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strategy for the out of favour mining sector | I'll take a stab at this question and offer a disclosure: I recently got in RING (5.1), NEM (16.4), ASX:RIO (46.3), and FCX (8.2). While I won't add to my positions at current prices, I may add other positions, or more to them if they fall further. This is called catching a falling dagger and it's a high risk move. Cons (let's scare everyone away) Pros The ECB didn't engage in as much QE as the market hoped and look at how it reacted, especially commodities. Consider that the ECB's actions were "tighter" than expected and the Fed plans to raise rates, or claims so. Commodities should be falling off a cliff on that news. While most American/Western attention is on the latest news or entertainment, China has been seizing commodities around the globe like crazy, and the media have failed to mention that even with its market failing, China is still seizing commodities. If China was truly panicked about its market, it would stop investing in other countries and commodities and just bail out its own country. Yet, it's not doing that. The whole "China crisis" is completely oversold in the West; China is saying one thing ("oh no"), but doing another (using its money to snap up cheap commodities). Capitalism works because hard times strengthen good companies. You know how many bailouts ExxonMobil has received compared to Goldman Sachs? You know who owns more real wealth? Oil doesn't get bailed out, banks do, and banks can't innovate to save their lives, while oil innovates. Hard times strengthen good companies. This means that this harsh bust in commodities will separate the winners from the losers and history shows the winners do very well in the long run. Related to the above point: how many bailouts from tax payers do you think mining companies will get? Zero. At least you're investing in companies that don't steal your money through government confiscation. If you're like me, you can probably find at least 9 people out of 10 who think "investing in miners is a VERY BAD idea." What do they think is a good idea? "Duh, Snapchat and Twitter, bruh!" Then there's the old saying, "Be greedy when everyone's fearful and fearful when everyone's greedy." Finally, miners own hard assets. Benjamin Graham used to point this out with the "dead company" strategy like finding a used cigarette with one more smoke. You're getting assets cheap, while other investors are overpaying for stocks, hoping that the Fed unleashes moar QE! Think strategy here: seize cheap assets, begin limiting the supply of these assets (if you're the saver and not borrowing), then watch as the price begins to rise for them because of low supply. Remember, investors are part owners in companies - take more control to limit the supply. Using Graham's analogy, stock pile those one-puff cigarettes for a day when there's a low supply of cigarettes. Many miners are in trouble now because they've borrowed too much and must sell at a low profit, or in some cases, must lose. When you own assets debt free, you can cut the supply. This will also help the Federal Reserve, who's been desperately trying to figure out how to raise inflation. The new patriotic thing to do is stimulate the economy by sending inflation up, and limiting the supply here is key. |
Income and taxes with subcontracting? | Since you say 1099, I'll assume it's in the US. :) Think of your consulting operation as a small business. Businesses are only taxed on their profits, not their revenues. So you should only be paying tax on the $700 in the example you gave. Note, though, that you need to be sure the IRS thinks you're a small business. Having a separate bank account for the business, filing for a business license with your local city/state, etc are all things that help make the case that you're running a business. Of course, the costs of doing all those things are business expenses, and thus things you can deduct from that $1000 in revenue at tax time. |
Growth of unrealized gains in tax-managed index funds | Right now, the unrealized appreciation of Vanguard Tax-Managed Small-Cap Fund Admiral Shares is 28.4% of NAV. As long as the fund delivers decent returns over the long term, is there anything stopping this amount from ballooning to, say, 90% fifty years hence? I'd have a heck of a time imagining how this grows to that high a number realistically. The inflows and outflows of the fund are a bigger question along with what kinds of changes are there to capital gains that may make the fund try to hold onto the stocks longer and minimize the tax burden. If this happens, won't new investors be scared away by the prospect of owing taxes on these gains? For example, a financial crisis or a superior new investment technology could lead investors to dump their shares of tax-managed index funds, triggering enormous capital-gains distributions. And if new investors are scared away, won't the fund be forced to sell its assets to cover redemptions (even if there is no disruptive event), leading to larger capital-gains distributions than in the past? Possibly but you have more than a few assumptions in this to my mind that I wonder how well are you estimating the probability of this happening. Finally, do ETFs avoid this problem (assuming it is a problem)? Yes, ETFs have creation and redemption units that allow for in-kind transactions and thus there isn't a selling of the stock. However, if one wants to pull out various unlikely scenarios then there is the potential of the market being shut down for an extended period of time that would prevent one from selling shares of the ETF that may or may not be as applicable as open-end fund shares. I would however suggest researching if there are hybrid funds that mix open-end fund shares with ETF shares which could be an alternative here. |
