the open is quite the ride and you are in the back of the execution queue, you can get significant slippage. (1) may require (live) data of the post-market session, which is often not easy to come by for the entire US stock universe. Depending on your physical execution method (phone, fax, online), you may lack accurate information of the post-market. If you want to execute orders based on RTH and only want to do that after hours because of personal schedule constraints, this is not really important. Personally I would always recommend (3), independent of the use case because it allows you more control over your orders and their fills. TL;DR: If you are trading long-term it does not really matter. If you go down to the intra-day level of holding time, it becomes relevant.
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Why do people buy insurance even if they have the means to overcome the loss?
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You're making the assumption that a person would be aware, in advance, that they'd have enough resources to pay the costs of anything that might happen. Second, you're assuming the cost of insurance would outweigh what the person would have to pay out of pocket if they didn't have insurance. In other words as an example, if the insurance premiums on my car are so high that it would be cheaper for me to replace it myself in cash then it might make sense, but how likely is that to be the case? There's a gambling adage that I think applies here - "Always bet with the house's money". Why would I put my own money on the line in the event of some event rather than pay for an insurance policy that takes care of it for me? That way, my costs are predictable and manageable - I pay the premiums and perhaps a deductible, and that's it.
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Do stock prices drop due to dividends?
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Yes, the stock price drops on the ex-dividend date by roughly the amount of the dividend. There is even academic research testing this and confirming that the popular rule of thumb works well.
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Using a FOREX platform to actually change money
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If you wanted to spend money in another country, a specialist credit card would be the most cost-effective way. Near-spot exchange rate, zero-loading, no/low ATM fees. Likewise a pre-paid debit card would also allow for money transfer across borders. If this is the right situation, FOREX trading platforms are overkill to achieve a valid solution.
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Evidence for timing market in the short run?
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This is the S&P a bit over 20 years. If you've discovered a way to sell at 1400 in 2000, buy at 800 or so in 2003, sell again, well, you get the idea. There's strong evidence the typical investor hears the S&P is making new highs and rushes in. It's this influx that may send stocks higher from here, until the smart money senses 'overbought' and bails. I am not the smart money, but my ability to ignore emotion, and use asset allocation naturally had me selling a bit into each run up, and of course buying during downturns. Not all or none, and not with any perfect timing, just at year end when I'm rebalancing. I am not a fan of short term timing, although I do respect Victor's observations and excellent example of when it's been shown to work.
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What to do when paying for an empty office space?
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Generally speaking, yes, you're obliged to pay rent for the remainder of the lease term. But the landlord is obliged to mitigate damages, so if you can find a suitable tenant the landlord has to let you out of the lease.
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How risky are penny stocks?
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Penny stocks are for the real gambler. Don't even think about holding them long. Buy a lot of shares and profit from a penny uptick. Rake a hundred dollars here and there a few times a week if you can. Don't fall in love with it. Trade for profit. Don't bet the farm. Only play what you can afford to lose at the Great Casino in the sky (the stock market). Sure, you will pick some losers, but you are not married to it, you don't have to keep it. A couple of good winners will erase some loses. Having lost thousands on the Blue Chips, and feeling I have wasted time waiting for an annual $100 gain on an ETF or mutual if I get lucky, has made me more risk tolerant for these "BAD" investments. The "GOOD" investments should do so well.
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For very high-net worth individuals, does it make sense to not have insurance?
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There are 2 maxims that help make sense of insurance: Following those 2 rules, "normal" insurance makes sense. Can't afford to replace your car? insure it. Can afford to lose your TV? Don't insure it. People with a net worth in the low millions have very similar insurance needs to the middle class. For example, they might be able to afford a new car when they total it, but they probably can't afford to pay for the long term care of the person they accidentally ran over. Similarly, they probably need to insure their million dollar house, just like average people insure more affordable housing. "Very wealthy" people still have the same basic choices, but for different assets. If you are a billionaire, then you might not bother to insure your $30k childhood home or your fleet vehicles, but you probably would insure your $250m mansion, your $100m yacht and your more pricey collectible cars. It's also worth noting that "very wealthy" people are at much higher risk of being sued for negligence or personal injury. As such, they are more likely to purchase personal liability or umbrella insurance coverage to protect against such risks. Multi-million-dollar personal injury suits would never be filed against a poorer person simply because they couldn't afford to pay even the plaintiff's lawyer fees when they lost the court case. Insurance also makes sense when the insurance company is likely to (grossly) underestimate the risk they are taking. For example, if I am a really bad driver, but i have a clean record thanks to my army of lawyers, then insurance might actually be a good deal for me even on average. To take the "very wealthy" stereotypes to the extreme, perhaps my eccentric billionaire neighbor and I are in an escalating feud which I think will result in my butler "accidentally" running his car into my neighbor's precious 1961 Ferrari.
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What is the market rate of non-cash ISA fund administration fee in UK?
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Is he affiliated with the company charging this fee? If so, 1% is great. For him. You are correct, this is way too high. Whatever tax benefit this account provides is negated over a sufficiently long period of time. you need a different plan, and perhaps, a different friend. I see the ISA is similar to the US Roth account. Post tax money deposited, but growth and withdrawals tax free. (Someone correct, if I mis-read this). Consider - You deposit £10,000. 7.2% growth over 10 years and you'd have £20,000. Not quite, since 1% is taken each year, you have £18,250. Here's what's crazy. When you realize you lost £1750 to fees, it's really 17.5% of the £10,000 your account would have grown absent those fees. In the US, our long term capital gain rate is 15%, so the fees after 10 years more than wipe out the benefit. We are not supposed to recommend investments here, but it's safe to say there are ETFs (baskets of stocks reflecting an index, but trading like an individual stock) that have fees less than .1%. The UK tag is appreciated, but your concern regarding fees is universal. Sorry for the long lecture, but "1%, bad."
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When should I walk away from my mortgage?
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Many good answers here, especially that you have to consider that renting may be more expensive than you'd think. Also, keep in mind that rent is money that is completely lost. Even if the property has dropped in value, if you keep paying, you will be able to recuperate part of your mortgage payments when you sell the house. Normally this is about +-30%, but you need to calculate this yourself by dividing the expected sales price of the house by the total mortgage payments you have to make to pack back everything. So I'd say walking away only makes sense if the rents around where you want to live are much lower than (<+-30%) your mortgage payment, and stable. In stead of walking away immediately, perhaps you can refinance your mortgage with a new one? In 2008 the rates were around 5.8%, now they are around 3.6% or so. I don't know how it goes in the USA but in my country, if the rates drop, it is relatively to do this and it can save people who refinance thousands if not more.
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Short an option - random assignment?
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You've described the process fairly well. It's tough to answer a question that ultimately is 'how is this fair?' It's fair in that it's part of the known risk. And for the fact that it applies to all, pretty equally. In general, this is not very common. (No, I don't have percents handy, I'm just suggesting from decades of trading it's probably occurring less than 10% of the time). Why? Because there's usually more value to the buyer in simply selling the option and using the proceeds to buy the stock. The option will have 2 components, its intrinsic value ("in the money") and the time premium. It takes the odd combination of low-to-no time premium, but desire of the buyer to own the stock that makes the exercise desirable.
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Are underlying assets supposed to be sold/bought immediately after being bought/sold in call/put option?
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In the first case, if you wish to own the stock, you just exercise the option, and buy it for the strike price. Else, you can sell the option just before expiration, it will be priced very close to its in-the-money value.
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At what age should I start or stop saving money?
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There is no age-limit, in fact the sooner you start the better - the sooner the money starts to compound.
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Is it a gift or not?
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There are a few things that this question prompts -
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Snowball debt or pay off a large amount?
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Pay the Best Buy first. Most of these "Do not pay until..." deals require you to retire the entire debt by the deadline, or they will charge you deferred interest for the entire period. So, if this was a six-month deal, they're going to hit you for an extra $300 in December.
