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How much (paper) cash should I keep on hand for an emergency?
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It's also worth thinking about minor "emergencies" when the location of your cash may be more important than the amount. I keep a baggie of change and small bills in my glovebox for meters and tolls. I keep a ten dollar bill in my armband when I go out for a jog or bike. Those little stashes have saved me more than once. Zombie apocalypse money? I just have a couple hundred at home.
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American taxes if living outside the US and get paid by US company on a US bank account
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Technically, if you earn in US (being paid there, which means you have a work visa) and live in other country, you must pay taxes in both countries. International treaties try to decrease the double-taxation, and in this case, you may pay in your country the difference of what you have paid in US. ie. your Country is 20% and USA is 15%, you will pay 5%, and vice-versa. This works only with certain areas. You must know the tax legislation of both countries, and I recommend you seek for advisory. This site have all the basic information you need: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion Good luck.
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Can I deduct work equipment I am not required to purchase by my employer?
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Old question, but in the comments of the accepted answer, I believe Nate Eldredge is correct and littleadv is incorrect. Nate copied the actual quote from the IRS guidelines, quoted below: An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense doesn't have to be required to be considered necessary. Noise cancelling headphones certainly count as "appropriate and helpful to your business" in the software industry, especially with the trend of open office layouts. And because of the ubiquitous distractions inherent in the aforementioned office space, noise cancelling headphones are becoming quite "common and accepted" for use by developers. I'd be more hesitant about the keyboard and monitor, as presumably the employer is providing those already. As using your own could be said to just be a personal preference over those provided, the argument that providing your own version is "appropriate and helpful" is a little more shaky. I am not a tax lawyer, so don't come after me if you get audited, but my guess from reading the actual IRS guidelines is noise cancelling headphones: probably, keyboard and monitor: maybe.
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What is a good way to keep track of your credit card transactions, to reduce likelihood of fraud?
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Sign up for alerts. Everytime you use your card, you'll get an alert. That way if there is an unauthorized transaction, you'll know right away. The alerts can also tell you what amount was charged - since this happens right away, the last last cc transaction is fresh in your memory and any overcharges can be easily detected. Has saved me more times than I can remember!
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Am I legally allowed to offset the tax I pay on freelance work? (UK)
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Yes, you can deduct from your taxable profits (almost) any expenses incurred in the course of your business. See here for HMRC's detailed advice on the subject. The fact that you have salaried PAYE employment as well makes no difference.
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What is an ideal number of stock positions that I should have in my portfolio?
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The two biggest issues that impact your question I would say are diversification and fees. If you have $10,000 to invest and only invest it in two securities, then a 20% drop in one security can have you lose 10% of your initial investment which I would consider a very high risk scenario. If you have $10,000 to invest and invest it in 20 securities, then a 20% drop in one security would only cause you to lose 1% of your initial investment. So far this is looking better from a diversification point of view. But then the issue of fees comes in. If you paid $10 per trade to buy those 20 securities you already spent 2% of your initial investment in fees! Not to mention you will pay at least another $200 to get out of all those positions. No right answer - but those are the two factors I always try to balance.
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Why don't people generally save more of their income?
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This question is likely to be voted closed as opinion-based. That said - In general people have become accustomed to instant gratification. They also have the media showing them luxury and are enticed every day to buy things they don't need. In the US, the savings rate is awfully low, but it's not just the lower 50%, it's 75% of people who aren't saving what they should. see http://web.stanford.edu/group/scspi/_media/working_papers/pfeffer-danziger-schoeni_wealth-levels.pdf for an interesting article on the topic of accumulated wealth.
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Is working on a W2 basis, with benefits paid to me, a good idea?
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It's hard to answer without knowing all of the details (i.e. what was your salary for each of the options), but I think you probably made a good choice. 1099: Would have required you to pay self-employment tax, but also would have allowed you to deduct business expenses. W2 with benefits: Likely would have been beneficial if you needed healthcare (since group plans can be cheaper than individual plans, and healthcare payments aren't taxed), but if you don't use the healthcare, that would have been a waste. W2, no benefits: Assuming your salary here falls between the 1099 and the W2 with benefits, it seems like a good compromise for your situation.
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why do energy stocks trade at lower prices compared to other sectors?
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Large-scale price range of a stock isn't directly meaningful; that reflects how many shares exist, not just how desirable they are. A stock split, for example, doubles the number of shares everyone holds while cutting the value of each share in half; that's meaningless except that it makes the shares a bit easier to trade in. Change in price is more interesting. In the case of energy companies, that often reflects major changes in energy supply, distribution, use, or how well positioned people feel the company is for the next change in these. Fracking's surge and the questions raised against it, whether a major pipeline will or won't be built, international energy price trends, breakthroughs in renewables... if it might affect energy price, it might affect the company's strength, both absolute and relative to others. In other words, the same kinds of things that affect any stock.
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Is giving my girlfriend money for her mortgage closing costs and down payment considered fraud?
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There are several areas of passive fraud by being unclear on what you are doing. When a citizen buys a house, the mortgage lender wants all the details as to how the buyer rounded up the money. That is so they can use their own formulas to assess the buyer's creditworthiness and the probability that the buyer will be able to keep up on payments, taxes and maintenance; or have they overextended themselves. The fraud is in the withholding of that info. By way of tricking them into making a favorable decision, when they might not have if they'd had all the facts. Then there's making this sound all lovey-dovey, good intentions, no strings attached, no expectations. You're lying to yourself. What you've actually done is put money between yourselves, because you have not laid down FAIR rules to cover every possibility. You're not willing to plan for failure because you don't want to admit failure is possible, which is vain. Once you leap into this bell jar, the uncertainty of "what happens if..." will intrude itself into everyone's thoughts, slowly corroding your relationship. It's a recipe for disaster. That uncertainty puts her in a very uncomfortable position. She has to labor to make sure the issue doesn't explode, so she's tiptoeing around you to avoid fights. Every fight, she'll wonder if you'll play the breakup card and threaten to demand the money back. The money will literally come between you. This is what money does. Thinking otherwise is a young person's mistake of inexperience. Don't take my word on it, contact Suze Orman and see what she says. Your lender is also not going to like those poorly defined lovers' promises, because they've seen it all before, and don't want to yet again foreclose on a house that fighting lovers trashed. (it's like, superhero battles are awesome unless you own the building they trashed.) This thing can still be done, but to remove this fraud of wishful thinking, you need to scrupulously plan for every possibility, agree to outcomes that are fair and achievable, put it in writing and share it with a neutral third party. You haven't done it, because it seems like it would be awkward as hell - and it will be! - Or it will test your relationship by forcing direct honesty about a bunch of things you haven't talked about or are afraid to - and it will! - And to be blunt, your relationship may not be able to survive that much honesty. But if it does, you'll be in much better shape. The other passive fraud is taxes. By not defining the characteristics of the payment, you fog up the question of how your contribution will be taxed (if it will be taxed). A proper contract with each other will settle that. (there's an argument to be made for involving a tax advisor in the design of that contract, so that you can work things to your advantage.) As an example, defining the payment as "rent" is about the worst you could do, as you will not be able to deduct any home expenses, she will need to pay income tax on the rent, but she can cannot take landlord's tax deductions on anything but the fraction of the house which is exclusively in your control; i.e. none.
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Incorporating, issuing stock and evaluating it
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No. Mark-to-market valuation relies on using a competitive market of public traders to determine the share price --- from free-market trading among independent traders who are not also insiders. Any professional valuation would see through the promotional nature of the share offer. It is pretty obvious that the purchaser of a share could not turn around and sell their share for $10, unless the 'free hosting' that is worth most of the $10 follows it... and that's more of hybrid of stock and bond than pure stock. It is also pretty obvious that selling a few shares for $10 does not mean one could sell 10,000,000 shares for $10, because of the well known decreasing marginal value effect from economics. While this question seems hypothetical, as a practical matter offering to sell share of unregistered securities in a startup for $10 to the general public, is likely to run afoul of state or federal securities laws -- irregardless of the honesty of the business or any included promotional offers. See http://www.sec.gov/info/smallbus/qasbsec.htm for more information about the SEC regulations for raising capital for small businesses.
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How to prevent myself from buying things I don't want
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I found the best way to do this was to make a spending plan at the beginning of the month with someone else. If you're married or in a relationship where you pool resources, then this is a natural way to sync up on your expectations. If you don't have a relationship of that nature, it's still good to have a friend that you talk to about things you are planning on buying. If I don't allow myself to buy things on a whim, if I have to take the time to justify my purchases to someone else, then I have to first think about the purchase and justify it to myself. Often the actual process of thinking it through is enough for me to talk myself out of it. Consider the tactics of car salesmen. Each time you attempt to leave the lot, to think about it overnight, they sweeten the offer to try to get you to buy before leaving. They know that if you leave the lot, you are much less likely to decide that you must have that car. You should have a policy of sleeping for one night before making any purchase over an arbitrary dollar amount say $250, or $500, or $1,000. Having that rule, and following it will save you a lot of buyers remorse. As an aside, I've had my eye on a 35mm prime lens for my camera for over a year now. I was ready to pay ~$500 for a nice lens that was discounted by $100, and I was a little sad that I missed the discount. However, I am very deliberate in my shopping, and I didn't want to buy until I read enough of the reviews to be certain about it. It turns out that the lens has a fatal flaw for landscape photography that most reviewers didn't notice because they were using it for portrait photography. I finally concluded that the lens I really wanted was an $800 lens. I looked at resale prices on my $600 lens and they are in the $350 range. So instead of missing out on a $100 discount, I missed out on a $150 loss trading up to the lens that I really want for the long term.
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Is there a debit card that earns miles (1 mile per $1 spent) and doesn't have an annual fee?
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I have an American Airlines VISA with miles that has no annual fee, but only because I request that they waive the fee each year. Word to the wise - they've never refused.
