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Apartment Security Deposit refunds in Maryland | In Maryland, a landlord must hold your security deposit in an escrow account and pay you interest when returning the deposit. The interest is simple interest; it does not compound. The interest rate that they must pay has changed over the last 43 years. Before October 1, 2004, the rate was 4%. Until January 1, 2015, the rate was 3%. Currently, the rate is 1.5% OR the simple interest rate accrued at the daily U.S. Treasury yield curve rate for one year, as of the first business day of each year, whichever is greater. (This year, the rate is 1.5%.) Maryland's Department of Housing and Community Development has a Security Deposit Calculator for easy calculation of this interest; however, it only works for deposits since January 1, 2015. It is unclear to me whether the interest rate in effect is the one that was in place when the security deposit was made, or if the rate changes over the years. At most, if you get 4% interest every year, I would expect you to receive $429.76, which is $158 + ($158 * 4% * 43). The interest is accrued every 6 months, so you would not get any interest for the 3 months that you rented in your 44th year. (With the new law that took effect this year, interest is accrued monthly.) At least, if the interest rate changes with the new laws, I would expect you to receive $413.18, which is $158 + ($158 * 4% * 32.5) + ($158 * 3% * 10.25) + ($158 * 1.5% * 0.5). Some text on the Security Deposit Calculator suggests that the laws for Prince George's County are different than the rest of the state. If you are in that county, you'll need to check the local ordinances to see what security deposit policies apply. |
Are Index Funds really as good as “experts” claim? | I actually love this question, and have hashed this out with a friend of mine where my premise was that at some volume of money it must be advantageous to simply track the index yourself. There some obvious touch-points: Most people don't have anywhere near the volume of money required for even a $5 commission outweigh the large index fund expense ratios. There are logistical issues that are massively reduced by holding a fund when it comes to winding down your investment(s) as you get near retirement age. Index funds are not touted as categorically "the best" investment, they are being touted as the best place for the average person to invest. There is still a management component to an index like the S&P500. The index doesn't simply buy a share of Apple and watch it over time. The S&P 500 isn't simply a single share of each of the 500 larges US companies it's market cap weighted with frequent rebalancing and constituent changes. VOO makes a lot of trades every day to track the S&P index, "passive index investing" is almost an oxymoron. The most obvious part of this is that if index funds were "the best" way to invest money Berkshire Hathaway would be 100% invested in VOO. The argument for "passive index investing" is simplified for public consumption. The reality is that over time large actively managed funds have under-performed the large index funds net of fees. In part, the thrust of the advice is that the average person is, or should be, more concerned with their own endeavors than they are managing their savings. Investment professionals generally want to avoid "How come I my money only returned 4% when the market index returned 7%? If you track the index, you won't do worse than the index; this helps people sleep better at night. In my opinion the dirty little secret of index funds is that they are able to charge so much less because they spend $0 making investment decisions and $0 on researching the quality of the securities they hold. They simply track an index; XYZ company is 0.07% of the index, then the fund carries 0.07% of XYZ even if the manager thinks something shady is going on there. The argument for a majority of your funds residing in Mutual Funds/ETFs is simple, When you're of retirement age do you really want to make decisions like should I sell a share of Amazon or a share of Exxon? Wouldn't you rather just sell 2 units of SRQ Index fund and completely maintain your investment diversification and not pay commission? For this simplicity you give up three basis points? It seems pretty reasonable to me. |
Should I be filling out form W-9 for somebody I sold used equipment to? | They are a business. You're not a corporation. They paid you more than $600 during the year, so they're supposed to send 1099 to you and the IRS about it. They need your taxpayer certification (W9) for that. They were supposed to ask for it before they paid you, but yes - they're supposed to ask for it. |
What happens when a company stops trading? (pink sheets) | What will happen if the stock price just continues to decline? Nothing. What would happen if folks just stop trading it? Nothing. What if the company goes private? Then they will have to buy you out based on some agreed upon price, as voted by the board and (potentially) approved by the shareholders. Depending on the corporation charter, the board may not be required to seek the shareholders' approval, but if the price the board agreed upon is unreasonable you can sue and prevent the transaction. How do they decide the fair value of the outstanding stocks? Through a process called "valuation", there are accounting firms which specialize in this area of public accounting. |
Dry cleaners lost $160 pants, what should I do? | Do you have the claim ticket? I'll assume yes. Do a Google search for "Dry Cleaner Regulations for [state you live in]" and see if there is a regulatory agency because some states have them, although that might just be for environmental concerns. Worth a shot to call one and ask if they handle customer complaints. Otherwise, the goal is to have them either find your pants or compensate you for the loss. I'd try one last time on the phone or in person. If that fails: Send them a nastygram in the mail demanding $160 by x date or you will pursue "further actions". Keep the letter short and sweet. You can use Google to find example demand letters. After they ignore the letter, file in small claims court. It will cost you ~$50 in filing fees which will be included in the judgement if you win. Go to court, explain why you feel they owe you $160. Bring the claim ticket, the matching suit jacket, and proof that replacing it will cost $160. Step 4: win! Or if that sounds like too much work, you can just write a nasty review on Yelp. You won't get your pants back but it'll feel good. I'd avoid the complaining to the BBB because they have no teeth and the dry cleaner is not obligated to respond to a BBB complaint. Standing right outside their door handing out pamphlets might be a bad idea since it's likely private property and they'll make you leave. But you could always do the labor union thing and hold a "shame on the drycleaners for losing my pants!" sign out by the street or entrance to the parking lot. (That seems like a lot of effort, although it'll look great on your Facebook feed!) |
Home Renovations are expensive.. Should I only pay cash for them? | It depends on your situation. If your floor is broken, fix it. If you don't have $1,000 on hand, spend appropriately. It seems silly to be doing ROI calculations on the potential impact on resale value. It's sillier to blow money frivolously, whether you do so with cash or credit. I'm assuming that if you have a broken linoleum floor that the kitchen isn't new, so it doesn't make sense to install your "dream tile" into the kitchen. Skip the imported travertine or wood and buy some nice linoleum and hire a handyman to put it in or install it yourself. You can probably do this for $500-700. If you have longer term plans for the kitchen, get them on paper and figure out what exactly you want to do and when you'll be able to do it. |
Need something more basic than a financial advisor or planner | If you are living near a land-grant university, you might be able to find help from the university's Extension Service. In many land-grant universities (the land grants were given to universities formed for the purpose of improving "agricultural and mechanical arts"), the Extension Services have expanded beyond farm-related services to include horticulture, food and nutrition counseling, consumer finance, money management and budgeting advice etc. See, for example this site. |
How do you measure the value of gold? | 1) Get some gold. 2) Walk around, yelling, "Hey, I have some gold, who wants to buy it?" 3) Once you have enough interested parties, hold an auction and see who will give you the most dollars for it. 4) Trade the gold for that many dollars. 5) You have just measured the value of your gold. |
Bid price… sudden Drop | An option gives you the option rather than the obligation to buy (or sell) the underlying so you don't have to exercise you can just let the option expire (so long it doesn't have an automatic expiry). After expiration the option is worthless if it is out of the money but other than that has no hangover. Option prices normally drop as the time value of the option decays. An option has two values associated with it; time value and exercise value. Far out of the money (when the price of the underlying is far from the strike price on the losing side) options only have time value whereas deep in the money options (as yours seems to be) has some time value as well as the intrinsic value of the right to buy (sell) at a low (high) price and then sell (buy) the underlying. The time value of the option comes from the possibility that the price of the underlying will move (further) in your favour and make you more money at expiry. As expiry closes it is less likely that there will be a favourable mood so this value declines which can cause prices to move sharply after a period of little to no revaluing. Up to now what I have said applies to both OTC and traded options but exchange traded options have another level of complexity in their trading; because there are fewer traders in the options market the size of trade at which you can move the market is much lower. On the equities markets you may need to trade millions of shares to have be substantial enough to significantly move a price, on the options markets it could be thousands or even hundreds. If these are European style options (which sounds likely) and a single trading entity was holding a large number of the exchange traded options and now thinks that the price will move significantly against them before expiry their sell trade will move the market lower in spite of the options being in the money. Their trade is based on their supposition that by the time they can exercise the option the price will be below the strike and they will lose money. They have cashed out at a price that suited them and limited what they will lose if they are right about the underlying. If I am not correct in my excise style assumption (European) I may need more details on the trade as it seems like you should just exercise now and take the profit if it is that far into the money. |
Ongoing things to do and read to improve knowledge of finance? | Before you can truly learn, you must unlearn first. I recommend the book "Fooled by Randomness" by Nassim Taleb. |
Getting correlation from regression slope (Completely stumped) | I just used the formula in below link and did some math. I have that book too but haven't looked at it yet really. Lots of maths to have fun with. Let me know if this is correct or needs fixing. Source: http://wiki.fool.com/How_to_Calculate_Beta_From_Volatility_%26_Correlation |
I'm only spending roughly half of what I earn; should I spend more? | Apart from what the other posters have said, you could look at some 'good cause'. I'd keep on saving 50% as spending more won't really make you more happy. You already sound happy. What I used to do, when I could, was to donate 10% of my 'profit' per year. I'd compare year start with year end and do the math. Afterwards it was just a matter of choosing. there are non government organizations that will get most money where it's needed. Edit as soon as the business I'm starting becomes profitable, I'll continue my donations. Thanks for the appreciations. |
Do Banks Cause Inflation? What are other possible causes? | There are several causes of inflation. One is called cost push — that is, if the price of e.g. oil goes up sharply (as it did in the 1970s), it creates inflation by making everything cost more. Another is called demand pull: if labor unions bargain for higher wages (as they did in the 1960s), their wage costs push up prices, especially after they start buying. The kind of inflation that the banks cause is monetary inflation. That is, for every dollar of deposits, they can make $5 or $10 of loans. So even though they don't "print" money (the Fed does) it's as if they did. The result could be the kind of inflation called "too much money chasing too few goods." |
If our economy crashes, and cash is worthless, should i buy gold or silver | Neither. Food, fuel, and tools. Books on how to make and use basic tools -- the books published for farmers who want to kluge their own solutions might be helpful. Heck, help defend a library; it will be beyond price as soon as things settle out a bit. Having skills like blacksmithing and knowing how to teach could go a long way. SF really has explored this in better detail than we could possibly cover here. |
