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Switch from DINK to SIWK: How do people afford kids? | With your wife's income, you're not doing to see a net difference if she stops working that job. You may actually yield a little more. At the end of the day, it's doable, but you're going to have to rationalize your spending and one or both of you should pick up a part-time job. Do you remember the last time you bought lunch or went out to dinner? You're wasting money. Even a 50% gig at a quality employer like Starbucks or Home Depot will let you make $15-20k. I respect your religious beliefs, but 17% of your income is steep, and you may want to revisit that. |
Are there cons to paying monthly bills with a rewards card and then paying it off monthly? | Some accounts, such as my electric, and payments to the tax collector charge a significant enough fee that is counter productive to use a rewards card. One example of this is Alligent Air. They give you a $6 discount if you pay with a debit card which was about 5% of the ticket price. Anytime you borrow money, even as well intentioned and thought out as you plan to do so, you are increasing risk. By managing it carefully you can certainly mitigate it. The question becomes, does that time spent in management worth the $600/year? I did the costco amex deal for about 12 years earning about $300-$400 per year and only once getting hit with a late/finance charge. Despite the success, I opted to end this for a few different reasons. First off people using credit tend to spend more. Secondly, I felt it was not worth my time in management. Thirdly, I did not want the risk. Despite the boasts of many, the reality is that few people actually pay off their card each month. By your post, it seems to me that you will be one of the rare few. However, if you are expending 5K per month, your income must be above the US national average. Is $600 really worth it? Perhaps budgeting for Christmas would be a better option. |
Why do people buy stocks that pay no dividend? | Instead of giving part of their profits back as dividends, management puts it back into the company so the company can grow and produce higher profits. When these companies do well, there is high demand for them as in the long term higher profits equates to a higher share price. So if a company invests in itself to grow its profits higher and higher, one of the main reasons investors will buy the shares, is in the expectation of future capital gains. |
When is the best time to put a large amount of assets in the stock market? | The one thing we know for certain is that holding large amounts of cash isn't ideal - inflation will eat away at your wealth. It's understandable that you're hesitant to put all your wealth in common stock. The S&P 500's price/earnings is 18.7 right now - a little high by historical standards. But consider that the S&P 500 has given a CAGR of approximately 10% (not inflation-adjusted) since 1970. If you don't time the market correctly, you could miss out on considerable gains. So it's probably best to invest at least a portion of your wealth in common stocks, and just accept the risk of short-term losses. You'll likely come out ahead in the long run, compared to an investor who tries to time the market and ends up holding cash positions for too long. If you really think US stocks are overpriced, you could look at other markets, but you'll find similar P/Es in Europe and Japan. You could try an emerging market fund like VEMAX if you have the risk tolerance. Let's say you're not convinced, and don't want to invest heavily in stocks right now. In the current market, safe cash alternatives like Treasury bills offer very low yields - not enough to offset inflation tax. So I would invest in a diversified portfolio of long-term bonds, real estate, maybe precious metals, and whatever amount of stock you're comfortable with. |
Making an offer on a property - go in at market price? | First piece of advice: fire your agent. A pushy agent is a bad agent. From what you've told us, he's actually given you poor advice regarding mortgage interest rates. Rates are already at historic lows. That and the precarious state of the world economy mean that further rate cuts are more likely in the near term. Second piece of advice: While more information on the real estate market you're in would help, going in at asking price is rarely a good idea. Sale prices from "the last few years" are not relevant to what you should pay, because the last few years include a financial crisis caused in large part by the bursting of a housing bubble. They could be even less relevant depending on your location because of a spike in foreclosures in certain areas of the U.S. There was already a ton of housing inventory before, so an increase due to foreclosures is going to depress prices further. Now that banks are finally practicing the due diligence they should have been all along, your ability to be pre-approved for large mortgage amount puts you in a strong position. Use a tool like Zillow or Redfin to see what properties in that area have sold for over the past six months. You should also be able to see a history of what prices the particular property you're interested in has been offered and/or sold at in the past. Also check and see how long the particular property you're interested in has been on the market. If it's been on the market more than 60-90 days, it's priced too high. |
Recommendation for learning fundamental analysis? | Below is just a little information on this topic from my small unique book "The small stock trader": The most significant non-company-specific factor affecting stock price is the market sentiment, while the most significant company-specific factor is the earning power of the company. Perhaps it would be safe to say that technical analysis is more related to psychology/emotions, while fundamental analysis is more related to reason – that is why it is said that fundamental analysis tells you what to trade and technical analysis tells you when to trade. Thus, many stock traders use technical analysis as a timing tool for their entry and exit points. Technical analysis is more suitable for short-term trading and works best with large caps, for stock prices of large caps are more correlated with the general market, while small caps are more affected by company-specific news and speculation…: Perhaps small stock traders should not waste a lot of time on fundamental analysis; avoid overanalyzing the financial position, market position, and management of the focus companies. It is difficult to make wise trading decisions based only on fundamental analysis (company-specific news accounts for only about 25 percent of stock price fluctuations). There are only a few important figures and ratios to look at, such as: perhaps also: Furthermore, single ratios and figures do not tell much, so it is wise to use a few ratios and figures in combination. You should look at their trends and also compare them with the company’s main competitors and the industry average. Preferably, you want to see trend improvements in these above-mentioned figures and ratios, or at least some stability when the times are tough. Despite all the exotic names found in technical analysis, simply put, it is the study of supply and demand for the stock, in order to predict and follow the trend. Many stock traders claim stock price just represents the current supply and demand for that stock and moves to the greater side of the forces of supply and demand. If you focus on a few simple small caps, perhaps you should just use the basic principles of technical analysis, such as: I have no doubt that there are different ways to make money in the stock market. Some may succeed purely on the basis of technical analysis, some purely due to fundamental analysis, and others from a combination of these two like most of the great stock traders have done (Jesse Livermore, Bernard Baruch, Gerald Loeb, Nicolas Darvas, William O’Neil, and Steven Cohen). It is just a matter of finding out what best fits your personality. I hope the above little information from my small unique book was a little helpful! Mika (author of "The small stock trader") |
What can I do when the trading price of a stock or ETF I want to buy is too high? | If you find a particular stock to be overvalued at $200 for example and a reasonable value at $175, you can place a limit order at the price you want to pay. If/when the stock price falls to your desired purchase price, the transaction takes place. Your broker can explain how long a limit order can stay open. This method allows you to take advantage of flash crashes when some savvy stock trader decides to game the market. This tactic works better with more volatile or low-volume stocks. If it works for an S&P500 tracking ETF, you have bigger problems. :) Another tactic is to put money into your brokerage cash account on a regular basis and buy those expensive stocks & funds when you have accumulated enough money to do so. This money won't earn you any interest while it sits in the cash account, but it's there, ready to be deployed at a moment's notice when you have enough to purchase those expensive assets. |
Why do stock exchanges close at night? | Here are some plausible reasons why markets might continue to close: |
What is the best source of funding to pay off debt? | Thirty thousand in credit card debt is a "big elephant to eat" so to speak. But you do it by taking a bite at a time. One positive is that you do not want to borrow from your 401K. Doing so is a horrible idea. The first question you have to ask yourself and understand, is how you accumulated 30K in credit card debt in the first place? Most people get there by running up a relatively small amount, say 5K, and playing the zero transfer game a few times. Then add in a late payment, and a negative event or two (like the car breaking down or a trip to the emergency room) and poof a large amount of credit card debt. Obviously, I have no idea if this is how you got there, and providing some insight might help. Also, your age, approximate income, and other debts might also help provide more insight. I assume you are still working and under age 59.5 as you are talking about borrowing from your 401K. Where I come from is that my wife (then girlfriend) found ourselves under stifling debt a few years ago. When we married, we became very intentional and focused on ridding ourselves of debt and now sit completely debt free (including the house). During our debt payoff time, we lived off of less than 25% of our salary. We both took extra jobs when we were able. Intensity was our key. If I were you, I would not refi the house. There are costs associated with this and why would you put more debt on your home? I might cash out the annuity provided that there are no negative tax consequences and depending on how much you can get for it. Numbers are the key here. However, I feel like doing so will not retire this debt. The first thing you need to do is get on a written budget. A game plan for spending and stick to it. If you are married, your spouse has to be part of this process. The budget has to be fresh each month, and each month you and your wife should meet. To deviate from the budget, you will also need to have a meeting. My wife and I still do this despite being debt free and enjoying very healthy incomes. Secondly, it is about cutting expenses. Cable: off. No eating out or vacations. Cut back on cell phone plans, only basic clothing. Gift giving is of the $5 variety and only for those very close to you. Forget lattes, etc. Depending on your income I would cut 401K contributions to zero or only up to the company match (if your household income is above 150K/year). Third, it is about earning more. Ebay, deliver pizzas, cut grass, overtime, whatever. All extra dollars go to credit card balance reduction. At a minimum, you should find an extra $1000/month; however, I would shoot for 2K. If you can find 2K, you will be done with this in 13 months. I know the math doesn't work out for that, but once you get momentum, you find more. How good will it feel to be out from under this oppression next March? I know you can do this without cashing in the annuity or refinancing. Do you believe it? |
