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I am a small retail investor. Can I invest in the Facebook IPO at the IPO price? [duplicate] | I have an account with ETrade. Earlier this week I got an offer to participate in the IPO proper (at the IPO price). If Charles Schwab doesn't give you the opportunity, that's a shortcoming of them as a brokerage firm; there are definitely ways for retail investors to invest in it, wise investment or no. (Okay, technically it wasn't an offer to participate, it was a notice that participation was possibly available, various securities-law disclaimers etc withstanding. "This Web site is neither an offer to sell nor a solicitation to buy these securities. The offer is by prospectus only. This Web site contains a preliminary prospectus for each offering." etc etc). |
How can I determine which stores are regarded as supermarkets for a rewards credit card? | Contact AmEx. They are the only ones who might have a current list. |
Is the BA Avios Visa airlines rewards card worth it? | I am a proud member of the BA frequent fliers' club (Executive Club). Their service is superb. Their avios (aka miles) are quite useful. However, that is if you're not flying with British Airways, because if you do - you'll pay enormous amounts as "taxes". I've used their avios on Air Berlin, American Airlines and Iberia - several times each, and their prices are very reasonable (including trans-Atlantic flights, although I mostly used it for domestic flights in the US and EU). If you only fly BA - their club charges ridiculous amounts for taxes and you would probably want to be in one of their partners' clubs. Depending on your traveling pattern - I'd suggest American Airlines (if you travel a lot in the US) or Qantas (if you travel to far East). I'm not familiar with other partners' clubs, so can't tell. So whether or not the 50K avios worth the investment is really up to you - it depends greatly on your traveling pattern and where you can use them. If only on BA - not sure if it is worth the trouble (although you do end up with about 50%-70% discount of the regular price when you buy miles tickets). |
How are RSU's factored into Income during loan qualification? | RSUs are not "essentially cash". "R" in the RSU stands for restricted. These awards have strings attached, and as long as the strings are attached - you don't really own the money. As such, most banks do not include RSUs in the income considerations. Some do, especially if they have a specific agreement with your employer (check your HR/benefits coordinator). Specifically for mortgage loan, where the underwriting is very strict, I'm not aware of banks that include RSUs as income without a specific agreement with the employer as a perk. For credit cards/car loans, where you just need to write a number, they would probably care less. Some banks (but not all) consider past performance, and would include bonuses (and maybe RSUs) if you can show several consecutive years of comparable bonuses. |
How do I estimate my taxes when I have only 1099 income? | So there are a lot of people that get into trouble in your type of self employment situation. This is what I do, and I use google drive so there are no cost for tools. However, having an accounting system is better. Getting in trouble with the IRS really sucks bad. |
How does my broker (optionsXpress) calculate probabilities that the stock will hit a certain price? | Their algorithm may be different (and proprietary), but how I would to it is to assume that daily changes in the stock are distributed normally (meaning the probability distribution is a "bell curve" - the green area in your chart). I would then calculate the average and standard deviation (volatility) of historical returns to determine the center and width of the bell curve (calibrating it to expected returns and implied volaility based on option prices), then use standard formulas for lognormal distributions to calculate the probability of the price exceeding the strike price. So there are many assumptions involved, and in the end it's just a probability, so there's no way to know if it's right or wrong - either the stock will cross the strike or it won't. |
3% Equity options in software company, entitles me to revenue share? | It might, but it also might not. The Board of Directors gets to decide whether and how much dividends are paid to stockholders. So this will vary from company to company and may change over time. I suggest you ask the person making the offer. That said: It looks like they offered you OPTIONS, not Shares. An option is just the right to buy stock at a given price in the future. It is extremely unlikely that you would be entitled to any dividends since you don't have an ownership stake, just a potential to be a shareholder. |
Where can one download or subscribe to end of day price data for Tokyo stocks? | Google Finance certainly has data for Tokyo Stock Exchange (called TYO on Google) listings. You could create a "portfolio" consisting of the stocks you care about and then visit it once per day (or write a script to do so). |
What are the contents of fixed annuities? | An annuity is a contract. Its contents are "a contractual obligation from the issuing company". If you want to evaluate how your annuity is likely to fare, you're essentially asking whether or not its issuer will honor its contract. They're legally required to honor the contract, unless they go bankrupt. (Even if they do go bankrupt, you will be a creditor and may get a portion of the assets recovered by the bankruptcy process.) Generally, the issuer will take the proceeds and invest them in the stock market (or possibly in similar instruments - e.g. Berkshire-Hathaway bought a railroad and invests some money in it directly). They invest in these places because that's where the returns are. One of the reason that annuities may have a good rate on paper is that they may end up taking some of your principal, because many are structured as some form of survivor's insurance policy. Consider: If you're 65 years old and have some retirement savings, you'd like to be able to spend them without fear of them running out because you live longer than you expected (e.g. you survive to your 90s). So, you could invest in the stock market and hope for a 7% return indefinitely and then plan to spend the returns - but if those returns don't materialize for a few years because there's a big stock market crash, you're in big trouble! Or, you could buy an annuity contract which will pay you 7% a year (or more!) until you die. Then you're guaranteed the returns unless the issuer goes bankrupt. (Sure, you lose all your principal, but you're dead, so hey, maybe you don't care.) The insurance company essentially sells risk-tolerance. Other annuities aren't structured like this, and may be marketed towards non-retirees. They're usually not such a good deal. If they appear to be such a good deal, it may be an illusion. (Variable annuities in particular are hard to reason about without a good deal of knowledge about how the stock market behaves on a year-to-year basis: many of them have a maximum return as well as a minimum, and the stock market may pile up a lot of its returns into one year, so after a "crash and recovery" cycle you might end up behind the market instead of ahead.) Annuities are a form of safety. Safety can be very expensive. If you're investing your own money, consider whether you need that safety. You probably needn't worry quite so much about the issuer being crazy-fraudulent or Ponzi-esque: you should worry mostly about whether it looks better on paper than it is. |
What's a good personal finance management web app that I can use in Canada? | I use MoneyStrands (formerly called Expensr), but mostly just to track expenses and look at reports on my spending habits. It has some really pretty charts, with the ability to drill down into categories and sub-categories, or graph monthly spending for any custom date range. It does a half-decent job of auto-categorizing the imported bank transactions, and you can set up additional rules for common vendors, but I still have to do some manual work after each import. It does a good job of integrating my credit cards, bank accounts, and I can even manually add cash transactions. It has some basic budgeting capabilities, but they're not very useful for someone who needs to carefully budget thier monthly spending. Another one I've heard about is mint.com, but it only supports American banks (last I heard, anyway). |
My company didn't pay taxes on my behalf | Many a time even if the tax is deducted and paid by the company it does not reflect as a credit against your PAN for various reasons like, you not submitting it to your employer in time, errors of reconciliation, etc. Its advisable that you inform your company finance officer that you have received such a letter. Q1. The sure shot way of knowing that your company is depositing tax with government is to view your tax credit report. This was set-up in 2004 and gives the details of all credits against your PAN and the tax deducted against your PAN. It shows if the tax was TDS and which employer paid it, or if this was a self assessment, or TCS, etc. To view this report there are 2 options: Register directly at http://www.tin-nsdl.com/panregistration.asp. Follow the one time registration process and keep viewing the tax credits. Note it normally takes 2-3 months to reflect the data. The other alternative is that quite a few leading banks [Citi, SBI, etc] provide a direct access to this report from their internet banking frontend, provided your PAN is associated to your account. Q2. The only details you need to submit are the Form 16. This would have all the details of when the tax was paid and the BSR number required for reconciling. Q3. TDS is the liability of the employer. However if this has not been deducted or too little was deducted based on incorrect/incomplete information give by you, then its your liability. For example if you change jobs in a year, the tax deducted is always less and you have to pay the difference. Q4. If its established that the company was at fault for not deducting the tax or deducting and not paying it to government on time, there are enough provisions to penalize the company including putting the top management team behind bars. |
Why the volume disparity between NUGT and DUST? | NUGT and DUST both track GDX with triple leverage, but in opposite directions. GDX has been rising steadily throughout 2016, and certainly since over the last month. DUST experiences much higher volume when GDX is in a downward trend, as it was from 2013-2016. I think you'll see the same thing with DRIP and GUSH when oil has been moving steadily in one direction or the other. This is really a reflection of the herd mentality to jump in when things look like they're going a particular direction. |
How much would it cost me to buy one gold futures contract on Comex? | When you buy a futures contract you are entering into an agreement to buy gold, in the future (usually a 3 month settlement date). this is not an OPTION, but a contract, so each party is taking risk, the seller that the price will rise, the buyer that the price will fall. Unlike an option which you can simply choose not to exercise if the price goes down, with futures you are obligated to follow through. (or sell the contract to someone else, or buy it back) The price you pay depends on the margin, which is related to how far away the settlement date is, but you can expect around 5% , so the minimum you could get into is 100 troy ounces, at todays price, times 5%. Since we're talking about 100 troy ounces, that means the margin required to buy the smallest sized future contract would be about the same as buying 5 ounces of gold. roughly $9K at current prices. If you are working through a broker they will generally require you to sell or buy back the contract before the settlement date as they don't want to deal with actually following through on the purchase and having to take delivery of the gold. How much do you make or lose? Lets deal with a smaller change in the price, to be a bit more realistic since we are talking typically about a settlement date that is 3 months out. And to make the math easy lets bump the price of gold to $2000/ounce. That means the price of a futures contract is going to be $10K Lets say the price goes up 10%, Well you have basically a 20:1 leverage since you only paid 5%, so you stand to gain $20,000. Sounds great right? WRONG.. because as good as the upside is, the downside is just as bad. If the price went down 10% you would be down $20000, which means you would not only have to cough up the 10K you committed but you would be expected to 'top up the margin' and throw in ANOTHER $10,000 as well. And if you can't pay that up your broker might close out your position for you. oh and if the price hasn't changed, you are mostly just out the fees and commissions you paid to buy and sell the contract. With futures contracts you can lose MORE than your original investment. NOT for the faint of heart or the casual investor. NOT for folks without large reserves who can afford to take big losses if things go against them. I'll close this answer with a quote from the site I'm linking below The large majority of people who trade futures lose their money. That's a fact. They lose even when they are right in the medium term, because futures are fatal to your wealth on an unpredicted and temporary price blip. Now consider that, especially the bit about 'price blip' and then look at the current volatility of most markets right now, and I think you can see how futures trading can be as they say 'Fatal to your Wealth' (man, I love that phrase, what a great way of putting it) This Site has a pretty decent primer on the whole thing. their view is perhaps a bit biased due to the nature of their business, but on the whole their description of how things work is pretty decent. Investopedia has a more detailed (and perhaps more objective) tutorial on the futures thing. Well worth your time if you think you want to do anything related to the futures market. |
