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Monthly money transfers from US to Puerto Rico
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Puerto Rico: Last I checked, the Puerto Rico banking system wasn't materially different than working within the US - though some Continental US banks exclude US Territories like Guam and Puerto Rico or charge more when dealing with them. I'm not certain as to why. However, most banks don't see them any differently than a regular US bank. Regarding Wire Transfers (WT): $35 for an ad-hoc WT within the US and Puerto Rico is for the most part average. Wires cost money for the convenience of quick clearing and guaranteed funds. If you have a business/commercial account where you are doing this regularly and paying a monthly fee for a WT service, $10 - $15 each may be expected. I had a business account with US Bank where I paid $15 a month for a WT transfer service and reoccurring template (always went to the same account - AMEX in this case) and the transfers were only $15 each. But, a WT as a general rule, especially when it's only a once a month thing from a personal account, will cost around $25 - $35 in the US and Puerto Rico. As others have said, you can simply mail a personal check just as you would in the US. Many people choose to use Money Orders for Puerto Rico as they can be cashed at the post office (I believe there is an amount limit though). ACH: If you want even easier, I would use ACH. Banks in Puerto Rico use this ACH (Automatic Clearing House) system as we do in the Continental US. It will take a little longer than WT, but as you said - this is fine. Not all US Banks offer free ACH, but a number of them do. Last I checked, Citibank and USAA where among them. Banks like, BAC charges a small fee. Much smaller than a WT! This post may be useful to you: What's the difference between wire transfer and ACH?
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Are option contracts subject to mark to market rules
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If I sell a covered call, on stock I own 100%, there is no risk of a margin call. The stock goes to zero, I'm still not ask to send in more money. But, if bought on margin, margin rules apply. A naked put would require you to be able to buy the stock if put to you. As the price of the stock drops, you still need to be able to buy it at the put strike price. Mark to market is just an expression describing how your positions are considered each day.
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Does it make sense to buy a house in my situation?
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The $3K includes property tax, right? It looks like the mortgage alone will be about $2150 or so. If your (cal) state tax is enough to put you into itemized deductions, your mortgage and property tax are a write off, and the $3k will actually be closer to the $2K you are considering for rent. The wild card as I see it is that your budget is so tight that any unforeseen expenses will be charged. As a long time homeowner, I know these expenses sometime appear to be high, and regular, despite their random nature. The money earmarked for credit card payments will go a long way to cover the tight budget you seem to have. This and your decreasing support makes this look tight but not impossible. The condition of the house would make or break the deal, in my opinion.
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Do query services like Google Finance and Yahoo Finance go back to correct busted and adjusted trades?
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No. Busts are very infrequent, and if an equity were illiquid enough to be affected, the bust cost would be enormous. For a liquid equity, the amount of busted volume is insignificant except during a flash crash or flash spike. Then it would be reasonable to redownload.
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Simple and safe way to manage a lot of cash
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If this money is intended to be used for retirement and depending on how old "older" is, it sounds a little risky to be putting too much money in a stock based mutual fund. While the CDs may seem like crappy investments right now, it is important to down-shift risk as you get closer to retirement because this person won't have as much time to recover if the markets take another big dip.
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Are long-term bonds risky assets?
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AAA bonds are safe, as far as the principal goes. If you buy long term bonds today (at very low rates) and the interest rate goes up to 10% in 5 years, the current value of the bonds will decrease. But if you hold the bonds till maturity, you will almost certainly (barring MBS scenarios) get the expected principal and interest on the bonds. If you decide to sell a long-term bond before it matures, it will probably be worth less than you paid for it if interest rates have risen since you bought it.
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What are the tax implications of earnings from the stock market (BSE)?
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If you have held the stocks longer than a year, then there is no tax apart from the STT that is already deducted when you sell the shares. If you have held the stock for less than a year, you would have to pay short term capital gains at the rate of 15% on the profit. Edit: If you buy different shares from the total amount or profits, it makes no difference to taxes.
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How to automate the tracking of ratios and other values for a set of stocks or ETFs?
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Spreadsheets need not be static, they can pull data from the web. This article describes the method you seek.
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Why do people buy new cars they can not afford?
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The car you dream of might not be available in your local used car market. Or if it is, there might be something wrong with it. Here are some reasons that a person might want to buy a new car. Basically, if you have a picture in your mind of what your next car should look like, it is easier to shop for a new car: New cars are getting better. Here are some reasons that a person might want a newer generation car rather than an older generation car: Cars wear out. Here are some reasons a person shopping for a car might pass on a used car: In other words, there are good reasons to want a car that is either brand new, exactly two years old, or 3 - 5 years old. The brand new car might be better than the old car ever was.
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How do cashier's checks work and why are they good for scams?
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Ok, few things to understand first: Secondly, think about the way a scam usually flows. A person (scammer) with an actual bank account with money issues a valid cashiers check, trick someone else (victim) into receiving it (typically in exchange for a percent) and passing along a portion to another account (back to the scammer). The scammer then reports the first transaction as fraudulent and the bank takes back that transaction. Now the victim is stuck with the second transaction, and without the funds from the first. Meanwhile the scammer has both the original funds and the percentage from the second one. In a way they're attractive for scammers because they're so trusted.
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What is the difference between fund and portfolio?
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A "Fund" is generally speaking a collection of similar financial products, which are bundled into a single investment, so that you as an individual can buy a portion of the Fund rather than buying 50 portions of various products. e.g. a "Bond Fund" may be a collection of various corporate bonds that are bundled together. The performance of the Fund would be the aggregate of each individual item. Generally speaking Funds are like pre-packaged "diversification". Rather than take time (and fees) to buy 50 different stocks on the same stock index, you could buy an "Index Fund" which represents the values of all of those stocks. A "Portfolio" is your individual package of investments. ie: the 20k you have in bonds + the 5k you have in shares, + the 50k you have in "Funds" + the 100k rental property you own. You might split the definition further buy saying "My 401(k) portfolio & my taxable portfolio & my real estate portfolio"(etc.), to denote how those items are invested. The implication of "Portfolio" is that you have considered how all of your investments work together; ie: your 5k in stocks is not so risky, because it is only 5k out of your entire 185k portfolio, which includes some low risk bonds and funds. Another way of looking at it, is that a Fund is a special type of Portfolio. That is, a Fund is a portfolio, that someone will sell to someone else (see Daniel's answer below). For example: Imagine you had $5,000 invested in IBM shares, and also had $5,000 invested in Apple shares. Call this your portfolio. But you also want to sell your portfolio, so let's also call it a 'fund'. Then you sell half of your 'fund' to a friend. So your friend (let's call him Maurice) pays you $4,000, to invest in your 'Fund'. Maurice gives you $4k, and in return, you given him a note that says "Maurice owns 40% of atp9's Fund". The following month, IBM pays you $100 in dividends. But, Maurice owns 40% of those dividends. So you give him a cheque for $40 (some funds automatically reinvest dividends for their clients instead of paying them out immediately). Then you sell your Apple shares for $6,000 (a gain of $1,000 since you bought them). But Maurice owns 40% of that 6k, so you give him $2,400 (or perhaps, instead of giving him the money immediately, you reinvest it within the fund, and buy $6k of Microsoft shares). Why would you set up this Fund? Because Maurice will pay you a fee equal to, let's say, 1% of his total investment. Your job is now to invest the money in the Fund, in a way that aligns with what you told Maurice when he signed the contract. ie: maybe it's a tech fund, and you can only invest in big Tech companies. Maybe it's an Index fund, and your investment needs to exactly match a specific portion of the New York Stock Exchange. Maybe it's a bond fund, and you can only invest in corporate bonds. So to reiterate, a portfolio is a collection of investments (think of an artist's portfolio, being a collection of their work). Usually, people refer to their own 'portfolio', of personal investments. A fund is someone's portfolio, that other people can invest in. This allows an individual investor to give some of their decision making over to a Fund manager. In addition to relying on expertise of others, this allows the investor to save on transaction costs, because they can have a well-diversified portfolio (see what I did there?) while only buying into one or a few funds.
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Are money market instrument and short-term debt same?
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The Money Market is a place where one trades Instruments. The market is similar to that of the Stock Market. The instruments traded in Money Markets include Short Term Debt Instruments as well as FX Swap Instruments and Mortgage & Asset Backed Securities. The FX & Mortgage Securities are not Debt instruments per se. They also include other custom created instruments that are traded. The definition of Short Term debt is any guaranteed instrument with a maturity of less than a year. These instruments are used in various transactions, including retail and the Money Market is not the only place these are traded.
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How to know if two ETFs are 'substantially identical' according to wash sale rules?
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Nobody knows for sure what "substantially identical" means because the IRS hasn't officially defined it. Until they do so, it would come down to the decision of an auditor or a tax court. The rule of thumb that I have always heard is if the funds track the same index, they are probably substantially identical. I think most people wouldn't consider any pair of AGG, CMF, and NYF to be substantially identical, so you should be safe with your tax-loss harvesting strategy.
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Optimal way to use a credit card to build better credit?
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First I would like to say, do not pay credit card companies in an attempt to improve your credit rating. In my opinion it's not worth the cash and not fair for the consumer. There are many great resources online that give advice on how to improve your credit score. You can even simulate what would happen to your score if you did "this". Credit Karma - will give you your TransUnion credit score for free and offers a simulation calculator. If you only have one credit card, I would start off by applying for another simply because $700 is such a small limit and to pay a $30 annual fee seems outrageous. Try applying with the bank where you hold your savings or checking account they are more likely to approve your application since they have a working relationship with you. All in all I would not go out of my way and spend money I would not have spent otherwise just to increase my credit score, to me this practice is counter intuitive. You are allowed a free credit report from each bureau, once annually, you can get this from www.annualcreditreport.com, this won't include your credit score but it will let you see what banks see when they run your credit report. In addition you should check it over for any errors or possible identity theft. If there are errors you need to file a claim with the credit agency IMMEDIATELY. (edit from JoeT - with 3 agencies to choose from, you can alternate during the year to pull a different report every 4 months. A couple, every 2.) Here are some resources you can read up on: Improve your FICO Credit Score Top 5 Credit Misconceptions 9 fast fixes for your credit scores
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How to find cheaper alternatives to a traditional home telephone line?
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Try to use VOIP service provider or web enabled conference calling services in your home phone. Now a days communication technologies have seen a boost as well as integration of different formats and platforms which easily reduces phone bills of a user. Service such as UberConference, Skype, Webinar etc enables audio/video as well as web conferencing feature for their user. Service tiers such as free plans, basic plans and business plans allow user to use these conference calling services per their need. Have a look at any such service and use it as an alternative of your home phone line.
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How does one typically exit (close out) a large, in-the-money long put option position?
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While open interest usually correlates to volume, the mark of liquidity is the bid ask spread. Even when trading options with spreads as large as an ask 2x the bid, a more realistic price that traders are willing to accept lies somewhere in the middle. Any option can easily be exited at intrinsic value: underlying price - exercise price for calls, exercise price - underlying price for puts. For illiquid options, this will be the best price obtained. For longer term options, something closer to the theoretical price is still possible. If an underlying is extremely liquid, yet the options aren't quite then options traders will be much more ready to trade at the theoretical price. For exiting illiquid options, small, < 4 contracts, and infrequent, > 30 minute intervals, orders are more likely to be filled closer to the theoretical price; however, if one's sells are the only trades, traders on the other side will take note and accept ever lowering implied volatilities. With knowledge of what traders will accept, it is always more optimal to trade out of options rather than exercise because of the added costs and uncertainty involved with exercising and liquidating.
