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Are RSUs ever taxed as long term capital gains? | I don't know the legal framework for RSUs, so I'm not sure what is mandatory and what is chosen by the company issuing them. I recently reviewed one companies offering and it basically looked like a flat purchase of stock on the VEST date. So even if I got a zillion shares for $1 GRANTED to me, if it was 100 shares that vested at $100 on the 1st, then I would owe tax on the market value on the day of vest. Further, the company would withhold 25% of the VEST for federal taxes and 10% for state taxes, if I lived in a state with income tax. The withholding rate was flat, regardless of what my actual tax rate was. Capital gains on the change from the market value on the VEST date was calculated as short-term or long-term based on the time since the VEST date. So if my 100 shares went up to $120, I would pay the $20 difference as short term or long term based on how long I had owned them since the VEST. That said, I don't know if this is universal. Your HR folks should be able to help answer at least some of these questions, though I know their favorite response when they don't know is that you should consult a tax professional. Good luck. |
Trading on exchanges or via brokerage companies? | I was wondering what relations are between brokerage companies and exchanges? Are brokers representing investors to trade on exchanges? Yes...but a broker may also buy and sell stocks for his own account. This is called broker-delaer firm. For individual investors, what are some cons and pros of trading on the exchanges directly versus indirectly via brokers? Doesn't the former save the investors any costs/expenses paid to the brokers? Yes, but to trade directly on an exchange, you need to register with them. That costs money and only a limited number of people can register I believe. Note that some (or all?) exchanges have their websites where I think trading can be done electronically, such as NASDAQ and BATS? Can almost all stocks be found and traded on almost every exchange? In other words, is it possible that a popular stock can only be found and traded on one exchange, but not found on the other exchange? If needed to be more specific, I am particularly interested in the U.S. case,and for example, Apple's stock. Yes, it is very much possible with smaller companies. Big companies are usually on multiple exchanges. What are your advices for choosing exchange and choosing brokerage companies? What exchanges and brokerage companies do you recommend? For brokerage companies, a beginner can go with discount broker. For sophisticated investors can opt for full service brokers. Usually your bank will have a brokerage firm. For exchanges, it depends...if you are in US, you should send to the US exchanges. IF you wish to send to other exchanges in other countries, you should check with the broker about that. |
How to “pay” one self in a single member LLC w/ separate checking account? | Basically, yes. Don't use your business account for personal spending because it may invalidate your limited liability protection. Transfer a chunk of money to your personal account, write it down in your books as "distribution" (or something similar), and use it in whatever way you want from your personal account. The IRS doesn't care per se, but mixing personal and business expenses will cause troubles if you're audited because you'll have problems distinguishing one from another. You should be using some accounting software to make sure you track your expenses and distributions correctly. It will make it easier for you to prepare reports for yourself and your tax preparer, and also track distributions and expenses. I suggest GnuCash, I find it highly effective for a small business with not so many transactions (if you have a lot of transactions, then maybe QuickBooks would be more appropriate). |
What to sell when your financial needs change, stocks or bonds? | You have to understand what risk is and how much risk you want to take on, and weight your portfolio accordingly. I think your 80/20 split based on wrong assumptions is the wrong way to look at it. It sounds like your risk appetite has changed. Risk is deviation from expected, so risk is not bad, and you can have cases where everyone would prefer the riskier asset. If you think the roulette table is too risky, instead of betting $1, stick 50c in your pocket and you changed the payoffs from $2 or 0 to 50c or $1.50 If your risk appetite has changed - change your risk exposure. If not, then all you are saying is I bought the wrong stuff earlier, now I should get out. |
How is the opening-day price of a stock decided? | When a stock is going to become public there's a level of analysis required to figure out the range of IPO price that makes sense. For a company that's somewhat mature, and has a sector to compare it to, you can come up with a range that would be pretty close. For the recent linkedin, it's tougher to price a somewhat unique company, running at a loss, in a market rich with cash looking for the next great deal. If one gives this any thought, an opening price that's so far above the IPO price represents a failure of the underwriters to price it correctly. It means the original owners just sold theirvshares for far less than the market thought they were worth on day one. The day of IPO the stock opens similar to how any stock would open at 9:30, there are bids and asks and a price at which supply (the ask) and demand (bid) balance. For this IPO, it would appear that there were enough buyers to push the price to twice the anticipated open and it's maintained that level since. It's possible to have a different system in which a Dutch auction is used to make the shares public, in theory this can work, it's just not used commonly. |
How to buy stock on the Toronto Stock Exchange? | You probably bought the cross listed WestJet stock. If you wanted to buy shares on the TSE, I'd suspect you'd have to find a way to open a brokerage account within Canada and then you'd be able to buy the shares. However, this could get complicated to some extent as there could be requirements of Canadian tax stuff like a Social Insurance Number that may require some paperwork. In addition, you'd have to review tax law of both countries to determine how to appropriately report to each country your income as there are various rules around that. TD Waterhouse would be the Canadian subsidiary of TD Ameritrade though I haven't tried to create a Canadian brokerage account. |
Why most of apple stock price since 10years have been gained overnight? | I'll answer this question: "Why do intraday traders close their position at then end of day while most gains can be done overnight (buy just before the market close and sell just after it opens). Is this observation true for other companies or is it specific to apple ?" Intraday traders often trade shares of a company using intraday leverage provided by their firm. For every $5000 dollars they actually have, they may be trading with $100,000, 20:1 leverage as an example. Since a stock can also decrease in value, substantially, while the markets are closed, intraday traders are not allowed to keep their highly leveraged positions opened. Probabilities fail in a random walk scenario, and only one failure can bankrupt you and the firm. |
Investments - Huge drop in bid price versus last close | Depends on when you are seeing these bids & asks-- off hours, many market makers pull their bid & ask prices entirely. In a lightly traded stock there may just be no market except during the regular trading day. |
How should I decide whether to buy more shares of a stock when its price drops? | There is no way to find out what future will be if you have only quote from past. In other words, nobody is able to trade history successfully and nobody will be able, ever. Quote's movement is not random. Quote is not price. Because brokerage account is not actual money. Any results in past do not guarantee you anything. Brokerage accounts should only have portions of money which you are ready to loose completely. Example: Investment firms recommended buying falling Enron stocks, even when it collapsed 3 times, then - bankrupt, suddenly. What a surprise! |
How to treat miles driven to the mechanic, gas station, etc when calculating business use of car? | Alright, IRS Publication 463: Travel, Entertainment, Gift, and Car Expenses Business and personal use. If you use your car for both business and personal purposes, you must divide your expenses between business and personal use. You can divide your expense based on the miles driven for each purpose. Example. You are a sales representative for a clothing firm and drive your car 20,000 miles during the year: 12,000 miles for business and 8,000 miles for personal use. You can claim only 60% (12,000 ÷ 20,000) of the cost of operating your car as a business expense Obviously nothing helpful in the code. So I would use option 1, weight the maintenance-related mileage by the proportion of business use. Although if you use your car for business a lot (and perhaps have a spouse with a car), an argument could be made for 3. So I would consider my odds of being audited (even lower this year due to IRS budget cuts) and choose 1 or 3. And of course never throw anything away until you're room temperature. |
Why call option price increases with higher volatility | Understanding the BS equation is not needed. What is needed is an understanding of the bell curve. You seem to understand volatility. 68% of the time an event will fall inside one standard deviation. 16% of the time it will be higher, 16%, lower. Now, if my $100 stock has a STD of $10, there's a 16% chance it will trade above $110. But if the STD is $5, the chance is 2.3% per the chart below. The higher volatility makes the option more valuable as there's a highr chance of it being 'in the money.' My answer is an over simplification, per your request. |
How to avoid getting back into debt? | Congratulations on seeing your situation clearly! That's half the battle. To prevent yourself from going back into debt, you should get rid of any credit cards you have and close the accounts. Just use your debit card. Your post indicates you're not the type to splurge and get stuff just because you want it, so saving for a larger purchase and paying cash for it is probably something you're willing to do. Contrary to popular belief, you can live just fine without a credit card and without a credit score. If you're never going back into debt, you don't need a credit score. Buying a house is possible without one, but is admittedly more work for you and for the underwriters because they can't just ask the FICO god to bless you -- they have to actually see your finances, and you have to actually have some. (I realize many folks will hate this advice, but I am actually living it, and life is pretty good.) If you're in school, look at how much you spend on food while on campus. $5-$10/day for lunch adds up to $100-$200 over a month (M-F, four weeks). Buy groceries and pack a lunch if you can. If your expenses cannot be reduced anymore, you're going to have to get a job. There is nothing wrong with slowing down your studies and working a job to get your income up above your expenses. It stinks being a poor student, but it stinks even more to be a poor student with a mountain of debt. You'll find that working a job doesn't slow you down all that much. Tons of students work their way through school and graduate in plenty of time to get a good job. Good luck to you! You can do it. |
