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How do I find quality Wind power / renewable energy mutual funds? | Usually it makes sense to invest in individual companies when you're investing in a "hot" sector. Secular funds have their own risks that can be difficult to measure. First Solar is one of the premier PV players. The fund gives you a false sense of diversification. If you bought a mutual fund in 2000 in the computer space, you'd have pieces of HP, Dell, Apple, IBM, EMC, Cisco, Intel etc. Did the sector perform the same as the companies in it? Nooo. As for renewable energy, IMO that ship has sailed for the "pure play" renewable stocks. I'd look at undervalued companies with exposure to renewables that haven't been hyped up. (or included in a sector mutual fund) Examples for this area? The problem with this sector is that the industry is dependent on government subsidies, and the state of government budgets make that a risky play. Proceed with caution! |
First time home buyer: Can you withdraw funds from a Roth 401k for a first time home purchase? | The rules are quite different. There is no special home purchase penalty-free withdrawal. In the case that your account has been open for five years, you can withdraw the principal (but not the earnings) without penalty. You may want to talk to a professional for further details. The real question is: why do you want to borrow against your future to finance your present? Your down payment funds should come from another source than your retirement. Retirement funds should only be touched in the direst financial straights. |
Can an Indian citizen/resident invest in a US company and collect the profits in India? | Every month I will get a return in from my share of the profit which would be used for repayment of capital and interest in India. Not to sure what the business plan is. Please factor all the modalities, Exchange rate fluctuations, etc. My concern is regarding RBI rules and regulations, FEMA guidelines, and Income tax. Under the Liberalized Remittance Scheme; Funds can be transferred outside India. Any profit you make will be taxable in India. You will have to declare this pay tax in as per schedule. |
Why does it look like my 401k loan default was not paid by my 401k account balance? | There are multiple reasons why this may have happened: 1.) I couldn't tell in your question whether or not you had already paid off the loan before requesting the rollover. But if the loan was defaulted - then the $9k left in your account is not distributable, but is there to pay back the remaining balance on your loan. The $9k will be treated as income, and will be taxed - you will receive a 1099-R detailing the taxes you'll owe. I don't know why this wasn't done when they did your rollover distribution. Typically it all happens at the same time - but it can vary depending on the administrator. 2.) Do you get some type of safe harbor discretionary match, or profit sharing contribution? If so - perhaps this contribution was made after your account was liquidated. So now there is residual money in your account and it is treated as a new distribution, which incurs a new $60 distribution fee. 3.) Stock - if some of your investments were in stock - these take a few extra days to liquidate. Typically a TPA/Recordkeeper would wait until ALL of the funds are liquidated before issuing the rollover. But some companies may be shady and do it separately - incurring an additional $60 distribution fee. If this was the case - I would go to your former employer's HR and tell them whats happening and to start looking for a new 401(k) administrator! I hope this helps :-) Good luck! |
What are the risks with ETFs with relatively low market caps? | Market cap probably isn't as big of an issue as the bid/ask spread and the liquidity, although they tend to be related. The spread is likely to be wider on lesser traded ETF funds we are talking about pennies, likely not an issue unless you are trading in and out frequently. The expense ratios will also tend to be slightly higher again not a huge issue but it might be a consideration. You are unlikely to make up the cost of paying the commission to buy into a larger ETF any time soon though. |
For net worth, should I value physical property at my cost to replace it, or the amount I could get for selling it? | You are not asking for insurance purposes. So I'll go with this - I have two asset numbers I track. All investments, retirement accounts, etc, the kind that are valued at day's end by the market, etc. From that number I subtract the mortgage. This produces the number that I can say is my net worth with a paid in full house. The second number simply adds back the house's value, give or take. Unless I owned art that was valued in the six figures, it seems pointless to me to add it up, except for insurance. If my wife and I died tomorrow, the kid can certainly auction our stuff off, but knowing that number holds no interest for us. When most people talk 'net worth', I don't see them adding these things up. Cars, maybe, but not even that. |
A good investment vehicle for saving for a mortgage down payment? | When you are saving for money you need in 5 years or less the only real option is a savings account. I know the return is nothing at this point, but if you cannot take the risk of losing all of your money that's the only thing I would recommend. Now you could try a good growth stock mutual fund if, when you look up in 2 - 3 years and you have lost money you wait it out until it grows enough to get what you lost back then buy your house. I would not do the second option because I wouldn't want to be stuck renting while waiting for the account to recover, and actually thinking about it that way you have more risk. 3 years from now if you have lost money and don't yet have enough saved you will have to continue paying rent, and no mutual fund will out preform that. |
Why must identification be provided when purchasing a money order? | The Bank Secrecy Act of 1970 requires that banks assist the U.S. Gov't in identifying and preventing money laundering. This means they're required to keep records of cash transactions of Negotiable Instruments, and report any such transactions with a daily aggregate limit of a value greater than (or equal to?) $10,000. Because of this, the business which is issuing the money order is also required to record this transaction to report it to the bank, who then holds the records in case FinCEN wants to review the transactions. EDITED: Added clarification on the $10,000 rule |
How best to grow my small amount of money starting at a young age? [duplicate] | I would like to add my accolades in saving $3000, it is an accomplishment that the majority of US households are unable to achieve. source While it is something, in some ways it is hardly anything. Working part time at a entry level job will earn you almost three times this amount per year, and with the same job you can earn about as much in two weeks as this investment is likely to earn, in the market in one year. All this leads to one thing: At your age you should be looking to increase your income. No matter if it is college or a high paying trade, whatever you can do to increase your life time earning potential would be the best investment for this money. I would advocate a more patient approach. Stick the money in the bank until you complete your education enough for an "adult job". Use it, if needed, for training to get that adult job. Get a car, a place of your own, and a sufficient enough wardrobe. Save an emergency fund. Then invest with impunity. Imagine two versions of yourself. One with basic education, a average to below average salary, that uses this money to invest in the stock market. Eventually that money will be needed and it will probably be pulled out of the market at an in opportune time. It might worth less than the original 3K! Now imagine a second version of yourself that has an above average salary due to some good education or training. Perhaps that 3K was used to help provide that education. However, this second version will probably earn 25,000 to 75,000 per year then the first version. Which one do you want to be? Which one do you think will be wealthier? Better educated people not only earn more, they are out of work less. You may want to look at this chart. |
Clear example of credit card balance 55 days interest-free “trick”? | There are always little tricks you can play with your credit card. For example, the due date of your statement balance is not really set in stone as your bank would like you to believe. Banks have a TOS where they can make you liable to pay interest from the statement generation date (which is a good 25 days before your due date) on your balance, if you don't pay off your balance by your due date. However, you can choose to not pay your balance by your due date upto 30 days and they will not report your late payment to credit agencies. If they ask you to pay interest, you can negotiate yourself out of it as well (although not sure if it will work every-time if you make it a habit!) Be careful though: not all banks report your credit utilization based on your statement balance! DCU for example, reports your credit utilization based on your end-of-the-month balance. This can affect your short term credit score (history?) and mess around with your chances of pulling off these tricks with the bank CSRs. These "little tricks" can effectively net you more than 60 days of interest free loans, but I am not sure if anyone will condone this as a habit, especially on this website :-) |
What price can *I* buy IPO shares for? | If you participate in an IPO, you specify how many shares you're willing to buy and the maximum price you're willing to pay. All the investors who are actually sold the shares get them at the same price, and the entity managing the IPO will generally try to sell the shares for the highest price they can get. Whether or not you actually get the shares is a function of how many your broker gets and how your broker distributes them - which can be completely arbitrary if your broker feels like it. The price that the market is willing to pay afterward is usually a little higher. To a certain extent, this is by design: a good deal for the shares is an incentive for the big (million/billion-dollar) financiers who will take on a good bit of risk buying very large positions in the company (which they can't flip at the higher price, because they'd flood the market with their shares and send the price down). If the stock soars 100% and sticks around that level, though, the underwriting bank isn't doing its job very well: Investors were willing to give the company a lot more money. It's not "stealing", but it's definitely giving the original owners of the company a raw deal. (Just to be clear: it's the existing company's owners who suffer, not any third party.) Of course, LinkedIn was estimated to IPO at $30 before they hiked it to $45, and plenty of people were skeptical about it pricing so high even then, so it's not like they didn't try. And there's a variety of analysis out there about why it soared so much on the first day - fewer shares offered, wild speculative bubbles, no one could get a hold of it to short-sell, et cetera. They probably could have IPO'd for more, but it's unlikely there was, say, $120/share financing available: just because one sucker will pay the price doesn't mean you can move all 7.84 million IPO shares for it. |
Student loan payments and opportunity costs | I bought a house when I was 22, I also had $10k in student load debt. After the down payment, I had $1,500 to my name and $82k worth of debt. All the advice pointed to "pay the minimum payment and invest the rest." I discarded the advice and scrimped and put everything extra to those bills. I paid it all off by the time I was 31, and now at 34 I'm self employed, have about $110,000 saved up, a house worth $105,000, 2 cars worth a total of $8,000 and no debt. Keep in mind most of those years I was making $24-$30k a year I might have lost out on a couple years of investments, but right now there are no money worries... wouldn't you rather be like that instead of worrying if you might lose your job? |