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How accurate is Implied Volatility in predicting future moves?
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Historical volatility of a stock is going to be based on past performance, basically its current trend. That can be useful, but really is no indication of how it will perform in the future. Especially with a big swing in the market. Now if you're talking about implied volatility (IV) of an options contract, that's a little different. IV is derived from an option’s price and shows what the market “implies” about the stock’s volatility in the future. Thus it is based on the actions of active traders and market makers. So, it gives you a bit more insight into what's going on, but at times has less to do with fundamentals. I guess a good way to think of IV based on options contracts is as an educated opinion, of the market as a whole, with regards to how much that stock could likely move over a period of time (options expiration). Also note that IV represents the potential for a stock to move, but it does not forecast direction. I don't know of any studies off the top of my head, but I'm sure there have been plenty.
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If a stock doesn't pay dividends, then why is the stock worth anything?
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While there are many very good and detailed answers to this question, there is one key term from finance that none of them used and that is Net Present Value. While this is a term generally associate with debt and assets, it also can be applied to the valuation models of a company's share price. The price of the share of a stock in a company represents the Net Present Value of all future cash flows of that company divided by the total number of shares outstanding. This is also the reason behind why the payment of dividends will cause the share price valuation to be less than its valuation if the company did not pay a dividend. That/those future outflows are factored into the NPV calculation, actually performed or implied, and results in a current valuation that is less than it would have been had that capital been retained. Unlike with a fixed income security, or even a variable rate debenture, it is difficult to predict what the future cashflows of a company will be, and how investors chose to value things as intangible as brand recognition, market penetration, and executive competence are often far more subjective that using 10 year libor rates to plug into a present value calculation for a floating rate bond of similar tenor. Opinion enters into the calculus and this is why you end up having a greater degree of price variance than you see in the fixed income markets. You have had situations where companies such as Amazon.com, Google, and Facebook had highly valued shares before they they ever posted a profit. That is because the analysis of the value of their intellectual properties or business models would, overtime provide a future value that was equivalent to their stock price at that time.
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Can I move my 401k to another country without paying tax penalty?
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hello – I am a natural born US citizen; I have worked 35+ years in the United States; I have a 401(k), IRA, Social Security benefits. I have researched the ex-patriot possibilities for several years. I've consulted both accountants and tax attorneys. The long answer is: hire tax consultants/attorneys to try to shelter what assets you can. 401(k), IRA, and Social Security benefits are all taxable worldwide to US citizens. unless you become the citizen of your new country of residence, these taxes are unavoidable. since all of the above assets are considered "pretax" to the US government, they are all taxable on distribution whether slowly or in lump sum. the short answer is: "Hotel California"… "Relax, said the watchman – we are programmed to receive. You can check out any time, but you can never leave…"
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What is a typical investment portfolio made up of?
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Paying off the high-interest debt is a good first start. Paying interest, or compound interest on debt is like paying somebody to make you poor. As for your 401k, you want to contribute enough to get the full match from your employer. You might also consider checking out the fees associated with your 401k with an online fee analyzer. If it turns out you're getting reamed with fees, you can reduce them by fiddling with your investments. Checking your investment options is always a good idea since jobs frequently change them. Opening an IRA is a good call. If you're eligible for both Roth and Traditional IRAs, consider the following: Most financial institutions (brokers or banks) can help you open an IRA in a matter of minutes. If you shop around, you will find very cheap or even no fee options. Many brokers might try to get your business by giving away something for ‘free.' Just make sure you read the fine print so you understand the conditions of their promotional offer. Whichever IRA you choose, you want to make sure that it's managed properly. Some people might say, ‘go for it, do it yourself’ but I strongly disagree with that approach. Stock picking is a waste of time and market timing rarely works. I'd look into flat fee financial advisors. You have lots of options. Just make sure they hear you out, and can design/execute an investment plan specific to your needs At a minimum, they should: Hope this is helpful.
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How do you choose which mortgage structure is appropriate when buying a home?
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Go for 15 years loan - Lower interest rate over 2-5 years period. If you can afford to pay 20% down then please do. Do not assume the average ROI will +(8-10%). It all depends on market and has variable factors like city, area and demand.
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Is there a formula to use to analyse whether an investment property is a good investment?
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When you invest in a property, you pay money to purchase the property. You didn't have to spend the money on the property though - you could have invested it in the stock market instead, and expected to make a 4% annualized real rate of return or thereabouts. So if you want to know whether something's a "good investment", ask whether your annual net income will be more or less than 4% of the money you put into it, and whether it is more or less risky than the stock market, and try to judge accordingly. Predicting the net income, though, is a can of worms, doubly so when some of your expenses aren't dollar-denominated (e.g. the time you spend dealing with the property personally) and others need to be amortized over an unpredictable period of time (how long will that furnace repair really last?). Moreover your annualized capital gain and rental income is also unpredictable; rent increases in a given area cannot be expected to conform to a predetermined mathematical formula. Ultimately it is impossible to predict in the general case - if it were possible we probably would have skipped that last housing bubble, so no single simple formula exists.
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How come the government can value a home more than was paid for the house?
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The real answer why the government is "allowed" to do something is because they are the government and they make the rules. There are lots of laws that I think make no sense. I ran into a similar situation to yours. I bought a house during a time when the market in my area was way down. The previous owner had paid $140,000 but I got it for only $80,000. The government appraised it for, I forget the exact number, but over $100,000. I appealed, and the argument I made to the appeal board was that the law says it is supposed to be appraised for "fair market value". The definition of "fair market value" is the amount that a willing buyer would pay to a willing seller, absent special conditions like a sweetheart sale to a relative. The house had been advertised for a higher price and the seller had to drop the price several times before getting an offer, and finally accepting mine. This is pretty much the definition of "fair market value". The appeals board replied that it was not FMV because the market was bad at this particular time and so I got a good deal. I said that that's the definition of market value: it goes up and down as market conditions change. If the market happened to be up when someone bought a house and they had to pay a high price, would the government assess the house at a lower value because that was an unusually high price? I doubt it. They ended up reducing the assessed value, but not to what I actually paid. All that said, arguably a foreclosure sale might be considered special conditions. Prices at a foreclosure sale tend to be lower than "ordinary" sales. In a foreclosure, the bank is usually trying to get rid of the property quickly because they don't want to be in the property-management business, they want to be in the money lending and management business. Of course you could say that sort of thing about conditions surrounding many sales. Maybe the price is low because the seller needed cash now to start a business. Maybe the price is high because the buyer was too lazy to shop around. Maybe the price is low because the buyer is a very skilled negotiator. Etc etc. My watch just broke and while I was shopping for a new one I found two listings for the exact same watch, I mean exact same manufacturer and model number, identical picture, on the same web site, one giving the price as $24 and the other as $99. What is the market value of that watch? I presume anyone who saw both listings would pick the $24 one, but I presume some number of people pay the higher price because they never see the lower price. In real life there isn't really one, exact, fair market value. That's an abstraction.
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Real estate agent best practice
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There are people that make up a small segment of the population that have an unsatisfied need to see the insides of other people's houses. There's also a segment of the population that don't quite understand the "big picture" of how service professions work... for example, any group of friends going into a restaurant and requesting a table and sitting at it for over an hour, but feel they don't need to leave a tip because they only ordered espressos or shared a desert. Sure, you're paying for the service of a service professional, but it should also include their time and resources you consume outside of the actual service but many don't have that perspective. Why should I pay you if you aren't providing your actual "service" to me even though I'm consuming your time and resources that would be earning you your expected salary otherwise, is their justification. So when you encounter an individual from both small segments of the population mentioned above, the result is the problem your wife faces with perspective buyers. I look at the Agent / Buyer relationship from a different perspective when I encounter these no-harm intended individuals. I don't see it as the buyer is hiring the agent... for if that was the case, a contract of some sorts would be involved detailing the menu of services provided by the agent with associated costs, the buyer would make selections from the menu, pay the costs, and services rendered. but that's not how it works. so its important to understand the perspective of the agent looking to hire the buyer.. you're not paying the buyer to be your client, but you are looking to select the prospective buyer that's going to generate cash flow. In a commissions based work force that is also your main source of income, you have to look at prospective clients as that.. simply prospects..but who are a vital component of your salary. So when allocating your time and resources, especially if you're dealing with several prospects, you literally have to turn away these cold leads who are just looking for design tips and paint color pattern suggestions and you as their escort. If I was in the shoe-making business, i wouldn't hire a walk-in, give him access to materials and work space with the assumption that if its to his liking, it'll generate profit towards my salary needs, if the only thing he's interested in doing is looking around at all the other shoes, a behavior that requires my presence, time, and resources. You almost can't even justify it as "looking at it as possible income in the future" if it's costing you revenue now, whether its in the form of having to neglect actual buyers or you could be investing your time in things that would impact salary needs, such as advance course work (attending optional trainings offered by your broker), or investing time finding more serious leads.
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found a 1994 uncashed profit sharing retirement plan check
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Checks (in the US, anyway) are only good for six months after they have been written. After that. under the US Uniform Commerical Code they are considered "stale checks" and banks need not accept them. My experience is that they generally won't -- but you probably shouldn't count on that, either when figuring out whether to try depositing an old check or figuring out how much cash you need to keep in your checking account to cover recent stale checks. The check you now hold is certainly a statement of intent to pay you and thus is a useful document to supplement other evidence that they still owe you the money -- but since checks can be cancelled and/or a replacement check may have been issued, its value for that purpose may be limited. You can try depositing it and see what happens. If that doesn't work (or you don't want to bother trying it) you can contact the retirement plan, point out that this check went uncashed, and ask them to send you a replacement. If they haven't already done so (you might want to check your own records for that), there shouldn't be any problem with this. (Note: Many business checks have a statement printed on them that they're only good for 90 days or so. If yours does, you can skip trying to cash it; just contact the retirement plan offices.)
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In NYC is there sales tax on services like computer / cell phone repair?
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According to the New York State Department of Taxation and Finance, your service would appear to be exempt from taxes. However, if you are charging for tangible items, those would incur a sales tax.
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Why have I never seen a stock split?
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If you want to see one split, well, a reverse split anyway, keep an eye on TZA, FAZ, BGZ, and any Direxion fund. These funds decay continuously forever. Once they get close to $10-$15 or so, they reverse-split them back to the $30-$50 range and the process starts over. This happens about once a year. A few years ago I sent Direxion an email asking what happens when they run out of shares to reverse split and the reply was that's its an open fund where shares can be created or redeemed at will. That still didn't answer the question of what happens when they run out of shares. If they create new shares, the price will drop below the $10 level where many fund managers aren't allowed to buy.
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Using stable short-term, tax-free municipal bond funds to beat the bank?
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Banks' savings interest is ridiculous, has always been, compared to other investment options. But there's a reason for that: its safe. You will get your money back, and the interest on it, as long as you're within the FDIC insurance limits. If you want to get more returns - you've got to take more risks. For example, that a locality you're borrowing money to will default. Has happened before, a whole county defaulted. But if you understand the risks - your calculations are correct.
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What is the best approach to save money for College for three kids?
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I'm not a 'rule of thumb' guy, but here, I'd suggest that if you can set aside 10% of your income each year for college, that would be great. That turns out to be $900/mo. In 15 years, if you saw an 8% CAGR, you'd have $311K which happens to be in your range of expenses. And you'd still have time to go as the baby won't graduate for 22(?) years. (Yup, 10% is a good rule of thumb for your income and 3 kids) Now, on the other hand, I'd research what grants you'd be able to get if you came up short. If instead of saving a dime, you funded your own retirement and the spouse's IRA if she's not working, and time the mortgage to pay it off in 15 years from now, the lack of liquid funds actually runs in your favor. But, I'm not an expect on this, just second guessing my own fully funded college account for my daughter.