Home owners association for houses, pro/cons | At its best, a HOA provides the same benefits as a condo association -- shared investment in the shared neighborhood resources/environment. At its worst, a HOA has the same problems as a condo association, potentially creating unreasonable constraints on what you can or can't do with your own property because your decisions might affect the value of someone else's property or demanding shared investment in something you don't consider worthwhile. Basically, if an HOA is active in your neighborhood, (A) make sure you know its history and biases before you buy, and (B) make sure you're active in it, or you may be unpleasantly surprised by its decisions. |
Snowball debt or pay off a large amount? | Pay the highest rate debt first, it's as simple as that. When that debt is paid (the 24% card in this case) pay off the next one. As far as having an emergency fund is concerned, I consider it a second priority. If one owes 24% money, that $2000 emergency fund is costing $480/yr. Ouch. Avoid the behaviors that got you into debt in the first place, and pay the cards off as fast as you can. When you have no balance, start to save, first into the emergency account, then toward retirement. |
If the U.S. defaults on its debt, what will happen to my bank money? | You must mean the current debt ceiling debacle. The meaning of it is: US government is constantly borrowing money (by issuing treasury bonds) and constantly repaying some of the bonds that come to maturity, and also has other obligations it has to meet by law all the time - such as Social Security checks, bonds interest, federal employees' salaries and pensions, etc. By law, total amount of money that can be borrowed at the same time is capped. That means, there can be situation where the government needs to borrow money to pay, say, interest on existing bonds, but can not, since the limit is reached. Such situation is called a default, since the government promised to pay the interest, but is unable to do so. That does not mean the government has no money at all and will completely collapse or couldn't raise money on the market if it were permitted by law to do so (currently, the market is completely willing to buy the debt issued by US government, and with interest that is not very high, though of course that may change). It also does not mean the economy ceases to function, dollars cease to have value or banks instantly go bankrupt. But if the government breaks its promises to investors, it has various consequences such as raising the costs of borrowing in the future. Breaking promises to other people - like Social Security recipients - would also look bad and probably hurt many of them. Going back to your bank account, most probably nothing would happen to the money you store there. Even if the bank had invested 100% of the money in US treasury bonds (which doesn't really happen) they still can be sold on the open market, even if with some discount in the event of credit rating downgrade, so most probably your account would not be affected. As stated in another answer, even if the fallout of all these calamities causes a bank to fail, there's FDIC and if your money is under insured maximums you'll be getting your money back. But if your bank is one of the big ones, nothing of the sort would happen anyway - as we have seen in the past years, government would do practically anything to not allow any big bank failures. |
When to trade in a relatively new car for maximum value | My suggestion would be to keep it. The value of a new car is that you get to drive it around when it's still new and shiny, and that you know its history. If you maintain it in good condition, both mechanically and cosmetically, then you can have both of those benefits for the life of the car. Your question merges the old car sale and new car purchase transactions together, but that's not correct. The value of your 2010 car has no relationship to the value of any new car you might buy, except incidentally through the market forces that act on each. The car dealership is likely to be skilled at making you feel like your most important criteria are satisfied, but they will try to construct the deal to maximize the money you pay them while making you feel like you're the one maximizing your value. Also note that the dealership cannot give you maximum value for your car, because it costs them money to sell it and they take all the risk. Some of the difference between typical direct-sale and trade-in prices is the commission you are paying them to both sell it for you and absorb the risks in the transaction. |
How can I register a UK business without providing a business address? | You don't have to provide your personal home address per se. You can provide a legal address where Companies house can send across paper correspondence to. Companies house legally requires an address because directors are liable to their shareholders(even if you are the only shareholder) and to stop them from disappearing just like that with shareholder's money. Moreover your birth date will also be visible on websites which provide comapnies information. You can ask these websites to stop sharing your personal information. Every company must have a registered office within the UK which is the official legal address of the company. It must be a physical address (i.e. not a PO Box without a physical location) as Companies House will use this address to send correspondence to. To incorporate a private limited company you need at least one director, who has to be over 16 years of age. You may also have a secretary, but this is optional. The information you will need to supply for each officer includes: You may also have officers that are companies or firms, and for these you will need to supply the company or firm name, its registered office address, details of the legal form of the company, where it is registered and if applicable its registration number. |