How to determine duration of a common stock whose dividends grow in perpetuity? | The Dividend Discount Model is based on the concept that the present value of a stock is the sum of all future dividends, discounted back to the present. Since you said: dividends are expected to grow at a constant rate in perpetuity ... the Gordon Growth Model is a simple variant of the DDM, tailored for a firm in "steady state" mode, with dividends growing at a rate that can be sustained forever. Consider McCormick (MKC), who's last dividend was 31 cents, or $1.24 annualized. The dividend has been growing just a little over 7% annually. Let's use a discount, or hurdle rate of 10%. MKC closed today at $50.32, for what it's worth. The model is extremely sensitive to inputs. As g approaches r, the stock price rises to infinity. If g > r, stock goes negative. Be conservative with 'g' -- it must be sustainable forever. The next step up in complexity is the two-stage DDM, where the company is expected to grow at a higher, unsustainable rate in the early years (stage 1), and then settling down to the terminal rate for stage 2. Stage 1 is the present value of dividends during the high growth period. Stage 2 is the Gordon Model, starting at the end of stage 1, and discounting back to the present. Consider Abbott Labs (ABT). The current annual dividend is $1.92, the current dividend growth rate is 12%, and let's say that continues for ten years (n), after which point the growth rate is 5% in perpetuity. Again, the discount rate is 10%. Stage 1 is calculated as follows: Stage 2 is GGM, using not today's dividend, but the 11th year's dividend, since stage 1 covered the first ten years. 'gn' is the terminal growth, 5% in our case. then... The value of the stock today is 21.22 + 51.50 = 72.72 ABT closed today at $56.72, for what it's worth. |
What U.S. banks offer two-factor authentication (such as password & token) for online banking? | There are very few banks which offer two-factor authentication. Part of the reason is cost. Providing a token to every account-holder is expensive, not just in the device or system, but in providing support and assistance to the millions of people who won't have the faintest idea how it works and complain that they no longer have access to their accounts. That said, it is sometimes available on request for personal accounts and many banks require it for their business clients. My HSBC Business account comes with two-factor as default and it works extremely well. There is also the pseudo-two-factor security offered by Visa and MasterCard (3-D secure) which performs a similar function. |
GnuCash: Reimbursable expenses paid by credit card | GNUCash won't show 'Credit Card' type accounts in "Process Payment", as of v.2.6.1. A workaround is to create another account of type A/Payable. Then, transfer the operations you want to pay via "Process Payment" to this new account. It should be visible now. A drawback is that you have split your current Credit Card debt, which makes it harder to track. Alternatively you may wish to only use this new account for all your credit card related expenses. Another alternative is processing payments for these purchases manually to keep the 'credit card' accounts consistent. |
Potential pitfalls of this volume trading strategy | First challenge: Creating a system which can understand written English well enough to read the news. Nothing short of IBM's Watson has proven very good at extracting meaning from unstructured text. Second challenge: By the time it reaches "the news", the big actors already know and have responded. Third challenge: It's not uncommon for a stock to drop on good news, or rise on bad, because the price had previously adjusted to an expectation of even better/worse news and is now correcting itself. Basic principle: It it was simple and obvious, everyone would already be doing it. |
In the stock market, why is the “open” price value never the same as previous day's “close”? | Besides overnight news events and auction mechanisms there is a more fundamental reason the price of a stock is always moving. Theoretically the stock price will move slightly even in the unlikely scenario that absolutely nothing of interest happens during the entire night. Let me go into that in some more detail: Stock valuation using Discounted Cash FLow One of the fundamental reasons that stock value is constantly changing is because underneath every stock there is a company that expects to make some kind of profit or loss in the future. We have to go into the fundamentals of stock value to understand why this is important: One popular way to determine the value of a stock is by looking into the future and summing up all the earnings (or cashflows) it has yet to produce. You have to reduce each amount by a certain factor that gets larger for payments that are farther into the future. Think of it this way: a dollar in hand now is better than a dollar that you get tomorrow. This method of valuation is called Discounted Cash Flow (abbr. DCF; see the wikipedia article on DCF) Time's effect on stock value Now take the Close price C, and the open price O. Let's assume that since there has been no news, the expectations for future earnings are the same for C and O. Remember that the discounting factor for these earnings is dependent on the time until the cashflow occurs? For O, this time is slightly shorter than for C, and therefore the value will be slightly higher (or lower, when the company is expected to incur losses). So now you can see that even without all the external forces that continuously push and pull on the stock price, a stock still changes in value over time. Hope this helps. |
How to calculate the closing price percentage change for a stock? | The previous day's close on Thursday 10th October was 5,000.00 The close on Friday 11th October is 5,025.92 So the gain on Friday was 25.92 (5025.92 - 5000) or 0.52% (25.92/5000 x 100%). No mystery! |
Swiss-style Monetary Policy | I'm not sure what is traditionally meant by "Swiss-style monetary policy" but lately it has meant the same thing as US monetary policy, or Japanese monetary policy, or Euro monetary policy: PRINT. Look how many Swiss Francs it takes to buy a currency that cannot be printed: I'm not sure why they would be touting "Swiss-style monetary policy". That hasn't been too stellar lately. |
What is a typical investment portfolio made up of? | Paying off the high-interest debt is a good first start. Paying interest, or compound interest on debt is like paying somebody to make you poor. As for your 401k, you want to contribute enough to get the full match from your employer. You might also consider checking out the fees associated with your 401k with an online fee analyzer. If it turns out you're getting reamed with fees, you can reduce them by fiddling with your investments. Checking your investment options is always a good idea since jobs frequently change them. Opening an IRA is a good call. If you're eligible for both Roth and Traditional IRAs, consider the following: Most financial institutions (brokers or banks) can help you open an IRA in a matter of minutes. If you shop around, you will find very cheap or even no fee options. Many brokers might try to get your business by giving away something for ‘free.' Just make sure you read the fine print so you understand the conditions of their promotional offer. Whichever IRA you choose, you want to make sure that it's managed properly. Some people might say, ‘go for it, do it yourself’ but I strongly disagree with that approach. Stock picking is a waste of time and market timing rarely works. I'd look into flat fee financial advisors. You have lots of options. Just make sure they hear you out, and can design/execute an investment plan specific to your needs At a minimum, they should: Hope this is helpful. |
My bank refused to do a charge back | Call Comcast during a non-peak time (first thing in the morning?), wait on hold, and politely explain what happened and request a $50 credit. Also politely request that your premium support request be handled for free given how much hassle you've had getting disconnected. They'll be able to tell your premium request was never answered because there are no notes on your support tickets. Calling them is much easier than any of your other options. |
Should I Use an Investment Professional? | Ask yourself the same question for furniture making. Would you feel more comfortable sitting in a chair that you made yourself versus one that you bought from a furniture store? How about one that you bought from IKEA and assembled? For an experienced, competent furniture maker, you might be able to make an equivalent chair for less money and be highly confident. For a "DIY" builder, you might be less confident but be willing to take more of a risk with the possibility of making a good chair for less money (and gain experience on what not to do next time). The same applies to investing - if you are highly confident in your own abilities, DIY investing may work better for you. For the "general population", however, relying on experts to do the hard work (and paying a little more for their services) is probably a better option and gives you more confidence. As for the second quote, I'm note sure there's a causality there. If anything, I think it's the other way around - people who have more money saved for retirement are more likely to use investment advisors. |
Which banks have cash-deposit machines in Germany? | This may not answer your question but it may be an alternative. My credit union credits my account for deposits immediately (ones I make in an envelope). They view it as a service to their members. They take the risk that the member could deposit an empty envelope, say they deposited $400, and then withdraw the money. There may be banks in your country that do business this way. |
Do I have to pay a capital gains tax if I rebuy different stocks? | Yes- you do not realize gains or losses until you actually sell the stock. After you sell the initial stocks/bonds you have realized the gain. When you buy the new, different stocks you haven't realized anything until you then sell those. There is one exception to this, called the "Wash-Sale Rule". From Investopedia.com: With the wash-sale rule, the IRS disallows a loss deduction from the sale of a security if a ‘substantially identical security' was purchased within 30 days before or after the sale. The wash-sale period is actually 61 days, consisting of the 30 days before and the 30 days after the date of the sale. For example, if you bought 100 shares of IBM on December 1 and then sold 100 shares of IBM on December 15 at a loss, the loss deduction would not be allowed. Similarly, selling IBM on December 15 and then buying it back on January 10 of the following year does not permit a deduction. The wash-sale rule is designed to prevent investors from making trades for the sole purpose of avoiding taxes. |
What should I look for when looking for stocks that are 'on-sale'? | It might seem like the PE ratio is very useful, but it's actually pretty useless as a measure used to make buy or sell decisions, and taken largely on its own, pretty useless becomes utterly and completely useless. Stocks trade at prices based on future expectations and speculation, so that means if traders expect a company to double its profits next year, the share price could easily double (there are reasons it might not increase so much, and there are reasons it could increase even more than that, but that's not the point). The Price is now double, but the Earnings is still the same, so the PE ratio is double, and this doubling is based on something some traders know, or think they know, but other traders might not know or not believe! Once you understand that, what use is a PE ratio really? The PE ratio of a company might be low because it is in a death spiral, with many traders believing it will report lower and lower profits in years to come, and the lower the PE ratio of a given company gets probably, relatively, the more likely it is to go bust! If you buy a stock with a low PE ratio you must do so because you feel you understand the company, understand why the market is viewing it negatively, believe that the negativity is wrong or over done, and believe that it will turn around. Equally a PE ratio might be high, but be an excellent buy still because it has excellent growth prospects and potential even beyond what is priced in already! Lets face it, SOMEONE has been buying at the price that's put that PE ratio where is is, right? They might be wrong of course, or not! Or they might be justified now but circumstances might change before earnings ever reach the current priced in expectation. You'll know next year probably! To answer your actual question... first you should now understand there is no such thing as a stock that is on sale, just stocks that are priced broadly according to the markets consensus on its value in years to come, the closest thing being a stock that is 'over sold' (but one man's 'over sold' is another man's train crash remember)... so what to actually look for? The only way to (on average) make good buy and sell decisions is to know about investing and trading (buy some books, I have 12), understand the businesses you propose to invest in and understand their market(s) (which may also mean understanding national and international economics somewhat). |