Should I set a stop loss for long term investments? | Do not use a stop loss order as a long-term investor. The arguments in favor of stop losses being presented by a few users here rely on a faulty premise, namely, that there is some kind of formula that will let you set your stop such that it won't trigger on day-to-day fluctuations but will trigger in time to protect you from a significant loss in a serious market downturn. No such formula exists. No matter where you set your stop, it is as likely to dump you from your investment just before it begins climbing again as it is to shield you from continued losses. Each time that happens, you will have sold low and bought high, incurring trading fees into the bargain. It is very unlikely that the losses you avoid in a bear market (remember, you still incur the loss up until your stop is hit; it's only the losses after that that you avoid) will make up the costs of false alarms. On top of that, once you have stopped out of your first investment choice, then what? Will you reinvest in some other stock or fund? If those investments didn't look good to you when you first set up your asset allocation, then why should they look any better now, just because your primary investment has dropped by some arbitrary[*] amount? Will you park the money in cash while you wait for prices to bottom out? The market bottom is only apparent in retrospect. There is no formula for calling it in real time. Perhaps stop loss orders have their uses in active trading strategies, or maybe they're just chrome that trading platforms use to attract customers. Either way, using them on long-term investments will just cost you money in the long run. Forget the fancy order types, and manage your risk through your asset allocation. The overwhelming likelihood is that you will get better performance, and you will spend less time worrying about your investments to boot. [*] Why are the stop levels recommended by the formulae invariably multiples of 5%? Do the market gods have a thing for round numbers? |
How to model fees from trades on online platforms? | Assuming cell A1 contains the number of trades: will price up to A1=100 at 17 each, and the rest at 14 each. The key is the MAX and MIN. They keep an item from being counted twice. If X would end up negative, MAX(0,x) clamps it to 0. By extension, if X-100 would be negative, MAX(0, X-100) would be 0 -- ie: that number doesn't increase til X>100. When A1=99, MIN(a1,100) == 99, and MAX(0,a1-100) == 0. When A1=100, MIN(a1,100) == 100, and MAX(0,a1-100) == 0. When A1=101, MIN(a1,100) == 100, and MAX(0,a1-100) == 1. Of course, if the 100th item should be $14, then change the 100s to 99s. |
What are the tax implications if I do some work for a company for trade, rather than pay? | Yes, the business can count that as an expense but you will need to count that as income because a computer = money. |
Is it ever logical to not deposit to a matched 401(k) account? | If your plan permits loans, deposit enough through the year to maximize the match and then take a loan from the plan. Use the loan portion to pay your student loan. Essentially you have refinanced your debt at a (presumably) lower rate and recieved the match. You pay yourself back (with interest) through your payroll. The rates are typically the prime rate + 1%. The loans are subject to a lesser of 50% vested account balance or $50,000 provision. |
How to acquire assets without buying them? | You don't start out buying a shopping mall, you have to work up to it. You can start with any amount and work up to a larger amount. For me, I saved 30% of my salary(net), investing in stocks for 8 years. It was tough to live on less, but I had a goal to buy passive income. I put down this money to buy 3 houses, putting 35% down and maintaining enough cash to make 5 years of payments. I rented out the houses making a cap of 15%. The cap is the net payment per year / cost of the property, where the net accounts for taxes and repairs. I did not spend any of the profits, but I did start saving less salary. After 5 years of appreciation, mortgage payments and rental profit, I sold one house to get a loan for a convenience store. Buildings go on the market all the time, it takes 14 years to directly recoup an investment at a 7% cap, which is the average for a commercial property sale. Many people cash out for this reason, it's slow, but steady growth, though the earnings on property appreciation is a nice bonus. Owning real estate is a long term game, after a long time of earning, you can reinvest, but it comes with the risk of bad or no tenants. You can start both slower and smaller, just make sure you're picking up assets, not liabilities. Like investing in cars is generally bad unless you are sure it will appreciate. |
Saving up for an expensive car | This seems really simple to me. |
Why do some online stores not ask for the 3-digit code on the back of my credit card? | There are different ways of credit card purchase authorizations. if some choose less secure method it's their problem. Merchants are charged back if a stolen card is used. |
Can signing up at optoutprescreen.com improve my credit score? | If I had a business and was able to claim a feature, I would. It's simple marketing. If in fact, opting out helped your score, the site would promote that feature. Soft pulls for prescreened offers are not counted. No more than my constant peek at my score through Credit Karma. Opt out, if you wish. The benefit of course is less mail, which saves trees. Less risk of identity theft, someone can take the application and try to forge from there. Less risk of an infected paper cut opening this mail (don't ask.) I am a compulsive mail shredder, so I peek and these and shred. A year ago I received an offer of $30,000 zero interest, max transfer fee $50. I sent the entire sum to my 5% mortgage. Now I refinanced and paying that back. It saved me $1500 over the year. Too much trouble for some, but how long does it take to make $1500? For 40% of this country's families, that's a week's pay. The monthly extra bill didn't bother me. This last paragraph is an anecdote, not so much addressing question. I did that first. |
Buying a house. I have the cash for the whole thing. Should I still get a mortgage to get the homeowner tax break? | Not for the tax break, no; as others have said that still costs you money. However, with rates being low right now and brought a bit lower by the tax break, this is an opportunity for the safest form of leveraged investing you will ever find. If you invest that money, the returns on investment will probably be better than the mortgage rate, and that leaves you with a net profit. There is some risk if the market collapses, but it's less risk than any other form of borrowing to invest. That also leave you with more flexibility if you need cash in a hurry; you can draw down the investments rather than taking another loan. If the risk bothers you, you can do what I did and split the difference. I put 50% down and financed the rest. I sometimes regret not having pushed it harder, since it has worked out well for me ... but that was the level of risk I was comfortable with. |
If I had no income due to a net operating loss, will I be refunded the Social Security and Medicare taxes withheld? | If you have a CPA working for you already - this is a question you should be asking that CPA. Generally, NOL only affects the tax stemming from the Internal Revenue Code (Title 26 Subtitle A of the US Code). Social Security and Medicare, while based on income, are not "income tax", these are different taxes stemming from different laws. Social Security and Medicare withheld from your salary are FICA taxes (Title 26 Subtitle C of the US Code). They're deducted at source and not on your tax return, so whatever changes you have in your taxable income on the tax return - FICA taxes are not affected by it. Self Employment tax (Schedule SE) on your Schedule C earnings in the carry-back years will also not be affected, despite being defined in the IRC, because the basis of the tax is the self-employment income while the carryback reduces the AGI. |
Why aren't bond mutual funds seeing huge selloffs now? | Since 1971, mortgage interest rates have never been more than .25% below current rates (3.6%). Even restricting just to the last four years, rates have been as much as .89% higher. Overall, we're much closer to the record low interest rate than any type of high. We're currently at a three-year low. Yes, we should expect interest rates to go up. Eventually. Maybe when that happens, bonds will fall. It hasn't happened yet though. In fact, there remain significant worries that the Fed has been overly aggressive in raising rates (as it was around 2008). The Brexit side effects seem to be leaning towards an easing in monetary policy rather than a tightening. |
Bonds vs equities: crash theory | Diversify into leveraged short/bear ETFs and then you can quit your job and yell at your boss "F you I'm short your house!" edit: this is a quote from Greg Lippmann and mentioned in the book "The Big Short" |
Looking for good investment vehicle for seasonal work and savings | In the short-term, a savings account with an online bank can net you ~1% interest, while many banks/credit unions with local branches are 0.05%. Most of the online savings accounts allow 6 withdrawals per month (they'll let you do more, but charge a fee), if you pair it with a checking account, you can transfer your expected monthly need in one or two planned transfers to your checking account. Any other options that may result in a higher yield will either tie up your money for a set length of time, or expose you to risk of losing money. I wouldn't recommend gambling on short-term stock gains if you need the money during the off-season. |
What are the alternatives to compound interest for a Muslim? | Invest in growth stocks which do not pay any dividends (Note that some part of the dividends issued by a corporation might be from interest received by the company and passed on to you as a dividend); Buy a house from a bank that practices Islamic Banking. See this question which you yourself answered a few weeks ago to understand how this works. |
What am I actually buying when trading in CFDs | CFDs (Contracts for Difference) are basically a contract between you and the broker on the difference in price of the underlying between the time you open a position and close a position. You are not actually buying the underlying. With share CFDs, the outcome is a bit like buying the underlying shares on margin. You pay interest for every day you hold the CFDs overnight for long CFDs. However, with short positions, you get paid interest for every day you hold your short position overnight. Most people use CFDs for short term trading, however they can be used for medium to longer term trading just as you would hold a portfolio on margin. What you have to remember is that because you are buying on margin you can lose more than your initial contract amount. A way to manage this risk is by using position sizing and stop loses. With your position sizing, if you wanted to invest $10,000 in a particular share trading at $10 per share, you would then buy 1000 shares or 1000 CFDs in that share. Your initial expense with the CFDs might be only $1000 (at a margin rate of 10%). So instead of increasing your risk by having an initial outlay of $10,000 with the CFDs you limit your risk to the same as you were buying the shares directly. |