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Found an old un-cashed paycheck. How long is it good for? What to do if it's expired?
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The typical rule in the US is 180 days, but some banks do it differently. However, even if the check is dead, you should be able to call the payroll department for your old job. They can stop payment on the old check and issue you another one.
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Can I sell a stock immediately?
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You have no guarantees. The stock may last have traded at $100 (so, the market price is $100), but is currently in free-fall and nobody else will be willing to buy it for any more than $80. Or heck, maybe nobody will be willing to buy it at all, at any price. Or maybe trading on this stock will be halted. Remember, the market price is just what the stock last traded at. If you put in a 'market order', you are ordering your broker to sell at the best available current price. Assuming someone's willing to buy your stock, that means you'll sell it. But if it last traded at $100, this doesn't guarantee you'll sell at anything close to that.
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Personal finance web service with account syncing in Germany
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I don't think there is a law against it. For example comdirect offers multi banking so you can access your accounts from other banks through the comdirect website. My guess would be: Germans are very conservative when it comes to their money (preferring cash above cards, using "safe" low interest saving accounts instead of stocks) so there just might be no market for such a tool. There are desktop apps with bank syncing that offer different levels of personal finance management. Some I know are MoneyMoney, outbank, numbrs, GNUCash and StarMoney.
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Do people tend to spend less when using cash than credit cards?
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Others have commented on the various studies. If, as JoeTaxpayer says, this one particular study he mentions does not really exist, there are plenty of others. (And in that case: Did someone blatantly lie to prove a bogus point? Or did someone just get the name of the organization that did the study wrong, like it was really somebody called "B&D", they read it as "D&B" because they'd heard of Dun & Bradstreet but not of whoever B&D is. Of course if they got the organization wrong maybe they got important details of the study wrong. Whatever.) But let me add one logical point that I think is irrefutable: If you always buy with cash, there is no way that you can spend more than you have. When you run out of cash, you have no choice but to stop spending. But when you buy with a credit card, you can easily spend more than you have money in the bank to pay. Even if it is true that most credit card users are responsible, there will always be some who are not, and credit cards make it easy to get in trouble. I speak from experience. I once learned that my wife had run up $20,000 in credit card debt without my knowledge. When she divorced me, I got stuck with the credit card debt. To this day I have no idea what she spent the money on. And I've known several people over the years who have gone bankrupt with credit card debt. Even if you're responsible, it's easy to lose track with credit cards. If you use cash, when you take out your wallet to buy something you can quickly see whether there's a lot of money left or not so much. With credit, you can forget that you made the big purchase. More likely, you can fail to add up the modest purchases. It's easy to say, "Oh, that's just $100, I can cover that." But then there's $100 here and $100 there and it can add up. (Or depending on your income level, maybe it's $10 here and $10 there and it's out of hand, or maybe it's $10,000.) It's easier today when you can go on-line and check the balance on your credit card. But even at that, well just this past month when I got one bill I was surprised at how big it was. I went through the items and they were all legitimate, they just ... added up. Don't cry for me, I could afford it. But I had failed to pay attention to what I was spending and I let things get a little out of hand. I'm a pretty responsible person and I don't do that often. I can easily imagine someone paying less attention and getting into serious trouble.
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Do credit ratings (by Moody's, S&P, and Fitch) have any relevance?
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The problems with ratings and the interpretation of ratings is that they are retrospective, and most people read them as prospective. They basically tell you that debtor is solvent right now. What does that mean? It means that the ratings are based on the audited financial statements of a company, government or other organization issuing debt. So, in the best case scenario where the rating agency is acting properly, they are still dependent on folks with fiduciary responsibility telling the truth. And even if they are telling the "truth", accounting rules make it possible to obscure problems for years in some cases. Municipal goverments are a great example of this... the general obligation bonds cities and even states with deep structural budget problems still get good ratings, because they are solvent and have sufficient operating cash to meet obligations today. But towards the end of a 30-year bond's life, that may not be the case anymore unless they dramatically alter their budgets. At the end of the day, ratings are one aspect of due diligence. They are useful screening devices, but you need to understand who you are lending money to by purchasing bonds and diversify your holdings to protect your wealth. The problem, of course, is when the trustees of your pension fund invests in garbage assets after getting a sales pitch on the beach in Hawaii, then conveniently place all of the blame for that bad investment on the rating agency. You unfortunately have zero control over that.
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Are lottery tickets ever a wise investment provided the jackpot is large enough?
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Here's an interesting link to a discussion about an Australian investor group back in the 1990s that bought almost every combination in the West Virginia lottery. It's pretty fascinating stuff. How An Australian Group Cornered A Lottery I don't need to add to what's already been said here, but it's a fun story!
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Why is mortgage interest deductible in the USA for a house you live in?
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It's a scam pushed through to benefit the banking system. Tax payments become income for the banks. Any alleged benefits for property holders are ultimately reduced by increased property prices, capital gains tax and estate taxes
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Do overall 401(k) contribution limits sum across employers?
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Let me first start off by saying that you need to be careful with an S-Corp and defined contribution plans. You might want to consider an LLC or some other entity form, depending on your state and other factors. You should read this entire page on the irs site: S-Corp Retirement Plan FAQ, but here is a small clip: Contributions to a Self-Employed Plan You can’t make contributions to a self-employed retirement plan from your S corporation distributions. Although, as an S corporation shareholder, you receive distributions similar to distributions that a partner receives from a partnership, your shareholder distributions aren’t earned income for retirement plan purposes (see IRC section 1402(a)(2)). Therefore, you also can’t establish a self-employed retirement plan for yourself solely based on being an S corporation shareholder. There are also some issues and cases about reasonable compensation in S-Corp. I recommend you read the IRS site's S Corporation Compensation and Medical Insurance Issues page answers as I see them, but I recommend hiring CPA You should be able to do option B. The limitations are in place for the two different types of contributions: Elective deferrals and Employer nonelective contributions. I am going to make a leap and say your talking about a SEP here, therefore you can't setup one were the employee could contribute (post 1997). If your doing self employee 401k, be careful to not make the contributions yourself. If your wife is employed the by company, here calculation is separate and the company could make a separate contribution for her. The limitation for SEP in 2015 are 25% of employee's compensation or $53,000. Since you will be self employed, you need to calculate your net earnings from self-employment which takes into account the eductible part of your self employment tax and contributions business makes to SEP. Good read on SEPs at IRS site. and take a look at chapter 2 of Publication 560. I hope that helps and I recommend hiring a CPA in your area to help.
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How do I explain why debt on debt is bad to my brother?
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This is not the case with your brother only. There are many business which run on this premise. It goes till the time all the conditions are in control and get busted when things goes out of way. You have mentioned the loan amount and not the monthly repayment amount. Even if you say, a new loan will not solve his problem, what are the way out ? Telling things nicely sometime does not work especially when facts are otherwise. Hence you need to make a compete case study which should also consider his capacity to pay. As of now it seems he has debts of around 20 months of his earning, which can be considered high, depending upon the terms of major loan such as car loan and personal loan. A case study is way out. You can explain him with such case study that he should not go for further loans.
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Company asking for card details to refund over email
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Definitely push for a check, they may not do anything nefarious with your credit card number however someone else may be able to read the email before it gets to its final destination. It's never safe to give out credit card number in a less than secure interface. Also, if this is a well known company, then the person interacting with you should know better than to ask for your information through email.
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value of guaranteeing a business loan
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The guarantee's value to you is whatever you have to pay to get the guarantee, assuming that you don't decide it's too expensive and look for another guarantor or another solution entirely. How much are you willing to pay for this loan, not counting interest and closing costs? That's what it's worth. See past answers about the risks of co-signing for a realistic view of how much risk your guarantor would be accepting and why they should hold out for a very substantial reimbursement for this service.
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23 and on my own, what should I be doing?
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You are doing Great! But you might want to read a couple of books and do some studying on budgeting and personal finance - education yourself now and you will avoid pain in the future. I learned a lot from reading Dave Ramsey's Total Money Makeover, and I have found some great advice from the simple budgeting guidelines on LearnVest. Budget in these three categories with these percentages, You may find that your "essentials" lower than 50%, because you are sharing room and utilities. You want to put as much into "financial" as you can for the first 1-2 years, to reduce (or eliminate) your student loan debt. Many folks will recommend you save six months (salary/expenses) for emergencies and unexpected situations. But understand that you are in debt now, and you have a unique opportunity to pay off your debt before your living expenses creep up (as they so often do). Since you are a contractor, put aside 2 months expenses (twice what I would normally advise), and then attack paying off your debts with passion. Since you have a mix of student loans, focus on paying them off by picking one at a time, paying the minimum against the others while you pay off the one you picked, then proceed to the next. Dave Ramsey advises a Debt Snowball, paying the smallest one first (psychological advantage, early wins), while others advise paying the highest interest off first. Since you have over $2400/month available to pay down debt, you could plan on reducing your student loan debt substantially in a year. But avoid accumulating other debt along the way. Save for larger purchases. Your bedroom purchase may have been premature, but you needed some basics. But check your contract. Since many 0% furniture loan deals retroactively charge interest if you don't pay them off in full - you might want to make regular payments, and pay the debt off a month early (avoid any 'gotcha's). You might want to open a retirement account - many folks recommend a Roth account for folks your age - it is after tax, but you don't pay tax when you withdraw money. Roth is better when you have lots of deductions (think mortgage, kids). But some retirement account would be great to get started. Open a credit union account (if you can), that will make getting a credit card or personal loan (installment) easier. You want to build a credit file, but you don't want credit card debt (seems contradictory), so opening 2 credit cards over the next year will help your credit. You want a good credit mix (student loans, revolving, installment, and mortgage - wait on that one).
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Why call option price increases with higher volatility
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When volatility is higher, the option is more likely to end up in-the-money. Moreover, when it ends up in-the-money, it is likely to be over the strike price by a greater amount. Consider a call option. With high volatility, moves in the stock price are big - both up moves and down moves. If the stock moves up by a lot, the call option holder will benefit greatly. On the other hand, when the stock moves down, below a certain point the option holder does not care how big a down move the stock has. His downside is limited. Hence, the value of the option is increased by high volatility. I know everyone who searches this is looking for this answer. Bump so people are able to get this concept instead of looking all over the web for it.
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Would I qualify for a USDA loan?
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You probably won't get a mortgage. UDSA has a 41% ratio of monthly debt to monthly income limit, and a score of 660 or better. A 250,000 mortgage at current rates for 30 year mortgage is about $1560/mo. (included in this figure is the 1% mortgage insurance premium, the .4% annual fee, the current rate for a 660 credit rating, the 2% points fee added at the front of the mortgage, typical closing cost added to transaction, and the .5% fee for over-mortgage insurance for the first 3 years since your mortgage will be higher than the value of the house due to these additional fees) Credit card payments = $120 ($60 times 2) Car payments = $542 ($271 for your car, $271 for the car you will be getting) Student loan = $50/month Child Support = $500/month Total = $2772/month Your income per month is 82000/12 = $6833/month $2772/$6833 = 40.6%... This is awfully close to the limit, so they likely would also look at your ability to save. Not seeing savings in the above example, I assume it is low. USDA site One mortgage help site breaks down some of the requirements into layman's language. Not knowing your exact location (county/state) and how many children you have, it is hard to be sure whether you make too much to qualify. This link shows the income limits by number of people in the house and the county/state. There are few places in which you could be living that would qualify you to any of their programs unless you have a several children. As others have posted, I suggest you get your debt down.