What typically happens to unvested stock during an acquisition? | This is a great question. I've participated in a deal like that as an employee, and I also know of friends and family who have been involved during a buyout. In short: The updated part of your question is correct: There is no single typical treatment. What happens to unvested restricted stock units (RSUs), unvested employee stock options, etc. varies from case to case. Furthermore, what exactly will happen in your case ought to have been described in the grant documentation which you (hopefully) received when you were issued restricted stock in the first place. Anyway, here are the two cases I've seen happen before: Immediate vesting of all units. Immediate vesting is often the case with RSUs or options that are granted to executives or key employees. The grant documentation usually details the cases that will have immediate vesting. One of the cases is usually a Change in/of Control (CIC or COC) provision, triggered in a buyout. Other immediate vesting cases may be when the key employee is terminated without cause, or dies. The terms vary, and are often negotiated by shrewd key employees. Conversion of the units to a new schedule. If anything is more "typical" of regular employee-level grants, I think this one would be. Generally, such RSU or option grants will be converted, at the deal price, to a new schedule with identical dates and vesting percentages, but a new number of units and dollar amount or strike price, usually so the end result would have been the same as before the deal. I'm also curious if anybody else has been through a buyout, or knows anybody who has been through a buyout, and how they were treated. |
What is the correct pronunciation of CAGR? | Most readers probably know that an acronym is an invented word made up of the initial letters or syllables of other words, like NASA or NATO. Fewer probably know that an initialism is a type of acronym that cannot be pronounced as a word, but must be read letter-by-letter, like FBI or UCLA. A quote from Daily Writing Tips. CAGR is an initialism, and should not be pronounced. |
Who can truly afford luxury cars? | Keep in mind your household income is in the top 20%, which does not translate to wealth. Given a healthy income, and no debt, other then a small house payment, you probably have a decent amount of free cash flow. This could easily be used to buy a car on time… which a lot of people do. Congratulations on being different. Having said that, living as you do, you will likely be wealthier than your income suggests. If you invested the amount you saved on car payments for an average car you can become a muli-millionaire. Doing that alone can put you in the top 10% of the wealthiest in this nation. Keep in mind 76% of Americans live paycheck-to-paycheck, so there is a sizable portion of the population that make more than you do, yet one costly emergency can cause them to spiral into significant financial difficulty. News flash: Emergencies happen. If I am not being clear, you are living wisely! I would recommend reading The Millionaire Next Door and The Millionaire Mind. You will understand that not following the whims of advertisers is good for your bottom line and that it is good to be different from the general population. One of my favorite stories from the author is these yuppies hires the author to find them rich people to sell their products. The author gets the rich people by offering them cash, albeit a relatively small amount considering their wealth (about $200) and lunch. The yuppies complain that the guys don’t “look rich” as there are no fancy suits or Rolex watches. One of the rich guys likes the pitch so much in inquires on how he can buy the company. There are a lot of lessons in that short anecdote. |
What should I do with $4,000 cash and High Interest Debt? | The difference in interest is not a huge factor in your decision. It's about $2 per month. Personally I would go ahead and knock one out since it's one less to worry about. Then I would cancel the account and cut that card up so you are not tempted to use it again. To address the comments... Cutting up the card is NOT the ultimate solution. The solution is to stop borrowing money... Get on a strict budget, live on less than what you bring home, and throw everything you can at this high-interest debt. The destroying of the card is partly symbolic - it's a gesture to indicate that you're not going to use credit cards at all, or at least until they can be used responsibly, not paying a DIME of interest. It's analogous to a recovering alcoholic pouring out bottles of booze. Sure you can easily get more, but it's a commitment to changing your attitude and behavior. Yes leaving the card open will reduce utilization and improve (or not hurt) credit score - but if the goal is to stop borrowing money and pay off the other card, then once that is achieved, your credit score will be significantly improved, and the cancelling of the first card will not matter. The card (really both cards) should never, ever be used again. |
Can you explain why these items are considered negatives on my credit report? | Creditworthiness is proven over time. The longer your track record of making payments on time, the more probable you will stick to credit agreements in future (or so the reasoning goes). Conversely, someone who has only just started applying for credit could be someone whose finances were previously stable but have now started to get into difficulty. Obviously this is not necessarily the case but it is one possible inference. This inference is strengthened when same person applies for further credit in a short space of time. Ultimately, what is considered positive is a stable credit record over a reasonable period of time, because it indicates you stick to payment schedules and don't suddenly need credit due to money problems. Credit card accounts are considered a good indicator of credit status because they imply what kind of borrower you are. Whereas many credit arrangements present a straightforward case of arrears / no arrears (e.g. think of a mobile phone account – either you pay your bill or you don't), with credit cards there is an element of flexibility in how much you borrow, and how much of that you repay. If you run up four figure monthly balances but clear them in full each month without fail, that is a good sign. If your average balance is increasing and you are paying on time but just the minimum amount, that is a potential flag. In other words, credit cards are of particular interest because they paint a more nuanced picture. Provided you use one responsibly, getting and using a credit card may improve your status with credit reference agencies. |
Is there a free, online stock screener for UK stocks? | Most free stock screeners for UK stocks, even those mentioned above, are very poor and not worth the effort really, and searching for stock screeners on a search engine will only bring up stock screeners for USA stocks. The best free UK stock screener (registration is required although this is FREE) is without any doubt on www.digitallook.com who also provide many other features like five year fundamentals, charts, prospects, etc, which can easily be downloaded onto a spreadsheet. I really wouldn't look elsewhere to be honest unless you are prepared to pay. |
Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building? | Grade 'Eh' Bacon answers it well, the issue is risk. To explain further, when a bank issues a loan, that loan comes with certain legal rights. If the bank decided to partner with a construction company, many of those rights to collect would be gone. Debt is treated differently than equity in the legal system. Banks are good at debt, investors are good at equity. We also oversimplify it by asking why banks don't prefer equity to debt. Some investment banks also like to deal in equity, so it's probably an inaccurate assumption that you start with. |
When does a low PE ratio not indicate a good stock? | PE can be misleading when theres a good risk the company simply goes out of business in a few years. For this reason some people use PEG, which incorporates growth into the equation. |
Is there any way to buy a new car directly from Toyota without going through a dealership? | Any car manufacturer that undercuts their own dealer network would have that network fall apart quickly. Tesla is using a dealer-free distribution model from the start, so they don't have that problem. Toyota doesn't work that way, though. GM imposed a uniform no-haggling policy with their Saturn brand, but that policy was coupled with local monopolies for dealers to make it work. Lexus has also experimented with no-haggling and online ordering (with delivery still taking place at a dealership). The rest of Toyota doesn't work that way, though. Some car manufacturers, such as BMW and Audi, allow you to take delivery of your new car at the factory for a discount. But even then, the transaction still takes place through a dealer. Toyota doesn't work that way, though. For one thing, they work at a different scale. If you buy a Camry in the US, it might be produced in Kentucky, Indiana, or Aichi, depending on business conditions. You say that you want to cut out the middleman, but the fact is that you do require someone to deliver a Toyota to you, like it or not. If you're interested in saving money, consider trying various well documented tips, such as negotiating by e-mail before showing up, pitting dealerships against each other. If you don't want to negotiate, you might be able to take advantage of pre-negotiated dealer prices through Costco. You mentioned that the dealership offered you a 7.99% interest rate for your 710 FICO score. That sounds insanely high — I'd expect deals more like 2% advertised by buyatoyota.com. (Remember, Toyota Motor Credit Corporation exists to help Toyota Motor Corporation sell more cars cheaply.) You can also seek alternate financing online (example) or through your own bank. |
Put idle savings to use while keeping them liquid | First of all, look for a savings account with a decent interest rate. Online banks are good at offering those, and you can transfer your money back and forth from the checking account with a couple of business days' delay. ING Direct offers 1.1% APY right now - lame, but much better than nearly-nothing. If you'd like a little nicer rate of return you should also consider putting some of the money (the part you need least) in a short- or intermediate-term bond ETF or mutual fund. You can sell them quite readily, they pay more interest than a savings account, and because of the shorter maturities involved the interest rate risk is limited. (That's the one that makes your bonds less valuable now because the rates went up after you bought them.) I have some NYSE:BIV that's yielding 3.8% or so. |
“Correct” answer on Visa credit quiz doesn't make sense | I took the quiz that you linked too and answered with what I considered "ideal" answers with the exception of checking C for that particular question.... The first thing I saw was I needn't have bothered with giving the ideal answer as the result is self graded (paraphrased) as...all "A" great, mostly "A" good, mostly "B" you can do better, any "C" you probably have problems...regardless of your actual answers. Secondly my ideal answers didn't agree with theirs. Finally, neither my ideal nor theirs takes actual circumstances into account. For instance paying off your debt each month: there are quite a few cards that offer zero percent financing for extended periods of time, for those cards the ideal would be for the debt to be paid off before the terms change. Whether that should be steady progression towards zero or a ballon payment at the end, would depend upon your circumstances. In short, look at this quiz as a rough guideline, not a nuanced evaluation of your credit handling capabilities. |
Does an index have a currency? | In practice, most (maybe all) stock indices are constructed by taking a weighted average of stock prices denominated in a single currency, and so the index implicitly does have that currency - as you suggest, US dollars for the S&P 500. In principle you can buy one "unit" of the S&P 500 for $2,132.98 or whatever by buying an appropriate quantity of each of its constituent stocks. Also, in a more realistic scenario where you buy an index via a tracker fund, you would typically need to buy using the underlying currency of the index and your returns will be relative to that currency - if the index goes up by 10%, your original investment in dollars is up by 10%. |