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Negative properties of continuously compounded returns
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What you're missing is the continuous compounding computation doesn't work that way. If you compound over n periods of time and a rate of return of r, the formula is e^(r*n), as you have to multiply the returns together with a mulitplicative base of 1. Otherwise consider what 0 does to your formula. If I get a zero return, I have a zero result which doesn't make sense. However, in my formula I'd still get the 1 which is what I'm starting and thus the no effect is the intended result. Continuous compounding would give e^(-.20*12) = e^(-2.4) = .0907 which is a -91% return so for each $100 invested, the person ends up with $9.07 left at the end. It may help to picture that the function e^(-x) does asymptotically approach zero as x tends to infinity, but that is as bad as it can get, so one doesn't cross into the negative unless one wants to do returns in a Complex number system with imaginary numbers in here somehow. For those wanting the usual compounding, here would be that computation which is more brutal actually: For your case it would be (1-.20)^12=(0.8)^12=0.068719476736 which is to say that someone ends up with 6.87% in the end. For each $100 had in the beginning they would end with $6.87 in the end. Consider someone starting with $100 and take 20% off time and time again you'd see this as it would go down to $80 after the first month and then down to $64 the second month as the amount gets lower the amount taken off gets lower too. This can be continued for all 12 terms. Note that the second case isn't another $20 loss but only $16 though it is the same percentage overall. Some retail stores may do discounts on discounts so this can happen in reality. Take 50% off of something already marked down 50% and it isn't free, it is down 75% in total. Just to give a real world example where while you think a half and a half is a whole, taking half and then half of a half is only three fourths, sorry to say. You could do this with an apple or a pizza if you want a food example to consider. Alternatively, consider the classic up and down case where an investment goes up 10% and down 10%. On the surface, these should cancel and negate each other, right? No, in fact the total return is down 1% as the computation would be (1.1)(.9)=.99 which is slightly less than 1. Continuous compounding may be a bit exotic from a Mathematical concept but the idea of handling geometric means and how compounding returns comes together is something that is rather practical for people to consider.
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Live in Florida & work remote for a New York company. Do I owe NY state income tax?
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New York State is one of a few states that will go after telecommuter taxes (such that some people may end up paying double tax even if they don't live in NY). There are a few ways that you can avoid this. If you NEVER come to NY for work, and your employer can stipulate that your position is only available to be filled remotely, you will likely be covered. But there are a myriad of factors relating to this such as whether the employer reimburses you for your home office and whether you keep "business records" at your office. Provided you can easily document the the factors in TSB-M-06(5)I, you shouldn't have to pay NYS taxes. (source: I've worked with a NYS tax attorney as an employer to deal with this exact scenario).
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22-year-old inherited 30k from 529 payout - what is the best way to invest?
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Also, my wealth manager doesn't like to discuss my money with me. To some extent, I understand this because finances are not my forte This is akin to porn surfing all day at your job instead of writing code, fire him ASAP. For now I would stick it in a bank account until you are comfortable and understand the investments you are purchasing. Here are some options to consider: The last one is tricky. You might have to interview several in order to find that one gem. With you being so young it is unlikely any of your friends have a need for such a service. I would concentrate on asking older work colleagues or friends of your parents for recommendations. Ask if they are educated by their adviser. In the end it would really pay for you to educate yourself about finances. No one can quite do as good as a job as you can in this area. You recognize that there was a problem with your current guy, that shows wisdom. If you have an interest in this area, I would recommend attending a Financial Peace University class. All my kids (about your age and older) are required to take it. It will help you navigate debt, mortgages, insurance, and investing and will cost you about $100. If you don't learn enough the first time, and you won't, you can repeat the course as many times as you wish for no additional cost.
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Acquiring first office clothes
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Like the other answers, I'm not entirely sure the equivalent exists in your country. But in the US there are thrift stores run by charities like GoodWill or the Salvation Army that sell clothes for very little money. When my wife was in a similar situation very early in her career she learned the trick of driving to thrift stores nearest to the richest neighborhoods in town. She often found high dollar designer clothes that had been worn once (to an event or party) and then donated. Apparently it is quite gauche for the well-to-do to be caught dead in the same outfit twice. It wasn't uncommon for her to find clothes/shoes that retailed for hundreds of dollars for $10 or so.
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Basic mutual fund investment questions
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You asked 3 questions here. It's best to keep them separate as these are pretty distinct, different answers, and each might already have a good detailed answer and so might be subject to "closed as duplicate of..." That said, I'll address the JAGLX question (1). It's not an apples to apples comparison. This is a Life Sciences fund, i.e. a very specialized fund, investing in one narrow sector of the market. If you study market returns over time, it's easy to find sectors that have had a decade or even two that have beat the S&P by a wide margin. The 5 year comparison makes this pretty clear. For sake of comparison, Apple had twice the return of JAGLX during the past 5 years. The advisor charging 2% who was heavy in Apple might look brilliant, but the returns are not positively correlated to the expense involved. A 10 or 20 year lookback will always uncover funds or individual stocks that beat the indexes, but the law of averages suggests that the next 10 or 20 years will still appear random.
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Who gets the periodic payments when an equity is sold on an repurchase agreement?
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The Wikipedia page for Repurchase Agreement has two relevant pointers on this topic: The legal title for any securities used in a repo actually pass from seller to buyer during the term of the agreement. In basic terms this means that if one sells a bond on repo with a promise to buy it back, then the ownership actually transfers to the buyer for that period of time. If a coupon is paid during this time period, it can either go to the buyer or the seller. Usually, the coupon payment goes to the initial owner of the security pre-repo (our "seller"). But sometimes the repurchase agreement will specify otherwise. So, again in basic terms, usually the repo seller/initial security owner receives any payments made during the term of the repurchase agreement. (Both points are in the first paragraph of the section "Structure and Terminology".)
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Can I request to change 401k offerings from my employer, e.g. to invest in ETFs?
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See if any of the funds they offer are index funds, which will generally have MUCH lower fees and which seem to perform as well as any of the actively managed funds in the same categories.
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How do I invest and buy/sell stocks? What does “use a broker” mean?
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Some good answers already, but let me add a TL:DR version. Brokers work like a special type of bank account where you can deposit or withdraw money. The major difference is that they also give you the ability to buy/sell investments with the money in your account which you can do by either calling them or using their website. Important: Many investments you will make through a broker(e.g. stocks) are not insured against losing value like the money in your bank account.
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How can I get the most value from my employer's ESPP?
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A 15% discount does not necessarily mean it is a good investment. The stock price can go down at any point. 15% discount might mean you are getting a little better deal than the average cat.
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Is there any truth to the saying '99% of the world's millionaires have become rich by doing real estate'?
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Most millionaires became millionaires by being very frugal and living well below their means, all the time.
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How do I explain why debt on debt is bad to my brother?
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How about doing some calculations and show him how much he is paying for things he is buying on credit.Mix in some big and small purchases to show how silly it is on both. Some examples: What really made the debt issue hit home for me (no pun intended) was when I bought my first house and read the truth in lending disclosure statements to find that a $70K house (those were the days) was going to cost me over $200K by the time I had paid off a 30 year note.
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How do share buybacks work?
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The short version of JB King's excellent answer is that the company will typically buy back shares from the open market at market price. Sometimes, it will specifically target larger stakeholders, even controlling interests, who are making noise that they want to divest; if such an investor were to just dump their stock on the open market, neither the investor nor the company would be very happy with the resulting price collapse. In those cases, the company may offer an incentive price above market rates. In recent times, the investor looking to divest has often been the U.S. Government, who received stock in return for bailouts, and (with notable exceptions) turned a modest profit on many of them. Not enough to break even on the entire bailout, but the Government didn't just throw $700 billion in taxpayer money down a hole as conservative pundits would have you believe. In the '80s, a specific type of buy-back was made famous, called the "leveraged buyout". Basically, the company took out a huge loan against itself, and used that money to buy up all the company's publicly-traded shares, essentially becoming a private company. This became a popular tool among private equity groups, for better and worse.
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How do I do double-entry bookkeeping for separately-managed investment accounts?
