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How to reconcile these contradictory statements about the effect of volume on stock price? | These statements aren't necessarily contradictory. In the first case, investors are bearish because they anticipate selling in the future (because all the interested buyers have bought, so all that remains in the short run are people willing to sell and therefore drive down the price). In the second case, the trend is strengthened because the increase in volume indicates that the price movement interested a lot of traders. The trend could be bullish or bearish. The statements aren't contradictory because the second case could very well lead to the first case. For example, if an increase in price is coupled with an increase in volume, this could indicate that the positive trend is strengthening (second case). Traders are becoming more interested in the price move, so they buy. However, once all of the traders who are willing to enter the market long do so, we're in the first case. Investors realize that all of the traders who were interested in buying have bought, so they become bearish because they expect selling to start soon. |
Is it possible for me to keep my credit card APR at 0% permanently? | If you pay your statement balance in full before the due date you will never pay a cent in interest no matter what your interest rate is.* In fact, I don't even know what my interest rates are. Credit card companies offer this sort of thing in the hopes you will spend more than you can afford to pay completely in those first 15 months. * Unless you use a cash advance, with those you will accrue interest immediately upon receiving the cash sometimes with an additional fee on top. |
If I take a loss when I sell my car, can I claim a capital loss deduction on my income tax return? | While you'd need to pay tax if you realized a capital gain on the sale of your car, you generally can't deduct any loss arising from the sale of "personal use property". Cars are personal use property. Refer to Canada Revenue Agency – Personal-use property losses. Quote: [...] if you have a capital loss, you usually cannot deduct that loss when you calculate your income for the year. In addition, you cannot use the loss to decrease capital gains on other personal-use property. This is because if a property depreciates through personal use, the resulting loss on its disposition is a personal expense. There are some exceptions. Read up at the source links. |
When does Ontario's HST come into effect? | It looks like the HST will be in effect in Ontario on July 1st, 2010. As to whether it will replace GST with HST for all services, it looks like some sectors may get special treatment: Ontario may exempt mutual funds from HST (National Post). But it doesn't look final yet. However, I would suggest that most service-based businesses in Ontario need to prepare to start charging 13% HST instead of 5% GST. It will be the law. On the "goods" side of the new harmonized tax, it looks like certain goods will still be exempt from the provincial portion. Here's a quote from the Ontario Budget 2009 News Release: "Books, diapers, children's clothing and footwear, children's car seats and car booster seats, and feminine hygiene products would be exempt from the provincial portion of the single sales tax." Here's some additional information on the introduction of the HST, from the province: General Transitional Rules for Ontario HST. And finally, another interesting article from the Ottawa Business Journal: Preparing For Ontario Sales Tax Harmonization – It's Not Too Early UPDATE: I just received an insert from Canada Revenue Agency included with my quarterly GST statement. Titled "Harmonization of the Sales Tax in Ontario and British Columbia", it contains a section titled "What this means for you" (as in, you the business owner). Here's an excerpt: [...] All Ontario and B.C. registrants would need to update their accounting and point-of-sale systems to accomodate the change in rate and new point-of-sale rebates for the implementation date of July 1, 2010. The harmonization of the sales tax in Ontario and B.C. may affect the filing requirements of registrants outside of these two provinces. Registrants will report their HST according to their current GST filing frequency. As a result of the harmonization, there will be changes to the rebates for housing and public service bodies. More information will be released as it becomes available. Visit the CRA web site often, at www.cra.gc.ca/harmonization, for the most up-to-date information on the harmonization of the sales tax and how it may affect you. [...] Last, I found some very detailed information on the HST here: NOTICE247 - Harmonized Sales Tax for Ontario and British Columbia - Questions and Answers on General Transitional Rules for Personal Property and Services. Chances are anything you want to know is in there. |
Why is volatility in a positive direction clubbed in the same risk category as volatility in a negative direction? | Mostly, when an equity's price rises, its statistical and implied volatilities fall and vice versa. The reason why is a mathematical phenomenon mixed with the reality that a unceasingly falling asset price will soon not exist, skewing the results with survivorship bias. Since volatility is standard deviation of price indexes, a security that changes in price by the same amount every day will have lower volatility, so a rising price will have lower implied volatility because its mostly experiencing positive daily price change while a recently falling price will have higher volatility because factored together with the positive price changes, the negative price changes will widen the standard deviation of the securities price index. Quantitatively, any change, in or out of one's favor, is a risk because change is uncertain, and any uncertainty is a risk. This quantitative interpretation while valid runs almost totally counter to the value opinion, that a lower price relative to value is a lower risk than a higher price relative to value, but both have their place in time. Over long time periods, it's best to use the value interpretation, quantitative for shorter. Using the opposite has hastily destroyed many a fund manager. |
Tenant wants to pay rent with EFT | What you've described is the norm in Australia, where it's rare for anyone under sixty to use cheques. Assuming they're transferring the funds using internet banking, I would have the following suggestions: You make it clear that the the funds must reach your account by the due date for rent. It is their (the tenant's) responsibility to allow for the normal transfer delay from their account to yours. This will save unpleasant arguments later if the rent is late. If you're not comfortable with your tenant knowing your banking details, set up another account specifically for receiving rental income payments and paying your costs associated with the property. This may have the added benefit of simplifying things at tax time. Another alternative, which I think others have mentioned, is to use an escrow service like PayPal, but be aware that these kinds of services will usually charge a small percentage when you withdraw your funds. |
Paying tax for freelance work while travelling | Having freelanced myself in South America I could give you a sound advice BUT you would first need to answer some questions. 1) How long do you plan on being in South America? At the end of 2017 will you be back in Ireland or still being in South America? In other words was is your country of residence for tax purposes on Dec. 31 2017 ? That is the key element to consider. Link 2) In latin America you can freelance with a legal working permit BUT in all these countries more than 50% of the economy is under the table. In all these countries expatriate work under the table. The question you need to answer is then: Who will be your employer, a company or the owner of this company? Working undeclared in Latin America is very common, what are the risks? The legal risks depend on the country and their laws. In which country will you travel? How long will you stay there? You will have a tourist visa or a working visa? 3) An important detail, your health. Check how long you can be out of Ireland without loosing your social health benefits in Ireland? In my country, if I am abroad for more than 180 days, I loose my national health coverage. Evaluate the amount of days you will be out of Ireland and where you want to be on Dec. 31th. That could change a lot of things in your life. |
Are 'per trade' fees charged on every order or just once per stock? | In my experience they charge you coming and going. For example, if a brokerage firm is advertising that their commissions are only $7/trade, then that means you pay money to buy the stock, plus $7 to them, and later on if you want to sell that stock you must pay $7 to get out of the deal. So, if you want to make any money on a stock (say, priced at $10) you would have to sell it at a price above $10+$7+$7=$24. That kind of sale could take a few years to turn a profit. However, with flat-rate fees like that it is advantageous to buy in bulk. |
Should I exclude bonds from our retirement investment portfolio if our time horizon is still long enough? | Having cash and bonds in your portfolio isn't just about balancing out the risk and volatility inherent in equities. Consider: If you are 100% invested in equities and the market declines by 30%, you'll be hard pressed to come up with additional money to "buy low". You'll miss out on the rebalancing bonus. But, if you make a point of keeping some portion of your portfolio in cash and bonds, then when the market has such a decline (and it will), you'll be able to rebalance your portfolio back to target weights — i.e. redeploy some of your cash and bonds into equities to take advantage of the lower prices. |
How can my dad (grandpa) transfer shares to my 2 year old son? | A UTMA may or may not fit your situation. The main drawbacks to a UTMA account is that it will count against your child for financial aid (it counts as the child's asset). The second thing to consider is that taxes aren't deferred like in a 529 plan. The last problem of course is that when he turns 18 he gets control of the account and can spend the money on random junk (which may or may not be important to you). A 529 plan has a few advantages over a UTMA account. The grandparents can open the account with your son as the beneficiary and the money doesn't show up on financial aid for college (under current law which could change of course). Earnings grow tax free which will net you more total growth. You can also contribute substantially more without triggering the gift tax ~$60k. Also many states provide a state tax break for contributing to the state sponsored 529 plan. The account owner would be the grandparents so junior can't spend the money on teenage junk. The big downside to the 529 is the 10% penalty if the money isn't used for higher education. The flip side is that if the money is left for 20 years you will also have additional growth from the 20 years of tax free growth which may be a wash depending on your tax bracket and the tax rates in effect over those 20 years. |
Good habits pertaining to personal finance for someone just getting started? | If you are not working, I believe you would be getting some money from your family to meet your expenses. In such a case, I would start with maintaining a Cash A/c which would list your monthly expenses and the money you received, which is what I used to do at your age. You can maintain it in a notebook with pen/pencil or using online tools such as Google Sheets. Enter each expense entries each day as debits and entries towards any money you receive as credits. At the end of the month, tally them and see how much you have left. Also, this gives you a clear picture of where your expenses are what is that you can avoid. On longer term, this can help you form an annual budget for your personal finances. |