I'm a UK citizen, can I use US stockbrokers? | The UK has historically aggressive financial law, inherited from Dutch friendship, influence, and acquisitions by conquest. The law is so open that nearly anyone can invest through the UK without much difficulty, and citizens have nearly no restrictions on where to invest. A UK citizen can either open an account in the US with paperwork hassles or at home with access to all world markets and less paperwork. Here is the UK version of my broker, Interactive Brokers. Their costs are the lowest, but you will be charged a minimum fee if you do not trade enough, and their minimum opening balance can be prohibitively high for some. If you do buy US products, be sure to file your W-8BEN. |
What does it mean when my Money Market account lists both a dividend share and an APY? | In a money market fund, one share is worth $1. For your fund, you'll earn $0.0010 a year per share, or 0.10%. That is all that you will earn. The APY is just another number to represent this interest rate, not a separate income stream. If you were expecting extra money from a separately credited dividend, you were mistaken. (Usually the APY is a slightly different number than the interest rate, to reflect the way that the interest is compounded over the course of the year. In this case the compounding is too slight to notice with just 2 decimal places.) If you were investing in a regular savings account, you would see the rate you are paid expressed as an APY also, but not as a dividend (as no shares are involved) and use that number to compare the two. If you were buying a bond fund or stock fund that did not have a fixed price, you could calculate the dividend yield based on the current stock price, but you would not probably see an APY listed. Money market funds are kind of an odd hybrid of 'fund' and 'savings', so they list both. |
Should Emergency Funds be Used for Infrequent, but Likely, Expenses? | The concept of emergency fund is a matter of opinion. I can tell you the consensus is that one should have 6-9 months worth of expenses kept as liquid cash. This is meant to cover literally all bills that you might encounter during that time. That's a lot of money. There are levels of savings that are shy of this but still responsible. Not enough to cover too much in case of job loss, but enough to cover the busted transmission, the broken water heater, etc. this is still more than many people have saved up, but it's a worthy goal. The doctor visit is probably the lowest level. Even without insurance, the clinic visit should be under $200, and this shouldn't cause you to have to carry that amount beyond the time the bill comes in. The point that shouldn't be ignored is that if you owe money at 18% on a credit card, the emergency fund is costing you money, and is a bit misguided. I'd send every cent I could to the highest rate card and not have more than a few hundred $$ liquid until the cards were at zero. Last - $5K, $10K in the emergency account is great, unless you are foregoing matched 401(k) dollars to do it. All just my opinion. Others here whom I respect might disagree with parts of my answer, and they'd be right. Edit - Regarding the 'consensus 6-9 months' I suggest - From Investopedia - "...using the conservative recommendation to sock away eight monthsโ worth of living expenses...." The article strongly support my range for the fact that it both cites consensus, yet disagrees with it. From Money Under 30 The more difficult you rank your ability to find a new job, the more we suggest you save โ up to a yearโs worth of expenses if you think your income would be very difficult to replace. From Bank of America I have no issue with those comfortable with less. A dual income couple who is saving 30% of their income may very well survive one person losing a job with no need to tap savings, and any 'emergency' expense can come from next month's income. That couple may just need this month's bills in their checking account. |
How to determine how much to charge your business for rent (in your house)? | If you are talking about a home office, you don't "charge" the business anything. If the area is used exclusively as an office you pro-rate by square footage just the actual expenses. TurboTax recent published an article "Can I Take the Home Office Deduction?" which is a must read if you don't understand the process. (Note: I authored said article.) |
Why have candlestick charts overlaps? | Remember that prices refer to discrete events in the market - trades - it is easily possible that the highest price for a trade in the next period is lower than the highest price in the current one as someone in the current period may be willing to pay more in this period than anyone in the next. The ending price of a period is also determined this way; it is the last price that someone was willing to pay in this period not the first price that someone will pay in the next period. Why? because the last price in this period is not in the next period by definition! edit: added something on illiquid stocks Illiquid stocks may have intraday gaps in the sequence of candlesticks where no trading occurred. Below is one such chart for 1pm plc.(OPM.L) a UK based leasing company (thanks to Yahoo finance for this): |
Home Valuation in a Dodgy neighborhood | I wouldn't personally spend any money on an appraisal. Spend some time yourself looking at Zillow.com and maybe Realtor.com and other sites to review recent sales in your specific area. Not the houses a mile away. Try to find comparables to yours. The key factor is dollars per square foot. See if the trend over the last couple of years is upwards or downwards in dollars per square foot of living area. If it's downwards, I wouldn't invest for sure. |
Can somebody give a brief comparison of TSP and IRAs? | The TSP is similar to a 401K. If you were hired as a federal employee on or after 1 January 1987 you are under the FERS retirement program. That means that you are eligible for matching. If they will match your deposits then the TSP, up to the matching limit, is a better choice. Skipping the TSP will mean that you you are leaving money on the table. |
What does โinterest ratesโ, without any further context, generically refer to? | The generic representative of interest rates is the 10 year treasury bond rate. (USA). As an approximation most other interest rates do tend to move up and down with the treasury rate, but with more or less sensitivity. Another prominently discussed interest rate is the short term loan rate established by the Federal Reserve for loans it makes to banks. |
Ghana scam and direct deposit scam? | Of course, it is a scam. Regardless of how the scam might work, you already know that the person on the other end is lying, and you also know that people in trouble don't contact perfect strangers out of the blue by e-mail for help, nor do they call up random phone numbers looking for help. Scammers prey on the gullibility, greed, and sometimes generosity of the victims. As to how this scam works, the money that the scammer would be depositing into your father's account is not real. However, it will take the bank a few days to figure that out. In the mean time, your father will be sending out real money back to the scammer. When the bank figures out what is going on, they will want your father to pay back this money. |
Money transfer from India to USA | The liabilities are the same regardless of the route, besides tax evasion schemes such as handing the money to her as cash. Taxes will run up to half of the amount. The best routes are: Western union, moneygram, and similar services- about 2k You are allowed to gift 14k tax free. You can increase this amount by sending to multiple trusted people. See here. https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/INF12127.html The gifter pay taxes, the giftee does not- unless the gifter fails to pay. Let me know which route you prefer. If you do a bank transfer then you will have to work that out with your bank. If you chose to do a wire transfer, yes. Yes, if it's no more than about $2000. |
I have savings and excess income. Is it time for me to find a financial advisor? | Whether your financial status is considered "OK" depends on your aspirations. You aren't spending more than you earn and have no debt. That puts you in the category of OK in my book, but the information in your post indicates that you would benefit from some financial advice--100 grand sounds like a lot of money to have in a bank unless you are on the verge of spending it. Financial advisors come in various shapes and sizes. Many will charge you a lot for what turns out to be helpful advice in the first meeting, but very little value-added thereafter. Some don't have the best incentives (they may be incentivized to encourage you to put your money into certain funds, for example). There are many financial advisors (of sorts) that you have access to that won't cost you anything. For example, if you have a 401(k) at work, I bet there is a representative from the plan administrator that will meet with you for free. If you open a brokerage account or IRA at any place (Fidelity, Vanguard, etc.) you can easily talk with one of their reps and get all sorts of advice. My personal take is to meet with anyone who will meet with me for free, but not to pay anyone for this service. It's too easy to get good advice and paying for it doesn't guarantee that you get better advice. Your financial situation will depend primarily on a few things you have not mentioned here. For example, How much are you setting aside for retirement and what are your retirement goals? This is something lots of people can give you advice on, but we don't know what market returns will be going forward so we don't really know. One bit of advice that may benefit you is how to set aside money for retirement in the most tax advantaged way. How much do you feel that you need saved up for large expenses? Thinking of starting a family? How many months worth of income are you comfortable having set aside? What is your tolerance of risk? If you put your money in risky assets, you may make more, but you may also actually lose money. Those are the questions a financial advisor will ask about. Once you have his/her advice--and preferrably after talking to a few advisors--you can make your own decision. Basically, your options are: Rules of thumb: Save only what makes sense to save in banks given your expected needs for cash. Put a lot in tax advantaged accounts (don't give Uncle Sam any gifts). Then look at financial and real investments. There are a number of free resources on the internet. For example FutureAdvisor. Or you can hit up the forums at BogleHeads. Those guys give and receive financial advice as a hobby. They aren't professionals, but you can get a lot of varying ideas and make up your own mind, which to me is better than (just) asking a professional. BTW, regarding the ESPP: these plans often give you a discount on stock and can therefore be a good idea. Just be sure you don't hold the stock longer than you need to. It's generally a bad idea to concentrate your wealth in any single investment, especially one highly correlated with your background risk (i.e., if the company does poorly you will already be worse off because you may lose your job or see fewer advancement opportunities. No need to add losses in your savings to that). 1 Please note: I am neither advocating nor discouraging buying guns, gold, or other controversial real assets. I'm just giving examples of items some people buy as part of their wealth-preservation strategy. |
Should a high-school student invest their (relative meager) savings? | If you're not rich, investing money will produce very small return, and is a waste of your resources. If you want to save until you die, then go for it (that's what investment companies want you to do). I suggest invest your money in building a network of friends who will be future asset for you. A group of friends helping each other have a much higher prospect of success. It has been proven that approximately 70% of jobs have been obtained through networking. Either through family, or friends, this is the vast majority. I will reiterate, invest on friends and family, not on strangers who want to tie down your money so they can have fun for the moment, while you wait to have fun when you're almost dead. Added source for those who are questioning the most well known fact within organizations, I'm baffled by the level of ignorance. Linkedin Recruitment Blog ...companies want to hire from within first; only when there are no appropriate internal candidates will they rely on referrals from employees (who get a bonus for a successful hire) and people who will approach them through informational meetings. The latter category of jobseekers (you) have the benefit of getting known before the job is "officially posted." For those who believe loaning money to friends and family is a way of losing money -> this is a risk well worth taking -> and the risk is much lower than loaning your money to strangers -> and the reward is much higher than loaning your money to strangers. |