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For any accounts where you have a wish to keep track of dividends, gains and losses, etc., you will have to set up a an account to hold the separately listed securities. It looks like you already know how to do this. Here the trading accounts will help you, especially if you have Finance:Quote set up (to pull security prices from the internet). For the actively-managed accounts, you can just create each managed account and NOT fill it with the separate securities. You can record the changes in that account in summary each month/year as you prefer. So, you might set up your chart of accounts to include these assets: And this income: The actively-managed accounts will each get set up as Type "Stock." You will create one fake security for each account, which will get your unrealized gains/losses on active accounts showing up in your trading accounts. The fake securities will NOT be pulling prices from the internet. Go to Tools -> Securities Editor -> Add and type in a name such as "Merrill Lynch Brokerage," a symbol such as "ML1," and in the "Type" field input something like "Actively Managed." In your self-managed accounts, you will record dividends and sales as they occur, and your securities will be set to get quotes online. You can follow the general GnuCash guides for this. In your too-many-transactions actively traded accounts, maybe once a month you will gather up your statements and enter the activity in summary to tie the changes in cost basis. I would suggest making each fake "share" equal $1, so if you have a $505 dividend, you buy 505 "shares" with it. So, you might have these transactions for your brokerage account with Merrill Lynch (for example): When you have finished making your period-end summary entries for all the actively-managed accounts, double-check that the share balances of your actively-managed accounts match the cost basis amounts on your statements. Remember that each fake "share" is worth $1 when you enter it. Once the cost basis is tied, you can go into the price editor (Tools -> Price Editor) and enter a new "price" as of the period-end date for each actively-managed account. The price will be "Value of Active Acct at Period-End/Cost of Active Acct at Period-End." So, if your account was worth $1908 but had a cost basis of $505 on Jan. 31, you would type "1908/505" in the price field and Jan. 31, 2017 in the date field. When you run your reports, you will want to choose the price source as "Nearest in Time" so that GnuCash grabs the correct quotes. This should make your actively-managed accounts have the correct activity in summary in your GnuCash income accounts and let them work well with the Trading Accounts feature.
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Is Stock Trading legal for a student on F-1 Visa doing CPT in USA?
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you dont need any permits or be inside the US to trade the exact same securities on US exchanges. you can literally move your bitcoin from a chinese exchange to us exchange in seconds. i don't see how you can possibly run into legal issues if anyone from outside the country can trade bitcoins on an exchange inside the country without any permit. a lot of these exchanges dont ask for ID or social security number anyways. none of it is government regulated. also trading anything is never a passive income. theres no such thing as an easy or obvious investment. there are always risks- and the actual risk is often deceivingly low
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Is Weiss Research, Inc. a legitimate financial research company?
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Weiss Ratings is an independent company providing data and analysis for the bank and insurance industries. We’ve published the Weiss Financial Strength Ratings for banking institutions and insurance companies since 1989 and continue to use the methodology praised by the GAO back in 1994. Weiss Ratings has consistently graded failed institutions in the lowest Weiss Rating tier at the time of failure. We invite you to look at the Weiss Ratings' track record.
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What percent of a company are you buying when you purchase stock?
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What percent of a company are you buying when you purchase stock? The percent of a company represented by a single share can be calculated by percent = 1/number_of_shares*100% Apple comprises 5,250,000,000 shares, so one share makes up about 1.9e-8% of a company, or 0.000000019% of Apple.
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What kind of life insurance is cheaper? I'm not sure about term vs. whole vs. universal, etc
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Whole life in most instances is a very bad plan. It's marketed as a life insurance policy wrapped in an investment but it does neither very well. The hidden caveat of whole life is that the investment goes away if you die. Say for example I have a $100,000 whole life insurance policy and over the years I have paid in enough to have a $15,000 cash value on the policy. If I die, my family gets $100,000 and the cash value is lost. With term life you can get a substantially higher amount of coverage for a smaller payment. If you invest the difference you end up not only with better coverage, but a better cash value from the difference if you don't die (which is what we all hope for anyways). As JackiYo said, your insurance should be designed around replacing lost income/value. You should get 10x your annual income in term life insurance.
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moving family deposits away from Greece (possibly in UK)
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I think you can do it as long as those money don't come from illegal activities (money laundering, etc). The only taxes you should pay are on the interest generated by those money while sitting in the UK bank account. Since I suppose you already paid taxes on those money in Greece while you were earning those money. About being audited, in my own experience banks don't ask you much where your money are coming from when you bring money to them, they are very willing to help, and happy. (It's a differnte story when you ask to borrow money). When I opened a bank account in US I did not even have an SSN, but they didn't care much they just took my passport and used the passport number for registering the account. Obviously on the interest generated by the money in the US bank account I had to pay taxes, but it was easy because I simply let the IRS via the bank to withdarw the 27% on the interest generated (not on the capital deposited). I didn't put a huge amount of money there I had to live there for 1 year or some more. Maybe if i deposited a huge amount of money someone would have come to ask me how did I make all those money, but those money were legally generated by me working in Italy before so I didn't have anything to be afraid about. BTW: in Italy I was thinking to move money to a German bank in Germany. The risk of default is a nightmare, something of completly new now in UE compared to the past where each state had its own currency. According to Muro history says that in case of default it happened that some government prevented people from withdrawing money form bank accounts: "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." but in case Greece prevents people from withdrwaing money, those money are still in EURO, so i'm wondering what would be the effect. I mean would it be fair that a Greek guy can not withdraw is EURO money whilest an Italian guy can withdraw the same currency money in Italy?!
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My ex sold our car that still had money owed
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This is not a finance issue, it is a legal one. You need to talk to a lawyer. To save your credit you can pay off the bank now and fight out the details with your ex later. The bank is still owed their money.
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How are the best way to make and save money at 22 years old
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Make sure you have a budget, there is a pretty cool budget tracker that you can download here (it works in excel and is easy to use). The important thing is to not only make a budget but also keep in touch and track your budget, some free ebooks and other investment ebooks too. Just start with the budget tracker: http://www.futureassist.com.au/young-to-mid-life Focus on paying off debt first Next look at ETF's (Exchange Traded Funds) as a possible investment option - this is an Australian Government Website but ETF's all work in the same way: https://www.moneysmart.gov.au/investing/managed-funds/exchange-traded-funds-etfs
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How can I find if I can buy shares of a specific company?
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A company whose stock is available for sale to the public is called a publicly-held or publicly-traded company. A public company's stock is sold on a stock exchange, and anyone with money can buy shares through a stock broker. This contrasts with a privately-held company, in which the shares are not traded on a stock exchange. In order to invest in a private company, you would need to talk directly to the current owners of the company. Finding out if a company is public or private is fairly easy. One way to check this is to look at the Wikipedia page for the company. For example, if you take a look at the Apple page, on the right sidebar you'll see "Type: Public", followed by the stock exchange ticker symbol "AAPL". Compare this to the page for Mars, Inc.; on that page, you'll see "Type: Private", and no stock ticker symbol listed. Another way to tell: If you can find a quote for a share price on a financial site (such as Google Finance or Yahoo Finance), you can buy the stock. You won't find a stock price for Mars, Inc. anywhere, because the stock is not publicly traded.
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Why do people use mortgages, when they could just pay for the house in full?
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The advantage of using a mortgage is that you pay for a house at TODAY's price, using TOMORROW's money. Your question suggests that you rightly observed that it was not a good idea around 2006 (the last peak in housing). That was when prices were at their maximum, and had nowhere to go but down. Some experts think that house prices STILL have further to go on the downside. Meanwhile, wages have been going nowhere during that time. This phenomenon seems to happen about every 40 years or so, the 1930s, the 1970s, and around 2010. At MOST other times, say the 1980s, houses are likely to go up for the "foreseeable" future. At those times, you want to buy the house at "today's" price, then pay for it in future dollars when you are earning more money. The irony is that what most people observe as teenagers is usually the wrong thing to do when they are, say, forty. In 2035, it will probably make sense to have a large mortgage in a bull housing market, which is the opposite of what you observed around 2010. So a better rule is to do at age 40 what made sense about the time you were born (in your case, perhaps the 1990s). Whereas the people born in the early 1970s that got "caught" recently, observed the bull market of the 1980s and 1990s in THEIR teens and twenties, rather than the bear market of the 1970s that took place about the time they were born.