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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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How can I get a wholesaler ID number?
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This is a state by state thing, and I'm cheating because I know you are in New York State:
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Why do people buy insurance even if they have the means to overcome the loss?
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There are a couple of reasons that a person might choose to use insurance even if they could handle the financial loss if something went wrong. They know their risk better than the insurance company. While it might seem odd at first glance that an individual can be better at assessing risk than a large company with thousands of actuaries. There are limits to the amount of knowledge that an insurance company can have or use to price their insurance products. For instance if you were a very aggressive driver but didn't have any recent tickets or accidents because you were in college and didn't have a car on a regular basis, but now you have a job and drive 30 miles to work every day. You know your risk is relatively high but the insurance company sees you as relatively low risk and aren't able to price that extra risk into your premium. Just because a person can survive financial after losing something like a car or a house doesn't mean it isn't desirable to pay a small price to mitigate that risk. If you are using your savings to pay for an emergency then that money needs to be semi liquid in case you need it limiting your investment options. Where as if you purchase insurance you pay a small amount of money to be able to invest the rest of your money. Liquidity is a big deal particularly if you are a small business and investing into your business where your money can make your more money but you may or may not be able to access that money very easily.
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Does a company's stock price give any indication to or affect their revenue?
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Most of stock trading occurs on what is called a secondary market. For example, Microsoft is traded on NASDAQ, which is a stock exchange. An analogy that can be made is that of selling a used car. When you sell a used car to a third person, the maker of your car is unaffected by this transaction and the same goes for stock trading. Still within the same analogy, when the car is first sold, money goes directly to the maker (actually more complicated than that but good enough for our purposes). In the case of stock trading, this is called an Initial Public Offering (IPO) / Seasoned Public Offering (SPO), for most purposes. What this means is that a drop of value on a secondary market does not directly affect earning potential. Let me add some nuance to this. Say this drop from 20$ to 10$ is permanent and this company needs to finance itself through equity (stock) in the future. It is likely that it would not be able to obtain as much financing in this matter and would either 1) have to rely more on debt and raise its cost of capital or 2) obtain less financing overall. This could potentially affect earnings through less cash available from financing. One last note: in any case, financing does not affect earnings except through cost of capital (i.e. interest paid) because it is neither revenue nor expense. Financing obtained from debt increases assets (cash) and liabilities (debt) and financing obtained from stock issuance increases assets (cash) and shareholder equity.
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What percentage of my portfolio should be in individual stocks?
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How much should a rational investor have in individual stocks? Probably none. An additional dollar invested in a ETF or low cost index fund comprised of many stocks will be far less risky than a specific stock. And you'd need a lot more capital to make buying, voting, and selling in individual stocks as if you were running your own personal index fund worthwhile. I think in index funds use weightings to make it easier to track the index without constantly trading. So my advice here is to allocate based not on some financial principal but just loss aversion. Don't gamble with more than you can afford to lose. Figure out how much of that 320k you need. It doesn't sound like you can actually afford to lose it all. So I'd say 5 percent and make sure that's funded from other equity holdings or you'll end up overweight in stocks.
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How can I find out what factors are making a stock's price rise?
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At any moment, the price is where the supply (seller) and demand (buyer) intersect. This occurs fast enough you don't see it as anything other than bid/ask. What moves it? News of a new drug, device, sandwich, etc. Earning release, whether above or below expectations, or even dead-on, will often impact the price. Every night, the talking heads try to explain the day's price moves. When they can't, they often report "profit taking" for a market drop, or other similar nonsense. Some moves are simple random change.
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How much does it cost to build a subdivision of houses on a large plot of land?
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Let's think like a real estate developer. First you need to check with the zoning commission the restrictions for the area. Let's say that the plot is actually suitable for 10 homes. You buy the land. You also need to finance the build itself. If you don't have enough cash you need to acquire financing from banks and perhaps from other sources as well, because banks won't loan you the entire amount. Next you need to divide the plot into 10 pieces, making sure that each piece has driveway access to the street and plan access to utilities (water/sewer/electricity/broadband/phone lines). Plan the size and position of each house. Get building approval. This is a process that can take some time, especially if they have follow-up questions. Get a builder to build the houses, including ground work and preparation for utilities. Get approval for the finished houses. A building inspector will check that the houses follow the permission and all laws and regulations that apply. This step can entail time and added cost. Get a real estate agent to sell the new homes. Often, the selling process starts in the planning phase and early buyers are able to influence both the layout of the house and the finish. Your cost estimate included a profit of 140k for each house. From that a builder needs to subtract financing costs, real estate agent costs, any costs that you forgot to factor in, budget overdrafts, contingency costs, and salaries for your staff and yourself. I estimate the project time to 1.5-2 years. So, we have an $8M project with a gross profit of $1.4M (not including all costs). Net profit probably just a few hundred thousand. Or less. Real estate developers with local knowledge would be able to make a much more accurate estimate on both time and cost. My guess is that they have, and since the plot hasn't sold in a while, either the price is at the upper end of what makes a profitable project or there are other restrictions that limit the number/size of homes that can be built on it.
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Why do financial institutions charge so much to convert currency?
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Mainly because they can. Yes, there is a cost for banks to execute such transactions, and yes, there is a cost to cover the implied risks, but it is far from 3 or 4%. There are banks that charge a flat rate of less than 30$ (and no percentage), so for larger amounts, it is worth shopping around. Note that for smaller amounts, which are the majority of personal transactions, that is probably about as, if not more expensive, than paying 3% - below 1000$, 3% is less than 30$. So charging a percentage is actually better for people that want to transfer smaller amounts.
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Benjamin Graham: Minimum Size of the company
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Benjamin Grahams strategy was to invest in REALLY SAFE stocks. In his time lean businesses weren't as common as they are now and he found many companies with assets greater than the value of their shares. Putting a number figure on it isn't really necessary but the concept is useful. Its the idea that bigger companies are less turbulent (Which is something to avoid for an investor). Most companies in the top 500 or whatever will satisfy this.
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Non Resident aliens - Question of standard vs itemized
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The IRS' primary reference Pub 519 Tax Guide for Aliens -- current year online (current and previous years downloadable in PDF from the Forms&Pubs section of the website) says NO: Students and business apprentices from India. A special rule applies .... You can claim the standard deduction .... Use Worksheet 5-1 to figure your standard deduction. If you are married and your spouse files a return and itemizes deductions, you cannot take the standard deduction. Note the last sentence, which is clearly an exception to the 'India rule', which is already an exception to the general rule that nonresident filers never get the standard deduction. Of course this is the IRS' interpretation of the law (which is defined to include ratified treaties); if you think they are wrong, you could claim the deduction anyway and when they assess the additional tax (and demand payment) take it to US Tax Court -- but I suspect the legal fees will cost you more than the marginal tax on $6300, even under Tax Court's simplified procedures for small cases.
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Why does an option lose time value faster as it approaches expiry
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Don´t forget that changing volatility will have an impact on the time value too! So at times it can happen that your time value is increasing instead of decreasing, if the underlying (market) volatility moves up strongly. Look for articles on option greeks, and how they are interdependent. Some are well explaining in simple language.
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Why are banks providing credit scores for free?
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I think the biggest reason is price; it's a lot cheaper now than it was to offer these. That's because for the most part, when you get a credit score for free, you're not getting a true FICO score. You're getting instead a VantageScore. VantageScore was created by the three credit bureaus, and as such they can offer it without paying Fair Isaac a licensing fee. That makes it a lot cheaper to offer, and while it's not absolutely identical to FICO (or more accurately to any of the FICO provided scores) it's close enough for most peoples' purpose. And of course undoubtedly Fair Isaac has some price pressure on their side now that Vantage is big enough that many people see them as fungible. As such they've had to make it easier, or they'd lose business - no longer being a monopolist. The other relevant piece here is that probably in many of these cases they're really just offering you what Experian would give you directly - so it's just a cross-marketing thing (where Experian, or perhaps another bureau, gets access to you as a customer so they can up-sell you ID theft insurance and whatnot, while the bank gets to offer the free score).
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Why do I see multiple trades of very small quantities?
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It looks more like someone is trying to pocket the spread. The trades are going off at the bid then the ask (from what I can tell without any L1 and L2 data, but the spread could be bigger than what the prices show, since the stock looks pretty volatile given the difference between current price and VWAP...). Looking through the JSE rule books I didn't find any special provisions on how they handle odd lots in their Central Order Book, but the usual practice in other markets is to display only round lot orders. So these 4 share orders would remain hidden from book participants and could be set there to trigger executions from those who are probing for limit orders. Or to make a market with very limited risk.
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Why does a company's stock price affect its ability to raise debt?
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As JB hints, it is likely due to superior or improving, fundamentals. If the fundamentals of a company improve then its ability to repay loans improves. If its ability to repay improves then more sources of cash become willing to lend to the company. Also if fundamentals are improving then more sources are willing to buy and/or hold the stock.
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Is there a term that better describes a compound annual growth rate (CAGR) when it is negative?
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Same question had popped up in our office,and we got an answer from one of the senior colleague. He said that we can call it CARC (Compounded Annual Rate of Change).
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Why would refinancing my mortgage increase my PMI, even though rates are lower?