Optimal way to use a credit card to build better credit? | I answered a similar question, How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score?, in which I show a graph of how utilization impacts your score. In another answer to Should I keep a credit card open to maintain my credit score?, I discuss the makeup of your score. From your own view at Credit Karma, you can see that age of accounts will help your score, so now is the time to get the right cards and stay with them. My background is technology (electrical engineer) and MBA with a concentration in finance. I'm not a Psychology major. If one is undisciplined, credit can destroy them. If one is disciplined, and pays in full each month, credit is a tool. The quoting of billionaires is a bit disingenuous. I've seen people get turned away at hotels for lack of a credit card. $1000 in cash would not get them into a $200/night room. Yes, a debit card can be used, but the rental car and hotel "reserve" a large amount on the card, so if you don't have a high balance, you may be out of town and out of luck. I'll quote another oft-quoted guru: "no one gets rich on credit card rewards." No, but I'm on track to pay for my 13 year old's last semester in college with the rewards from a card that goes right into her account. It will be great to make that withdrawal and not need to take the funds from anywhere else. The card has no fee, and I've not paid them a dime in interest. By the way, with 1-20% utilization ideal, you want your total available credit to be 5X the highest monthly balance you'd every hit. Last - when you have a choice between 2% cash reward, and the cash discount Kevin manages, take the discount, obviously. |
Why doesn't Japan just divide the Yen by 100? | Another possibly significant issue, is that the number ten thousand is very important in the Japanese language. In Japanese, you count in ones, tens, hundreds, thousands, ten thousands, BUT instead of a 'hundred thousand', you have ten ten thousands. and then one hundred ten thousands, and then a thousand ten thousands. The ten thousand yen note, equivalent roughly to the $100 bill, is the main base of Japanese currency. If you go to the bank, for example, you will almost always take out your money in ten thousand yen notes. Knowing a little about the language, i would say it would become quite strange and un-natural to suddenly start using a hundred as the main note value. I doubt the Japanese people would ever even consider that, and my guess is the only people who are even put out by the large number of zeroes are foreigners who are used to dealing in dollars and cents. |
Priced out of London property market. What are my accommodation investment options? | Be radical! (I assume you are not working for a city bank getting paid “city wages” – e.g. you are one of the 99% of people in London or more “normal” income.) House prices and rents in London and anywhere within reasonable commuting distances are now so high that couples in reasonable jobs often have to rent rooms in shared houses (HMOs). This is due to so many people wishing to live/work in London and there not being enough new homes built. If you are looking at buying a property to rent out, you need the rent to be about double the interest payments on the mortgage – otherwise you will not be able to afford repairs, or cope when interest rates increase – (you could also get a tax bill that is more the your profit). Finding such a property is very hard in London, as the prices of homes have gone up a lot more in London then rents have. There are still some flats where the rent will cover the landlord’s costs, but not many. (Any landlord that brought more than a few years ago, is making a very nice profit in London, as the rents have gone up a lot since they brought – but are you willing to bet your life on the rents going up even more?) Moving a short distance out of London, does not help much. So look at somewhere like Manchester or Birmingham |
Can stock brokerage firms fail? | Yes, any company can go under. SIPC offers a level of protection. They don't guarantee against stocks dropping, but will replace stocks that you owned, but the broker stole from you. (overgeneralization). There's a $500K limit, with $250K max in cash. |
How can I withdraw money from my LLC? | Generally, unless you explicitly elect otherwise, LLCs are transparent when it comes to taxes. So the money in the LLC is your money for tax purposes, there's no need to pay yourself a salary. In fact, the concept of salary for LLC members doesn't exist at all. It is either distributions or guaranteed payments (and even that is mostly relevant to multi-member LLCs). The only concern is the separation of personal and LLC finances - avoiding commingling. Mixing your personal and business expenses by using the same accounts/cards for both business and personal spending may cause troubles when it comes to the liability protection in case of a lawsuit. I'd suggest discussing this with a FL-licensed attorney. Bottom line - technically the withdrawal is just writing yourself a check from the business account or moving money between your personal and business accounts. If you're a sole member - you need not more than that. Make sure the operating agreement explicitly empowers you to do that, of course. There are no tax consequences, but as I mentioned - there may be legal consequences. |
Looking for a good source for Financial Statements | If you're researching a publicly traded company in the USA, you can search the company filings with the SEC. Clicking 'Filings' should take you here. |