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What happens when the bid and ask are the same?
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Rule 610 (Google for it) stands that if Bid and Ask are the same, the market is considered Locked, and the exchange must stop all trading. So the same person can't quote the same bid and ask price. However, HFTs have found ways to circumvent this limitation when exchanges created special order types for them, e.g. Spam-and-Cancel
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How to invest with a low net worth
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I have an opposite view from all the other contributions here. Why not consider starting your own business. With the little money you have the return will most times be much higher than stocks return. The business is yours; you keep the business and the profit streams in the long term. Simply find businesses you can even start with a 100 or 200 euros and keep the rest with your bank. this is a sure way to become millionaire my friends.
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Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan?
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You seem to think that you are mostly paying interest in the first year because of the length of the loan period. This is skipping a step. You are mostly paying interest in the first year because your principle (the amount you owe) is highest in the first year. You do pay down some principle in that first year; this reduces the principle in the second year, which in turn reduces the interest owed. Your payments stay the same; so the amount you pay to principle goes up in that second year. This continues year after year, and eventually you owe almost no interest, but are making the same payments, so almost all of your payment goes to principle. It is a bit like "compounded interest", but it is "compounded principle reduction"; reducing your principle increases the rate you reduce it. As you didn't reduce your principle until the 16th year, this has zero impact on the interest you owed in the first 15 years. Now, for actual explicit numbers. You owe 100,000$ at 3% interest. You are paying your mortgage annually (keeps it simpler) and pay 5000$ per year. The first year you put 3000$ against interest and 2000$ against principle. By year 30, you put 145$ against interest and 4855$ against principle. because your principle was tiny, your interest was tiny.
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Which r in perpetuity formula to pricing a business?
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In the equity markets, the P/E is usually somewhere around 15. The P/E can be viewed as the inverse of the rate of a perpetuity. Since the average is 15, and the E/P of that would be 6.7%, r should be 6.7% on average. If your business is growing, the growth rate can be incorporated like so: As you can see, a high g would make the price negative, in essence the seller should actually pay someone to take the business, but in reality, r is determined from the p and an estimated g. For a business of any growth rate, it's best to compare the multiple to the market, so for the average business in the market with your business's growth rate and industry, that P/E would be best applied to your company's income.
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Does the profit of a company directly affect its stock or indirectly by causing people to buy or sell?
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people implicity agree to sell stocks when a company does bad But, remember, when you sell the stock of a company that, in your estimation, 'did bad', someone else had to buy; otherwise, there is no sale. The someone else who bought your shares evidently disagrees with your assessment. Did you sell because the company didn't earn a profit at all? Did it not earn a profit because it's in a dead-end business that is slowly but inevitably declining to zero? Something like Sears Holdings? Or did it not make a profit because it is in an emerging market that will possibly someday become hugely profitable? Something like Tesla, Inc.? Did you sell because the company made a profit, but it was lower than expected? Did they make a lower-than-expected profit because of lower sales? Why were the sales lower? Is the industry declining? Was the snow too heavy to send the construction crews out? Did the company make a big investment to build a new plant that will, in a few years, yield even higher sales and profits? What are the profits year-over-year? Increasing? Declining? Usually, investors are willing to pay a premium, that is more than expected, for a stock in a company with robust growth. As you can see, the mere fact that a company reported a profit is only one of many factors that determine the price of the shares in the market.
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Why not just invest in the market?
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Index funds do leech a "free ride" on the coattails of active traders. Consider what would happen if literally everyone bought index funds. For a company there would be no motivation to excel. Get listed; all the index funds are forced to buy your stock; now sit on your derriere playing Freecell, or otherwise scam/loot the company. Go bankrupt. Rinse wash repeat. This "who cares who John Galt is" philosophy would kill the economy dead. Somebody has to actually buy stocks based on research, analysis and value. Company managers need to actively fear, respect and court those people. They don't need to be mutual-fund managers, but they do need to be somebody. Maybe activist investors like Warren Buffett will suffice. Maybe retirement fund or endowment managers like CalPERS or Harvard can do this. Better be somebody! I'm all for index funds... Just saying only a fraction of the market's capital can be in index funds before it starts into a tragedy of the commons.
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Not paying cash for a house
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The common opinion is an oversimplification at best. The problem with buying a house using cash is that it may leave you cash-poor, forcing you to take out a home equity loan at some point... which may be at a higher rate than the mortgage would have been. On the other hand, knowing that you have no obligation to a lender is quite nice, and many folks prefer eliminating that source of stress. IF you can get a mortgage at a sufficiently low rate, using it to leverage an investment is not a bad strategy. Average historical return on the stock market is around 8%, so any mortgage rate lower than that is a relatively good bet and a rate MUCH lower (as now) is that much better a bet. There is, of course, some risk involved and the obligation to make mortgage payments, and your actual return is reduced by what you're paying on the mortage... but it's still a pretty good deal. As far as investment vehicles: The same answers apply as always. You want a rate of return higher than what you're paying on the mortgage, preferably market rate of return or better. CDs won't do it, as you've found. You're going to have to increase the risk to increase the return. That does mean picking and maintaining a diversified balance of investments and investment types. Working with index funds makes diversifying within a type easy, but you're probably going to want both stocks and bonds, rebalancing between them when they drift too far from your desired mix. My own investments are a specific mix with one each of bond fund, large cap fund, small cap fund, REIT, and international fund. Bonds are the biggest part of that, since they're lowest risk, but the others play a greater part in producing returns on the investments. The exact mix that would be optimal for you depends on your risk tolerance (I'm classified as a moderately aggressive investor), the time horizon you're looking at before you may be forced to pull money back out of the investments, and some matters of personal taste. I've been averaging about 10%, but I had the luxury of being able to ride out the depression and indeed invest during it. Against that, my mortgage is under 4% interest rate, and is for less than 80% of the purchase price so I didn't need to pay the surcharge for mortgage insurance. In fact, I borrowed only half the cost of the house and paid the rest in cash, specifically because leveraging does involve some risk and this was the level of risk I was comfortable with. I also set the duration of the loan so it will be paid off at about the same time I expect to retire. Again, that's very much a personal judgement. If you need specific advice, it's worth finding a financial counselor and having them help you run the numbers. Do NOT go with someone associated with an investment house; they're going to be biased toward whatever produces the most income for them. Select someone who is strictly an advisor; they may cost you a bit more but they're more likely to give you useful advice. Don't take my word for any of this. I know enough to know how little I know. But hopefully I've given you some insight into what the issues are and what questions you need to ask, and answer, before making your decisions.
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What is the valuation of a company based on?
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The textbook answer would be "assets-liabilities+present discounted value of all future profit". A&L is usually simple (if a company has an extra $1m in cash, it's worth $1m more; if it has an extra $1m in debt, it's worth $1m less). If a company with ~0 assets and $50k in profit has a $1m valuation, then that implies that whoever makes that valuation (wants to buy at that price) really believes one of two things - either the future profit will be significantly larger than $50k (say, it's rapidly growing); or the true worth of assets is much more - say, there's some IP/code/patents/people that have low book value but some other company would pay $1m just to get that. The point is that valuation is subjective since the key numbers in the calculations are not perfectly known by anyone who doesn't have a time machine, you can make estimates but the knowledge to make the estimates varies (some buyers/sellers have extra information), and they can be influenced by those buyers/sellers; e.g. for strategic acquisitions the value of company is significantly changed simply because someone claims they want to acquire it. And, $1m valuation for a company with $500m in profits isn't appropriate - it's appropriate only if the profits are expected to drop to zero within a couple years; a stagnant but stable company with $500m profits would be worth at least $5m and potentially much more.
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Understanding highly compensated employees within 401ks
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There are some nuances with HCE definition. To answer your questions. It's compensation as defined by the plan. Usually it's gross comp, but it can exclude things like fringe benefits, overtime pay, commissions, bonuses, etc. The compensation test is also a look-back test, meaning that an EE is determined to be an HCE in the current year if their compensation in the previous year was over the limit. I'm not sure how stock options affect this, but I expect they would be counted. Probably have an ESOP plan at that point too which is a whole other can-o-woms. The 5% owner test applies to the current year and also has a one-year look-back period. If at ANY point, even for a day, an employee was more than 5% owner, they are HCE for that year and next. Yes there is a limit. A company may limit the amount of HCE's to the top 20% of employees by pay like Aganju said. They can also disregard employees that may otherwise have been excluded under the plan using statutory exclusions. Example, they can disregard employees under 21 years and with less than 1 year of service. Hahaha, the IRS does not like to concisely define things. You can look here, that's probably as concise as you'll get. Hope this helps!
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Should I take a personal loan for my postgraduate studies?
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I would delay purchase of a condo or apartment until you have at a minimum, 6 months of living expenses including mortgage set aside in other investments that could be liquidated. If you lost your source of income though disability or layoff or an unexpected termination of a grant, you need to have that cushion or a significant other whose salary can sustain payments. You could lose a lot if you either cannot make the payments and/or the value to the apartment dips greatly. Many folks in the recent housing bubble and Great Recession learned this the hard way. Many lost their entire investment by not being able to make payments AND seeing their house lose 1/3 of its value.
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In a competitive market, why is movie theater popcorn expensive?
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People have moods, that mean they don't have the same level of demand for luxuries every day. There might be some days when I'm feeling a bit poor, or feel like I need to save money, and the price I'm prepared to pay for a box of popcorn might be 50c. There might be other days, for example, the day after I receive my wages, when I feel rich and I don't care how much I spend on things. On such a day, the price I'm prepared to pay for a box of popcorn might be $10. Now, when a supermarket sells popcorn, they're not really able to price discriminate between these two groups. People come through their doors in all kinds of mood, so the profit-maximising price for popcorn is going to be somewhere in the middle. But the only people who go to a movie theatre are people who are already in the right mood to spend money on needless luxuries. So the very fact of being in a movie theatre means that a popcorn stall, whether affiliated to the theatre or not, is open only to the high-spending end of the market. They have already caught me when I'm in the mood to spend, so their profit-maximising price will be much higher than that of the supermarket.
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Recent college grad. Down payment on a house or car?
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When I was in that boat a few years ago, I went for the car first. My thoughts: If I get the car first, I'm guaranteed to have a car that runs well. That makes it more convenient to commute to any job, or for social functions. I ended up dropping about $20k into a car (paid cash, I don't like being in debt). I chose to buy a really nice car, knowing it will last for many years to come - I'm expecting to not replace it for about 10 years from the purchase. I would urge you to consider paying in full for the car; dumping $20k+ is a lot, and there are plenty of nice cars out there in the $10-20k range that will work just fine for years to come. One benefit of paying in full is that you don't have a portion of your income tied into the car loan. The main reason I chose not to go for the house first had more to do with the difference in commitment. A home mortgage is a 30-year commitment on a large chunk of your income. With the job market and housing markets both currently working against you, it's better to wait until you have a large safety net to fall into. For example, it's always recommended to have several months worth of living expenses in savings. Compared to renting, having 6 or more months of mortgage payments + utilities + insurance + property taxes + other mandatory expenses (see: food, gas) comes out to a significant amount more that you should have saved (for me, I'm looking at a minimum of about $20k in savings just to feel comfortable; YMMV). Also, owning a house always has more maintenance costs than you will predict. Even if it's just replacing a few light bulbs at first, eventually you'll need something major: an appliance will die, your roof will spring a leak, anything (I had both of those happen in the first year, though it could be bad luck). You should make sure that you can afford the increased monthly payments while still well under your income. Once you're locked in to the house, you can still set aside a smaller chunk of your income for a new car 5-10 years down the road. But if you're current car is getting down to it's last legs, you should get that fixed up before you lock yourself in to an uncomfortable situation. Don't be in too much of a hurry to buy a house. The housing market still has a ways to go before it recovers, and there's not a whole lot to help it along. Interest rates may go up, but that will only hurt the housing market, so I don't expect it to change too much for the next several months. With a little bit of sanity, we won't have another outrageous housing bubble for many years, so houses should remain somewhat affordable (interest rates may vary). Also keep in mind that if you pay less that 20% down on the house, you may end up with some form of mortgage interest, which is just extra interest you'll owe each month.