Should I buy a house because Mortgage rates are low | There is a significant tie between housing prices and mortgage rates. As such, don't assume low mortgage rates mean you will be financially better off if you buy now, since housing prices are inversely correlated with mortgage rates. This isn't a huge correlation - it's R-squared is a bit under 20%, at a 1.5-2 year lag - but there is a significant connection there. Particularly in that 10%+ era (see chart at end of post for details) in 1979-1982, there was a dramatic drop in housing price growth that corresponded with high interest rates. There is a second major factor here, though, one that is likely much more important: why the interest rates are at 10%. Interest rates are largely set to follow the Federal Funds rate (the rate at which the Federal Reserve loans to banks). That rate is set higher for essentially one purpose: to combat inflation. Higher interest rates means less borrowing, slower economic growth, and most importantly, a slower increase in the money supply - all of which come together to prevent inflation. Those 10% (and higher!) rates you heard about? Those were in the 70's and early 80's. Anyone remember the Jimmy Carter years? Inflation in the period from 1979 to 1981 averaged over 10%. Inflation in the 70s from 1973 to 1982 averaged nearly 9% annually. That meant your dollar this year was worth only $0.90 next year - which means inevitably a higher cost of borrowing. In addition to simply keeping pace with inflation, the Fed also uses the rate as a carrot/stick to control US inflation. They weren't as good at that in the 70s - they misread economic indicators in the late 1970s significantly, lowering rates dramatically in 1975-1977 (from ~12% to ~5%). This led to the dramatic double-digit inflation of the 1979-1981 period, requiring them to raise rates to astronomic levels - nearly 20% at one point. Yeah, I hope nobody bought a house on a fixed-rate mortgage from 1979-1981. The Fed has gotten a lot more careful over the years - Alan Greenspan largely was responsible for the shift in policy which seems to have been quite effective from the mid 1980s to the present (though he's long gone from his spot on the Fed board). Despite significant economic changes in both directions, inflation has been kept largely under control since then, and since 1991 have been keeping pretty steady around 6% or less. The current rate (around 0%) is unlikely to stay around forever - that would lead to massive inflation, eventually - but it's reasonable to say that prolonged periods over 10% are unlikely in the medium term. Further, if inflation did spike (and with it, your interest rates), salaries tend to spike also. Not quite as fast as inflation - in fact, that's a major reason a small positive inflation around 2-3% is important, to allow for wages to grow more slowly for poorer performers - but still, at 10% inflation the average wage will climb at a fairly similar pace. Thus, you'd be able to buy more house - or, perhaps a better idea, save more money for a house that you can then buy a few years down the road when rates drop. Ultimately, the advice here is to not worry too much about interest rates. Buy a house when you're ready, and buy the house you're ready for. Interest rates may rise, but if so it's likely due to an increase in inflation and thus wage growth; and it would take a major shift in the economy for rates to rise to the 10-11% level. If that did happen, housing prices (or at least growth in prices) would likely drop significantly. Some further references: |
Are cashiers required to check a credit card for a signature in the U.S.? | So my wife was at work today and got yelled at by both a cop and her managers for simply LOOKING at the card. I don't understand I also work in retail and of course I must see the card to ensure it is a real card, it is a very strict policy that we must have a valid physical card to run any credit/debit transactions. People put skimmers everywhere you use your card and can pick up the info off the strip and put it onto another card and use it without you noticing right away. With the right equipment they can put their name on it or the name on their fake I.d. so the only red flag would be them trying to use several different cards |
Is it smarter to buy a small amount of an ETF every 2 or 3 months, instead of monthly? | By not timing the market and being a passive investor, the best time to invest is the moment you have extra money (usually when wages are received). The market trends up. $10 fee on $2000 represents 0.5% transaction cost, which is borderline prohibitive. I would suggest running simulations, but I suspect that 1 month is the best because average historical monthly total return is more than 0.5%. |
What emergencies could justify a highly liquid emergency fund? | Weather events and aging infrastructure. Cash will buy gasoline, food and water when there is no power or telephone connectivity to process ATMs and credit cards. |
Should I set a stop loss for long term investments? | The emphasis of "stop loss" is "stop", not "loss". Stop and long term are contradictory. After you stop, what are you going to do with your cash? Since it's long term, you still have 5+ years to before you use the money, do you simply park everything in 0.5% savings account? On the other hand, if your investment holds N stocks and one has dropped a lot, you are free to switch to another one. This is just an investment strategy and you are still in the market. |
Why won't my retirement account let me write a “covered put”? | I have a Roth IRA with Scottrade, and they allow me to write cash secured puts, as well as covered calls. I can also purchase calls or puts, if I choose. When I write a cash secured put, it automatically deducts the amount required to purchase the shares at the strike price from my "cash available for transactions". |
Investing Account Options | Immediately move your Roth IRA out of Edward Jones and into a discount broker like Scottrade, Ameritrade, Fidelity, Vanguard, Schwab, or E-Trade. Edward Jones will be charging you a large fraction of your money (probably at least 1% explicitly and maybe another 1% in hidden-ish fees like the 12b-1). Don't give away several percent of your savings every year when you can have an account for free. Places like Edward Jones are appropriate only for people who are unwilling to learn about personal finance and happy to pay dearly as a result. Move your money by contacting the new broker, then requesting that they get your money out of Edward Jones. They will be happy to do so the right way. Don't try and get the money out yourself. Continue to contribute to your Roth as long as your tax bracket is low. Saving on taxes is a critically important part of being financially wise. You can spend your contributions (not gains) out of your Roth for any reason without penalty if you want/need to. When your tax bracket is higher, look at traditional IRA's instead to minimize your current tax burden. For more accessible ways of saving, open a regular (non-tax-advantaged) brokerage account. Invest in diversified and low-cost funds. Look at the expense ratios and minimize your portfolio's total expense. Higher fee funds generally do not earn the money they take from you. Avoid all funds that have a nonzero 12b-1 fee. Generally speaking your best bet is buying index funds from Fidelity, Vanguard, Schwab, or their close competitors. Or buying cheap ETF's. Any discount brokerage will allow you to do this in both your Roth and regular accounts. Remember, the reason you buy funds is to get instant diversification, not because you are willing to gamble that your mutual funds will outperform the market. Head to the bogleheads forum for more specific advice about 3 fund portfolios and similar suggested investment strategies like the lazy portfolios. The folks in the forums there like to give specific advice that's not appropriate here. If you use a non-tax-advantaged account for investing, buy and sell in a tax-smart way. At the end of the year, sell your poor performing stocks or funds and use the loss as a tax write-off. Then rebalance back to a good portfolio. Or if your tax bracket is very low, sell the winners and lock in the gains at low tax rates. Try to hold things more than a year so you are taxed at the long-term capital gains rate, rather than the short-term. Only when you have several million dollars, then look at making individual investments, rather than funds. In a non-tax-advantaged account owning the assets directly will help you write off losses against your taxes. But either way, it takes several million dollars to make the transactions costs of maintaining a portfolio lower than the fees a cheap mutual/index fund will charge. |
Could the loan officer deny me even if I have the money as a first time home buyer? | I've been a mortgage broker for almost 20 years. I get people loans all of the time thru FHA and Conventional (Fannie Mae) with just one year work history; however, as a student, you must submit your school transcripts and your major needs to be in line with your current job. I'm closing a guy next week that has only been in his job for 8 months but he just graduated with his Masters in Biology. He's currently a wild life manager and the underwriter signed off on it easily. |
What are the ins/outs of writing equipment purchases off as business expenses in a home based business? | Keep this rather corny acronym in mind. Business expenses must be CORN: As other posters have already pointed out, certain expenses that are capital items (computers, furniture, etc.) must be depreciated over several years, but you have a certain amount of capital items that you can write off in the current tax year. |
Can saving/investing 15% of your income starting age 25, likely make you a millionaire? | As others have shown, if you assume that you can get 6% and you invest 15% of a reasonable US salary then you can hit 1 million by the time you retire. If you invest in property in a market like the UK (where I come from...) then insane house price inflation will do it for you as well. In 1968 my parents bought a house for £8000. They had a mortgage on it for about 75% of the value. They don't live there but that house is now valued at about £750,000. Okay, that's close to 60 years, but with a 55 year working life that's not so unreasonable. If you assume the property market (or the shares market) can go on rising forever... then invest in as much property as you can with your 15% as mortgage payments... and watch the million roll in. Of course, you've also got rent on your property portfolio as well in the intervening years. However, take the long view. Inflation will hit what a million is worth. In 1968, a million was a ridiculously huge amount of money. Now it's 'Pah, so what, real rich people have billions'. You'll get your million and it will not be enough to retire comfortably on! In 1968 my parents salaries as skilled people were about £2000 a year... equivalent jobs now pay closer to £50,000... 25x salary inflation in the time. Do that again, skilled professional salary in 60 years of £125000 a year... so your million is actually 4 years salary. Not being relentlessly negative... just suggesting that a financial target like 'own a million (dollars)' isn't a good strategy. 'Own something that yields a decent amount of money' is a better one. |
Is it worth investing in Index Fund, Bond Index Fund and Gold at the same time? | Taking into account that you are in Cyprus, a Euro country, you should not invest in USD as the USA and China are starting a currency war that will benefit the Euro. Meaning, if you buy USD today, they will be worth less in a couple of months. As for the way of investing your money. Look at it like a boat race, starting on the 1st of January and ending on the 31st of December each year. There are a lot of boats in the water. Some are small, some are big, some are whole fleets. Your objective is to choose the fastest boat at any time. If you invest all of your money in one small boat, that might sink before the end of the year, you are putting yourself at risk. Say: Startup Capital. If you invest all of your money in a medium sized boat, you still run the risk of it sinking. Say: Stock market stock. If you invest all of your money in a supertanker, the risk of it sinking is smaller, and the probability of it ending first in the race is also smaller. Say: a stock of a multinational. A fleet is limited by it's slowest boat, but it will surely reach the shore. Say: a fund. Now investing money is time consuming, and you may not have the money to create your own portfolio (your own fleet). So a fund should be your choice. However, there are a lot of funds out there, and not all funds perform the same. Most funds are compared with their index. A 3 star Morningstar rated fund is performing on par with it's index for a time period. A 4 or 5 star rated fund is doing better than it's index. Most funds fluctuate between ratings. A 4 star rated fund can be mismanaged and in a number of months become a 2 star rated fund. Or the other way around. But it's not just luck. Depending on the money you have available, your best bet is to buy a number of star rated, managed funds. There are a lot of factors to keep into account. Currency is one. Geography, Sector... Don't buy for less than 1.000€ in one fund, and don't buy more than 10 funds. Stay away from Gold, unless you want to speculate (short term). Stay away from the USD (for now). And if you can prevent it, don't put all your eggs in one basket. |
Deriving the put-call parity | Think of it this way: C + (-P) = forward contract. Work it out from there. Anyways, this stack is meant for professionals, not students, I think. |
Do retailers ever stock goods just to make other goods sell better? | They may stock items that frame the various price points. Of course they risk having the items go stale before they are sold. You also have situations where the store will advertise an item, but end up taking a loss on that sale because it will bring people in, and they will make other purchases. Determining what to stock, how to display it, and how to advertise it involves both math and psychology. |
What are the risks with ETFs with relatively low market caps? | Market cap probably isn't as big of an issue as the bid/ask spread and the liquidity, although they tend to be related. The spread is likely to be wider on lesser traded ETF funds we are talking about pennies, likely not an issue unless you are trading in and out frequently. The expense ratios will also tend to be slightly higher again not a huge issue but it might be a consideration. You are unlikely to make up the cost of paying the commission to buy into a larger ETF any time soon though. |