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The PMI rate is calculated at the time your mortgage is underwritten to be terminated at the point where you have 20% equity in your home. It is calculated based off of default risks based on your current equity value at the time of the loan. So if you got your mortgage before the banking crisis those risk charts have changed dramatically and not in your favor. So lets say you have a 100k home which you put 10k down so you have a mortgage of 90k. Since you have accumulated an additional 5k equity so payoff value is now 85k. If you refinance your mortgage and the home values in your area have dropped 15% you now are borrowing 100% of the value of your home. So you have higher risk from being at 100% as opposed to 90%. And the PMI is for the 20% of equity you do not have that the bank can not expect to recover. So when you originally bought the house your PMI pay out was 10k. At 85K value and 100% borrowed the PMI payout will be closer to 18k. While you may still be able to sell your home for the original value when they do the refinance calculations they use what your area has trended. If that is the case you maybe be able get an actual appraisal to use but that will come out of your pocket. *Disclaimer: These are simplifications of how the whole complex process works if you call the banker they can explain exactly why, show you the numbers, and help you understand your specific circumstances. *
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Can we buy and sell stocks without worrying about settlement period
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In the United States, regulation of broker dealer credit is dictated by Regulation T, that for a non-margin account, 100% of a trade must be funded. FINRA has supplemented that regulation with an anti-"free rider" rule, Rule 4210(f)(9), which reads No member shall permit a customer (other than a broker-dealer or a “designated account”) to make a practice, directly or indirectly, of effecting transactions in a cash account where the cost of securities purchased is met by the sale of the same securities. No member shall permit a customer to make a practice of selling securities with them in a cash account which are to be received against payment from another broker-dealer where such securities were purchased and are not yet paid for. A member transferring an account which is subject to a Regulation T 90-day freeze to another member firm shall inform the receiving member of such 90-day freeze. It is only funds from uncleared sold equities that are prohibited from being used to purchase securities. This means that an equity in one's account that is settled can be sold and can be purchased only with settled funds. Once the amount required to purchase is in excess of the amount of settled funds, no more purchases can be made, so an equity sold by an account with settled funds can be repurchased immediately with the settled funds so long as the settled funds can fund the purchase. Margin A closed position is not considered a "long" or "short" since it is an account with one loan of security and one asset of security and one cash loan and one cash liability with the excess or deficit equity equal to any profit or loss, respectively, thus unexposed to the market, only to the creditworthiness of the clearing & settling chain. Only open positions are considered "longs" or "shorts", a "long" being a possession of a security, and a "short" being a liability, because they are exposed to the market. Since unsettled funds are not considered "longs" or "shorts", they are not encumbered by previous trades, thus only the Reg T rules apply to new and current positions. Cash vs Margin A cash account cannot purchase with unsettled funds. A margin account can. This means that a margin account could theoretically do an infinite amount of trades using unsettled funds. A cash account's daily purchases are restricted to the amount of settled funds, so once those are exhausted, no more purchases can be made. The opposite is true for cash accounts as well. Unsettled securities cannot be sold either. In summation, unsettled assets can not be traded in a cash account.
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Should I buy or lease a car given that its not a super luxury car and I only drive 15 miles/d on avg?
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Alternative: buy a recent-model used car in good condition. Or buy an older car in good condition. Let someone else pay the heavy depreciation that happens the moment you drive a new car off the dealer's lot.
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Can a wealthy investor invest in or make a deal with a company before it goes public / IPO?
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IPO is "Initial Public Offering". Just so you know. The valuations are done based on the company business model, intellectual property, products, market shares, revenues and profits, assets, and future projections. You know, the usual stuff. Yes, it is. And very frequently done. In fact, I can't think of any company that is now publicly traded, that didn't start this way. The first investor, the one who founds the company, is the first one who invests in it after raising the capital (even if it is from his own bank account to pay the fees for filing the incorporation papers). What is the difference between "normal" investor and "angel"? What do you refer to as "angel"? How is it abnormal to you? Any investor can play a role, depending on the stake he/she has in the company. If the stake is large enough - the role will be significant. If the stake is the majority - the investor will in fact be able major decisions regarding the company. How he bought the stocks, whether through a closed offering, initial investment or on a stock exchange - doesn't matter at all. You may have heard of the term "angels" with regards to high-tech start up companies. These are private investors (not funds) that invest their own money in start ups at very early stages. They're called "angels" because they invest at stages at which it is very hard for entrepreneurs to raise money: there's no product, no real business, usually it is a stage of just an idea or a patent with maybe initial prototype and some preliminary business analysis. These people gamble, in a sense, and each investment is very small (relatively to their wealth) - tens of thousands of dollars, sometimes a hundred or two thousands, and they make a lot of these. Some may fail and they lose the money, but those that succeed - bring very high returns. Imagine investing 10K for 5% stake at Google 15 years ago. Those people are as investors as anyone else, and yes, depending on their stake in the company, they can influence its decisions.
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Using stock markets in Europe, how can I buy commodities / resources, to diversify my portfolio?
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I recommend avoiding trading directly in commodities futures and options. If you're not prepared to learn a lot about how futures markets and trading works, it will be an experience fraught with pitfalls and lost money – and I am speaking from experience. Looking at stock-exchange listed products is a reasonable approach for an individual investor desiring added diversification for their portfolio. Still, exercise caution and know what you're buying. It's easy to access many commodity-based exchange-traded funds (ETFs) on North American stock exchanges. If you already have low-cost access to U.S. markets, consider this option – but be mindful of currency conversion costs, etc. Yet, there is also a European-based company, ETF Securities, headquartered in Jersey, Channel Islands, which offers many exchange-traded funds on European exchanges such as London and Frankfurt. ETF Securities started in 2003 by first offering a gold commodity exchange-traded fund. I also found the following: London Stock Exchange: Frequently Asked Questions about ETCs. The LSE ETC FAQ specifically mentions "ETF Securities" by name, and addresses questions such as how/where they are regulated, what happens to investments if "ETF Securities" were to go bankrupt, etc. I hope this helps, but please, do your own due diligence.
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What effect would sovereign default of a European country have on personal debt or a mortgage?
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This is a hard question to answer. Government debt and mortgages are loosely related. Banks typically use yields on government bonds to determine mortgage interest rates. The banks must be able to get higher rates from the mortgage otherwise they would buy government bonds. Your question mentions default so I'm assuming a country has reneged on its promise to pay either the principal or interest on government bonds. The main thing to consider is "Who does not get their money?". In other words, who does the government decide not to pay. This is the important part. The government will have some money so they could pay some bond holders. They must decide who to shaft. For example, let's look at who holds Greek government debt. Around 70% of Greek government debt is held outside Greece. See table below. The Greek government could decide to default only on the debt to foreign holders. In that case the banks in France and Switzerland would take the loss on their bonds. This could cause severe problems in France and Switzerland depending on the percentage of Greek bonds that make up the banks' assets. Greek banks would still face losses, however, since the price of their Greek bond holdings would drop sharply when the government defaults. Interestingly, the losses for the Greek banks may be smaller than the losses faced by the French and Swiss banks. This is usually the favored option chosen by government since the French and Swiss don't vote in Greece. Yields on Greek government bonds would rise dramatically. If your Greek mortgage is an adjustable rate mortgage then you could see some big adjustments upward. If you live in France or Switzerland then the bank that owns your mortgage may go under if Greece defaults. During liquidation the bank will sell their assets which includes mortgages and you will probably not notice any difference in your mortgage. As I stated earlier: this is a hard question to answer since the two financial instruments involved (bonds and mortgages) are similar but may or may not be related.
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What is the purpose of the wash sale rule?
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Overall the question is one of a political nature. However, this component can have objective answers: "What behavior is trying to be prevented?" There are mechanisms by which capital gains can be deferred (1031 like-kind exchange, or simply holding a long position for years) or eliminated by the estate step up in basis. With these available, mechanisms that enable basis-reduction are ripe for abuse. On the other hand, if this truly bothers you then if you meet the IRS qualifications of a day trader, you may elect to use "mark to market" accounting, eliminating this entirely as a concern. Special rules for traders of securities
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Is insurance worth it if you can afford to replace the item? If not, when is it?
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Another factor to consider is that resale value of the laptop is quite bit more if it is still under warranty. This would apply to people who replace their laptop often. It is higher because the purchaser can be assured they are not getting a lemon. I determined this by comparing prices on ebay before selling my computer. Of course, if you keep your laptop longer than the warranty, this means nothing. But for me it meant I could sell my old laptop quickly and for a better price. Because I used my laptop for work and totally depended on it, even one day of downtime would cost me a lot, so it was worthwhile to keep a relatively new laptop under warranty. Also, for those using Apple Care, there is an undocumented perk: Apple covered an out of warranty repair on a time capsule under my apple care for my laptop even tho they were not purchased at the same time.
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What does “Net Depreciation in Fair Value” mean on a financial report?
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First, the annual report is just that, a snapshot that shows value at the beginning and end of the period. Beginning = Aug 08 = $105B End = Aug 09 = $89B Newsletter date May 10 = $96B Odd they chose end of August as it's not even a calendar quarter end. The $16B was market loss during that period. Nearly half of that seemed to be recovered by the time this newsletter came out. The balance sheet also has to show deposits and payments made to existing retirees. I haven't looked at the S&P numbers for those dates, but my gut says this is right. The market tanked and the plan was down, but not too bad. Protect? The PBGC guarantees pensions up to a certain limit. I believe that in general, teachers are below the limit and are not at risk of a reduced benefit. You do need to check that your plan is covered. If not, I believe the state would take over directly. I hope this helps.
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Can I use same stock broker to buy stocks from different stock markets?
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In the US there is only one stock market (ignoring penny stocks) and handfuls of different exchanges behind it. NYSE and NASDAQ are two different exchanges, but all the products you can buy on one can also be bought on the other; i.e. they are all the same market. So a US equities broker cannot possibly restrict access to any "markets" in the US because there is only one. (Interestingly, it is commonplace for US equity brokers to cheat their customers by using only exchanges where they -- the brokers -- get the best deals, even if it means your order is not executed as quickly or cheaply as possible. This is called payment for order flow and unfortunately will probably take an Act of Congress to stop.) Some very large brokers will have trading access to popular equity markets in other countries (Toronto Stock Exchange, Mexico Stock Exchange, London Stock Exchange) and can support your trades there. However, at many brokers or in less popular foreign markets this is usually not the case; to trade in the average foreign country you typically must open an account with a broker in that country.