Can zero-coupon bonds go down in price? | Let's say today you buy the bond issued by StateX at 18$. Let's say tommorow morning the TV says that StateX is going towards default (if it happens it won't give you back not even the 18$ you invested). You (and others that bought the same bond like you) will get scared and try to sell the bond, but a potential buyer won't buy it for 18$ anymore they will risk maximum couple of bucks, therefor the price of your bond tomorrow is worth 2$ and not 18 anymore. Bond prices (even zero coupon ones) do fluctuate like shares, but with less turbolence (i.e. on the same period of time, ups and downs are smaller in percentage compared to shares) EDIT: Geo asked in the comment below what happens to the bond the FED rises the interest. It' very similar to what I explained above. Let's say today you buy the bond just issued by US treasury at 50$. Today the FED rewards money at 2%, and the bond you bought promised you a reward of 2% per year for 10 years (even if it's zero coupon, it will give you almost the same reward of one with coupons, the only difference is that it will give you all the money back at once, that is when the bond expires). Let's say tommorow morning the TV says that FED decided to rise the interest rates, and now on it lends money rewarding a wonderful 4% to investors. US treasury will also have to issue bonds at 4%. You can obviously keep your bond until expiration (and unless US goes default you will get back all your money until the last cent), but if you decide to sell your bond, you will find out that people won't be willing to pay 50$ anymore because on the market they can now buy the same type of bond (for the same period of time, 10 years) that give them 4% per year and not a poor 2% like yours. So people will be willing to pay maximum 40$ for your bond or less. |
Moving Coin Collection to Stapled Coin Pockets | I would be wary of having coins in containers with cardboard. Ideally you want the coins to be in an airtight envelope made of plastic to minimize any chance of oxidation or reaction with chemicals in the air. Cheap, retail coins like you would find in a Whitman collection are not generally going to hold value well. Sometimes you can sell a collection and break even if you have a nice complete set, but in general VF coins with common dates will not appreciate at all. Investment coins usually are high-priced items that sell for thousands each, not the sort thing you find in Whitman folders. In general, collectibles are bad investments in the US because IRS rules tax gains as ordinary income. So, unless you sell them under the table or have really low income, you lose a lot of your profit. If you enjoy collecting, focus on the fun of it, worrying about investment in coin collections is a joy killer. A Parting Anecdote... When I was a kid I painstakingly assembled a lot of BU rolls, because that was the hot thing back then. I wrote on them "DO NOT OPEN FOR 10 YEARS". You know how much a 1980 BU roll of Lincoln cents is worth now, 40 years later? $2.00 on eBay. Some days I spend more on lunch than the worth of my entire Lincoln cent collection. |
Is is possible to dispute IRS underpayment penalties? | The underpayment "penalty" is just interest on the late payments--willful or not has nothing to do with it. When they feel it's willful there will be additional penalties. |
Why does a long/purchased call option have a long position in the option itself? | It will be helpful to establish some definitions: Long "Long" is financial slang for "to have possession of an asset", legally, and "to debit an asset", financially. Short "Short" is financial slang for "to be liable for an asset", legally, and "to credit an asset", financially. Option "Option" is financial slang for "to have the right but not obligation to force the liable to perform action", legally. Without limits and when taken to absurdity, this can mean slavery. For equities, this means "to have the right but not the obligation to force the liable to buy/sell a specified asset at a specified price with a specified expiration for that right" for a call/put, respectively. By the above, a call option is "the right but not the obligation to force the liable to buy a specified asset at a specified price with a specified expiration for that right". By the definition of "long" above, a call option is actually not long the underlying. By the definitions above and with a narrower scope applied to equities & indexes, to be "long" the call means "to have the right but not the obligation to force the liable to buy a specified asset at a specified price with a specified expiration for that right" while to be "short" the call means "to have the obligation to be forced to sell a specified asset at a specified price with a specified expiration for that right". So, to be "long" a call means to simply own the call. |
What are some sources of information on dividend schedules and amounts? | I have 3 favorite sites that I use. http://www.nasdaq.com/symbol/mcd/dividend-history - lists the entire history of dividends and what dates they were paid so you can predict when future dividends will be paid. http://www.dividend.com/dividend-stocks/services/restaurants/mcd-mcdonalds/ - this site lists key stats like dividend yield, and number of years dividend has increased. If the next dividend is announced, it shows the number of days until the ex-dividend date, the next ex-div and payment date and amount. If you just want to research good dividend stocks to get into, I would highly recommend the site seekingalpha.com. Spend some time reading the articles on that site under the dividends section. Make sure you read the comments on each article to make sure the author is not way off base. Finally, my favorite tool for researching good dividend stocks is the CCC Lists produced by Seeking Alpha's David Fish. It is a giant spreadsheet of stocks that have been increasing dividends every year for 5+, 10+, or 25+ years. The link to that spreadsheet is here: http://dripinvesting.org/tools/tools.asp under "U.S. Dividend Champions". |
How does start-up equity end up paying off? | Read the book, "Slicing Pie: Fund Your Company Without Funds". You can be given 5% over four years and in four years, they hire someone and give him twice as much as you, for working a month and not sacrificing his salary at all. Over the four years, the idiot who offered you the deal will waste investors money on obvious, stupid things because he doesn't know anything about how to build what he's asking you to build, causing the need for more investment and the dilution of your equity. I'm speaking from personal experience. Don't even do this. Start your own company if you're working for free, and tell the idiot who offered you 5% you'll offer him 2% for four years of him working for you for free. |
Can a company donate to a non-profit to pay for services arranged for before hand? | Can a company say "StackExchange" donate to a non-profit company say $5,000 in agreement that they will spend that on paying a designer for a new website? And most importantly is this donation still tax deductible? A non-profit would have to typically create a bucket for IT Services or Website design. As long as "StackExchange" specify they employ a profession service to get it done, there would be no issue. If "StackExchange" were to specify an individula/company it would be an issue. |
Help: Being charged interest on a loan for which I received no statements telling me of this debt for the past 15 years. Surprise! | There is a ten year statue of limitations on debt collection, bankruptcy, etc. The problem is, if you start paying, even say, $1, you "acknowledge" the debt and the clock starts again. Debt claims fall under the "he said, she said," rubric. In debt restructuring situations, the debtor is taught to write all their creditors DENYING debts. Some percentage of those creditors won't have the paperwork to back up their claims. Others will, and can press their claims. Then a court decides. But in any event, a debt more than tens years old is a "stale," debt. A court is likely to rule in your favor. Unless you "acknowledge" the debt. |
How Should I Start my Finance Life and Invest? | I'd suggest looking at something like the Dummies series of books for this. Something like: Sometimes the books are combined into one big book. This would be the best bet. It's were I started. Every time I wondered something I just looked it up and learned. They are perfectly fine for the novice. Hope this helps. |
Why would a company with a bad balance sheet be paying dividends? | While Ford and the other auto makers have a bad few years, some companies want to have a cash dividend. It appeals to certain investors. Others have tried to avoid dividends: Microsoft didn't start until ~2003; Apple only from mid 80's until mid 90's.; Google never has had a cash dividend. The desire to keep the dividend, or even to increase it, make some companies continue the practice; even when it doesn't make complete sense. Here is a list of stocks that have INCREASED their dividend for the last 25+ years: http://www.dividend.com/dividend-stocks/25-year-dividend-increasing-stocks.php Some have had good years, others bad years, in the last 25+ years. |
Are the guaranteed returns of regulated utilities really what they sound like? | Typically a private company is hit by demand supply issues and cost of inputs. In effect at times the cost of input may go up, it cannot raise the prices, because this will reduce demand. However certain public sectors companies, typically in Oil & Engery segements the services are offered by Public sector companies, and the price they charge is governed by Regulatory authorities. In essence the PG&E, the agreement for price to customers would be calculated as cost of inputs to PG&E, Plus Expenses Plus 11.35% Profit. Thus the regulated price itself governs that the company makes atleast 11.35% profit year on year. Does this mean that the shares are good buy? Just to give an example, say the price was $100 at face value, So essentially by year end logically you would have made 111.35/-. Assuming the company did not pay dividend ... Now lets say you began trading this share, there would be quite a few people who would say I am ready to pay $200 and even if I get 11.35 [on 200] it still means I have got ~6% return. Someone may be ready to pay $400, it still gives ~3% ... So in short the price of the stock would keep changing depending how the market percieves the value that a company would return. If the markets are down or the sentiments are down on energy sectors, the prices would go down. So investing in PG&E is not a sure shot way of making money. For actual returns over the years see the graph at http://www.pgecorp.com/investors/financial_reports/annual_report_proxy_statement/ar_html/2011/index.htm#CS |
ESPP advantages and disadvantages | It would be difficult to answer without knowing specifics about a particular offer. In certain cases, it's definitely great and one could become a millionaire [Google for example]. In other cases one could lose money. In most cases one makes a decent return. As the specifics are not available, in general look out for: Most of these would determine if the plan is good for you to get into. |
Can used books bought off Amazon be claimed as a tax deduction in Australia? | Yes, you can. That the books were purchased from abroad is irrelevant: you incurred an expense in the course of earning your income. If the books are expensive (>$300 per set iirc) you will need to deprecate them over a reasonable life time rather than claiming the entire amount up front. It doesn't matter whether what you got was a VAT Invoice; as long as you have some reasonable documentation of the expense you're ok. |