How do I analyse moving averages? | If you are going to be a long term investor you are only going to buy and hold. You will not sell. Thus future price is not relevant. Only dividend payout is relevant. Divide the dividend by the price you paid to get the yeald. Edit: once again the sitesite will not allow me to add a comment, so I have to edit a previous post... What you call 'active investor' is not really investing, it is speculating. When you try to 'buy low, sell high' you have, at best, a 50-50 chance of picking the low. You then pay a commission on that buy. After you buy then you have a 50-50 chance, at best, of picking the high. You also have to pay the commission on the sell. 50% times 50% is 25%.So you have, at best a 25% chance of buying low and selling high. You are churning your account which makes money for the broker whether you make money or not. If, instead, you buy and hold a dividend paying security then the going price is irrelevant. You paid for the security once and do not have to pay for it again. Meanwhile the dividends roll in forever. 'Buy low, sell high' is a fools game. Warren Buffet does not do it, he buys and holds. |
Does dollar cost averaging really work? | If you define dollar cost cost averaging as investing a specific dollar amount over a certain fixed time frame then it does not work statistically better than any other strategy for getting that money in the market. (IE Aunt Ruth wants to invest $60,000 in the stock market and does it $5000 a month for a year.) It will work better on some markets and worse on others, but on average it won't be any better. Dollar cost averaging of this form is effectively a bet that gains will occur at the end of the time period rather than the beginning, sometimes this bet will pay off, other times it won't. A regular investment contribution of what you can afford over an indefinite time period (IE 401k contribution) is NOT Dollar Cost Averaging but it is an effective investment strategy. |
I have more than $250,000 in a US Bank account… mistake? | First, what's the reason? Why do you have that much in cash at all - are you concerned about market volatility, are you planning to buy a house, do you have tens of millions of dollars and this is your slush fund? Are you a house flipper and this is part of business for you? If you need the money for short term use - ie, you're buying a house in cash next month - then as long as you're in a sound bank (one of the big national ones, for example) it seems reasonable. You can never predict a crash like 2008, but it seems unlikely that Chase or Citibank will go under in the next few weeks. If you like to have a cash position, then split the money among multiple banks. Buy a CD at one major bank with some of the amount. My in-laws have a trust which is partially invested in CDs, and they use multiple banks for this purpose to keep their accounts fully insured. Each separate bank you're covered up to 250k, so if you have $150k at Chase and $150k at a local bank, you're covered. (You're also covered in a much larger amount - up to 1MM potentially - if you are married, as you can have a separate account each for $250k and a joint account up to $500k.) Otherwise, why do you have that much in cash? You should invest it in something that will return more than inflation, at a minimum... Edit post-clarifications: $350k is around my level of 'Maybe, maybe not'. You're risking $100k on a pretty low risk (assuming this isn't a small local bank, and even those are pretty low still). In order to remove that risk you have to do something active - ie, take 100k somewhere else, open a new bank account, etc. - which isn't exactly the hardest thing in the world, but it does take effort. Is it worth the 0.001% chance (entirely made up) you lose the 100k? That's $10, if you agree with that risk chance. Up to you. It wouldn't be particularly hard, though, to open an account with an online bank, deposit $100k in there in a 6 month CD, then pay the IRS from your other account and when the 6 month CD expires take the cash back into your active account. Assuming you're not planning on buying a house in the next six months this should be fine, I'd think (and even then you'd still have $150k for the downpayment up front, which is enough to buy a $750k house w/o PMI). Additionally, as several commenters note: if you can reasonably do so, and your money won't be making significant interest, you might choose to pay your taxes now rather than later. This removes the risk entirely; the likely small interest you earn over 3 months may be similar to the amount you'd spend (mostly of your time, plus possibly actual expenses) moving it to another bank. If you're making 2% or 3% this may not be true, but if you're in a 0.25% account like my accounts are, $100k * 0.25% * 0.25 is $62.50, after all. |
Can my broker lock my cash account if I try to use the money from a stock sale during the three-day settlement period? | Here's how this works in the United States. There's no law regarding your behavior in this matter and you haven't broken any laws. But your broker-dealer has a law that they must follow. It's documented here: The issue is if you buy stock before your sell has settled (before you've received cash) then you're creating money where before none existed (even though it is just for a day or two). The government fears that this excess will cause undue speculation in the security markets. The SEC calls this practice freeriding, because you're spending money you have not yet received. In summary: your broker is not allowed to loan money to an account than is not set-up for loans; it must be a margin account. People with margin account are able to day-trade because they have the ability to use margin (borrow money). Margin Accounts are subject to Pattern Daytrading Rules. The Rules are set forth by FINRA (The Financial Industry Reporting Authority) and are here: |