When the Reserve Bank determines the interest rates, do they take the house prices into account? | The setting of interest rates (or "repurchase rates") varies from country to country, as well as with the independence of the central bank. There are a number of measurements and indices that central bankers can take into account: This is a limited overview but should give an indication of just how complex tracking inflation is, let alone attempting to control it. House prices are in the mix but which house or which price? The choice of what to measure faces the difficulty of attempting to find a symmetrical basket which really affects the majority regularly (and not everyone is buying several new houses a year so the majority are ring-fenced from fluctuations in prices at the capital end, but not from the interest-rate end). And this is only when the various agencies (Statistics, Central Bank, Labour, etc.) are independent. In countries like Venezuela or Argentina, government has taken over release of such data and it is frequently at odds with individual experience. Links for the US: And, for Australia: |
If a stock doesn't pay dividends, then why is the stock worth anything? | Stock has value to the buyer even if it does not currently pay dividends, since it is part ownership of the company (and the company's assets). The owners (of which you are now a part) hire managers to make a "dividend policy decision." If the company can reinvest the profits into a project that would earn more than the "minimum acceptable rate of return," then they should do so. If the company has no internal investment opportunities at or above this desired rate, then the company has an obligation to declare a dividend. Paying out a dividend returns this portion of profit to the owners, who can then invest their money elsewhere and earn more. For example: The stock market currently has, say, a 5% rate of return. Company A has a $1M profit and can invest it in a project with an expected 10% rate of return, so they should do so. Company B has a $1M profit, but their best internal project only has an expected 2% rate of return. It is in the owners' best interest to receive their portion of their company's profit as a dividend and re-invest it in other stocks. (Others have pointed out the tax deferrment portion of dividend policy, so I skipped that) |
$10,000 to invest in the house - Pay down principal or spruce up to increase appraisal? | There is no guarantee improvements will raise the appraised value. You also don't want your property tax appraisal to go up if you can avoid it. Since you are talking on the order of $10k I'll assume you're only a few thousand dollars more from getting to 20%. That said, any schemes you might come up with like refinancing or second line of credit will probably cost more in fees than they are worth, unless you can get a much nicer interest rate. Figure out how long you plan to stay there, Evaluate your options (do nothing, principal reduction, refinance for 30, 15, or even an ARM) and figure out your bottom line by comparing everything in a spreadsheet One more thing: if you do pay a substantial amount of extra principal, you can ask the lender to "rebalance" which will correct the minimum monthly payment to your remaining term. This will likely incur a fee, but could be helpful in an emergency |
How many days does Bank of America need to clear a bill pay check | I cannot answer the original question, but since there is a good deal of discussion about whether it's credible at all, here's an answer that I got from Bank of America. Note the fine difference between "your account" and "our account", which does not seem to be a typo: The payment method is determined automatically by our system. One of the main factors is the method by which pay to recipients prefer to receive payments. If a payment can be issued electronically, we attempt to do so because it is the most efficient method. Payment methods include: *Electronic: Payment is sent electronically prior to the "Deliver By" date. The funds for the payment are deducted from your account on the "Deliver By" date. *Corporate Check: This is a check drawn on our account and is mailed to the pay to recipient a few days before the "Deliver By" date. The funds to cover the payment are deducted from your account on the "Deliver By" date. *Laser Draft Check: This is a check drawn on your account and mailed to the pay to recipient a few days before the "Deliver By" date. The funds for the payment are deducted from your account when the pay to recipient cashes the check, just as if you wrote the check yourself. To determine how your payment was sent, click the "Payments" button in your Bill Pay service. Select the "view payment" link next to the payment. Payment information is then displayed. "Transmitted electronically" means the payment was sent electronically. "Payment transaction number" means the payment was sent via a check drawn from our account. "Check number" means the payment was sent as a laser draft check. Each payment request is evaluated individually and may change each time a payment processes. A payment may switch from one payment method to another for a number of reasons. The merchant may have temporarily switched the payment method to paper, while they update processing information. Recent changes or re-issuance of your payee account number could alter the payment method. In my case, the web site reads a little different: Payment check # 12345678 (8 digits) was sent to Company on 10/27/2015 and delivered on 10/30/2015. Funds were withdrawn from your (named) account on 10/30/2015. for one due on 10/30/2015; this must be the "corporate check". And for another, earlier one, due on 10/01/2015, this must be the laser draft check: Check # 1234 (4 digits) from your (named) account was mailed to Company on 09/28/2015. Funds for this payment are withdrawn from your account when the Pay To account cashes the check. Both payments were made based on the same recurring bill pay payment that I set up manually (knowing little more of the company than its address). |
F-1 Visa expired - Unable to repay private student loan. What to do? | I would contact your loan servicing company explain the situation and see if you can renegotiate terms. They may be able to drop the interest rate or lengthen the schedule to reduce the payment amount. I wouldn't default on the loan as that would likely hinder coming to/working in the US in the future. Not knowing your financial situation or country, could you attempt to obtain financing in your own country in order to pay off the US based loan? I would at least attempt to make some sort of payment while you attempt renegotiation, refinancing or pursue a job in the US, even if it technically puts or keeps you in default of the loan. Making any payment at least shows the willingness to pay back the loan, and you're not intentionally defaulting on your obligation. |
Can I prove having savings without giving out the account number? | If you're worried about the account number just take a statement and black out the account number with a Sharpie or the like. That is if the account number even appears on it, these days it often doesn't. |
Relation between inflation rates and interest rates | Is it true that due the to the increase in interest rates that inflation is likely to increase as well? It is typically the reverse where inflation causes interest rates to rise. Interest rates fundamentally reflect the desire for people to purchase future goods over present day goods. If I loan money to someone for 5 years I lose the ability to use that money. In order to entice me to loan the money the borrower would have to offer me an incentive, that is, they would have to give me additional money at the end of that 5 years. This additional money is the interest rate and it reflects the desire of people to spend money in the future versus the present day. If offered the same amount of money today versus 5 years from now almost everyone would chose to take the money now. Money in the present is more valuable than the same amount of money in the future. Interest rates would still exist even with a currency that could not be printed. I would still prefer to have the currency today than in the future. If the currency is continually devalued (i.e. the issuer is printing more of the currency) than borrowers may charge additional interest to compensate for the loss in purchasing power when they make a loan. Also, it is hard to compare interest rates and inflation. Inflation is very difficult to calculate. New products and services, as well as ever changing consumer desires, continually change the mixture of goods in the market so it is nearly impossible to compare a basket of goods today to a basket of goods 5, 10, 20, or 30 years ago. |
What price can *I* buy IPO shares for? | If you participate in an IPO, you specify how many shares you're willing to buy and the maximum price you're willing to pay. All the investors who are actually sold the shares get them at the same price, and the entity managing the IPO will generally try to sell the shares for the highest price they can get. Whether or not you actually get the shares is a function of how many your broker gets and how your broker distributes them - which can be completely arbitrary if your broker feels like it. The price that the market is willing to pay afterward is usually a little higher. To a certain extent, this is by design: a good deal for the shares is an incentive for the big (million/billion-dollar) financiers who will take on a good bit of risk buying very large positions in the company (which they can't flip at the higher price, because they'd flood the market with their shares and send the price down). If the stock soars 100% and sticks around that level, though, the underwriting bank isn't doing its job very well: Investors were willing to give the company a lot more money. It's not "stealing", but it's definitely giving the original owners of the company a raw deal. (Just to be clear: it's the existing company's owners who suffer, not any third party.) Of course, LinkedIn was estimated to IPO at $30 before they hiked it to $45, and plenty of people were skeptical about it pricing so high even then, so it's not like they didn't try. And there's a variety of analysis out there about why it soared so much on the first day - fewer shares offered, wild speculative bubbles, no one could get a hold of it to short-sell, et cetera. They probably could have IPO'd for more, but it's unlikely there was, say, $120/share financing available: just because one sucker will pay the price doesn't mean you can move all 7.84 million IPO shares for it. |
How to fund sabbatical to prepare house for sale? | I'll write this up as a more formal answer, here. I'd suggest looking into a Home Equity Line of Credit, or HELOC. You didn't mention in your question how much equity you have in the home, but assuming at least 20%, you might be able to open a HELOC with a line of $40,000. My experience is that you can do 50% of your equity, but depends on the bank. Here are a few notes that are generally in play with HELOC's (YMMV, so be sure to know the specifics before signing on the line) Doing this, at least when we did 8 years ago, did not subject us to PMI. There are certainly plenty of things to research, but it sounds like you're pretty astute based on how you're evaluating the financial side of this endeavor. There are no guarantees in real estate. Houses could be selling like crazy now, but in 6 months they might not. It certainly sounds like that's a lower risk in your area, but you never know what might happen. If you're taking on this extra line of credit, make sure that it's something you could afford should the worst case scenario happen. Equity loans are also available. This is a more traditional fixed-rate loan rather than line of credit, so you'd be looking at set monthly payments rather than the flexibility of paying interest only when you need to. There's a brief write-up on the differences here. I have also heard of a construction loan, which falls into the same category as the aforementioned options, but I can't speak to today's market on those. |
How much should a new graduate with new job put towards a car? | As an absolute basic in life you always need 1 month's salary free and clear sitting in the bank. You do not have this. You don't even get to count that. It's what Napoleon would refer to as an "iron reserve": you have to have this. You actually won't even have this for some two or three months. Note that you have a staggering amount of debt. You have absolutely no assets. You own nothing. You have no savings. So at this point we can say "Could your situation be any worse?" and the answer is "It could not be any worse." On the "good things in your outlook" side you have the idea that you probably have a job (it's unfortunate how you refer to it as "will pay" when you mean "might pay") but you're in perhaps the highest-expense, most-flakey economic zone on Earth. Recall that i) every company eventually closes and ii) every job eventually ends. The next incredible problem you face is that I'm guessing you just have no clue how expensive it is to insure and run a car. Any ideas of buying anything more than a junker is a non-starter, but on top of that you're not realizing how expensive it is going to be for you to run a car. Disturbingly, you have a very poor idea of even how far it is you have to drive each day. The only realistic solution for you is to bike each day to work (buy the cheapest possible bike); become the "eccentric guy" who really focusses on health. Bike in for an hour, shower at the office or a nearby gym, enjoy your day and bike home. You'll need a backpack to carry your pack lunch, buy the cheapest backpack. Since it's LA, it may be impractical. You may literally need a car. In that case, your only solution is That's the only thing you can do. Plain lean on your parents or relatives to borrow some old car and use that. (It will still cost you an awful lot of money to do so - repairs, tires, insurance, and everything else.) A reminder, You do not have your one-month "iron reserve". You have a staggering amount of debt. You have absolutely no assets. You own nothing. You have no savings. Additionally you live with the parents; you have a dream of a job (in one the highest-priced, most flakey regions) and "job" is another word for no security - jobs evaporate all the time for many reasons. Please be careful. Regarding a car, find a way to borrow one; offer to make a repair on it, say. Don't spend one cent on anything your first six months at work, concentrate only on your job. See where you are after six months. |