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How should we organize our finances to effectively plan and prepare for an retirement in next 10 years?
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The biggest issue is your lack of diversification. Your real estate investments have performed quite well so far, but you have also likely enjoyed a period of unprecedented growth that is not sustainable. In the long term, stocks have always outperformed real estate investments, which tend to track more closely to the inflation rate. You need more balance for when when the real estate market cools off. You don't mention tax-deferred retirement savings accounts. You should prioritize your attention to these to keep your income tax low. Consider selling one of your investment properties if you can't adequately fund the 401k.
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Does the stock market create any sort of value?
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Let's say that you bought a share of Apple for $10. When (if ever) their stock sold for $10, it was a very small company with a very small net worth; that is, the excess of assets over liabilities. Your $10 share was perhaps a 1/10,000,000th share of a tiny company. Over the years, Apple has developed both software and hardware that have real value to the world. No-one knew they needed a smartphone and, particularly, an iPhone, until Apple showed it to us. The same is true of iPads, iPods, Apple watches, etc. Because of the sales of products and services, Apple is now a huge company with a huge net worth. Obviously, your 1/10,000,000th share of the company is now worth a lot more. Perhaps it is worth $399. Maybe you think Apples good days are behind it. After all, it is harder to grow a huge company 15% a year than it is a small company. So maybe you will go into the marketplace and offer to sell your 1/10,000,000th share of Apple. If someone offers you $399, would you take it? The value of stocks in the market is not a Ponzi scheme, although it is a bit speculative. You might have a different conclusion and different research about the future value of Apple than I do. Your research might lead you to believe the stock is worth $399. Mine might suggest it's worth $375. Then I wouldn't buy. The value of stocks in the market is based on the present and estimated future value of living, breathing companies that are growing, shrinking and steady. The value of each company changes all the time. So, then, does the price of the stock. Real value is created in the stock market when real value is created in the underlying company.
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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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Investing in third world countries
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I strongly recommend you to invest in either stocks or bonds. Both markets have very strict regulations, and usually follow international standards of governance. Plus, they are closely supervised by local governments, since they look to serve the interests of capital holders in order to attract foreign investment. Real estate investment is not all risky, but regulations tend to be very localized. There are federal, state/county laws and byelaws, the last usually being the most significant in terms of costs (city taxes) and zoning. So if they ever change, that could ruin your investment. Keeping up with them would be hard work, because of language, legal and distance issues (visiting notary's office to sign papers, for example). Another thing to consider is, specially on rural distant areas, the risk of forgers taking your land. In poorer countries you could also face the problem of land invasion, both urban and rural. Solution for that depends on a harsh (fast) or socially populist (slow) local government. Small businesses are out of question for you, frankly. The list of risks (cash stealing, accounting misleading, etc.) is such that you will lose money. Even if you ran the business in your hometown it would not be easy right?
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How could a company survive just on operations cash flow, i.e. no earnings?
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It is true that operation profit comes from gross profit however it is possible for a company to have negative net profit yet have postive cash flow , it has to do with the accounting practice A possible example is that a company has extremely high depreciation expense of fixed asset hence net profit will be negative but cash flow will be positive. Assuming the fixed asset has been fully paid for in earlier years
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Premium classification when selling covered calls in a traditional IRA?
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If you hold stock in a traditional IRA and sell a covered call against that stock, the premium received for writing that call belongs to the IRA just as would any other gain, dividend, or interest. It is not a contribution but simply adds to the balance in the IRA. The nature of the gain (capital or ordinary) is not relevant since all parts of the IRA balance are treated the same when funds are (eventually) withdrawn.
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How do dividend reinvestment purchases work?
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Many brokers administer their own dividend reinvestment plans. In this case, on dividend payment date, they automatically buy from the market on behalf of their reinvestment customers, and they administer all fractional shares across all customers. All of your shares are in the broker's street name anyway, the fractional share is simply in their account system. The process is well documented for several common online brokers; so any specific questions you may have about differences in policies or implementation should be directed to your broker: https://us.etrade.com/e/t/estation/help?id=1301060000 https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA208.pdf
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What are a few sites that make it easy to invest in high interest rate mutual funds?
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If you want a ~12% rate of return on your investments.... too bad. For returns which even begin to approach that, you need to be looking at some of the riskiest stuff. Think "emerging markets". Even funds like Vanguard Emerging Markets (ETF: VWO, mutual fund, VEIEX) or Fidelity Advisor Emerging Markets Income Trust (FAEMX) seem to have yields which only push 11% or so. (But inflation is about nil, so if you're used to normal 2% inflation or so, these yields are like 13% or so. And there's no tax on that last 2%! Yay.) Remember that these investments are very risky. They go up lots because they can go down lots too. Don't put any money in there unless you can afford to have it go missing, because sooner or later you're likely to lose something half your money, and it might not come back for a decade (or ever). Investments like these should only be a small part of your overall portfolio. So, that said... Sites which make investing in these risky markets easy? There are a good number, but you should probably just go with vanguard.com. Their funds have low fees which won't erode your returns. (You can actually get lower expense ratios by using their brokerage account to trade the ETF versions of their funds commission-free, though you'll have to worry more about the actual number of shares you want to buy, instead of just plopping in and out dollar amounts). You can also trade Vanguard ETFs and other ETFs at almost any brokerage, just like stocks, and most brokerages will also offer you access to a variety of mutual funds as well (though often for a hefty fee of $20-$50, which you should avoid). Or you can sign up for another fund providers' account, but remember that the fund fees add up quickly. And the better plan? Just stuff most of your money in something like VTI (Vanguard Total Stock Market Index) instead.
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How do share dilution scams make money?
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For this to work, those who control the dilution must also control their salaries because the only way for them to be paid off when it's the corporation itself selling is to gain access to the proceeds. When a corporation sells newly issued equity, the corporation itself owns the money. To at least have the appearance of propriety, the scammers must be paid those proceeds. Both actions imply that the board is captured by the scammers. There are many corporations that seem to do this even with persistently large market capitalizations. The key difference between this and pump-and-dump is that its a fraudulent group of investors selling in this case instead of the corporation itself. A detailed simple example Corporations are mandated by law to be little oligarchies; although, "republic" is now becoming more appropriate with all of the new shareholder rights. A corporation is controlled at root by the board of directors who are elected by the shareholders. The board has no direct operational control, as that is left to the "king", the CEO; however, the board does control what everyone wants access to: the money. Board members have all sorts of legal qualitative mandates on how to behave, and they've functioned fairly decently efficiently over the long run, but there are definitely some bad apples. Boards are somewhat intransigent since it's difficult to hold board elections, and usually only specific board members are put up for election by a shareholder vote, so a bad one has the potential to really get stuck in there. Once a bad one is in there, they don't care because they know it will be tough to get them out, so they run roughshod over the company's purse. Only the board can take action on major funding such as the CEO's operating budget, board compensation, financing, investment, etc, some with shareholder approval, some without. The corporation itself owns all of those assets, but the board controls them. In this example, they scheme with most likely the top executive, but a rubber stamp top executive could allow a lower rung to scheme with the board, but the board is always constant until the law is changed. Because there's no honor amongst thieves, the board votes which can require some combination of executive and shareholder approval are taken very close together: sell shares, increase salaries to key executive schemers, increase board compensation. The trusting shareholders believe this is in the best interests of the company at large so go along. So the money flows from existing & new shareholders to the corporation now controlled by a malicious board and then finally to the necessary malicious executive and the vital malicious board.
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On a debt collection agency's letter, what does “balance” refer to?
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The balance is the amount due.
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My friend wants to put my name down for a house he's buying. What risks would I be taking?
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Something else to consider, even if your friend is on the up and up and never misses a payment: Until the house is paid off, any time you apply for credit banks will count the mortgage payment on your friends house against your ability to pay all your existing debts in addition to whatever new loan you're applying for. If you're renting a home now, this will likely mean that you'll be unable to buy one until your friends house is paid off.
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How much should I be contributing to my 401k given my employer's contribution?
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First - yes, take the 2.5%. It could be better, but it's better than many get. Second - choosing from "a bunch" can be tough. Start by looking at the expenses for each. Read a bit of the description, if you can't tell your spouse what the fund's goal is, don't buy it.
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Separate bank account for security deposit from tenant
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In Massachusetts, we have a similar law. Each tenant fills out a W9 and the account is in their name. You need to find a bank willing to do this at no cost, else fees can be problematic. With today's rates, any fee at all will exceed interest earned.
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Is there a good options strategy that has a fairly low risk?
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There isn't really a generic options strategy that gives you higher returns with lower risk than an equivalent non-options strategy. There are lots of options strategies that give you about the same returns with the same risk, but most of the time they are a lot more work and less tax-efficient than the non-options strategy. When I say "generic" I mean there may be strategies that rely on special situations (analysis of market inefficiencies or fundamentals on particular securities) that you could take advantage of, but you'd have to be extremely expert and spend a lot of time. A "generic" strategy would be a thing like "write such-and-such sort of spreads" without reference to the particular security or situation. As far as strategies that give you about the same risk/return, for example you can use options collars to create about the same effect as a balanced fund (Gateway Fund does this, Bridgeway Balanced does stuff like it I think); but you could also just use a balanced fund. You can use covered calls to make income on your stocks, but you of course lose some of the stock upside. You can use protective puts to protect downside, but they cost so much money that on average you lose money or make very little. You can invest cash plus a call option, which is equivalent to stock plus a protective put, i.e on average again you don't make much money. Options don't offer any free lunches not found elsewhere. Occasionally they are useful for tax reasons (for example to avoid selling something but avoid risk) or for technical reasons (for example a stock isn't available to short, but you can do something with options).
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Why are we taxed on revenue and companies on profit?