Relationship between liquidity and an efficient market | Liquidity is highly correlated to efficiency primarily because if an asset's price is not sampled during the time of a trade, it's price is unknown therefore inefficient. Past prices can be referenced, but they are not the price of the present. Prices of substitutes are even worse. SPY is extremely efficient for an equity. If permitted, it could easily trade with much lower ticks and still have potential for a locked market. Ideal exchange An ideal exchange has no public restrictions on trade. This is not to say that private restrictions would need to be put in place for various reasons, but one would only do that if it were responsible for its own survival instead of being too big to fail. In this market, trades would be approximately continuous for the largest securities and almost always locked because of continuous exchange fee competition with ever dropping minimum ticks. A market that can provide continuous locked orders with infinite precision is perfectly efficient from the point of view of the investor because the value of one's holdings are always known. EMH In terms of the theory the Efficient Market Hypothesis this is irrelevant to the rational investor. The rational investor will invest in the market at large of a given asset class, only increasing risk as wealth increases thus moving to more volatile asset classes when the volatility can be absorbed by excess wealth. Here, liquidity is also helpful, the "two heads are better than one" way of thinking. The more invested in an asset class, the lower the class's variance and vice versa. Bonds, the least variant, dwarf equities which dwarf options, all in order of the least variance. Believe it or not, there was a day when bonds were almost as risky as equities. For those concerned with EMH, liquidity is also believed to increase efficiency in some forms because liquidity is proportional to the number of individuals invested thus reducing the likelihood of an insufficient number of participants. External inefficiency In the case of ETFs that do not perfectly track their underlying index less costs at all times between index changes, this is because they are forbidden from directly trading in the market on their own behalf. If they were allowed and honest, the price would always be perfect and much more liquid than it otherwise should be since the combined frequency of all index members is much higher than any one alone. If one was dishonest, it would try to defraud with higher or lower numbers; however, if insider trading were permitted, both would fail due to the prisoner's dilemma that there is no honor among thieves. Here, the market would detect the problem much sooner because the insiders would arbitrage the false price away. Indirect internal efficiency Taking emerging market ETFs as an example, the markets that those are invested into are heavily restricted, so their ETF to underlying price inefficiencies are more pronounced even though the ETFs are actually working to make those underlying markets more efficient because a price for them altogether is known. |
What happens when PayPal overdrafts a checking account (with an ample backup funding source available)? | PayPal will be contacting you shortly, I'm sure. You'll see the reversal on their site in a few days as well as a fee from their end I bet. |
Figuring out an ideal balance to carry on credit cards [duplicate] | I think this advice to carry a balance each month is nonsense. You're just wasting money that way. Personally, I have always paid off my credit cards every month for as long as I can remember, and my credit score is only 8 points below the max. The bigger factors by far are: It might be good advice to charge a small amount each month on your credit cards each month in order to keep seldom-used accounts active (remember, longer payment history is better), but there's no reason not to pay off the balance to avoid the interest charges. In short, the "ideal balance" to carry month-to-month on a credit card is zero. |
Why would you sell your bonds? | Investment strategies abound. Bonds can be part of useful passive investment strategy but more active investors may develop a good number of reasons why buying and selling bonds on the short term. A few examples: Also, note that there is no guarantee in bonds as you imply by likening it to a "guaranteed stock dividend". Bond issuers can default, causing bond investors to lose part of all of their original investment. As such, if one believes the bond issuer may suffer financial distress, it would be ideal to sell-off the investment. |
Investing: P/E Ratio basic question | While on the surface it might not make sense to pay more than one dollar to get just one dollar back, the key thing is that a good company's earnings are recurring each year. So, you wouldn't just be paying for the $1 dollar of earnings per share this year, but for the entire future stream of earnings per share, every year, in perpetuity -- and the earnings may grow over time too (if it remains a good company.) Your stock is a claim on a portion of the company's future. The brighter and/or more certain that future, the more investors are willing to pay for each recurring dollar of earnings. And the P/E ratio tells you, in effect, how many years it might take for your investment to earn back what you paid โ assuming earnings remain the same. But you would hope the earnings would grow, too. When a company's earnings are widely expected to grow, the P/E for the stock is often higher than average. Bear in mind you don't actually receive the company's earnings, since management often decides to reinvest all or a portion of it to grow the company. Yet, many companies do pay a portion of earnings out as dividends. Dividends are money in your pocket each year. |
Tutoring Business Payroll Management | This is going to depend on the tax jurisdiction and I have no knowledge of the rules in Illinois. But I'd like to give you some direction about how to think about this. The biggest problem that you might hit is that if you collect a single check and then distribute to the tutors, you may be considered their employer. As an employer, you would be responsible for things like This is not meant as an exhaustive list. Even if not an employer, you are still paying them. You would be responsible for issuing 1099 forms to anyone who goes above $600 for the year (source). You would need to file for a taxpayer identification number for your organization, as it is acting as a business. You need to give this number to the school so that they can issue the correct form to you. You might have to register a "Doing Business As" name. It's conceivable that you could get away with having the school write the check to you as an individual. But if you do that, it will show up as income on your taxes and you will have to deduct payments to the other tutors. If the organization already has a separate tax identity, then you could use that. Note that the organization will be responsible for paying income tax. It should be able to deduct payments to the tutors as well as marketing expenses, etc. If the school will go for it, consider structuring things with a payment to your organization for your organization duties. Then you tell the school how much to pay each tutor. You would be responsible for giving the school the necessary information, like name, address, Social Security number, and cost (or possibly hours worked). |
If a stock has only buyers and no sellers how does its price go up? | You can, in theory, have the stock price go up without any trading actually occurring. It depends on how the price is quoted. The stock price is not always quoted as the last price someone paid for it. It can also be quoted as the ask price, which is the price a seller is willing to sell at, and the price youd pay if you bought at market. If I am a seller, I can raise the asking price at any time. And if there are no other sellers, or at least none that are selling lower than me, it would look like the price is going up. Because it is, it now costs more to buy it. But no trading has actually occurred. |
W2 vs 1099 Employee status | In general that's illegal. If you're a W2 employee, you don't miraculously become a 1099 contractor just because they pay you more. If your job doesn't change - then your status doesn't change just because they give you a raise. They can be sued (by you, and by the IRS) for that. Other issues have already been raised by other respondents, just wanted to point out this legal perspective. |
Offer Price for my stock not shown on quote and a subsequent sale higher than my offer | Many exchanges trade the same securities. An order may be posted to a secondary exchange, but if the National Best Bid and Offer data provider malfunctions, only those with data feeds from that exchange will see it. Only the data provider for the primary exchange where a stock is listed provides the NBBO. Missing orders are very common with the NBBO data providers. NASDAQ's order consolidator has had many failures over the past few years, and the data provider's top executive has recently resigned. Brokers have no control over this system. A broker may be alerted to a malfunction by an accountholder, but a broker may only inform the relevant exchange and the relevant data provider. |
Can't the account information on my checks be easily used for fraud? | Yes this is a huge security loophole and many banks will do nothing to refund if you are scammed. For example for business accounts some Wells Fargo branches say you must notify within 24 hours of any check withdrawal or the loss is yours. Basically banks don't care - they are a monopoly system and you are stuck with them. When the losses and complaints get too great they will eventually implement the European system of electronic transfers - but the banks don't want to be bothered with that expense yet. Sure you can use paypal - another overpriced monopoly - or much better try Dwolla or bitcoin. |
Why does an option lose time value faster as it approaches expiry | If you think about it, the value of an option comes from the chance that the price at the expiration date can exceed the strike price. As it gets closer to the expiration date, the chance is getting smaller, because there is simply not enough time for an out-of-money option to hit that strike. Therefore, the value of an option decays. |
Do company-provided meals need to be claimed on my taxes? | It looks like the resource to deciding these is here Concerning the meals, the law seems a bit vague to me. You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests. This exclusion does not apply if you allow your employee to choose to receive additional pay instead of meals. If the whole point of google providing meals is to benefit Google as such people will not leave the googleplex when to obtain meals elsewhere causing increased productivity for Google, then this is covered as a business expense. (Even if it wasn't, Google would have to notify you that it was providing you a non-expensable benefit, i.e. compensation, by giving you a 1099 at the end of the year). Concerning the other benefits, the only way I could see those items not being taxable benefits is if one of the two applies. |
ETF's for early retirement strategy | If your intention is to purchase ETFs on a regular basis (like $x per month), then ETFs may not make sense. You may have to pay a fixed transaction cost like you were buying a stock for each purchase. In a similar no load mutual fund, there are more likely to be no transaction costs (depending on how it is bought). The above paragraph is not very definitive, and is really dependent upon how you would purchase either ETFs or Mutual funds. For example if you have a Fidelity brokerage account, they may let you buy certain ETFs commission free. Okay then either ETFs make great sense. It would not make sense to buy ones that they charge $35 per transaction if you have regular transactions that are smallish. The last two questions seem to be asking if you should buy MF or buy stocks directly. For most people the later is a losing proposition. They do not have the time or ability to buy stocks directly, effectively. Even if they did they may not have the capital to make enough of a difference when one considers all the cost involved. However, if that kind of thing interests you, perhaps you should dabble. Start out small and look at the higher costs of doing so as part of the "cost of doing business". |