Why can we cancel cheques, but not Western Union transfers? | You are presuming that after the transfer, the cash is still "sitting in a Western Union register" but no, that cash may have already been taken by the fraudster. To refund the victim, Western Union would have to (1) pay the victim back the amount of money lost, and then (2) pursue the fraudster to reclaim the lost funds. Because the fraudster at the other end can simply show ID to get the money [ie: they do not have an account with Western Union], the cost to pursue that person to reclaim the lost funds would be substantially higher than for your bank, because your bank can simply ding your account. In the event that your account goes into overdraft [because there were insufficient funds to reclaim the full amount], the bank at least has a framework in place to pursue you for penalties. |
Is there a standard or best practice way to handle money from an expiring UTMA account? | I'd first put it in CDs or other short term account. Get through school first, then see where you land. If you have income that allows you to start a Roth IRA, I'd go for that, but keep it safe in case you actually need it back soon. After school, if you don't land a decent job fast, this money might be needed to live on. How long will it last if you take a few months to find work? If you do find a good job, moving, and setting up an apartment has a cost. Once you're there, I'd refer you to the many "getting started" Q&As on this site. |
How much does the volatility change for a 1$ move in the underlying | The volatility measures how fast the stock moves, not how much. So you need to know the period during which that change occurred. Then the volatility naturally is higher the faster is the change. |
Money transfer from India to USA | We have a house here in India worth Rs. 2 Crores. We want to sell it and take money with us. Selling the house in India will attract Capital Gains Tax. Essentially the price at which you sell the property less of the property was purchased [or deemed value when inherited by you]. The difference is Capital Gains. You have to pay tax on this gains. This is currently at 10% without Indexation and 20% with Indexation. Please note if you hold these funds for more than an year, you would additionally be liable for Wealth tax at 1% above Rs 50 lacs. Can I gift this whole amount to my US Citizen Daughter or what is the maximum limit of Gift amount What will be the tax liability on me and on my Daughter in case of Gift Whether I have to show it in my Income Tax Return or in my Daughter's Tax Return. What US Income Tax Laws says. What will be the procedure to send money as Gift to my Daughter. Assuming you are still Indian citizen when to gift the funds; From Indian tax point of you there is no tax to you. As you daughter is US citizen, there is no gift tax to her. There is no limit in India or US. So you can effectively gift the entire amount without any taxes. If you transfer this after you become a US Resident [for tax purposes], then there is a limit of USD 14,000/- per year per recipient. Effective you can gift your daughter and son-in-law 14,000/- ea and your husband can do the same. Net 14,000 * 4 USD per year. Beyond this you either pay tax or declare this and deduct it from life time estate quota. Again there is no tax for your daughter. What are the routes to take money from India to US Will the money will go directly from my Bank Act.to my Daughter's Bank Account. Will there will be wire transfer from bank to bank Can I send money through other money sender Certified Companies also. The best way is via Bank to Bank transfer. A CA Certificate is required to certify that taxes have been paid on this funds being transferred. Under the liberalized remittance scheme in India, there is a limit of USD 1 Million per year for moving funds outside of India. So you can move around Rs 6-7 Crore a year. |
On paper I have 1 share in my company. How can I sell a smaller percentage of my company to another party? | There are 2 basic ways to have someone buy partial ownership of your company: OR If they buy shares that you already own, then their shares will have the same rights as yours (same voting rights, same dividend rights, etc.). If they buy shares newly created from the company, they could be either identical shares to what you already own, or they could be a new class of shares [you may need to adjust the articles of incorporation if you did not plan ahead with multiple share classes]. You really need to talk to a lawyer & tax accountant about this. There are a lot of questions you need to consider here. For example: do you want to use the money in the business, or would you rather have it personally? Are you concerned about losing some control of how the business is run? What are the short term and long-term tax consequences of each method? What does your new partner want in terms of their share class? The answers to these questions will be highly valuable, and likely worth much more than the fees you will need to pay. At the very least, you will likely need a lawyer and accountant anyway to ensure the filings & taxes are done correctly, so better to involve them now, rather than later. There are many other situations to consider here, and an online forum is not the best place to get advice that might put you in a sticky legal situation later on. |
How to quickly track daily cash expenses that don't come with a receipt? | A pencil and a small notepad really work here, but if you have a smartphone then some way of using it makes sense as well. Try: Transcribe all of these onto a better record at the end of each day. Also record the amount of money in your wallet/purse/pocket every day, and check to see if the amounts you've recorded add up to the amount you've spent. It'll be easier to remember that newspaper you bought at the end of the day, rather than a week later. Or just record the difference as 'miscellaneous'. |
Looking to buy a house in 1-2 years. Does starting a Roth IRA now make sense? | If you are going to be buying a house in 1-2 years, I would be putting my money into a short term holding area like a high interest (which isn't that high right now) or a CD (also low interest) because of your near-term need. I wouldn't use the Roth option for your down payment money. If you invest in something volatile (and stocks/mutual funds are very volatile in a 1-2 year term) I would consider it too risky for your need and time frame. |
What name is given to a value such as this? | This is called "change" or "movement" - the change (in points or percentage) from the last closing value. You can read more about the ticker tape on Investopedia, the format you're referring to comes from there. |
Working for recruiter on W-2 vs. working for client on 1099? | The tax savings of being 1099 can be significant. It depends on your salary, and what you can deduct. You may want to consult with an accountant. The social security tax, for the self employed, is 12.4% of profit not on revenue. If you can write off more than half of the income as expenses then you could be paying less than a w-2 employee. Also you might make a higher salary as a 1099, it is rare the offer the same compensation for a W-2 as a 1099 as the former has higher expenses for the employer. It is hard to know without actual numbers, actual expected expense deductions and so forth. Which is why I would suggest consulting with an accountant. You may want to talk to one in the state where he will be working rather than where you live now. |
Should I buy a home or rent in my situation? | First, you are not a loser nor an idiot! You have avoided many debt mistakes and have a stable income. This move will be good for you and your family and an opportunity to continue to build your life together. The fact you are even thinking about this and asking questions shows that you are responsible. To your rent/buy question, Ben Miller has a great summary in his answer. I have nothing more to add except that you already know you cannot buy. That question is not really your main problem. You need some financial goals and then you need a plan to achieve those goals. As you become more educated about finances, it can be like drinking from a fire hose. Trying to analyze too much information can paralyze you and make you 'freak out' that you are messing everything up! Try this. Think about where you want to be in 5 years or so. Write down with your fiance some of those dreams and goals. Maybe things like finish college degree(s), buy a house, pay off student loans, wedding, have more kids, etc... As you prioritize these things, you will see that some are short-term goals and some are long-term. Then you lay out a step by step plan to get there. By focusing on each step at a time, you see more success and are more motivated. As you see movement towards your goals, you will be willing to sacrifice more to get there. You will be willing to rent a cheaper place with less room to make more headway on these things. This will be a several year plan, which is why it is so important to define your goals at the beginning. This will give you motivation and the mental toughness to follow through when it is difficult. |
How is it possible that a preauth sticks to a credit card for 30 days, even though the goods have already been delivered? | Open a dispute for the preauth. It is effectively a double charge, since you have already paid for the item. You can provide evidence of the other transaction. This forces them to go through some hassle and waste some time on the issue. |
Why would anyone want to pay off their debts in a way other than “highest interest” first? | I wouldn't advocate it, but one reason to pay a lower interest rate is if you have $990 on a $1000 limit credit card with 6% interest and $5000 on a $15k limit card at 10% interest. Having $500 to pay in a month and putting it on the lower interest would free up a greater percentage of credit on that card and could potentially help your credit rating I believe. I think having $1000 on 10 different credit cards w/ $15k limit reflects better than $10k on one $15k card, regardless of interest rates. Personally I think that's dumb b/c having the extra credit available is an opportunity to get into trouble a lot easier. |
What U.S. banks offer two-factor authentication (such as password & token) for online banking? | Some credit unions also offer them and support Business banking as well. First Tech Credit Union is a great example. They also have the most security-oriented banking website I've seen to date. https://www.firsttechfed.com/ As a side note I've found that Credit Unions are a MUCH better deal for personal and business banking. |
Can one use Google Finance to backtest (i.e. simulate trades in the past)? | If you use Google Finance, you will get incorrect results because Google Finance does not show the dividend history. Since your requirement is that dividends are re-invested, you should use Yahoo Finance instead, downloading the historical 'adjusted' price. |