When the market crashes, should I sell bonds and buy equities for the inevitable recovery? | The problem with the proposed plan is the word "inevitable". There is no such thing as a recovery that is guaranteed (though we may wish it to be so), and even if there was there is no telling how long it will take for a recovery to occur to a sufficient degree. There are also no foolproof ways to determine when you have hit the bottom. For historical examples, consider the Nikkei. In 2000 the value fell from 20000 to 15000 in a single year. Had you bought then, you would have found the market still fell and didn't get back to 15k until 2005...where it went up and down for years, when in 2008 it fell again and would not get back to that level again until 2014. Lest you think this was an isolated international incident, the same issues happened to the S&P in 2002, where things went up until they fell even lower in 2009 before finally climbing again. Will there be another recession at some point? Surely. Will there be a single, double, or triple dip, and at what point is the true bottom - and will it take 5, 10, or 20+ years for things to get back above when you bought? No one really knows, and we can only guess. So if you want to double down after a recession, you can, but it's important you not fool yourself into thinking you aren't greatly increasing your risk exposure, because you are. |
Questioning my Realtor | A mortgage lender will not usually lend more than they could get if they had to repossess the property and sell it to recover their investment (in the U.S. it is generally accepted that 80% of market value is the golden number that makes the mortgage work). That's why an appraisal is required. Even with 50% down, the numbers might not add up if your property is appraised very low (extremely unlikely, though. It's more likely your realtor is inexperienced). |
Repaying Debt and Saving - Difficult Situation | Given the listed expenses, this problem will not have a nice solutions. So lets quickly go through them and see when the most pressing ones can be dealt with: Solved within 1 year: 900 Solved within a few years: 1300: 900+400 You may be able to save a couple of hundred on the rest, but just take a minute to look at the above. Within 1 year she will be able to 'break even' and within a few years she will be able to live fairly comfortably. She will eat through her funds in about 10 months, which should coincide with the end of the tuition costs. If you could just sponsor her a little bit, or just be there for her in case of unexpected expenses, she should make it till the end of the year after which things are looking up and she will have a healthy surplus each month. Soon you and your sister can probably help her build up a nice buffer quickly, after which her worries should be over. |
What sort of tax treatment does a charitable micro-lending loan incur? | When lending through Kiva you are not making a "charitable contribution" it's a loan so you cannot deduct the amount you loaned out. If you do lose money from your loan you can write off your entire loss same as you would with any other investment. However you should be careful because in the event of a tax audit you need to have the proper documentation in order to prove that loss (I don't know what Kiva provides). So to answer your question, no you would not be liable for any taxes from a Kiva loan. |
Capital gains tax when I sell my home if I use a portion of it for an AirBnB | Getting the first year right for any rental property is key. It is even more complex when you rent a room, or rent via a service like AirBnB. Get professional tax advice. For you the IRS rules are covered in Tax Topic 415 Renting Residential and Vacation Property and IRS pub 527 Residential Rental Property There is a special rule if you use a dwelling unit as a personal residence and rent it for fewer than 15 days. In this case, do not report any of the rental income and do not deduct any expenses as rental expenses. If you reach that reporting threshold the IRS will now expect you to to have to report the income, and address the items such as depreciation. When you go to sell the house you will again have to address depreciation. All of this adds complexity to your tax situation. The best advice is to make sure that in a tax year you don't cross that threshold. When you have a house that is part personal residence, and part rental property some parts of the tax code become complex. You will have to divide all the expenses (mortgage, property tax, insurance) and split it between the two uses. You will also have to take that rental portion of the property and depreciation it. You will need to determine the value of the property before the split and then determine the value of the rental portion at the time of the split. From then on, you will follow the IRS regulations for depreciation of the rental portion until you either convert it back to non-rental or sell the property. When the property is sold the portion of the sales price will be associated with the rental property, and you will need to determine if the rental property is sold for a profit or a loss. You will also have to recapture the depreciation. It is possible that one portion of the property could show a loss, and the other part of the property a gain depending on house prices over the decades. You can expect that AirBnB will collect tax info and send it to the IRS As a US company, we’re required by US law to collect taxpayer information from hosts who appear to have US-sourced income. Virginia will piggyback onto the IRS rules. Local law must be researched because they may limit what type of rentals are allowed. Local law could be state, or county/city/town. Even zoning regulations could apply. Also check any documents from your Home Owners Association, they may address running a business or renting a property. You may need to adjust your insurance policy regarding having tenants. You may also want to look at insurance to protect you if a renter is injured. |
Determining current value for real estate for inheritance purposes | There are multiple ways of determining the value of an inherited property. If you aren't planning on selling it, then the best way would be to have a real estate agent do a comp on the property (or multiple real estate agents). |
why do I need an emergency fund if I already have investments? | You're absolutely correct. If you have maxed out your retirement investment vehicles and have some additional investments in a regular taxable account, you can certainly use that as an emergency source of funds without much downside. (You can borrow from many retirement account but there are downsides.) Sure, you risk selling at a loss when/if you need the money, but I'd rather take the risk and take advantage of the investment growth that I would miss if I kept my emergency fund in cash or money market. And you can choose how much risk you're willing to take on when you invest the money. |
Calculating return on a series of stock positions with multiple uneven transactions | Generally if you are using FIFO (first in, first out) accounting, you will need to match the transactions based on the number of shares. In your example, at the beginning of day 6, you had two lots of shares, 100 @ 50 and 10 @ 52. On that day you sold 50 shares, and using FIFO, you sold 50 shares of the first lot. This leaves you with 50 @ 50 and 10 @ 52, and a taxable capital gain on the 50 shares you sold. Note that commissions incurred buying the shares increase your basis, and commissions incurred selling the shares decrease your proceeds. So if you spent $10 per trade, your basis on the 100 @ 50 lot was $5010, and the proceeds on your 50 @ 60 sale were $2990. In this example you sold half of the lot, so your basis for the sale was half of $5010 or $2505, so your capital gain is $2990 - 2505 = $485. The sales you describe are also "wash sales", in that you sold stock and bought back an equivalent stock within 30 days. Generally this is only relevant if one of the sales was at a loss but you will need to account for this in your code. You can look up the definition of wash sale, it starts to get complex. If you are writing code to handle this in any generic situation you will also have to handle stock splits, spin-offs, mergers, etc. which change the number of shares you own and their cost basis. I have implemented this myself and I have written about 25-30 custom routines, one for each kind of transaction that I've encountered. The structure of these deals is limited only by the imagination of investment bankers so I think it is impossible to write a single generic algorithm that handles them all, instead I have a framework that I update each quarter as new transactions occur. |
Why Are Credit Card Rates Increasing / Credit Limits Falling? | Of course your situation is very hurtful at a personal level, and I sympathize. I just don't get your point about being driven further into debt? It would seem that with a lower credit score you are prevented from taking on more debt. That can absolutely be hurtful especially to someone who runs a business that relies on short term credit. As for why they do this, they do it to reduce their risk - they don't want to lend more money, they are afraid that you will lose your job and default. Of course it is not as personal as I am writing it, not for you (they don't target you personally - they target your credit profile) and not for them (it is a matter of how the market views the debt and how much they can trade on such debt, not what they want to do personally). As for the TARP bailouts not releasing enough credit - this is reality. Goverment always thinks it can influence the situation more than it actually can. In order to unfreeze credit there needs to be a growing economy that makes the risk look acceptable. No amount of Goverment nudging will really change that more than marginally. By the way, legislation like this (forcing credit card companies to not raise their rates) can lead to credit restrictions. By artifically forcing the rates down the risk has to be ballanced somewhere - so it will be ballanced by lowering credit lines or by other means. Like any price control, if you restrict the price, it causes shortages. Intrest rates are the price of credit. |
The doctor didn't charge the health insurance in time, am I liable? | The hospital likely has a contract with your insurance company which makes them obligated to bill the insurance before billing you! I had a similar occurrence that was thrown out when my insurance company provided a copy of a contract with the hospital to the judge. So if there is an agreement they must file with the insurance in timely manner. |
Should I wait to save up 20% downpayment on a 500k condo? | As I've crunched numbers towards what my family could afford for a down payment (in an area with similar housing costs - don't you hate that high cost of living?), I've come up with the following numbers: We may be missing some area of expenses, but in general I think we are being fairly conservative. You should consider making a similar list to determine your comfort level. Spend some time with an interest calculator to know the serious pain of each dollar you are paying interest on to a lender. Also know that the bigger your down payment, the more likely the seller is to accept your offer. It shows you are serious. |
Can I sell a stock immediately? | You can always trade at bid or ask price (depending if you are selling or buying). Market price is the price the last transaction was executed at so you may not be able to get that. If your order is large then you may not even be able to get bid/ask but should look at the depth of the order book (ie what prices are other market participants asking for and what is the size of their order). Usually only fast traders will trade at bid/ask, those who believe the price move is imminent. If you are a long term trader you can often get better than bid or ask by placing a limit order and waiting until a market participant takes your offer. |