Is there an advantage to keeping a liquid emergency fund if one also has an untapped line of credit? | Let me offer what I did in a similar situation - Two points (a) we were banking $20K/yr or so to the cash fund, 2 good incomes, and the ability to go indefinitely on just one of the 2. (b) A HELOC that was prime-1.5%. The result was to mentally treat the HELOC as our emergency fund, but to enjoy the interest savings of over $16,500/yr for the $100K that had a sub-1% return. When I first referenced this story, I came under criticism. Fair enough, it's not for everyone. Let's jump ahead. We owe $228K @3.5%. We had tapped the equity line for brief periods, but never over $20,000. When we lost our jobs, both of us, we had hit our number and are semi-retired now. Our retirement budget included the current mortgage payment, so we are in line for that dropping out of the budget in 12 years, and starting social security after that, which I did not include as part of the budget. Note - when we lost our jobs, the severance was 6 month's pay, and we collected unemployment as well. The first 12 months were covered without tapping our retirement funds at all. So, to Nick's point (and excellent answer) our first line of defense against unemployment was this combination of severance and unemployment insurance. |
If the former owner of my home is still using the address, can it harm me? | Don't worry about it. One of the big banks who like to whine a lot about defaulting borrowers is sending credit cards to a former resident of my home. The guy died in the late 90s. |
Can a husband and wife who are both members of the same LLC file a joint tax return? | Since from the question it seems that you're talking about the US taxation, I'll assume that. You can definitely continue filing jointly. Being members of a partnership has no bearing on how you file your own tax return. The partnership will distribute K-1 to each of you separately, but you'll report both of them on the same return. |
When should I start saving/investing for my retirement? | Start now. It's a lot easier to save now than it is to start to save later. |
I have an extra 1000โฌ per month, what should I do with it? | First check: Do you have all the insurances you need? The two insurances everyone should have are: Another insurance you might want to get is a contents insurance ("Hausratsversicherung"). But if you don't own any super-expensive furniture or artworks, you might also opt to self-insure and cover it with: Priority 2: Emergency fund. Due to the excellent healthcare and welfare system in Germany, this is not as important as in many other countries. But knowing that you have a few thousand โฌ laying around in liquid assets in case something expensive breaks down can really help you sleep at night. If you decide not to pay for contents insurance, calculate what it would cost you if there is a fire in your apartment and you would have to replace everything. That's how large your emergency fund needs to be. You also need a larger emergency fund if you are a homeowner, because as a homeowner there might always be an emergency repair you have to pay for. Priority 3: Retirement. Unless there will be some serious retirement reforms in the next 40 years (and I would not bet on that!), the government-provided pension will not be enough to cover your lifestyle cost. If you don't want to suffer from poverty as a senior citizen you will have to build up a retirement plan now. Check which options your company provides ("Betriebliche Altersvorsorge") and what retirement options you have which give you free money from the government ("Riester-Rente"). Getting professional advise to compare all the options with each other can be really beneficial. Priority 4: Save for a home. In the long-run, owning a home is much cheaper than renting one. Paying of a mortgage is just like paying rent - but with the difference that the money you pay every month isn't spent. Most of it (minus interest and building maintenance costs) stays your capital! At one point you will have paid it off and then you never have to pay rent in your life. It even secures the financial future of your children and grandchildren, who will inherit your home. But few banks will give you a good interest rate if you have no own capital at all. So you should start saving money now. Invest a few hundred โฌ every month in a long-term portfolio. You might also get some additional free money for this purpose from your employer ("Vermรถgenswirksame Leistungen"). |
Mortgage or not? | Better in terms of what? less taxes paid? or more money to save for retirement? In terms of retirement, it would be better for you to keep the condo you currently have for at least two reasons: You wouldn't incur the penalties and fees from buying and selling a home. Selling and buying a home comes with a multitude of fees and expenses that aren't included in your estimation. You aren't saddled with a mortgage payment again. You aren't paying a mortgage payment right now. If you set aside the amount you would be paying towards that, it more than covers your taxes, with plenty left over to put towards retirement. |
Would cross holding make market capitalization apparently more? | I started to work out, step by step, why this doesn't work, but the scenario is too convoluted to make that helpful. Basically, you're making mistakes in some or all of the following spots: |
Is it a good practice to keep salary account and savings account separate? | I pretty much only use my checking. What's the downside? Checking accounts don't pay as much interest as savings account. Oh, but wait, interest rates have been zero for nearly 10 years. So there is very little benefit to keeping money in my savings account. In fact, I had two savings accounts, and Well Fargo closed one of them because I hadn't used it in years. Downsides of savings accounts: You are limited to 5 transfers per month into or out of them. No such limit with checking. Upsides of savings accounts: Well, maybe you will be less likely to spend the money. Why don't you just have your pay go into your checking and then just transfer "extra money" out of it, rather than the reverse? If you want to put money "away" so that you save it, assuming you're in the U.S.A., open a traditional IRA. Max deposit of $5500/year, and it reduces your taxable income. It's not a bad idea to have a separate account that you don't touch except for in an emergency. But, for me, the direction of flow is from work, to checking, to savings. |
Why is the stock market price for a share always higher than the earnings per share? | Stock prices are set by supply and demand. If a particular stock has a high EPS, say, $100, then people will bid more for that stock, driving up its price over one with a $10 EPS. Your job as an investor is to find stocks with low share prices, but which will give you high earnings (either in dividends, our future share price). This means finding stocks which you believe the market has priced incorrectly, for whatever reason (as an example, many bank stocks are being punished right now, even if the underlying banks are in good shape financially). If you want to beat the market indices, be prepared to do a lot of research, because you're trying to outsmart the market as a whole. |
What's the appropriate way to signify an S-Corp? | S-Corp is a corporation. I.e.: you add a "Inc." or "Corp." to the name or something of that kind. "S" denotes a specific tax treatment which may change during the lifetime of the corporation. It doesn't refer to a legal status. |
Why are options created? | Do you need to buy car insurance? If you do, you are buying to open a put option. |
Dividends - Why the push to reinvest? | A dividend is a cash disbursement from the company. The value of the company goes down the same amount of the dividend, so it is analogous to having money in a savings account and taking a withdrawal every month. Obviously you are going to have less in the end than if you just kept the money in the account. suppose that I own 10 different stocks, and don't reinvest dividends, but keep them on account, and each month or two, as I add more money to invest, either in one of my existing stocks, or perhaps something new, I add whichever dividend amount is currently available in cash to my new purchase, would this strategy provide the same results? Roughly, yes. Reinvesting dividends is essentially buying more stock at the lower price, which is a net zero effect in total balance. So if you invested in the same stocks, yes you'd be in the same place. If you invested in different stocks, then you would have a performance difference depending on what you invested in. The risk is the temptation to take the cash dividend and not reinvest it, but take it in cash, thereby reducing your earning power. That is, is there some particular reason that the brokers are recommending automatically reinvesting dividends as opposed to reinvesting them manually, perhaps not always in the same item? I'd like to think that they're looking after your best interest (and they might be), but the cynical part of me thinks that they're either trying to keep your business by increasing your returns, or there's some UK regulation I'm not aware of that requires them to disclose the effect of reinvesting dividends. ยฃ100 invested in the UK stock market since 1899 would have grown into just ยฃ177 after adjusting for inflation. This figure seems ludicrous to me. I haven't actually measured what the historical returns on the "UK market" are, but that would mean an annualized return (adjusted for inflation) of just 0.5%. Either UK stocks pay a ridiculous amount of dividends or there's something wrong with the math. EDIT I still have not found a definitive source for the real UK market return, but according to this inflation calculator, ยฃ100 in 1899 would equate to almost ยฃ12,000 today, for an average inflation rate of 4.14 percent, which would put the CAGR of the UK market at about 4.9%, which seems reasonable. The CAGR with dividend reinvestment would then be about 9.1%, making dividend reinvestment a no-brainer in the UK market at least. |
Can I place a stock limit order to buy above the current price? Can I place a stock limit order to sell below the current price? | buy above the current price in the stock market You can do that, but what is the purpose to do so ? Brokers take the limit price of your order as the highest price you are going to pay. So if an order can be fulfilled below the limit they will do so. can I sell below the current price You can put in a order to do so. But what I have seen with my current broker is that the order never reached the market and wasn't executed at all. The broker might have some safeguards or process in place to stop me from doing so. Not sure how other brokers deal with it. |
Can you buy out a pink sheet listed company by purchasing all of the oustanding shares? | Sure. No-one promises that all the outstanding stocks are ever for sale, but if you get them all - you get them all, what marketplace you used for that doesn't really matter. |
When is the best time to put a large amount of assets in the stock market? | Trying to "time the market" is usually a bad idea. People who do this every day for a living have a hard time doing that, and I'm guessing you don't have that kind of time and knowledge. So that leaves you with your first and third options, commonly called lump-sum and dollar cost averaging respectively. Which one to use depends on where your preferences lie on the risk/reward scpectrum. Dollar cost averaging (DCA) has lower risk and lower reward than lump sum investing. In my opinion, I don't like it. DCA only works better than lump sum investing if the price drops. But if you think the price is going to drop, why are you buying the stock in the first place? Example: Your uncle wins the lottery and gives you $50,000. Do you buy $50,000 worth of Apple now, or do you buy $10,000 now and $10,000 a quarter for the next four quarters? If the stock goes up, you will make more with lump-sum(LS) than you will with DCA. If the stock goes down, you will lose more with LS than you will with DCA. If the stock goes up then down, you will lose more with DCA than you will with LS. If the stock goes down then up, you will make more with DCA than you will with LS. So it's a trade-off. But, like I said, the whole point of you buying the stock is that you think it's going to go up, which is especially true with an index fund! So why pick the strategy that performs worse in that scenario? |
Might I need a credit score to rent, or for any other non-borrowing finances? | Credit scores are not such a big deal in Canada as they are in the US and even some European countries. One reason for this: the Social Insurance Number (SIN number) isn't used for so many purposes like the Social Security Number (SSN) in the US. The SIN number isn't even required to get credit (but with some exceptions it is needed to open an interest-bearing savings account, so that the interest income can be reported). You can refuse to provide the SIN number to most private companies. Canada also has one of the highest per-capita immigration rates of any large country, so new arrivals are expected, and services are geared up for them. Most of the banks offer special deals for "New Canadians". You should get a credit card (even if just a secured credit card) through them with one of these offers to start a credit file anyway, but there's no need to actually use it much. Auto-paying a utility bill through the card, and paying it off in full each month, is one way to keep it active. No need to ever pay any interest. Most major apartment rental firms will expect a good proportion of their renters to be new to Canada, so should have procedures in place to deal with it (such as a higher deposit). You should not give them your SIN for a credit check, even when you're more established. Same for utilities, they can just charge a higher deposit if they can't credit check you. For private landlords, everything is negotiable (but see the laws link at the end of this answer). You will later need a credit rating for a mortgage on a house (if not paying cash), so it's worth getting that one token credit card. Useful for car rental also. Here's a fairly complete summary of the laws on renting in Canada, which includes the maximum deposits that can be asked for, and notice periods. |