Why would a company have 2 listings on the same exchange? | A company can issue different kinds of shares. For example, some kinds of shares may get preference in dividends or payment in event of (company) bankruptcy. Preferred shares are an example of this. A company might have several kinds of preferred shares and a 'common stock'. Here is a good explanation. See too the Wikipedia article about preferred stock. Toronto-Dominion Bank (TD) is an example of a company that has fourteen different preferred share issues, each with its own listing on the Toronto Stock Exchange (TSE) and symbol. TD has one kind of common stock, which is also listed on the TSE. However, TD common equity trades much more actively than the preferred shares. Remember that preferred stock is a different security type than common stock e.g. common has voting rights, preferred does not. |
What are the fundamental levels that makes a Stock Ideal? (either to sell or buy) | for buying: High PE, low debt, discount = win. a company with high debt (in relation to revenues and cash on hand) will have to pay interest and pay off the debt, stunting their growth. and just like a normal person, will barely be able to pay their bills and keep borrowing and might go bankrupt determining discount is just looking for a technical retracement to a support level or lower. (but if you dont enter at the support level, you most likely missed the best entry) |
Should I buy a home or rent in my situation? | If I were you, I would rent. Wait to buy a home. Here is why: When you say that renting is equal in cost to a 30-year mortgage, you are failing to consider several aspects. See this recent answer for a list of things that need to be considered when comparing buying and renting. You have no down payment. Between the two of you, you have $14,000, but this money is needed for both your emergency fund and your fiancée's schooling. In your words: "we can’t reeaallllly afford a home." A home is a big financial commitment. If you buy a home before you are financially ready, it will be continuous trouble. If you need a cosigner, you aren't ready to buy a home. I would absolutely advise whoever you are thinking about cosigning for you not to do so. It puts them legally on the hook for a house that you can't yet afford. You aren't married yet. You should never buy something as big as a home with someone you aren't married to; there are just too many things that can go wrong. (See comments for more explanation.) Wait until you are married before you buy. Your income is low right now. And that is okay for now; you've been able to avoid the credit card debt that so many people fall into. However, you do have student loans to pay, and taking on a huge new debt right now would be potentially disastrous for you. Your family income will eventually increase when your fiancée gets her degree and gets a job, and at that time, you will be in a much better situation to consider buying a house. You need to move "ASAP." Buying a house when you are in a hurry is a generally a bad idea. When you look for a home, you need to take some time looking so you aren't rushed into a bad deal that you will regret. Even if you decide you want to buy, you should first find a place to rent; then you can take your time finding the right house. To answer your question about escrow: When you own a house, two of the required expenses that you will have besides the mortgage payment are property taxes and homeowner's insurance. These are large payments that are only due once a year. The bank holding the mortgage wants to make sure that they get paid. So to help you budget for these expenses and to ensure that these expenses are paid, the bank will add these to your monthly mortgage payment, and set them aside in a savings account (called an escrow account). Then when these bills come due once a year, they are paid for out of the escrow account. |
How are derivatives different from bucket shops? | How are derivatives like covered warrants or CFDs different from the bucket shops that were made illegal in the US? After reading up a little on the topic, the core difference seems to be that bucket shops were basically running betting pools, with everyone betting against the operator, whereas CFDs and similar derivatives are traded between speculators and the operator merely provides a market and checks the liquidity of participants. A CW seems to be a different matter that I'm not fully sure I understand (at least the description of Wikipedia seems to contradict your statement about not trade being performed on the underlying security). Should I worry that some regulator decides that my "market maker" is an illegal gambling operation? Not really. Nations with a mature financial industry (like Japan) invariably have heavy regulations that mandate constant auditing of institutions that sell financial instruments. In Japan, the Financial Services Agency is in charge of this. It's almost impossible that they would let an institution operate and later decide that its basic business model is illegal. What is possible are mainly two scenarios: |
At what interest rate should debt be used as a tool? | I don't really see it as worth it at any level because of the risk. If you take $10,000,000 using the ratios you gave making 2% return. That is a profit of $200,000. Definitely not worth it, but lets go to 20% profit that is $2,000,000. To me the risk involved at beint 10 million in debt isn't worth it to make $2,000,000 quickly it would be pretty easy doing something wrong to wipe out everything. |
What to do if my aging father is sustaining a hobby that is losing several thousand dollars every month? | You've already counted the cost. It will cost your family ~$10,000 per month until your father dies, or until there's no money left, to enable him to pretend that he is a successful business owner. I'd ask him when he thinks business is going to pick up again. He may be honest with himself. Or, ask him to consider what will happen if he outlives the money that's going out the door. Ask him if he would like to be bankrupt on top of needing to close his business. (I don't view asking those questions as being unloving, by the way.) |
Should I buy a home or rent in my situation? | Another reason, and to me the main reason not to buy a house if you're in your early 20s (regardless of your income), is mobility. If you rent, you can move pretty much whenever you want after the first year of your rental lease is up, even before then in some cases. If your fiancee finishes school and gets a great job offer in another city or state, you can move there pretty quickly. When you own a house, that is much harder to do. Your having two kids makes it harder in either case, but at this point in your lives you really don't know where your future will take you, geographically speaking, and renting gives you the option of moving easily if you have to. |
Why GOOG is “After Hours” while FB is “Pre-market”? | Pre-Market trading activity is shown on the site from 4:15 - 9:30 AM (actual trading starts at 4:00 AM EST) The NASDAQ Stock Market Trading Sessions (Eastern Time) Pre-Market Trading Hours from 4:00 a.m. to 9:30 a.m. Market Hours from 9:30 a.m. to 4:00 p.m. After-Market Hours from 4:00 p.m. to 8:00 p.m. Read more: http://www.nasdaq.com/about/trading-schedule.aspx#ixzz38OtcISrq In this case GOOG did not trade in the Pre-market until that time and FB was. |
Is there a catch to offers of $100 when opening up a new checking account? | There's no catch. Banks need to acquire customers just like any other business. One common way to acquire new customers is by advertising on the radio, TV, print, etc. Another common way to acquire new customers is by offering incentives like the one you linked to. Basically, PNC is confident that they will make more than $100 in profit over the entire lifetime of a customer. This is a very reasonable assumption, considering that: |
What should my finances look like at 18? | The golden rule is "Pay yourself first." This means that you should have some form of savings plan set up, preferably a monthly automatic withdrawal that comes out the day after your pay is deposited. 10% is a reasonable number to start with. You are in a wonderful situation because you are thinking about this 10-15 years before most of us do. Use this to your advantage. You are also in a good situation if you can defer the purchase of the house (assuming prices don't rise drastically in the next few years -- which they might.) If your home situation is acceptable, then sit down with the parents and present a plan. Something along the lines of: I'd like to move out and start my life. However, it would be advantageous to stay here for a few years to build up a down payment and reserve. I'm happy to help out with expenses, but do need a couple years of rent-free support to get started. Then go into monk mode for one year. It's doable, and you can save a lot of cash. Then you're on the road to freedom. |
Better ways to invest money held by my small, privately-held Canadian corporation? | Since you are talking about a small firm, for the long term, it would be advisable to invest your money into the expansion - growth, diversification, integration - of your business. However, if your intention is to make proper use of your earnings in the short term, a decent bank deposit would help you to increase the credit line for your business with the benefit of having a high enough liquidity. You can also look at bonds and other such low risk instruments to protect your assets. |
Negatives to increased credit card spending limit? [duplicate] | The only drawback is if you spend more than you can with the new limit and end up having to pay interest if you can't pay the balance in full. Other than that, there are no drawbacks to getting a credit increase. On the flip side, it's actually good for you. It shows that the banks trust you with more credit, and it also decreases your credit utilization ratio (assuming you spend the same). |
Withdrawing cash from investment: take money from underperforming fund? | Bob should treat both positions as incomplete, and explore a viewpoint which does a better job of separating value from volatility. So we should start by recognizing that what Bob is really doing is trading pieces of paper (say Stocks from Fund #1 or Bonds from Fund #2, to pick historically volatile and non-volatile instruments.