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I pay taxes on revenue. You do have the ability to deduct expenses, though it's not as comprehensive as what companies can do: These figures apply to everybody, so those that earn more get taxed more on thee additional income in each bracket (meaning the first $100,000 of taxable income is taxed the same for everybody at one rate, the next $100,000 at a different rate, etc.) So you do get to deduct personal expenses and get taxed on "profit" - but since the vast majority of people don't keep detailed records of what they spend, it's much simpler just to use blanket deduction amounts for everyone. Companies have much more detailed systems in place to track and categorize expenses, so it's easier to just tax on net profit. Plus, the corporate tax rate is much higher than the average individual tax rate - would you trade more deductions for a higher tax rate?
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Are car buying services worth it?
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Depends on how you value your time. These programs do not say they will get you the lowest basement price; they say you get a reasonable price without negotiation. This is true. Use a service. Pick out the car you want and spend less than an afternoon picking up your vehicle. You don't have to fret or do all of the price research or comparison shopping because that is what the service does for you. Since you have to pick a make and model before you begin AND because you need to arrange your financing at a credit union before you being (regardless of a buying service) I don't think they actually work out financially for most folks. My anecdote: Because we were buying an already inexpensive new car, the Costco pre-negotiated discount was just a few hundred bucks. The discount is different for each car (naturally). Our base model was terrific in consumer reports, but the sticker price doesn't leave dealerships a lot of room for profit to start with. We ended up saving a couple thousand dollars by skipping the Costco program and following these tips from JohnFX: What are some tips for getting the upper hand in car price negotiations? But we did it all over email. We emailed any dealership we could find online that was in driving distance. (There were literally dozens of dealerships to choose from.) We made a new, throw away email address and starting to ask for a lower price. Whenever we got a lower price, we simply asked the others to beat it. All over email. It only took a few days, we know we got a low price and the stress really wasn't a factor. (A couple of the salespeople got a little rude, but it was over the email so we didn't care or fret.) I had time to kill, and the extra hassle and effort saved me much more money.
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Should I pay off my 50K of student loans as quickly as possible, or steadily? Why?
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The definitive answer is: It Depends. What are your goals? First and foremost, you need to have at least 3 months expenses in cash or equivalent. (i.e. an investment that you can withdraw from quickly, and without penalty). The good news is that you don't have to come up with it instantly. Set a time frame - one year - for creating this safety net, and pay towards that goal. This is the single most important piece of financial advice you will receive. Now determine what you need to do. For example, you may need a car. Compare interest rates on your student loan and the car loan. Put your cash towards whichever is higher. If you don't need a car or other big ticket item, then you may consider sticking your surplus into the student loans. 50k at $1650 a month will be paid down in about 3 years, which might be a bit long to live the monastic lifestyle. I'd look at paying down the smallest loan first (assuming relatively similar rates), and freeing up that payment for yourself. So if you can pay off 1650 a month, and free up $100 of that in six months, then you can reward yourself with half that surplus, and apply the other half to the next loan. (This is different than some would suggest because you're talking about entering severe spartan mode, which is not sustainable.) Remember that life happens. You'll meet someone. You'll have an accident, your brother will get sick and you'll give him some money to help out. You've got to be prepared for these events, and for these reasons, I don't recommend living that close to the edge. Remember, you're not in default, and you do have the option of continuing to pay the minimum for a long time.
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How do you measure the value of gold?
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There are three aspects of what to value gold over. It doesn't easily chemically react with anything, so it stays pure over a long period of time (vs, say a bar of iron or a bar of butter). So it's valuable so far as it doesn't rot. It is shiny, and there is the historical allure of having a bag of shiny, jingly gold coins. Other people will give you other items of perceived value in exchange for it. I believe it was Warren Buffett who stated his opinion on gold - paraphrased such: "You pay people to dig it out of the ground, you pay people to purify it and pour into forms, you pay people to verify the number of nine's purity in it, you pay people to build a secure building to store it in, and you pay people to stand around and guard it. Where is the value in that?"
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What's the benefit of opening a Certificate of Deposit (CD) Account?
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The benefit, as other answers have mentioned, is higher interest rates than are available compared to other comparable options. My bank keeps spamming me with offers for a sub 1% APR savings account that only requires a $10,000 balance, for example. While CDs and similar safe investments don't seem like they offer much value now (or in the recent past), that's because they strongly correlate to the federal funds rate, which is near historic lows. See the graph of CD rates and the federal funds rate, here. You may have felt differently in July of 1984, when you could get a 5 year CD with an APR above 12%. As you can see in this graph of historical CD yields, it hasn't always been the case that CDs offered such small returns. That being said, CDs are safe investments, being FDIC insured (up to the FDIC insurance limits), so you're not going to get great rates from one, because there's basically no risk in this particular type of investment. If you want better rates, you get those by investing in riskier instruments that have the possibility of losing value.
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Can a Covered Call be called away before the expiration date?
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They can sell a lower price call if they expect the stock to plummet in the near term but they are bullish on the longer term. What they are looking to do is collect the call premium and hope it expires worthless. And then again 'hope' that the stock will ultimately turn around. So yes, a lot of hoping. But can you explain what you mean by 'my brokerage gives premiums for prices lower than the current price'? Do you mean you pay less in commissions for ITM calls?
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US Stock Market - volume based real-time alert
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TdAmeritrade offers this service for free using 3rd party company markit. From markit's site, below is their guarantee. http://www.markit.com/product/markit-on-demand Markit On Demand delivers an average of two million alerts per day through various technology platforms and via multiple channels, including email, instant messages, wireless, RSS and Facebook. Investors can subscribe to their alerts of choice, and Markit On Demand guarantees that they will receive an alert within five minutes of the event trigger for all price and volume alerts
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Why diversify stocks/investments?
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Diversifying is the first advice given to beginner in order to avoid big loss. For example in 2014 the company Theranos was really appealing before it fail in 2016. So a beginner could have invest ALL his money and lose it. But if he has deverified he wouldn't lost everything. As an investor goes from beginner to experience some still Diversify and other concentrate. Mostly it depends how much confident you are about an investement. If you have 20 years of experience, now everything about the company and you are sure there will be profit you can concentrate. If you are not 100% sure there will be a profit, it is better to Diversify. Diversifying can also be profitating when you loose money: because you will pay tax when you earn money, if you diversify you can choose to loose money in some stock (usually in december) and in this way cut your taxes.
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Why I cannot find a “Pure Cash” option in 401k investments?
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The short term bond fund, which you are pretty certain to have as an option, functions in this capacity. Its return will be low, but positive, in all but the most dramatic of rising rate scenarios. I recall a year in the 90's when rates rose enough that the bond fund return was zero or very slightly negative. It's not likely that you'd have access to simple money market or cash option.
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Precious metal trading a couple questions
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Correcting Keith's answer (you should have read about these details in the terms and conditions of your bank/broker): Entrustment orders are like a "soft" limit order and meaningless without a validity (which is typically between 1 and 5 days). If you buy silver at an entrustment price above market price, say x when the market offer is m, then parts of your order will likely be filled at the market price. For the remaining quantity there is now a limit, the bank/broker might fill your order over the next 5 days (or however long the validity is) at various prices, such that the overall average price does not exceed x. This is different to a limit order, as it allows the bank/broker to (partially) buy silver at higher prices than x as long as the overall averages is x or less. In a limit set-up you might be (partially) filled at market prices first, but if the market moves above x the bank/broker will not fill any remaining quantities of your order, so you might end up (after a day or 5 days) with a partially filled order. Also note that an entrustment price below the market price and with a short enough validity behaves like a limit price. The 4th order type is sort of an opposite-side limit price: A stop-buy means buy when the market offer quote goes above a certain price, a stop-sell means sell when the market bid quote goes below a certain price. Paired with the entrusment principle, this might mean that you buy/sell on average above/below the price you give. I don't know how big your orders are or will be but always keep in mind that not all of your order might be filled immediately, a so-called partial fill. This is particularly noteworthy when you're in a pro-rata market.
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How do you choose which mortgage structure is appropriate when buying a home?
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Down payment: Emphatically avoid PMI if at all possible; it's pouring money down the drain. Do 20% down if you can, or pay off enough to bring you above 20% and ask for PMI to be removed as soon as you can. Beyond that it's a matter of how much risk you want to accept and how long you'll own the place, and you'll have to run the numbers for the various alternatives -- allowing for uncertainty in your investments -- to guide your decision. Do not assume you will be able to make a profit when you sell the house; that's the mistake which left many people under water and/or foreclosed on. Do not assume that you will be able to sell it quickly; it can take a year of more. Do not assume immediate or 100% occupancy it you rent it out; see many other answers here for more realistic numbers.... and remember that running a rental is a business and has ongoing costs and hassles. (You can contract those out, but then you lose a good percentage of the rent income.) Double mortgage is another great way to dig yourself into a financial hole; it can be a bigger cost than the PMI it tries to dodge and is definitely a bigger risk. Don't.
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Buy tires and keep car for 12-36 months, or replace car now?
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I don't see how anyone could give you a hard-and-fast formula, unless they know where to get some applicable statistics. Because several factors here are not a straight calculation. If you don't replace the tires but keeping driving the car, what is the increased probability that you will get into an accident because of the bald tires? How much will bald tires vs new tires affect the selling price of the car? Presumably the longer you drive the car after getting new tires, the less increase this will give to the market value of the car. What's the formula for that? If you keep the car, what's the probability that it will have other maintenance problems? Etc. That said, it's almost always cheaper to keep your current car than to buy a new one. Even if you have maintenance problems, it would have to be a huge problem to cost more than buying a new car. Suppose you buy a $25,000 car with ... what's a typical new car loan these days? maybe 5 years at 5%? So your payments would be about $470 per month. If you compare spending $1000 for new tires versus paying $470 per month on a new car loan, the tires are cheaper within 3 months. The principle is the same if you buy with cash. To justify buying a new car you have to factor in the value of the pleasure you get from a new car, the peace of mind from having something more reliable, etc, mostly intangibles.