What choices should I consider for investing money that I will need in two years? | Investing $100k into physical gold (bars or coins) is the most prudent option; given the state of economic turmoil worldwide. Take a look at the long term charts; they're pretty self explanatory. Gold has an upward trend for 100+ years. http://www.goldbuyguide.com/price/ A more high risk/high reward investment would be to buy $100k of physical silver. Silver has a similar track record and inherent benefits of gold. Yet, with a combination of factors that could make it even more bull than gold (ie- better liquidity, industrial demand). Beyond that, you may want to look at other commodities such as oil and agriculture. The point is, this is troubled times for worldwide economies. Times like this you want to invest in REAL things like commodities or companies that are actually producing essential materials. |
Options for the intelligent but inexperienced | Realize this is almost a year old, but I just wanted to comment on something in Dynas' answer above... "Whenever you trade always think about what the other guys is thinking. Sometimes we forget their is someone else on the other side of my trade that thinks essentially the exact opposite of me. Its a zero sum game." From a market maker's perspective, their primary goal is not necessarily to make money by you being wrong, it is to make money on the bid-offer spread and hedging their book (and potentially interalize). That being said, the market maker would likely be quoting one side of the market away from top of the book if they don't want to take exposure in that direction (i.e. their bid will be lower than the highest bid available or their offer higher than the lowest offer available). This isn't really going to change anything if you're trading on an exchange, but important to consider if you can only see the prices your broker/dealer provides to you and they are your counterparty in the trade. |
What is inflation? | I've seen a lot of long and complicated answers here so here is my simple and short answer: Let's say the economy consists of: 10 apples and 10$. Then an apple costs 1$. If you print 10$ more you have: 10 apples and 20$. Then an apple costs 2$. That is it! It's not what Kenshin said: Over time, prices go up! However I would like to add something more on the topic: inflation is theft! If I hack the bank and steal 10% from each account it's obvious that it is theft. It's a bit less obvious when the government prints out money and people loose 10% of the value in their bank accounts but the end result is the same. Final note: some may disagree but I do not consider inflation when 5 of the apples rot and you have: 5 apples and 10$ and an apple now costs 2$. This is a drop in supply and if the demand stays the same prices will rise. |
Creating a personal company | You're confusing so many things at once here...... First thing first: we cannot suggest you what to do business-wise since we have no idea about your business. How on Earth can anyone know if you should sell the software to someone or try to distribute to customers yourself? How would we know if you should hire employees or not? If you say you don't need employees - why would you consider hiring them? If you say you want to sell several copies and have your own customers - why would you ask if you should sell your code to someone else? Doesn't make sense. Now to some more specific issues: I heard sole proprietary companies doesn't earn more than 250k and it's better to switch to corporation or LLC etc. because of benefits. I heard it was snowing today in Honolulu. So you heard things. It doesn't make them true, or relevant to you. There's no earning limit above which you should incorporate. You can be sole proprietor and make millions, and you can incorporate for a $10K/year revenue business. Sole proprietorship, incorporation (can be C-Corp or S-Corp), or LLC - these are four different types of legal entity to conduct business. Each has its own set of benefits and drawbacks, and you must understand which one suits you in your particular situation. For that you should talk to a lawyer who could help you understand what liability protection you might need, and to a tax adviser (EA/CPA licensed in your state) who can help you understand the tax-related costs and benefits of each choice. On the other hand I heard that if I create LLC company, in case of failure, they can get EVERYTHING from me, what's this all about? No. This is not true. Who are "they", how do you define "failure", and why would they get anything from you at all? Even without knowing all that, your understanding is wrong, because the "LL" in LLC stands for LIMITED liability. The whole point of forming LLC or Corporation is to limit your own personal liability. But mere incorporation or forming LLC doesn't necessarily mean your liability is limited. Your State law defines what you must do for that limited liability protection, and that includes proper ways to run your business. Again - talk to your lawyer and your tax adviser about what it means to you. I'm totally unfamiliar with everything related to taxes/companies/LLC/corporation etc Familiarize yourself. No-one is going to do it for you. Start reading, ask specific questions on specific issues, and get a proper legal and tax advice from licensed professionals. |