hardship withdrawal | Gaining traction is your first priority. WARNING: as @JosephZambrano explains in his answer the tax penalty for withdrawing from a 401(k) can easily exceed the APR of the credit card making it a very bad strategy. Consult in-depth with a financial advisor to see before taking that path. As @JoeTaxpayer has noted a loan is another alternative. The 401k is no good to you if you can't have shelter or comfort in the mean time. The idea is to look at all the money as a single thing and balance it together. There is no credit and retirement, just a single target that you can hit by moving the good money to clear the bad. Consolidating the credit card debt somehow would be very wise if you can. Assuming it is 30% APR shrinking that quickly is the first priority. You may be able to justify a hardship withdrawal to finance the reduction/consolidation of the credit card. It may be worth considering negotiating a closure arrangement with a reduced principal. Credit card companies can be quite open to this as it gets their money back. You may also be able to negotiate a lower interest rate. You may be able to negotiate a non-credit-affecting debt consolidation with a debt consolidator. They want to make money and a 25K loan to a person with sound credit is a pretty good bet. Moving, buying a house, or any of that may just relocate the problem. You may be able to withdraw $25K from your 401k under hardship, pay the credit card, and come up with a payment plan for the medical debt. It's a retirement setback for sure, but retirement is an illusion with that credit card shark eating all of your hard-earned money. You gotta slay that beast quick. Again, be sure to fully analyze whether the penalty on the 401(k) withdrawal exceeds the APR of the credit card. |
How to calculate interest payments without EBIT | The actual financial statements should always be referenced first before opening or closing a position. For US companies, they are freely available on EDGAR. Annual reports are called 10-Ks, and quarterly reports are called 10-Qs. YHOO and GOOG do a great job of posting financials that are quickly available, but money.msn has the best. These should be starting point, quick references. As you can see, they may all have the same strange accounting. Sometimes, it's difficult to find the information one seeks in the consolidated financial statements as in this case, so searching through the filing is necessary. The notes can be helpful, but Ctrl-F seems to do everything I need when I want something in a report. In AAPL's case, the Interest expense can be found in Note 3. |
Should I open a credit card when I turn 18 just to start a credit score? | I will disagree with the other answers. The idea that there is some to establish a "credit history" is largely a myth propagated by loaners who see it as positive propaganda to increase the numbers of their prospective customers. You will find some people who claim they were rejected for a card because they had no "credit history," but in every case what these people are not telling you is they also had no income (were students, house wives, or others with no steady income). Anyone who has income can get a credit card or other line of credit regardless of their "credit history." Even people who have gone bankrupt can get credit cards if they have proven income. If your answer to this is that "you have no income, but still want a credit card", I would advise you to re-read that sentence several times and think carefully about it. I have never had a credit card and never missed having one, except when trying to rent cars which was somewhat complex and annoying to do in the 2005-2010 time period without a credit card. Credit cards have a number of disadvantages: I definitely agree with those who will tell you credit cards are convenient, they are, but for someone who wants to be financially prudent and build wealth they are unnecessary and unwise. If you don't believe me, read "The Total Money Makeover" by David Ramsey, one of the most famous and best-selling books ever written on personal finance. He actually will give you much better and detailed reasons to avoid CCs than me. After all, who am I, just some dumb rich schmuck with lots of money and no debt and a happy life. Comment on Culture I think it is pretty funny we have a lot of spendthrift Americans in this thread basically telling the OP to get lots of credit cards as soon as possible. If you asked the same question in Japan you would get completely different answers and votes. In Japan its hard to even use credit cards. The people there are much more responsible financially than Americans; the average Japanese person has much higher wealth than a person with the same income in the United States. One of the reasons for this, among many, is that the average Japanese person does not use credit cards. A Japanese person, if you translated this question for them, would think the whole thing a typical example of how foolish Americans are. |
Adding a 180 day expiration to checks | Your bank has discretion to honor checks after 6 months, so you should talk to your bank about their specific policy. In general, banks won't accept "large" stale checks. The meaning of "large" varies -- $25,000 in NYC, as little as $2k in other places. Banks that service high-volume check issuers (like rebate companies) reject checks at 180 days. For business purposes, I think some banks will create accounts for specific mailings or other purposes as well. (i.e. 2011 refund account) The accounts close after a year. |
College student interested in starting a stock portfolio, how much should I invest? | You should invest a trivial (<500$USD) amount of money in a stock portfolio. If you aren't able to make more on the market than the interest rates of your loans, you are losing money. This question has discussed this topic as well. |
Fringe Benefits (Lodging) for single member S-Corp | None whatsoever, no. Moreover, trying something like that would very likely trigger a full audit. |
Has anyone compared an in-person Tax Advisor to software like Turbo Tax? | It depends on the person. i will take turbo tax over any mediocre or poor accountant ANY DAY. You get consistent, accurate tax preparation with the software (desktop - not the online version) I was in a housing rental partnership with my brothers and one of them insisted on using his accountant... what a mistake. I have been using turbo tax for 10+ years and have always been happy. It handles my non trivial situation with ease: I am happy with it but have to admit I don't have a good accountant to compare it to. I see no reason to go to an accountant except for planning purposes. Just for tax prep it is more than worth it and more than you will need. |
Put Option Pricing | Standard options are contracts for 100 shares. If the option is for $0.75/share and you are buying the contract for 100 shares the price would be $75 plus commission. Some brokers have mini options available which is a contract for 10 shares. I don't know if all brokers offer this option and it is not available on all stocks. The difference between the 1 week and 180 day price is based on anticipated price changes over the given time. Most people would expect more volatility over a 6 month period than a 1 week period thus the demand for a higher premium for the longer option. |
Bank statements - should I retain hardcopies for tax or other official purposes (or keep digital scanned copies)? | In the UK Directgov don't specify anything more than "records", which leads me to think that a digital copy might be acceptable. With regards to bank statements, individuals (i.e. not self-employed, or owning a business) need to keep them for between 12 and 15 months after your tax return, depending on when you filed it. Source: Record keeping (individuals and directors) - Directgov |
As an investor what are side effects of Quantitative Easing in US and in EU? | Well if your looking to explain inflation to children, I would use this example. Take two fruits they like IE: Apples and Oranges. Give them both 2 of each. Ask them how many of your apples would you give for 1 orange and how many apples would you want to get 1 orange(most likely they will say 1). Now give them 5 more apples each. Then ask them the same question. In economics and finance many things can not be proven, so to tell you what QE will do for a fact can't be said, you can only be told theories. There are to many variables. |
Do altcoin trades count as like-kind exchanges? (Deferred capital gains tax) | Just a thought because this is a really good question: Would the buying and selling of blockchain based digital currency, using other blockchain based digital currencies, be subject to like kind treatment and exempt from capital gains until exchanged for a non-blockchain based good or service (or national currency) Suppose someone sells 1 bitcoin to buy 100 monero. Monero's price and bitcoin's price then change to where the 100 monero are 3 bitcoins. The person gets their bitcoin back and has 66.67 monero remaining. This scenario could be: Suppose someone sells 1 bitcoin at $1000 to buy 100 monero at $10. Bitcoin crashes 80% to $200 while monero crashes to only $6 per monero. $6 times 100 is $600 and if the person gets their bitcoin back (at $200 per bitcoi), they still lost money when measured in US Dollars if they move that bitcoin back to US dollars. In reading the IRS on bitcoin, they only care about the US dollar value of bitcoin or monero and in this example, the US dollar value is less. The person may have more bitcoins, but they still lost money if they sell. |
What is best investment which is full recession proof? | I don't think there is a recession proof investment.Every investment is bound to their ups and downs. If you buy land, a change in law can change the whole situation it may become worthless, same applies for home as well. Gold - dependent on world economy. Stock - dependent on world economy Best way is to stay ever vigilant of world around you and keep shuffling from one investment to another balance out your portfolio. "The most valuable commodity I know of is information." - Wall Street -movie |
Can the risk of investing in an asset be different for different investors? | In a perfect market, share prices are by definition a perfect reflection of the true value of a share. Hence, you always get $10 for a share that's worth that much. In reality, the market is imperfect. Prices are somewhat of an average of all different estimates, and there's a cost-of-trading margin between sales and buy prices. Hence, in a perfect market it doesn't matter whether you have a stop loss order at $9.00. That just trades your stock worth $9 for cash worth the same $9. In an imperfect market, that trade nets you less. Furthermore, is risk a linear function of money? Perhaps not, if you bought on margin, need to lend extra and your interest rate increases with the extra credit demand. |
What is an effective way to invest in electric car industry? | At this time I would say that the electric car industry as a whole is too new to be able to invest in it as a sector. There are only a handful of companies that focus solely on electric cars to create a moderately diverse portfolio, let alone a mutual fund. You can invest in mutual funds that include EV stocks as part of an auto sector or clean energy play, for example, but there's just not enough for an EV-only fund at this point. At this point, perhaps the best you can do if you want an exclusively EV portfolio is add some exposure to the companies that are the biggest players in the market and review the market periodically to see if any additional investments could be made to improve your diversification. Look at EV-only car makers, battery makers, infrastructure providers, etc. to get a decent balance of stocks. I would not put any more than 10% of your entire investment portfolio into any one stock, and not more than 20% or so in this sector. |
How exactly does dealing in stock make me money? | You can make money via stocks in two primary ways: Note that there's no guarantee of either. So it may very well not make you money. |