Should you co-sign a personal loan for a friend/family member? Why/why not? | My personal rule is to not loan money (or co-sign) for any amount that I am not willing to give away. It can go wrong in so many ways, and having a family or friend involved means making a "business" decision is difficult. If a bank won't loan the person the money, why should I? Being a co-signer is the same as borrowing the money in my name and giving it right over to the borrower. There might be great reasons to do it. I would probably sign a loan to keep my family alive or healthy, but no other reason. There are many ways to help without signing a loan. Give a room and a place to live, loan a car. The other thing is if you really truly believe in the borrower, it won't do long term damage to your credit or your financial goals, and you are the only resort; go ahead. I am thinking about helping a teenager afford their first car or student loans. |
5/1 ARM: Lifetime cap, First Adjustment Cap, Margin, and Annual Cap? | I hope this image is clear. A spreadsheet is how I look at these things. Unfortunately, you didn't offer the starting balance so I use $100K which makes it easy to scale. You build a simple spreadsheet and enter the "what if" scenario, this tells me that worse case, an increase of 1% on the rate each year results in a near 60% increase in payments over the 10 years. Of course, this isn't the end of the story, I'd first change the payments to reflect the 5% rate, and see how much that drives the balance down. This would reduce the principal enough that the increase would be much less. On $100K, you'd pay $536.82 based on a 5% rate, regardless of the required payment. At 7.75% the payment is $563.11, not even 5% higher. If you'd like a spreadsheet started for you, I'll put it someplace for you to grab it. |
What's the catch with biweekly mortgage payments? | Pete and Noah addressed the math, showing how this is, in effect, converting a 30yr to a ~23yr mortgage, at a cost, plus payment about 8% higher (1 extra payment per year). No magic there. The real issue, as I see it, is whether this is the best use of the money. Keep in mind, once you pay extra principal, which in effect is exactly what this is, it's not easy to get it back. As long as you have any mortgage at all, you have the need for liquidity, enough to pay your mortgage, tax, utilities, etc, if you find yourself between jobs or to get through any short term crisis. I've seen people choose the "sure thing" prepayment VS the "risky" 401(k) deposit. Ignoring a match is passing up a 50% or 100% return in most cases. Too good to pass up. 2 points to add - I avoided the further tangent of the tax benefit of IRA/401(k) deposits. It's too long a discussion, today's rate for the money saved, vs the rate on withdrawal. Worth considering, but not part of my answer. The other discussion I avoid is Nicholas' thoughts on the long term market return of 10% vs today's ~4% mortgage rate. This has been debated elsewhere and morphs into a "pre-pay vs invest" question. |
Can saving/investing 15% of your income starting age 25, likely make you a millionaire? | It depends on how much you save, how much your savings earns each year. You can model it with a very simple spreadsheet: Formula view: You can change this simple model with any other assumptions you wish to make and model. This spreadsheet presumes that you only make $50,000/year, never get a raise, that your savings earns 6% per year and that the market never has a crash like 2008. The article never states the assumptions that the author has made, and therefore we can't honestly determine how truthful the author is. I recommend the book Engineering Your Retirement as it has more detailed models and goes into more details about what you should expect. I wrote a slightly more detailed post that showed a spreadsheet that is basically what I use at home to track my retirement savings. |
How can I improve my credit score if I am not paying bills or rent? | You can improve your credit score simply by being an authorized user on someone's credit card account. They don't even physically have to give you a card to use, they can just add you to the account as an authorized user and your credit score will be affected. Be forewarned though, it can be negatively impacted as well. Only participate in such a scheme if it's with someone trustworthy and reliable. |
Do people tend to spend less when using cash than credit cards? | I thought I'd see if the credit card companies had anything to say about this while trying to get merchants to sign up. I went to visa.com, clicked "Run Your Business" in the top nav, then "Accept Visa Payments". This page has a "More benefits of accepting Visa" link with an overlay (which I can't easily link directly to), which includes these lines: While the average cash transaction is $17, credit card purchases average $70 while debit card purchases average $36.ยฒ ยฒ Visa Payment Panel Study (2Q11 to 1Q12 time period); Visa MARS Data: March 2015 โ May 2015 That obviously doesn't tell the entire story (I suspect people are more likely to pull out cash when they're just buying a stick of gum, and more more likely to pull out a card when they're buying large electronics), but certainly there is some evidence from the credit card companies themselves that people spend more when using cards, which is one of the aspects they use to convince merchants to accept cards. I think the best evidence that people spend more is that more and more merchants accept cards. Accepting cards comes with some significant costs (though it's important to keep in mind that accepting cash can come with some significant costs as well). I suspect that merchants wouldn't do so unless the increased sales that they get for accepting cards makes up for the fees that they need to pay and the equipment they need to buy to accept them (not to mention the risks of chargebacks and the like). |
Can I get my property taxes lowered? | You most definitely can appeal the county's appraisal of your property. How to do so, and your odds of success will vary widely by your location, but I have successfully appealed the valuation on one of my rental properties. I asked my realtor to provide me with recent sales of comparable homes in the neighborhood & provided them along with my appeal as evidence of what I felt a reasonable valuation should be. One of three things will happen: 1) Your appeal will be accepted, 2) It will be denied, or 3) you will be asked to come in & plea your case in front of the county assessor. In my case, the county accepted my appeal without needing to testify. Look around your county assessor's website ... you will probably be able to find the form necessary for filing an appeal. If not, give them a call & they'll tell you the procedure. The county generally uses a simplistic statistical model to do their valuations. Little to no human time is spent reviewing your home's value, so it's quite possible for their valuation to be unreasonable. An appeal can take a bit of time & paperwork, but can definitely be worth the effort if the county's valuation is way off. Hope this helps! @mhoran_psprep Your point is well taken that in practice the relationship between sales prices & tax assessments is a bit more tenuous. The waters get muddy when property values have a large swing (like the past 5 years). When tax assessor's started seeing large drops in property values during the recession (and consequent drops in their budgets), I'm sure there was considerable pressure to prevent wholesale decreases in tax valuations. It's politically easier to "prop-up" falling valuations than to raise tax rates. However, the fact remains that the models that assessors use in determining property values are based on sales history - thus, I believe (and have found) that recent sales can be a persuasive piece of evidence in a property tax assessment appeal. |
how derivatives transfer risk from one entity to another | The important thing to realize is, what would you do, if you didn't have the call? If you didn't have call options, but you wanted to have a position in that particular stock, you would have to actually purchase it. But, having purchased the shares, you are at risk to lose up to the entire value of them-- if the company folded or something like that. A call option reduces the potential loss, since you are at worst only out the cost of the call, and you also lose a little on the upside, since you had to pay for the call, which will certainly have some premium over buying the underlying share directly. Risk can be defined as reducing the variability of outcomes, so since calls/shorts etc. reduce potential losses and also slightly reduce potential gains, they pretty much by definition reduce risk. It's also worth noting, that when you buy a call, the seller could also be seen as hedging the risk of price decreases while also guaranteeing that they have a buyer at a certain price. So, they may be more concerned about having cash flow at the right time, while at the same time reducing the cost of the share losing in value than they are losing the potential upside if you do exercise the option. Shorts work in the same way but opposite direction to calls, and forwards and futures contracts are more about cash flow management: making sure you have the right amount of money in the right currency at the right time regardless of changes in the costs of raw materials or currencies. While either party may lose on the transaction due to price fluctuations, both parties stand to gain by being able to know exactly what they will get, and exactly what they will have to pay for it, so that certainty is worth something, and certainly better for some firms than leaving positions exposed. Of course you can use them for speculative purposes, and a good number of firms/people do but that's not really why they were invented. |
What happens if one brings more than 10,000 USD with them into the US? | Bad plan. This seems like a recipe for having your money taken away from you by CBP. Let me explain the biases which make it so. US banking is reliable enough for the common citizen, that everyone simply uses banks. To elaborate, Americans who are unbanked either can't produce simple identity paperwork; or they got an account but then got blacklisted for overdrawing it. These are problems of the poor, not millionaires. Outside of determined "off the grid" folks with political reasons to not be in the banking and credit systsm, anyone with money uses the banking system. Who's not a criminal, anyway. We also have strong laws against money laundering: turning cash (of questionable origin) into "sanitized" cash on deposit in a bank. The most obvious trick is deposit $5000/day for 200 days. Nope, that's Structuring: yeah, we have a word for that. A guy with $1 million cash, it is presumed he has no choice: he can't convert it into a bank deposit, as in this problem - note where she says she can't launder it. If it's normal for people in your country to haul around cash, due to a defective banking system, you're not the only one with that problem, and nearby there'll be a country with a good banking system who understands your situation. Deposit it there. Then retain a US lawyer who specializes in this, and follow his advice about moving the money to the US via funds transfer. Even then, you may have some explaining to do; but far less than with cash. (And keep in mind for those politically motivated off-the-financial-grid types, they're a bit crazy but definitely not stupid, live a cash life everyday, and know the law better than anybody. They would definitely consider using banks and funds transfers for the border crossing proper, because of Customs. Then they'll turn it into cash domestically and close the accounts.) |
Index fund that tracks gold and other commodities | I don't know answers that would be specific to Canada but one of the main ETF funds that tracks gold prices is GLD (SPDR Gold Trust) another is IAU (iShares Gold Trust). Also, there are several ETF's that combine different precious metals together and can be traded. You can find a fairly decent list here on the Stock Encylopedia site. |
Is there any instance where less leverage will get you a better return on a rental property? | There are two obvious cases in which your return is lower with a heavily leveraged investment. If a $100,000 investment of your own cash yields $1000 that's a 1% return. If you put in $50,000 of your own money and borrow $50,000 at 2%, you get a 0% return (After factoring in the interest as above.) If you buy an investment for $100,000 and it loses $1000, that's a -1% return. If you borrow $100,000 and buy two investments, and they both lose $1000, that's a -2% return. |