Should I be worried that I won't be given a receipt if I pay with cash? | In some states, it is your responsibility to pay the sales tax on a transaction, even if the party your purchase from doesn't collect it. This is common with online purchases across state lines; for example, here in Massachusetts, if I buy something from New Hampshire (where there is no sales tax), I am required to pay MA sales tax on the purchase when I file my income taxes. Buying a service that did not include taxes just shifts the burden of paperwork from the other party to me. Even if you would end up saving money by paying in cash, as other here have pointed out, you are sacrificing a degree of protection if something goes wrong with the transaction. He could take your money and walk away without doing the work, or do a sloppy job, or even damage your vehicle. Without a receipt, it is your word against his that the transaction ever even took place. Should you be worried that he is offering a discount for an under the table transaction? Probably not, as long as you don't take him up on it. |
Buying my first car out of college | DO NOT buy this car. First, I want to say I love BMW's. There's a reason why they call them "ultimate driving machine" and why other car manufacturers compare their new models to BMWs. I own 330i and I absolutely love it. Every time you get into the car, it just begs you to push and abuse it. Everything from steering response to throttle to engine sound. Awesome car. However... 1) BMW is not known for their reliability. I've had to do numerous things to this car and if I didn't do the work myself (i like tinkering with cars), it would be a pretty big money pit (and actually still is). German parts are more expensive then regular cars. Labor will run you if you take it for service. Right now my car is on jack stands while I'm fixing an oil leak, replacing cooling system components which are known to fail and doing work with the cam timing system which uses bad seals. 2) If you buy a used car which is 3 years old, just remember all the wearable items and everything that wants to break, will break 3 years sooner on you. Someone else already pre-enjoyed your car's maintenance-free days. At 60k-80k things will start to go. Ask me how I know. So you'll start paying for maintenance way before your 5-year loan expires. Compare this 330i to the Acura Integra I used to have. Acura (aka Honda) had 194k miles when I sold it and I NEVER ONCE got stranded with the Acura. 3) Fuel economy is not that good and btw you have to use the most expensive gas. 4) If you are really set on buying a BMW because you enjoy driving and won't drive like an old lady (my apologies to those old ladies that drive at least the speed limit, but you are not the majority), then still do not by this one and check out auctions. I bought my 2003 330i in 2005 for 21k when it cost over 40k new. You could probably find one with less than 20k miles on it. My final advice is either a) learn to at least do basic maintenance or b) stick to always buying new cars which don't have any issues in first 4-7 years, then move on before you have to schedule your life around your cars. on the bright side I doubt you'll have to ever replace the exhaust and you can buy tail lights on e-bay for roughly $60 :) |
What standards should I expect of my CPA when an error was made? | What is the right way to handle this? Did you check the forms? Did the form state $0 tax due on the FTB LLC/Corp form (I'm guessing you operate as LLC/Corp, since you're dealing with the Franchise Tax)? The responsibility is ultimately yours. You should cross check all the numbers and verify that they're correct. That said, if the CPA filled the forms incorrectly based on your correct data - then she made a mistake and can be held liable. CPA filing forms from a jurisdiction on the other end of the country without proper research and knowledge may be held negligent if she made a grave mistake. You can file a law suit against the CPA (which will probably trigger her E&O insurance carrier who'll try to settle if there's a good chance for your lawsuit to not be thrown away outright), or complain to the State regulatory agency overseeing CPAs in the State of her license. Or both. Am I wrong for expecting the CPA should have properly filled out and filed my taxes? No, but it doesn't shift the responsibility from you. How can I find out if the CPA has missed anything else? Same as with doctors and lawyers - get a second opinion. Preferably from a CPA licensed in California. You and only you are responsible for your taxes. You may try to pin the penalties and interest on the CPA if she really made a mistake. California is notorious for very high LLC/Corp franchise tax (cost of registering to do business in the State). It's $800 a year. You should have read the forms and the instructions carefully, it is very prominent. It is also very well discussed all over the Internet, any search engine would pop it up for you with a simple "California Franchise Tax for LLC/Corp" search. CA FTB is also very aggressive in assessing and collecting the fee, and the rules of establishing nexus in CA are very broad. From your description it sounds like you were liable for the Franchise tax in CA, since you had a storage facility in CA. You may also be liable for sales taxes for that period. |
Do tax-exempt bond fund earnings need to be reported on taxes? | At the end of the year, the mutual fund company sends you a statement like any other investment and it has a bunch of boxes that you copy into your tax return software. Then you just check the box that says 'tax-exempt' and you're done. |