Disputing Items to Improve Credit Report | Disputing the remark seems unlikely to move your score, since it is just that -- a remark. It's hard to say whether the scoring models can/do read the remarks and incorporate them (somehow) into the scoring metric itself. Disputing the revolving account that should be reported as closed is a different matter. The question there would be what the status of that account is/was. In other words, is it showing as an open collection or some other status which would indicate the creditor still has a pending claim? If so, disputing it might have some effect, although nobody would be able to tell you for certain or even how much your score might be affected. If, as you say, that account should have been part of the bankruptcy package then getting that corrected could be important enough to achieve what you're looking for. You can try it and see, but even if the effect is minor, you still want your credit report to be a true reflection of the facts. I hope this helps. Good luck! |
Events that cause major movement in forex? | currency's central bank or treasury/finance department speeches that can announce a significant change in policy. That includes: Particularly when it is a high level figure within the department such as the President or Prime Minister making the announcement. Macroeconomic stats: GeoPolitical considerations, such as: Economic calendars, such as ForexFactory and MyFxBook track planned economic news releases. Obviously, a coup d'etat or war declaration may not be well known in advance. |
Term loan overpayment options: applied to principal, or…? | It may have been the standard practice for a long time, and indeed it still is the common practice for my credit union to apply all excess payment directly to the principal. At the risk of sounding a little cynical, I will suggest that there is a profit motive in the move to not applying excess payments to principal unless directly instructed to do so. Interest accrued isn't reduced until the principal is reduced, so it benefits the creditor to both have the money in advance and to not apply it to the principal. You should probably move forward with the expectation that all of your creditors are adversarial even if only in a passive-aggressive manner. |
Is it better to buy this used car from Craigslist or from a dealership? | You seem to be on the right track. I feel, though, that it's worth addressing your maintenance budget. Even if both cars described in your question are from the same model year, one has been in service 2x more; one car has been on the road, in weather, twice as much as the other. I'm not sure what's being represented in the $6k of maintenance, but a whole host of systems can require maintenance or replacement at 200k+ miles. A/C compressor, all sorts of rubber parts (seals, hoses, belts, bushings), computer systems, stereo, window regulators, the list goes on. I don't know at what point the battery on a hybrid needs to be replaced, or what that replacement entails, but likely the battery or the hybrid recharge system will require something after 200k miles of service. I would learn more about what actual maintenance a high mileage prius can experience. To answer your question though, at this level of "used" I don't think the dealership adds anything to the equation. When you're buying certified pre-owned, the dealership/manufacturer relationship and warranty can be meaningful. When you're buying a 100k+ miles car from a random small used car lot it might as well be a stranger on craigslist... |
Meanings of “price of the derivative” | @Tim - in this case, a futures contract isn't like an options contract. It's simply a method of entering into an agreement for delivery at a future date. While the speculators appear to have taken over, there are practical examples of use of the futures market. I am a gold miner and I see that my cost is $1200/oz given my quality of ore. I see the price of gold at $1600 and instead of worrying that if it goes too low, I run at a loss, I take advantage and sell contracts to match my production for the next year (or as long as the contracts go, I forget how far out gold futures are). Of course I give up the higher price if gold goes higher, but this scenarion isn't speculation, it's a business decision. The bread maker, on the other hand, might buy wheat futures to guarantee his prices for the next year. |
How do I calculate the actual dividend amount for a monthly dividend payout mutual fund? | In the absence of a country designation where the mutual fund is registered, the question cannot be fully answered. For US mutual funds, the N.A.V per share is calculated each day after the close of the stock exchanges and all purchase and redemption requests received that day are transacted at this share price. So, the price of the mutual fund shares for April 2016 is not enough information: you need to specify the date more accurately. Your calculation of what you get from the mutual fund is incorrect because in the US, declared mutual fund dividends are net of the expense ratio. If the declared dividend is US$ 0.0451 per share, you get a cash payout of US$ 0.0451 for each share that you own: the expense ratio has already been subtracted before the declared dividend is calculated. The N.A.V. price of the mutual fund also falls by the amount of the per-share dividend (assuming that the price of all the fund assets (e.g. shares of stocks, bonds etc) does not change that day). Thus. if you have opted to re-invest your dividend in the same fund, your holding has the same value as before, but you own more shares of the mutual fund (which have a lower price per share). For exchange-traded funds, the rules are slightly different. In other jurisdictions, the rules might be different too. |
Gift Tax and LLC with foreign partners | The LLC portion is completely irrelevant. Don't know why you want it. You can create a joint/partnership trading account without the additional complexity of having LLC. What liability are you trying to limit here? Her sisters will file tax returns in the us using the form 1040NR, and only reporting the dividends they received, everything else will be taxed by Vietnam. You'll have to investigate how to file tax returns there as well. That said, you'll need about $500,000 each to invest in the regional centers. So you're talking about 1.5 million of US dollars at least. From a couple of $14K gifts to $1.5M just by trading? I don't see how this is feasible. |
The Benefits/Disadvantages of using a credit card | never carry a balance on a credit card. there is almost always a cheaper way to borrow money. the exception to that rule is when you are offered a 0% promotion on a credit card, but even then watch out for cash advance fees and how payments are applied (typically to promotional balances first). paying interest on daily spending is a bad idea. generally, the only time you should pay interest is on a home loan, car loan or education loan. basically that's because those loans can either allow you to reduce an expense (e.g. apartment rent, taxi fair), or increase your income (by getting a better job). you can try to make an argument about the utility of a dollar, but all sophistry aside you are better off investing than borrowing under normal circumstances. that said, using a credit card (with no annual fee) can build credit for a future car or home loan. the biggest advantage of a credit card is cash back. if you have good credit you can get a credit card that offers at least 1% cash back on every purchase. if you don't have good credit, using a credit card with no annual fee can be a good way to build credit until you can get approved for a 2% card (e.g. citi double cash). additionally, technically, you can get close to 10% cash back by chasing sign up bonuses. however, that requires applying for new cards frequently and keeping track of minimum spend etc. credit cards also protect you from fraud. if someone uses your debit card number, you can be short on cash until your bank fixes it. but if someone uses your credit card number, you can simply dispute the charge when you get the bill. you don't have to worry about how to make rent after an unexpected 2k$ charge. side note: it is a common mis-conception that credit card issuers only make money from cardholder interest and fees. card issuers make a lot of revenue from "interchange fees" paid by merchants every time you use your card. some issuers (e.g. amex) make a majority of their revenue from merchants. |
Understanding the Nasdaq insider trading information | Usually insiders are in a better position than you to understand their business, but that doesn't mean they will know the future with perfect accuracy. Sometimes they are wrong, sometimes life events force them to liquidate an otherwise promising investment, sometimes their minds change. So while it is indeed valuable information, as everything in fundamental analysis it must be taken with a grain of salt. Automatic Sell I think these refer to how the sell occurred. Often the employees don't get actual shares but options or warrants that can be converted to shares. Or there may be special predetermined arrangements regarding when and how the shares may be traded. Since the decision to sell here has nothing to do with the prospects of the business, but has to do with the personal situation of the employee, it's not quite the same as outright selling due to market concerns. Some people, for instance, are not interested in holding stock. Part of their compensation is given in stock, so they immediately sell the stock to avoid the headache of watching an investment. This obviously doesn't indicate that they expect the company will go south. I think automatic sell refers to these sorts of situations, but your broker should provide a more detailed definition. Disposition (Non Open Market) These days people trade through a broker, but there's nothing stopping you from taking the physical shares and giving them to someone in exchange for say a stack of cash. With a broker, you only "sell" without considering who is buying. The broker then finds buyers for you according to their own system. If selling without a broker you can also be choosy with who is buying, and it's not like anybody can just call up the CEO and ask to buy some stock, so it's a non-open market. Ultimately though it's still the insider selling. Just on a different exchange. So I would treat this as any insider sell - if they are selling, they may be expecting the stock to become less valuable. indirect ownership I think this refers to owning an entity that in turn owns the asset. For instance CEO of XYZ owns stock in ACME, but ACME holds shares of XYZ. This is a somewhat complicated situation, it comes down to whether you think they sold ACME because of the exposure to XYZ or because of some other risk that applies only to ACME and not XYZ. Generally speaking, I don't think you would find a rule like "if insider transactions of so and so kinds > X then buy" that provides guaranteed success. If such a rule was possible it would have been exploited already by the professionals. The more sensible option is to consider all data available to you and try to make a holistic evaluation. All of these insider activities can be bullish or bearish depending on many other factors. |
Is the stock market a zero-sum game? | No, the stock market and investing in general is not a zero sum game. Some types of trades are zero sum because of the nature of the trade. But someone isn't necessarily losing when you gain in the sale of a stock or other security. I'm not going to type out a technical thesis for your question. But the main failure of the idea that investing is zero sum is the fact the a company does not participate in the transacting of its stock in the secondary market nor does it set the price. This is materially different from the trading of options contracts. Options contracts are the trading of risk, one side of the contract wins and one side of the contract loses. If you want to run down the economic theory that if Jenny bought her shares from Bob someone else is missing out on Jenny's money you're free to do that. But that would mean that literally every transaction in the entire economy is part of a zero sum game (and really misses the definition of zero sum game). Poker is a zero sum game. All players bet in to the game in equal amounts, one player takes all the money. And hell, I've played poker and lost but still sometimes feel that received value in the form of entertainment. |