Finding a good small business CPA? | Look for an accountant who brings not only expertise in number crunching, but consulting and business planning - a full package. |
Opening 5 credit cards at once with no history to ruin, is it a good idea? | Yes, this is definitely possible. You can optimize your credit worthiness within 18 months, you would first start with a secured credit card just to establish a little bit of credit history and then use that as a jumping point 6 months later to do several unsecured credit card applications. As a student, your primary limiting factor will be your truthful income when you apply for the cards, resulting in low limits, where using less than 30% of those limits is not a useful amount of money. Your credit scores can be looked at as a spendable balance. New inquiries spend some of that balance, low utilization earns you more of the balance. They will trend upwards with the right approach, and you can use the balance at their highs to time more inquiries. Note: My answers typically differ in that I narrowly tailor my answers to the question asked, and don't masquerade or acknowledge the idea of advice. Impulsive spenders with credit have bad credit, I can live with that. |
What's the purpose of having separate checking and savings accounts? | For some people, it's easier to stick to a budget if they have separate checking and savings accounts because they can deposit funds directly into their savings account and not have those funds accessible by debit/credit card, checks, etc. This allows people to pay themselves first and accumulate savings, while making it slightly more difficult to spend those savings on a whim. One a more technical/legal note, one key difference in the United States comes from Regulation D. §204.2(d)(2) of the law limits you to six withdrawals from savings and money market accounts. No such limit exists for checking accounts. Regulation D also forbids banks from paying interest on business checking accounts. In the simplest case, checking accounts and savings accounts are a tradeoff between liquidity and return. Checking accounts are much more liquid, but won't necessarily earn interest, while savings accounts are less liquid because of the withdrawal limits, but earn interest. Nowadays, however, sweep accounts blur this line somewhat because they function like checking accounts, in that you can write an unlimited number of checks, make an unlimited number of withdrawals, etc. but you can also earn interest on your account balance because some or all of the funds are "swept" into an investment account when not in use. The definition of "in use" can vary from business to business and bank to bank. |
Credit card interest calculator with grace period & different interest rate calculation methods? | If you want to ensure that you stop paying interest, the best thing to do is to not use the card for a full billing cycle. Calculating credit card interest with precision ahead of time is difficult, as how you use the card both in terms of how much and when is critical. |
Are tax deductions voluntary? | Legally: gods know. I would strongly recommend asking the Law asre of Stack Exchange to advise on that. Practically: What's the worst that happens? They audit, you say "Yeah, I could probably have claimed these deductions but I didn't want to; is that a problem?", they decide and either nothing happens or they issue you the unwanted refunnd. They aren't going to fine you for overpaying. Unless this would expose something criminal -- or you're a public figure and it would be embarassing -- this strikes me as falling firmly within the bounds of "no harm, no foul". |
How does one value Facebook stock as a potential investment? | In the long term, a P/E of 15-25 is the more 'normal' range. With a 90 P/E, Facebook has to quadruple its earnings to get to normal. It this possible? Yes. Likely? I don't know. I am not a stock analyst, but I love numbers and try to get to logical conclusions. I've seen data that worldwide advertising is about $400B, and US about $100B. If Facebook's profit runs 25% or so and I want a P/E of 20, it needs profit of $5B on sales of $20B (to reconcile its current $100B market cap). No matter what FB growth in sales is, the advertising spent worldwide will not rise or fall by much more than the economy. So with a focus on ads, they would need about 5% of the world market to grow into a comfortable P/E. Flipping this around, if all advertising were 25% profit (a crazy assumption), there are $100B in profit to be had world wide each year, and the value of the companies might total $2T in aggregate. The above is a rambling sharing of the reasonable bounds one might expect in analyzing a stock. It can be used for any otherwise finite market, such as soft drinks. There are only so many people on the planet, and in aggregate, the total soft drink consumption can't exceed, say 6 billion gallons per day. The pie may grow a bit, but it's considered fixed as an order of magnitude. Edit - for what it's worth, as of 8/3/12, the price has dropped significantly, currently $20, and the P/E is showing as 70X. I'm not making any predictions, but the stock needs a combined higher earnings or lower valuation to still approach 'normal.' |
Where can I find a company's earnings history for free? | Regulators? SEC, in the US. Its public records for public companies. |
what is the best way of investment which gives returns forever? | What is the best way that I can invest money so that I can always get returns? If you want something that doesn't require any work on your end, consider having a fee-only financial planner make a plan so that your investments can be automated to generate a cash flow for you or get an annuity as the other classic choices here as most other choices will require some time commitment in one form or other. Note that for stock investments there could be rare instances like what happened for a week in September in 2001 where the markets were closed for 5 days straight that can be the hiccup in having stocks. Bonds can carry a risk of default where there have been municipalities that defaulted on debt as well as federal governments like Russia in the 1990s. Real estate may be subject to natural disasters or other market forces that may prevent there always being a monthly payment coming as if you own a rental property then what happens if there aren't tenants because there was an evacuation of the area? There may be some insurance products to cover some of these cases though what if there are exceptionally high claims all at once that may have an insurance company go under? Would it be to set up an FD in a bank, to buy land, to buy a rental house, to buy a field, or maybe to purchase gold? What investment of your own time do you plan on making here? Both in terms of understanding what your long-term strategy is and then the maintenance of the plan. If you put the money in the bank, are you expecting that the interest rate will always be high enough to give you sufficient cash to live as well as having no financial crisis with the bank or currency you are using? Are there any better investments? You may want to reconsider what assumptions you want to make and what risks you want to accept as there isn't likely to be a single solution here that would be perfect. |
Taking out a loan to pay down a mortgage | You're not crazy, but the banks are. Here's the problem: You're taking 100% LTV on property A - you won't be able to get a second mortgage for more than 80% total (including the current mortgage) LTV. That's actually something I just recently learned from my own experience. If the market is bad, the banks might even lower the LTV limit further. So essentially, at least 20% of your equity in A will remain on the paper. Banks don't like seeing the down-payment coming from anywhere other than your savings. Putting the downpayment from loan proceeds, even if not secured by the property which you're refinancing, will probably scare banks off. How to solve this? Suggest to deal with it as a business, putting both properties under a company/LLC, if possible. It might be hard to change the titles while you have loans on your properties, but even without it - deal with it as if it is a business. Approach your bank for a business loan - either secured by A or unsecured, and another investment loan for B. Describe your strategy to the banker (preferably a small community bank in the area where the properties are), and how you're going to fund the properties. You won't get rates as low as you have on A (3.25% on investment loan? Not a chance, that one is a keeper), but you might be able to get rid of the balloon/variable APR problem. |
Understanding how this interpretation of kelly criterion helps the trader | I don't know too much about the kelly criterion, but going by the other answers it sounds like it could be quite risky depending how you use it. I have been taught the first thing you do in trading is protect your existing capital and any profits you have made, and for this reason I prefer and use Position Sizing (PS). The concept with PS is that you only risk a small % of your capital on every trade, usually not more than 1%, however if you want to be very aggressive then not more than 2%. I use 1% of my capital for every trade. So if you are trading with an account of $40,000 and your risk R on every trade is 1%, then R = $400. As an example, say you decide to buy a stock at $10 and you work out your initial stop to be at $9.50, then our maximum risk R of $400 is divided by the stop distance of $0.50 to get your PS = $400/$0.50 = 800 shares. If the price then drops after your purchase, your maximum loss (subject to no slippage) would be $400. If the price moves up you would raise your stop until your potential loss becomes smaller and smaller and then becomes a gain once your stop moves above your initial purchase price. The aim is to make your gains be larger than your losses. So if your average loss is kept to 1R or less then you should aim to get your average gains to 2R, 3R or more. This would be considered a good trading system where you will make regular profits even with a win ratio of 50%. |
When a stock price goes down, does the money just disappears into thin air? | You buy a $100k sport car, but don't buy any insurance. You take a curve too fast and jump out just in time to see your car go off a cliff, like a chase movie. The value went from $100k to zero in seconds. Where did the $100k go? |
Why is it good to borrow money to buy a house? | First, as others have commented, the idea that getting a mortgage to buy a house is always a good idea is false. It depends on a number of factors including the current interest rate, what you think the future interest rate will do over the life of your mortgage, the relative cost of renting vs. buying, and how long you would stay in the house that you bought. To the extent that a mortgage for a house is more often recommended than buying other goods on credit, it is for these reasons: Except for #1 above, you could and can find other situations where taking a loan makes more sense than buying in cash. This more true if you have the resources and the skill to invest money at a rate that beats the interest rate you pay to the creditor. The general advice not to try this rests in the fact that most people don't have the resources or the skill to actually make this pay off, especially on high-interest rate loans or over short time periods. |
I have made all the payments on a car I cosigned. Do I have to fight for possession of the vehicle? | Ordinarily a cosigner does not appear on the car's title (thus, no ownership at all in the vehicle), but they are guaranteeing payment of the loan if the primary borrower does not make the payment. You have essentially two options: Stop making payments for him. If he does not make them, the car will be repossessed and the default will appear on both his and your credit. You will have a credit ding to live with, but he will to and he won't have the car. Continue to make payments if he does not, to preserve your credit, and sue him for the money you have paid. In your suit you could request repayment of the money or have him sign over the title (ownership) to you, if you would be happy with either option. I suspect that he will object to both, so the judge is going to have to decide if he finds your case has merit. If you go with option 1 and he picks up the payments so the car isn't repossessed, you can then still take option 2 to recover the money you have paid. Be prepared to provide documentation to the court of the payments you have made (bank statements showing the out-go, or other form of evidence you made the payment - the finance company's statements aren't going to show who made them). |
How late is Roth (rather than pretax) still likely to help? | My simplest approach is to suggest that people go Roth when in the 15% bracket, and use pre-tax to avoid 25%. I outlined that strategy in my article The 15% solution. The monkey wrench that gets thrown in to this is the distortion of the other smooth marginal tax curve caused by the taxation of social security. For those who can afford to, it makes the case to lean toward Roth as much as possible. I'd suggest always depositing pretax, and using conversions to better control the process. Two major benefits to this. It's less a question of too late than of what strategy to use. |
eBay Account and SIM cards sent to my address | In your mother's position, I would do two things: Get a copy of her credit report. Money Advice Service has a useful page on how to do this - it is cheap (£2) or free to do and will immediately tell you if someone else is using her address for anything untoward. Check with the Post Office whether anyone has set up a redirect on mail to your Mum's address. You can redirect by individual names, so if Joe Bloggs buys a bunch of stuff and has it sent to him at your Mum's address, he could set up a redirect at the Post Office so any post for Joe Bloggs at that address gets redirected to Joe Blogg's real address. There is a page about this on the Post Office website, I don't know exactly how to check if someone else has set this up but I'm sure the Post Office would help you find out. Additionally, I would consider visiting the address (the same house number in the "Road" where hers is in the "Avenue") and see whether the occupants have anything useful to say about this. I would just say you'd had some mis-delivered post, and want to check what their names are so that you can pass on anything that is intended for them that comes to your address (and ask them to do likewise for you). Depending on how that goes you could also ask about the ebay store and see whether it really is them that set it up. |