First time home buyer. How to negotiate price? | Advice from a long-time flipper You negotiate price based on four factors and none of these are set in stone: How much you love the house. Is this house a 100 out of 100 for you or a 85 or a 75. How much have you compromised. What is the likelihood that you will find a house that will make you just as happy or at least close. You might have a house that is a 95 out of 100 but there are five other houses that you rated between 93-95. What is your timeframe. Know that playing hardball takes longer and can knock you out of the game sometimes and takes a little while to find a new game. What is the relative housing market. Zillow and other such sites are crap. Yes the give you a generalized feel for a community but their estimates are off sometimes by 30-40%. Other factors like street/noise/updates to house/ and so on are huge factors. You will have to really navigate the area and look for very comparable houses that have recently sold. Then use average housing movements to extrapolate your future houses cost. As a buyer you have two jobs. Buy the house you want and manage your agent. Your agent wants you to buy a house as soon as possible and to increase their reputation. Those are their only two factors of working. By you offering closer to the asking price they are able to get their sales as quick as possible. Also other agents will love working with them. In fact your agent is selling you on the home and the price. Agents hardly worry about you paying too much - as most buyers oversell the deal they get on their home. Admitting that you paid too much for your house is more of an admission of ignorance of yourself, compared to agent incompetency. If you decide to low-ball the owner, your agent spends more time with you and possibly reduces their reputation with the selling agent. So it is common for agents to tell you that you should not offer a low price as you will insult the owner. My advice. Unless the home is truly one of a kind for the market offering anything within 20% of the asking price is DEFINITELY within range. I have offered 40% less. If a house is asking too much and has been on the market for 8 months there is no way I am going in with an offer of even 15% lower. That leaves you no room. What you do? First think about how much you think this house could sell for in the next 3 months. In your example let's say 80K based on conservative comps. Then take the most you would actually pay for it. Let's say 75K. 70K is about as high of an opening offer I would go. Do NOT tell your agent your true breaking points. If you tell your agent that you would go to 75K on the house. Then that is what their negotiations will start at. Remember they want the sale to happen as soon as possible. Very likely the other agent - especially if they know each other - will ask if how flexible you are going to be. Then next thing you know your agent calls you back and says would you be willing to go 77K or the owner is firm at 80K. Do not give up your position. You should never forecast to your agent what your next bid or offer would be for the house. Never get into scenarios or future counters. So you offer 70K. If your agent asks you how firm that is? "Very firm". If your agent doesn't want to take the offer to them, "Thank you for being my agent, but I am going to be working with someone that represents what I want." If the owner says "You are done too me cheapskate." Well that's how it goes. If the owner stays firm at asking or lowers - then you can come up if you feel comfortable doing so. But understand what your goal is. Is it to get a house or to get a good deal on a house? Mine was always to get a good deal on a house. So I might offer 72K next. If they didn't budge, I am out. If they moved down I went from there. Easy Summary The fact is if they aren't willing to negotiate with you enough it always ends the same. You give them your take-it-or-leave-it offer. You tell your agent that if he/she comes back with one penny over it comes from their commission (god I have said this 100 times in my life and it is the best negotiation tactic you have with your agent). The owner says yes or no and it is over. |
When to trade in a relatively new car for maximum value | I love giving non-answer answers. It will depend on you. Suppose you are embarrassed by driving older cars, your significant other doesn't like having you drive an older car, you don't really maintain the car well, it develops a variety of problems, acquires a few dents and you really worry about reliability. Then the value of the car will probably drop rather quickly below the blue book value and you should sell it. On the other hand, if you don't care how the car looks, it runs pretty well (fewer repairs than you would expect), you maintain it yourself (aka cheaply) and do a good job at that, and have plenty of friends who owe you a favor and will give you a ride if your car won't start, there will probably never be a time that the value to you drops below the 'official' blue book value (what others will pay), so you would drive it until the engine drops out of the chassis. The blue book value represents some kind of rough consensus about what a car of that age and exterior condition is worth to the typical person; it will be the discrepancy between the 'typical' person and you that determines whether you'll sell. An illustration of this: I know a few people who (1) don't care what their car looks like and (2) are very handy at repairs. These people started out by buying cheap used cars and ran them until they basically fell to pieces. However, even though their 'taste' in cars didn't changes, as their incomes increased, it finally reached the point where doing their own repairs was too much of a time sink, so the value of really old cars dropped in their minds and they shifted to buying newer cars and selling them before they completely fell apart. That's why this is a hard question to answer. |