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Investment / Savings advice in uncertain economy
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$23,000 Student Loans at 4% This represents guaranteed loss. Paying this off quickly is a conservative move, while your other investments may easily surpass 4% return, they are not guaranteed. Should I just keep my money in my savings account since I want to keep my money available? Or are there other options I have that are not necessarily long term may provide better returns? This all depends on your plans, if you're just trying to keep cash in anticipation of the next big dip, you might strike gold, but you could just as easily miss out on significant market gains while waiting. People have a poor track record of predicting market down-turns. If you are concerned about how exposed to market risk you are in your current positions, then you may be more comfortable with a larger cash position. Savings/CDs are low-interest, but much lower risk. If you currently have no savings (you titled the section savings, but they all look like retirement/investment accounts), then I would recommend focusing on that first, getting a healthy emergency fund saved up, and budgeting for your car/house purchases. There's no way to know if you'd be better off investing everything or piling up cash in the short-term. You have to decide how much risk you are comfortable with and act accordingly.
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What is insider trading exactly?
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One scenario described in the original question -- a non-insider who trades after informal conversations with friends, where no insiders directly benefit from any such disclosure -- might not be illegal. (IANAL -- this is just my personal interpretation of articles in the news recently.) http://www.bloomberg.com/news/articles/2015-10-05/insider-trading-cases-imperiled-as-top-u-s-court-spurns-appeal the appeals court said prosecutors needed to show that the person disclosing the information received a clear benefit -- something more than the nurturing of a friendship ... In a 1980 case the Supreme Court rejected the idea of “a general duty between all participants in market transactions to forgo actions based on material, nonpublic information."
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Should I buy a home or rent in my situation?
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You said 2 things that made me think you are one of the rare young couples barely making it but should attempt to buy rather than rent anyway.... Around my area, renting a place is about equivalent to just paying a monthly mortgage of a 30yr 3.5% APR of a home priced at around $250,500. and... Our ideal price range would be $100,000-160,000 with a 25-30yr mortgage at 3.5 - 5.4% The other answers suggesting that you should rent and the reasons given were excellent ones but because of those 2 points you made, this tells me that you would be willing to live in a much much more basic house if you owned rather than rented. Many renters rent rather than buy because they want a really nice place for their money and are willing to spend what it takes to get a nice place, but not you. If you buy, you would be willing to take a place worth half or even less than half what you would get if you rented. That tells me you might accept a place that needs a little work. Perhaps you and/or your fiancée have some skills needed to do a little of the work yourself. I hope you decide to buy rather than rent if you can swing it, and instead of taking a 2nd job, spend all your spare time working on your little investment. It's possible that by the time you're done fixing that house up some, through your own creative efforts or through the help you might get from your friends, you could end up with a $250,000 house, own it, and reap all the great benefits of owning rather than renting...or...better yet, sell that place for a nice profit, then turn around and buy the next one already fixed up with your newly acquired great credit to help you with the new mortgage, and ready for you to move in and enjoy. It's how my wife and I got started (only we didn't have the benefit of historically low interest rates) and if we can do it, I believe you can too. Here are a couple tips that might help out....1) Don't spend a lot of money to fix the place...try to find the time to do the simpler tasks yourself. If you don't have the skills, you can learn them on youtube or by picking the brains of all the great willing people working at your local discount home project superstore. 2) Cosmetics go a long way towards increasing the value of a house. a) needs paint and b) needs carpet but not a) major structural damage and b) needs roof. Regarding some of your other points... HOA, hopefully if you buy in a formal community, the HOA should be less than $200. If it's more than that, it might be harder to do as I suggest. Closing Costs, probably more like 4 - 5% Taxes, monthly if included in mortgage, normally quarterly or semi-annually if not Utilities...you're budgeting quite high for that. Depending on your area, you might only spend an average of $200/month, maybe even less. Insurance...see answer for taxes Regular maintenance, $1K a year might be about right but we better include irregular also, which comes up more often than you might think when owning, let's say $2 - $3 a year. Unexpected costs. Expect the unexpected but if the place needs a new roof or something big like that, then you didn't do your homework before buying.
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Does reading financial statements (quarterly or annual reports) really help investing?
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I agree with @STATMATT. Financial statements are the only thing that Warren Buffett & Charlie Munger read. To answer your question though, really depends on what type of investor you are and what information are you trying to extract. It is essential for the Buffett style (buy & hold). But if you are a short term or technical investor then I don't see it being of much value.
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Why do people buy insurance even if they have the means to overcome the loss?
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All investors have ultimately the same investment goal: maximize returns while limiting risk to an acceptable level. Of course we would love to maximize returns while minimizing risk, but in most cases if you want higher returns you must be willing to accept higher levels of risk. We must keep in mind that investors are humans, not computers. As such not everybody is willing to accept the same level of risk. Insurance is simply a way to "buy down" risk. Yes, it reduces our overall gains (most of the time), but so do bonds vs stocks (most of the time). And yet who among us doesn't have bonds in our portfolio? Insurance is yet another way to balance risk and return.
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Looking to buy a house in 1-2 years. Does starting a Roth IRA now make sense?
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With a Roth IRA, you can withdraw the contributions at any time without penalty as long as you don't withdraw the earnings/interest. There are some circumstances where you can withdraw the earnings such as disability (and maybe first home). Also, the Roth IRA doesn't need to go through your employer and I wouldn't do it through your employer. I have mine setup through Fidelity though I'm not sure if they have any guaranteed 3% return unless it was a CD. All of mine is in stocks. Your wife could also setup a Roth IRA so over 2 years, you could contribute $20,000. If I was you, I would just max out any 403-b matches (which you surely are at 25% of gross income) and then save my down payment money in a normal money market/savings account. You are doing good contributing almost 25% to the 403-b. There are also some income limitations on Roth IRAs. I believe for a married couple, it is $160k.
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Who owns NASDAQ? Does it collect fees from stock transactions?
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NASDAQ OMX Group owns NASDAQ, a stock exchange. It is a corporation, and is listed on the NASDAQ as NDAQ. It makes money by: source NASDAQ also charges for market data services, found in the NASDAQ "Datastore". Other information about the fees charged by NYSE and NASDAQ may be found in the Investopedia article The NYSE And Nasdaq: How They Work.
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What should I be aware of when renting a home to a corporation instead of an individual?
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This is business as usual, except that you need to keep in mind that the corporate entity is separate from the individual. As such - all the background checks and references should be with regards to the actual renter - the corporation. You should be cautious as it is not so easy to dissolve an individual (well... Not as easy, and certainly not as legal), as it is to dissolve the corporation. So you may end up with a tenant who doesn't pay and doesn't have to pay because the actual renter, the corporation, no longer exists. So check the corporation background - age, credit worthiness, tax returns/business activity, judgements against, etc etc, as you would do for an individual.
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GNUCash: How to count up equity?
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I would say when starting with Gnucash to start with the level of granularity you are comfortable with while sticking to the double entry bookkeeping practices. So going through each one: Refund for Parking Pass. Assuming you treat the Parking Pass as a sunk cost, i.e. an Expense account, its just a negative entry in the Expense account which turns into a positive one in your Bank account. Yes it may look weird, and if you don't like it you can always 'pay from Equity' the prior month, or your Bank Account if you're backfilling old statements. Selling physical items. If you sold it on eBay and the value is high enough you'll get tax forms indicating you've earned x. Even if its small or not done via eBay, treat it the same way and create a 'Personal Items/Goods' Income account to track all of it. So the money you get in your Bank account would have come from there. Found jacket money would be an Equity entry, either Opening Balances into Cash or Bank account. Remember you are treating Equity / Opening Balances as the state before you started recording every transaction so both the value going into Assets (Banks,Stock,Mutual Funds) and Liabilities (Mortgage, Student Debt, Credit Card Debt) originate from there.
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In a buy order with a trigger, will I pay the current ask or the buy price in the order?
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I think that if the price does not go very far up, then your order will open on 101, because you are setting a limit order, if suddenly the price goes up very quickly or with a gep even, then you may not be given a position. But this is with a limit order and it is better to check with the broker. There are also warrants in which you can adjust the price range, for example, from 101 to 103, and at a sharp price jump, it is possible for you and would not give a position at a price of 101, but perhaps 103 would get.
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What prevents interest rates from rising?