Why would people sell a stock below the current price? | People in this case, are large institutional investors. The "bid ask" spread is for "small traders" like yourself. It is put out by the so-called specialists (or "market makers") and is typically good for hundreds or thousands of shares at a time. Normally, 2 points on a 50 stock is a wide spread, and the market maker will make quite a bit of money on it trading with people like yourself. It's different if a large institution, say Fidelity, wants to sell, say 1 million shares of the stock. Depending on market conditions, it may have trouble finding buyers willing to buy in those amounts anywhere near 50. To "move" such a large block of stock, they may have to put the equivalent of K-Mart's old "Blue Light Special" on, several points below. |
How many warrants do I need to exercise to get a stock? | No, you trade the warrant and the warrant price of $11.50 for one stock. The warrant is a little like an option, but with a longer term. If you buy a IPOA.WS warrant then that warrant gives you the option to buy one share of class A stock at $11.50 at a future date. If in the future, the stock is worth $20, then you make $20 - $11.50 - per share. If you buy one IPOA.U, then you get 1/3 of a warrant and 1 share of stock, the warrants will be useless unless you buy in groups of 3 for the IPOA.U. I didn't see the timeframe of the warrant, they're usually good for 10+ years, and they're currently trading in the $1.5-1.8 range. To confirm, here's a decent article about how warrants work: http://www.investopedia.com/articles/04/021704.asp |
Can landlord/property change unit after approval and payment of fees? | Without the specifics of the contract, as well as the specifics of the country/state/city you're moving to, it's hard to say what's legal. But this also isn't law.se, so I'll answer this from the point of view of personal finance, and what you can/should do as next steps. Whenever paying an application fee or a deposit, you need to ensure that you have in writing exactly what you're applying for or putting a deposit in for. Whether this is an apartment, a car, or a loan, before any money changes hands, you need to get in writing exactly what you're putting that money to. So for a car, you'd want to have the complete specifications - make, model, year, color, extra packages, and any relevant loan information if applicable. You wouldn't just hand a dealer $2000 for "a Toyota Camry", you'd make sure it was specified which one, in writing, as well as the total you're expecting to pay. Same for an apartment: you should have, in writing (email is fine) the specific unit you are putting a deposit for, and the specific rate you'll be paying, and the length of time the lease is for. This is to avoid a common tactic: bait and switch, which is what it looks like you've run into. A company puts forth a "nice" model, everything looks good, you get far enough in that it seems like you're locked in - and then it turns out you're really getting a less nice model that's not as ideal as whatever you signed up for. Now if you want to get what you originally signed up for you need to pay extra - presumably "something was wrong in the original ad", or something like that. And all you can hear in the background is Darth Vader... "I am altering the deal. Pray I don't alter it any further." So; what do you do when you've been bait-and-switched? The best thing to do is typically to walk away. Try to get your application fee back; you may or may not be able to, but it's worth a shot, and even if you cannot, walk away anyway. Someone who is going to bait-and-switch on you is probably not going to be a good landlord; my guess is that rent is going to keep going up beyond the level of the market, and you probably can kiss your security deposit goodbye. Second, if walking away isn't practical for whatever reason, you can find out what the local laws are. Some locations (though very few, sadly) require advertised prices to be accurate; particularly the fact that they re-advertised the unit again for the same rate suggests they are falling afoul of that. You can ask around, search the internet, or best yet talk to a lawyer who specializes in this sort of thing; some of them will be willing to at least answer a few questions for free (hoping to score your business for an easy, profitable lawsuit). Be aware that it's not exactly a good situation to be in, to be suing your landlord; second only to suing your employer, in my opinion, in terms of bad things to do while hoping to continue the relationship. Find an alternative as soon as you can if you go this route. In the future, pay a lot of attention to detail when making application fees. Often the application fee is needed before you get into too much detail - but pick a location that has reasonable application fees, and no extras. For example, in my area, it's typical to pay a $25 application fee, nonrefundable, to do the credit check and background check, and a refundable $100-$200 deposit to hold the unit while doing that; a place that asks for a non-refundable deposit is somewhere I'd simply not apply at all. |
I'm 23 and was given $50k. What should I do? | I'll add 2 observations regarding current answers. Jack nailed it - a 401(k) match beats all. But choose the right flavor account. You are currently in the 15% bracket (i.e. your marginal tax rate, the rate paid on the last taxed $100, and next taxed $100.) You should focus on Roth. Roth 401(k) (and if any company match, that goes into a traditional pretax 401(k). But if they permit conversions to the Roth side, do it) You have a long time before retirement to earn your way into the next tax bracket, 25%. As your income rises, use the deductible IRA/ 401(k) to take out money pretax that would otherwise be taxed at 25%. One day, you'll be so far into the 25% bracket, you'll benefit by 100% traditional. But why waste the opportunity to deposit to Roth money that's taxed at just 15%? To clarify the above, this is the single rate table for 2015: For this discussion, I am talking taxable income, the line on the tax return designating this number. If that line is $37,450 or less, you are in the 15% bracket and I recommend Roth. Say it's $40,000. In hindsight on should put $2,550 in a pretax account (Traditional 401(k) or IRA) to bring it down to the $37,450. In other words, try to keep the 15% bracket full, but not push into 25%. Last, after enough raises, say you at $60,000 taxable. That, to me is "far into the 25% bracket." $20,000 or 1/3 of income into the 401(k) and IRA and you're still in the 25% bracket. One can plan to a point, and then use the IRA flavors to get it dead on in April of the following year. To Ben's point regarding paying off the Student Loan faster - A $33K income for a single person, about to have the new expense of rent, is not a huge income. I'll concede that there's a sleep factor, the long tern benefit of being debt free, and won't argue the long term market return vs the rate on the loan. But here we have the probability that OP is not investing at all. It may take $2000/yr to his 401(k) capture the match (my 401 had a dollar for dollar match up to first 6% of income). This $45K, after killing the card, may be his only source for the extra money to replace what he deposits to his 401(k). And also serve as his emergency fund along the way. |
How risky are penny stocks? | Penny stocks are only appealing to two types of investors: Most of the beginners who invest in penny stocks only do so because they don't have a lot of money to invest in the marketplace while starting out, or they would otherwise like to avoid investing their savings into penny stocks. * If you are a beginning investor - do NOT invest in Penny Stocks * |
How does remittance work? How does it differ from direct money transfer? | The Option 2 in your answer is how most of the money is moved cross border. It is called International Transfer, most of it carried out using the SWIFT network. This is expensive, at a minimum it costs in the range of USD 30 to USD 50. This becomes a expensive mechanism to transfer small sums of money that individuals are typically looking at. Over a period of years, the low value payments by individuals between certain pair of countries is quite high, example US-India, US-China, Middle-East-India, US-Mexico etc ... With the intention to reduce cost, Banks have built a different work-flow, this is the Option 1. This essentially works on getting money from multiple individuals in EUR. The aggregated sum is converted into INR, then transferred to partner Bank in India via Single SWIFT. Alongside the partner bank is also sent a file of instructions having the credit account. The Partner Bank in India will use the local clearing network [these days NEFT] to credit the funds to the Indian account. Option 3: Other methods include you writing a check in EUR and sending it over to a friend/relative in India to deposit this into Indian Account. Typically very nominal costs. Typically one month of timelines. Option 4: Another method would be to visit an Indian Bank and ask them to issue a "Rupee Draft/Bankers Check" payable in India. The charges for this would be higher than Option 3, less than Option 1. Mail this to friend/relative in India to deposit this into Indian Account. Typically couple of days timelines for transfer to happen. |
What to do with a distribution as a young person? | I have money to invest. Where should I put it? Anyone who answers with "Give it to me, I'll invest it for you, don't worry." needs to be avoided. If your financial advisor gives you this line or equivalent, fire him/her and find another. Before you think about where you should put your money, learn about investing. Take courses, read books, consume blogs and videos on investing in stocks, businesses, real estate, and precious metals. Learn what the risks and rewards are for each, and make an informed decision based on what you learned. Find differing opinions on each type of investment and come to your own conclusions for each. I for example, do not understand stocks, and so do not seriously work the stock market. Mutual funds make money for the folks selling them whether or not the price goes up or down. You assume all the risk while the mutual fund advisor gets the reward. If you find a mutual fund advisor who cannot recommend the purchase of a product he doesn't sell, he's not an advisor, he's a salesman. Investing in business requires you either to intimately understand businesses and how to fund them, or to hire someone who can make an objective evaluation for you. Again this requires training. I have no such training, and avoid investing in businesses. Investing in real estate also requires you to know what to look for in a property that produces cash flow or capital gains. I took a course, read some books, gained experience and have a knowledgeable team at my disposal so my wins are greater than my losses. Do not be fooled by people telling you that higher risk means higher reward. Risks that you understand and have a detailed plan to mitigate are not risks. It is possible to have higher reward without increasing risk. Again, do your own research. The richest people in the world do not own mutual funds or IRAs or RRSPs or TFSAs, they do their own research and invest in the things I mentioned above. |
Someone asks you to co-sign a loan. How to reject & say โnoโ nicely or politely? | 'If i co-sign that makes me 100% liable if for any reason you can't or won't pay. Also this shows up on a credit report just like it's my debt. This limits the amount i can borrow for any reason. I don't want to take on your debt, that's your business and i don't want to make it mine'. |
How will a limit order be executed when the stock market opens if there is a large change from the price of the day before? | The next day the market opens trading at 10.50, You haven't specified whether you limit order for $10.10 is to buy or sell. When the trading opens next day, it follows the same process of matching the orders. So if you have put a limit order to buy at $10.10 and there is no sell order at that price, your trade will not go through. If you have placed a limit sell order at $10.10 and there is a buyer at or higher price, it would go through. The Open price is the price of the first trade of the day. |