I can't understand candlestick shadows | Each candlestick in a candlestick chart represents the open, close, high and low for a period of time. If you are looking at a daily chart it represents the open price, close price, high price and low price for that day. If you are looking at an hourly chart, then a single candlestick represents the open, close, high and low prices for an hour. If looking at a weekly chart, then a single candlestick will represent the opening price on Monday morning, the closing price on Friday afternoon, and the highest and lowest price for that week. The diagram below represents the two main types of candle sticks. When the price closes higher than they open for the period of the candlestick it is called a bullish candle and the main body is usually represented in green. When the price closes lower than they open for the period of the candlestick it is called a bearish candle and the main body is usually represented in red. In a bullish candle with a large real body and small shadows or wicks, where prices open near the low of the period and close near the top of the period, it represents a very bullish period (especially if volume is high). An example of this situation could be when good news is released to the market and most market participants want to buy the shares driving prices higher during the period. An example of a bullish candle with a small real body and a large upper shadow or wick could be when market participants start buying early during the period, then some negative news comes out or prices reach a major resistance level, then prices drop from their highs but still close higher than the open. The large upper shadow represents some indecision in prices moving higher. In a bearish candle with a large real body and small shadows or wicks, where prices open near the high of the period and close near the low of the period, it represents a very bearish period (especially if volume is high). An example of this situation could be when bad news is released to the market and most market participants want to sell the shares driving prices lower during the period. An example of a bearish candle with a small real body and a large lower shadow or wick could be when market participants start selling early during the period, then some positive news comes out or prices reach a major support level, then prices move up from their lows but still close lower than the open. The large lower shadow represents some indecision in prices moving lower. These are just some examples of what can be derived from looking at candlestick charts. There are plenty more and too much to include in this answer. Another type of candle is the Doji, represented in the diagram below. The Doji Candle represents indecision in the market. Prices open then move up to the high of the period then start falling past the open before reversing again and closing either at the open or very close to the open. The market participants can't decide whether the price should move up or down, so prices end up closing very close to where they opened. A doji Candle close to a market high or low could represent a turning point in the short term trend and could mean that over the next period or two prices could reverse and go in the opposite direction. There are many more definitions for candlestick charts, and I would recommend an introductory book on candlestick charting, like one from the "Dummies" series. The main things to keep in mind as a beginner it that a strong bullish candle with small shadows and large real body could represent further price movement upwards, a strong bearish candle with small shadows and large real body could represent further movement downwards, and any candle with large shadows could represent indecision and a reversal from the direction of the large shadow. |
Peer to Peer Lending Small notes Vs Large Notes | I started with lending club about a year ago. I love it. It has been insightful. Off topic, but I am in a loan to a guy who make 120K a year and is regularly late and has a pretty high interest rate. Crazy. You gain some economies of scale by going with a bigger note. I have $100 notes that I get hit for 2 or 3 cents for a fee, where $25 notes are always a penny. However, I don't think that should be your deciding factor. I scale my note purchases based on how much I like the status of the borrower. For example, I did $100 (which is currently my max) for a guy with a reasonable loan amount 16K, a stable work history (15+ years), a great credit history, and a great interest rate (16.9%). If one of those things were a bit out of "whack". I might go $50, two $25. I prefer 36 month notes, really 5 years to get out of debt? It is unlikely to happen IMHO. Keep in mind that if you invest $100 in a loan, then you get one $100 note. You can't break them up into 4 $25 notes. For that reason, if you are likely to want to sell the note prematurely, keep it at $25. The market is greater. I've had a lot of success using the trading account, buying further discounted notes for people who want out of lending club, or get spooked by a couple of late payments and a change in billing date. Another advantage of using the trading account is you start earning interest day 1. I've had new notes take a couple of weeks to go through. To summarize: There are some other things, but that is the main stuff I look at. |
Understanding how this interpretation of kelly criterion helps the trader | I don't know too much about the kelly criterion, but going by the other answers it sounds like it could be quite risky depending how you use it. I have been taught the first thing you do in trading is protect your existing capital and any profits you have made, and for this reason I prefer and use Position Sizing (PS). The concept with PS is that you only risk a small % of your capital on every trade, usually not more than 1%, however if you want to be very aggressive then not more than 2%. I use 1% of my capital for every trade. So if you are trading with an account of $40,000 and your risk R on every trade is 1%, then R = $400. As an example, say you decide to buy a stock at $10 and you work out your initial stop to be at $9.50, then our maximum risk R of $400 is divided by the stop distance of $0.50 to get your PS = $400/$0.50 = 800 shares. If the price then drops after your purchase, your maximum loss (subject to no slippage) would be $400. If the price moves up you would raise your stop until your potential loss becomes smaller and smaller and then becomes a gain once your stop moves above your initial purchase price. The aim is to make your gains be larger than your losses. So if your average loss is kept to 1R or less then you should aim to get your average gains to 2R, 3R or more. This would be considered a good trading system where you will make regular profits even with a win ratio of 50%. |
Recent college grad. Down payment on a house or car? | I'd suggest buying a used car for cash, car loans are a bad idea. I bought my last car a few years ago for $8k off of craigslist, and it is still running great. Make sure you get a car checked out by a mechanic before buying (usually they'll drop it off at a mechanic you want to have take a look, or perhaps just go with you). My general rule is to not take out loans for anything which decreases in value. So a home mortgage would be fine, a car loan is not a great plan. Buy cash, and save for the next purchase. If you buy a decent used Corolla (or other small import car), you can get it for $8k, it will likely last a few years at least. That could end up costing you less than $200 per month total, or less. Much better deal in the long run. |
Does the rise in ACA premiums affect employer-provided health insurance premiums? | There are a lot of moving parts, individual premiums and annual increases have little to do with employer premiums and annual increases and vice versa. Most people think of XYZ insurer as a single company with a single pool of insured folks. This common knowledge isn't accurate. Insurers pool their business segments separately. This means that Individual, small business, mid-size business, and large business are all different operating segments from the viewpoint of the insurer. It's possible to argue that because so many people are covered by employer plans that individual plans have a hard time accumulating the required critical mass of subscribers to keep increases reasonable. Age banded rating: Individual coverage and small group coverage is age rated, meaning every year you get older. In addition to your age increase, the premium table for your plan also receives an increase. Employers with 100+ eligible employees are composite rated (in general), meaning every employee costs the same amount. The 18 year old employee costs $500 per month, the 64 year old costs $500 per month. Generally, the contributions an employee pays to participate in the plan are also common among all ages. This means that on a micro level increases can be more incremental because the employer is abstracting the gross premium. Composite rating generally benefits older folks while age rating generally benefits younger folks. Employer Morale Incentive: Generally the cost to an employee covered by an employer plan isn't directly correlated to the gross premium, and increases to the contribution(s) aren't necessarily correlated to the increases the employer receives. Employers are incentivised by employee morale. It's pretty common for employers to shoulder a disproportionate amount of an increase to keep everyone happy. Employers may offset the increase by shopping some ancillary benefit like group life insurance, or bundling the dental program with the medical carrier. Remember, employees don't pay premiums they pay contributions and some employers are more generous than others. Employers are also better at budgeting for planned increases than individuals are. Regulators: In many of the states that are making the news because of their healthcare premium increases there simply isn't a regulator scrutinizing increases. California requires all individual and small group premiums to be filed with the state and increases must be justified with some sort of math and approved by a regulator. Without this kind of oversight insurers have only the risk of subscriber flight to adjust plan provisions and press harder during provider contract negotiations. Expiring Transitional Reinsurance Fee and Funds: One of the fees introduced by healthcare reform paid by insurers and self-insured employers established a pot of money that individual plans could tap to cope with the new costs of the previously uninsurable folks. This fee and corresponding pot of money is set to expire and can no longer be taken in to account by underwriters. Increased Treatment Availability: It's important that as new facilities go online, insurer costs will increase. If a little town gets a new cancer clinic, that pool will see more cancer treatment costs simply as a result of increased treatment availability. Consider that medical care inflation is running at about 4.9% annually as of the most recent CPI table, the rest of the increases will result from the performance of that specific risk pool. If that risk pool had a lot of cancer diagnoses, you're looking at a big increase. If that risk pool was under priced the prior year you will see an above average increase, etc. |
How to share income after marriage and kids? | My own personal point of view. I earn about twice what my wife to be earns. We are planning on getting married next year. I ultimately do all the finances (basically because she hates that kind of thing) not because I'm in charge or whatever. To work out how we do this I wrote a spreadsheet: At the top it has my monthly pay in one column and her's in another. I add all our bills (against me initally). At the bottom I have a total of both of our "spending money". Spending money is wage - bills - savings I then move money out of my column into her column. My goal is that we pay all the bills and save a decent amount and have roughly the same amount to spend each month. So each persons spending money should be roughly equal. I then fine tune this as things change (if we get a pay rise we alter it, if a bill goes up or down we alter it) To manage this we have 4 accounts, a joint account to pay bills (both give a set amount to each mont), a savings acount (both give a set amount to each month) and our own accounts (where we get paid and where our spending money lives). Like everyone else says, this seems fair to me. I don't earn more, we both earn "an amount" and this should be split equally. |
Can I register for VAT to claim back VAT without selling VAT applicable goods? (UK) | As far as I know any business can register for VAT regardless of the nature of the business. If all the goods you sell (or services you provide) are VAT-exempt or zero-rated then you will get refunds from HMRC on VAT your business pays. Any business whose non-VAT exempt turnover (which would include zero-rated goods and services provided) exceeds the registration threshold must register, again even if that means they are "forced" to claim refunds. So the only question would be whether your rather nebulous activities were enough to qualify you as a business or organisation to which the VAT regime applies at all. The one-liner answer to that is generally, if goods or services are provided in return for a charge, there’s a business activity for VAT purposes Inevitably there's a much bigger body of statute and case law and it won't always be obvious whether the one-liner answer applies or not to a particular activity so it may be necessary to seek specialist advice. |
Tenant wants to pay rent with EFT | You could setup a Ally account to use solely for this. There is no minimum, no opening balance requirement, and you can do up to 6 transfers a month for free. This would partition your money from other accounts, while giving you the flexibility to move it to other accounts with ease. |