*) for pieces of paper (Greenbacks). In the end, this is a trade, and should always be thought of as such. Does Bob value his stocks more than his bonds? Then he should probably draw from Fund #2. If he values his bonds more, he should probably draw from Fund #1. However, both Bob and his financial adviser demonstrate an assumption: that an instrument, whether stock bond or dollar bill, has some intrinsic value (which may raise over time). The issue is whether its perceived value is a good measure of its actual value or not. From this perspective, we can see the stock (Fund #1) as having an actual value that grows quickly (6.5% - 1.85% = 4.65%), and the bond (Fund #2) as having an actual value that grows slower (4.5% - 1.15$ = 3.35$). Now the perceived value of the stocks is highly volatile. The Chairman of the Fed sneezes and a high velocity trader drives a stock up or down at a rate that would give you whiplash. This perspective aligns with the broker's opinion. If the stocks are low, it means their perceived value is artificially low, and selling it would be a mistake because the market is perceiving those pieces of paper as being worth less than they actually are. In this case, Bob wins by keeping the stocks, and selling bonds, because the stocks are perceived as undervalued, and thus are worth keeping until perceptions change. On the other hand, consider the assumption we carefully slid into the argument without any fanfare: the assumption that the actual value of the stock aligns with its historical value. "Past performance does not predict future results." Its entirely possible that the actual value of the stocks is actually much lower than the historical value, and that it was the perceived value that was artificially higher. It may be continuing to do so... who knows how overvalued the perceived value actually was! In this case, Bob wins by keeping the bonds. In this case, the stocks may have "underperformed" to drive perceptions towards their actual value, and Bob has a great chance to get out from under this market. The reality is somewhere between them. The actual values are moving, and the perceived values are moving, and the world mixes them up enough to make Scratchers lottery tickets look like a decent investment instrument. So what can we do? Bob's broker has a smart idea, he's just not fully explaining it because it is unprofessional to do so. Historically speaking, Bobs who lost a bunch of money in the stock market are poor judges of where the stock market is going next (arguably, you should be talking to the Joes who made a bunch of money. They might have more of a clue.). Humans are emotional beings, and we have an emotional instinct to cut ties when things start to go south. The market preys on emotional thinkers, happily giving them what they want in exchange for taking some of their money. Bob's broker is quoting a well recognized phrase that is a polite way of saying "you are being emotional in your judgement, and here is a phrasing to suggest you should temper that judgement." Of course the broker may also not know what they're doing! (I've seen arguments that they don't!) Plenty of people listened to their brokers all the way to the great crash of 2008. Brokers are human too, they just put their emotions in different places. So now Bob has no clear voice to listen to. Sounds like a trap! However, there is a solution. Bob should think about more than just simple dollars. Bob should think about the rest of his life, and where he would like the risk to appear. If Bob draws from Fund #1 (liquidating stocks), then Bob has made a choice to realize any losses or gains early... specifically now. He may win, he may lose. However, no matter what, he will have a less volatile portfolio, and thus he can rely on it more in the long run. If Bob draws from Fund #2 (liquidating bonds) instead, then Bob has made a choice not to realize any losses or gains right away. He may win, he may lose. However, whether he wins or loses will not be clear, perhaps until retirement when he needs to draw on that money, and finds Fund #1 is still under-performing, so he has to work a few more years before retirement. There is a magical assumption that the stock market will always continue rewarding risk takers, but no one has quite been able to prove it! Once Bob includes his life perspective in the mix, and doesn't look just at the cold hard dollars on the table, Bob can make a more educated decision. Just to throw more options on the table, Bob might rationally choose to do any one of a number of other options which are not extremes, in order to find a happy medium that best fits Bob's life needs: * I intentionally chose to label Fund #1 as stocks and Fund #2 as bonds, even though this is a terribly crude assumption, because I feel those words have an emotional attachment associated to them which #1 and #2 simply do not. Given that part of the argument is that emotions play a part, it seemed reasonable to dig into underlying emotional biases as part of my wording. Feel free to replace words as you see fit to remove this bias if desired. |
How to rebalance a portfolio without moving money into losing investments | You are very correct, rebalancing is basically selling off winners to buy losers. Of course the thinking is that selling a winner that has already increased 100% on the basis that it has doubled so it is likely to go down in the near future. However, just look at Apple as an example, if you bought Apple in June 2009 for $20 (adjusted price) and sold it as part of rebalancing when it rose to $40 (adjusted price) in September 2010, you would have missed out on it reaching over $95 2 years later. Similarly you look to rebalance by buying assets which have been battered (say dropped by 50%) on the basis that it has dropped so much that it should start increasing in the near future. But many times the price can fall even further. A better method would be to sell your winners when they stop being winners (i.e. their uptrend ends) and replace them with assets that are just starting their winning ways (i.e. their downtrend has ended and are now starting to Uptrend). This can be achieved by looking at price action and referring to the definitions of an uptrend and a downtrend. Definition of an uptrend - higher highs and higher lows. Definition of a downtrend - lower lows and lower highs. |
Why is a home loan (mortgage) cheaper than gold loan? | Why is a home loan (mortgage) cheaper than gold loan? It has to do with risk. Lending money secured by gold is inherently riskier than a loan secure by your home. Increased risk means the lender must charge more. That's why home loans are cheap compared to loans for other purposes. Home loans are secured by the house. Houses are assets that hold and usually retain some value. Houses are easy to track down (they can't be hidden or moved) in the event that you don't repay your loan. Houses are reasonably liquid, they can be resold to pay off a defaulted loan. |
Index funds with dividends? | nan |
ETF S&P 500 with Reinvested Dividend | Vanguard has low cost ETFs that track the S&P 500. The ticker is VOO, its expense ratio is 0.05%, which is pretty low compared to others in the market. Someone correct me if I'm wrong, but you won't have to pay tax on the dividends if it's in a retirement account such as a Traditional(pay taxes when you withdraw) or Roth IRA(pay income/federal/fica etc, but no taxes on withdrawal)... |
Why are typical 401(k) plan fund choices so awful? | To piggy back mbhunter's answer, the broker is going to find a way to make the amount of money they want, and either the employee or the company will foot that bill. But additionally, most small businesses want to compete and the market and offer benefits in the US. So they shop around, and maybe the boss doesn't have the best knowledge about effective investing, so they end up taking the offering from the broker who sells it the best. Give you company credit for offering something, but know they are as affected by a good salesperson as anybody else. Being a good sales person doesn't mean you are selling a good product. |
My tenant wants to pay rent through their company: Should this raise a red flag? | Maybe you should consider setting up a Taxpayer Identification Number (TIN) for your business dealings as a landlord and consider providing that instead of your SSN for this type of thing. I am assuming (if this is legitimate) they want it so they can send you a 1099 as they might be obligated to do if they are claiming the rent as a business expense. Also, I'd suggest having the tenant tell their employer to contact you directly. There is no need for the tenant in this situation to also get your SSN/TIN. |
Where can I get AEX historical data - Amsterdam? | Try the general stock exchange web page. http://www.aex.nl I did a quick trial myself and was able to download historical data for the AEX index for the last few years. To get to the data, I went to the menu point "Koersen" on the main page and chose "Indices". I then entered into the sub page for the AEX index. There is a price chart window in which you have to choose the tab "view data". Now you can choose the date range you need and then download in a table format such as excel or csv. This should be easy to import into any software. This is the direct link to the sub page: http://www.aex.nl/nl/products/indices/NL0000000107-XAMS/quotes |
Buying shares in a company after you quit | US law dictates that you cannot buy / sell shares in a company you work for except during open trading windows. I understand lockout periods when you're in a company but what about after you quit? There's no such law. Trading lockouts are imposed by companies themselves to avoid the complexities of identifying "insiders". For large companies it sometimes is easier/cheaper to assume everyone is insider instead of imposing internal data flow controls and limitations. For such companies, their internal policies would also manage how the employees who are leaving should be treated. |
Who can truly afford luxury cars? | In many (most?) cases, luxury cars are leased rather than purchased, so the payments on even an expensive car might not be as high as you'd expect. For simplicity, take a $100,000 car. If you were to buy that in cash or do a standard five-year auto loan, that would be incredibly expensive for all but the wealthiest of people. But a lease is different. When you lease a car, you are financing the car's depreciation over the lease term. So, let's suppose that you're signing up for a three-year lease. The car manufacturer will make an estimate of what that car will be worth when you bring it back in three years (this is called the residual value). If this number is $80,000, that means the lessee is only financing the $20,000 difference between the car's price and its residual value after three years - rather than the full $100,000 MSRP. At the end of the lease, he or she just turns the car back in. Luxury cars are actually especially amenable to leasing because they have excellent brand power - just because of the name on the hood, there are many people who would be happy to pay a lot for a three-year-old Mercedes or BMW. With a mid- or low-range car, the brand is not as powerful and used cars consequentially have a lower residual value (as a percentage of the MSRP) than luxury cars. So, don't look at an $80,000 luxury car and assume that the owner has paying for the entire $80,000. |
How much does a landlord pay in taxes? | how much taxes would I pay on my income from the rent they would pay me? The same as on any other income. California doesn't have any special taxes for rental/passive income. Bothe CA and the Federal tax laws do have special treatment, but it is for losses from rental. Income is considered unearned regular income and is taxed at regular brackets. Would I be able to deduct the cost of the mortgage from the rental income? The cost of mortgage, yes. I.e.: the interest you pay. Similarly you can deduct any other expense needed to maintain the property. This is assuming you're renting it out at FMV. If not, would I pay the ordinary income tax on that income? In particular, would I pay CA income tax on it, even though the property would be in WA? Yes. Don't know how WA taxes rental income, but since you are a California tax resident - you will definitely be taxed by California on this, as part of your worldwide income. |
Why would you ever turn down a raise in salary? | I recently rejected an offer at a different firm that would have provided a 14k yearly increase. The reason for the rejection was because I would have had to give up two work from home days, my commute would have been about an hour and half each way, I would have lost about 14 extra days of PTO and holiday pay, and the new company didn't match anything for 401k. |