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A lot of loans are taken out on a fixed rate basis, so the rate is part of the contract and is therefore covered by contract law. If the loan is taken out on a variable basis then in principle the rate can rise within the terms of the contract. If a particular lender tries to raise its rates out of line with the market then its customers will seek alternative, cheaper, loans and pay off their expensive loan if they can. If rates rise sharply in general due to unusual politico-economic circumstances then those with variable rate loans can find themselves in severe trouble. For example the base rate in the UK (and therefore variable mortgage rates closely tied to it) spiked sharply in the late 80s which caused severe stress to a lot of borrowers and undoubtedly pushed some into financial difficulties.
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May 6, 2010 stock market decline/plunge: Why did it drop 9% in a few minutes?
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Trading error at Citi
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How to invest in a currency increasing in value relative to another?
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On international stock exchanges, they trade Puts and Calls, typically also for currencies. If for example 1 NOK is worth 1 $ now, and you buy Calls for 10000 NOK at 1.05 $ each, and in a year the NOK is worth 1.20 $ (which is what you predict), you can execute the Call, meaning 'buying' the 10000 NOK for the contracted 1.05 $ and selling them for the market price of 1.20 $, netting you 12000 - 10500 = 1500 $. Converting those back to NOK would give you 1250 NOK. Considering that those Calls might cost you maybe 300 NOK, you made 950 NOK. Note that if your prediction is common knowledge, Calls will be appropriately priced (=expensive), and there is little to make on them. And note also that if you were wrong, your Calls are worth less than toilet paper, so you lost the complete 300 NOK you paid for them. [all numbers are completely made up, for illustration purposes] You can make the whole thing easier if you define the raise of the NOK against a specific currency, for example $ or EUR. If you can, you can instead buy Puts for that currency, and you save yourself converting the money twice.
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How smart is it really to take out a loan right now?
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You are not "the economy". The economy is just the aggregate of what is going on with everyone else. You should make the decision based on your own situation now and projected into the future as best you can. Loan rates ARE at historical lows, so it is a great time to take a loan if you actually need one for some reason. However, I wouldn't go looking for a loan just because the rates are low for the same reason it doesn't make sense to buy maternity clothes if you are a single guy just because they are on sale.
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What is the purpose of endorsing a check?
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When the check is deposited, the bank verifies the signature in the check matches your signature in file.
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(United Kingdom) Multiple Stock ISAs?
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It is a very good idea to spread your ISAs over more than one stock broker. However now that a lot of stock brokers charge an admin fee it can get expensive if you use too many. There is no need to tell your last year’s ISA provider that you are using a different one, however you MUST ONLY pay into one ISA provider in each tax year.
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In India, what is the difference between Dividend and Growth mutual fund types?
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I wrote about this a while back: http://blog.investraction.com/2006/10/mutual-funds-dividend-option-or-growth.html In short: Growth options of a mutual fund scheme don't pay out any money, they reinvest the dividend they receive. Dividend options pay out some money, at different intervals, based on the surplus they accumulate. In India, the options have very similar underlying portfolios, so HDFC Equity Fund (Growth) and HDFC Equity Fund (dividend) will have the same percentage allocation to each stock. Update: I also have a video you might want to see on the subject: http://www.youtube.com/watch?v=Bx8QtnccfZk
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Is short selling a good hedging strategy during overzealous market conditions?
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I saw that an answer hasn't been accepted for this yet: Being bearish is a good hedging strategy. But being hedged is a better hedging strategy. The point being that not everything in investments is so binary (up, and down). A lot of effective hedges can have many more variables than simply "stock go up, stock go down" As such, there are many ways to be bearish and profit from a decline in market values without subjecting yourself to the unlimited risk of short selling. Buying puts against your long equity position is one example. Being long an ETF that is based on short positions is another example.
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How can I invest my $100?
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There are websites out there that let people apply for micro-loans, and let other people fund those loans, and get a percent of the interest back as the loans are paid off. I have heard of people with spare cash "investing" in these sites. However, I don't think there is a guarantee of return of your money, and I have heard mixed reviews by people, so I will not link to any such sites here.
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Transfering money from NRE to saving account is taxable or not
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Meagrely transferring money within your own accounts doesn't result in any tax, however legally once you are an NRI you cannot operate a savings account at all as per Reserve Bank Guidelines found here One option is for you to transfer to a joint account held by a close relative of yours with you and this would be tax free in India.
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Is there a good book that talks about all the type of products to invest?
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There is no magical book that talks about the thousands of investment instrument types that are available ranging from brown fields land up to CDS futures and beyond. In addition to the huge number the depth of understanding ranges from knowing that a security type exists all the way up to being able to mark the instrument to market for illiquid instances of the instrument. I have been in the industry for about six years and have a fair understanding of what I would term the basics of most security types (I cannot, for example, mark to market exotic options) but most of my knowledge has come from using these instruments on a daily basis and Investopedia. The basis of my knowledge has come from the CFA Claritas Investment certificate book when I took that exam (and CFA Level 1 but I'd recommend against reading that unless you are taking the exam) and Paul Wilmott's texts on Quantitative finance; mostly Paul Wilmott on Quantitative Finance 2nd Edition. tl;dr: you can't get a good grounding on all security types ; there are far too many. To get a good grounding in the most used takes a lot of effort, much more than a book will give you.
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I co-signed a car but i am listed as the primary account holder for the loan
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First of all you do not "co-sign a car". I assume what you mean by this is that you co-signed a loan, and the money was used to buy a car. Once you signed that loan YOU OWED THE MONEY. Once a loan exists, it exists, and you will owe the money until the loan is paid. If you do not want to owe the money, then you need to pay back the money you borrowed. You may not think "you" borrowed the money because the car went to someone else. THE BANK AND THE COURTS DO NOT CARE. All they care about is that YOU signed the loan, so as far as they are concerned YOU owe the money and you owe ALL of the money to the bank, and the only way to change that is to pay the money back.
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How fast does the available amount of gold in the world increase due to mining?
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For the last few years around 2,500 metric tonnes of gold have been produced each year. This is on top of existing supply of 160,000 metric tonnes. Existing yearly production is around 1.5% of the existing supply. Charts from here.
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Old Cancelled Cards
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Closed accounts are used when calculating Average Age of Accounts (AAoA) by FICO. They will drop off your report 7 years after their closure, at which time your AAoA will decrease and most likely lower your credit score. Keeping your oldest card with an annual fee (AF) is a tough question. Since the exact calculations are a secret, it's hard to quantify the value of that card. Keep in mind that if you do decide to close it now (or right before the next AF) it will continue to count for the next 7 years. What you can do is the following: Assume you won't be applying for any new cards in the next 7 years. Look at all your current accounts and calculate the AAoA of all of them that would still be on your report 7 years from now. Calculate it with and without your oldest card. The difference will show you the effect closing the card today will have. There is a potential way to raise your AAoA depending on if you have an AMEX card. AMEX reports all accounts as being open from your original 'member since' date. If your oldest AMEX (ever, not necessarily still open) is older than your AAoA, opening a new AMEX will actually raise your average. age of accounts is 15% of your score. note that some websites that calculate your AAoA for you (like creditkarma) don't count closed accounts, but since FICO does the age those websites generate should be ignored.
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How is not paying off mortgage better in normal circumstances?
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One way of looking at it is that your equity in your house is an investment in a particular class of asset, and investing further in that asset class may drive you away from, rather than towards, your preferred asset mix. It's pretty common here in New Zealand for people's only investments to be their homes and rental properties. I wish those people luck when our current property boom ends.
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If earning as freelancer, is it better to be a Sole Trader or Limited Company?
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As I understand it (please correct me if i'm wrong, i've looked at this before and i've been a sole trader briefly but I've never formed a LTD company) there are pros and cons to forming a limited company. Pros Cons
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Is it wise to have plenty of current accounts in different banks?
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Its actually a good thing. The #1 factor to your credit score is your credit utilization. So if you don't spend money unwisely and they don't have any annual fee I would keep them and use them each twice a year to keep them in your credit mix.
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Is the need to issue bonds a telltale sign that the company would have a hard time paying coupons?