Last trade is bought? or sold? | When there is a trade the shares were both bought and sold. In any trade on the secondary market there has to be both a buyer and a seller for the trade to take place. So in "lasttradesize" a buyer has bought the shares from a seller. |
What options do I have at 26 years old, with 1.2 million USD? | Since the question asked for options, rather than advice, I’ll offer a few. And you can ignore the gratuitous advice that may sneak in. There are countries that will happily give you citizenship for a fee. And others where an investment of far less than your million will get you well on your way. Having citizenship and a passport from another country can be handy if your current one is or becomes unpopular or unstable. From data at numbeo.com, I estimate that my lifestyle would cost me $3300 (US) in Geneva, Switzerland, and that everywhere else on the planet would be less. I haven’t been to Geneva, but I have spent only $2500 (average) per month in eleven countries over three years, and could have been comfortable on far less. $2500/month will go through 1.2 million in only forty years, but if you use it to generate income, and are less wasteful than me, ... With the first few dollars you get, you might take steps to hedge the possibility of not actually getting it all. Appeals can take a long time, and if the defendant runs out of money or figures out how to hide, the size of the judgment is irrelevant. Believe strongly enough in something to donate money for/to it? I’ll leave the investment options to others. |
When's the best time to sell the stock of a company that is being acquired/sold? | I'm not sure what you expect in terms of answers, but it depends on personal factors. It pretty well has to depend on personal factors, since otherwise everyone would want to do the same thing (either everyone thinks the current price is one to sell at, or everyone thinks it's one to buy at), and there would be no trades. You wouldn't be able to do what you want, except on the liquidity provided by market makers. Once that's hit, the price is shifting quickly, so your calculation will change quickly too. Purely in terms of maximising expected value taking into account the time value of money, it's all about the same. The market "should" already know everything you know, which means that one time to sell is as good as any other. The current price is generally below the expected acquisition price because there's a chance the deal will fall through and the stock price will plummet. That's not to say there aren't clever "sure-fire" trading strategies around acquisitions, but they're certain to be based on more than just timing when to sell an existing holding of stock. If you have information that the market doesn't (and assuming it is legal to do so) then you trade based on that information. If you know something the market doesn't that's going to be good for price, hold. If you know something that will reduce the price, sell now. And "know" can be used in a loose sense, if you have a strong opinion against the market then you might like to invest based on that. Nothing beats being paid for being right. Finally, bear in mind that expected return is not the same as utility. You have your own investment goals and your own view of risk. If you're more risk-averse than the market then you might prefer to sell now rather than wait for the acquisition. If you're more risk-prone than the market then you might prefer a 90% chance of $1 to 90c. That's fine, hold the stock. The extreme case of this is that you might have a fixed sum at which you will definitely sell up, put everything into the most secure investments you can find, and retire to the Caribbean. If that's the case then you become totally risk-averse the instant your holding crosses that line. Sell and order cocktails. |
Optimal Asset Allocation | There are a couple of reasons to diversify your assets. First, since we cannot predict which of our investments will perform best, we want to "cast our net" broadly enough to have something invested in what's going to be performing well. Second, diversification isn't intended to provide the highest returns, but rather it is used to soften the effects of market volatility. By softening the downsides and lowering the overall volatility among our assets, returns are more consistent. If a model does not address future downside risk it is only telling you part of the story. (Past performance does not guarantee... you get the picture) |
Is it safe to take a new mortgage loan in Greece? | Please clarify your question. What do you mean by "..loan in Greece"? If you are referring to taking a mortgage loan to purchase residential property in Greece, there are two factors to consider: If the loan originates from a Greek bank, then odds are likely that the bank will be nationalized by the government if Greece defaults. If the loan is external (i.e. from J.P. Morgan or some foreign bank), then the default will certainly affect any bank that trades/maintains Euros, but banks that are registered outside of Greece won't be nationalized. So what does nationalizing mean for your loan? You will still be expected to pay it according to the terms of the contract. I'd recommend against an adjustable rate contract since rates will certainly rise in a default situation. As for property, that's a different story. There have been reports of violence in Greece already, and if the country defaults, imposes austerity measures, etc, odds are there will be more violence that can harm your property. Furthermore, there is a remote possibility that the government can attempt to acquire your private property. Unlikely, but possible. You could sue in this scenario on property rights violations but things will be very messy from that point on. If Greece doesn't default but just exits the Euro Zone, the situation will be similar. The Drachma will be weak and confidence will be poor, and unrest is a likely outcome. These are not statements of facts but rather my opinion, because I cannot peek into the future. Nonetheless, I would advise against taking a mortgage for property in Greece at this point in time. |
Is it wise to sell company stock to pay down a mortgage? | If by "Company Stock" you mean "stock in the company I work for" then absolutely sell your stock. It is too big a risk to have your investments tied into the same company that is also providing your salary. If you mean stock as in general investments, I like to look at it this way. If you have $25,000 stock and a $100,000 mortgage you ask this question: If I had a $75,000 mortgage would I borrow an additional $25,000 against my house to invest in the stock market? If the answer is yes, then you are taking a risk consistent with your tolerance for risk. If you answer no, then your tolerance for risk says you'd be happier paying down your mortgage. |
Pros and Cons of Interest Only Loans | Pros: Cons: Before the housing bubble the conventional wisdom was to buy as much home as you could afford, thereby borrowing as much you can afford. Because variable rates lead to lower mortgages, they were preferred by many as you could buy more house. This of course lead to many people losing their home and many thousands of dollars. A bubble is not necessary to trigger a chain of events that can lead to loss of a home. If an interest only borrower is late on a payment, this often triggers a rate increase. Couple that with some other things that can happen negatively, and you are up $hit's creek. IMO it is not wise. |
Is investing into real estate a good move for a risk-averse person at the moment | Real estate is never a low-risk investment. I'd keep your money in the bank, and make sure that you don't have more in any one bank than is guaranteed in the event of bank failure. If your bank account is in Greece, Italy, Spain, Portugal or Ireland, I'd consider moving it to Eurozone country that's in better shape, as there's just a slight possibility of one or more of those countries exiting the Eurozone in a disorderly fashion and forcibly converting bank accounts to a new and weak currency. |
How smart is it to really be 100% debt free? | My take is that there are many factors to consider when deciding whether to accelerate payment of a debt beyond the require minimum. Ideally you would want to be debt-free with a home owned outright, a pension big enough to lead a nice life for the rest of your days and plenty of savings to cover any unexpected expenses. Being debt-free is not a bad thing but it should not come at the expense of your overall financial health. |
How to spend more? (AKA, how to avoid being a miser) | Unless your stinginess has reach truly compulsive levels, it should be enough to consciously remind yourself of the value of your time when you make purchase decisions or find yourself chasing minor savings. Another way might be to deliberately give yourself a monthly or weekly budget that you're allowed to "waste" on luxuries and conveniences without worrying. |
Selling equities for real-estate down payment | My suggestion would be to do the math. That is the best advice you can get when considering any investment. There are other factors you haven't considered, too... like the fact that interest rates are at extremely low levels right now, so borrowing money is relatively cheap. If you're outside the US though, that may be less of a consideration as the mortgage lending institutions in Europe only tend to give 5-year locks on loan rates without requiring a premium. You may be somewhere else in the world. You will probably struggle to do the actual math about the probability of the market going down or up, but what you can do is this: Figure out what it would cost you to cash out the investments. You say your balance is $53,000 in various items. (Congrats! That's a nice chunk of money.) But with commissions and taxes and etc., it may reduce the value of your investments by 10% - 25% when you try to cash out those investments. Paying $3,000 to get that money out of the investments is one thing... but if you're sending $10,000 to the tax man when you sell this all off, that changes the economics of your investments a LOT. In that case you might be better off seeing what happens if the markets correct by 10%... you'd still have more than if you sold out and paid major taxes. Once you know your down payment, calculate the amount of property you could afford. You know your down payment could be somewhere around $50,000 after taxes and other items... At an 80:20 loan-to-value ratio that's about $250,000 of a property that you can qualify for, assuming you could obtain the loan for $200,000. What could you buy for that? Do some shopping and figure out what your options are... Once you have two or three potential properties, figure out the answer to "What would the property give you?" Is it going to be rented out? Are you going to live there? Both? If you're living in it, then you come out ahead if the costs for the mortgage debt and the ongoing maintenance and repairs are less than what you currently pay in rent. Figure out what you pay right now to put a roof over your head. Will the place you could buy need repairs? Will you pay more on a mortgage for $200,000 USD (in your local currency) than what you currently do for housing? Don't even factor in the possible appreciation of a house you inhabit when you're making this kind of investment decision... it could just as easily burn down as go up in value. If you would rent it, what kind of rental would that be? Long-term rental? Expect to pay for other people to break your stuff. Short-term rental? You can collect more money per tenant per day, but you'll end up with higher vacancy rates. And people still break your stuff. But do the math and see if you could collect enough in rent from a tenant (person or business or whatever the properties are you could buy) to cover the amount you are paying in debt, plus what you would pay in taxes (rent is income), plus what you would need for maintenance, plus insurance. IF the numbers make sense, then real estate can be a phenomenally lucrative investment. I own some investment properties myself. It is a great hedge against inflation (you can raise rents when contracts lapse... usually) and it is an excellent way to own a tangible item. But if you don't know the numbers and exactly how it would make you better off than sitting and hoping that the markets go up, because they generally do over time, then don't take the jump. |
As a Brit, how do I invest in US ETFs | Vanguard has just recently started listing its funds in London but it doesn't look like the High Dividend Yield ETF is available yet. You'll need to either get a broker who can trade on the U.S. markets (there might be tax and exchange rate complications), or wait until Vanguard lists this stock on the London exchange. |