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Is there any kind of unsecured stock loan?
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In the U.S. it is typical that a stock brokerage account can be set up to buy stock with up to half the cost being borrowed from the broker. This is called a margin account. The stock purchased must remain in the account until sold (or the loan is paid off), as it serves as built-in collateral for the loan. If the market price for the stock goes down too much, you will be required to add money, or the stock will be sold to cover the loan. See this question for some more information.
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What are the differences between an investment mortgage and a personal mortgage?
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I used to own a few investment properties, so I'm pretty familiar with this. As MrChrister mentions, lenders see investment mortgages as higher risk. People who fall into financial trouble are much more likely to let their investment properties go than their personal residence. Consequently, the interest rates and downpayment requirements are generally higher. Typically a mortgage for an investment property will require 20% down, vs. as low as 3-5% down for a personal residence. With excellent credit and some shopping around, you could probably do 10% down. Interest rates are typically about a half-percent higher as well. You'll also find that the more investment properties you have, the harder it becomes to finance new ones. Banks look at debt-to-income ratios to determine if you are over extended. Typically banks like to see that your housing payments are less than 20% or so of your income. However, with rental properties, housing payments generally account for far more than 20% of your rental income. Other income you have can offset that, but after buying 2-3 houses or so, your DTI generally creeps into the range where lenders are uncomfortable lending to you anymore. This is why you'll find that many rental properties are bought on land contracts with owner financing rather than with mortgages.
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Is it beneficial to convert non-investment real estate to rental if I need to make major repairs? (USA/Missouri)
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I think you may have a significant misunderstanding here. You have been renting your property out for two years, now. There is no special "roommate" clause in the tax code; roommates are renters, and the rent they pay is rental income. (If they were roommates in a property you both rented from a third party, that would be different.) See publication 527, chapter 4 for more details on the subject (search on "Renting Part of Property"). You should be: You may also consider "Not renting for profit" section, which may be closer to what you're actually thinking - of changing from "Renting not for profit" to "Renting for profit". Not rented for profit means you can report on your 1040 as opposed to filing Schedule E, but it does mean you have to actually not make a profit (and remember, some of the money that goes to paying the mortgage is not deductible on this side of things since it's your property and you'll get that money back, presumably, when you sell it). If that is what you're asking about, it sounds like it's just a matter of money. Are you going to start making money? Or, are you going to start making enough significant upgrades/etc. to justify the tax deduction? You should consider the actual, specific numbers carefully, probably with the help of a CPA who is familiar with this sort of situation, and then make the decision that gives you the best outcome (keeping in mind that there may be long-term impacts of switching from not-for-profit to for-profit rental treatment).
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What is the different between 2 :1 split and 1:1 split
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There is no such thing as a "one for one" split. It's either N for 1, or 1 for N in a reverse split. And for either, N can't be 1. Yes a 3:2 can happen, but I still read it as 1.5 for 1.
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In US, is it a good idea to hire a tax consultant for doing taxes?
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Good tax people are expensive. If you are comfortable with numbers and computers, you can do it better yourself.
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Why do investors buy stock that had appreciated?
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People buy stocks with the intention of making money. They either expect the price to continue to rise or that they will get dividends and the price will not drop (enough) to wipe out their dividend earnings.
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H&R Block says form 1120 not finalized? IRS won't take it yet?
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This form is due March 15. This year, the 15th is Saturday, so the deadline is Monday March 17th. Keep in mind, the software guys would have two choices, wait until every last form is finalized before releasing, or put the software out by late November when 80%+ are good to go. Nothing is broken in this process. Keep in mind that there are different needs depending on the individual. I like to grab a copy in early December, and have a preliminary idea of what my return with look like. I'll also know if I'll owe so much that I should send in a quarterly tax payment. The IRS isn't accepting any return until 1/31 I believe, so you've lost no time. When you open the program, it usually ask to 'phone home' and update. In a couple weeks, all should be well. (Disclosure - I have guest posted on tax issues at both TurboTax and H&R Block's blogs. The above are my own views.)
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Historic prices for currencies, commodities,
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My guess it's a legal agreement between Yahoo and data provider on what data can be stored, displayed and for how long. Check out this list of data providers
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How can I find a report of dividend earned in a FY?
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Log in to kotak securities demat account. THere, you can find statement of your sell purchase and dividend received.
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VAT and German freelance working on international project
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11 / 111 / 11111 looks like the (old) tax number: it is used by the tax office to know who you are, it isn't good at all for the spanish company. It would even change when you move inside Germany. VAT IDs are not exclusive to GmbHs (but a GmbH always has one). As freelancers you can get at VAT ID but you don't always have to. The tax office offers a "small business" treatment (§ 19 UStG) for freelancers, kind of an opt-out for the VAT ID. As you do not have a VAT ID, this is probably your case. It means So what to do? If I were you, I'd write them that according to §19 UStG and the European Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, TITLE XII CHAPTER 1 "Special scheme for small enterprises" you were not assigned a VAT ID, and VAT is not applicable to your bill. The fact that VAT is not applicable in this case does not mean that they are allowed to refuse payment. I heard a rumour (but don't really know) that a number similar to the VAT ID is planned also for freelancers (Wirtschafts-IDNr.). You could go to your tax office and ask them about. Maybe that yields a number that satisfies spanish burocracy. AFAIK, you can go to your tax office and ask them to give you a real VAT number. But careful: that has the serious drawback that you have to do do an advance VAT estimate and pay that to the tax office at least quarterly (for bigger business monthly). And (AFAIK) you are not allowed to change back to the small business treatment for several years.
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Are there any e-commerce taxation rules in India?
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There are no clear guidelines. If you are selling as individual, then what ever profit you make gets added to your overall income as you pay tax accordingly. This is true for sole proprietor or partnership kind of firms. If you are registered as a Company, the profits are taxed as business income. There may be VAT and other taxes. Please consult a CA who can guide you in specifics as for eCommerce, there is no defined law and one has to interpret various other tax laws.
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To rebalance or not to rebalance
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'Buy and Hold' Is Still a Winner: An investor who used index funds and stayed the course could have earned satisfactory returns even during the first decade of the 21st century. by By Burton G. Malkiel in The Wall Street Journal on November 18, 2010: "The other useful technique is "rebalancing," keeping the portfolio asset allocation consistent with the investor's risk tolerance. For example, suppose an investor was most comfortable choosing an initial allocation of 60% equities, 40% bonds. As stock and bond prices change, these proportions will change as well. Rebalancing involves selling some of the asset class whose share is above the desired allocation and putting the money into the other asset class. From 1996 through 1999, annually rebalancing such a portfolio improved its return by 1 and 1/3 percentage points per year versus a strategy of making no changes." Mr. Malkiel is a professor of economics at Princeton University. This op-ed was adapted from the upcoming 10th edition of his book "A Random Walk Down Wall Street," out in December by W.W. Norton. http://online.wsj.com/article/SB10001424052748703848204575608623469465624.html
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When one pays Quarterly Estimated Self Employment Taxes, exactly what are they paying?
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Your question does not say this explicitly, but I assume that you were once a W-2 employee. Each paycheck a certain amount was withheld from your check to pay income, social security, and medicare taxes. Just because you did not receive that amount of money earned does not mean it was immediately sent to the IRS. While I am not all that savvy on payroll procedures, I recall an article that indicated some companies only send in withheld taxes every quarter, much like you are doing now. They get a short term interest free loan. For example taxes withheld by a w-2 employee in the later months of the year may not be provided to the IRS until 15 January of the next year. You are correct in assuming that if you make 100K as a W-2 you will probably pay less in taxes than someone who is 100K self employed with 5K in expenses. However there are many factors. Provided you properly fill out a 1040ES, and pay the correct amount of quarterly payments, you will almost never owe taxes. In fact my experience has been the forms will probably allow you to receive a refund. Tax laws can change and one thing the form did not include last year was the .9% Medicare surcharge for high income earners catching some by surprise. As far as what you pay into is indicative of the games the politicians play. It all just goes into a big old bucket of money, and more is spent by congress than what is in the bucket. The notion of a "social security lockbox" is pure politics/fantasy as well as the notion of medicare and social security taxes. The latter were created to make the actual income tax rate more palatable. I'd recommend getting your taxes done as early as possible come 1 January 2017. While you may not have all the needed info, you could firm up an estimate by 15 Jan and modify the amount for your last estimated payment. Complete the taxes when all stuff comes in and even if you owe an amount you have time to save for anything additional. Keep in mind, between 1 Jan 17 and 15 Apr 17 you will earn and presumably save money to use towards taxes. You can always "rob" from that money to pay any owed tax for 2016 and make it up later. All that is to say you will be golden because you are showing concern and planning. When you hear horror stories of IRS dealings it is most often that people spent the money that should have been sent to the IRS.
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Why do some symbols not have an Options chain for specific expiration dates?
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The answer is actually very simple: the cost of data. Seriously. Call the CBOE tomorrow and ask yourself. They have two big programs: 1) the penny pilot program, where options trade at penny increments instead of 5 cent increments. This is only extended to a select few symbols because of the amount of data this can generate is too much for the data vendors. Data vendors store and sell historical data. The exchanges themselves often have a big data vending business too. 2) the weekly options program, where only select symbols get these chains because of the amount of data they will generate. Liquidity and demand are factors in determining if the CBOE will consider enabling those series on new issues. (although they have to give the list of which symbols are on these programs to the SEC)
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using credit card and paying back quickly
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I can't speak for every credit card, but I know two of mine don't have overage fees. The transaction either goes through, or gets denied. Check your card agreement and look for the fee section. One other thing to consider, sometimes when you make an online payment to a credit card, you will notice that the "Available Balance" number on the account will increase right away even if the payment is not reflected on your "Current Balance". If this is the case, and you are positive that your payment will be successfully posted to the account, I say go for it.
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Should you always max out contributions to your 401k?
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To be clear, a 401K is a vehicle, you make investments WITHIN it, if you choose poorly such as say putting all your money into company stock when working for the next Enron, you can still get hurt badly. So it is important to have diversity and an appropriate risk level based on your age, tolerance for risk, etc. That said, as vehicles go it is outstanding, and the 'always max your 401K' is very very common advice for a large number of investing professionals, CFA's, pundits, etc. That said there are a few priorities to consider here. First priority, if there is some level of company matching, grab that, it's hard to beat that kind of 'return' in almost any other case. Second, since you never want to tap into a 401K (if you can at all avoid it) before you are ready to retire, you should first be sure you have a good 'emergency fund' set aside in the event you lose your job, or some other major catastrophy happens. Many recommend setting aside at least 6 months of basic living expenses. Third, if you have any high interest debt (like credit card debt) pay that stuff down as fast as you can. You'll save a ton of interest (it's pretty much the same as investing the money you use to pay it down, and getting a return equal to the interest rate you are paying, with zero risk.. can't be beat. You'll also end up with a lot better cash flow, and the ability to start saving first and spending out of savings, so you earn interest instead of paying it. Once you have those things out of the way, then it is time to think about fully funding the 401K. and keep in mind, since you don't pay taxes on it, the 'felt effect' to you pocket is about 80% or even less, of what goes into the account, so it's not as painful as you might think, and the hit to your take home may be less than you'd expect. Contributing as much as you can, as early as you can also lets you benefit from the effect of compounding, and has a far larger affect on the balance than money put into the account closer to retirement. So if you can afford to max it out, I surely would advise you to do so.