Why is financial data of some public companies not available on Yahoo Finance? | In general, the short answer is to use SEDAR, the Canadian database that compiles financial statements for Canadian companies. The financial statements for Pacific Rubiales Energy Corp can be found here. The long answer is that the data might be missing because in Canada, each province has their own agency to regulate securities. Yahoo might not compile information from such a wide array of sources. If other countries also have a decentralized system, Yahoo might not take the time to compile financial information from all these sources. There are a myriad of other reasons that could cause this too, however. This is why SEDAR is useful; it 's the Canadian equivalent of the SEC's EDGAR database, and it maintains a sizeable database of financial statements. |
Buying and selling the same stock | Sorry, no, any time you sell for a profit you owe tax. |
If something is coming into my account will it be debit or credit in my account? | Most bank registers (where you write down entries) show deposits (+) to account as a CREDIT. Payments, fees, and withdrawals are DEBITs to your bank accounnt. On loans such as credit card accounts, a credit to your loan account is a payment or other reductions of the amount you owe. A charge to your account is a DEBIT to you loan account. They did this just to confuse us! |
Creating S-Corp: Should I Name My Wife as a Director/Shareholder? | There are many aspects to consider in deciding what sort of company you want to form. Instead of an S-corporation, you should determine whether it would be better to form a Limited Liability Company (LLC), Limited Partnership (LP) or even a professional company (PC). Littleadv is correct: There is minimal benefit in forming an S-corp with you and your wife as the shareholders, if you will be the only contributor-worker. There are costs associated with an S-corporation, or any corporation, that might outweigh benefits from more favorable tax treatment, or personal protection from liability: Filing fees and disclosure rules vary from state to state. For example, my father was a cardiologist who had no employees, other than my grandmother (she worked for free), in a state with income taxes (NM). He was advised that a PC was best in New Mexico, while an S-Corp was better in Florida (there are no personal income taxes in Florida). The only way to know what to do requires that you consult an accountant, a good one, for guidance. |
I'm 20 and starting to build up for my mortgage downpayment, where should I put my money for optimal growth? | You should never take advice from someone else in relation to a question like this. Who would you blame if things go wrong and you lose money or make less than your savings account. For this reason I will give you the same answer I gave to one of your previous similar questions: If you want higher returns you may have to take on more risk. From lowest returns (and usually lower risk) to higher returns (and usually higher risk), Bank savings accounts, term deposits, on-line savings accounts, offset accounts (if you have a mortgage), fixed interest eg. Bonds, property and stock markets. If you want potentially higher returns then you can go for derivatives like options or CFDs, FX or Futures. These usually have higher risks again but as with any investments some risks can be partly managed. What ever you decide to do, get yourself educated first. Don't put any money down unless you know what your potential risks are and have a risk management strategy in place, especially if it is from advice provided by someone else. The first rule before starting any new investment is to understand what your potential risks are and have a plane to manage and reduce those risks. |
What does “Yield Curve” mean? | Great question! A Yield Curve is a plot of the yields for different maturities of debt. This can be for any debt, but the most common used when discussing yield curves is the debt of the Federal Government. The yield curve is observed by its slope. A curve with a positive slope (up and to the right) or a steepening curve, i.e. one that's becoming more positively sloped or less negatively sloped, may indicate several different situations. The Kansas City Federal Reserve has a nice paper that summarizes various economic theories about the yield curve, and even though it's a bit dated, the theories are still valid. I'll summarize the major points here. A positively sloped yield curve can indicate expectations of inflation in the future. The longer a security has before it matures, the more opportunities it has to be affected by changes in inflation, so if investors expect inflation to occur in the future, they may demand higher yields on longer-term securities to compensate them for the additional inflationary risk. A steepening yield curve may indicate that investors are increasing their expectations of future inflation. A positively sloped yield curve may also reflect expectations of deprecation in the dollar. The publication linked before states that depreciation of the dollar may have increased the perceived risk of future exchange rate changes and discouraged purchases of long-term Treasury securities by Japanese and other foreign investors, forcing the yields on these securities higher. Supply shocks, e.g. decreases in oil prices that lead to decreased production, may cause the yield curve to steepen because they affect short-term inflation expectations significantly more than long-term inflation. For example, a decrease in oil prices may decrease short-term inflation expectations, so short-term nominal interest rates decline. Investors usually assume that long-term inflation is governed more by fundamental macroeconomic factors than short-term factors like commodity price swings, so this price shock may lead short-term yields to decrease but leave long-term relatively unaffected, thus steepening the yield curve. Even if inflation expectations remain unchanged, the yield curve can still change. The supply of and demand for money affects the "required real rate," i.e. the price of credit, loans, etc. The supply comes from private savings, money coming from abroad, and growth in the money supply, while demand comes from private investors and the government. The paper summarizes the effects on real rates by saying Lower private saving, declines in the real money supply, and reduced capital inflows decrease the supply of funds and raise the required real rate. A larger government deficit and stronger private investment raise the required real rate by increasing the demand for funds. The upward pressure on future real interest rates contributes to the yield curve's positive slope, and a steepening yield curve could indicate an increasing government deficit, declines in private savings, or reduced capital coming in from abroad (for example, because of a recession in Europe that reduces their demand for US imports). an easing of monetary policy when is economy is already producing near its capacity ... would initially expand the real money supply, lowering required short-term real interest rates. With long-term real interest rates unchanged, the yield curve would steepen. Lower interest rates in turn would stimulate domestic spending, putting upward pressure on prices. This upward price pressure would probably increase expected inflation, and as the first bullet point describes, this can cause long-term nominal interest rates to rise. The combination of the decline in short-term rates and the rise in long-term rates steepens the yield curve. Similarly, an inverted yield curve or a positively sloped yield curve that is becoming less steep may indicate the reverse of some or all of the above situations. For example, a rise in oil prices may increase expectations of short-term inflation, so investors demand higher interest rates on short-term debt. Because long-term inflation expectations are governed more by fundamental macroeconomic factors than short-term swings in commodity prices, long-term expectations may not rise nearly as much as short term expectations, which leads to a yield curve that is becoming less steep or even negatively sloped. Forecasting based on the curve slope is not an exact science, just one of many indicators used. Note - Yield Curve was not yet defined here and was key to my answer for What is the "Bernanke Twist" and "Operation Twist"? What exactly does it do? So I took the liberty of ask/answer. |
Is there a standard or best practice way to handle money from an expiring UTMA account? | I'd first put it in CDs or other short term account. Get through school first, then see where you land. If you have income that allows you to start a Roth IRA, I'd go for that, but keep it safe in case you actually need it back soon. After school, if you don't land a decent job fast, this money might be needed to live on. How long will it last if you take a few months to find work? If you do find a good job, moving, and setting up an apartment has a cost. Once you're there, I'd refer you to the many "getting started" Q&As on this site. |
How much life insurance do I need? | After some thought, I follow Dave Ramsey's advice because it's simple and I can do the math in my head - no online calculator needed. :) You need Life Insurance if someone depends on your income. You can replace your income with a single lump sum of 8-10 times your current income where those who need your income, can get roughly your salary each year from the life insurance proceeds. |
Identity theft? | Assuming you live in the US, it is quite normal when you are applying for a loan that the application will ask you to confirm your identity. One of these methods is to ask you which of the following addresses you have lived at, with some of them being very similar (i.e. same city, or maybe even the same street). Sometimes they will ask questions and your answer would be "None of the above." This is done to prevent fraudsters from applying for a loan under your identity. If you see no signs of unauthorized accounts or activities on your credit reports, and you initiated the car loan application, then you should be fine. |
Most effective Fundamental Analysis indicators for market entry | The three places you want to focus on are the income statement, the balance sheet, and cash flow statement. The standard measure for multiple of income is the P/E or price earnings ratio For the balance sheet, the debt to equity or debt to capital (debt+equity) ratio. For cash generation, price to cash flow, or price to free cash flow. (The lower the better, all other things being equal, for all three ratios.) |
Is there a good rule of thumb for how much I should have set aside as emergency cash? | 6 to 9 months worth of expenses is recommended. You should also consider having long-term disability insurance in place, in case of serious illness or accident. |