What does the -V indicate on MKC ticker | MKC is non-voting stock, MKC/V is voting stock. Ofter times you'll see two or more stock symbols for a company. These usually reflect different classes of stocks. For example, voting vs. non-voting (as in this case) or preferred vs non-preferred stock. |
What are the marks of poor investment advice? | Bad signs: |
Which technical indicators are suitable for medium-term strategies? | Speaking from stock market point of view, superficially, TA is similarly applicable to day trading, short term, medium term and long term. You may use different indicators in FX compared to the stock market, but I would expect they are largely the same types of things - direction indicators, momentum indicators, spread indicators, divergence indicators. The key thing with TA or even when trading anything, is that when you have developed a system, that you back test it, to prove that it will work in bear, bull and stagnant markets. I have simple systems that are fine in strong bull markets but really poor in stagnant markets. Also have a trading plan. Know when you are going to exit and enter your trades, what criteria and what position size. Understand how much you are risking on each trade and actively manage your risk. I urge caution over your statement ... one weakened by parting the political union but ought to bounce back ... We (my UK based IT business) have already lost two potential clients due to Brexit. These companies are in FinServ and have no idea of what is going to happen, so I would respectfully suggest that you may have less knowledge than professionals, who deal in currency and property ... but one premise of TA is that you let the chart tell you what is happening. In any case trade well, and with a plan! |
Investing in stocks with gross income (not yet taxed) cash from contract work? | You need to report the income from any work as income, regardless of if you invest it, spend it, or put it in your mattress (ignoring tax advantaged accounts like 401ks). You then also need to report any realized gains or losses from non-tax advantaged accounts, as well as any dividends received. Gains and losses are realized when you actually sell, and is the difference between the price you bought for, and the price you sold for. Gains are taxed at the capital gains rate, either short-term or long-term depending on how long you owned the stock. The tax system is complex, and these are just the general rules. There are lots of complications and special situations, some things are different depending on how much you make, etc. The IRS has all of the forms and rules online. You might also consider having a professional do you taxes the first time, just to ensure that they are done correctly. You can then use that as an example in future years. |
How do you translate a per year salary into a part-time per hour job? | It's difficult to quantify the intangible benefits, so I would recommend that you begin by quantifying the financials and then determine whether the difference between the pay of the two jobs justifies the value of the intangible benefits to you. Some Explainations You are making $55,000 per year, but your employer is also paying for a number of benefits that do not come free as a contractor. Begin by writing down everything they are providing you that you would like to continue to have. This may include: You also need to account for the FICA tax that you need to pay completely as a part time employee (normally a company pays half of it for you). This usually amounts to 7.8% of your income. Quantification Start by researching the cost for providing each item in the list above to yourself. For health insurance get quotes from providers. For bonuses average your yearly bonuses for your work history with the company. Items like stock options you need to make your best guess on. Calculations Now lets call your original salary S. Add up all of the costs of the list items mentioned above and call them B. This formula will tell you your real current annual compensation (RAC): Now you want to break your part time job into hours per year, not hours per month, as months have differing numbers of working days. Assuming no vacations that is 52 weeks per year multiplied by 20 hours, or 1040 hours (780 if working 15 hours per week). So to earn the same at the new job as the old you would need to earn an hourly wage of: The full equation for 20 hours per week works out to be: Assumptions DO NOT TAKE THIS SECTION AS REPRESENTATIVE OF YOUR SITUATION; ONLY A BALLPARK ESTIMATE You must do the math yourself. I recommend a little spreadsheet to simplify things and play what-if scenarios. However, we can ballpark your situation and show how the math works with a few assumptions. When I got quoted for health insurance for myself and my partner it was $700 per month, or $8400 per year. If we assume the same for you, then add 3% 401k matching that we'll assume you're taking advantage of ($1650), the equation becomes: Other Considerations Keep in mind that there are other considerations that could offset these calculations. Variable hours are a big risk, as is your status as a 'temporary' employee. Though on the flip side you don't need to pay taxes out of each check, allowing you to invest that money throughout the year until taxes are due. Also, if you are considered a private contractor you can write off many expenses that you cannot as a full time employee. |
Why would anyone buy a government bond? | Great question. There are several reasons; I'm going to list the few that I can think of off the top of my head right now. First, even if institutional bank holdings in such a term account are covered by deposit insurance (this, as well as the amount covered, varies geographically), the amount covered is generally trivial when seen in the context of bank holdings. An individual might have on the order of $1,000 - $10,000 in such an account; for a bank, that's basically chump change, and you are looking more at numbers in the millions of dollars range. Sometimes a lot more than that. For a large bank, even hundreds of millions of dollars might be a relatively small portion of their holdings. The 2011 Goldman Sachs annual report (I just pulled a big bank out of thin air, here; no affiliation with them that I know of) states that as of December 2011, their excess liquidity was 171,581 million US dollars (over 170 billion dollars), with a bottom line total assets of $923,225 million (a shade under a trillion dollars) book value. Good luck finding a bank that will pay you 4% interest on even a fraction of such an amount. GS' income before tax in 2011 was a shade under 6.2 billion dollars; 4% on 170 billion dollars is 6.8 billion dollars. That is, the interest payments at such a rate on their excess liquidity alone would have cost more than they themselves made in the entire year, which is completely unsustainable. Government bonds are as guaranteed as deposit-insurance-covered bank accounts (it'll be the government that steps in and pays the guaranteed amount, quite possibly issuing bonds to cover the cost), but (assuming the country does not default on its debt, which happens from time to time) you will get back the entire amount plus interest. For a deposit-insured bank account of any kind, you are only guaranteed (to the extent that one can guarantee anything) the maximum amount in the country's bank deposit insurance; I believe in most countries, this is at best on the order of $100,000. If the bank where the money is kept goes bankrupt, for holdings on the order of what banks deal with, you would be extremely lucky to recover even a few percent of the principal. Government bonds are also generally accepted as collateral for the bank's own loans, which can make a difference when you need to raise more money in short order because a large customer decided to withdraw a big pile of cash from their account, maybe to buy stocks or bonds themselves. Government bonds are generally liquid. That is, they aren't just issued by the government, held to maturity while paying interest, and then returned (electronically, these days) in return for their face value in cash. Government bonds are bought and sold on the "secondary market" as well, where they are traded in very much the same way as public company stocks. If banks started simply depositing money with each other, all else aside, then what would happen? Keep in mind that the interest rate is basically the price of money. Supply-and-demand would dictate that if you get a huge inflow of capital, you can lower the interest rate paid on that capital. Banks don't pay high interest (and certainly wouldn't do so to each other) because of their intristic good will; they pay high interest because they cannot secure capital funding at lower rates. This is a large reason why the large banks will generally pay much lower interest rates than smaller niche banks; the larger banks are seen as more reliable in the bond market, so are able to get funding more cheaply by issuing bonds. Individuals will often buy bonds for the perceived safety. Depending on how much money you are dealing with (sold a large house recently?) it is quite possible even for individuals to hit the ceiling on deposit insurance, and for any of a number of reasons they might not feel comfortable putting the money in the stock market. Buying government bonds then becomes a relatively attractive option -- you get a slightly lower return than you might be able to get in a high-interest savings account, but you are virtually guaranteed return of the entire principal if the bond is held to maturity. On the other hand, it might not be the case that you will get the entire principal back if the bank paying the high interest gets into financial trouble or even bankruptcy. Some people have personal or systemic objections toward banks, limiting their willingness to deposit large amounts of money with them. And of course in some cases, such as for example retirement savings, it might not even be possible to simply stash the money in a savings account, in which case bonds of some kind is your only option if you want a purely interest-bearing investment. |
How do you invest in real estate without using money? | There is (almost) always money involved somewhere, but it doesn't have to come from you. It can be investors, credit cards, or even seller-financing (I've done all 3). Examples: If you can find partners with the money to make the deals happen, then your job is to put the deal together. Find the properties, negotiate the price, even get the property under contract (all without any obligation or cost on your part... yes it absolutely can be done). Then your partners will fund the deal if it's good enough and their terms are met, etc. In some areas you can put a property on a credit card. If you find a house say for $25,000 that will rent for $300/month, and you can put it on a credit card (especially at zero percent for a year or something similar), then you can generate cashflow as a landlord without putting up any cash of your own on the purchase. Of course there are many risks associated with landlording and i could tell you horror stories... but we're not addressing that here. You can negotiate a sale with an owner who agrees to finance the entire purchase for you. I once purchased 3 properties at once this way from a seller who financed the entire sale, all closing costs, everything, this way. Of course they needed a lot of repair and such so I had to fund that another way, but at least the purchase itself cost me no money out of pocket. So these infomercials/courses are not inherently scams in the sense that what they are teaching is (usually... I'm sure there are exceptions) true. However they generally give you enough information to get into trouble, and not out. But that's what true learning is... it's getting into trouble and finding a way out that doesn't kill you. =) That's called experience, and you can't buy that for any price. |
I'm only spending roughly half of what I earn; should I spend more? | I have an idea. Keep saving what you are and think "Early Retirement". Work for 20 years, then do whatever you want 40 hours a week. If your satisfied with your current lifestyle, start thinking of your bigger long term financial goals and when you want to accomplish them by. Maybe you can accomplish these sooner than you think. Saving to buy a house/property? Investment portfolio? Want to travel all over the world? Family planning/kids? I am sure you will figure out how you would want to spend it. |
Ghana scam and direct deposit scam? | The reason this sort of question gets asked over and over again is because it's initially difficult to comprehend how you can possibly be scammed if you have no money in your bank account. Perhaps this would make it easier to understand: Someone approaches you in the parking lot of a mall and says, Excuse me, complete stranger, please take this $100 bill and go buy me a pair of $50 shoes at the shoe store. Then go buy whatever you'd like with the rest of the money. Sounds like a good deal, right? The $100 bill is counterfeit. If it were not, the person would buy the shoes themselves. It doesn't get any simpler than that. |
Does anyone offer no interest loans? | Such loans are of course possible. They exist because the lender gains something other than interest from them: What would happen to the economy if these were common? These are common, common as anything. In fact where it's not banks lending the money, these are the default. So, nothing would happen to the economy, this is one of the ways the economy works all over the world. If you're more interested in a loan from a bank or other financial institution, made to you for whatever purpose you want - here's $10,000, have fun, give it back ten years from now - ask yourself what the bank would get from that? Perhaps they could do it as a perk when you do something else with them like get a mortgage or keep $1000 in your chequing account all the time. But in the absence of any other relationship, what would be their reason for taking on the overhead and paperwork of approving you for a loan and keeping track of whether you're paying it back or not, for no return, whether financial or intangible? No return? It doesn't happen. |