Is 0% credit card utilization worse than 1-20% credit card utilization for any reason other than pure statistics? | I too was very confused when I tried to be tricky and paid down my balance BEFORE the bill date. I thought this would be a great thing because it would show my utilization near zero percent. The opposite happen, it dropped my credit score from 762 to 708. Here is the best example I can come up with when it comes to utilization. Lets pretend you are an insurance company and you trying to figure out who are the best risk drivers. The people that drive 10% of the day are a better risk than the people that drive 50% of the day. The people that drive 50% of the day are a better risk than the people that drive 90% of the day. Here is the rub when people drive 0%. When you look at the people at 0% they appear to be walking, busing or flying. What they are NOT doing is driving. Since they are not driving (using Credit) they are viewed as POOR drivers since they are not keeping up on their driving skills. (Paying bills, watching how they spend, and managing their debt). So, now before the billing date I pay down my balance to something between 5 to 10% of my utilization. After the bill is issued, I pay it off in FULL. ( I am not going to PAY these crazy interest rates). What shows up on my credit report is a person that is driving his credit between 5 and 10% utilization. It shows I know I how to manage my revolving accounts. I know it's dumb, you would think they reward people that have zero debt, I don't hate banks I hate the game. ( I do love me some reward points =)) |
Should I pay off my 50K of student loans as quickly as possible, or steadily? Why? | The definitive answer is: It Depends. What are your goals? First and foremost, you need to have at least 3 months expenses in cash or equivalent. (i.e. an investment that you can withdraw from quickly, and without penalty). The good news is that you don't have to come up with it instantly. Set a time frame - one year - for creating this safety net, and pay towards that goal. This is the single most important piece of financial advice you will receive. Now determine what you need to do. For example, you may need a car. Compare interest rates on your student loan and the car loan. Put your cash towards whichever is higher. If you don't need a car or other big ticket item, then you may consider sticking your surplus into the student loans. 50k at $1650 a month will be paid down in about 3 years, which might be a bit long to live the monastic lifestyle. I'd look at paying down the smallest loan first (assuming relatively similar rates), and freeing up that payment for yourself. So if you can pay off 1650 a month, and free up $100 of that in six months, then you can reward yourself with half that surplus, and apply the other half to the next loan. (This is different than some would suggest because you're talking about entering severe spartan mode, which is not sustainable.) Remember that life happens. You'll meet someone. You'll have an accident, your brother will get sick and you'll give him some money to help out. You've got to be prepared for these events, and for these reasons, I don't recommend living that close to the edge. Remember, you're not in default, and you do have the option of continuing to pay the minimum for a long time. |
Income tax on international income with money not deposited in India | Three points for you to keep in mind. 1. In the very first year, you should have 182 days outside India. So that in the year when you start your consultancy, you will not have any liability to pay tax on earning abroad. 2. Although you may be starting a consultancy abroad, if you do any services in India, there will be withholding tax depending on the country in which you have started the consultancy business. 3. Whatever money you repatriate is not taxable in India. However, if you you repatriate the money as gift to anyone who is not a relative, will be taxed in his/her hand. |
Do corporate stock splits negate share repurchase programs? | Companies do both quite often. They have opposite effects on the share price, but not on the total value to the shareholders. Doing both causes value to shareholders to rise (ie, any un-bought back shares now own a larger percentage of the company and are worth more) and drops the per-share price (so it is easier to buy a share of the stock). To some that's irrelevant, but some might want a share of an otherwise-expensive stock without paying $700 for it. As a specific example of this, Apple (APPL) split its stock in 2014 and also continued a significant buyback program: Apple announces $17B repurchase program, Oct 2014 Apple stock splits 7-to-1 in June 2014. This led to their stock in total being worth more, but costing substantially less per share. |
Interest on self assessment tax | Assuming you are Resident Indian. As per Indian Income Tax As per section 208 every person whose estimated tax liability for the year exceeds Rs. 10,000, shall pay his tax in advance in the form of “advance tax”. Thus, any taxpayer whose estimated tax liability for the year exceeds Rs. 10,000 has to pay his tax in advance by the due dates prescribed in this regard. However, as per section 207, a resident senior citizen (i.e., an individual of the age of 60 years or above) not having any income from business or profession is not liable to pay advance tax. In other words, if a person satisfies the following conditions, he will not be liable to pay advance tax: Hence only self assessment tax need to be paid without any interest. Refer the full guideline on Income tax website |
Contract job (hourly rate) as a 1099: How much would I be making after taxes? | Does your spouse work? That's one factor that can put your income into a higher bracket. The one difference to note is you will pay 2x the social security portion, so even though not "federal" tax, its right off the top nearly 13%. I'm not familiar with your states tax. It's really worth dropping the $75 on a copy of the software and running your own exact numbers. |
Refinance when going to sell? | When evaluating a refinance, it all comes down to the payback. Refinancing costs money in closing costs. There are different reasons for refinancing, and they all have different methods for calculating payback. One reason to finance is to get a lower interest rate. When determining the payback time, you calculate how long it would take to recover your closing costs with the amount you save in interest. For example, if the closing costs are $2,000, your payback time is 2 years if it takes 2 years to save that amount in interest with the new interest rate vs. the old one. The longer you hold the mortgage after you refinance, the more money you save in interest with the new rate. Generally, it doesn't pay to refinance to a lower rate right before you sell, because you aren't holding the mortgage long enough to see the interest savings. You seem to be 3 years away from selling, so you might be able to see some savings here in the next three years. A second reason people refinance is to lower their monthly payment if they are having trouble paying it. I see you are considering switching from a 15 year to a 30 year; is one of your goals to reduce your monthly payment? By refinancing to a 30 year, you'll be paying a lot of interest in your first few years of payments, extending the payback time of your lower interest rate. A third reason people refinance is to pull cash out of their equity. This applies to you as well. Since you are planning on using it to remodel the home you are trying to sell, you have to ask yourself if the renovations you are planning will payoff in the increased sale price of your home. Often, renovations don't increase the value of their home as much as they cost. You do renovations because you will enjoy living in the renovated home, and you get some of your money back when you sell. But sometimes you can increase the value of your home by enough to cover the cost of the renovation. Talk to a real estate agent in your area to get their advice on how much the renovations you are talking about will increase the value of your home. |
how does one see the CBOE VIX index on Google Finance? | For whatever reason, I don't believe they offer it. Yahoo does. A google for google finance VIX turns up people asking the question, but no quote on google. |
Are stories of turning a few thousands into millions by trading stocks real? | The short answer is yes, it is possible to do what these classes claim, however, it is highly unlikely. For every person they can show you that got rich using whatever so called method they are teaching, there are hundreds of people that didn't that they aren't telling you about. What I would recommend is invest in a well diversified portfolio. If you have a higher tolerance for risk then you can make some of that portfolio out of higher risk/reward investments. Maybe you pick the next Apple or Google or Netflix or whatever but that portion of your portfolio should be money that you can afford to lose in case you pick duds. |
Accepting personal “donations” (not as a non-profit) | Lots of webcomic sites now have "tip jar" links, or let supporters send money via services like Patrion. I presume other kinds of sites have developed similar solutions. I'd suggest you go out, wander the web a bit looking for such, then contact the sites' owners to ask how it's been working for them |
How would IRS treat reimbursement in a later year of moving expenses? | IRS pub 521 has all the information you need. Expenses reimbursed. If you are reimbursed for your expenses and you use the cash method of accounting, you can deduct your expenses either in the year you paid them or in the year you received the reimbursement. If you use the cash method of accounting, you can choose to deduct the expenses in the year you are reimbursed even though you paid the expenses in a different year. See Choosing when to deduct, next. If you deduct your expenses and you receive the reimbursement in a later year, you must include the reimbursement in your income on Form 1040, line 21 This is not unusual. Anybody who moves near the end of the year can have this problem. The 39 week time test also can be an issue that span over 2 tax years. I would take the deduction for the expenses as soon a I could, and then count the income in the later year if they pay me back. IF they do so before April 15th, then I would put them on the same tax form to make things easier. |
Which kind of investment seems feasible to have more cashflow every week or month? | I'll mirror what the others have said in that your expectations for returns are wildly out of line with reality. If you could achieve that with only moderate risk hopefully you can see that you could ladder those returns by re-investing them and become a billionaire in short order. You may have noticed that there are a lot of really financially savvy people who are not billionaires. So the math for your plan falls apart somewhere, obviously. However, in the spirit of being helpful, and with the caveat that super high returns involve super high risk I'll try and point you in the direction where this is theoretically possible, even if the odds would be better buying lottery tickets. One way to get more leverage from your money than just buying stocks is to buy options. With an options strategy your return/loss will be magnified greatly compared to buying stocks. That is, you can lose or gain a much higher multiplier of your original investment. That said, I don't advise doing that with any money that you can't afford to lose every penny of, because you likely will. |