In general, is it financially better to buy or to rent a house? | Forget, for the moment, which will pay off most over the long term. Consider risk exposure. You've said that you (hypothetically) have "little or no money": that's the deal-breaker. From a risk-management perspective, your investment portfolio would be better off diversified than with 90% of your assets in a house. Consider also the nature of the risk which owning a house exposes you to: Housing prices are generally tied to the state of the economy. If the local economy crashes, not only could you lose your job, but you could lose a good part of the value of your house... and still owe a lot on your loan. (You also might not be able to move as easily if you found a new job somewhere else.) You should almost certainly rent until you're more financially stable and could afford to pay the new mortgage for a year (or more) if you suddenly lost your job. Then you can worry more about maximizing your investments' rate of return. |
How can I calculate the volatility(standard deviation) of a stock price? and/or ROI (return on investment) of a stock? | Use the Black-Scholes formula. If you know the current price, an options strike price, time until expiration, and risk-free interest rate, then knowing the market price of the option will tell you what the market's estimation of the volatility is. This does rely on a few assumptions, such as Gaussian random walk, but those are reasonable assumptions for most stocks. You can also get a list of past stock prices, put them in Excel, and ask Excel to calculate the standard deviation with stdev.s(), but that gives you the past volatility. The market's estimate of future volatility is more relevant. |
What is a good way to save money on car expenses? | Manage the fuel consumption price: check the pattern of fuel prices if you can for your area. Some areas have weekly changes which are somewhat predictable and some sites will even predict the minimum price for the next day. Some other areas will have a discount fuel day. Switch to diesel: fuel consumption by diesel engines are much better than standard combustion engines. Downside is not as many refueling stations. Switch to a hybrid: fuel consumption is better than comparable combustion engines alone but the downside is that the technology is new and still maturing. Check out this site for more information. |
How high should I set my KickStarter funding goal in order to have $35,000 left over? | There's two big problems here and they are both related to the same thing: The last line says it all: you live in California. CA is a terrible state to do business in. the taxes on this money alone are crushing. Also, while I think you need to re-visit your budget and lifestyle, the cost of living is very, very high in CA and affecting your decisions. Of course, all of this raises the question - if you can afford 12K in expenses each month, and I'm assuming you're the only source of income, then you should be able to afford funding your own game :D |
Are credit histories/scores international? | Some countries in European Union are starting to implement credit history sharing, for example now history from polish bureau BIK and German Schufa are mutually available. Similar agreements are planned between polish BIK and bureaus in the Netherlands and United Kingdom. |
What are your experiences with 'self directed' 401ks? | I use the self-directed option for the 457b plan at my job, which basically allows me to invest in any mutual fund or ETF. We get Schwab as a broker, so the commissions are reasonable. Personally, I think it's great, because some of the funds offered by the core plan are limited. Generally, the trustees of your plan are going to limit your investment options, as participants generally make poor investment choices (even within the limited options available in a 401k) and may sue the employer after losing their savings. If I was a decision-maker in this area, there is no way I would ever sign off to allowing employees to mess around with options. |
How do I calculate two standard deviations away from the stock price? | Standard Deviation is a mathematical term that is useful in many areas. It can be considered a measure of how tight the data points are to the average. If there is consistency in the measurement system, then a point that is two standard from the average can be considered an outlier. It doesn't even need to be time based. We can say that a child born weighing less than X pounds is more than 2 standard deviations below the average. Using it to look at a price or an index value doesn't make a lot of sense because many expect there to be long term growth. For example you would never say that you will buy a new jacket for your child when they are two standard deviations above their average height. You can say you will buy or sell a financial instrument when the P/E ratio is 2 standard deviations from some average. It could be the average of the long term history, or the index, or the sector. You could do the same thing for earnings per share or many other business of financial statistics. A standard deviation calculated from a time series assumes that the measurement will normally stay withing some bounds. And that straying from those bounds is a sign of the right time to buy or sell. |
Where to start with personal finance? | My reading list for someone just getting into personal finance would include the following I know it's a bunch but I'm trying to cover a few specific things. Yeah it's a bit of reading, but lets face it, nobody is going to care as much about your money as YOU do, and at the very least this kind of knowledge can help fend off a 'shark attack' by someone trying to sell you something not because it's best for you, but because it earns them a fat commission check. Once you've covered those, you have a good foundation, and oh lord there's so many other good books that you could read to help understand more about money, markets etc.. Personally I'd say hit this list, and just about anything on it, is worth your time to read. I've used publishers websites where I could find them, and Amazon otherwise. |
When a fund drops significantly, how can I research what went wrong? [duplicate] | Usually there are annual or semi-annual reports for a mutual fund that may give an idea for when a fund will have "distributions" which can cause the NAV to fall as this is when the fund passes the taxable liabilities to shareholders in the form of a dividend. Alternatively, the prospectus of the fund may also have the data on the recent distribution history that is likely what you want. If you don't understand why a fund would have a distribution, I highly suggest researching the legal structure of an open-end mutual fund where there more than a few rules about how taxes are handled for this case. |
What risks are there acting as a broker between PayPal and electronic bank transfers? | This is definitely a scam. I had a friend sign up for a very similar offer and what they did was send a fake check and then asked to transfer the same amount to them. So now you just send them a couple grand and you're holding a fake check. |
Is stock in a private corporation taxable? | This stock is the same as any other, but you need to keep clear in your head that you and your company are now different entities. You (the person) will pay tax on capital gains and losses when you sell any stock that you hold in your own name. You'll also owe "regular" tax if you draw a salary, etc. The fact that it may be "your" company does not change these things. The company will not recognize a gain by selling stock to raise capital since it's nominally exchanging things of equal value, say $100 in cash for $100 in stock. In order to sell stock, however, you MIGHT need to register with the SEC depending on how you're going about finding your investors, so keep that in mind. |
Why do governments borrow money instead of printing it? | I believe there are two ways new money is created: My favorite description of this (money creation) comes from Chris Martenson: the video is here on Youtube. And yes, I believe both can create inflation. In fact this is what happened in the US between 2004 and 2007: increasing loans to households to buy houses created an inflation of home prices. |
Do my 401k/Roth accounts benefit from compounding? | You might be confusing two different things. An advantage of investing over a long term is the compounding of returns. Those returns can be interest, dividends, or capital gains. The mix between them depends on what you invest it and how you invest in it. This advantage applies whether your investment is in a taxable brokerage account or in a tax-advantaged 401K or IRA. So, start investing early so that you have longer for this compounding of returns to happen. The second thing is the tax deferral you get from 401(k) or IRAs. If you invest in a ordinary taxable account, then you have to pay taxes on your interest and dividends for the year in which they occur. You also have to pay taxes on any capital gains which you realize during the year. These yearly tax payments are then money that you don't get the benefit of compounding on. With 401(k) and IRAs, you don't have to pay taxes during these intermediate years. |
What can I replace Microsoft Money with, now that MS has abandoned it? | How complicated is your budget? We have a fairly in depth excel spreadsheet that does the trick for us. Lots of formulas and whatnot for calculating income, outgo, expected and actual expenses, expenses budgeted over time (i.e. planned expenses that are semi-annual or annual) as well as the necessary emergency funds based on expenses. Took me a few hours to initially create and many tweaks over months to get just right but it's reliable and we know we'll never lose support for it. I'd be willing to share it if desired, I'll just have to remove our personal finance figures from it first. |
Why there's always a very huge volume of trades for AAPL every day before market close? | A huge amount of money in all financial markets is from institutional investors, such as mutual funds, government pension plans, sovereign wealth funds, etc. For various reasons these funds do all of their trading at the end of the day. They care primarily that their end-of-day balances are in line with their targets and are easy to audit and far less about "timing the market" for the best possible trades. So, if you're looking at a stock that is owned by many institutional investors -- such as a stock (like AAPL) that makes up a significant portion of an index that many funds track -- there will be a huge amount of activity at this time relative to stocks that are less popular among institutions. Even just in its introduction this paper (PDF) gives a fair overview of other reasons why there's a lot of trading at end-of-day in general. (In fact, because of all this closing activity and the reliance on end-of-day prices as signposts for financial calculations, the end-of-day has for decades been the single most fraud-ridden time of the trading day. Electronic trading has done away with a lot of the straight-up thievery that floor traders and brokers used to get away with at the expense of the public, but it still exists. See, for example, any explanation of the term banging the close, or the penalties against 6 banks just last month for manipulating the FX market at the close.) |
Do Online Currency Exchanges' registration with the government guarantee safety and reliability? | Government registering of financial institutions usually is to make the government safe (eg FINTRAC is watching for money laundering and financing terrorism) rather than to make it's customers safe. Most governments have many levels of registrations and regulatory bodies. The most stringent requirements are usually obligatory only for banks, and they indeed often include precautions for insuring customer's deposits. Even this insurances have limits, eg in most EU countries the state guarantees deposits up to 100kEUR. If you deposit more and the bank flops - you lose everything over the limit. Companies like forex or currency exchanges usually make their best effort to avoid as many regulations as possible, just because it's costly. If a given company does have guarantee funds and/or customer insurance, it should be advertised and explained on their website. However the whole issue of trust is misguiding. You don't have to "trust" in your grocery store to shop there. There is no government guarantee that the vegetables sold will be tasty. If you buy and the product fells short of your expectations, you call it a loss and start shopping elsewhere. Financial services are no different than any other product. I recommend to your aunt to start small and see how it works. If a service turns out well, she can increase the amount sent through exchange and decrease amount sent through bank. But still, it's always prudent to send eg $1000 every week instead of $4000 once a month. It's more time consuming and cumbersome than having your bank do it - but it's the safety and convenience you're paying premium for. |