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I've tracked my spending and have created a budget, now what do I do with it?
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Having been in exactly this position (not in a debt hole, built a budget to get a better view of what spending is), I can say what the greatest gift it brings is: it's a decision tool. When you are spending out of only one account, you often make decisions based on the total money in the account. “Should we go out for dinner? Can I make this impulse purchase?” This is terrible, because many, if not all, of those dollars are already intended for certain future expenses like groceries, bills, etc. You can't see how many of those dollars are discretionary. A budget is like having many accounts. Instead of looking at your real account(s) to make spending decisions, you look at your budget lines. You to want impulse buy a gadget — do you have money remaining in a relevant budget line? If yes, the decision is yours, if no, the budget is telling you that you don't have dollars for that.* Similarly for more prosaic purchases — you want to splurge on some non-staple groceries to make a fancy dinner or try out a new recipe, and the budget line for Groceries will tell you if you can do that. Instead of looking at (e.g.) $6000 in a chequing account, you're looking at $600 (assigned) − $146.86 (spend) = $453.14 (available) in a monthly groceries budget line. Just like you can now see where your money has been going, by maintaining and using your budget lines, and having every single dollar you spend go through the budget (to show your totally assigned, total spent, and total remaining), you can continue to see where your money is going in near real-time. You're no longer looking at bills and statements to figure out what's going on and plan, you're looking at money flows and future intentions, as you should be. This approach to budgeting has completely changed our finances. So that's what a budget is for: real-time spending decision-making control over your money, which for us has translated into a lovely mix of painless austerity in spending categories where austerity is smart, and guilt-free spending in more indulgent categories because we have already determined exactly how much we can afford and wish to spend. * A budget line with insufficient funds doesn't actually take the decision entirely away from you though. If a budget line doesn't have funds to spare for a given purchase, you can still make the purchase — but now you're also making the decision to go and revise your budget, taking dollars away from other budget lines to adjust the line you've overspent, to keep the budget accurate.
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Why is auto insurance ridiculously overpriced for those who drive few miles?
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because it cost the insurer more, obviously. while this sounds snarky, it's important to realize that actual insurance companies set their insurance rates based on actual historical costs. for some reason people who report low miles have cost the company more dollars per reported mile than people who report high miles. in that sense, insurance is not overpriced. if it were truly overpriced, then an insurer would specialize in such insurance and make a killing on the free market. the more interesting questions is why do drivers who claim to travel very few miles cost the insurance companies so much per mile? that question has a host of possible answers and it's difficult to say which is the largest cost. here are just a few:
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How to calculate a mutual fund's yield
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If the expense ratio of the fund is 0.00% then yes. However, if the fund has expenses of 1% then if the NAV of the fund is $10/share the expenses would cause you to see only $.002 a share and thus you'd have $.10 in total as the expenses first cut down the yield.
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How to find a good third-party, 401k management/advice service?
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The vanilla advice is investing your age in bonds and the rest in stocks (index funds, of course). So if you're 25, have 75% in stock index fund and 25% in bond index. Of course, your 401k is tax sheltered, so you want keep bonds there, assuming you have taxable investments. When comparing specific funds, you need to pay attention to expense ratios. For example, Vanguard's SP 500 index has an expense ratio of .17%. Many mutual funds charge around 1.5%. That means every year, 1.5% of the fund total goes to the fund manager(s). And that is regardless of up or down market. Since you're young, I would start studying up on personal finance as much as possible. Everyone has their favorite books and websites. For sane, no-nonsense investment advise I would start at bogleheads.org. I also recommend two books - This is assuming you want to set up a strategy and not fuss with it daily/weekly/monthly. The problem with so many financial strategies is they 1) don't work, i.e. try to time the market or 2) are so overly complex the gains are not worth the effort. I've gotten a LOT of help at the boglehead forums in terms of asset allocation and investment strategy. Good luck!
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What to sell when your financial needs change, stocks or bonds?
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The answer may be a compromise... if your goal is to make bonds a larger part of your portfolio, sell both stocks and bonds in a 4:1 ratio. or (3:1 or whatever works for you) Also, just as you dollar-cost-average purchases of securities, you can do the same thing on the way out. Plan your sales and spread them over a period of time, especially if you have mutual funds.
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Wash sales and year end tax implications
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Yes, the net effect is zero. If you own zero shares by Nov 30, for example, and don't buy any more shares by 12/31, the year is done, and nothing left to account for.
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Buying a house 50/50
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I don't like it using percentages makes no sense. Find out what market value is for rent and pay 1/2 of that to your partner, adjust annually. You partner should be protected from inflation if he is going to invest in real estate.
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How safe is a checking account?
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In the case of bank failures You are protected by FDIC insurance. At the time I wrote this, you are insured up to $250,000. In my lifetime, it has been as high as $1,000,000 and as low as $100,000. I attached a link, which is updated by FDIC. In the case of fraud It depends. If you read this story and are horrified (I was too), you know that the banking system is not as safe as the other answers imply: In February 2005, Joe Lopez, a businessman from Florida, filed a suit against Bank of America after unknown hackers stole $90,000 from his Bank of America account. The money had been transferred to Latvia. An investigation showed that Mr. Lopez’s computer was infected with a malicious program, Backdoor.Coreflood, which records every keystroke and sends this information to malicious users via the Internet. This is how the hackers got hold of Joe Lopez’s user name and password, since Mr. Lopez often used the Internet to manage his Bank of America account. However the court did not rule in favor of the plaintiff, saying that Mr. Lopez had neglected to take basic precautions when managing his bank account on the Internet: a signature for the malicious code that was found on his system had been added to nearly all antivirus product databases back in 2003. Ouch. But let's think about the story for a second - he had his money stolen because of online banking and he didn't have the latest antivirus/antimalware software. How safe is banking if you don't do online banking? In the case of this story, it would have prevented keyloggers, but you're still susceptible to someone stealing your card or account information. So: In the bank's defense, how does a bank not know that someone didn't wire money to a friend (which is a loss for good), then get some of that money back from his friend while also getting money back from the bank, which had to face the loss. Yes, it sucks, but it's not total madness. As for disputing charges, from personal experience it also depends. I don't use cards whatsoever, so I've never had to worry, but both of my parents have experienced banking fraud where a fake charge on their card was not reversed. Neither of my parents are rich and can't afford lawyers, so crying "lawsuit" is not an option for everyone. How often does this occur? I suspect it's rare that banks don't reverse the charges in fraudulent cases, though you will still lose time for filing and possibly filling out paperwork. The way to prevent this: As much as I hate to be the bearer of bad news, there is no absolutely safe place to keep your money. Even if you bought metals and buried them in the ground, a drifter with a metal detector might run across it one day. You can take steps to protect yourself, but there is no absolute guarantee that these will work out. Account Closures I added this today because I saw this question and have only seen/heard about this three times. Provided that you get the cashier's check back safely, you should be okay - but why was this person's account closed and look at how much funds he had! From his question: In the two years I banked with BoA I never had an overdraft or any negative marks on my account so the only thing that would stick out was a check that I deposited for $26k that my mom left me after she passed. Naturally, people aren't going to like some of my answers, especially this, but imagine you're in an immediate need for cash, and you experience this issue. What can you do? Let's say that rent is on the line and it's $25 for every day that you're late. Other steps to protect yourself Some banks allow you to use a keyword or phrase. If you're careful with how you do this and are clever, it will reduce the risk that someone steals your money.
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What happens to people without any retirement savings?
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I'm afraid you have missed a few of the outcomes commonly faced by millions of Americans, so I would like to take a moment to discuss a wider range of outcomes that are common in the United States today. Most importantly, some of these happen before retirement is ever reached, and have grave consequences - yet are often very closely linked to financial health and savings. Not planning ahead long-term - 10-20+ years - is generally associated with not planning ahead even for the next few months, so I'll start there. The most common thing that happens is the loss of a job, or illness/injury that put someone out of work. 6 in 10 adults in the US have less than $500 in savings, so desperation can set in very quickly, as the very next paycheck will be short or missing. Many of these Americans have no other source of saved money, either, so it's not like they can draw on retirement savings, as they don't have that either. Even if they are able to get another job or recover enough to get back to work in a few weeks, this can set off a desperate cycle. Those who have lost their jobs to technical obsolescence, major economic downturns, or large economic changes are often more severely affected. People once making excellent, middle-class (or above) wages with full benefits find they cannot find work that pays even vaguely similarly. In the past this was especially common in heavy labor jobs like manufacturing, meat-packing, and so on, but more recently this has happened in financial sectors and real estate/construction during the 2008 economic events. The more resilient people had padding, switched careers, and found other options - the less resilient, didn't. Especially during the 1970s and 1980s, many people affected by large losses of earning potential became sufficiently desperate that they fell heavily (or lost their functioning status) into substance abuse, including alcohol and drugs (cocaine and heroine being especially popular in this segment of the population). Life disruption - made even more major by a lack of savings - is a key trigger to many people who are already at risk of issues like substance addiction, mental health, or any ongoing legal issues. Another common issue is something more simple, like loss of transportation that threatens their ability to hold their job, and a lack of alternatives available through support networks, savings, family, and public transit. If their credit is bad, or their income is new, they may find even disreputable companies turn them away, or even worse - the most disreputable companies welcome them in with high interest and hair-trigger repossession policies. The most common cycle of desperation I have seen usually starts with banking over-drafts, and its associated fees. People who are afraid and desperate start to make increasingly desperate, short-sighted choices, as tunnel-vision sets in and they are unable to consider longer-term strategy as they focus on holding on to what they have and survival. Many industries have found this set of people quite profitable, including high-interest "check cashing", payday loans, and title loans (aka legal loan sharks), and it is not rare that desperate people are encouraged to get on increasing cycles of loan amounts and fees that worsen their financial situation in exchange for short-term relief. As fees, penalties, and interest add up, they lose more and more of their already strained income to stay afloat. Banks that are otherwise reputable and fair may soon blacklist them and turn them away, and suddenly only the least reputable and most predatory places offer to help at all - usually with a big smile at first, and almost always with awful strings attached. Drugs and alcohol are often readily available nearby and their use can easily turn from recreational to addictive given the allure of the escapism it offers, especially for those made vulnerable by increasing stress, desperation, loss of hope, isolation, and fear. Those who have not been within the system of poverty and desperation often do not see just how many people actively work to encourage bad decision making, with big budgets, charm, charisma, and talent. The voices of reason, trying to act as beacons to call people to take care of themselves and their future, are all too easily drowned out in the roar of a smooth and enticing operation. I personally think this is one of the greatest contributions of the movement to build personal financial health and awareness, as so many great people find ever more effective ways of pointing out the myriad ways people try to bleed your money out of you with no real concern for your welfare. Looking out for your own well-being and not being taking in by the wide array of cons and bad deals is all too often fighting against a strong societal current - as I'm sure most of our regular contributors are all too aware! With increasing desperation often comes illegal maneuvers, often quite petty in nature. Those with substance abuse issues often start reselling drugs to others to try to cover lost income or "get ahead", with often debilitating results on long-term earning potential if they get caught (which can include cost barriers to higher education, even if they do turn their life around). I think most people are surprised by how little and