What is the fastest way to retire, using passive income on real estate | It is worth noting first that Real Estate is by no means passive income. The amount of effort and cost involved (maintenance, legal, advertising, insurance, finding the properties, ect.) can be staggering and require a good amount of specialized knowledge to do well. The amount you would have to pay a management company to do the work for you especially with only a few properties can wipe out much of the income while you keep the risk. However, keshlam's answer still applies pretty well in this case but with a lot more variability. One million dollars worth of property should get you there on average less if you do much of the work yourself. However, real estate because it is so local and done in ~100k chunks is a lot more variable than passive stocks and bonds, for instance, as you can get really lucky or really unlucky with location, the local economy, natural disasters, tenants... Taking out loans to get you to the million worth of property faster but can add a lot more risk to the process. Including the risk you wouldn't have any money on retirement. Investing in Real Estate can be a faster way to retirement than some, but it is more risky than many and definitely not passive. |
OTC Markets, Time, and Trading | Something to consider is that in the case of the company you chose, on the OTC market, that stock is thinly traded and with such low volume, it can be easy for it to fluctuate greatly to have trades occur. This is why volume can matter for some people when it comes to buying shares. Some OTC stocks may have really low volume and thus may have bigger swings than other stocks that have higher volume. |
Is there any circumstance in which it is necessary to mark extra payments on a loan as going to “principal and not interest”? | It could be a couple of things besides extra principal: I seem to remember hearing that some (shady?) lenders would just pocket extra payments if you didn't specify where they were headed, but I've also been told that this just isn't true. |
What can I do to remedy ISA cash/shares transfer latency? | One possibility you may consider is to keep all of your funds in the stocks and shares ISA while investing that proportion you wish to keep in cash into a tradeable "Money Market" ETF. A Money Market ETF will give you rates comparable to interest rates on cash and at the same time it will give you "instant access" subject to normal 3 day settlement of equities. This is not exactly a perfect solution. Most Money Market ETFs will pay monthly dividends, so depending on your timing, you may have to give up some interest. In the worst case, if you were to sell the day before going ex-dividend, then you would be giving up a months interest. In the best case, if you were to sell on the day of going ex-dividend, you would be giving up no interest. |
Buying from an aggressive salesperson | My advice is to quit worrying about the salesman's tactics. They are a distraction. What do you want? How much are you willing to pay for it. If you want the instrument, decide how much you want to pay for it. Round down to the next even hundred. Take that much in $100 bills. Put the money in his hand and say, "This is what I have, take it or leave it". You must be prepared to walk out of the store without the instrument. |
What are the alternatives to compound interest for a Muslim? | I cannot tell you what is or is not allowed under Islamic law. What I can tell you is that when most investors talk about the "power of compound interest," they are not actually necessarily talking about interest! The idea of the magic of compound interest is that when you receive an interest payment on your investment, you now have a larger investment, earning more interest. Your investment grows exponentially. This doesn't just apply to interest payments, however, but can apply to any type of investment where the profits of the investment cause the investment to get larger. For example, if you invest in a company's stock, and the value of the stock goes up 10% in a year, after that year your investment is worth more than it was at the beginning. If it goes up another 10% the following year, you have gained more money in the second year than you did in the first. Your gains are compounding, even though interest payments are not involved at all. The same is true if you reinvest dividends or if you use business profit to expand your business, for example. The term "power of compound interest" is so named for historical reasons, but really applies to any type of investment where the investment itself is growing. |
Option trading: High dollar value stock option and equity exposure | Seems like you are concerned with something called assignment risk. It's an inherent risk of selling options: you are giving somebody the right, but not the obligation, to sell to you 100 shares of GOOGL. Option buyers pay a premium to have that right - the extrinsic value. When they exercise the option, the option immediately disappears. Together with it, all the extrinsic value disappears. So, the lower the extrinsic value, the higher the assignment risk. Usually, option contracts that are very close to expiration (let's say, around 2 to 3 weeks to expiration or less) have significantly lower extrinsic value than longer option contracts. Also, generally speaking, the deeper ITM an option contract is, the lower extrinsic value it will have. So, to reduce assignment risk, I usually close out my option positions 1-2 weeks before expiration, especially the contracts that are deep in the money. edit: to make sure this is clear, based on a comment I've just seen on your question. To "close out an options position", you just have to create the "opposite" trade. So, if you sell a Put, you close that by buying back that exact same put. Just like stock: if you buy stock, you have a position; you close that position by selling the exact same stock, in the exact same amount. That's a very common thing to do with options. A post in Tradeking's forums, very old post, but with an interesting piece of data from the OCC, states that 35% of the options expire worthless, and 48% are bought or sold before expiration to close the position - only 17% of the contracts are actually exercised! (http://community.tradeking.com/members/optionsguy/blogs/11260-what-percentage-of-options-get-exercised) A few other things to keep in mind: certain stocks have "mini options contracts", that would correspond to a lot of 10 shares of stock. These contracts are usually not very liquid, though, so you might not get great prices when opening/closing positions you said in a comment, "I cannot use this strategy to buy stocks like GOOGL"; if the reason is because 100*GOOGL is too much to fit in your buying power, that's a pretty big risk - the assignment could result in a margin call! if margin call is not really your concern, but your concern is more like the risk of holding 100 shares of GOOGL, you can help manage that by buying some lower strike Puts (that have smaller absolute delta than your Put), or selling some calls against your short put. Both strategies, while very different, will effectively reduce your delta exposure. You'd get 100 deltas from the 100 shares of GOOGL, but you'd get some negative deltas by holding the lower strike Put, or by writing the higher strike Call. So as the stock moves around, your account value would move less than the exposure equivalent to 100 shares of stock. |
Should I buy my house from my landlord? | Can he legally break your lease if he sells the place? If not I would just keep renting. It doesn't sound like you love the house and you plan on moving or would prefer a different type of place long term. Unless you yourself plan on getting involved in being a renting it out to others in the future - just rent and move on at some point. If he can break your lease upon sale of the property then I'd be casually keeping an eye out for another place to rent if that happens. |
Why are fund managers' average/minimum purchase price from form 13F the same? | The GuruFocus Link is just reporting the high and low price of the quarter. Price Range (Average) – The estimated trade prices. The average price is calculated from the time weighted average during the period. If no price range is shown, the trade prices are estimated trade prices, which are more accurate estimates. AAPL: $420.05 - $549.03 ($467.26) The numbers for the high and low match what I found for AAPL on Yahoo Finance. Keep in mind their definition uses estimate 3 times. |
How to bet against the London housing market? | While I am not an advocate of shorting anything (unlimited downside, capped upside), you can: |
Help me understand Forex in Interactive Brokers | You're confusing open positions and account balance. Your position in GBP is 1000, that's what you've bought. You then used some of it to buy something else, but to the broker you still have an open position of 1000 GBP. They will only close it when you give them the 1000GBP back. What you do with it until then is none of their business. Your account balance (available funds) in GBP is 10. |
How to invest Rs.10k in India | I am going to assume that this is going to be a long term investment and you don't need this money before 5-6years at the very least. My advise would be to invest in one of the following funds : IDFC Premier equity fund growth plan (Direct) (Only SIP allowed right now) ICICI Discovery fund growth plan (Direct) DSP microcap fund growth plan (Direct) In case you do not want to be invested in small and mid cap and want a little less volatility then my first choice for that would be : Quantum long term equity fund dividend plan Whatever you go for make sure you go directly with the fund house and not through a broker as you end up getting charged an extra .63% extra as opposed to going direct and you will also be paying for a demat account which can be avoided if you invest directly with a fund house. Out of the above mentioned funds Quantum has the lowest expense ratio of 1.25% and it is a huge benefit if you are talking 10+ years because it makes a lot of difference. Source : My own research and experience as an investor. |
How are long term capital gains taxes calculated? | You pay taxes on capital gains when you realize your gains by selling the investment property. Also, in the US, taxes on capital gains are computed at special rates depending on your current income level, and so when you realize your gains two years from now, you will pay taxes on the gains at the special rate then applicable to your income level for the year of sale. Remember also that the US Congress can change the tax laws at any time between now and the time you sell your stocks, and so the rates you are looking at now may have changed too. |
Would there be tax implications if I used AirBnB as opposed to just renting out a unit normally? | It actually depends on the services provided. If you're renting through AirBnB, you're likely to provide much more services to the tenants than a traditional rental. It may raise it to a level when it is no longer a passive activity. See here, for starters: Providing substantial services. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For information, see Publication 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5 |
Fees aside, what factors could account for performance differences between U.S. large-cap index ETFs? | The "ideal world" index fund of any asset class is a perfect percentage holding of all underlying assets with immediate rebalancing that aligns to every change in the index weighting while trading in a fully liquid market with zero transaction costs. One finance text book that describes this is Introduction to Finance: Markets, Investments, and Financial Management, see chapter 11. Practically, the transaction costs and liquidity make this unworkable. There are several deviations between what the "ideal world algorithm" ("the algorithm") says you should do and what is actually done. Each of these items addresses a real-world solution to various costs of managing a passive index fund. (And they are good solutions.) However, any deviation from the ideal index fund will have a risk. An investor evaluating their choices is left to pick the lowest fees with the least deviation from the ideal index fund. (It is customary to ignore whether the results are in excess or deficit to the ideal). So your formula is: This is also described in the above book. |
Super-generic mutual fund type | You can also create a CD ladder (say 1/3 in a 6 month CD, 1/3 in a 1 year CD, 1/3 in a 2 year CD) with half of your emergency fund money. You always want to leave some of it in a liquid account so you can get at it immediately without any interest penalty. CD's provide higher interest than a savings account. By staggering the lengths of the CD's, you give yourself more options, and can roll them over into CD's with higher rates (since interest rates are soooo low right now) as the CD's mature. |