Where are the non floated Groupon shares | Many people have criticized the Groupon IPO model because it doesn't make sense as an investment, unless you are an insider with cheap shares. Basically, you have: |
Which practice to keep finances after getting married: joint, or separate? | My wife and I have a different arrangement. I like to track everything down to the transaction level. She doesn't want everything tracked. We have everything joint and I track everything except she has one credit card where I do not see the statements only the total. She is more comfortable, because she can buy things without me seeing the price for individual transactions. |
Which U.S. online discount broker is the best value for money? | I agree, Schwab representatives are easy to reach and very helpful. I also like Vanguard for their low mutual fund fees, so I do my retirement stuff with them, but it took forever to get in touch with a representative just to ask a simple question. Now that they are lowering their rates to 8.95 per trade (effective January 19th), the value for your money is even better. |
Why do mutual fund trading limitations exist? e.g. 90 day transfer limits? | Mutual funds (that are not exchange-traded funds) often need to sell some of their securities to get cash when a shareholder redeems some shares. Such transactions incur costs that are paid (proportionally) by all the shareholders in the fund, not just the person requesting redemption, and thus the remaining shareholders get a lower return. (Exchange-traded funds are traded as if they are shares of common stock, and a shareholder seeking a redemption pays the costs of the redemption). For this reason, many mutual funds do not allow redemptions for some period of time after a purchase, or purchases for some period of time after a redemption. The periods of time are chosen by the fund, and are stated in the prospectus (which everyone has acknowledged has been received before an investment was made). |
Why does Warren Buffett say his fund performance, relatively, is likely to be better in a bear market than in a bull market? | Warren Buffet and Berkshire Hathaway took a 50% loss in each of the last two bear markets. His stock even lost 10% in 2015 when the S&P lost 8%. He doesn't have a track record to support the claim that his stock performs relatively better in a bear market, so perhaps it's best to take his letter with a grain of salt. Edit: As one commenter points out, Mr. Buffett is comparing the book performance of his fund to the market performance of an index. That is an apples to oranges comparison. It's deceptive at best. |
What are some good, easy to use personal finance software? [UK] | CashBase has a web app, an iPhone app and an Android app, all sync'ed up. It doesn't integrate with banks automatically, but you can import bank statements as CSV. Disclaimer: I'm CashBase's founder. |
What to do with a distribution as a young person? | I have money to invest. Where should I put it? Anyone who answers with "Give it to me, I'll invest it for you, don't worry." needs to be avoided. If your financial advisor gives you this line or equivalent, fire him/her and find another. Before you think about where you should put your money, learn about investing. Take courses, read books, consume blogs and videos on investing in stocks, businesses, real estate, and precious metals. Learn what the risks and rewards are for each, and make an informed decision based on what you learned. Find differing opinions on each type of investment and come to your own conclusions for each. I for example, do not understand stocks, and so do not seriously work the stock market. Mutual funds make money for the folks selling them whether or not the price goes up or down. You assume all the risk while the mutual fund advisor gets the reward. If you find a mutual fund advisor who cannot recommend the purchase of a product he doesn't sell, he's not an advisor, he's a salesman. Investing in business requires you either to intimately understand businesses and how to fund them, or to hire someone who can make an objective evaluation for you. Again this requires training. I have no such training, and avoid investing in businesses. Investing in real estate also requires you to know what to look for in a property that produces cash flow or capital gains. I took a course, read some books, gained experience and have a knowledgeable team at my disposal so my wins are greater than my losses. Do not be fooled by people telling you that higher risk means higher reward. Risks that you understand and have a detailed plan to mitigate are not risks. It is possible to have higher reward without increasing risk. Again, do your own research. The richest people in the world do not own mutual funds or IRAs or RRSPs or TFSAs, they do their own research and invest in the things I mentioned above. |
How long does it take for a Tangerine no-fee money-transfer email to be delivered? | I phoned Tangerine; they enlightened me. It generally takes 2 hours for the email to arrive. Next, the recipient must open the email, click the link, and enter their bank account number. They'll generally receive the money 2-3 business days after that. This forum post suggests that the delays are due to systemic risk management, tendering, and clearing. |
Take advantage of rock bottom oil prices | I would suggest that oil stocks are going down due to reduced earnings predictions. The market may go too far in selling off oil and oil-related stocks. You may be able to pick up a bargain, but beware that prices may continue to fall in the short to medium term. |
Should I sell my stocks when the stock hits a 52-week high in order to “Buy Low, Sell High”? | You asked for advice, so I'll offer it. Trying to time the market is not a great strategy unless you're sitting in front of a Bloomberg terminal all the time. Another person answering your question suggests the use of index funds; he's likely to be right. Look up "asset allocation." What you want to do is decide that you want your portfolio to contain, for example: If one of your stock holdings goes up far enough that you're out of your target asset allocation ranges, sell some of it and buy something in another asset class,s so you're back in balance. That way you lock in some profit when things go up, without losing access to potential future profits. The same applies if something goes down; you buy more of that asset class by selling others. This has worked really well for me for 30+ years. |
What types of careers consistently make the most money entering with no background or social skills? | It sounds like you're massively under-selling yourself. You presumably have a degree to get into the PhD program, and you now have work experience as well. But you're applying for jobs in fast food restaurants. You may struggle to get a job because they will expect you to only be there a few weeks until you find a "proper" job. |
What are the differences between an investment mortgage and a personal mortgage? | I used to own a few investment properties, so I'm pretty familiar with this. As MrChrister mentions, lenders see investment mortgages as higher risk. People who fall into financial trouble are much more likely to let their investment properties go than their personal residence. Consequently, the interest rates and downpayment requirements are generally higher. Typically a mortgage for an investment property will require 20% down, vs. as low as 3-5% down for a personal residence. With excellent credit and some shopping around, you could probably do 10% down. Interest rates are typically about a half-percent higher as well. You'll also find that the more investment properties you have, the harder it becomes to finance new ones. Banks look at debt-to-income ratios to determine if you are over extended. Typically banks like to see that your housing payments are less than 20% or so of your income. However, with rental properties, housing payments generally account for far more than 20% of your rental income. Other income you have can offset that, but after buying 2-3 houses or so, your DTI generally creeps into the range where lenders are uncomfortable lending to you anymore. This is why you'll find that many rental properties are bought on land contracts with owner financing rather than with mortgages. |
Why is a stock dividend considered a dividend? What makes it different from a stock split? | The key difference I've found between a stock split and a stock dividend – of the exact same stock and class, as opposed to a spin-off – seems to be from the company's own accounting perspective. There doesn't appear to be any actual transfer of value to the shareholder with either kind of transaction; i.e. in theory, each transaction would be immaterial to the value of your holdings. With respect to the company's accounting, a stock split affects the par value of the shares, whereas a stock dividend reduces the retained earnings account in order to increase paid-in or contributed capital. I found a good online source which explains the history behind this accounting difference: McGraw-Hill - Intermediate Accounting eBook, 6/e - Chapter 18 - Stock Dividends and Splits. Small quote: [...] Besides being based on fallacious reasoning, accounting for stock dividends by artificially reclassifying “earned” capital as “invested” capital conflicts with the reporting objective of reporting shareholders' equity by source. Despite these limitations, this outdated accounting standard still applies. Since neither the corporation nor its shareholders apparently benefits from stock dividends, why do companies declare them?23 Occasionally, a company tries to give shareholders the illusion that they are receiving a real dividend. Another reason is merely to enable the corporation to take advantage of the accepted accounting practice of capitalizing retained earnings. Specifically, a company might wish to reduce an existing balance in retained earnings—otherwise available for cash dividends—so it can reinvest the earned assets represented by that balance without carrying a large balance in retained earnings. [...] There's a lot more on that page, before and after, worth reading. From another book: Google Books - Comparative Income Taxation, a Structural Analysis - page 314 - Stock Dividends. Small quote: The distribution of dividends in the form of stock or "bonus" shares to existing shareholders typically involves a transfer for corporate law purposes of retained earnings into stated capital. It can been [sic] viewed as a deemed distribution of a cash dividend to the shareholders followed by a corresponding contribution to capital or as solely as an event at the corporate level which has no effect on the shareholders whose economic interest in the corporation is unchanged by the receipt of additional shares. The systems have taken varied approaches to the stock dividend problem. The treatment is in part a function of the rules dealing with distributions of stated capital. [emphases above are mine] [... continues w/descriptions of different countries' tax treatments of the kinds of stock dividends. Includes U.S., Sweden, Japan, Netherlands, Canada, Australia, U.K., France, Germany. ...] As far as why a corporation might want to capitalize earnings and reduce the equity otherwise available for dividends, I can only imagine that, ignoring taxes for a moment, that it may have something to do with capital ratios that need to be maintained for financing or regulatory purposes? Yet, I remain curious. If I discover more on this then I'll update my answer. Additional resources: |
Dividend vs Growth Stocks for young investors | In financial theory, there is no reason for a difference in investor return to exist between dividend paying and non-dividend paying stocks, except for tax consequences. This is because in theory, a company can either pay dividends to investors [who can reinvest the funds themselves], or reinvest its capital and earn the same return on that reinvestment [and the shareholder still has the choice to sell a fraction of their holdings, if they prefer to have cash]. That theory may not match reality, because often companies pay or don't pay dividends based on their stage of life. For example, early-stage mining companies often have no free cashflow to pay dividends [they are capital intensive until the mines are operational]. On the other side, longstanding companies may have no projects left that would be a good fit for further investment, and so they pay out dividends instead, effectively allowing the shareholder to decide where to reinvest the money. Therefore, saying "dividend paying"/"growth stock" can be a proxy for talking about the stage of life + risk and return of a company. Saying dividend paying implies "long-standing blue chip company with relatively low capital requirements and a stable business". Likewise "growth stocks" [/ non-dividend paying] implies "new startup company that still needs capital and thus is somewhat unproven, with a chance for good return to match the higher risk". So in theory, dividend payment policy makes no difference. In practice, it makes a difference for two reasons: (1) You will most likely be taxed differently on selling stock vs receiving dividends [Which one is better for you is a specific question relying on your jurisdiction, your current income, and things like what type of stock / how long you hold it]. For example in Canada, if you earn ~ < $40k, your dividends are very likely to have a preferential tax treatment to selling shares for capital gains [but your province and specific other numbers would influence this]. In the United States, I believe capital gains are usually preferential as long as you hold the shares for a long time [but I am not 100% on this without looking it up]. (2) Dividend policy implies differences in the stage of life / risk level of a stock. This implication is not guaranteed, so be sure you are using other considerations to determine whether this is the case. Therefore which dividend policy suits you better depends on your tax position and your risk tolerance. |