Do altcoin trades count as like-kind exchanges? (Deferred capital gains tax) | Like-kind of exchanges have a list of requirements. The IRS has not issued formal guidance in the matter. I recommend to be aggressive and claim the exchange, while justifying it with a good analogy to prove good faith (and persuade the IRS official reading it the risk of losing in tax court would be to high). Worst case the IRS will attempt to reject the exchange, at which point you could still pony up to get rid of the problem, interest being the only real risk. For example: Past tax court rulings have stated that collectable gold coins are not like kind to gold bars, and unlike silver coins, but investment grade gold coins are like kind to gold bars. So you could use a justification like this: I hold Bitcoin to be like-kind to Litecoin, because they use the same fundamental technology with just a tweak in the math, as if exchanging different grades of gold bars, which has been approved by tax court ruling #xxxxx. Note that it doesn't matter whether any of this actually makes sense, it just has be reasonable enough for you to believe, and look like it is not worth pursuing to an overworked IRS official glancing at it. I haven't tried this yet, so up to now this is a guess, but it's a good enough guess in my estimation that I will be using it on some rather significant amounts next year. |
Got a “personal” bonus from my boss. Do I have to pay taxes and if so, how do I go about that? | Yes, it's taxable. If anyone suggests it's a gift, they are mistaken. There's a line on the 1040 for "other" and as long as you claim it, you're fine with the IRS. It's 2012 income as you already got it. Edit - mhoran makes two good points I'm not really able to address. (a) does a late bonus such as this effect one's penalty? (b) since it skipped payroll, will there be an issue by not having FICA withheld? |
What happens to my savings if my country defaults or restructures its debt? | My 0,02€ - I probably live in the same country as you. Stop worrying. The Euro zone has a 100.000€ guaranty deposit. So if any bank should fail, that's the amount you'll receive back. This applies to all bank accounts and deposits. Not to any investments. You should not have more than 100.000€ in any bank. So, lucky you, if you have more than that money, divide between a number of banks. As for the Euro, there might be an inflation, but at this moment the USA and China are in a currency battle that 'benefits' the Euro. Meaning you should not invest in dollars or yuan at this time. Look for undervalued currency to invest in as they should rise against the Euro. |
Why does short selling require borrowing? | A simple way to ask the question might be to say "why can't I just use the same trick with my own shares to make money on the way down? Why is borrowing someone else's shares necessary to make the concept a viable one? Why isn't it just the inverse of 'going long'?" A simple way to think about it is this: to make money by trading something, you must buy it for less than you sell it for. This applies to stocks like anything else. If you believe the price will go up, then you can buy them first and sell them later for a higher price. But if you believe the price will go down, the only way to buy low and sell high is to sell first and buy later. If you buy the stock and it goes down, any sale you make will lose you money. I'm still not sure I fully understand the point of your example, but one thing to note is that in both cases (i.e., whether you buy the share back at the end or not), you lost money. You say that you "made $5 on the share price dropping", but that isn't true at all: you can see in your example that your final account balance is negative in both cases. You paid $20 for the shares but only got $15 back; you lost $5 (or, in the other version of your example, paid $20 and got back $5 plus the depreciated shares). If you had bought the shares for $20 and sold them for, say, $25, then your account would end up with a positive $5 balance; that is what a gain would look like. But you can't achieve that if you buy the shares for $20 and later sell them for less. At a guess, you seem to be confusing the concept of making a profit with the concept of cutting your losses. It is true that if you buy the shares for $20 and sell them for $15, you lose only $5, whereas if you buy them for $20 and sell for $10, you lose the larger amount of $10. But those are both losses. Selling "early" as the price goes down doesn't make you any money; it just stops you from losing more money than you would if you sold later. |
Is there a good book that talks about all the type of products to invest? | There is no magical book that talks about the thousands of investment instrument types that are available ranging from brown fields land up to CDS futures and beyond. In addition to the huge number the depth of understanding ranges from knowing that a security type exists all the way up to being able to mark the instrument to market for illiquid instances of the instrument. I have been in the industry for about six years and have a fair understanding of what I would term the basics of most security types (I cannot, for example, mark to market exotic options) but most of my knowledge has come from using these instruments on a daily basis and Investopedia. The basis of my knowledge has come from the CFA Claritas Investment certificate book when I took that exam (and CFA Level 1 but I'd recommend against reading that unless you are taking the exam) and Paul Wilmott's texts on Quantitative finance; mostly Paul Wilmott on Quantitative Finance 2nd Edition. tl;dr: you can't get a good grounding on all security types ; there are far too many. To get a good grounding in the most used takes a lot of effort, much more than a book will give you. |
Is the Swiss stock market inversely correlated with the Swiss Franc like Japan today? | Roughly about 1 of 2 Swiss francs is won abroad. So, yes it is easier for Swiss companies to export when the Swiss franc is not "too high" as it has been those last years. The main export market for Switzerland is the UE. Some companies are doing most or all of their business on the Swiss market. Others are much more exposed to the the health of the global economy. When the Swiss franc appreciates, some companies suffer a lot from that and other less. It depends on their product portfolio, competitors, and other factors. The last decades have shown that how the Swiss Franc valuation is less and less correlated with the performance of the Swiss economy. The Swiss franc is used as a safe haven when the global economy goes bad or is uncertain. In those times, the Swiss franc can be overevaluated, at least as compared to the purchasing power. When the global economy is improving, the over-appreciation of the Swiss franc tends to disapear ; this is happening now (in Mid-2017). As a summary, the Swiss franc itself is not truly correlated with the competitiveness of the Swiss economy, but more about how people in the world are anxious. In this regard, it behaves a little bit like gold. |
How can one get their FICO/credit scores for free? (really free) | I've seen credit cards that provide you your credit score for free, updated once a month and even charted over the last year. Unfortunately the bank I used to have this card with was bought and the purchasing bank discontinued the feature. Perhaps someone out there knows of some cards that still offer a feature like this? |
Why would you ever turn down a raise in salary? | In Australia there are cases for the argument. 1) We have laws against unfair dismissal that do not apply above certain thresholds. Your position is more secure with the lower salary. 2) Tax benefits for families are unfairly structured such that take home pay may actually be less, again due to a threshold. This tends to benefit charities as people need to shed the taxable income if a repayment of benefits would otherwise be triggered. 3) You do not want to "just cross" a tax bracket in a year where levies are being raised for natural disasters or budget shortfall. In this case a raise could be deferred ? |
Should I buy a house with a friend? | A real life experience. A friend of mine did that with his housemates. They bought a house together as students and it worked for them. The tricky bit is to have a very good contract with your housemates as to how the venture should work. What if? Somebody can't pay, somebody can't enjoy the house (on an extended trip), somebody wants out (marriage, etc.) It worked for my friend... |
Intrinsic value of non-voting shares which don't pay dividends | Even with non-voting shares, you own a portion of the company including all of its assets and its future profits. If the company is sold, goes out of business and liquidates, etc., those with non-voting shares still stand collect their share of the funds generated. There's also the possibility, as one of the comments notes, that a company will pay dividends in the future and distribute its assets to shareholders that way. The example of Google (also mentioned in the comments) is interesting because when they went to voting and non-voting stock, there was some theoretical debate about whether the two types of shares (GOOG and GOOGL) would track each other in value. It turned out that they did not - People did put a premium on voting, so that is worth something. Even without the voting rights, however, Google has massive assets and each share (GOOG and GOOGL) represented ownership of a fraction of those assets and that kept them highly correlated in value. (Google had to pay restitution to some shareholders of the non-voting stock as a result of the deviation in value. I won't get into the details here since it's a bit of tangent, but you could easily find details on the web.) |
Can I withdraw from my Roth IRA retirement account to fund a startup? | There are two methods of doing this Pulling out the money and paying the penalty if any, and going on your way. Having the Roth IRA own the business, and being an employee. If you go with the second choice, you should read more about it on this question. |
Apartment lease renewal - is this rate increase normal? | There could be a number of reasons for a rent increase. The only information I can offer is how I calculate what rent I will charge. The minimum I would ever charge per unit (Mortgage payment + Water) / Number of units This number is the minimum because it's what I need to keep afloat. Keep in mind these are ballpark numbers The target rent ((Mortgage payment + Water) / Number of units)*1.60 I mark up the price 60% for a few reasons. First, the building needs a repair budget. That money has to come from somewhere. Second, I want to put away for my next acquisition and third I want to make a profit. These get me close to my rental price but ultimately it depends on your location and the comparables in the area. If my target rent is 600 a month but the neighbors are getting 700-800 for the same exact unit I might ask more. It also depends on the types of units. Some of my buildings, all of the units are identical. Other buildings half of the units are bigger than the other half so clearly I wouldn't charge a equal amount for them. Ultimately you have to remember we're not in the game to lose money. I know what my renters are going to pay before I even put an offer in on a building because that's how I stay in business. It might go up over the years but it will always outpace my expenses for that property. |
As a Canadian, what should I invest in if I'm betting that the Canadian real estate will crash? | If you believe you can time the crash, then We all know what comes after a crash… just as we know what comes after the doom, we just don’t know when…. |
Would you withdraw your money from your bank if you thought it was going under? | I probably would not take it out, since I have enough layers of backstops: Maybe if I could find a better rate. :) |
Alternative to Jumbo Mortgage | Yes, banks still offer combo loans, but it is going to depend on the appraised value of your home. Typically lenders will allow you to finance up to 80% loan to value on the first mortgage (conforming loan amount) and 95% combined loan to value on a HELOC. I would start by checking with your local credit union or bank branch. They have more competitive rates and can be more flexible with loan amount and appraised value guidelines. |
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