Making $100,000 USD per month, no idea what to do with it | Your #1 problem is the Government both in it's form as a taxation outfit and as a 'law and order' outfit. You'd be very surprised at how fast a bank seizes your bank account in response to a court order. Purchase 100 Mexican 50 Peso Gold (1.2 oz/ea). These coins are cheap (lowest cost to get into) and will not be reportable on sale to taxing authorities. That money is out of the banking system and legal system(s). Do not store them in a bank! You need to find a tax strategist, probably a former IRS agent / CPA type. With the rest remaining money... There's an old saying, Don't fight the Fed. As well as "The trend is your friend". So, the Fed wants all savers fully invested right now (near 0 interest rates). When investing, I find that if you do exactly opposite what you think is the smart thing, that's the best thing. Therefore, it follows: 1) Don't fight the Fed 2) Do opposite of smart 3) Do: Fight the Fed (and stay 100% out of the market and in cash) We're looking like Japan so could remain deflationary for decades to come. Cash is king... |
Why do Dealers/Brokers hold Inventory in Stocks? | The difficulty is that you are thinking of a day as a natural unit of time. For some securities the inventory decisions are less than a minute, for others, it can be months. You could ask a similar question of "why would a dealer hold cash?" They are profit maximizing firms and, subject to a chosen risk level, will accept deals that are sufficiently profitable. Consider a stock that averages 1,000 shares per day, but for which there is an order for 10,000 shares. At a sufficient discount, the dealer would be crazy not to carry the order. You are also assuming all orders are idiosyncratic. Dividend reinvestment plans (DRIP) trigger planned purchases on a fixed day, usually by averaging them over a period such as 10 days. The dealer slowly accumulates a position leading up to the date whenever it appears a good discount is available and fills the DRIP orders out of their own account. The dealer tries to be careful not to disturb the market leading up to the date and allows the volume request to shift prices upward and then fills them. |
Learning investment--books to read? Fundamental/Value/Motley Fool | You are smart to read books to better inform yourself of the investment process. I recommend reading some of the passive investment classics before focusing on active investment books: If you still feel like you can generate after-tax / after-expenses alpha (returns in excess of the market returns), take a shot at some active investing. If you actively invest, I recommend the Core & Satellite approach: invest most of your money in a well diversified basket of stocks via index funds and actively manage a small portion of your account. Carefully track the expenses and returns of the active portion of your account and see if you are one of the lucky few that can generate excess returns. To truly understand a text like The Intelligent Investor, you need to understand finance and accounting. For example, the price to earnings ratio is the equity value of an enterprise (total shares outstanding times price per share) divided by the earnings of the business. At a high level, earnings are just revenue, less COGS, less operating expenses, less taxes and interest. Earnings depend on a company's revenue recognition, inventory accounting methods (FIFO, LIFO), purchase price allocations from acquisitions, etc. If you don't have a business degree / business background, I don't think books are going to provide you with the requisite knowledge (unless you have the discipline to read textbooks). I learned these concepts by completing the Chartered Financial Analyst program. |
How is Los Angeles property tax calculated if a 50% owner later buys out the other 50%? | Can't vouch for LA, but property typically is taxed at either the appraised value, the most recent purchase price ("if it wasn't worth that much, you wouldn't have paid that much"), or some combination of the two (usually highest of the two, to prevent "$1 and other goods and services" from lowering the tax to zero). You have now explicitly paid a total of $125k for the property; the fact that you bought it in two stages shouldn't be relevant. But "should" and law are only tangentially connected. I'd recommend asking a tax accountant who know your local practices, unless someone here can give you an authoritative answer. |
How can my dad (grandpa) transfer shares to my 2 year old son? | A UTMA may or may not fit your situation. The main drawbacks to a UTMA account is that it will count against your child for financial aid (it counts as the child's asset). The second thing to consider is that taxes aren't deferred like in a 529 plan. The last problem of course is that when he turns 18 he gets control of the account and can spend the money on random junk (which may or may not be important to you). A 529 plan has a few advantages over a UTMA account. The grandparents can open the account with your son as the beneficiary and the money doesn't show up on financial aid for college (under current law which could change of course). Earnings grow tax free which will net you more total growth. You can also contribute substantially more without triggering the gift tax ~$60k. Also many states provide a state tax break for contributing to the state sponsored 529 plan. The account owner would be the grandparents so junior can't spend the money on teenage junk. The big downside to the 529 is the 10% penalty if the money isn't used for higher education. The flip side is that if the money is left for 20 years you will also have additional growth from the 20 years of tax free growth which may be a wash depending on your tax bracket and the tax rates in effect over those 20 years. |
The Purpose of Change Machines | I think you're talking about two types of machines, at least in the United States. The term change machine usually refers to a machine that accepts large denominations of currency and returns an equal amount of currency in smaller bills or coins. Typically these machines are used to provide coins in exchange for paper currency, in which case they are also often known as bill changers. Exactly what bills or coins these machines return depends on the machine. Read the instructions on the machine to get the details (they're usually right on the machine). For example my apartment building has a machine that converts small bills like ones and fives to quarters, since the laundry machines only took quarters. The other type of machine are coin-cashing machines, like the Coinstar machines you might see at a grocery store. Many banks used to have these machines as well although in my area they're few and far between now. These machines perform the opposite function of the traditional change machine and convert smaller denominations (mostly coins) into bill form. For example if you dump all your accumulated pennies into the machine, it will probably give you bills and larger coins like quarters, dimes, nickels in exchange, after subtracting a small fee. I've heard that now, some of these machines may give you a gift card of some kind instead of bills, although they'll still subtract a fee from your original amount, usually. Once again just read the instructions and they should tell you. When my bank had one of these machines, they didn't charge a fee as long as you were a customer at the bank. I'm sure that varies from place to place and bank to bank though. Wikipedia's article has this to say (see the article for references): In some sections of the U.S., regional banks have begun offering free coin-counting services in the amount of a gift card. Refunds are often given in cash rather than in the form of a gift card. In some cases, it is not even necessary for the customer to have an account at the bank; the free service is offered as a way to attract new business from individuals who are not current account holders. TD Bank's "Penny Arcade" coin counters were free and available to both customers and non-customers in many branches, but as of November 2010, the bank charges a 6% fee for non-customers to use the machine. |
Safe method of paying for a Gym Membership? | I've often encountered the practices you describe in the Netherlands too. This is how I deal with it. Avoid gyms with aggressive sales tactics My solution is to only sign up for a gym that does not seem to have one-on-one sales personnel and aggressive sales tactics, and even then to read the terms and conditions thoroughly. I prefer to pay them in monthly terms that I myself initiate, instead of allowing them to charge my account when they please. [1] Avoid gyms that lack respect for their members Maybe you've struggled with the choice for a gym, because one of those 'evil' gyms is very close to home and has really excellent facilities. You may be tempted to ask for a one-off contract without the shady wording, but I advise against this. Think about it this way: Even though regular T&C would not apply, the spirit with which they were drawn up lives on among gym personnel/management. They're simply not inclined to act in your best interest, so it's still possible to run into problems when ending your membership. In my opinion, it's better to completely avoid such places because they are not worthy of your trust. Of course this advice goes beyond gym memberships and is applicable to life in general. Hope this helps. [1] Credit Cards aren't very popular in the Netherlands, but we have a charging mechanism called 'automatic collection' which allows for arbitrary merchant-initiated charges. |
Digital money pots? | I guess it depends on your bank. My bank (Rabobank) recently did introduce this feature. You don't get a card per category, though. Instead you set up rules to match each expenditure to one of the existing pots. |
Extended family investment or pay debt and save | I would suggest, both as an investor and as someone who has some experience with a family-run trust (not my own), that this is probably not something you should get involved with, unless the money is money you're not worried about - money that otherwise would turn into trips to the movies or something like that. If you're willing to treat it as such, then I'd say go for it. First off, this is not a short or medium term investment. This sort of thing will not be profitable right away, and it will take quite a few years to become profitable to the point that you could take money out of it - if ever. Your money will be effectively, if not actually, locked up for years, and be nearly entirely illiquid. Second, it's not necessarily a good investment even considering that. Real estate is something people tend to feel like it should be an amazing investment that just makes you money, and is better than risky things like the stock market; except it's really not. It's quite risky, vulnerable to things like the 2008 crash, but also to things like a local market being a bit down, or having several months with no renter. The amount your fund will have in it (at most $100x15/month) won't be enough to buy even one property for years ($1500/month means you're looking at what, 100-150 months before you have enough?), and as such won't have enough to buy multiple properties for even longer, which is where you reach some stability. Having a washing machine break down or a roof leak is a big deal when you only have one property to manage; having five or six properties spreads out the risk significantly. You won't get tax breaks from this, of course, and that's where the real issue is for you. You would be far better off putting your money in a Roth IRA (or a regular IRA, but based on your career choice and current income, I'd strongly consider a Roth). You'll get tax free growth, less risky than this fund AND probably faster growing - but regardless of both of those, tax free. That 15-25% that Uncle Sam is giving you back is a huge, huge deal, greater than any return a fund is going to give you (and if they promise that high, run far and fast). Finally, as someone who's watched a family trust work at managing itself - it's a huge, huge headache, and not something I'd recommend at least (unless it comes with money, in which case it's of course a different story). You won't agree on investments, inevitably, and you'll end up spending huge amounts of time trying to convince each other to go with your idea - and it will likely end up being fairly stagnant and conservative, because that's what everyone will be able to at least not object to. It might be something you all enjoy doing, in which case good luck - but definitely not my cup of tea. |