Renting or Buying an House | You may be in a situation where buying is preferred, especially because you can enter the market in a strong position - with a 20% down payment. If you have the financial ability to assume the risk of owning, you may be better off. I would consider two things. Renting is purchasing a service. You are buying the flexibility to move with minimum hassle and the landlord is assuming the risk of owning the asset (property). They will make money on you, like any service provider. Buying is purchasing an asset. You are buying the underlying asset and assume all the risks associated with it. This is large, unforeseen maintenance, fees, taxes, depreciation, etc... Some of these risks were passed to you as a renter, but some were not. Just like purchasing $400k in stock, if you have to sell when the market is down, you lose big. You win if you can hold. Unlike a stock, real estate will eat your cash in taxes and repairs unless it is rented. If you are willing to be a long-distance landlord, this may work out. Understand that property management fees will eat into your rent income and being long-distance will give more potential for a bad tenant to ruin your property value. These and other factors (e.g. vacancy rate) will increase your risk of loss and should be considered. Some of this will be your preference, since you will spend much more time dealing with buying/selling/property management as opposed to a more clean rental situation. Is this hassle worth the savings? For many, yes; others, no. Finally, I hope this calculator can help clarify some of the financial aspects for you. http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0 Good Luck! |
Beginning investment | I am a huge fan of jim Cramer and while you may not get CNBC in Australia you can prolly catch jim cramers podcasts If you have an iPod or iPhone which really will help your financial literacy a bit. Here's my advice . Set up a IRA or tax advantaged accounts if they exist in Australia (sorry I only know usa markets really well). Then you can pick investments to go in there or in a different investment account. I am a huge fan of index funds in particular Etf index funds because they are still very liquid. I prefer the free or no commission funds by Charles scwabb but vanguard is also very good or maybe even better. A few great funds are the vanguard total stock market fund (it invests in every company in the world) and any fund that mirrors the s&p 500 or the Russell 2000 midcap. Another good idea just to make room to save money is make a budget with your wife. I like the other post about planning in reverse . Setting up a budget to see your expenses and then make automatic pay dedications that go into savings or different accounts for savings. |
I spend too much money. How can I get on the path to a frugal lifestyle? | Use software that calculates your net worth and track it over time. I track my personal finances in Mint, and I love checking my net worth every week. It's turned into a kind of competition with myself... It's like keeping track of how fast you run a 5k, or how many pounds of weight you've lost. It helps you determine if you are making progress, and if you, it's positive reinforcement that you are doing the right things. |
Why is there so much variability on interest rate accounts | I spent some time comparing banks' interest rates until I realized that it didn't actually matter (to me). The only money I keep in checking and savings accounts is money that I'm going to spend shortly or is part of an emergency fund, and in both those cases convenience of liquidity is far more important than small differences in interest (I want to be able to go to a nearby branch, even if traveling, and pull out large sums of money). The majority of our money goes into investment accounts, where it's earning much more than even the best savings account. Most of your 100k would be much better served in a stock/bonds mix. Are standard taxable investment accounts one of those things you can't open? What about if you opened one in your home country? |
Is real (physical) money traded during online trading? | With Forex trading - physical currency is not involved. You're playing with the live exchange rates, and it is not designed for purchasing/selling physical currency. Most Forex trading is based on leveraging, thus you're not only buying money that you're not going to physically receive - you're also paying with money that you do not physically have. The "investment" is in fact a speculation, and is akin to gambling, which, if I remember correctly, is strictly forbidden under the Islam rules. That said, the positions you have - are yours, and technically you can demand the physical currency to be delivered to you. No broker will allow online trading on these conditions, though, similarly to the stocks - almost no broker allows using physical certificates for stocks trading anymore. |
How long can I convert 401(k) to Roth 401(k)? | the deadline for roth conversions is december 31st. more precisely, roth conversions are considered to have happened in the tax year the distribution was taken. this creates a kind of loop hole for people who do an ira rollover (not a trustee-to-trustee transfer). technically, you can take money out of your traditional ira on december 31st and hold it for 60 days before deciding to roll it over into either another traditional ira or a roth ira. if you decide to put it in another traditional account, it is not a taxable event. but if you decide to put it in a roth account, the "conversion" is considered to have happened in december. unfortunately non-trustee rollovers are tricky. for one, the source trustee will probably take withholding that you will have to make up with non-ira funds. and rollovers are limitted to a certain number per year. also, if you miss the 60-day deadline, you will have to pay an early-withdrawal penalty (with some exceptions). if you really want to push the envelope, you could try to do this with a 60-day-rule extension, but i wouldn't try it. source: https://www.irs.gov/publications/p590a/ch01.html oddly, recharacterizations (basically reverse roth conversions) have a deadline of october 15th of the year after the original roth conversion it is reversing. so, you could do the conversion in december, then you have up to 10 months to change your mind and "undo" the conversion with a "recharacterization". again, this is tricky business. at the very least, you should be aware that the tax calculations for recharacterization are different if you convert the funds into a new empty roth account vs an existing roth account with a previous balance. honestly, if you want to get into the recharacterization business, you can probably save more on taxes by converting in january before 20-month stock market climb rather than simply converting in the year your tax brackets are low. that is the typical recharacterization strategy. source: https://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-IRAs-Recharacterization-of-Roth-Rollovers-and-Conversions |
Selling stocks as LIFO or FIFO | According to the IRS, you must have written confirmation from your broker "or other agent" whenever you sell shares using a method other than FIFO: Specific share identification. If you adequately identify the shares you sold, you can use the adjusted basis of those particular shares to figure your gain or loss. You will adequately identify your mutual fund shares, even if you bought the shares in different lots at various prices and times, if you: Specify to your broker or other agent the particular shares to be sold or transferred at the time of the sale or transfer, and Receive confirmation in writing from your broker or other agent within a reasonable time of your specification of the particular shares sold or transferred. If you don't have a stockbroker, I'm not sure how you even got the shares. If you have an actual stock certificate, then you are selling very specific shares and the purchase date corresponds to the purchase date of those shares represented on the certificate. |
Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building? | Assumption - you live in a country like Australia, which has "recourse" mortgages. If you buy the apartment and take out a mortgage, the bank doesn't care too much if your apartment gets built or not. If the construction fails, you still owe the bank the money. |
Why do people take out life insurance on their children? Should I take out a policy on my child? | Sales tactics for permanent insurance policies can get pretty sleazy. Sending home a flier from school is a way for an insurance salesperson to get his/her message out to 800 families without any effort at all, and very little advertising cost (just a ream of paper and some toner). The biggest catchphrases used are the "just pennies per day" and "in case they get (some devastating medical condition) and become uninsurable." Sure, both are technically true, but are definitely used to trigger the grown ups' insecurities. Having said that (and having been in the financial business for a time, which included selling insurance policies), there is a place for insurance of children. A small amount can be used to offset the loss of income for the parents who may have to take extended time away from work to deal with the event of the loss of their child, and to deal with the costs of funeral and burial. Let's face it, the percentage of families who have a sufficiently large emergency fund is extremely small compared to the overall population. Personally, I have added a child rider to my own (term) insurance policies that covers any/all of my children. It does add some cost to my premiums, but it's a small cost on top of something that is already justifiably in place for myself. One other thing to be aware of: if you're in a group policy (any life insurance where you're automatically accepted without any underwriting process, like through a benefit at work, or some other club or association), the healthy members are subsidizing the unhealthy ones. If you're on the healthy side, you might consider foregoing that policy in favor of getting your own policy through an insurance company of your choice. If you're healthy, it will always be cheaper than the group coverage. |
How do I estimate my taxes when I have only 1099 income? | As long as you paid 100% of your last year's tax liability (overall tax liability, the total tax to pay on your 1040) or 90% of the total tax liability this year, or your underpayment is no more than $1000, you won't be penalized as long as you pay the difference by April 15th. That's per the IRS. I don't know where the "10% of my income" came from, I'm not aware of any such rule. |
What US tax laws apply to a 13 year old game developer? | 13 or 30, the only real difference is that as a minor, you are claimed as a dependent on your parent's return, so you don't have you own exemption. But you do have a standard deduction of $6300 when it comes to earned income. Yes, you'll pay taxes, federal, state, and tax for social security. There's nothing wrong with paying taxes. In fact, I hope you have to pay a small fortune in tax! That would mean you've made a large fortune, and after taxes, still got to keep a good chunk of it. If your income is minimal, you'll actually pay very little in taxes, not enough to even think about wanting to give away what you can sell. |
How much of each stock do index funds hold? | Note that an index fund may not be able to precisely mirror the index it's tracking. If enough many people invest enough money into funds based on that index, there may not always be sufficient shares available of every stock included in the index for the fund to both accept additional investment and track the index precisely. This is one of the places where the details of one index fund may differ from another even when they're following the same index. IDEALLY they ought to deliver the same returns, but in practical terms they're going to diverge a bit. (Personally, as long as I'm getting "market rate of return" or better on average across all my funds, at a risk I'm comfortable with, I honestly don't care enough to try to optimize it further. Pick a distribution based on some stochastic modelling tools, rebalance periodically to maintain that distribution, and otherwise ignore it. That's very much to the taste of someone like me who wants the savings to work for him rather than vice versa.) |
What happens if someone destroy money? | Depending on the country, nothing. For example, the US has about $1.3 trillion dollars of cash in circulation. Which means that if you were to burn a million dollars of it, that would be 0.000077% of the circulating cash. But cash is a small portion of the actual money in the US. Only about 8% of all money is in cash, the rest is in other forms of value, which means that you'd only be destroying 0.0000062% of the US's money if you burned a full $1,000,000. |
Should I include my hard assets as part of my net worth? | Net worth is interesting as it can have a different number assigned depending on your intent. The number I focus on is my total retirement account and any brokerage account. I purposely exclude the value of my house.* This tells me how much I'm able to invest. My heir would look at it a bit differently. She'd have the cash not only from the house, but from every bit of our possessions that can be sold. For my own purposes, knowing I have a piece of art that might sell for $xxx doesn't mean much, except for insurance purposes. In your case, if the coins are gold, and held for investment, count them. If they were your grandfather's and you plan to leave them to your own grandkids, I'd leave them out. * I make this point for two reasons - as someone with an eye toward retirement, the house doesn't get included in the 4% return math that I apply to the retirement and stock accounts. Also, in our situation, even when we downsize at retirement, the move isn't likely to pull much cash out of the house, it will be a lateral move. For those who plan to move from a McMansion in the suburbs of NY or Boston to a modest home in a lower cost of living elsewhere, that difference may be very important, and should be taken into account. This is simply how we handle this. |