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One more scenario is when the company already has maturing debt. e.g Company took out a debt of 2 billion in 2010 and is maturing 2016. It has paid back say 500 million but has to pay back the debtors the remaining 1.5 billion. It will again go to the debt markets to fund this 1.5 billion maybe at better terms than the 2010 issue based on market conditions and its business. The debt is to keep the business running or grow it. The people issuing debt will do complete research before issuing the debt. It can always sell stock but that results in dilution and affects shareholders. Debt also affects shareholders but when interest rates are lower, companies tend to go to debt markets. Although sometimes they can just do a secondary and be done with it if the float is low.
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Finance car with or with out a balloon payment
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That interest rate (13%) is steep, and the balloon payment will have him paying more interest longer. Investing the difference is a risky proposition because past performance of an investment is no guarantee of future performance. Is taking that risk worth netting 2%? Not for me, but you must answer that last question for yourself. To your edit: How disruptive would losing the car and/or getting negative marks on your credit be? If you can quantify that in dollars then you have your answer.
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Does selling mixed-term stocks with a LIFO tax strategy make sense?
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Your question is missing too much to be answered directly. Instead - here are some points to consider. Short term gains taxed at your marginal rates, whereas long term gains have preferable capital gains rates (up to 20% tax rate, instead of your marginal rate). So if you're selling at gain, you might want to consider to sell FIFO and pay lower capital gains tax rate instead of the short term marginal rate. If you're selling at loss and have other short term gains, you would probably be better selling LIFO, so that the loss could offset other short term gains that you might have. If you're selling at loss and don't have short term gains to offset, you can still offset your long term gains with short term losses, but the tax benefit will be lower. In this case - FIFO might be a better choice again. If you're selling at loss, beware of the wash sale rules, as you might not be able to deduct the loss if you buy/sell within too short a window.
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If I use stock as collateral for a loan and I default, does the bank pay taxes when they sell my stock?
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If you are planning this as a tax avoidance scheme, well it is not. The gains will be taxable in your hands and not in the Banks hands. Banks simply don't cash out the stock at the same price, there will be quite a bit of both Lawyers and others ... so in the end you will end up paying more. The link indicates that one would pay back the loan via one's own earnings. So if you have a stock worth USD 100, you can pledge this to a Bank and get a max loan of USD 50 [there are regulations that govern the max you can get against 100]. You want to buy something worth USD 50. Option1: Sell half the stock, get USD 50, pay the captial gains tax on USD 50. Option2: Pledge the USD 100 stock to bank, get a loan of USD 50. As you have not sold anything, there is no tax. Over a period pay the USD 50 loan via your own earnings. A high valued customer may be able to get away with a very low rate of intrest and very long repayment period. The tax implication to your legal hier would be from the time the stock come to his/her hands to the time she sold. So if the price increase to 150 by the time Mark dies, and its sold at 160 later, the gain is only of USD 10. So rather than paying 30% or whatever the applicable tax rate, it would be wise to pay an interest of few percentages.
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How can you possibly lose on investments in stocks?
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In your own example of VW, it dropped from its peak price of $253 to $92. If you had invested $10,000 in VW in April 2015, by September of that year it would have gone down to $3,600. If you held on to your investment, you would now be getting back to $6,700 on that original $10,000 investment. Your own example demonstrates that it is possible to lose. I have a friend who put his fortune into a company called WorldCom (one of the examples D Stanley shared). He actually lost all of his retirement. Luckily he made some money back when the startup we both worked for was sold to a much larger company. Unsophisticated investors lose money all the time by investing in individual companies. Your best bet is to start searching this site for answers on how to invest your money so that you can see actual strategies that reduce your investment risk. Here's a starting point: Best way to start investing, for a young person just starting their career? If you want to better illustrate this principle to yourself, try this stock market simulation game.
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Buying shares in employer's company during IPO
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So the key factor here, IMHO, is the amount we are talking about. $2K is just not a lot of money. If you lose every penny, you can recover. On the other hand it is unlikely to make you wealthy. So if I was you I would buy in, more for the fun of it all. Now if it was a large amount of money that we were talking about it would be about a percentage of my net worth. For example, lets say the minimum was 20K, and you really believed in the company. If I had a net worth of less than 200K, I would not do it. If I had a larger net worth, I would consider it unless I was near retirement. So if I was 30, hand a net worth of 300K, I would probably invest as even if I did lose it all, I could recover. Having said all that it does not sound like you completely agree that the company will be profitable. So in that case, don't buy. Also, I have the opportunity to buy my own company's stock at a discount. However, I do not for two reasons. The first is I don't like investing in the company I work for. Secondly, they require you to hold the stock for a year.
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Gift card fraud: To whom to report? How to recover funds? Is the party which issued me the card liable?
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Question 1: Who do I report such fraud to? Walmart, or their card processor. They may be in their right to require the original purchaser to do the report. Generally, credit card and debit card fraud must be reported to the bank within 60 days of the statement for them to take responsibility. I don't see why gift cards would be different. You can also report it to the police, but I believe you'll be asked to file a report in the jurisdiction where the card was used. Again - time is of the essence, and there's nothing much they could do with your report now. Question 2: How can I recover the $100 value of my Walmart gift card? At this point, 2.5 years later when the card was used to buy prepaid cards, there's no way to catch the thief and recover the funds. Had you reported it promptly, Wlamart could have block the prepaid cards sold or track their usage, but now is too late. Question 3: Is Citibank in any way liable? (The gift card was fraudulently used shortly after---within the same month---I received it from Citibank.) I doubt it unless you can show a pattern. It could be someone working for the Citibank, someone working for the USPS, or someone just stole a bunch of numbers and waited until they became activated.
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Can I register for VAT to claim back VAT without selling VAT applicable goods? (UK)
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IANAL, I have not been VAT registered myself but this is what I have picked up from various sources. You might want to confirm things with your solicitor or accountant. As I understand it there is a critical difference between supplying zero-rated goods/services and supplying exempt goods/services. If the goods/services are zero-rated then the normal VAT rules apply, you charge VAT on your outputs (at a rate of 0%) and can claim back VAT on your inputs (at whatever rate it was charged at, depending on the type of goods.. If the goods/services are exempt you don't charge and VAT on your outputs and can't claim back any VAT on your inputs. (Things get complicated if you have a mixture of exempt and non-exempt outputs) According to http://oko.uk/blog/adsense-vat-explained adsense income is a buisness to buisness transaction with a company in another EU country and so from a supplier point of view (you are the supplier, google is the customer) it counts as a zero-rated transaction.
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Repaying Debt and Saving - Difficult Situation
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Your mother has a problem that is typical for a woman with children. She is trying to help her children have a good life, by sacrificing to get them to a point where they can live comfortably on their own. Though she has a difficult situation now, much of the problems come from a very few choices by her and her children, and her situation can be fixed. Let me point out a few of the reasons why she has come to this point: My mother is a single mom... she is turning 50 this summer... she has about $60k in school loans from the college I attended... she has payments of $500/month ($10k) to my sisters college... she lives on her own in a 2 bedroom apartment... Mother's current 'income statement', Income Essentials (total $3131, 71%, too high, goal $2200) Lifestyle (total $150, low, she should have $500-900 to live her life) Financial (total $1350, 31%) Some observations and suggestions: Even though the $1625 rents seems high, your mom might enjoy her apartment and consider part of her rent ($300) a lifestyle choice (spending money for time), and the higher rent may make sense. But the rent is high for her income. Your mom should be spending more on food, and budget $200/month. Your mom should be saving money for investments and retirement. She should be putting 10% into savings ($440), plus any IRA/401K pretax savings. Your sister should be paying for her own college. She should take her own student loans, so that her mother can save for retirement. And since she only has $10K left, an alternative would be that you could loan her the money, and she could repay you when she graduates (you have money, as you loaned your mother $8K). You should be repaying the $500/month on the $60K student loan your mother took to help you get through college. You have benefited from the education, and the increased opportunity the college education has given you. Now is the time to accept responsibility and pay your debts. You could at least agree to split the expense with her, and were you paying even $300/month (leaving $200 for her), that would still fix her budget. Your mom should get a car that is paid for and reduce her transportation expenses, until the $350/month debt is resolved. She should resolve to spend no more than $300/month for a car, and with $100/month for insurance be under 10% for her vehicle. Since your mother lives in the US (NJ) she could avoid the $350/month debt payment though BK. But since there are other solutions she could exercise to resolve her problems, this is probably not needed. You mom could consider sharing her apartment to share expenses. Paying $1625 for an apartment for one person seems extravagant. She might enjoy sharing her apartment with a room-mate. That is about it. Once her children take responsibility for their lives, your mom will have a manageable budget, and less stress in her life. Mother's revised 'income statement', Income Essentials (total $2721, 62%, high, need to reduce by $500) Lifestyle (total $450, 10%, low) Financial (total $990, 23%) While you and your sister have these changes, Summary of changes: Some rent is lifestyle, reduced car loan by $200, sister pays her college $500, you pay your college $300, mom saves 10% of her income. Once your sister graduates and starts to repay you for your help with her college, you can take over paying the remainder of your loans, saving your mom an additional $200/month.