How to avoid getting back into debt? | Spend less than you earn. If you have no job (source of income), then you can not possibly stay out of debt as you have to spend money to live and study. |
Why would someone buy a way out-of-the-money call option that's expiring soon? | I think the best answer that doesn't make the buyer look like a moron is this. Buyer had previously sold a covered call. They wanted to act on a different opportunity so they did a closing buy/write with a spread of a couple cents below asking for the stock, but it dipped a couple cents and the purchase of those options to close resolved at 4 cents due to lack of sellers. |
My tenant wants to pay rent through their company: Should this raise a red flag? | The company that's apparently going to pay this rent wants to treat it as a business expense. They are asking for your SSN because they expect to issue a 1099-MISC. (They probably gave you a Form W-9? It's not mandatory but it's common to request a taxpayer ID on this form.) There are a couple of issues at play here: |
Why have U.S. bank interest rates been so low for the past few years? | I've wondered the same thing. And, after reading the above replies, I think there is a simpler explanation. It goes like this. When the bank goes to make a loan they need capital to do it. So, they can get it from the federal reserve, another bank, or us. Well, if the federal reserve will loan it to them for lets say 0.05%, what do you think they are going to be willing to pay us? Id say maybe 0.04%. Anyway, I could be wrong, but this makes sense to me. |
What low-fee & liquid exchange-traded index funds / ETFs should I consider holding in a retirement portfolio? | Here's a dump from what I use. Some are a bit more expensive than those that you posted. The second column is the expense ratio. The third column is the category I've assigned in my spreadsheet -- it's how I manage my rebalancing among different classes. "US-LC" is large cap, MC is mid cap, SC is small cap. "Intl-Dev" is international stocks from developed economies, "Emer" is emerging economies. These have some overlap. I don't have a specific way to handle this, I just keep an eye on the overall picture. (E.g. I don't overdo it on, say, BRIC + Brazil or SPY + S&P500 Growth.) The main reason for each selection is that they provide exposure to a certain batch of securities that I was looking for. In each type, I was also aiming for cheap and/or liquid like you. If there are substitutes I should be looking at for any of these that are cheaper and/or more liquid, a comment would be great. High Volume: Mid Volume (<1mil shares/day): Low Volume (<50k shares/day): These provide enough variety to cover the target allocation below. That allocation is just for retirement accounts; I don't consider any other savings when I rebalance against this allocation. When it's time to rebalance (i.e. a couple of times a year when I realize that I haven't done it in several months), I update quotes, look at the percentages assigned to each category, and if anything is off the target by more than 1% point I will buy/sell to adjust. (I.e. if US-LC is 23%, I sell enough to get back to 20%, then use the cash to buy more of something else that is under the target. But if US-MC is 7.2% I don't worry about it.) The 1% threshold prevents unnecessary trading costs; sometimes if everything is just over 1% off I'll let it slide. I generally try to stay away from timing, but I do use some of that extra cash when there's a panic (after Jan-Feb '09 I had very little cash in the retirement accounts). I don't have the source for this allocation any more, but it is the result of combining a half dozen or so sample allocations that I saw and tailoring it for my goals. |
Less than a year at my first job out of college, what do I save for first? | I recommend saving for retirement first to leverage compound interest over a long time horizon. The historical real return on the stock market has been about 7%. Assuming returns stay at 7% in the future (big assumption, but don't have any better numbers to go off of), then $8,000 saved today will be worth $119,795 in 40 years (1.07^40*8000). Having a sizable retirement portfolio will give you peace of mind as you progress through life and make other expenditures. If you buy assets that pay you money and appreciate, you will be in a better financial position than if you buy assets that require significant cash outflows (i.e. property taxes, interest you pay to the bank, etc.) or assets that ultimately depreciate to zero (a car). As a young person, you are well positioned to pay yourself (not the bank or the car dealership) and leverage compound interest over a long time horizon. |
When to sell a stock? | My theory is that for every stock you buy, you should have an exit strategy and follow it. It is too hard to let emotions rule if you let your default strategy be "let's see what happens." and emotional investing will almost never serve you well. So before buying a stock, set a maximum loss and maximum gain that you will watch for on the stock, and when it hits that number sell. At the very least, when it hits one of your numbers, consciously make a decision that you are effectively buying it again at the current price if you decide to stay in. When you do this, set a new high and low price and repeat the above strategy. |
How should I begin investing real money as a student? | Without knowing what you are trying to achieve - make a bit of pocket money, become financially independent, invest for retirement, learn trading to become a trader - I'll give you a few thoughts ... The difficulty you will have trading with $400-600 is that brokerage will be a high proportion of your "profits". I'm not sure of the US (assuming US rather than AU, NZ, etc) rates for online brokers, but UK online brokers are the order of £6-10 / trade. Having a quick read suggests that the trading is similar $6-10/trade. With doing day trades you will be killed by the brokerage. I'm not sure what percent of profitable trades you have, but if it is 50% (e.g.), you will need to make twice the brokerage fees value on each profitable trade before you are actually making a profit. There can be an emotional effect that trips you up. You will find that trading with your own real money is very different to trading with fake money. Read up about it, this brief blog shows some personal thoughts from someone I read from time to time. With a $10 brokerage, I would suggest the following Another option, which I wouldn't recommend is to leverage your money, by trading CDFs or other derivatives that allow you to trade on a margin. Further to that, learn about trading/investing Plus other investment types I have written about earlier. |
Most common types of financial scams an individual investor should beware of? | If anyone offers you guaranteed better than average returns, run. They are either lying to you or to themselves. (Claiming that they will try to beat the market is more credible, but that becomes a matter of whether there is any reason to believe that they'll succeed.) If anyone sends you an unsolicited stock tip, run. They wouldn't be doing so if it wasn't an attempt to manipulate you or the market or both. Most likely its a pump-and-dump attempt. |
How can it be possible that only ~10% of options expire worthless, and only ~10% are exercised? | You gave your own answer - the 80% is positions, not contracts. Most actors on the option market have no interest in the underlying asset. They want "just" exposure to its price movement. It makes more sense to close your position than to be handed over bushels of wheat or whatever. |
Why do Americans have to file taxes, even if their only source of income is from a regular job? | One significant reason it makes sense for filing to be the default is home ownership rates. I think far more so than investment income, Americans own homes: as there is a significant mortgage interest deduction, between that and investments a large number of Americans would have to file (about a third of Americans get the mortgage interest tax deduction, and a large chunk of the richest don't qualify but would have to file for investments anyway). We also have a very complicated tax code, with nearly everyone getting some kind of deduction. Earned Income Tax Credit for the working poor (folks making, say, $30k for a family of 4 with a full-time job get several thousand dollars in refundable credits, for example), the Student Loan interest deduction, the above mortgage deduction, almost everyone gets something. Finally, your employer may not know about your family situation. As we have tax credits and deductions for families based on number of children, for example, it's possible your employer doesn't know about those (if you don't get health insurance on their behalf, they may well not know). Start reporting things like that separately... and you end up with about as much work as filing is now. |
Free cash flow and capex on morningstar.com | Free Cash Flow (FCF) is not a metric/data point which represents any ACTUAL cash flow of a company. FCF is a data point which communicates how much cash a company has after Operating cash requirements and cash expenditures "required" to grow and maintain the existing business. FCF can be used to pay dividends, buy back stock, purchase companies, et cetera. None of which are REQUIRED to run the business. |
I'm 18. How to build good monthly income at my 20's? | Market rate of return averages about 8% annually (sometimes more, sometimes less or negative). To get 30k monthly -- even taking that as pretax -- you're talking about 360k yearly. Divide that by 0.08 and you need to have savings of 4.5 million--- and really you should double that for safety.. Tl;dr: forget it. Added thought: If you really have $20k/month coming in, you really have no business asking the Internet for advice. Hire a professional financial advisor (not a broker, someone who is paid a flat fee for their expertise and has no incentives to give you less-than-optimal advice). . The money they will save/make for you will more than pay for their hire. |
Consolidating company pensions | Have you shopped around? I would agree that the fees seem high. The first question I would ask if if the .75% management fee is per year or per month? If it is per month, you will almost certainly lose money each year. A quick search shows that Fidelity will allow one to transfer their pensions into a self directed account. Here in the US, where we have 401Ks, it is almost always better to transfer them into something self directed once you leave an employer. Fidelity makes it really easy, and I always recommend them. (No affiliation.) Here in the US they actually pay you for you transferring money into your account. This can come in the form of free stock trades or money added to your account. I would encourage you to give them or their competitors a look in order to make an informed decision. Often times, a person with lowish balances, can't really afford to pay those high management fees. You might need in the 10s of millions before something like that makes sense. |