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What does it mean for a company to have its market cap larger than the market size?
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The quickest way to approach this question is to first understand that it compares flows vs. levels. Market size is usually stated as an annual or other period figure, e.g. "The market size of refrigerators will be $10mn in 2019." This is a flow figure. Market capitalization is a level figure at any given point in time, e.g. "The market cap of the company was $20 million at the end of its last fiscal quarter." Confusion sometimes occurs when levels and flows are used loosely for comparisons. It is common for media to make statements such as "Joe Billionaire is worth more than the GDP of Roselandia." That is comparing a current level (net worth) with an annual flow (GDP). With this in mind, there are a variety of conditions where a company's equity market value will exceed its market size. The most extreme example is an innovating, development-stage enterprise, say, a biotech company, developing a new market for a new product; the current market size may be nil while the enterprise is worth something greater. The primary reason however for situations where a company's equity market cap is greater than its market size is usually that the financial market expects the enterprise (and oftentimes its market, though this isn't necessary) to grow substantially over time and hence the discounted value of the company may be greater than the current or near future market size. A final example: US annual GDP (which comprises of much more than corporate incomes and profits) for 2014 was about $17.4tn while the nation's total equity market value in 2014 was $25.1tn, both according to the World Bank. That latter figure also doesn't include the trillions of corporate debts these companies have issued so the total market cap of US, Inc. is substantially greater than $25.1tn.
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Using credit cards online: is it safe?
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You're right that someone who, say, photographed the front of your card at the store could use it to make some online purchases. Schemes like Visa's 3-D Secure provide additional online security by having you enter your password on the issuer's website, but they aren't common yet in the US. But as littleadv says, you as the cardholder generally aren't liable for fraud (except $50 in some cases). Just be sure to check your statement monthly and notify the issuer of any fraud within 60 days. To issuers, fraud losses are fairly predictable, and the cost is acceptable.
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How to pay for Alzheimer's care?
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See Paying for Care | Caregiver Center | Alzheimer's Association. Notable excerpts: For most individuals 65 or older, Medicare is the primary source of health care coverage. However, private insurance, a group employee plan or retiree health coverage also may be in effect. [...] In addition to Medicare, the person with dementia may qualify for a number of public programs. These programs provide income support or long-term care services to people who are eligible. This includes Social Social Security Disability Income (SSDI) for workers younger than 65, Supplemental Security Income (SSI), Medicaid, veteran benefits, and tax deductions and credits. [...] Many community organizations provide low-cost or even free services, including respite care, support groups, transportation and home-delivered meals. You also may consider informal care arrangements using family, friends, neighbors, faith communities and volunteer groups.
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Does it make any sense to directly contribute to reducing the US national debt?
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No. Unless you are ten Bill Gates rolled into one man, you can not possibly hope to make a dent in the 14 trillion debt. Even if you were and paid off whole debt in one payment, budget deficits would restore it to old glory in a short time. If you have some extra money, I'd advise to either choose a charity and donate to somebody who needs your help directly or if you are so inclined, support a campaign of a financially conservative politician (only if you are sure he is a financial conservative and doesn't just tell this to get elected - I have no idea how you could do it :).
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Where do countries / national governments borrow money from?
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Depends on the country, whether its a currency issuer with floating exchange rate, and what the debt is denominated in. For instance, the US has no real debt, b/c its all in US dollars and can be printed at any time. It has no need to borrow anything, it issues its own currency. It used to be different 4 decades ago, on the gold standard, so in general people still think currency issuers need to borrow (or earn) to spend. Just a relic in thinking. But when the country does not issue its own currency, then it does need to earn or borrow in order to spend. In this case, it could borrow from anywhere that will lend it money. In US, a state would fit this description. Or Greece, as it borrowed Euros, for which it is not an issuer of. EDIT: just came across this blog http://pragcap.com/where-does-the-money-come-from Its title, "Where does the money come from". Maybe he saw this question. Anyway, the US does not need to borrow money. Why would it borrow what it creates? From the video: "Thinking is hard, that's why we don't do it a lot". Great line.
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Tenant wants to pay rent with EFT
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I'd consider this offer. Keep in mind, any time you write a check, there's the information he's asking for. If it makes you feel comfortable, use the small balance account, or set up a 4th one you'll use for these incoming deposits only.
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Consumer Loans vs Mortgages
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Here's a good definition of a consumer loan: What is a Consumer Loan? As@Pete B. pointed out, there are some states (California loves to be the oddball, doesn't it?) that treat some loans in a more unconventional manner, but the gist of it is that a consumer loan is normally unsecured, meaning there's no collateral or lien associated with it. A signature loan would be a good example of a consumer loan. Many times, loans made by non-banks (finance companies that loan for consumer purchases, for instance) would be considered to be consumer loans. I hope this helps. Good luck!
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If stock price drops by the amount of dividend paid, what is the use of a dividend
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You buy stocks for dividends over the long term. If a share of stock pays $1.00 in dividends every quarter, that's four dollars a year. If you bought it for $40, it pays out $4 in a year, and it's still worth roughly $40 at the end of the year, you're $4 richer. People will often invest large amounts of money in stable stocks not planning to sell it, but only collect the dividends which are either re-invested or pulled out as income.
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To use a line of credit or withdraw from savings
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No one can really answer this for you. It is a matter of personal preference and the details of your situation. There are some really smart people on here, when placed in your exact situation, would do completely different things. Personal finance is overall, personal. If it was me, I'd never borrow money in retirement. If I had the cash, I'd use it to help fund the purchase. If I didn't, I simply wouldn't. For me wealth retention (in your case) is surprisingly more about behavior than math (even though I am a math guy). You are simply creating a great deal of risk at a season in your life with a diminished ability to recover from negative events. In my opinion you are inviting "tales of woe" to be part of your future if you borrow. Others would disagree with me. They would point to the math and show how you would be much better off on borrowing instead of pulling out of investments provided a sufficient return on your nest egg. They may even have a case as you might have to pay taxes on money pulled out magnifying the difference in net income on borrowing versus pulling out in a lump sum. Here in the US, the money you pulled out would be taxed at the highest marginal rate. To help with a down payment of 50K, you might have to pull out 66,500 to pay the taxes and have enough for the down payment. The third option is to not help with a down payment or to help them in a different way. Perhaps giving them a few hundred per month for two years to help with their mortgage payment. Maybe watch their kids some to reduce day care costs or help with home improvements so they can buy a lower price home. Those are all viable options. Perhaps the child is not ready to buy a home. Having said all that it really depends on your situation. Say your sitting on 5 million in investments, your pensions is sufficient to have some disposable income, and they are asking for a relatively small amount. Then pull the money out and don't be concerned. You nest egg will quickly recover the money.
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What percentage of my portfolio should be in individual stocks?
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I think it depends entirely on your risk tolerance. Putting money in individual stocks obviously increases your risk and potentially increases your reward. Personally (as a fairly conservative investor) I'd only invest in individual stocks if I could afford to lose the entire investment (maybe I'd end up buying Enron or Nortel). If you enjoy envesting and feel 10% is an acceptable loss I think you have your answer
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Shorting versus selling to hedge risk
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It's not quite identical, due to fees, stock rights, and reporting & tax obligations. But the primary difference is that a person could have voting rights in a company while maintaining zero economic exposure to the company, sometimes known as empty voting. As an abstract matter, it's identical in that you reduce your financial exposure whether you sell your stock or short it. So the essence of your question is fundamentally true. But the details make it different. Of course there are fee differences in how your broker will handle it, and also margin requirements for shorting. Somebody playing games with overlapping features of ownership, sales, and purchases, may have tax and reporting obligations for straddles, wash sales, and related issues. A straight sale is generally less complicated for tax reporting purposes, and a loss is more likely to be respected than someone playing games with sales and purchases. But the empty voting issue is an important difference. You could buy stock with rights such as voting, engage in other behavior such as forwards, shorts, or options to negate your economic exposure to the stock, while maintaining the right to vote. Of course in some cases this may have to be disclosed or may be covered by contract, and most people engaging in stock trades are unlikely to have meaningful voting power in a public company. But the principle is still there. As explained in the article by Henry Hu and Bernie Black: Hedge funds have been especially creative in decoupling voting rights from economic ownership. Sometimes they hold more votes than economic ownership - a pattern we call empty voting. In an extreme situation, a vote holder can have a negative economic interest and, thus, an incentive to vote in ways that reduce the company's share price. Sometimes investors hold more economic ownership than votes, though often with morphable voting rights - the de facto ability to acquire the votes if needed. We call this situation hidden (morphable) ownership because the economic ownership and (de facto) voting ownership are often not disclosed.
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Is 6% too high to trade stocks on margin?
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Yes, 6% is a waste of money, because some other brokers such as IB offer margin rates below 2%. Also, to borrow money for even less than any broker's margin interest rate, one can do an EFP transaction. This involves simultaneously shorting a stock and buying the SSF for the same stock. When the futures contract expires, you take delivery of the underlying stock to automatically close out your short position. Until then, you've effectively borrowed cash for the cost of borrowing the stock, which is typically less than 0.5% interest for widely traded ones. You also pay for the slight difference in price between the stock and the future, which is typically equivalent to another 0.5% interest or less. The total often comes to less than 1% interest. The only risk with this transaction is that the stock could become hard to borrow at some point, so then you would have to pay higher interest on it temporarily or maybe even have to close out your short early. But it is extremely rare for large, high-volume stocks to become hard-to-borrow. The borrowing cost of SPY has spiked above 5% on only a handful of days in the last decade.