Solo-401k interaction with employer sponsored 401k. Limits of contribution from Schedule C income | Alright, team! I found answers to part 1) and part 2) that I've quote below, but still need help with 3). The facts in the article below seem to point to the ability for the LLC to contribute profit sharing of up to 25% of the wages it paid SE tax on. What part of the SE tax is that? I assume the spirit of the law is to only allow the 25% on the taxable portion of the income, but given that I would have crossed the SS portion of SE tax, I am not 100%. (From http://www.sensefinancial.com/services/solo401k/solo-401k-contribution/) Sole Proprietorship Employee Deferral The owner of a sole proprietorship who is under the age of 50 may make employee deferral contributions of as much as $17,500 to a Solo 401(k) plan for 2013 (Those 50 and older can tack on a $5,500 annual catch-up contribution, bringing their annual deferral contribution to as much as $23,000). Solo 401k contribution deadline rules dictate that plan participant must formally elect to make an employee deferral contribution by Dec. 31. However, the actual contribution can be made up until the tax-filing deadline. Pretax and/or after-tax (Roth) funds can be used to make employee deferral contributions. Profit Sharing Contribution A sole proprietorship may make annual profit-sharing contributions to a Solo 401(k) plan on behalf of the business owner and spouse. Internal Revenue Code Section 401(a)(3) states that employer contributions are limited to 25 percent of the business entity’s income subject to self-employment tax. Schedule C sole-proprietors must base their maximum contribution on earned income, an additional calculation that lowers their maximum contribution to 20 percent of earned income. IRS Publication 560 contains a step-by-step worksheet for this calculation. In general, compensation can be defined as your net earnings from self-employment activity. This definition takes into account the following eligible tax deductions: (1) the deduction for half of self-employment tax and (2) the deduction for contributions on your behalf to the Solo 401(k) plan. A business entity’s Solo 401(k) contributions for profit sharing component must be made by its tax-filing deadline. Single Member LLC Employee Deferral The owner of a single member LLC who is under the age of 50 may make employee deferral contributions of as much as $17,500 to a Solo 401(k) plan for 2013 (Those 50 and older can tack on a $5,500 annual catch-up contribution, bringing their annual deferral contribution to as much as $23,000). Solo 401k contribution deadline rules dictate that plan participant must formally elect to make an employee deferral contribution by Dec. 31. However, the actual contribution can be made up until the tax-filing deadline. Pretax and/or after-tax (Roth) funds can be used to make employee deferral contributions. Profit Sharing Contribution A single member LLC business may make annual profit-sharing contributions to a Solo 401(k) plan on behalf of the business owner and spouse. Internal Revenue Code Section 401(a)(3) states that employer contributions are limited to 25 percent of the business entity’s income subject to self-employment tax. Schedule C sole-proprietors must base their maximum contribution on earned income, an additional calculation that lowers their maximum contribution to 20 percent of earned income. IRS Publication 560 contains a step-by-step worksheet for this calculation. In general, compensation can be defined as your net earnings from self-employment activity. This definition takes into account the following eligible tax deductions: (i) the deduction for half of self-employment tax and (ii) the deduction for contributions on your behalf to the Solo 401(k). A single member LLC’s Solo 401(k) contributions for profit sharing component must be made by its tax-filing deadline. |
Can PE ratio of stocks be compared to other investments? | In the long run (how long?) a shares price always reverts to being its proportional amount of the company's residual equity plus the net present value of its expected future cash flows. Or at least that's the theory. In practice PE ratio is used not as a way of measuring what the stock price itself will do but what the fundamental value of holding that share is compared to its price. It is a way of measuring what a company is worth compared to its price and comparing it against other companies to find companies where the underlying value of the company is underrepresented by the price. Comparing PE ratios within the same industry or sector is the most valid use for this (other than comparing previous years of the same company) and the validity of the comparison drops as the structure of the firm you are comparing with gets more different to that of the company. Each industry has its own "typical" average PE ratio and these differ wildly between industries so in a great many cases even comparing PE ratios between similar stocks in different industries isn't valid. Any weird pseudo PE ratio that you create for other instruments will be meaningless. In general the best way to compare investments across multiple instruments is by comparing returns. when comparing stocks to other instruments you may want to use the return on stock price or the return on capital employed (ROCE) depending on whether you want to compare the trading performance or the fundamental performance. |
What constitutes illegal insider trading? | You have to read some appeals court cases see scholar.google.com , as well as SEC enforcement actions on sec.gov to get an understanding of how the SEC operates. http://www.sec.gov/spotlight/insidertrading/cases.shtml There are court created guidelines for how insider trading would be proven There is no clear line, but it is the "emergency asset injunctions" (freezing your assets if you nailed a suspiciously lucrative trade) you really want to avoid, and this is often times enforced/reported by the brokers themselves since the SEC does not have the resources to monitor every account's trading activities. There are some thin lines, such as having your lawyer file a lawsuit, and as soon as it is filed it is technically public so you short the recipient's stock. Or having someone in a court room updating you on case developments as soon as possible so you can make trades (although this may just be actually public, depending on the court). But the rules create the opportunities Also consider that the United States is the most strict country in this regard, there are tons of capital markets and the ideals or views of "illegal insider trading" compared to "having reached a level of society where you are privileged to obtain this information" vary across the board contains charts of countries where an existing insider trading prohibition is actually enforced: http://repository.law.umich.edu/cgi/viewcontent.cgi?article=1053&context=articles https://faculty.fuqua.duke.edu/~charvey/Teaching/BA453_2005/BD_The_world.pdf Finally, consider some markets that don't include equities, as trading on an information advantage is only applicable to things the SEC regulates, and there are plenty of things that agency doesn't regulate. So trying to reverse engineer the SEC may not be the most optimal use of energy |
Put idle savings to use while keeping them liquid | I suppose it depends on how liquid you need, and if you're willing to put forth any risk whatsoever. The stock market can be dangerous, but there are strategies out there that will allow you to insure yourself against significant loss, while likely earning you a decent return. You can buy and sell options along with stocks so that if the stock drops, your loss is limited, and if it goes up or even stays where it's at, you make money (a lot more than 1% annually). Of course there's risk of loss, but if you plan ahead, you can cap that risk wherever you want, maybe 5%, maybe 10%, whatever suits your needs. And as far as liquidity goes, it should be no more than a week or so to close your positions and get your money if you really need it. But even so, I would only recommend this after putting aside at least a few thousand in a cash account for emergencies. |
Safe and cheap way to send money from Canada to South America | The catch with any exchange service is that you're going to involve some sort of business and they're going to want to get paid for their service. These services all come with their own exchange rates, fees, waiting periods, or requirements to even use said service. Commonly, pros towards one of those comes at the cost of another— e.g. fast transfers have higher fees or worse exchange rates. Over the past few months I needed a service and ended up using USForex. Since you're going from CAD to USD, you'd likely need to use CanadianForex. Pros: Cons: Overall, this option was far better than the $97.00 I was quoted from WesternUnion; or the $25.00-45.00 I was quoted from BMO Harris, which would have required I open a saving account with them. I wasn't provided a clean exchange rate between these two to know how all three compared. The only bit of advice I can say with any service is compare exchange rates. If you're transferring more than a few hundred dollars, the exchange rate can be seen as a "hidden" fee when it's unreasonably low. I'm not affiliated with or accommodated by any of the exchange services mentioned. |
I am a contractor with revenue below UK's VAT threshold. Should I register for VAT? | I love the flat rate VAT scheme. It's where you pay a percentage based on your industry. An example might be Computer repair services, where you'll pay 10.5% of your total revenue to the HMRC. But you'll be invoicing for VAT at 20% still. Would definitely recommend registering for it since you're expecting to cross the threshold anyway. And like DumbCoder said, you also get a first year discount of 1%, so in the example above, you'd end up paying 9.5% VAT on your turnover. I personally found it a pain to invoice without VAT (my clients expected it), so registering made sense regardless of the fact I was over threshold. The tricky bit is keeping under the £150k turnover so you stay eligible for the flat rate. It does get more complex otherwise. |
(Legitimate & respectable) strategies to generate “passive income” on the Internet? | One idea that I read among some of the many, many personal finance blogs out there is to create a niche website with good content and generate some ad revenue. The example the author gave was a website he'd made with some lessons to learn basic Spanish. Something as specific as that has a reasonable chance of becoming popular even if you never post new content (since you were looking for passive). The ad income won't be great, but it's likely to stay > 0 for a significant while. |
What emergencies could justify a highly liquid emergency fund? | If you engage in any kind of dangerous activity, the training courses will often state that an accident is not the result of a simple error. Examples of this include SCUBA and motorcycle training. Properly maintained equipment and training will mitigate many emergencies. Recently my dive buddy was 60' down, and ran out of air due to a tank O ring failure. She did not panic, and all of the dive team rallied to get her to the surface without anyone getting hurt, or even coming close to it. Financial tragedies are similar. In some cases, a single event triggers an avalanche of events that leads to tragedy. For example, hard economic times may lead to an employer doing 5% pay cuts across the board. However, they also cut bonuses and other ancillary pay items. This leads to a real cut of 20-25% of income. Leading a true cash flow emergency. As such cutbacks are needed, and this might put a strain on an already shaky relationship, this leads to that relationship ending, requiring more cash. Perhaps a car dies in this process or some household item needs repairing. Sure one can borrow money, but this tends to exasperate the avalanche rather than solve it. Having a low debt and a liquid emergency fund stops the avalanche in its tracks. In the case cited above issues would have been solved if the person lived off of 50% of their income rather than the way most people live (paycheck-to-paycheck). Also if there were savings for the car repair then that becomes a pain, but not a true stress. Think of a liquid emergency fund as "properly maintained equipment". It allows you to build a financial life on a solid foundation. In my own case, I attempted to live and invest without an emergency fund. It just did not work. I often had to liquidate investments at in opportune times, and could never really hold onto money. With the foundation of an emergency fund, one can build a prosperous life for one's self. You are welcome to try it your way, but if you fall, hopefully you will remember this answer and build your foundation first. |