I'm an American in my mid 20's. Is there something I should be doing to secure myself financially? | Buy this book. It is a short, simple crash course on personal finance, geared at someone in their 20s just starting out their career. You can easily finish it in a weekend. The book is a little dated at this point (pre housing bubble), but it is still valid. I personally feel it is the best intro to personal finance out there. 99% of the financial advice you read online will be a variation of what is already in this book. If you do what the book says, you should be in a solid position financially. You won't be an investment guru or anything, but you will at least have the fundamentals. There are various "protips" for personal finance that go beyond the book, but I would advise against paying too much attention to them until you have the basics down. |
I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment? | The worth of a share of stocks may be defined as the present cash value of all future dividends and liquidations associated therewith. Without a crystal ball, such worth may generally only be determined retrospectively, but even though it's generally not possible to know the precise worth of a stock in time for such information to be useful, it has a level of worth which is absolute and not--unlikely market price--is generally unaffected by people buying and selling the stock (except insofar as activities in company stock affect a company's ability to do business). If a particular share of stock is worth $10 by the above measure, but Joe sells it to Larry for $8, that means Joe gives Larry $2. If Larry sells it to Fred $12, Fred gives Larry $2. The only way Fred can come out ahead is if he finds someone else to give him $2 or more. If Fred can sell it to Adam for $13, then Adam will give Fred $3, leaving Fred $1 better off than he would be if he hadn't bought the stock, but Adam will be $3 worse off. The key point is that if you sell something for less than it's worth, or buy something for more that it's worth, you give money away. You might be able to convince other people to give you money in the same way you gave someone else money, but fundamentally the money has been given away, and it's not coming back. |
Can the risk of investing in an asset be different for different investors? | The other example I'd offer is the case for diversification. If one buys 10 well chosen stocks, i.e. stocks spread across different industries so their correlation to one another is low, they will have lower risk than each of the 10 folk who own one of those stocks per person. Same stocks, but lower risk when combined. |
Applying for and receiving business credit | I'm afraid the great myth of limited liability companies is that all such vehicles have instant access to credit. Limited liability on a company with few physical assets to underwrite the loan, or with insufficient revenue, will usually mean that the owners (or others) will be asked to stand surety on any credit. However, there is a particular form of "credit" available to businesses on terms with their clients. It is called factoring. Factoring is a financial transaction whereby a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount in exchange for immediate money with which to finance continued business. Factoring differs from a bank loan in three main ways. First, the emphasis is on the value of the receivables (essentially a financial asset), not the firm’s credit worthiness. Secondly, factoring is not a loan – it is the purchase of a financial asset (the receivable). Finally, a bank loan involves two parties whereas factoring involves three. Recognise that this can be quite expensive. Most banks catering to small businesses will offer some form of factoring service, or will know of services that offer it. It isn't that different from cheque encashment services (pay-day services) where you offer a discount on future income for money now. An alternative is simply to ask his clients if they'll pay him faster if he offers a discount (since either of interest payments or factoring would reduce profitability anyway). |
Multiple SEO companies claiming I have a past-due invoice | Reading stuff like this makes me want to go into the debt collection business. Just send letters to random people demanding money. Sounds like an easy way to make a living. What's your name and address? Just kidding. If they are sending stuff to a Virginia PO Box, close the box with no forwarding address and consider it case closed. If they are targetting you personally in New Hampshire, the best thing to do is to sue proactively before it goes to collection. New Hampshire has strict anti-debt-collection laws. Basically, what you do is go to small claims court and fill out a one-page form. Sue them for $2000, $3000 or whatever is convenient. Do not hire a lawyer. You can do this in 2 hours of your own time. Your grounds are: (1) Violation of the creditor of NH FDCA laws. According to the laws the creditor has to put all kinds of specific stuff in their threat letters. Since they are not doing this, they have violated NH FDCA. Read the FDCA so you know which specific items they are violating. (2) Extortion. Since you do not owe them any money, demanding money from you is extortion which is both criminally and civilly actionable. You sue them for mental anguish due to extortion. The validity of your claims is irrelevant. You just need to get them in court. There are two possibilities: (A) They fail to show up. In this case you win and they owe you $3000 or whatever. Not only that if they later try to collect from you send a copy of the judgement to the credit bureau or collector or whatever and that is proof you owe them no money. (B) They hire some stooge local lawyer who appears. Accept the court's offer for arbitration. When you go into arbitration with the lawyer tell him you will drop the lawsuit if they send you a check for $500 and a hand-written guarantee from him that you will never hear from his client again. Either way, you come out ahead. By the way, it is absolutely guaranteed that the enemy lawyer will accept your offer in (B) above because the SEO company is already paying him $5000 to show up to answer your lawsuit, and the lawyer does not want to hang around all morning in court waiting for the case to be heard. If he can get out of there in half an hour for only $500 he will do it. -------------------------------UPDATE If all you are getting is calls and the caller refuses to identify themself, then it is definitely an illegal scam. It is illegal in New Hampshire to make collection calls and refuse to full identify who is calling. The phone company has methods for dealing with illegal calls. First you have to file a police report. Then you call Verizon Security at 1-800-518-5507 (or whatever your phone company is). They will trace the call and identify the caller. They you can make a criminal complaint in their jurisdiction unless the call is from Pakistan or something. |
Are PINs always needed for paying with card? | Chip and Pin cards are popular in Europe, however in the US we don't have them. Visa/MC and Amex can issue chip and pin cards but no merchants or machines are set up here to take them. Only certain countries in Europe use them and since you could possibly have a US visitor or a non-chip and pin person using your machine or eating at your restaurant they usually allow you to sign or just omit the pin if the card doesn't have a chip. It is definitely less secure, but the entire credit card industry in the US is running right now without it, so I don't think the major credit card companies care too much (they just pass the fraud on to the merchants anyway). |
Does this sound like a great idea regarding being a landlord and starting a real estate empire? | This is a well worn path and not a bad idea. There are quite a few pitfalls but there are a lot of resources to learn for other people's mistakes. Having a plan and doing your research should help you avoid most of them. Here is some general advice to help get you started on the right foot. Know the market you are investing in. The city should have more than one major employer. The population should be rising and hopefully there are other positive economic indicators. Check the city's and state's chamber of commerce for useful information. You do not want to be stuck holding a bunch of upside down property in Detroit. Accurately calculate expenses. Set aside money for repairs. budget 5% of the rent or 100 a month for repairs if no repairs happen that money goes into the repair fund for the future. Set aside money for capital expenditures if the roof has a 10 years of life left in 10 years you better be ready to replace it same with any major appliances. Your area should have a baseline vacancy rate 5-8% in my area. That says out of a year your property will be vacant for around 6% of the year or 21 days for turnover. You should build that cushion into the budget as well setting aside a portion of the rent to cover that lean period. Some property management will offer "eviction insurance" which is basically them enforcing that savings. Financing maybe difficult a lot of banks like to see 25% down payments on investments. You will also face higher interest rates for investment properties. Banks generally also like to see enough money to cover 6 months worth of expenses in your account for all property. Some banks will not give financing for investment property to someone without 1-2 years of landlord experience. All in all finding money will be hard when you gets started and your terms may be less than ideal. (hopefully make around 3 - 5k a year in profit) If that includes loan pay-down and is not just cash-flow you are probably in the right ballpark. I can find $100-$200 dollars cash-flow a month on single family home in my area. Once loan pay-down is included your numbers are close. It sounds like you have a good attitude and a good plan. A book that I really enjoyed and I think may be useful is "Start Small, Profit Big in Real Estate" by Jay DeCima. I think of it as required reading for do-it-yourself real estate investors. Good luck and happy investing |
Why are stocks having less institutional investors a “good thing”? | Institutional investors are the "elephant" in the room. When they "sneeze," everyone else "catches cold." They're fine, if they're buying after YOU do. They're not bad, if you want to buy after they sell en masse. But when you read about moves of 10 percent, 15 percent or more in a single day, it's because a bunch of institutional investors all decided to do the same thing on the same day. That's more volatility than most people can stomach. Fewer institutional investors in a stock mean fewer chances of those things happening. |
Why is the stock market closed on the weekend? | The answer is 7-fold: BOTTOM LINES: Bubble; bursting bubble; Great Depression; Victory in WWII; All work and no play makes Jack (& Jill) very dull persons. |
Downside to temporarily lowering interest rates? | This is brilliant for AmEx; they make a cut off of every transaction you do, so even if you pay it off before you ever pay interest, they still may take some. Balance transfers, on the other hand, generally have a transfer fee that locks in a percent, depending on the offer. For your own sake, it can be a good deal if you Considering that they make some money, it makes sense why they offer people this - merchants, as you'll read from Nerd Wallet, are paying extra to use credit cards. |
When people say 'Interest rates are at all time low!" … Which interest rate are they actually referring to? | As Sean pointed out they usually mean LIBOR or the FFR (or for other countries the equivalent risk free rate of interest). I will just like to add on to what everyone has said here and will like to explain how various interest rates you mentioned work out when the risk free rate moves: For brevity, let's denote the risk free rate by Rf, the savings account interest rate as Rs, a mortgage interest rate as Rmort, and a term deposit rate with the bank as Rterm. Savings account interest rate: When a central bank revises the overnight lending rate (or the prime rate, repo rate etc.), in some countries banks are not obliged to increase the savings account interest rate. Usually a downward revision will force them to lower it (because they net they will be paying out = Rf - Rs). On the other hand, if Rf goes up and if one of the banks increases the Rs then other banks may be forced to do so too under competitive pressure. In some countries the central bank has the authority to revise Rs without revising the overnight lending rate. Term deposits with the bank (or certificates of deposit): Usually movements in these rates are more in sync with Rf than Rs is. The chief difference is that savings account offer more liquidity than term deposits and hence banks can offer lower rates and still get deposits under them --consider the higher interest rate offered by the term deposit as a liquidity risk premium. Generally, interest rates paid by instruments of similar risk profile that offer similar liquidity will move in parallel (otherwise there can be arbitrage). Sometimes these rates can move to anticipate a future change in Rf. Mortgage loan rates or other interests that you pay to the bank: If the risk free rate goes up, banks will increase these rates to keep the net interest they earn over risk free (= Δr = Rmort - Rf) the same. If Rf drops and if banks are not obliged to decrease loan rates then they will only do so if one of the banks does it first. P.S:- Wherever I have said they will do so when one of the banks does it first, I am not referring to a recursion but merely to the competitive market theory. Under such a theory, the first one to cut down the profit margin usually has a strong business incentive to do so (e.g., gain market share, or eliminate competition by lowering profit margins etc.). Others are forced to follow the trend. |