petty things can quickly cycle out of control. This can include things like not paying minor parking or traffic tickets, which can snowball from the $10-70 range into thousands of dollars (due to non-payment often escalating and adding additional penalties, triggering traffic stops for no other reason, etc.), arrest, and more. The elderly are not exempt from this system, and many of America's elderly spend their latter years in prison. While not all are tied to financial desperation as I've outlined above, a deeper look at poverty, crime, and the elderly will be deeply disturbing. Some of these people enter the system while young, but some only later in life. Rather than homelessness being something that only happens after people hit retirement, it often comes considerably earlier than that. If this occurs, the outcome is generally quite a bit more extreme than living off social security - some just die. The average life expectancy of adults who are living on the street is only about 64 years of age - only 2 years into early retirement age, and before full retirement age (which could of course be increased in the next 10-20 years, even if life expectancy and health of those without savings don't improve). Most have extremely restricted access to healthcare (often being emergency only), and have no comforts of home to rest and recuperate when they become ill or injured. There are many people dedicated to helping, yet the help is far less than the problem generally, and being able to take advantage of most of the help (scheduling where to go for food, who to talk to about other services, etc) heavily depends on the person not already suffering from conditions that limit their ability to care for themselves (mental conditions, mobility impairments, etc). There is also a shockingly higher risk of physical assault, injury, and death, depending on where the person goes - but it is far higher in almost every case, regardless. One of the chief problems in considering only retirement savings, is it assumes that you'll only have need for the savings and good financial health once you reach approximately the age of 62 (if it is not raised before you get there, which it has been multiple times to-date). As noted above, if homelessness occurs and becomes longstanding before that, the result is generally shortened lifespan and premature death. The other major issue of health is that preventative care - from simple dentistry to basic self-care, adequate sleep and rest, a safe place to rejuvenate - is often sacrificed in the scrambling to survive and limited budget. Those who develop chronic conditions which need regular care are more severely affected. Diabetic and injury-related limb loss, as one example, are far more likely for those without regular support resources - homeless, destitute, or otherwise. Other posters have done a great job in pointing out a number of the lesser-known governmental programs, so I won't list them again. I only note the important proviso that this may be quite a bit less in total than you think. Social Security on average pays retired workers $1300 a month. It was designed to avoid an all-too-common occurrence of simple starvation, rampant homelessness, and abject poverty among a large number of elderly. No guarantee is made that you won't have to leave your home, move away from your friends and family if you live in an expensive part of the country, etc. Some people get a bit more, some people get quite a bit less. And the loss of family and friend networks - especially to such at-risk groups - can be incredibly damaging. Note also that those financially desperate will be generally pushed to take retirement at the minimum age, even though benefits would be larger and more livable if they delayed their retirement. This is an additional cost of not having other sources of savings, which is not considered by many. Well, yes, many cannot retire whether they want to or not. I cannot find statistics on this specifically, but many are indeed just unable to financially retire without considerable loss. Social Security and other government plans help avoid the most desperate scenarios, but so many aspects of aging is not covered by insurance or affordable on the limited income that aging can be a cruel and lonely process for those with no other financial means. Those with no savings are not likely to be able to afford to regularly visit children and grandchildren, give gifts on holidays, go on cruises, enjoy the best assistive care, or afford new technological devices to assist their aging (especially those too new and experimental to be covered by the insurance plans they have). What's worse - but most people do not plan for either - is that diminished mental and physical capacity can render many people unable to navigate the system successfully. As we've seen here, many questions are from adult children trying to help their elderly parents in retirement, and include aging parents who do not understand their own access to social security, medicaid/medicare, assistive resources, or community help organizations. What happens to those aging without children or younger friend networks to step in and help? Well, we don't really have a replacement for that. I am not aware of any research that quantifies just how many in the US don't take advantage of the resources they are fully qualified to make use of and enjoy, due to a lack of education, social issues (feeling embarrassed and afraid), or inability to organize and communicate effectively. A resource being available is not very much help for those who don't have enough supportive resources to make use of it - which is very hard to effectively plan for, yet is exceedingly common. Without one's own independent resources, the natural aging and end of life process can be especially harsh. Elderly who are economically and food insecure experience far heightened incidence of depression, asthma, heart attack, and heart failure, and a host of other maladies. They are at greater risk for elder-abuse, accidental death, life-quality threatening conditions developing or worsening, and more. Scare-tactics aren't always persuasive, and they do little to improve the lives of many because the people who need to know it most generally just don't believe it. But my hope here is that the rather highly educated and sophisticated audience here will see a little more of the harsher world that their own good decisions, good fortune, culture, and position in society shields them from experiencing. There is a downside to good outcomes, which is that it can cause us to be blind to just how extremely different is the experience of others. Not all experience such terrible outcomes - but many hundreds of thousands in the US alone - do, and sometimes worse. It is not helpful to be unrealistic about this: life is not inherently kind. However, none of this suggests that being co-dependent or giving up your own financial well-being is necessary or advised to help others. Share your budgeting strategies, your plans for the future, your gentle concerns, and give of your time and resources as generously as you can - within your own set budgets and ensuring your own financial well-being. And most of all - do not so easily give up on your family and friends, and count them as life-long hopeless ne'er-do-wells. Let's all strive to be good, kind, honest, and offer non-judgmental support and advice to the best of our ability to the people we care about. It is ultimately their choice - restricted by their own experiences and abilities - but need not be fate. People regularly disappoint, but sometimes they surprise and delight. Take care of yourself, and give others the best chance you can, too.
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Self Assessment UK - Goods and services for your own use
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Work on your own site is certainly not relevant here, that's just a part of your trade, not a service you provided to yourself. The business received the benefit of that work, not you. Suppose your business sold televisions. If you took a TV from stock for your own lounge, that would be included in this box because you have effectively paid yourself with a TV rather than cash. If you take a TV from stock to use as a demo model, that's part of your trade and not goods you have taken out of the business for your own use. For services provided to your dad it's less clear. As Skaty said, it depends whether it's your business providing the service, or you personally. If you gave your dad a free TV then it would be clear that you have effectively paid yourself with another TV and then given it to your dad as a gift. With services it's less clear whether you're receiving services from the business for free. You might consider how it would be treated by your employer if you weren't self-employed. If you were just applying your skills to help your dad in your free time, your employer wouldn't care. If you used your employer's equipment or facilities, or hosted his site on a server that your employer pays for, your employer would be more likely to discipline you for effectively stealing services from them, as they would if you took a TV from their warehouse for him.
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Townhouse or stand-alone house for a first home?
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Houses tend to appreciate more than condos. Houses are also more expensive. So it's a choice. You mention your girlfriend will be buying it with you. Take the time now to decide what will happen if you split up and put it in writing. Are you splitting the downpayment and mortgage 50/50? If not things can get complicated. Also consider home improvement costs, etc. If you think she is "the one" and you'll end up starting a family together, look at the location, nearby schools, etc. Sure, it may sound too early to be thinking about these things, but if you get a head start on finding a nice house you could save a lot of money and build a lot of equity with some smart decisions today.
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Do large market players using HFT make it unsafe for individual investors to be in the stock market?
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There's a lot of hype about HFT. It involves computers doing things that people don't really understand and making a bunch of rich guys a bunch of money, and there was a crisis and so we hate rich wall street guys this year, and so it's a hot-button issue. Meh. There's some reason for concern about the safety of the markets, but I think there's also a lot more of people trying to sell you a newspaper. Remember that while HFT may mean there are a lot of trades, the buying and the selling add up to the same thing. Meanwhile, people who buy stock to hold on to it for significant periods of time will still affect the quantity of stock out there on the market, applying pressure to the price, buying and selling at the prices that they think the security is worth. As a result, it's unlikely that high-frequency trading moves the stock price very far from the price that the rest of the market would determine for very long; if it did, the lower-frequency traders could take advantage of it, buying if it's too low and selling if it's too high. How long do you plan to hold a stock? If you're trying to do day-trading, you might have some trouble; these people are competing with you to do the same thing, and have significant resources at their disposal. If you're holding onto your stock for years on end (like you probably should be doing with most stock) then a trivial premium or discount on the price probably isn't going to be a big deal for you.
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Should I open a credit card when I turn 18 just to start a credit score?
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I also feel it's important to NOT get a credit card. I'm in my mid 30's and have had credit cards since I was 20, as has everyone I know. Every single one of those people, with the exception of my dad, is currently carrying some amount of credit card debt - almost always in the thousands of dollars. Here is the essential problem with credit cards. Everyone sets out with good intentions, to use the credit card like a debit card, and pay charges off before interest accrues. However, almost no-one has the discipline to remember to do this, and a balance quickly builds up on the card. Also, it's extremely easy to prioritize other bill payments before credit card payments, resulting in a balance building up on the card. It's almost magical how quickly a balance will build up on a credit card. Ultimately, they are simply too convenient, too tempting for most human beings. The world, and especially the North American world, is in a massive debt crisis. It is very easy to borrow money these days, and our culture is at the point where "buy now pay later" is an accepted practice. Now that I have young children, I will be teaching them the golden rule of "don't buy something until you have cash to pay for it in full!" It sounds like an over simplification but this one rule will save you an incredible amount of financial grief over time.
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What are the reasons to get more than one credit card?
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Many reasons mentioned already. The reason why I have multiple is missing: I have a personal card for my private use and a company card for company use.
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Friend was brainwashed by MLM-/ponzi investment scam. What can I do?
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Even though this is really a psychology question, I'll try to give you an answer. You do nothing but stay away. What's going on is too small to matter. Bernie Madoff took investor's money and scammed them for $15B. That's B, billion, 9 zeros (Yes, I realize the UK Billion has 12, these are US Billion). Harry Markopolos was on to him, and presented his evidence to the government, but "No one would listen." In quotes because that's the title of the book he published on his experience. Even Barron's had an article suggesting that Madoff's returns were impossible. Eventually, it came to light. In my own experience, there was a mortgage acceleration product called "Money Merge Account." It claimed to help you pay off your mortgage in a fraction of the time "with no change to your budget." For two years or so, I was obsessed with exposing this scam, and wrote articles, nearly every week discussing every aspect of this product. Funny how even though mortgages are math that's pretty easy to explain, few sellers wanted to talk about the math. Using the same logic that you don't need to understand how a car works as long as you know how to drive. There were some people that would write to tell me I saved them the $3500 cost of that product, but mostly I argued with sellers who dismissed every word I wrote as if the math were incomprehensible to anyone but the software guys who wrote it. In the end, I had compiled a PDF with over 60 pages of my writing on the topic, and decided to call it quits. The product was recycled and now is sold as "Worth Unlimited," but the software is the same. This is all a tangent to your problem. It simply offers the fact that the big scam, Bernie, continued for a long time, and people who were otherwise intelligent, fell for his promises, and didn't want to believe otherwise. The mortgage software had many bloggers writing. Searching on the web found a lot of discussion, very easy to find. People will believe what they wish. Tell an Atheist that God exists, or a believer that He doesn't, and your words will fall on deaf ears. Unfortunately, this is no different.