Economics Books | i'm absolutely a newcomer in economics and i wish to understand how things work around finance. This is a pretty loaded question. To understand finance, you need the basics of economics. In almost every economics school in the country, you first study microeconomics and then economics. So, we'll start with micro. One of, if not the, most popular books is "Principles of Microeconomics" by Mankiw. This book covers the fundamentals of micro econ (opportunity, supply, demand, consumer choice, production, costs, basic game theory, and allocation of resources) in a clear and effective manner. It's designed for the novice and very easy to read. Like Mankiw's other book, "Principles of Macroeconomics" is also top notch. There is some overlap in key areas (i.e. opportunity cost, supply, demand, indifference curves, elasticity, taxation) because they are fundamental to economics and the overlap will always be there, but from there the book goes into key macro concepts like GDP, CPI, Employment, Monetary and Fiscal policy, and Inflation. An excellent intro primer indeed. Now that you have the fundamentals down, it's time to learn about finance. The best resource, in my opinion, is "Financial Markets" by Robert Shiller on Open Yale Courses. I've personally taken Prof. Shiller's class last semester, and the man is brilliant. The lectures cover every single aspect of finance and can turn the complete novice into a fairly experienced finance student. The first lecture also covers all the math required so you don't get lost at any point. Be warned, however, that the course is very deep. We used Fabozzi's textbook "Foundations of Financial Markets and Institutions," which is over 600 pages deep and we were required to know essentially all of it. Watch the videos and follow the readings and you'll be a finance whiz soon! Financial Markets on Open Yale And that's your roadmap to what you want. There are other economics books and it's true that the first few chapters of both Mankiw books are largely the same, but that's because any economics course always covers the basics first. If you want to look at other books, Krugman has written some good books as well. Be sure to read reviews because some books are meant for 2nd/3rd year econ students, so you don't want to get a too advanced book. At the novice level, we're interested in understanding the basic concepts so we can master Fabozzi. As for finance books - Fabozzi teaches you all the fundamentals of financial markets so you've got a powerful foundation. From there you can expand to more niche books such as books on investing or on monetary policy or whatever you want. Best of luck! |
Can I deduct taxes for home office as a freelance computer software developer? | You can do it, provided that the bedroom is ONLY set up as an office. That is, no bed, TV or other stuff. You can stretch it a bit, considering a TV is also a monitor, a couch is also a visitor couch. Whatever route you choose you have to be able to justify what everything is doing there in case of a visit from the authorities. I am (was) in exactly the same situation for two years and had no problem deducting ~30% of the housing costs. That is, the usage of bathroom and utilities is calculated as proportional to the surface area given to the office. It might make more sense to move into a larger apartment just so you can have one designated office room. Edit: the above applies in Germany, YMMV, IANAL, etc. EU is pretty consistent though in regulations and as far as I know the above aplies in most EU countries. |
Apartment lease renewal - is this rate increase normal? | Should you negotiate? Yes, what harm can it possibly do? The landlord is unlikely to come back and say "Because you tried to negotiate, I'm putting the rent up by 10% instead.", or to evict a paying tenant merely because they tried to negotiate. Is the proposed rent increase "normal"? Yes. Landlords will generally try to get as high a rent as they can. |
How to find if a public company has taken out a loan? | Somewhat. The balance sheet will include liabilities which as Michael Kjörling points out would tell you the totals for the debt which would often be loans or bonds depending on one's preferred terminology. However, if the company's loan was shorter than the length of the quarter, then it may not necessarily be reported is something to point out as the data is accurate for a specific point in time only. My suggestion is that if you have a particular company that you want to review that you take a look at the SEC filing in full which would have a better breakdown of everything in terms of assets, liabilities, etc. than the a summary page. http://investor.apple.com/ would be where you could find a link to the 10-Q that has a better breakdown though it does appear that Apple doesn't have any bonds outstanding. There are some companies that may have little debt due to being so profitable in their areas of business. |
Why is it rational to pay out a dividend? | The real value of a share of stock is the current cash value of all dividends the owner will receive, plus the current cash value of the final liquidation if any. Since people with different needs may judge the current cash value of an income stream differently, there would be a market basis for people to buy and sell stocks even if everyone could predict all future payouts perfectly. If shareholders knew that a company wouldn't pay any dividends until it was liquidated in the year 2066, whereupon it would pay $2000/share, then each share would in 2016 effectively be a fifty-year zero-coupon bond with a $2000 maturity value. While some investors would be willing to trade in such an instrument, the amount of money a company could charge for such an instrument would be far lower than the money it could charge for one with payouts that were more evenly distributed through time. Since the founders of most companies want their companies to be around for a long time, that would mean that shareholders would have no expectation of their shares ever yielding anything of value within any foreseeable timeframe. Even those who would be more interested in share-price appreciation than dividends wouldn't be able to see share prices rise if there wasn't any likelihood of the stock being bought by someone who wanted the dividends. |
Bollinger Bands and TRENDING market | Bollinger Bands are placed standard deviations away from the moving average. Therefore if the price is volatile, the bands diverge from the mean. During consolidation the bands would converge. They do not provide a clear indication of whether the price is trending or not. |
Is it a good investment for a foreigner to purchase a flat/apartment in China? | No, it's not. This could be a great question, but with no background, not so much. Do you live there now? For how long, and how much longer? You say investment, are you looking to live in it or rent it out? I have nothing against China, but I'd not buy anywhere unless the price, location, and timing all were right. |
New company doesn't allow 401k deposits for 6 months, what to do with money I used to deposit? | Short answer is fund a Roth. If you are under 50 then you can put in $5500 or $6500 if you are older. Great to have money in two buckets one pre tax and one post tax. Plus you can be aggressive putting money in it because you can always take money you put in the Roth out of the Roth with no tax or penalty. Taxes are historically low so it makes a lot of sense to diversify your retirement. |
Who Bought A Large Number Of Shares? | The reality that the share price did not move shows that there is nothing nefarious going on. It is most likely some mutual fund offloading their position to another fund. You can commonly see the play out at market openings if you have access to level II data. You will see a big block sitting on both sides of the same bid/ask. If you put in a higher bid (or vice versa) the two positions will move to match yours. And when the market opens their trade will be transacted BEFORE yours, even though you are thinking ... 'well I put in my bid first'. Obviously they have agreed to swap and agreed to use whatever value the market decides. |
Why will the bank only loan us 80% of the value of our fully paid for home? | To supplement existing answers: the appraised value does not necessarily represent the net amount the bank could actually recover with a foreclosure. Let's look at it from the point of view of the bank. Suppose the property appraises at $200,000 and they do what you want: loan you $200,000 with the property as collateral. Now suppose a short time later, you quit paying the mortgage and they have to foreclose. Can the bank get their $200,000 back? An appraisal is only an estimate; nobody can predict perfectly how much a property will sell for. Maybe the appraiser missed something significant, and the property will only fetch $180,000. Even if the appraisal was accurate when it was made, property values may have dropped in the meantime. Maybe a sudden economic crisis is driving real estate prices down across the board. Maybe interest rates have spiked. Maybe the county has changed the zoning regulations to locate a toxic waste dump next door to the property. In any of these cases, the property may again fetch well under $200,000. Maybe the condition of the property has changed. Perhaps you trashed the place and it will take $30,000 to clean it up. (People have a tendency to do things like that when they get foreclosed.) If the bank wants to get full market value for the property, they will incur the usual costs of selling a property: paying a real estate agent's commission, painting, renting furniture to stage the property, and so on. This will eat into the net amount they actually get from the sale. It may take some time (perhaps months) for a property to sell at its full market value. During this time, the bank is out $200,000. That's money they would rather be loaning out at interest to someone else, so this represents lost income. Foreclosing a mortgage is a fairly complicated procedure. The bank has to pay its staff, including lawyers, for a significant number of hours to get the foreclosure done. There will be court filing fees and so on. If you refuse to leave, they may have to get the sheriff to evict you; that has a fee as well. If you fight the foreclosure, that racks up even more legal fees. This too eats into the net proceeds from the sale. So if the bank loans you the full $200,000, they stand a pretty significant risk of not getting all of it back, after expenses. You can understand that risk may not be worth the interest they would get from you on the extra $40,000. On the other hand, if they loan you only 80% of the property's appraised value ($160,000), they effectively shift that risk onto you. Should you default on the loan, and they foreclose, all they have to do is sell the property for $160,000 or a little bit more. That shouldn't be too hard, even if it is not freshly painted or a bit trashed. They probably don't need to hire a real estate agent: just hold a quick auction, maybe first calling up a few investors who might be interested in flipping it. If it happens to sell for more than the outstanding principal of the loan, plus the bank's costs, then they will pay you the difference; but they have no incentive to make that happen, and every incentive to just get it sold quick. So any difference between the property's true value and the actual sale price now represents a loss to you first, not to the bank. So you can see why the bank would rather not loan you the full value of the property. 80% is a somewhat arbitrary figure but it cuts their risk by a lot. |
Would you withdraw your money from your bank if you thought it was going under? | If the FDIC didn't insure your deposit, there would be a run on EVERY bank, so there is no way the government will let it fail or go broke. It will be backstopped one way or another. So I wouldn't worry about losing my money. The only worry is the hassle of having to deal with the bank failure and getting at your money and getting it out. There could be a few days of illiquidity while the government is stepping in to sort things out. If that scares you or would be a big problem, then I'd find a safer choice. |
Ghana scam and direct deposit scam? | Yes, this is a scam. Tell your dad not to pay any money. There will likely be a large deposit in his account, but if he withdraws the money from his account, the bank will come after him looking for the money when the transfer to his account is reversed. |
Indicators a stock is part of a pump and dump scheme? | Pump-and-dump scams are indeed very real, but the scale of a single scam isn't anywhere near the type of heist you see in movies like Trading Places. Usually, the scammer will buy a few hundred dollars of a penny stock for some obscure small business, then they'll spam every address they have with advice that this business is about to announce a huge breakthrough that will make it the next Microsoft. A few dozen people bite, buy up a few thousand shares each (remember the shares are trading for pennies), then when the rise in demand pushes up the price enough for the scammer to make a decent buck, he cashes out, the price falls based on the resulting glut of stock, and the victims lose their money. Thus a few red flags shake out that would-be investors should be wary of: |