Trouble sticking to a budget when using credit cards for day to day transactions? | As long as you can be trusted with a Credit Card i find that if you have a setup that uses three accounts: 1. your Credit Card, 2. 2. a high interest internet account (most of these accounts don’t have fees), 3. a savings account. The Method that works for me is: 1st i calculate my fixed monthly bills i.e Rent and utilities and then transfer it into my high interest account. for the month whenever i make a purchase i transfer the money into the high interest account ( this way I can keep a running balance of what money I have left to spend in the month. Then when the Credit Card bill comes I transfer the money out of the high interest account across to pay off the Credit Card ( this way you generate interest on the money which you would have spent throughout the month and still maintain $0 of interest from the Credit Card) over a year you can generate at least enough money in interest to go out for dinner on one of free flights! |
What's the catch with biweekly mortgage payments? | I'll preface this with saying that I'm not a finance or real estate professional, this is just how I understand the situation and what I'm doing: We just got a 30year/FHA mortgage, there's no prepayment penalty, and no fees associated with paying it biweekly. In fact (Wells Fargo), while the payments get withdrawn biweekly, they don't actually post to the mortgage until there's enough for a full payment. So essentially here are the benefits I'm realizing: |
Why don't institutions share stock recommendations like Wall Street analysts? | Institutions may be buying large quantities of the stock and would want the price to go up after they are done buying all that they have to buy. If the price jumps before they finish buying then they may not make as great a deal as they would otherwise. Consider buying tens of thousands of shares of a company and then how does one promote that? Also, what kind of PR system should those investment companies have to disclose whether or not they have holdings in these companies. This is just some of the stuff you may be missing here. The "Wall street analysts" are the investment banks that want the companies to do business through them and thus it is a win/win relationship as the bank gets some fees for all the transactions done for the company while the company gets another cheerleader to try to play up the stock. |
Are bonds really a recession proof investment? | Without providing direct investment advice, I can tell you that bond most assuredly are not recession-proof. All investments have risk, and each recession will impact asset-classes slightly differently. Before getting started, BONDS are LOANS. You are loaning money. Don't ever think of them as anything but that. Bonds/Loans have two chief risks: default risk and inflation risk. Default risk is the most obvious risk. This is when the person to whom you are loaning, does not pay back. In a recession, this can easily happen if the debtor is a company, and the company goes bankrupt in the recessionary environment. Inflation risk is a more subtle risk, and occurs when the (fixed) interest rate on your loan yields less than the inflation rate. This causes the 'real' value of your investment to depreciate over time. The second risk is most pronounced when the bonds that you own are government bonds, and the recession causes the government to be unable to pay back its debts. In these circumstances, the government may print more money to pay back its creditors, generating inflation. |
Why is day trading considered riskier than long-term trading? | I think, the top three answers by Joe, Anthony and Bigh are giving you all the detail that you need on a technical sense. Although I would like to add a simple picture that underlines, that you can not really compare day trading to long-term trading and that the addictive and psychologic aspect that you mentioned can not be taken out of consideration. The long term investor is like someone buying a house for investment. You carefully look at all offers on the market. You choose by many factors, price, location, quality, environment, neighborhood and extras. After a long research, you pick your favorites and give them a closer look until you finally choose the object of desire, which will pay off in 10 years and will be a wise investment in your future. Now this sounds like a careful but smart person, who knows what he wants and has enough patience to have his earnings in the future. The short term investor is like someone running into the casino for a game of black-jack, roulette or poker. He is a person that thinks he has found the one and only formula, the philosopher's stone, the money-press and is seeking immense profits in just one night. And if it does not work, he is sure, that this was just bad coincidence and that his "formula" is correct and will work the next night. This person is a pure gambler and running the risk of becoming addicted. He is seeking quick and massive profits and does not give up, even though he knows, that the chances of becoming a millionaire in a casino are quite unrealistic and not better than playing in a lottery. So if you are a gamer, and the profit is less important than the "fun", then short term is the thing for you. If you are not necessarily seeking tons of millions, but just want to keep your risk of loss to a minimum, then long term is your way to go. So it is a question of personality, expectations and priorities. The answer why losses are bigger on high frequency signals is answered elsewhere. But I am convinced in reality it is a question of what you want and therefore very subjective. I have worked for both. I have worked for a portfolio company that has gone through periods of ups and downs, but on the long term has made a very tempting profit, which made me regret, that I did not ask for shares instead of money as payment. These people are very calm and intelligent people. They spend all their time investigating and searching for interesting objects for their portfolio and replace losers with winners. They are working for your money and investors just relax and wait. This has a very serious taste to it and I for my part would always prefer this form of investment. I have worked for an investment broker selling futures. I programmed the account management for their customers and in all those years I have only seen one customer that made the million. But tons of customers that had made huge losses. And this company was very emotional, harsh, unpersonal - employees changing day by day, top sellers coming in corvettes. All the people working there where gamblers, just like their customers. Well, it ended one day, when the police came and confiscated all computers from them, because customers have complained about their huge losses. I am glad, that I worked as a remote developer for them and got paid in money and not in options. So both worlds are so different from each other. The chances for bigger profits are higher on day trading, but so are the chances for bigger losses - so it is pure gambling. If you like gambling, split your investment: half in long term and other half in short term, that is fun and wise in one. But one thing is for sure: in over ten years, I have seen many customers loosing loads of money in options in the future markets or currencies. But I have never seen anyone making a loss in long term portfolio investment. There have been hard years, where the value dropped almost 30%, but that was caught up by the following years, so that the only risk was minimizing the profit. |
Why don't banks give access to all your transaction activity? | Although if you count only your data, it would be quite less 10 MB, multiply this by 1 million customers and you can see how quickly the data grows. Banks do retain data for longer period, as governed by country laws, typically in the range of 7 to 10 years. The online data storage cost is quite high 5 to 10 times more than offline storage. There are other aspects, Disaster recover time, the more the data the more the time. Hence after a period of time Banks move the data into Archive that are cheaper to store but are not available to online query, plus the storage is not optimized for search. Hence retrieval of this data often takes few days if the regulator demands or court or any other genuine request for data retrieval. |
Should I pay my Education Loan or Put it in the Stock Market? | 2.47% is a really, really good rate, doubly so if it's a fixed rate, and quadruply so if the interest is tax-deductible. That's about as close to "free money" as you're ever going to get. Heck, depending on what inflation does over the next few years, it might even be cheaper than free. So if you have the risk tolerance for it, it's probably more effective to invest the money in the stock market than to accelerate your student loan payoff. You can even do better in the bond market (my go-to intermediate-term corporate bond fund is yielding nearly 4% right now.) Just remember the old banker's aphorism: Assets shrink. Liabilities never shrink. You can lose the money you've invested in stocks or bonds, and you'll still have to pay back the loan. And, when in doubt, you can usually assume you're underestimating your risks. If you're feeling up for it, I'd say: make sure you have a good emergency fund outside of your investment money - something you could live on for six months or so and pay your bills while looking for a job, and sock the rest into something like the Vanguard LifeStrategy Moderate Growth fund or a similar instrument (Vanguard's just my personal preference, since I like their style - and by style, I mean low fees - but definitely feel free to consider alternatives). You could also pad your retirement accounts and avoid taxes on any gains instead, but remember that it's easier to put money into those than take it out, so be sure to double-check the state of your emergency fund. |
Debt collector has wrong person and is contacting my employer | Use with moderation. Powerful stuff. Your caller could be an offshore scammer too. Summarizing from http://www.creditinfocenter.com/rebuild/debt-validation.shtml: You can dispute the debt, and demand that the collector give you the name and address of the original creditor and show that it isn't past the statute of limitations. If they can't "validate" the debt by providing that info, in writing, they must drop it until they can do so. You can sue (though generally not for very much) if they don't. You may have to make this request in writing, so it has a paper trail. A valid verification respond must include: If they don't respond within 30 days, they are in violation of the Fair Credit Reporting Act (FDCPA section 809b), and you can send registered mail threatening them with a lawsuit if they don't immediately drop it and remove it from your credit report. They should respond to that within two weeks, and if they don't have darned good evidence will probably cave. If they can prove you do owe the money ... Well, you can hope they aren't licensed to collect in your state; if they aren't you can try to challenge them on that basis. Unlikely to work. If they agree, remember to send a copy of the letter to the credit reporting agencies to make sure it's taken off your record. If this isn't enough to resolve it, you'll probably need to bring suit. That's another long list of steps; I'm going to refer you to the linked site rather than summarize them here since at that point you should get a lawyer involved to make sure it's done promptly. |
Is it a bad idea to buy a motorcycle with a lien on it? | A lien is a mechanism to impede legal title transfer of a vehicle, real property, or sometimes, expensive business equipment. That's why title companies exist - to make sure there are no liens against something before a buyer hands money to a seller. The lien can be attached to a loan, unpaid labor related to the item (a mechanic's lien) or unpaid taxes, and there are other scenarios where this could occur. The gist of all this is that the seller of the vehicle mentioned does not have clear title if there is a lien. This introduces a risk for the buyer. The buyer can pay the seller the money to cover the lien (in the case of a bank loan) but that doesn't mean the seller will actually pay off the loan (so the title is never clear!). This article recommends visiting the bank with the seller, and getting title on-the-spot. However, this isn't always an option, as a local bank branch isn't probably going to have the title document available, though the seller might be able to make some arrangement for a local branch to have the title available before a visit to pay off the loan. The low-risk approach is for the seller to have clear title before any money changes hands. |
What funds were closed during or after the recent recessions? | Yes, many hedge funds (for example) did not survive 2008-2009. But hedge funds were failing both before and after that period, and other hedge funds thrived. Those types of funds are particularly risky because they depend so much on leverage (i.e. on money that isn't actually theirs). More publically-visible funds (like those of the big-name index fund companies) tended not to close because they are not leveraged. You say that "a great many companies" failed during the recession, but that's not actually true. I can't think of more than a handful of publically-traded companies that went bankrupt. So, since the vast majority of publically-traded companies stayed in business, their stocks kept some/most of their value, and the funds that owned those stocks stayed afloat. I personally did not see a single index fund that went out of business due to the recession. |
Advice for college student: Should I hire a financial adviser or just invest in index funds? | If you use a financial planner not only should they be a fiduciary but you should just pay them an hourly rate once a year instead of a percentage unless the percentage is cheaper at this time. To find a good one, go to the National Association of Personal Financial Advisers website, NAPFA.org. Another good resource is Garrett Planning Network: GarrettPlanningNetwork.com. |
Previous owner of my home wants to buy it back but the property's value is less than my loan… what to do? | I would not trust Zillow for an appraisal. The numbers I see on there vary a lot from real prices. I'm not sure I'd get a full appraisal either, as that means you "know" the value of the house and may be obliged to reveal it. I'd ask for the loan amount and see what the previous owner says. |
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