What are the costs to establish an LLC and to maintain it? | I'll answer in general terms, since I'm not familiar with the price ranges in Florida. The LLC formation costs $125 (state fee). In addition you'll need a registered agent. Registered agent could be your CPA/EA/bookkeeper/property manager/local friend, or you can pay firms specializing in providing registration and agents services such as NorthWestern or LegalZoom (there are many others). You'll need to pay an annual fee of ~$140 in Florida. If you are using someone to do the formation, they'll charge more (usually the on-line services are cheaper than a local CPA or attorney, by $100-$300). Bookkeeping will probably be charged by the hour, but some bookkeepers charge flat fees for small accounts. Per hour would be probably in the range of $40-$80. You'll have to pay taxes - both in Florida (where the property is) and on the Federal level to the IRS. You'll be paying them as a non-Resident individual. Your CPA/EA will charge you anywhere between $150 to $500 for that (if they charge more - run away, unless there's some specific complication that requires extra costs). You will need a ITIN for that, your CPA/EA can help you get one or you can apply yourself. Be careful with all those people selling cr@p about organizing in Delaware/Wyoming/Nevada (like CQM in his answer). Organizing in a state other than where the properties are located (or off-shore) won't save you a dime, and not only that - it will add to the costs. Because you'll have to pay to the state where you organized (CQM mentioned Wyoming - $50/year), keep registered agent in the state of organization (+$99) and also do all the things I've described above about Florida - as a "Foreign" (out of state) entity, which may mean higher fees. It won't save you any taxes as well, because you pay taxes to the state from which you derive income, which is Florida, either way. Remember that what you call LLC in Italy may be in fact a "Corporation" as defined in the US, and there's a huge difference. You should probably not put a real-estate property in a Corporation in the US. You must get a legal advice from a (Florida) lawyer ($0-$500/hr consultation), and a tax advice from a (Florida) CPA/EA ($0-$200/hr consultation). Do not consider anything I write here as a legal or tax advice, because it is not. You need a professional to help you because as an Italian, you don't know how things work exactly and relying on rumours and half-truths that you may find and get over the Internet may end up costing you significantly in damages. Also, talk to a reliable real estate agent and property manager before making any purchases. |
Would you withdraw your money from your bank if you thought it was going under? | To the average consumer, the financial health of a bank is completely irrelevant. The FDIC's job is to make it that way. Even if a bank does go under, the FDIC is very good at making sure there is little/no interruption in service. Usually, another bank just takes over the asset of the failing bank, and you don't even notice the difference. You might have a ~24 hour window where your local ATM doesn't work. I also really question the "FDIC is broke" statement. The FDIC has access to additional funding beyond the Deposit Insurance Fund mentioned in your link. It also has the ability to borrow from the Treasury. If you look into the FDIC's report a bit closer, the amount in the "Provision for Insurance Losses" is not just money spent on failing banks. It also includes money that has been set aside to cover anticipated failures and litigation. Saying the FDIC is "broke" is like saying I am "broke" because my checking account balance went down after I moved some money into a rainy-day fund. Failure of the FDIC would signal a failure of our financial system and the government that backs it. If the FDIC fails, your petty checking account would be meaningless anyway. The important things would be non-perishable food, clean water, and guns/ammo. That said, it will be interesting to see the latest quarterly report for the FDIC when it is released next week. The article implies things will look a little better for the FDIC, but we'll see. |
Why are we taxed on revenue and companies on profit? | I pay taxes on revenue. You do have the ability to deduct expenses, though it's not as comprehensive as what companies can do: These figures apply to everybody, so those that earn more get taxed more on thee additional income in each bracket (meaning the first $100,000 of taxable income is taxed the same for everybody at one rate, the next $100,000 at a different rate, etc.) So you do get to deduct personal expenses and get taxed on "profit" - but since the vast majority of people don't keep detailed records of what they spend, it's much simpler just to use blanket deduction amounts for everyone. Companies have much more detailed systems in place to track and categorize expenses, so it's easier to just tax on net profit. Plus, the corporate tax rate is much higher than the average individual tax rate - would you trade more deductions for a higher tax rate? |
Is the stock market too risky for long term retirement funds? Why should a 20- or 30-something person invest in stocks? | I'm going to go the contrarian route and suggest you stay completely out of the stock market for the foreseeable future. We're entering a period of time this country and world has never seen before. Our country is broke / insolvent. We are printing money to buy our own debt. This is beyond stupid. It will destroy us, just like it did Germany in the 1920's. Many states are on the verge of bankruptcy. The only thing stopping them is a constitutional issue. California, Illinois, Michigan, New York etc. are all broke. They are billions in debt and massive underfunding of pensions. More than a half-dozen European countries are on the verge of financial implosion. The Euro is just as bad off as our dollar. There are extremely powerful forces at work bent on destroying this country and the US dollar, to usher in a One World Government and financial system. IMO, buy as much gold and silver has you can. Not necessarily as an investment vehicle. I would do it as a survival vehicle. And, I don't mean gold/silver stocks. I mean you buy gold/silver and you take physical possession. |
Turning 30 and making the right decision with my savings and purchasing home | I love the idea of #1, keep that going. I don't think #2 is very realistic. Given the short time frame putting money at risk for a higher yield may not work in your favor. If it was me, I'd stick to a "high interest" savings account (around 1%). I don't mind #3 either, however, I'd be socking whatever you could to mortgage principle so you can get out of PMI sooner rather than later. That would be my top priority. Given the status of interest rates, you may end up saving money in the long run. I doubt it, but you may. If you choose to go with #3, don't settle for a house that you really don't like. Get something that you want. Who knows it may take you a year or so to find something! |
collateralized mortgage obligations | Say there are 5 people took loan of $100000 each. Those 5 people work in different jobs and have different capacity to payoff loan. Someone earning $40000 a year has higher risk to default on their payment then someone making $250000 a year. As Bank wants to sell this CDO to investor but how would investor know what the risk factor for this CDO is. This is where rating agency comes in picture. They apparently look at the underlying asset and assign rating to this CDO say AAA, B, AA etc which give investor idea of underlying risk. Problem here is rating agency gets paid by Bank to rate their CDO. So if a rating agency starts rating their CDO to higher risk Bank will go to next agency round the corner to get better rating and agency will lose commission. You can see the problem here. Now if people start struggling to pay loan, bank will not get money and it cannot pay CDO holders. If house that was worth $100000 when CDO was created is devalued to say $50000 today the underlying asset is not worth as much when CDO was sold. That is what happened when market crashed in 2008 and GFC hit. |
Buying a building with two flats, can I rent one out and still get a residential mortgage? | NO Even worse, most BTL(buy to let) lenders will not lend if you are going to be living in the property. There are very few lenders that will touch something like this. It is likely you will also need to use bridging for the time the building work takes at something like 1.5% per month! Try posting the question to http://www.propertytribes.com/ as there are a few UK mortgage experts on that site. |
How can I determine if my rate of return is “good” for the market I am in? | A good measurement would be to compare to index's. Basically a good way to measure your self would be to ask "If I put my money somewhere else how much better or worse would I have done?" Mutual funds and Hedge funds use the SP500 as a bench mark. Some funds actually wave their fee if they do not outperform the SP or only take a fee on the portion that has outperformed the SP500. in today's economy i dont know how to expect such a return The economy is not a good benchmark on what to expect from the stock market. For example in 2009 by certain standards the economy was worse then today but in 2009 the market rallied a great deal so your returns should have reflected that. You can use the SP500 as a quick reference to compare your returns (this is also considered the "standard" for a quick comparison). The way you compare your performance is also dependent on how you invest your money. If you are outperforming the SP500 you are doing well. Many mutual funds DO NOT outperform the SP500. Edit Additional Info: Here is an article with more comprehensive information on how to gauge your performance. In the article is a link to a free tool from morning star. Use the Right Benchmark to Accurately Measure Investment Performance |
Contributing factors to historical increase in trading volume | It's not primarily more people investing. In the 1980s stock exchanges went from open outcry trading floors where all trades involved actually exchanging pieces of paper to electronic trading. Once that happened, it wasn't long before most trades were executed by computer programs rather than human beings, turning stocks over rapidly for very short-term profits rather than long-term investment, greatly increasing the number of trades (and also increasing liquidity for the actual investors; it's by no means all bad). |
What debts are both partners liable for in a 'community property' state? | I know one piece of information that can help you (in a macabe sort of way) - from what my wife has told me, if your partner dies, you are not responsible for paying for their debts, especially student loans. I expect the same thing for credit cards - if someone were to happen to charge $2,000 on their credit card and get hit by a bus, the credit card company can cajole and plead for you to pay for it, but you have no legal requirement to do so. Unfortunately I do not have as much information about as if you spouse is living. |
Working on a tax free island to make money? | The Cayman Islands has an income tax enacted, it is just currently 0%. It raises revenues from its tourism, import duties, and business registration. It is part of the UK commonwealth and therefore enjoys the military protection of that federation, but doesn't have to spend on it. But unlike the US, the UK does not have an umbrella federal income tax on its overseas territories, so the Cayman Islands doesn't have to pass that down to its citizens nor do its citizens/residents have to be encumbered by one. It was not taxed by the King when it was first incorporated (hm, might need to fact check that). They also didn't go to war with the king over some small tax, so they got treated differently than some other North American colonies you might think of. The Cayman Islands is not the only government that raises revenues this way. Delaware also has a 0% income tax and raises the majority of its revenues on business registration (and perpetual franchise taxes on those businesses), allowing it to spare its citizens from passive income taxes. But unlike a US state, a citizen or business in a UK overseas territory does not have federal regulatory overhead, making it more attractive as a worldwide financial center. |