Bringing money to UK for investment purposes | Transfers of money to the UK for any purpose are not generally taxed, so you can just transfer it here and invest. Once the money is here, you'll be taxed on the business activity like anyone else - the company will have to pay corporation tax, and depending on your own residency you might have to pay income tax on any distributions from the company. |
Why is auto insurance ridiculously overpriced for those who drive few miles? | There are several aspects to this but at a high level it boils down to A lot goes in to insurance rating and risk projecting. You can't adjust a single variable and expect a proportional change in your premium, 7,000 miles per year just won't be 70% of the cost of 10,000 miles per year, because there are a lot of other things in play as well. To further address premium adjustments. Consider this: Even if your liability coverage did scale with perfect correlation to your mileage (using the same 70% from above, 7,000 miles per year versus 10,000 miles per year) then your premium composition is: $200 to $170 is 15%. No change will have a direct linear correlation to your total premium because there are different component pieces of the total premium. Fixed costs may be built in to the amounts for other component pieces of the premium, for example maybe no line of coverage ever has a cost below $X. Obviously these numbers are all made up Additionally, and also less considered is the fact that your liability also scales because of a lot of factors that have nothing to do with you. It might be the other cars that are on the road, it might be that more densely populated areas have more fender benders. For example if you live in Beverly Hills you have a much higher likelihood of accidentally bumping a $70-$80-$90-$100k+ car than you do in say, rural Wisconsin. If your zip code is gentrifying and everyone starts buying Mercedes, your liability coverage increases. You can not adjust one single variable and decide that you are lower risk than all insurers think you are. If you shop this coverage and all insurers are within a nominal margin of pricing for the same coverage levels, there isn't much to argue with; you are simply riskier than you think you are and the variable you are focused on is not as meaningful as you think it is. |
Finding a good small business CPA? | Check your local better business bureau. They can tell you who is in business, who's bonded, and who has had a lot of complaints levied against them for shoddy practices. |
Working as a freelancer overseas, but US Citizen, what is my tax situation? | This person must pay taxes in both the overseas country and in the U.S. This is unusual; generally, only the U.S. demands this. Depending on the specific country, he would likely not be taxed twice as the U.S. generally recognises tax paid in a different country. Note there are some gotchas, though. For example, although Canada has a generally higher tax scheme than the U.S., you may still end up owing tax if you use the Tax-Free Savings Account system in Canada, as that is not recognised in the U.S. As to whether or not this person should form a company, that is far too broad a question. It's going to depend in large part on the tax situations of the countries involved. This person needs to consult an accountant specialising in this situation. That is, on personal versus business tax and on tax involving U.S. citizens. Yes, this person can and indeed must file and pay taxes in the U.S., from outside the U.S. |
How to use stocks certificate as a gift to a teenager? | Yes, depending on what you're trying to achieve. If its just a symbolic gift - you can use a service like this. There are several companies providing this service, look them up, but the prices are fairly the same. You'll end up getting a real stock certificate, but it will cost a lot of overhead (around $40 to get the certificate, and then another $40 to deposit it into a brokerage account if you want to sell it on a stock exchange). So although the certificate is real and the person whose name on it is a full-blown shareholder, it doesn't actually have much value (unless you buy a Google or Apple stock, where the price is much much higher than the fees). Take into account that it takes around 2 months for the certificate to be issued and mailed to you, so time accordingly. Otherwise, you can open a custodial brokerage account, and use it to buy stocks for the minor. Both ways are secure and legal, each for its own purpose and with its own fees. |
What are the differences between an investment mortgage and a personal mortgage? | It's just a guess, as I'm from the UK and am unfamiliar with the term "investment" mortgage but is it one where you are buying the property in order to rent it out, and make money from it, rather than to live in? In the UK we call those "buy to let" mortgages and one of the main differences is that you have to have a higher deposit to get that type. |
Can I open a Demat account in India from abroad? | Yes NRIs are allowed to open a DEMAT account in India from abroad. Investments can be made under the Portfolio Investment NRI Scheme (PINS) either on repatriation or non-repatriation basis. As per,the guidelines of the Reserve Bank of India it is mandatory for NRIs to open a trading account with a designated institution authorized by the RBI. They must avail either a Non-Resident Ordinary (NRO) or Non-Resident External (NRE) account to route the various investments. |
Credit card transactions for personal finances | Other responses have focused on getting you software to use, but I'd like to attempt your literal question: how are such transactions managed in systems that handle them? I will answer for "double entry" bookkeeping software such as Quicken or GnuCash (my choice). (Disclaimer: I Am Not An Accountant and accountants will probably find error in my terminology.) Your credit card is a liability to you, and is tracked using a liability account (as opposed to an asset account, such as your bank accounts or cash in your pocket). A liability account is just like an asset except that it is subtracted from rather than added to your total assets (or, from another perspective, its balance is normally negative; the mathematics works out identically). When you make a purchase using your credit card, the transaction you record transfers money from the liability account (increasing the liability) to the expense account for your classification of the expense. When you make a payment on your credit card, the transaction you record transfers money from your checking account (for example) to the credit card account, reducing the liability. Whatever software you choose for tracking your money, I strongly recommend choosing something that is sufficiently powerful to handle representing this as I have described (transfers between accounts as the normal mode of operation, not simply lone increases/decreases of asset accounts). |
Why can we cancel cheques, but not Western Union transfers? | When you send money with Western Union, it is essentially a cash transaction. You supply Western Union with the name of the recipient and a location. Your recipient then shows up at a Western Union office, shows some identification, and receives cash. At this point, the transaction is over. It is impossible to retract it at this point, because Western Union has already handed out cash, and they have no way of contacting the recipient any longer. This is the reason why you might want to legitimately use Western Union. It is an instant way to send cash to anyone anywhere in the world. Let's say that your best friend is stuck in a foreign land and desperately needs money. You can give him cash just as fast as each of you can get to a Western Union office, and you don't even need a local bank account to do so. Unfortunately, however, the nature of the service also makes it useful for scammers. You should never use this service to pay for something from someone you don't know, because there are absolutely no safeguards. As mentioned by user662852 in the comments, you can indeed cancel a Western Union money transfer if you do so before the money is picked up by the recipient. But after they pick it up, the cash is gone. |
Are warehouse clubs like Costco and Sam's Club worth it? | We were members at costco, but decided not to renew. Meat was a definite cost savings, and laundry detergent as well. Diapers used to be a huge savings, but loblaws seems to be pricing things better now. We did by a bunch of Kirkland brand diapers and wipes before the membership ended. The problem we had was that you just get too much stuff - you save a bunch on that laundry detergent that you buy once every two years, or the chicken you have in your freezer forever. In Canada, the basic membership is $55 and we could not be certain we made that back, nor that we weren't over consuming as we walked the aisles. I have heard that the more expensive membership ($100) which gives you 2% back on purchases is a good way to gauge your usage and determine if it is worth it. It also costs nothing to give it a try - their policy is a full refund at any time, so in theory you could go in on your 364th day and get a refund. |
Should I pay off investment property mortgage | I would not recommend using your own money to pay off something that is not a strong asset. Use the savings where it will have the maximum return. Why not put (some of) the savings into another investment mortgage? Thanks to the leverage your return would be much higher than 5.5%, plus you would have more income. |
Is this trick enough to totally prevent bankrupcy in a case of a crash? | Adding to the answers above, there is another source of risk: if one of the companies you are short receives a bid to be purchased by another company, the price will most probably rocket... |
Can I pay off my credit card balance to free up available credit? | The card you have is one where you had to deposit an amount equivelent to your card limit -a secured limit credit card. Capital One is one if the primary cards of this type. The typical rules of credit card usage and building your credit, do not apply. So, yes, you want to use the card as much as possible and pay off your balance as often as is necessary to keep your limit freed up. You can actually pay the full balance plus 10%, and gain a little extra limit. Use your card as much as possible and call them and ask for a limit increase every three months. usually about 4 - 5 months in, they will increase your limit and do so without asking for a corresponding security deposit. This is really cool, because it means you are becoming credit-worthy. I know so much about this because I applied for this card for my son and am helping him in his attempt to repair his credit. His score increased by almost 200 points last year. |
What happens to an options contract during an all stock acquisition? | Depends on your contract, cash or shares delivered? If shares, then you get 5 BIG shares. Theres no longer any options. If you sell instantly, theoretically you will net the $10 difference + profit above strike. If cash, same thing just that you get cash $50 less strike. Applies to cash and stock deals Options are binary, never pro-rated. if converted, basically you end up with BIG shares. |
What could cause a stock to trade below book value? | Discrepancies between what the book value is reported as and what they'd fetch if sold on the open market. Legal disputes in court. |
Why do people buy insurance even if they have the means to overcome the loss? | Your basic point is correct; the savvy move is to use insurance only to cover losses that would be painful or catastrophic for you. Otherwise, self-insure. In the specific example of car insurance, you may be missing that it doesn't only cover replacement of the car, it also covers liability, which is a hundreds-of-thousands-of-dollars risk. The liability coverage may well be legally required; it may also be required as a base layer if you want to get a separate umbrella policy up to millions in liability. So you have to be very rich before this insurance stops making sense. In the US at least you can certainly buy car insurance that doesn't cover loss of the car, or that has a high deductible. And in fact, if you can afford to self-insure up to a high deductible, on average as you say that should be a good idea. Same is true of most kinds of insurance, a high deductible is best as long as you can afford it, unless you know you'll probably file a claim. (Health insurance in particular is weird in many ways, and one is that you often can estimate whether you'll have claims.) On our auto policy, the liability and uninsured motorist coverage is about 60% of the cost while damage to the car coverage is 40%. I'm sure this varies a lot depending on the value of your cars and how much you drive and driving record, etc. On an aging car the coverage for the car itself should get cheaper and cheaper since the car is worth less, while liability coverage would not necessarily get cheaper. |