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Investing/business with other people's money: How does it work?
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Basically, you either borrow money, or get other people to invest in your business by buying stock or something analogous. Sometimes you can get people to "park" money with you. For example, many people deposit money in a bank checking account. They don't get any interest or other profit from this, they just do it because the bank is a convenient place to store their money. The bank then loans some percentage of this money out and keeps the interest. I don't doubt that people have come up with more clever ways to use other people's money. Borrowing money for an investment or business venture is risky because if you lose money, you may be unable to pay it back. On the other hand, investors expect a share of the profit, not just a fixed interest rate.
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Transfer $70k from Wells Fargo (US) to my other account at a Credit Union bank
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Making a payment of any amount is usually legal, although of course the specific circumstances matter, and I'm not qualified to give legal advice. Just had to throw in that disclaimer not because I think there's a problem here, but because it is impossible to give a definite answer to a legal question in a specific situation on Stack Exchange. But the government will be involved. There are two parts to that. First, as part of anti-money-laundering laws, banks have to report all transactions above a certain limit; I believe $10k. When you use a check or similar to pay, that happens pretty much automatically. When making a cash payment, you may have to fill out some forms. An secondly, Edward Snowden revealed that the government also tapped into banking networks, so pretty much every transaction is recorded, even if it is not reportable.
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What is the correct way to report incentive stock options (ISO) on federal taxes?
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I'm assuming this was a cashless exercise because you had income show up on your w-2. When I had a similar situation, I did the following: If you made $50,000 in salary and $10,000 in stock options then your W-2 now says $60,000. You'll record that on your taxes just like it was regular income. You'll also get a form that talks about your stock sale. But remember, you bought and sold the stock within seconds. Your forms will probably look like this: Bought stock: $10,000 Sold stock: $10,000 + $50 commission Total profit (loss): ($50) From the Turbotax/IRS view point, you lost $50 on the sale of the stock because you paid the commission, but the buy and sell prices were identical or nearly identical.
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Why do stocks priced above $2.00 on the ASX sometimes move in $0.005 increments?
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Like in the US, more flexibility is extended to hidden orders. Australia has taken an aggressive approach to hidden orders in the direction of lower ticks. Aussies have a rich financial that evolved differently than the Dutch custom more familiarly known in the UK and US. They, like Chicago evolved out of commodities trade rather than trade. When commodities are worth nearly nothing per unit, larger precision comes naturally. For the Dutch, it was the opposite. A single ship would trade in 1/64 share or for the largest vessels, 1/128 share. Here, there's no point to high precision. New York, founded by the Dutch specialized in logistics just the same. To a man with a hammer, everything looks like a nail, so both Chicago, Australia, and other financial systems built by commodities rather than trade have extended the higher precision logic to everything else, and pricing is fantastic. It should not be a surprise why Australia has taken a lead in pushing infinite precision.
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Electric car lease or buy?
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There are some who argue that you should lease an electric car. These factors are in addition to all the normal pros and cons of leasing vs. buying. The technology is still new and is advancing rapidly. In 2-3 years, the newer model may have significantly improved features, range, and efficiency, as well as lower prices. If you are the type of person to upgrade regularly to the latest and greatest, leasing can make it a smoother transition. It is hard to predict the depreciation of the vehicles. This is both because of the above factors, but also because these kinds of cars are newer and so the statistical models used to predict their future values are less refined. The models for predicting gas car prices have been honed for decades. EV Manufacturers have in the past made some mistakes in their residual value estimations. When you lease a car, you get essentially an option to buy the car at the future predicted residual value. If, at the end of the lease, the market value of the car is higher than the residual value, you can purchase the car at the predetermined price, making yourself some extra money. If the value is lower than the residual, you can return the car or renegotiate. I know a relatively large number of electric vehicle owners. Most or all of the ones who got the vehicle new leased it. The rest bought used vehicles coming off lease, which can also be a good deal.
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Are credit cards not viewed as credit until you miss one payment?
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First, a note of my personal experience: up until a year ago, my credit lines were composed exclusively of credit cards with perfect payment histories, and my credit score is fine. If you mean that credit cards have no impact on a person's credit score until they miss a payment, that is certainly not correct. FICO's website identifies "payment history" as 35% of your FICO score: The first thing any lender wants to know is whether you’ve paid past credit accounts on time. This is one of the most important factors in a FICO® Score. ... Credit payment history on many types of accounts Account types considered for payment history include: ... Details on late or missed payments ("delinquencies") and public record and collection items FICO® Scores consider: How many accounts show no late payment A good track record on most of your credit accounts will increase your FICO® Scores. Clearly, from the last item alone, we see that credit lines (a category which includes credit cards) with no late payments is a factor in computing your FICO score, and certainly other credit bureaus behave similarly. Possibly the banker was trying to explain some other point, like "If you're careful not to spend more on your card than you have in the bank, you can functionally treat your credit card as a debit line," but did so in a confusing way.
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I don't understand all this techincal jargon
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Note: While I think the above is a reasonable interpretation, I'm not about to take legal responsibility for it since I'm not a lawyer, if you need serious advice get a professional opinion through appropriate channels.
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Renting from self during out of area remodel project - deductible?
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There are certain situations where you could legally pay yourself rent, but it'd be in the context of multiple business entities interacting, never in the context of an individual renting their own property. Even if you could, any rent paid to yourself would count as rental income, so there'd be no benefit. Edit: I was hunting for examples where it might be acceptable, and didn't, but I found a good explanation as to why it is not acceptable from Brandon Hall on a BiggerPockets post: To get technical, you will be going up against the Economic Substance Doctrine which states that a transaction has economic substance if: (1) the transaction changes in a meaningful way (apart from Federal income tax effects) the taxpayer’s economic position; and (2) the taxpayer has a substantial purpose (apart from Federal income tax effects) for entering into such transaction. By transferring your primary residence into a LLC, you would not be changing your economic position. Further, you do not have a substantial purpose for entering into such transaction other than to simply avoid paying federal income taxes. So it might make sense if multiple people owned the LLC that owned the property you wanted to rent, and there are instances where company X owns holding company Y that owns an office building that company X rents space in. But if you're the sole player in the LLC's then it sounds like a no-go.
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When to trade in a relatively new car for maximum value
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So this has been bugging me for a while, because I am facing a similar dilemma and I don't think anyone gave a clear answer. I bought a 2012 kia soul in 2012. 36 months financing at 300/mo. Will be done with my car loan in 2015. I plan on keeping it, while saving the same amount of money 300/mo until I buy my next car. But, I also have an option of trading it in for the the next car. Question: should I trade it in in 2015. should I keep it for 2 years more? 3 years more, before I buy the next car? What makes most financial sense and savings. I tried to dig up some data on edmunds - the trade-in value and "true cost to own" calculator. The make and model of my car started in 2010, so I do not have historical data, as well as "cost to own" calculator only spans 5 years. So - this is what I came up with: Where numbers in blue are totally made up/because I don't have the data for it. Granted, the trade-in values for the "future" years are guesstimated - based on Kia Soul's trade-in values from previous years (2010, 2011, 2012) But, this is handy, and as it gets closer to 2015 and beyond, I can re-plug in the data where it is available and have a better understanding of the trade-in vs keep it longer decision. Hope this helps. If the analysis is totally off the rocker, please let me know - i'll adjust it/delete it. Thank you
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ESPP advantages and disadvantages
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You should always always enroll in an espp if there is no lockup period and you can finance the contributions at a non-onerous rate. You should also always always sell it right away regardless of your feelings for the company. If you feel you must hold company stock to be a good employee buy some in your 401k which has additional advantages for company stock. (Gains treated as gains and not income on distribution.) If you can't contribute at first, do as much as you can and use your results from the previous offering period to finance a greater contribution the next period. I slowly went from 4% to 10% over 6 offering periods at my plan. The actual apr on a 15% discount plan is ~90% if you are able to sell right when the shares are priced. (Usually not the case, but the risk is small, there usually is a day or two administrative lockup (getting the shares into your account)) even for ESPP's that have no official lockup period. see here for details on the calculation. http://blog.adamnash.com/2006/11/22/your-employee-stock-purchase-plan-espp-is-worth-a-lot-more-than-15/ Just a note For your reference I worked for Motorola for 10 years. A stock that fell pretty dramatically over those 10 years and I always made money on the ESPP and more than once doubled my money. One additional note....Be aware of tax treatment on espp. Specifically be aware that plans generally withhold income tax on gains over the purchase price automatically. I didn't realize this for a couple of years and double taxed myself on those gains. Fortunately I found out my error in time to refile and get the money back, but it was a headache.