The best credit card for people who pay their balance off every month | BillShrink.com lets you compare credit cards based on all your specifics (miles vs. cash, where you shop the most, etc) and tells you what the best card is for your specific habits. MOD EDIT Looks like billshrink.com is shut down. From their site: Dear BillShrink customer, As you may have heard, BillShrink.com was shut down on July 31, 2013. While we’re sad to say goodbye, we hope we’ve been able to help you be better informed and save some money along the way! The good news is that much of the innovative award-winning BillShrink technology will still be available via our StatementRewards platform (made available to customers by our partnering financial institutions). Moreover, we expect to re-launch a new money-saving service in the future. To see more of what we’re up to, visit Truaxis.com. We have deleted your personal information as of July 31. We will retain your email address only to announce a preview of the new tool. If you do not want us to retain your email address, you can opt out in the form below. This opt out feature will be available until September 31, 2013. If you have already opted out previously, you do not need to opt out again. If you have any further questions, contact us at info@billshrink.com. Thanks, The BillShrink/Truaxis Team |
Why does capital gains tax apply to long term stock holdings? | Most well-off people have investments which they have held for long periods of time, often of very substantial value such as a large part of a company. They also have influence on legislators and officials through various social contacts, lobbyists, and contributions. They managed to convince these law makers to offer a lower tax on income derived from sales of such investments. The fig leaf covering this arrangement is that it "contributes to the growth of economy by encouraging long-term investment in new enterprises." |
What are the best software tools for personal finance? | Money Manager Ex PROS: CONS |
If there's no volume discount, does buying in bulk still make sense? | As with everything else, it's a question of trade-offs. Pros For Buying In Bulk Cons For Buying In Bulk Inventory cost. You need to purchase more shelving/cupboards to stock the goods. This is a real cost. The psychological effect of having more means you are more likely to use more, thus costing you more. Deflation of the cost of the item should occur over time in a well-functioning market economy. A $10 item today might be $9.50 in one year in real terms. There is a real opportunity cost associated with overbuying. Granted, an extra $100 in your bank account won't be earning too much if you have to spend it one month later, but it does mean you have less financial independence for that month. Risk of spoilage. There is a nonzero risk that your goods could be ruined by flood/fire/toddler/klutz damage. You need to decide which of these pros and cons are more important to you. Financially, you should only buy what you need between shopping trips. In reality the convenience of holding goods in storage for when you need them may outweigh the costs. |
Pay for a cheap car or take out a loan? | You may not have a good choice until you start that job. $2,000 is awfully low for a car, so it could be very risky. But you may not be able to get a loan until you start the new job. I would talk to a bank or credit union to get an idea of how much, if anything, you could borrow at this time. If you have a letter offering you the job that might help to get a loan. There are dealers who will finance a very cheap used car for anybody, but that kind of deal is likely to be at a very high interest rate and should be avoided. You could wind up with a debt and no car. One other possibility is to have a co-signer, such as a parent or other relative. That could make getting a car loan easy. |
What do I need as documentation in order to pay taxes in the Netherlands? | The Dutch tax office is pretty decent, although slightly overburdened. Don't expect a lot of help, but they're not generally known for making a lot of problems. Digital copies are fine, for instance. They will send you your first VAT notice. You probably would have known if your company would have been incorporated, so I'll assume you're just trading as a natural person. That means you still have to file VAT returns, but the business income is just filed annually as "other income". For the VAT part, you'll need to invoice your customers. Keep a copy of those invoices for your own bookkeeping, and keep track of the matching customer payments. Together these form the chief evidence of your VAT obligation. You also have a VAT deduction from your purchases (it's a Value-Added Tax, after all). Again, keep receipts. The usual VAT period is 3 months, so you'd pay VAT 4 times a year. But if you would pay less than 1883 euro, you might not need to pay at all and just need to file annually The income part is easy with the receipts you had for VAT purposes anyway. Dutch Tax Office, VAT, in English |
How does the process of “assignment” work for in-the-money Options? | First, it depends on your broker. Full service firms will tear you a new one, discount brokers may charge ~nothing. You'll have to check with your broker on assignment fees. Theoretically, this is the case of the opposite of my answer in this question: Are underlying assets supposed to be sold/bought immediately after being bought/sold in call/put option? Your trading strategy/reasoning for your covered call notwithstanding, in your case, as an option writer covering in the money calls, you want to hold and pray that your option expires worthless. As I said in the other answer, there is always a theoretical premium of option price + exercise price to underlying prices, no matter how slight, right up until expiration, so on that basis, it doesn't pay to close out the option. However, there's a reality that I didn't mention in the other answer: if it's a deep in the money option, you can actually put a bid < stock price - exercise price - trade fee and hope for the best since the market makers rarely bid above stock price - exercise price for illiquid options, but it's unlikely that you'll beat the market makers + hft. They're systems are too fast. I know the philly exchange allows you to put in implied volatility orders, but they're expensive, and I couldn't tell you if a broker/exchange allows for dynamic orders with the equation I specified above, but it may be worth a shot to check out; however, it's unlikely that such a low order would ever be filled since you'll at best be lined up with the market makers, and it would require a big player dumping all its' holdings at once to get to your order. If you're doing a traditional, true-blue covered call, there's absolutely nothing wrong being assigned except for the tax implications. When your counterparty calls away your underlyings, it is a sell for tax purposes. If you're not covering with the underlying but with a more complex spread, things could get hairy for you real quick if someone were to exercise on you, but that's always a risk. If your broker is extremely strict, they may close the rest of your spread for you at the offer. In illiquid markets, that would be a huge percentage loss considering the wide bid/ask spreads. |
Can rent be added to your salary when applying for a mortgage? | The days are long gone when offered mortgages were simply based on salary multiples. These days it's all about affordability, taking into account all incomes and all outgoings. Different lenders will have different rules about what they do and don't accept as incomes; these rules may even vary per-product within the same lender's product list. So for example a mortgage specifically offered as buy-to-let might accept rental income (with a suitable void-period multiplier) into consideration, but an owner-occupier mortgage product might not. Similarly, business rules will vary about acceptance of regular overtime, bonuses, and so on. Guessing at specific answers: #1 maybe, if it's a buy-to-let product, Note that these generally carry a higher interest rate than owner-occupier mortgages; expect about 2% more #2 in my opinion it's extremely unlikely that any lender would consider rental income from your cohabiting spouse #3 probably yes, if it's a buy-to-let product |
How to move (or not move) an LLC from Illinois to New Mexico? | Why not just leave it as is and register as foreign entity in New Mexico? You won't avoid the gross receipts tax, but other than that - everything stays as is. Unless Illinois has some taxes that you would otherwise not pay - just leave it there. |
Can my employer limit my maximum 401k contribution amount (below the IRS limit)? | On thing the questioner should do is review the Summary Plan Description (SPD) for the 401(k) plan. This MAY have details on any plan imposed limits on salary deferrals. If the SPD does not have sufficient detail, the questioner should request a complete copy of current plan document and then review this with someone who knows how to read plan documents. The document for a 401(k) plan CAN specify a maximum percentage of compensation that a participant in the 401(k) plan can defer REGARDLESS of the maximum dollar deferral limit in Internal Revenue Code Section 402(g). For example, the document for a 401(k) plan can provide that participants can elect to defer any amount of their compensation (salary) BUT not to exceed ten percent (10%). Thus, someone whose salary is $50,000 per year will effectively be limited to deferring, at most, $5,000. Someone making $150,000 will effectively be limited to deferring, at most, $15,000. This is true regardless of the fact that the 2013 dollar limit on salary deferrals is $17,500. This is also true regardless of whether or not a participant may want to defer more than ten percent (10%) of compensation. This "plan imposed" limit on salary deferral contributions is permissible assuming it is applied in a nondiscriminatory manner. This plan imposed limit is entirely separate from any other rules or restrictions on salary deferral amounts that might be as a result of things like the average deferral percentage test. |
Is gold subject to inflation? [duplicate] | Gold is a risky and volatile investment. If you want an investment that's inflation-proof, you should buy index-linked government bonds in the currency that you plan to be spending the money in, assuming that government controls its own currency and has a good credit rating. |
How to calculate 1 share movement | The price of a share has two components: Bid: The highest price that someone who wants to buy shares is willing to pay for them. Ask: The lowest price that someone who has a share is willing to sell it for. The ask is always higher than the bid, since if they were equal the buyer and seller would have a deal, make a transaction, and that repeats until they are not equal. For stock with high volume, there is usually a very small difference between the bid and ask, but a stock with lower volume could have a major difference. When you say that the share price is $100, that could mean different things. You could be talking about the price that the shares sold for in the most recent transaction (and that might not even be between the current bid and ask), or you could be talking about any of the bid, the ask, or some value in between them. If you have shares that you are interested in selling, then the bid is what you could immediately sell a share for. If you sell a share for $100, that means someone was willing to pay you $100 for it. If after buying it, they still want to buy more for $100 each, or someone else does, then the bid is still $100, and you haven't changed the price. If no one else is willing to pay more than $90 for a share, then the price would drop to $90 next time a transaction takes place and thats what you would be able to immediately sell the next share for. |