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Comparing/reviewing personal health insurance plans for the self-employed
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Health insurance is tough, as you know, because the offerings vary dramatically by State, and there is the added complication of the Affordable Care Act, which depending on where and who you are has had either a good or bad impact on the available options. If you are a sole proprietor or other business person, I'd advise talking to someone at a local chamber of commerce. Also, professional organizations like the IEEE or ACM (for IT professionals) often offer catastrophic medical or other health plans. Some employer plans give you the option to continue coverage at a higher cost when COBRA lapses as well. If you can't afford a comprehensive plan, make sure to get something to protect you against pre-existing conditions or hospitalization.
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Who Bought A Large Number Of Shares?
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SEC forms are required when declaring insider activity. An insider is defined by the SEC to be a person or entity which (i) beneficially owns 10% or more of the outstanding shares of the company, (ii) is an officer or director of the company, or (iii), in the case of insider trading, does so based on knowledge which is not otherwise publically available at the time. At any rate, the person or entity trading the stock is required to file certain forms. Form 3 is filed when a person first transitions into the status of an insider (by becoming an officer, director, or beneficial owner of a certain percentage of stock). Form 4 is filed when an existing insider trades stock under the company's symbol. Form 5 is filed when certain insider trades of small value are reported later than usual. *More information can be found at the SEC's website. Another possibility is that a large number of options or derivatives were exercised by an officer, director, or lending institution. In the cases of officers or directors, this would need to be declared with an SEC form 4. For an institution exercising warrants obtained as a result of a lending agreement, either form 3 or 4 would need to be filed. In addition to the above possibilities, username passing through pointed out a very likely scenario in his answer, as well.
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What is a typical investment portfolio made up of?
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An investment portfolio is typically divided into three components: All three of those can be accessed through mutual funds or ETFs. A 401(k) will probably have a small set of mutual funds for you to pick from. Mutual funds may charge you silly expenses if you pick a bad one. Look at the prospectus for the expense ratio. If it's over 1% you're definitely paying too much. If it's over 0.5% you're probably paying too much. If it's less than 0.1% you have a really good deal. US stocks are generally the core holding until you move into retirement (or get close to spending the money on something else if it's not invested for retirement). International stocks are riskier than US stocks, but provide opportunity for diversification and better returns than the US stocks. Bonds, or fixed-income investments, are generally very safe, but have limited opportunities for returns. They tend to do better when stocks are doing poorly. When you've got a while to invest, you should be looking at riskier investments; when you don't, you should be looking for safer investments. A quick (and rough) rule of thumb is that "your age should match the portion of your portfolio in bonds". So if you're 50 years old and approaching retirement in 15 years or so, you should have about 50% in bonds. Roughly. People whose employment and future income is particularly tied to one sector of the market would also do well to avoid investing there, because they already are at risk if it performs badly. For instance, if you work in the technology sector, loading up on tech stocks is extra risky: if there's a big bust, you're not just out of a job, your portfolio is dead as well. More exotic options are available to diversify a portfolio: While many portfolios could benefit from these sorts of holdings, they come with their own advantages and disadvantages and should be researched carefully before taking a significant stake in them.
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How do 401k handle rate of return
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A 401(k) is an investment just like any other investment. You generally get two types of return lumped into that number, but there can be more and you should read your funds prospectus carefully. If you aren't investing in direct companies, you're using mutual funds for instance, then you should read the funds prospectus to see how they handle these situations for the underlying securities they hold for you. Although I think this is the basic answer to the question as you asked.
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Having trouble with APR calculation
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Check your calculation of A**. I was able to duplicate their calculations using excel. Make you sure have accounted for all the terms, it can be easy to be one off. They are making a guess at the interest rate which will be wrong, then they are adjusting it to see how wrong it is, then making another adjustment. They will repeat until they see no movement in the guesses.
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Is there a standard check format in the USA?
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Legally, a check just needs to have a certain list of things (be an instruction to one's bank to pay a specific amount of money to bearer or to a specific entity, have a date, have a signature, etc.) There are anecdotes around of a guy depositing a junk mail check and it accidentally qualifying as a real check (which he turned into a live show), or of writing a check on a door, cow, or "the shirt off your back". What kind of checks your bank will process is technically up to them. Generally, if you get your blank checks printed up by any reputable firm, they'll have similar information in similar places, as well as the MICR line (the account and routing number in magnetic ink on the bottom) to allow for bank to process the checks with automated equipment. As long as it's a standard size, has the MICR line, and has the information that a check needs, your bank is likely to be fine with it. So, there are some standards, but details like where exactly the name of the bank is, or what font is used, or the like, are up to whoever is printing the check. For details on what standards your bank requires in order to process your checks, you'd have to check with your bank directly. Though, it wouldn't surprise me if they just directed you to their preferred check printer provider, as they know that they accept their check format fine. Though as I said, any reputable check printer makes sure that they meet the standards to get processed by banks without trouble. Unless you're a business that's going to be writing a lot of checks and pay a lot of fees for the privilege, a bank is not likely to want to make exceptions for you for your own custom-printed octagonal checks written in ancient Vulcan.
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Pay off mortgage or invest in high value saving account
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Basically, the easiest way to do this is to chart out the "what-ifs". Applying the amortization formula (see here) using the numbers you supplied and a little guesswork, I calculated an interest rate of 3.75% (which is good) and that you've already made 17 semi-monthly payments (8 and a half months' worth) of $680.04, out of a 30-year, 720-payment loan term. These are the numbers I will use. Let's now suppose that tomorrow, you found $100 extra every two weeks in your budget, and decided to put it toward your mortgage starting with the next payment. That makes the semi-monthly payments $780 each. You would pay off the mortgage in 23 years (making 557 more payments instead of 703 more). Your total payments will be $434,460, down from $478.040, so your interest costs on the loan were reduced by $43,580 (but, my mistake, we can't count this amount as money in the bank; it's included in the next amount of money to come in). Now, after the mortgage is paid off, you have $780 semi-monthly for the remaining 73 months of your original 30-year loan (a total of $113,880) which you can now do something else with. If you stuffed it in your mattress, you'd earn 0% and so that's the worst-case scenario. For anything else to be worth it, you must be getting a rate of return such that $100 payments, 24 times a year for a total of 703 payments must equal $113,880. We use the future value annuity formula (here): v = p*((i+1)n-1)/i, plugging in v ($113880, our FV goal), $100 for P (the monthly payment) and 703 for n (total number of payments. We're looking for i, the interest rate. We're making 24 payments per year, so the value of i we find will be 1/24 of the stated annual interest rate of any account you put it into. We find that in order to make the same amount of money on an annuity that you save by paying off the loan, the interest rate on the account must average 3.07%. However, you're probably not going to stuff the savings from the mortgage in your mattress and sleep on it for 6 years. What if you invest it, in the same security you're considering now? That would be 146 payments of $780 into an interest-bearing account, plus the interest savings. Now, the interest rate on the security must be greater, because you're not only saving money on the mortgage, you're making money on the savings. Assuming the annuity APR stays the same now vs later, we find that the APR on the annuity must equal, surprise, 3.75% in order to end up with the same amount of money. Why is that? Well, the interest growing on your $100 semi-monthly exactly offsets the interest you would save on the mortgage by reducing the principal by $100. Both the loan balance you would remove and the annuity balance you increase would accrue the same interest over the same time if they had the same rate. The main difference, to you, is that by paying into the annuity now, you have cash now; by paying into the mortgage now, you don't have money now, but you have WAY more money later. The actual real time-values of the money, however, are the same; the future value of $200/mo for 30 years is equal to $0/mo for 24 years and then $1560/mo for 6 years, but the real money paid in over 30 years is $72,000 vs $112,320. That kind of math is why analysts encourage people to start retirement saving early. One more thing. If you live in the United States, the interest charges on your mortgage are tax-deductible. So, that $43,580 you saved by paying down the mortgage? Take 25% of it and throw it away as taxes (assuming you're in the most common wage-earner tax bracket). That's $10895 in potential tax savings that you don't get over the life of the loan. If you penalize the "pay-off-early" track by subtracting those extra taxes, you find that the break-even APR on the annuity account is about 3.095%.
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How to start investing/thinking about money as a young person?
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nan
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Vanguard Mutual Funds — Diversification vs Share Class
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In general, I'd try to keep things as simple as possible. If your plan is to have a three-fund portfolio (like Total Market, Total International, and Bond), and keep those three funds in general, then having it separated now and adding them all as you invest more is fine. (And upgrade to Admiral Shares once you hit the threshold for it.) Likewise, just putting it all into Total Market as suggested in another answer, or into something like a Target Retirement fund, is just fine too for that amount. While I'm all in favor of as low expense ratios as possible, and it's the kind of question I might have worried about myself not that long ago, look at the actual dollar amount here. You're comparing 0.04% to 0.14% on $10,000. That 0.1% difference is $10 per year. Any amount of market fluctuation, or buying on an "up" day or selling on a "down" day, is going to pretty much dwarf that amount. By the time that difference in expense ratios actually amounts to something that's worth worrying about, you should have enough to get Admiral Shares in all or at least most of your funds. In the long run, the amount you manage to invest and your asset allocation is worth much much more than a 0.1% expense ratio difference. (Now, if you're going to talk about some crazy investment with a 2% expense ratio or something, that's another story, but it's hard to go wrong at Vanguard in that respect.)
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ESPP taxes after relocating from Europe to the United States?
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I would suggest to get an authoritative response from a CPA. In any case it would be for your own benefit to have at least the first couple of years of tax returns prepared by a professional. However, from my own personal experience, in your situation the income should not be regarded as "US income" but rather income in your home country. Thus it should not appear on the US tax forms because you were not resident when you had it, it was given to you by your employer (which is X(Europe), not X(USA)), and you should have paid local taxes in your home country on it.
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Can a single-member LLC have a fiscal year not as the calendar year?
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I'm no tax expert by any means. I do know that a disreagarded entity is considered a sole proprietor for federal tax purposes. My understanding is that this means your personal tax year and your business tax year must be one and the same. Nevertheless, it is technically possible to have a non-calendar fiscal year as an individual. This is so rare that I'm unable to find a an IRS reference to this. The best reference I could find was this article written by two CPAs. If you really want to persue this, you basically need to talk with an accountant, since this is complicated, and required keeping propper accounting records for your personal life, in addition to your business. A ledger creqated after-the-fact by an accountant has been ruled insufficent. You really need to live by the fiscal year you choose.
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How to rebalance a passive portfolio if I speculate a war is coming?
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Normally, in a war everybody suffers and the entire economy goes down. Military contractors do better than average, but the average sucks. The way to take advantage of knowing a war is coming is to leave as soon as possible. There are strategic materials that can become valuable in a war, but such investments are generally very specialized and not something an ordinary investor would be in a position to exploit. The most profitable businesses in war are food, oil, and ammunition.
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What's the appeal of dividends in investing? [duplicate]
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As mentioned, dividends are a way of returning value to shareholders. It is a conduit of profit as companies don't legitimately control upward appreciation in their share prices. If you can't wrap your head around the risk to the reward, then this simply means you partially fit the description for a greater investment risk profile, so you need to put down Warren Buffett's books and Rich Dad Poor Dad and get an investment book that fits your risk profile.
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If a stock doesn't pay dividends, then why is the stock worth anything?
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Since I'm missing the shortest and simplest answer, I'll add it: A car also doesn't offer dividends, yet it's still worth money. A $100 bill doesn't offer dividends, yet people are willing to offer services, or goods, or other currencies, to own that $100 bill. It's the same with a stock. If other people are willing to buy it off you for a price X, it's worth at least close to price X to you. In theory the price X depends on the value of the assets of the company, including unknown values like expected future profits or losses. Speaking from experience as a trader, in practice it's very often really just price X because others pay price X.
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