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Is Amazon's offer of a $50 gift card a scam?
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The most likely reason for this card is that Amazon has an arrangement with the issuer (I believe that that used to be Chase; may have changed since). Such an arrangement may allow Amazon to take the risk of chargebacks, etc. in return for the issuer handling the mechanics of billing. This is advantageous for Amazon, as otherwise they are subject to both their own procedures and those of the issuer. Amazon would rather take the entire risk than share it with someone else who charges for the privilege. Fees for processing credit cards can be as much as 5%, although 1-2% is more typical. Due to its size, Amazon may already have negotiated fees lower than 1%. But even so, any savings they make are to their benefit. Further, now they can get a share of the fees charged to other merchants. For example, if you buy a book from Barnes & Noble (an Amazon competitor) with the Amazon card, then Amazon gets some money in return, say 1% of the transaction. If the price is the same on Amazon and at Barnes & Noble, you can actually save money with the Amazon card. Amazon gives more "cash back" in the form of gift card balance for an Amazon purchase. So the card may mean that you buy from Amazon when you might otherwise have chosen someone else. If we again assume a 20% margin, they only need $200 of additional purchases to make $40 of profit. Someone who buys $1000 additional on the Amazon site makes them $200 of profit. They're over $160 ahead. Also note that Amazon is only giving you a gift card, which you have to use on Amazon. And it's difficult to spend exactly $50. As a practical matter, most people will buy, say, $60, with $10 of that money. So they sell you $48 of merchandise (their cost, assuming a 20% margin) for $10. They lost $38 on that transaction, but they've lured you into a long term relationship that may return more than that. And they didn't lose the $50 you gained. They only lost $38. Think about it as a marketing cost. Amazon is willing to pay $38 for a long term relationship with you. From their perspective, doing so in such a way that you come out $50 ahead (assuming you would have made the same purchases without this), is a win-win. Because once they have that relationship, they can leverage it to give them savings elsewhere. This is Amazon's approach in general. Originally all their products were drop shipped (from someone like Ingram Micro). They handled the web site and billing while the drop shipper handled inventory and shipping. Then Amazon added their own warehouses. Now they can do all that separately. This is just the same thing for buyers. Amazon manages all the risk of the transaction and thus gets all the profit. Because Amazon is managing the credit card risk, they have access to all the credit history. This helps them better determine if that sudden shipment of a $2000 camera to Thailand is a real transaction (you're a photographer who regularly vacations in Thailand) or a fake (you've never been to Thailand in your life and your phone is camera enough). That additional information may itself be worth enough to make the relationship profitable for Amazon. Amazon certainly gets something out of the relationship. You give them money. And you are likely to give them more money with the Amazon card than they would otherwise receive. But you get products in return. Is that a good deal? If you prefer having the products to the money, then yes. Others have suggested that it's the irresponsible credit card users that generate the real profit. I disagree. They generate more revenue in the short term, but then they overspend and declare bankruptcy. Then Amazon loses its money. Yes, they get more interest and fees in that case, but if they lose $1000, they needed to make $1000 in profit just to break even. It's safer to make the smaller short term profits with responsible customers who will continue to be customers for the long term. A steady profit of $100 or $200 a year is better than a one time profit of $500 followed by a loss of $1000 followed by nothing for ten years. Anyway, your question was if you should sign up for the card. If you are planning on doing a lot of shopping on Amazon, you might as well. It gives you cash back. If shopping on Amazon is inconvenient, then perhaps that outweighs the advantage of the card. The "cash back" is just Amazon money. You can't spend it anywhere but Amazon. If each transaction gives you a little bit of Amazon money, you have to keep going back to spend it.
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Did an additional $32 billion necessarily get invested into Amazon.com stock on October 26th, 2017?
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No, a jump in market capitalization does not equal the amount that has been invested. Market cap is simply the stock price times the total number of shares. This represents a theoretical value of the company. I say "theoretical" because the company might not be able to be sold for that at all. The quoted stock price is simply what the last buyer and seller of stock agreed upon for the price of their trade. They really only represent themselves; other investors may decide that the stock is worth more or less than that. The stock price can move on very little volume. In this case, Amazon had released a very good earnings report after the bell yesterday, and the price jumped in after hours trading. The stock price is up, but that simply means that the few shares traded overnight sold for much higher than the closing price yesterday. After the market opens today and many more shares are traded, we'll get a better idea what large numbers of investors feel about the price. But no matter what the price does, the change in market cap does not equal the amount of new money being invested in the company. Market cap is the price of the most recent trades extrapolated out across all the shares.
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Debt collector has wrong person and is contacting my employer
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You are talking to the wrong people. Debt collectors are not intimidated by anything you say. Call and tell them that, before you pay the debt, they need to get the paperwork from the company to verify that you actually owe them the money and the amount. You need copies of the original paperwork. This alone may resolve the issue. If not, then call the client company and explain that THEIR debt collection agency is talking to the wrong person. Explain why you are not that person. It may be necessary to tell them that your lawyer advised you that they will be personally held responsible for any damages that you may incur from this debt collector's actions. The client is the one who needs to be intimidated.
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Saving tax for long term stock investment capital gain by quiting my current job?
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Reducing your income by 20k is guaranteed to lower your tax bill by less than 20k (because there are no tax rates greater than 100%). Your goal shouldn't be to minimize taxes but to maximize total net income.
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Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan?
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Forget about terms. Think about loans in terms of months. To simplify things, let's consider a $1000 loan with .3% interest per month. This looks like a ten month term, but it's equally reasonable to think about it on a month-to-month basis. In the first month, you borrowed $1000 and accrued $3 interest. With the $102 payment, that leaves $901 which you borrow for another month. So on and so forth. The payoff after five payments would by $503.54 ($502.03 principal plus $1.51 interest). You'd save $2.99 in interest after paying $13.54. The reason why most of the interest was already paid is that you already did most of the borrowing. You borrowed $502.03 for six months and about $100 each for five, four, three, two, and one month. So you borrowed about $4500 months (you borrowed $1000 for the first month, $901 for the second month, etc.). The total for a ten month $1000 loan is about $5500 months of borrowing. So you've done 9/11 of the borrowing. It's unsurprising that you've paid about 9/11 of the interest. If you did this as a six month loan instead, then the payments look different. Say You borrow $1000 for one month. Then 834 for one month. So on and so forth. Adding that together, you get about $168.50 * 21 or $3538.50 months borrowed. Since you only borrow about 7/9 as much, you should pay 7/9 the interest. And if we adding things up, we get $10.54 in interest, about 7/9 of $13.54. That's how I would expect your mortgage to work in the United States (and I'd expect it to be similar elsewhere). Mortgages are pretty straight-jacketed by federal and state regulations. I too once had a car loan that claimed that early payment didn't matter. But to get rid of the loan, I made extra payments. And they ended up crediting me with an early release. In fact, they rebated part of my last payment. I saved several hundred dollars through the early release. Perhaps your loan did not work the same way. Perhaps it did. But in any case, mortgages don't generally work like you describe.
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