Buying my first car out of college | Read "Stop Acting Rich" by Dr Thomas Stanley. I'm concerned that even before you've earned your first paycheck you want a flashy car. $4800/yr on $63K/yr income is just about half what I'd recommend to someone who starts working. 10% is the minimum, if and only if, the employer matches 5, for a total 15% saved. Do it in a pretax account and when you go back to grad school convert to Roth. |
What would be a wise way to invest savings for a newly married couple? | Forgive me as I do not know much about your fine country, but I do know one thing. You can make 5% risk free guaranteed. How, from your link: If you make a voluntary repayment of $500 or more, you will receive a bonus of 5 per cent. This means your account will be credited with an additional 5 per cent of the value of your payment. I'd take 20.900 of that amount saved and pay off her loan tomorrow and increase my net worth by 22.000. I'd also do the same thing for your loan. In fact in someways it is more important to pay off your loan first. As I understand it, you will eventually have to pay your loan back once your income rises above a threshold. Psychologically you make attempt to retard your future income in order to avoid payback. Those decisions may not be made overtly but it is likely they will be made. So by the end of the day (or as soon as possible), I'd have a bank balance of 113,900 and no student loan debt. This amounts to a net increase in net worth of 1900. It is a great, safe, first investment. |
Offsetting the tax on vested RSUs with short term capital loss | No. The gain on RSU is not a capital gain, it is considered wages and treated as part of your salary, for tax purposes. You cannot offset it with capital losses in excess of $3000 a year. If you have RSUs left after they vest, and you then sell them at gain, the gain (between the vesting price and the sale price) is capital gain and can be offset by your prior years' capital losses. |
Perform exercise-and-hold AND exercise-and-sell-to-cover? | The simplest thing to do here is to speak to your employer about what is allowed. This should be spelt out in your company's "Stock Options Plan" documentation. In particular, this document will include details of the vesting schedule. For example, the schedule may only allow you to exercise 25% in the first year, 25% in the second year, and the remainder in the third year. Technically I can see no reason to prevent you from the mix-and-match approach you are suggesting. However, this may not be the case according to the schedule specification. |
Simple and safe way to manage a lot of cash | You can move most or all of those financial products into a single account at one institution, but I wouldn't go with a "mutual fund account" like Vanguard. The big online brokerages should offer: Consolidating everything into one statement can vastly simplify your record keeping. With a balance of $250k, you should be able to get a paper statement without a fee. Depending on where the accounts are currently held (e.g. if the stocks are at a full-service broker), you may also be able to save on fees. |
Options revisited: Gold fever | gold is incredibly volatile, I tried spreadbetting on it. During the month of its highest gain, month beginning to month end, I was betting it would go up - and I still managed to lose money. It went down so much, that my stop loss margin would kick in. Don't do things with gold in the short term its a very small and liquid market. My advice with gold, actually buy some physical gold as insurance. |
Clarification on student expenses - To file the tax for the next year | Assuming here that you're talking about deducting your tuition as a below the line deduction as a business expense or similar, then it depends. Per 1.162-5, if the education: Then it qualifies as a legitimate business expense and is deductible. If not - if you're going to school for a different career, such as someone employed as a waiter but going to school to get a degree in nursing, or someone employed as a teacher getting a law degree - then it's not; you'd have to qualify under one of the other (simpler, but lesser) credits. Read more on this topic at Tax topic 513. Note that the other most commonly applicable deduction - the above the line Tuition and Fees deduction - expired in 2016 and is not applicable (yet?) in 2017, and further would not require most of what you describe as it only counts tuition and fees paid directly to the institution and required as a condition of attendance, so books, parking, etc. don't count. |
For very high-net worth individuals, does it make sense to not have insurance? | Yes, and the math that tells you when is called the Kelly Criterion. The Kelly Criterion is on its face about how much you should bet on a positive-sum game. Imagine you have a game where you flip a coin, and if heads you are given 3 times your bet, and if tails you lose your bet. Naively you'd think "great, I should play, and bet every dollar I have!" -- after all, it has a 50% average return on investment. You get back on average 1.5$ for every dollar you bet, so every dollar you don't bet is a 0.5$ loss. But if you do this and you play every day for 10 years, you'll almost always end up bankrupt. Funny that. On the other hand, if you bet nothing, you are losing out on a great investment. So under certain assumptions, you neither want to bet everything, nor do you want to bet nothing (assuming you can repeat the bet almost indefinitely). The question then becomes, what percentage of your bankroll should you bet? Kelly Criterion answers this question. The typical Kelly Criterion case is where we are making a bet with positive returns, not an insurance against loss; but with a bit of mathematical trickery, we can use it to determine how much you should spend on insuring against loss. An "easy" way to undertand the Kelly Criterion is that you want to maximize the logarithm of your worth in a given period. Such a maximization results in the largest long-term value in some sense. Let us give it a try in an insurance case. Suppose you have a 1 million dollar asset. It has a 1% chance per year of being destroyed by some random event (flood, fire, taxes, pitchforks). You can buy insurance against this for 2% of its value per year. It even covers pitchforks. On its face this looks like a bad deal. Your expected loss is only 1%, but the cost to hide the loss is 2%? If this is your only asset, then the loss makes your net worth 0. The log of zero is negative infinity. Under Kelly, any insurance (no matter how inefficient) is worth it. This is a bit of an extreme case, and we'll cover why it doesn't apply even when it seems like it does elsewhere. Now suppose you have 1 million dollars in other assets. In the insured case, we always end the year with 1.98 million dollars, regardless of if the disaster happens. In the non-insured case, 99% of the time we have 2 million dollars, and 1% of the time we have 1 million dollars. We want to maximize the expected log value of our worth. We have log(2 million - 20,000) (the insured case) vs 1% * log(1 million) + 99% * log(2 million). Or 13.7953 vs 14.49. The Kelly Criterion says insurance is worth it; note that you could "afford" to replace your home, but because it makes up so much of your net worth, Kelly says the "hit it too painful" and you should just pay for insurance. Now suppose you are worth 1 billion. We have log(1 billion - 20k) on the insured side, and 1%*log(999 million) + 99% * log(1 billion) on the uninsured side. The logs of each side are 21.42 vs 20.72. (Note that the base of the logarithm doesn't matter; so long as you use the same base on each side). According to Kelly, we have found a case where insurance isn't worth it. The Kelly Criterion roughly tells you "if I took this bet every (period of time), would I be on average richer after (many repeats of this bet) than if I didn't take this bet?" When the answer is "no", it implies self-insurance is more efficient than using external insurance. The answer is going to be sensitive to the profit margin of the insurance product you are buying, and the size of the asset relative to your total wealth. Now, the Kelly Criterion can easily be misapplied. Being worth financially zero in current assets can easily ignore non-financial assets (like your ability to work, or friends, or whatever). And it presumes repeat to infinity, and people tend not to live that long. But it is a good starting spot. Note that the option of bankruptcy can easily make insurance not "worth it" for people far poorer; this is one of the reasons why banks insist you have insurance on your proprety. You can use Kelly to calculate how much insurance you should purchase at a given profit margin for the insurance company given your net worth and the risk involved. This can be used in Finance to work out how much you should hedge your bets in an investment as well; in effect, it quantifies how having money makes it easier to make money. |
US ISA equivalent for tax exempt investment & savings | As far as I know, there is no direct equivalent. An IRA is subject to many rules. Not only are there early withdrawal penalties, but the ability to deduct contributions to an IRA phases out with one's income level. Qualified withdrawals from an IRA won't have penalties, but they will be taxed as income. Contributions to a Roth IRA can be made post-tax and the resulting gains will be tax free, but they cannot be withdrawn early. Another tax-deductable investment is a 529 plan. These can be withdrawn from at any time, but there is a penalty if the money is not used for educational purposes. A 401K or similar employer-sponsored fund is made with pre-tax dollars unless it is designated as a Roth 401K. These plans also require money to be withdrawn specifically for retirement, with a 10% penalty for early withdrawal. Qualifying withdrawals from a regular retirement plan are taxed as income, those from a Roth plan are not (as with an IRA). Money can be made harder to get at by investing in all of the types of funds you can invest in using an IRA through the same brokers under a different type of account, but the contribution will be made with post-tax, non-deductable dollars and the gains will be taxed. |
which types of investments should be choosen for 401k at early 20's? | If you don't want to pay much attention to your investments, target date funds -- assuming you find one (like Vanguard's) with no management fees beyond those acquired from the underlying funds -- are usually a great choice: when the target date is far off, they invest almost entirely (usually 90% or so) in (mutual funds that in turn consist of many) stocks, with the remainder in bonds; as the date gets closer, the mix is automatically shifted to more bonds and less stocks (i.e. less risk, but less potential return too). |
Why do employer contributions count against HSA limits? | It's going to be quite a challenge to give a definitive answer to any "Why" question about law, and especially so for a question about tax law. One would need to try to dig up statements made by the legislators (and/or their aides) crafting and debating the law. As it is, tax law is already inconsistent in many ways. (Why are there people who can't contribute to a Roth IRA directly but can contribute to a Traditional and then immediately convert it to Roth? Why are maximum limits for 401(k) plans and IRAs separate rather than being one combined "retirement" savings maximum?) In the absence of some specific legislative statements saying that it was set up this way for some specific purpose, one must assume that it was written with the some goals as all tax law: As a compromise between various ideas, trying to accomplish some specific purpose. Feel free to add in some level of inefficiency and it being hard to completely understand the entirely of the tax law, which leads to things perhaps not being as "tidy" as one might hope for. But there's no reason to think that the people crafting the tax advantages for HSA plans had any reason to use 401(k) plans as a template, or wanted them to accomplish the same goals. |