For net worth, should I value physical property at my cost to replace it, or the amount I could get for selling it? | There is no objective "should". You need to be clear why you're tracking these numbers, and the right answer will come out of that. I think the main reason an individual would add up their assets and net worth is to get a sense of whether they are "making progress" or whether they are saving enough money, or perhaps whether they are getting close to the net worth at which they can make some life change. Obviously shares or other investment property ought to be counted in that. Buying small-medium consumer goods like furniture or electronics may improve your life but it's not especially improving your financial position. Accounting for them with little $20 or $200 changes every month or year is not necessarily useful. Things like cars are an intermediate case because firstly they're fairly large chunks of money and secondly they commonly are things people sell on for nontrivial amounts of money and you can reasonably estimate the value. If for instance I take $30k out of my bank account and buy a new car, how has my net worth changed? It would be too pessimistic to say I'm $30k worse off. If I really needed the money back, I could go and sell the car, but not for $30k. So, a good way to represent this is an immediate 10-20% cost for off-the-lot depreciation of the car, and then another 12% every year (or 1% every month). If you're tracking lifestyle assets that you want to accumulate, I think monetary worth is not the best scale, because it's only weakly correlated with the value you get out of them. Case in point: you probably wouldn't buy a second-hand mattress, and they have pretty limited resale value. Financially, the value of the mattress collapses as soon as you get it home, but the lifestyle benefit of it holds up just fine for eight years or so. So if there are some major purchases (say >$1000) that you want to make, and you want to track it, what I would do is: make a list of things you want to buy in the future, and then tick them off when you either do buy them, or cross them out when you decide you actually don't want them. Then you have something to motivate saving, and you have a chance to think it over before you make the purchase. You can also look back on what seemed to be important to you in the past and either feel satisfied you achieved what you wanted, or you can discover more about yourself by seeing how your desires change. You probably don't want to so much spend $50k as you want to buy a TV, a dishwasher, a trip to whereever... |
What are some good ways to control costs for groceries? | Check out the bulk stores like BJs, Sam's Club or whatever else is available to you. You can definitely save money shopping there but you also need to keep your wits about you as well. Example, if you're buying in bulk only to let food go to waste, obviously that's not good either... |
ETFs mirroring consistently outperforming companies? | What you may be looking for are multi-manager ETFs; these invest in a basket of diversified funds to get the best out of all of the funds. The problem with multi-manager funds is, of course, that you pay fees twice; once to the fund itself and once to each of the funds in the fund. The low fees on ETFs mean that it is not very profitable to actively maintain one so there are not many around (Googling returns very few). Noting that historic success doesn't guarantee future success and that fees are being applied to fees these funds only really benefit from diversification of manager performance risk. partial source of information and an example of a (non-outperforming) Multi-manager ETF: http://www.etfstrategy.co.uk/advisorshares-sets-date-for-multi-manager-etf-with-charitable-twist-give-53126/ |
As a Sole Proprietor, will “employer” Solo 401k contributions count towards gross income? | This seems to depend on what kind of corporation you have set up. If you're set up as a sole proprietor, then the Solo 401k contributions, whether employee or employer, will be deducted from your gross income. Thus they don't reduce it. If you're set up as an S-Corp, then the employer contributions, similar to large employer contributions, will be deducted from wages, and won't show up in Box 1 on your W-2, so they would reduce your gross income. (Note, employee contributions also would go away from Box 1, but would still be in Box 3 and 5 for FICA/payroll tax purposes). This is nicely discussed in detail here. The IRS page that discusses this in more (harder to understand) detail is here. Separately, I think a discussion of "Gross Income" is merited, as it has a special definition for sole proprietorships. The IRS defines it in publication 501 as: Gross income. Gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. If you are married and live with your spouse in a community property state, half of any income defined by state law as community income may be considered yours. For a list of community property states, see Community property states under Married Filing Separately, later. Self-employed persons. If you are self-employed in a business that provides services (where products are not a factor), your gross income from that business is the gross receipts. If you are self-employed in a business involving manufacturing, merchandising, or mining, your gross income from that business is the total sales minus the cost of goods sold. In either case, you must add any income from investments and from incidental or outside operations or sources. So I think that regardless of 401(k) contributions, your gross income is your gross receipts (if you're a contractor, it's probably the total listed on your 1099(s)). |
Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | The best investment is always in yourself and increasing your usable skills. If you invest the money in expanding your skills, it won't matter what the economy does, you will always be useful. |
Is it possible for me to keep my credit card APR at 0% permanently? | No. The intro rate is a gambit by the bank - they accept losing money in the short term but expect to gain money in the long term when your intro is over and you (hopefully) start paying interest. There's not much in it for them if you never get around to paying interest. Same can be said for people who close the card after their intro period, but that's different - the bank is correctly expecting that most people won't bother. |
If a stock doesn't pay dividends, then why is the stock worth anything? | Imagine that a company never distributes any of its profits to its shareholders. The company might invest these profits in the business to grow future profits or it might just keep the money in the bank. Either way, the company is growing in value. But how does that help you as a small investor? If the share price never went up then the market value would become tiny compared to the actual value of the company. At some point another company would see this and put a bid in for the whole company. The shareholders wouldn't sell their shares if the bid didn't reflect the true value of the company. This would mean that your shares would suddenly become much more valuable. So, the reason why the share price goes up over time is to represent the perceived value of the company. As this could be realised either by the distribution of dividends (or a return of capital) to shareholders, or by a bidder buying the whole company, the shares are actually worth something to someone in the market. So the share price will tend to track the value of the company even if dividends are never paid. In the short term a share price reflects sentiment, but over the long term it will tend to track the value of the company as measured by its profitability. |
Pay for a cheap car or take out a loan? | You are really showing some wisdom here, and congratulations on finishing college. Its a lot about likelihoods. If you buy a new car, there is something like a 99.5% chance you will get a car that will not need repairs. If you buy a car for $1200 there is probably a 20% chance that the car will only need minimal repairs. So the answer is there is no real guarantee that spending any amount of money you will end up with a car with no repairs. You also can't assume that with buying a car it will immediately need repairs. Its possible, that you could spend 1200 on a car and it will need an oil change. In three months it might need brakes and in 6 months tires. If that is the case, you could save up the money for repairs. Have you looked for a car? It will take some work, but you might be able to find something in good condition for your budget. If you shop for a loan, go with a good credit union or local bank. Mostly you are looking for a low rate. However, I would advise against it. You worked so hard on getting out of school without debt, why start now? Be weird and buy a car for cash. Heck someone may be able to loan you a car for a short time while you save some money. |
Where to find out conversion ratio between General Motors bonds and new GM stock? | I would imagine that as a holder you will receive information in the post when it's made public, but I don't think it's been decided yet. This thread on the Motley Fool boards is keeping an eye on them - you might want to keep an eye on the thread. |
Advice on low-risk long-term strategy for extra cash? | I can think of three things you might do: Talk to a fee-only adviser. As the comments suggest, this would only be one or two sessions to lay out what all you have, establish what you want it to do, and write a plan that you are comfortable carrying out yourself. What do your 401k and Roth IRA look like? If you mean for this money to be long-term, then your retirement portfolio might be a good place to start. I don't currently own them, but one of my personally hobby horses is I-Series Savings Bonds, commonly called I Bonds. Even in the current low interest rate environment, they are a good deal relative to everything else out there. I summarized this more fully in my answer to another question. You can invest up to $10,000 per SSN per year, and the interest rate is the sum of a fixed rate plus a floating rate based on CPI. Currently the fixed rate is 0%, but the floating rate is better than what you can get from most other cash-like instruments. |
Emptying a Roth IRA account | nan |
When should I walk away from my mortgage? | It's a decision that only you can make. What are the chances that you'll want to take another loan (any loan - car, credit card, installment plan for new fridge, whatever else)? What are the chances that with the bad credit you'll find it hard to rent a place (and in Cali it's hard to rent a place right now, believe me, I bought a place just to save on the rent)? What are the chances that the prices will bounce and your "on-paper" loss will be recovered by the time you actually need/want to sell the house? You have to check all these and make a wise decision considering all the pros and cons in your personal case. |
Why is it not a requirement for companies to pay dividends? | Cash flow is needed for expansion, either to increase manufacturing capacity or to expand the workforce. Other times companies use it to purchase other companies. Microsoft and Google have both used their cash or stocks to purchase companies. Examples by Google include YouTube, Keyhole (Google Earth), and now part of Motorola to expand into Phones. If you are investing for the future, you don't want a lot of dividends. They do bring tax issues. That is not a big problem if you are investing in an IRA or 401K. It is an issue if the non-tax-defered mutual fund distributes those dividends via the 1099, forcing you to address it on your taxes each year. Some investors do like dividends, but they are looking for their investments to generate cash. Who would require it? Would it be an SEC requirement? Even more government paperwork for companies. |
Deposit a cheque in an alternative name into a personal bank account (Australia) | You don't have much choice other than to open an account in your business name, then do a money transfer, as @DJClayworth says. You will not without providing your name and street address and possibly other information that you may consider to be of a private nature. This is due to laws about fraud, money laundering and consumer protection. I'm not saying that's what you have in mind! But without accountability of the sort provided by names and street addresses, banks would be facilitating crimes of many sorts, which is why regulatory agencies enforce disclosure requirements. |
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