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Little hazy on how the entire RSU's and etrade works
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(I'm assuming the tag of United-states is accurate) Yes, the remaining amount is tax free -- at the current price. If you sell at exactly the original price, there is no capital gain, no capital loss. So you've already payed the taxes. If you sell and there is a capital gain of $3000, then you will pay taxes on the $3000. If 33% is your marginal tax rate, and if you held the stock for less than a year, then you will keep $7000 and pay taxes of $1000. Somehow, I doubt your marginal tax rate is 33%. If you hold the stock for a year after eTrade sold some for you to pay taxes, then you will pay 15% on the gain -- or $450. eTrade sold the shares to pay the taxes generated by the income. Yes, those shares were considered income. If you sell and have a loss, well, life sucks. However, if you sell something else, you can use the loss to offset the other gain. So if you sell stock A for a loss of $3000, and sell stock B at a gain of $4000, then you pay taxes on the net of $1000.
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Would you withdraw your money from your bank if you thought it was going under?
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To the average consumer, the financial health of a bank is completely irrelevant. The FDIC's job is to make it that way. Even if a bank does go under, the FDIC is very good at making sure there is little/no interruption in service. Usually, another bank just takes over the asset of the failing bank, and you don't even notice the difference. You might have a ~24 hour window where your local ATM doesn't work. I also really question the "FDIC is broke" statement. The FDIC has access to additional funding beyond the Deposit Insurance Fund mentioned in your link. It also has the ability to borrow from the Treasury. If you look into the FDIC's report a bit closer, the amount in the "Provision for Insurance Losses" is not just money spent on failing banks. It also includes money that has been set aside to cover anticipated failures and litigation. Saying the FDIC is "broke" is like saying I am "broke" because my checking account balance went down after I moved some money into a rainy-day fund. Failure of the FDIC would signal a failure of our financial system and the government that backs it. If the FDIC fails, your petty checking account would be meaningless anyway. The important things would be non-perishable food, clean water, and guns/ammo. That said, it will be interesting to see the latest quarterly report for the FDIC when it is released next week. The article implies things will look a little better for the FDIC, but we'll see.
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Best way to start investing, for a young person just starting their career?
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Warren Buffett answered this question very well at the 2009 Berkshire Hathaway annual meeting. He said that it was important to read everything you can about investing. What you will find is that you will have a number of competing ideas in your head. You will need to think these through and find the best way to solve them that fits you. You will mostly learn how to invest through good examples. There are fewer good examples out there than you might think, given how many books there are and how many people get paid to give advice in this area. If you want to see how professional investors actually think about specific investments, over a thousand investment examples can be found at www.valueinvestorsclub.com, just login as a guest. The site is run by Joel Greenblatt (you would benefit from reading his books also), and it will give you a sense of the work that investors put into their research. Good luck.
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What are my risks of early assignment?
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The put vs call assignment risk, is actually the reverse: in-the-money calls are more likely to be exercised early than puts. Exercising a call locks in profit for the option holder because they can buy the shares at below market price, and immediately sell them at the higher market price. If there are dividends due, the risk is even higher. By contrast, exercising an in-the-money put locks in a loss for the holder, so it's less common.
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How To Record Income As An Affiliate ( UK )
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Every bill you write counts as income (if the bill doesn't get paid, you would count that as an expense). In cases where you don't write bills, I think the payment you receive would count as income, but you might check that on the HMRC website. So to record your income, you can basically record the payments that you receive. Anything you pay out for your business is an expense. You keep a receipt for every expense - if you don't have a receipt, you can't count it as an expense, so keeping all the receipts is very, very important. An exception are investments, for example buying a computer that should last multiple years; there you can count a percentage of the investment as expense every year. All income, minus all expenses, is your profit. You pay tax and National Insurance contributions according to your profit. You can do whatever you like with the profit. Notice that I didn't mention any salary. Self employed means you have no salary, you have profits and do with them whatever you like. On the other hand, you pay taxes on these profits almost exactly as if they were income. If you have this blog but are also employed, you'll add the profits to your normal income statement.
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Why are estimated taxes due “early” for the 2nd and 3rd quarters only?
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I suspect that the payments were originally due near the end of each quarter (March 15, June 15, September 15, and December 15) but then the December payment was extended to January 15 to allow for end-of-year totals to be calculated, and then the March payment was extended to April 15 to coincide with Income Tax Return filing.
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How can I set up a recurring payment to an individual (avoiding fees)?
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I think about as close as you're going to get is to use a personal PayPal account, and set up a reminder to yourself to log in and send the money. (Because, as you said, setting up a recurring payment is a business account thing.) From PayPal's website: Sending money – Personal payments: It's free within the U.S. to send money to family and friends when you use only your PayPal balance or bank account, or a combination of their PayPal balance and bank account. ... Receiving money – Personal payments: It's free to receive money from friends or family in the U.S. when they send the money from the PayPal website using only their PayPal balance or their bank account, or a combination of their PayPal balance and bank account. You can automate the reminder to yourself with any of the gazillion task managers out there: Google Calendar, MS Outlook, Todoist, Remember the Milk, etc.
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What is the best way to make a bet that a certain stock will go up in the medium term?
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I think that those options might well be your best bet, given the potential 700% return in one year if you're right. You could look and see if any Synthetic Zeros (a Synthetic Zero is a derivative that will pay out a set amount if the underlying security is over a certain price point) exist for the share but chances are if they do they wouldn't offer the 700% return. Also might be worth asking the question at the quant stack exchange to see if they have any other ideas.
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Changing Mailing Adress
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If you call them, you can make sure they'll use the new address, but if you want to do it online, there is some risk that the update is delayed. Note also that an address change with an immediate request for a replacement debit card smells very fishy - this what a hacker / thief would do to get your money. Calling seems to be the better approach, as you can verify your identity further. Otherwise, you might well run into an automated block.
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Why don't companies underestimate their earnings to make quarterly reports look better?
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You need to distinguish a company's guidance from analysts' estimates. A company will give a revenue/earnings guidance which is generally based on internal budgets. The guidance may be aggressive or conservative - some managements are known to be conservative and the market will take that into account to form actual estimates. When you see a headline saying that a company missed, it is generally by reference to the analysts' estimates. Analysts use a company's guidance as one data point among many others to form a forecast of revenue/earnings. The idea behind those headlines is that the average sales/earnings estimates of analysts is a good approximation of what the market expects (which is debatable).
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In general, is it financially better to buy or to rent a house?
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Which is generally the better option (financially)? Invest. If you can return 7-8% (less than the historical return of the S&P 500) on your money over the course of 25 years this will outperform purchasing personal property. If you WANT to own a house for other reason apart from the financial benefits then buy a house. Will you earn 7-8% on your money, there is a pretty good chance this is no because investors are prone to act emotionally.
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Stock prices using candlesticks
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No it does not. Candlesticks really have nothing to do with this, a stock price can open different then the previous day's close. Examining the chart of TSLA provides an example it closed on 1/18 at 238.8 it opened on 1/19 at 243.7 In candlestick parlance is is known as a "gap up".
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Can a company charge you for services never requested or received?
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In general, you can only be charged for services if there is some kind of contract. The contract doesn't have to be written, but you have to have agreed to it somehow. However, it is possible that you entered into a contract due to some clause in the home purchase contract or the contract with the home owners' association. There are also sometimes services you are legally required to get, such as regular inspection of heating furnaces (though I don't think this translates to automatic contracts). But in any case you would not be liable for services rendered before you entered into the contract, which sounds like it's the case here.
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How do I hedge stock options like market makers do?
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Let's consider that transaction cost is 0(zero) for calculation. In the scenario you have stated, maximum profit that could be made is 55$, however risk is unlimited. Hedging can also be used to limit your losses, let's consider this scenario. Stock ABC trading @ 100$, I'll buy the stock ABC @ 100$ and buy a put option of ABC @ strike price 90$ for a premium of 5$ with an expiration date of 1 month. Possible outcomes I end up in a loss in 3 out of 4 scenarios, however my loss is limited to 15$, whereas profit is unlimited.