Is it a good practice to keep salary account and savings account separate? | It possibly could have made sense historically when interest rates were higher. In the UK, you used to get negligible (if any) interest on a current (checking) account, but could get modest interest from a savings account, so transferring the bulk of your salary to a savings account and paying from there (or transferring back to the current account when needed) could make some sense (but even then was probably not worth the effort). Nowadays (at least in the UK), most (easy access) savings accounts pay very little interest, but there are current accounts (example list here from comparison site) that pay more interest provided you go through several hoops. Typically you have to pay your salary (or a minimum number of £000s per month) into the account, and have a minimum number of direct debits going out. Some have fees, some only last for a year. |
Why do some people say a house “not an investment”? | I think the claim is that you shouldn't buy a house expecting it to increase in value as you would a stock portfolio. OTOH if you are looking at it from the stand point of "I need housing, mortgage payments and rent are comparable and I build equity if I buy a house rather then rent" that's potentiality a very different situation (that I'm not qualified to judge). |
Allocation between 401K/retirement accounts and taxable investments, as a young adult? | I'm afraid you're mistaking 401k as an investment vehicle. It's not. It is a vehicle for retirement. Roth 401k/IRA has the benefit of tax free distributions at retirement, and as long as you're in the low tax bracket - it is for your benefit to take advantage of that. However, that is not the money you would be using to start a business or buy a home (except for maybe up to $10K you can withdraw without penalty for first time home buyers, but I wouldn't bother with $10k, if that's what will help you buying a house - maybe you shouldn't be buying at all). In addition, you should make sure you take advantage of the employer 401k match in full. That is free money added to your Traditional 401k retirement savings (taxed at distribution). Once you took the full advantage of the employer's match, and contributed as much as you consider necessary for your retirement above that (there are various retirement calculators on line that can help you in making that determination), everything else will probably go to taxable (regular) savings/investments. |
How can I find stocks with very active options chains? | Agree with some of the posts above - Barchart is a good source for finding unusual options activity and also open interest -https://www.barchart.com/options/open-interest-change |
Where can you find dividends for Australian Stock Market Shares (ASX) for more than 2 years of data? | It's difficult to compile free information because the large providers are not yet permitted to provide bulk data downloads by their sources. As better advertising revenue arrangements that mimic youtube become more prevalent, this will assuredly change, based upon the trend. The data is available at money.msn.com. Here's an example for ASX:TSE. You can compare that to shares outstanding here. They've been improving the site incrementally over time and have recently added extensive non-US data. Non-US listings weren't available until about 5 years ago. I haven't used their screener for some years because I've built my own custom tools, but I will tell you that with a little PHP knowledge, you can build a custom screener with just a few pages of code; besides, it wouldn't surprise me if their screener has increased in power. It may have the filter you seek already conveniently prepared. Based upon the trend, one day bulk data downloads will be available much like how they are for US equities on finviz.com. To do your part to hasten that wonderful day, I recommend turning off your adblocker on money.msn and clicking on a worthy advertisement. With enough revenue, a data provider may finally be seduced into entering into better arrangements. I'd much rather prefer downloading in bulk unadulterated than maintain a custom screener. money.msn has been my go to site for mult-year financials for more than a decade. They even provide limited 10-year data which also has been expanded slowly over the years. |
Free, web-based finance tracking with tag/label support? | Mint.com does all of that (except for the cash at hand). |
how late can i put money into an IRA and still have it count for 2015? | The IRA contribution for the year are allowed until the tax day of that year. I.e.: you can contribute for 2015 until April 15th, 2016 (or whatever the first business day is after that, if the 15th is a holiday). You'll have to explicitly designate your contribution for 2015, since some of the IRA providers may automatically designate the current year unless you explicitly say otherwise. If that happens - it will be very hard to fix later, so pay attention when you're making the contribution. You get a couple of things from your IRA provider: Form 5498 - details your contributions for the year, account FMV, and RMD details. You can see the actual form here. You don't always get this form, if you didn't contribute anything and no RMD is required for you. Since the last day to contribute is April 15th, these forms are usually being sent out around mid-May. But you should know how much you've contributed by the tax day without it, obviously, so this is only for the IRS matching and your record-tracking. Form 1099-R includes information about distributions (including withdrawals and roll-overs). You may not get this form if you didn't take any money out of your IRA. These come out around end of January. |
What type of pension should I get? | It's best to roll over a pension plan, you don't want to pay the penalties especially when you are young. Rolling over into another scheme, or rolling over into a scheme that is somewhat self directed would avoid the penalty and could help you achieve higher returns should you feel you will perform better. Making regular monthly or biweekly contributions is imperative so that you catch compounded returns on your investments. Since you state that you are inexperienced, I would suggest rolling over into the new scheme and sitting with the pension advisor for the company, ie Prudential, etc. Telling them some key information like your age, in how many years you expect to retire, your current income, your desired pension income per year and such will greatly help them ensure that you come as close to your goal as possible, providing nothing horrendous happens in the market. |
Are there any Social Responsibility Index funds or ETFs? | TIAA-Cref has their Social Choice Equity Fund, which is a Large Blend primarily equity fund that invests given the following consideration: The Fund primarily invests in companies that are screened by MSCI Inc. (“MSCI”) to favor companies that meet or exceed certain environmental, social and governance (“ESG”) criteria. The Fund does this by investing in U.S. companies included in one or more MSCI ESG Indices that meet or exceed the screening criteria described below. Prior to being eligible for inclusion in the MSCI ESG Indices, companies are subject to an ESG performance evaluation conducted by MSCI, consisting of numerous factors. The ESG evaluation process favors companies that are: (i) strong stewards of the environment; (ii) devoted to serving local communities where they operate and to human rights and philanthropy; (iii) committed to higher labor standards for their own employees and those in the supply chain; (iv) dedicated to producing high-quality and safe products; and (v) managed in an exemplary and ethical manner. https://www.tiaa.org/public/offer/products/mutual-funds/responsible-investing |
One of my stocks dropped 40% in 2 days, how should I mentally approach this? | Hopefully, before you invested in this stock, you evaluated the company. You looked at the financial information about the company and where the company was headed, and evaluated whether the stock was undervalued or overvalued. Hopefully, you determined that the stock was undervalued at the time you bought it. The thing to do now is to reevaluate the stock. Do you think the stock is overvalued or undervalued right now? If you didn't own it, would you buy it today? Instead of looking at the past performance of the stock, you want to try to determine which direction the stock will go from today. If you wouldn't buy it today at it's current price, then you should sell. If you have no idea how to do this evaluation, neither do I. For me, with the investing knowledge I have right now, investing in an individual stock would be way too risky. If you don't know how to evaluate a stock and determine if it is a good buy or not, then you should stay away from individual stocks and instead invest in stock mutual funds, which lower the risk by diversifying over lots of stocks. |
If a company has already IPO'ed and sold its shares, what is the incentive to keep making money? | A company doesn't offer up 100% of its shares to the market. There's a float amount of varying significance, maybe 30% of the shares are put up for public offer. Generally some amount of current shareholders will pledge some or all of their shares for offer to the public. This may be how the venture capital, private equity or other current investors cash out their initial investment. The company may issue new shares in order to raise money for some initiative. It may be a combination of existing shares and new. Additionally, a company may hold some "treasury shares" on its balance sheet. In this instance fluctuations in the share price directly affect the health of the balance sheet. As far as incentive goes, stock options to management and C-Suite employees keep everyone interested in an increasing stock price. |
Getting (historical) Standard & Poor Stock Guides | I haven't seen one of these in quite some time. Back in the 1970s, maybe the 1980s, stock brokers would occasionally send their retail clients a complimentary copy once in a while. Also, I remember the local newspaper would offer a year-end edition for a few dollars (maybe $3) and that edition would include the newspaper company's name on the cover. They were very handy little guides measuring 5 1/2 x 8 (horizontal) with one line devoted to each company. They listed hundreds of publicly traded companies and had basic info on each company. As you stated, for further info you needed to go to the library and follow-up with the big S&P and/or Moody's manuals. That was long before the internet made such info available at the click of a button on a home computer! |
How long can a company keep the money raised from IPO of its stocks? | Is it correct that there is no limit on the length of the time that the company can keep the money raised from IPO of its stocks, unlike for the debt of the company where there is a limit? Yes that is correct, there is no limit. But a company can buy back its shares any time it wants. Anyone else can also buy shares on the market whenever they want. |
Unusual real estate market with seemingly huge rental returns | I would not claim to be a personal expert in rental property. I do have friends and family and acquaintances who run rental units for additional income and/or make a full time living at the rental business. As JoeTaxpayer points out, rentals are a cash-eating business. You need to have enough liquid funds to endure uncertainty with maintenance and vacancy costs. Often a leveraged rental will show high ROI or CAGR, but that must be balanced by your overall risk and liquidity position. I have been told that a good rule-of-thumb is to buy in cash with a target ROI of 10%. Of course, YMMV and might not be realistic for your market. It may require you to do some serious bargain hunting, which seems reasonable based on the stagnant market you described. Some examples: The main point here is assessing the risk associated with financing real estate. The ROI (or CAGR) of a financed property looks great, but consider the Net Income. A few expensive maintenance events or vacancies will quickly get you to a negative cash flow. Multiply this by a few rentals and your risk exposure is multiplied too! Note that i did not factor in appreciation based on OP information. Cash Purchase with some very rough estimates based on OP example Net Income = (RENT - TAX - MAINT) = $17200 per year Finance Purchase rough estimate with 20% down Net Income = (RENT - MORT - TAX - MAINT) = $7500 per year |
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