Pay off car or use money for down payment | The best thing to do is pay off the car. Adding more variables to a negotiation with a car dealer (in this case, a trade in), is always going to go in their favor. This is why people recommend negotiating a price down first, before ever mentioning to the dealer you want to do a trade in or financing. |
How smart is it to really be 100% debt free? | Having no debt should be the ultimate goal for every household, IMHO, but at what cost? As an example, I had some clients (before they started working with me) that had outstanding debt when they retired and were gung-ho to pay it off. They opted to take it out of their retirement accounts. They didn't set aside enough for taxes which was their first mistake. After a few years, they now have realized they should not have paid off everything as now they have other medical issues that have arisen and not enough in their retirement accounts to satisfy their monthly requirement. |
How does Portfolio Turnover affect my investment? | may result in more taxes when Fund shares are held in a taxable account. When the fund manager decides to sell shares of a stock, and those shares have grown in value, that growth is a capital gain. If that fund is part of a taxable account then the investors in the fund will have to declare that income/gain on their tax forms. That could require the investors to have to pay taxes on those gains. Of course if the investors are holding the fund shares in a IRA or 401K then there are no taxes due in the near term. A higher portfolio turnover rate may indicate higher transaction costs... ...These costs, which are not reflected in annual fund operating expenses or in the previous expense examples, reduce the Fund’s performance. The annual fund operating expenses are the expenses that they can assume will happen every year. They include salaries, the cost of producing statements, paperwork required by the government, research... It doesn't include transaction costs. Which they can't estimate what they will be in advance. If the fund invests in a particular segment of the market, and there is a disruption in that segment, they may need to make many new investments. If on the other hand last year they made great choices the turnover may be small this year. During the most recent fiscal year, the Fund’s portfolio turnover rate was 3% of the average value of its portfolio. That may be your best indicator. |
What should my finances look like at 18? | I was in a similar situation at age 18/19, but not making quite as much money. I maxed out an IRA and bought savings bonds, although rates were decent then. I did flitter away about half of what I earned, which in retrospect was probably dumb. But I had a good time! |
How to find a public company's balance sheet and income statement? | The websites of the most publicly traded companies publish their quarterly and annual financials. Check the investor relations sections out at the ones you want to look at. |
Why buy insurance? | The fundamental flaw here is conflating net worth with utility, at least failing to recognize that there's a nonlinear relationship between the two. In the extreme example imagine taking a bet that will either make you twice as rich or completely broke. Your expected return is zero, but it would be pretty dumb to take it since being flat broke could ruin your life while being twice as rich may only improve it marginally. In more realistic cases most of your income is tied up in fixed costs, which magnifies relatively small perturbations to your net worth. Losing something essential (like your house or car), even if it's only 20% of your net worth, renders you effectively broke until you scrape together enough cash to get another one. That situation robs you of much more utility than you'd gain from a 20% increase in net worth. In either case, avoiding the risk is completely rational as long as you believe in nonlinear utility as a function of net worth, it's not just an issue of humans being "risk averse". |
How hard for US customers make payments to non-resident freelancer by wire transfer? | Can you tell me please, is it really hard to make international wire transfer for payment my job and can i resolve this problem without using third party services? This is mostly a barrier, the form at times is quite complicated. For Russia, one has to enter "Purpose of remittance" ... at times select intermediate banks, give BIC and other details. This can become unnerving to people who are not used to it. The other option you can try is set-up a credit card gateway and get funds via cards. |
Investment property information resources | As user14469 mentions you would have to decide what type of properties you would like to invest in. Are you after negatively geared properties that may have higher long term growth potential (usually within 15 to 20km from major cities), or after positive cash-flow properties which may have a lower long term growth potential (usually located more than 20km from major cities). With negative geared properties your rent from the property will not cover the mortgage and other costs, so you will have to supplement it through your income. The theory is that you can claim a tax deduction on your employment income from the negative gearing (benefits mainly those on higher tax brackets), and the potential long term growth of the property will make up for the negative gearing over the long term. If you are after these type of properties Michael Yardney has some books on the subject. On the other hand, positive cash-flow properties provide enough rental income to cover the mortgage and other costs. They put cash into your pockets each week. They don't have as much growth potential as more inner city properties, but if you stick to the outer regions of major cities, instead of rural towns, you will still achieve decent long term growth. If you are after these type of properties Margaret Lomas has some books on the subject. My preference is for cash-flow positive properties, and some of the areas user14469 has mentioned. I am personally invested in the Penrith and surrounding areas. With negatively geared properties you generally have to supplement the property with your own income and generally have to wait for the property price to increase so you build up equity in the property. This then allows you to refinance the additional equity so you can use it as deposits to buy other properties or to supplement your income. The problem is if you go through a period of low, stagnate or negative growth, you may have to wait quite a few years for your equity to increase substantially. With positively geared properties, you are getting a net income from the property every week so using none of your other income to supplement the property. You can thus afford to buy more properties sooner. And even if the properties go through a period of low, stagnate or negative growth you are still getting extra income each week. Over the long term these properties will also go up and you will have the benefit of both passive income and capital gains. I also agree with user14469 regarding doing at least 6 months of research in the area/s you are looking to buy. Visit open homes, attend auctions, talk to real estate agents and get to know the area. This kind of research will beat any information you get from websites, books and magazines. You will find that when a property comes onto the market you will know what it is worth and how much you can offer below asking price. Another thing to consider is when to buy. Most people are buying now in Australia because of the record low interest rates (below 5%). This is causing higher demand in the property markets and prices to rise steadily. Many people who buy during this period will be able to afford the property when interest rates are at 5%, but as the housing market and the economy heat up and interest rates start rising, they find it hard to afford the property when interest rate rise to 7%, 8% or higher. I personally prefer to buy when interest rates are on the rise and when they are near their highs. During this time no one wants to touch property with a six foot pole, but all the owners who bought when interest rates where much lower are finding it hard to keep making repayments so they put their properties on the market. There ends up being low demand and increased supply, causing prices to fall. It is very easy to find bargains and negotiate lower prices during this period. Because interest rates will be near or at their highs, the economy will be starting to slow down, so it will not be long before interest rates start dropping again. If you can afford to buy a property at 8% you will definitely be able to afford it at 6% or lower. Plus you would have bought at or near the lows of the price cycle, just before prices once again start increasing as interest rates drop. Read and learn as much as possible from others, but in the end make up your own mind on the type of properties and areas you prefer. |
How do I get into investing in stocks? | Before putting any significant money into stocks, I would recommend spending at least a year paper trading. It is amazing how much money you can lose trading stocks when you don't know what you are doing! |
Purchasing options between the bid and ask prices, or even at the bid price or below? | I frequently do this on NADEX, selling out-of-the-money binary calls. NADEX is highly illiquid, and the bid/ask is almost always from the market maker. Out-of-the-money binary calls lose value quickly (NADEX daily options exist for only ~21 hours). If I place an above-ask order, it either gets filled quickly (within a few minutes) due to a spike in the underlying, or not at all. I compensate by changing my price hourly. As Joe notes, one of Black-Scholes inputs is volatility, but price determines (implied) volatility, so this is circular. In other words, you can treat the bid/ask prices as bid/ask volatilities. This isn't as far-fetched as it seems: http://www.cmegroup.com/trading/fx/volatility-quoting-fx-options.html |
What is the best way to learn investing techniques? | Given what you state you should shop around for an advisor. Think of the time required to pursue your strategies that you list? They already have studied much of what you seek to learn about. Any good investor should understand the basics. This is Canadian based but many of the concepts are universal. Hope you find it helpful. http://www.getsmarteraboutmoney.ca/Pages/default.aspx |
Does “cash in lieu of dividend” incur any tax consequences in an IRA? | In a (not Roth) IRA, withdrawals are generally already taxed as regular income. So there should be no tax disadvantage to earning payment in lieu of dividends. It's possible that there is an exception for IRAs but I was unable to find one and I cannot see the reason for one since the dividend tax rate is usually lower than the income tax rate (which is why some company owners elect to receive part of the company profits via dividend rather than all through their salary). |
How to search efficiently for financial institutions, credit cards, etc (At least in Canada)? | Searching for Banks or Credit Unions based on their high interest accounts is likely to be a giant waste of your time. The highest you might find is 1.5% not clearing inflation. For anything less than 100k youre better off putting it in a money market fund until you know what you want to do with it, which you can find anywhere. |
Is this investment opportunity problematic? | Your Spidey senses are good. A good friend would not put you in such a position. It's simple, to skirt some issue (we'll get to that in a second) you are being asked to lie. All for a 15% return on your $$$$. <<< How much is that? You can easily lend him the money, and have a better paper trail. But the bank is not going to like that, and requires this money from friends or family to be a gift. I've heard mortgage guys at the bank say "It's just a formality, we need this paperwork to sell the loan to the investors." These bankers belong in jail, or at least fired and barred from the industry. They broke the economy in 2008, and should be stopped from doing it again. |
Can I buy only 4 shares of a company? | I'm not sure it is the best idea, but you can buy only 4 stocks generally. As you alluded to, you should take notice of the fees. Also note that many stocks trade at significantly lower prices than Apple's per shares, so you might want to factor that into your decision. You could probably get a better feel for transactions if you bought say 50 shares of a $30 stock; then it might be easier to see what it's like to sell some, etc. Note that specific trading sites might have various limits in place that would pose as barriers to this sort of behavior though. |
Purchase same stock twice | how does the trading company know which one I want to sell? It doesn't need to know. You just sell one. From taxation point of view depending on the country / tax jurisdiction, it can be only be FIFO or specific stock. |
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