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Options revisited: Gold fever
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Your plan already answers your own question in the best possible way: If you want to be able to make the most possible profit from a large downward move in a stock (in this case, a stock that tracks gold), with a limited, defined risk if there is an upward move, the optimal strategy is to buy a put option. There are a few Exchange Traded Funds (ETFs) that track the price of gold. think of them as stocks that behave like gold, essentially. Two good examples that have options are GLD and IAU. (When you talk about gold, you'll hear a lot about futures. Forget them, for now. They do the same essential thing for your purposes, but introduce more complexity than you need.) The way to profit from a downward move without protection against an upward move is by shorting the stock. Shorting stock is like the opposite of buying it. You make the amount of money the stock goes down by, or lose the amount it goes up by. But, since stocks can go up by an infinite amount, your possible loss is unlimited. If you want to profit on a large downward move without an unlimited loss if you're wrong and it goes up, you need something that makes money as the stock drops, but can only lose so much if it goes up. (If you want to be guaranteed to lose nothing, your best investment option is buying US Treasuries, and you're technically still exposed to the risk that US defaults on its debt, although if you're a US resident, you'll likely have bigger problems than your portfolio in that situation.) Buying a put option has the exact asymmetrical exposure you want. You pay a limited premium to buy it, and at expiration you essentially make the full amount that the stock has declined below the strike price, less what you paid for the option. That last part is important - because you pay a premium for the option, if it's down just a little, you might still lose some or all of what you paid for it, which is what you give up in exchange for it limiting your maximum loss. But wait, you might say. When I buy an option, I can lose all of my money, cant I? Yes, you can. Here's the key to understanding the way options limit risk as compared to the corresponding way to get "normal" exposure through getting long, or in your case, short, the stock: If you use the number of options that represent the number of shares you would have bought, you will have much, much less total money at risk. If you spend the same "bag 'o cash" on options as you would have spent on stock, you will have exposure to way more shares, and have the same amount of money at risk as if you bought the stock, but will be much more likely to lose it. The first way limits the total money at risk for a similar level of exposure; the second way gets you exposure to a much larger amount of the stock for the same money, increasing your risk. So the best answer to your described need is already in the question: Buy a put. I'd probably look at GLD to buy it on, simply because it's generally a little more liquid than IAU. And if you're new to options, consider the following: "Paper trade" first. Either just keep track of fake buys and sells on a spreadsheet, or use one of the many online services where you can track investments - they don't know or care if they're real or not. Check out www.888options.com. They are an excellent learning resource that isn't trying to sell you anything - their only reason to exist is to promote options education. If you do put on a trade, don't forget that the most frustrating pitfall with buying options is this: You can be basically right, and still lose some or all of what you invest. This happens two ways, so think about them both before you trade: If the stock goes in the direction you think, but not enough to make back your premium, you can still lose. So you need to make sure you know how far down the stock has to be to make back your premium. At expiration, it's simple: You need it to be below the strike price by more than what you paid for the option. With options, timing is everything. If the stock goes down a ton, or even to zero - free gold! - but only after your option expires, you were essentially right, but lose all your money. So, while you don't want to buy an option that's longer than you need, since the premium is higher, if you're not sure if an expiration is long enough out, it isn't - you need the next one. EDIT to address update: (I'm not sure "not long enough" was the problem here, but...) If the question is just how to ensure there is a limited, defined amount you can lose (even if you want the possible loss to be much less than you can potentially make, the put strategy described already does that - if the stock you use is at $100, and you buy a put with a 100 strike for $5, you can make up to $95. (This occurs if the stock goes to zero, meaning you could buy it for nothing, and sell it for $100, netting $95 after the $5 you paid). But you can only lose $5. So the put strategy covers you. If the goal is to have no real risk of loss, there's no way to have any real gain above what's sometimes called the "risk-free-rate". For simplicity's sake, think of that as what you'd get from US treasuries, as mentioned above. If the goal is to make money whether the stock (or gold) goes either up or down, that's possible, but note that you still have (a fairly high) risk of loss, which occurs if it fails to move either up or down by enough. That strategy, in its most common form, is called a straddle, which basically means you buy a call and a put with the same strike price. Using the same $100 example, you could buy the 100-strike calls for $5, and the 100-strike puts for $5. Now you've spent $10 total, and you make money if the stock is up or down by more than $10 at expiration (over 110, or under 90). But if it's between 90 and 100, you lose money, as one of your options will be worthless, and the other is worth less than the $10 total you paid for them both.
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Contract job (hourly rate) as a 1099: How much would I be making after taxes?
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There are way too many details missing to be able to give you an accurate answer, and it would be too localized in terms of time & location anyway -- the rules change every year, and your local taxes make the answer useless to other people. Instead, here's how to figure out the answer for yourself. Use a tax estimate calculator to get a ballpark figure. (And keep in mind that these only provide estimates, because there are still a lot of variables that are only considered when you're actually filling out your real tax return.) There are a number of calculators if you search for something like "tax estimator calculator", some are more sophisticated than others. (Fair warning: I used several of these and they told me a range of $2k - $25k worth of taxes owed for a situation like yours.) Here's an estimator from TurboTax -- it's handy because it lets you enter business income. When I plug in $140K ($70 * 40 hours * 50 weeks) for business income in 2010, married filing jointly, no spouse income, and 4 dependents, I get $30K owed in federal taxes. (That doesn't include local taxes, any itemized deductions you might be eligible for, IRA deductions, etc. You may also be able to claim some expenses as business deductions that will reduce your taxable business income.) So you'd net $110K after taxes, or about $55/hour ($110k / 50 / 40). Of course, you could get an answer from the calculator, and Congress could change the rules midway through the year -- you might come out better or worse, depending on the nature of the rule changes... that's why I stress that it's an estimate. If you take the job, don't forget to make estimated tax payments! Edit: (some additional info) If you plan on doing this on an ongoing basis (i.e. you are going into business as a contractor for this line of work), there are some tax shelters that you can take advantage of. Most of these won't be worth doing if you are only going to be doing contract work for a short period of time (1-2 years). These may or may not all be applicable to you. And do your research into these areas before diving in, I'm just scratching the surface in the notes below.
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How to manage 20 residential apartments
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I have no idea about India, but in many countries there are companies that specialize in property management. This means they will take on the business of maintaining the properties, finding tenants, doing paperwork and background checks, collecting rents and evicting tenants if necessary. Obviously for this they require a fee, but essentially the owner gets to sit back and do nothing except collect a cheque every month. In my country some real estate agents are in this business as well, though for 20 apartments I would be looking for a specialized firm.
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Why is retirement planning so commonly recommended?
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I actually really like the way you positioned this question. If you love what you are doing every day, why would you ever want to quit, right? I'd think of retirement as a safety net instead. Your retirement can be a fall back for if something happens if you are unable to work or deicide to work less. There are some really good answers listed here, but I think it depends on how you want to view, or rather define retirement.
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Most effective Fundamental Analysis indicators for market entry
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I think by definition there aren't, generally speaking, any indicators (as in chart indicators, I assume you mean) for fundamental analysis. Off the top of my head I can't think of one chart indicator that I wouldn't call 'technical', even though a couple could possibly go either way and I'm sure someone will help prove me wrong. But the point I want to make is that to do fundamental analysis, it is most certainly more time consuming. Depending on what instrument you're investing in, you need to have a micro perspective (company specific details) and a macro perspective (about the industry it's in). If you're investing in sector ETFs or the like, you'd be more reliant on the macro analysis. If you're investing in commodities, you'll need to consider macro analysis in multiple countries who are big producers/consumers of the item. There's no cut and dried way to do it, however I personally opt for a macro analysis of sector ETFs and then use technical analysis to determine my entry and/or exit.
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Can rent be added to your salary when applying for a mortgage?
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I am in Australia, but I think the banks in the UK would use similar wrkings. Your options 1 and 2 are basically no. Why would the bank consider your wife to be paying you rent when you live together. These are the type of practices that led to the GFC, and since then practices have been tightened. Regarding option 3, yes banks do take into consideration rent in their analysis of your loan. However, they would not include the full rent in their calculations, but about 70% to 75% of the full rent. This allows for loss of rent during vacant periods and adds a safety factor in their caluclations. But they will not include the rent itself, you would have to have other income as well to support your loan. Saying that, we do have Low Doc Loans in Australia (loans with little documentation required to get a loan). With these loans you basically have to make a declaration that you are telling the truth regarding your income sources and you can only usually borrow a lower LVR as these loans are seen as a bigger risk. These type of loans have also been tightened up since the GFC.
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Cost basis allocation question: GM bonds conversion to stock & warrants
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I found additional evidence on TDAmeritrade's website that helps confirm that the 3/17/11 prices Jason found are the ones to use since all three were traded on that day. Although GM+A had prices and trading as early as 2/28/11, GM+B's price and trading shows up no earlier than 3/14/11, but there was no trading indicated for GM+A on 3/14 so 3/14 can't be used. The two warrants were not traded every day after they came out. The next date that I found when all three, GM, GM+A and GM+B had trades was 4/11/11. I found Google and Yahoo Finance unable to produce the historical prices for the warrants that far back. Unfortunately, you need to be a TDA accountholder in order to access TDA's historical price information for stocks.
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New 1099 employee with Cobra insurance
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For the first four months of the year, when you were an employee, the health insurance premiums were paid for with pre-tax money. When you receive your W-2 at the end of the year, the amount in Box 1 of the W-2 will be reduced by the amount you paid for health insurance. You can't deduct it on your tax return because it has already been deducted for you. Now that you are a 1099 independent contractor, you are self-employed and eligible for the self-employed health insurance deduction. However, as you noted, the COBRA premiums are likely not eligible for this deduction, because the policy is in your old employer's name. See this question for details, but keep in mind that there are conflicting answers on that question.
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Is it legal if I'm managing my family's entire wealth?
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My answer is with respect to the United States. I have no idea about India's regulatory environment. You are opening yourself up to massive liabilities and problems if you deposit their money in your account. I managed investment accounts as a private investment advisor for years (those with less than 15 clients were not required to register) until Dodd-Frank changed the rules. Thus you would have to register as an advisor, probably needing to take the series 65 exam (or qualifying some other way, e.g. getting your CFP/CFA/etc...). I used a discount broker/dealer (Scottrade) as the custodian. Here's how it works: Each client's account was their own account, and I had a master account that allowed me to bill their accounts and manage them. They signed paperwork making me the advisor on their account. I had very little accounting to handle (aside from tracking basis for taxed accounts). If you take custody of the money, you'll have regulatory obligations. There are always lots of stories in the financial advisor trade publications about advisors who go to jail for screwing their clients. The most common factor: they took custody of the assets. I understand why you want a single account - you want to ensure that each client gets the same results, right? Does each client want the same results? Certainly the tax situation for each is different, yes? Perhaps one has gains and wants to take losses in one year, and the other doesn't. If their accounts are managed separately, one can take losses while the other realizes gains to offset other losses. Financial advisors offer these kinds of accounts as Separately Managed Accounts (SMAs). The advisors on these kinds of accounts are mutual funds managers, and they try to match a target portfolio, but they can do things like realize gains or losses for clients if their tax situation would prefer it. You certainly can't let them put retirement accounts into your single account unless the IRS has you on their list of acceptable custodians. I suggest that you familiarize yourself thoroughly with the regulatory environment that you want to operate under. Then, after examining the pros and cons, you should decide which route you want to take. I think the most direct and feasible route is to pass the Series 65, register as an investment advisor, and find a custodian who will let you manage the assets as the advisor on the account. Real estate is another matter, you should talk to an attorney, not some random guy on the internet (even if he has an MBA and a BS in Real Estate, which I do). This is very much a state law thing.
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What headaches will I have switching from Quicken to GnuCash?
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Instead of gnucash i suggest you to use kmymoney. It's easier
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