Cheapest way to โwireโ money in an Australian bank account to a person in England, while I'm in Laos? | You could use paypal to transfer money. You can pay with paypal and your UK contact could transfer the money to his bank account through paypal. I just received money this way from the US and paid 9 EUR for this. Receiving the funds is as quickly as clicking a button on the paypal site. Transfering it (without costs) took 1-3 days). It is by far the easiest way. If you are uncomfortable using paypal, the other option would be through your own bank account, where you would transfer using IBAN/SWIFT. The SWIFT bank account is usually the IBAN code plus a branch code. Often it is difficult to find the branch code, in that case you can use the IBAN+XXX. In the latter things might be delayed, but I actually haven't noticed the delay yet, since international transfer always seem to take between 1 and 10 days. The international transfering of money costs, except if it is within the EU region. The way to transfer money through Internet banking differs, from bank to bank. They keywords you need to look for are: SEPA, SWIFT, IBAN or international transfer. |
I received $1000 and was asked to send it back. How was this scam meant to work? | The initial story sounds normal. Happens every day. Checksums cannot prevent this, since it is a typo by the sender. The sender typed in a wrong account number. That account number happened to exist (so the sender wouldn't get any immediate error message), your account. But, that innocent story can also be used as part of a money laundering plan. Namely, to give the money a legitimate source. Also can be used in a scheme to frame you for something. The question of how the person got your phone number raises suspicion. The bluffs to avoid the normal paperwork, and then disappearing, make it incriminating. No doubt. Take this to the police. The question arises: even if the plan (whatever it was) failed, why didn't he do the paperwork and get the money back? The answer is that that would leave a trail to possibly be picked up in a future investigation. |
Income Tax and Investments | The $50k is subject to the appropriate income taxes, which may include FICA taxes including the employer share if you are self employed. The after tax money can then be invested with the amount invested being the cost basis (I.e., if you invest $40k you will have a cost basis of $40k). In future years you will have taxes due if any of those investments pay dividends (or capital gain distributions). Once you sell you will have a capital gain or loss that you will pay taxes on (or take a deduction if a loss). Now you can improve this picture if you are able to put some of your money into a retirement account (either a tax deductible or a ROTH). With retirement accounts you do not pay tax on the capital gains or dividends. If you use a tax deferred account your tax is higher but that is because you were also investing Uncle Sam's portion of your pay check. |
How can the Samsung Upgrade Programme offer 0% APR? | The financing is built into the price. I do not have hard facts, but I strongly suspect that very few people buy brand-new smartphones at full price upfront. Most pay a monthly installment to the carrier or retailer equal to 1/24 of the full price, which in effect is "0% financing for 2 years". Samsung might be able to advertise a lower retail price and then offer financing at some rate of interest, but from a marketing standpoint, offering "0%" financing makes it feel like you're getting "free money", when in fact it's built into the overall price. Which sounds better, buying an $840 phone with 0% financing for two years or buying an $800 phone at 4.85% APR for two years (both have a $35 monthly payment)? |
Why can we cancel cheques, but not Western Union transfers? | You are presuming that after the transfer, the cash is still "sitting in a Western Union register" but no, that cash may have already been taken by the fraudster. To refund the victim, Western Union would have to (1) pay the victim back the amount of money lost, and then (2) pursue the fraudster to reclaim the lost funds. Because the fraudster at the other end can simply show ID to get the money [ie: they do not have an account with Western Union], the cost to pursue that person to reclaim the lost funds would be substantially higher than for your bank, because your bank can simply ding your account. In the event that your account goes into overdraft [because there were insufficient funds to reclaim the full amount], the bank at least has a framework in place to pursue you for penalties. |
How to incentivize a real-estate broker to find me a cheap house | Having just gone through this process as a buyer via broker in Israel, here are my thoughts: Tl;dr: An incentive such as you are suggesting would not be particularly helpful. In this case, your best option is to spend your efforts shopping for a broker that you can trust. The rest: Your main concern is that the broker will find you a place at the top of your budget and will not negotiate aggressively. The main person responsible for negotiation is YOU. You are paying for the property, and you are putting in bids: not your agent. The agent should advise you, but in the end should pass along your bids directly. The real problem is that you, as the buyer, generally do not have as close a feel for the pulse of the market as the broker, who should be quite aware of recent closings in the neighborhood. Therefore, there are a few things that you can do to help arm yourself: At the end of the day, if you have decided to use a broker, you are making a large financial commitment to hire someone to find you the best place, and therefore it may be more important at this point to spend your efforts shopping around for the best broker, rather than trying to figure out how to outsmart her. You are correct: buyers' agents DO have incentives to sell you on places that may not be right or good for you. For example: Although your scheme may help a bit with the first concern, it will not help at all with the other two, which I assume to be much more likely problems in any event. Instead, find recommendations for brokers from others. Have the broker show you a few properties and put in some low bids to get a feel for how she handles them. Discuss the properties together and try to assess if they really have your interests in mind. You are paying a lot for their service, and you should make sure, as much as possible, that they really are working honestly and in your best interest. A good broker who knows his market and is trying to help you can be a great asset in the opaque, cutthroat real estate market. ืืื ืืืืื, ืืื ืืื. ืกืืฃ ืืืจ ืืื ื ืฉืืข, ืืช ืืืืืืื ืืืจื ืืืช ืืฆืืืชืื ืฉืืืจ ืื ืื ืื ืืืื. Good luck! |
How does Robinhood stock broker make money? | Yes, there is a lot they are leaving out, and I would be extremely skeptical of them because of the "reasons" they give for being able to charge $0 commissions. Their reasons are that they don't have physical locations and high overhead costs, the reality is that they are burning venture capital on exchange fees until they actually start charging everyone they suckered into opening accounts. They also get paid by exchanges when users provide liquidity. These are called trade rebates in the maker-taker model. They will start offering margin accounts and charging interest. They are [likely] selling trade data to high frequency trading firms that then fill your stock trades at worse prices (Robinhood users are notorious for complaining about the fills). They may well be able to keep commissions low, as that has been a race to the bottom for a long time. But if they were doing their users any actual favors, then they would be also paying users the rebates that exchanges pay them for liquidity. Robinhood isn't doing anything unique as all brokers do what I mentioned along with charging commissions, and it is actually amazing their sales pitch "$0 commissions because we are just a mobile app lol" was enough for their customers. They are just being disingenuous. |
Why is a stock dividend considered a dividend? What makes it different from a stock split? | You can argue that cash dividend is a kind of split as well by this logic. The stock price on ex-dividend gets a hit coincidental with the dividend to be paid, so one can argue that the investor has the same cash value on the day the dividend was paid as if it wouldn't be paid at all. However, for the company to distribute stocks instead of cash may be advantageous if they have low cash reserves but significant amount of treasury stocks, and the stocks are of high liquidity. It is also a way for the company to release treasury stocks without diluting the current shareholders and creating taxable income to the company, that's an important factor to consider. This is in fact the real answer to your question. The main difference between split and stock dividend is that in split, the stock distributions proportions don't change. With stock dividend - they do. While the outstanding share proportions do not change, total proportions do, because of the treasury stocks being distributed. So company has less stocks in its vaults, but everyone else still has the same proportions of ownership. Compare this to split: company's treasury stocks would be split as well, and it would continue essentially sitting on the same proportion of stocks. That shift of treasury stocks to the outside shareholders - this is what makes it a dividend. |
Do I even need credit cards? | A credit card can be a long running line of credit that will help to boost your FICO score. However if you have student loans, a mortgage, or car payments those will work just as well. If you ever get to the point where you don't have any recent lines of credit, this may eventually end up hurting your score, but until then you really don't need any extras. |
If I make over 120k a year, what are my options for retirement plans? | First off, high five on the paycheck. There are a few retirement issues to deal with. 401k issues - At that income level, you will probably fall into the "Highly Compensated Employee" category, which means things get a little more complicated, both for you and your employer. (Wikipedia link) IRA issues - As you already realized, you make too much to directly open and contribute to a Roth IRA. You can open a Traditional IRA, however. Your income is already over the limit for Traditional IRA deduction (bummer), so it would seem there is little point to opening an IRA at all. However, there is a way to take advantage of a Roth IRA, even at your income level. It is possible to convert a Traditional IRA into a Roth IRA. There used to be income limits on the ability to do the conversion, which would have normally made this off limits to you. Starting in 2010, the income limit is removed, so you can do this. Basically, you open a Traditional IRA, max it out, then convert it to a Roth. Since there was no income deduction, you shouldn't have to pay any more taxes. (link) Disclaimer: I've never tried this, nor do I know anyone who has, so you might want to research it a bit more before you try it yourself. |
What is a โJunk Bondโ? | A "junk bond" is one that pays a high yield UP FRONT because there is a good chance that it could default. So the higher interest rate is necessary to try to compensate for the default Junk bonds are used in leveraged buyouts (LBOs) because such deals are INHERENTLY risky. "Normal" companies may have 20%-30% debt and the rest equity, so that the company will have to lose 70%-80% of its value before the debtholders start losing money on "normal" bonds. But in an LBO, the company may have only 10%-20% equity and the rest debt. Meaning that if it loses that small equity cushion, the value of the "junk" bonds will be impaired. |
In general, is it financially better to buy or to rent a house? | I just read through all of the answers to this question and there is an important point that no one has mentioned yet: Oftentimes, buying a house is actually cheaper than renting the identical house. I'm looking around my area (suburbs of Chicago, IL) in 2017 and seeing some houses that are both for sale and for rent, which makes for an easy comparison. If I buy the house with $0 down (you can't actually put $0 down but it makes the numerical comparison more accurate if you do), my monthly payment including mortgage (P+I), taxes, insurance, and HOA, is still $400 less than the monthly rent payment. (If I put 20% down it's an even bigger savings.) So, in addition to the the tax advantages of owning a home, the locked in price that helps you in an economy that experiences inflation, and the accumulated equity, you may even have extra cash flow too. If you were on the fence when you would have had to pay more per month in order to purchase, it should be a no-brainer to buy if your monthly cost is lower. From the original question: Get a loan and buy a house, or I can live for the rest of my life in rent and save the extra money (investing and stuff). Well, you may be able to buy a house and save even more money than if you rent. Of course, this is highly dependent on your location. |
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