Issuing bonds at discount - computing effective interest rate | If the market rate and coupon were equal, the bond would be valued at face value, by definition. (Not 100% true, but this is an exercise, and that would be tangent to this discussion). Since the market rate is higher than the coupon rate, the value I am willing to pay drops a bit, so my return is the same as the market rate. This can be done by hand, a time value of money calculation for each payment. Discount by the years till received at the market rate to get the present value for each payment, and sum up the numbers. The other way is to use a finance calculator and solve for rate. The final payment of $10,000 (ignore final coupon just now) is $10,000/(1.1^5). In other words, that single chunk of cash is worth 10% less if it's one year away, (1.1)^2 if 2 years away, etc. Draw a timetable with each payment and divide by 1.1 for each year it's away from present. If the 9% coupon is really 4.5% twice a year, it's $450 in 6 month intervals, and each 6 mo interval is really 5% you discount. Short durations like this can be done by hand, a 30 year bond with twice a year payments is a pain. Welcome to Money.SE. |
I am turning 18 and I am a Student, I need strategies on building great credit soon. Where should I start? | The details of credit score calculation tend to change periodically, but the fundamentals are mostly consistent. Pay your bills, keep your average account age high, overpay your credit card minimums, and keep your overall debt low. And do soft pulls on your credit report to see what's happening. First, the simplest route: pay all your bills early or on time. Automatic deduction may be useful in this regard, especially for bills with predictable amounts. A corollary to this tip is to never leave an unpaid bill. What often happens to young people is in the course of moving around they leave the final bill unpaid and it gets reported to collections. Make sure you follow up online with all bills, even after canceling the service. Second, average account age and oldest account age matter. Open an account like a credit card and never close it, so you'll have an older account (hopefully a zero-fee card). Try to keep other accounts open rather than closing them (no need to cancel a zero-fee credit card) so your average account age stays higher. A card that works on internal systems (like a gift card) is not going to show up on a credit report; a card that works like any VISA/MC is likely going to show up. The rule of thumb is if they need your SSN to run a credit check for the application, then the card will appear on a credit report. You can pull your credit report to find out if the card is listed (you may have to allow time for lag before the card appears, but I'm not sure how long that might be). Third, a tip for extra credit score is to pay more than the minimum required on credit card bills. You can achieve this by either using your credit card at least once a month or by leaving a small hanging balance each month so there's always something to overpay next month. Credit card reporting will be either: unpaid, underpaid, minimum paid, or overpaid. Minimum payment helps your score and overpayment helps more. If you can use your credit card every month, that will give you something to overpay every month. Otherwise, you can leave a small debt left on the card but still pay over the monthly minimum. However, your total debt load, especially debt carried on your cards, counts against your score; aim for less than 10% of your limit. Finally, of course, is to pull your credit report periodically. You need to know what others are seeing. Since debt load utilization matters, make sure the reported card maximum is correct on your credit report. Talk to your bank or account issuer if the limit is wrong. If a collection appears, then you need to handle it. Often you can negotiate with the collector, but be careful to negotiate how they will report the resolution. You want them to agree to remove any negative information (either in exchange for payment or because of a mistake). Failing that, you want them to mark it paid in full or satisfied in full; letting them notate your score that you only partially paid is what you want to avoid, since it most signals someone with cash flow problems and credit issues. They control their reporting to credit bureaus, so if the person on the phone demurs, ask to speak to their supervisor or someone with negotiating authority. Try to get any agreements in writing. Remember that your total debt load is a factor in your credit score. Home loans and student loans do affect credit score. If you take on a smaller home loan, then it will affect your credit less harshly (and leave you with smaller monthly payments). |
Is it better to pay an insurance deductible, or get an upgrade? | I think you have a few choices that cannot be described by math alone: Repair current phone: 149 Replace current phone with new model from carrier: 100 + cost of new phone Replace current phone with new model on payment plan from carrier: 100 + cost of new phone + finance charge (could be zero or cleverly hidden). You can also replace the current phone with either a used or new bought from a separate party. Quite recently I was selling some gently used IPhones 4S for around $140. So really you have to determine what is most important to you guys. Is it important to have the newest model phone with laying out the least amount of cash now? Then by all means go with the payment plan with your current carrier. Is it most important to be financially efficient, while having a good working phone? Then pay the deductible; or buy something gently used. In my opinion, having a phone payment is a losing game, akin to buying a new car every three years or so. You are buying something on time that quickly depreciates and hiding the true cost of the item in "painless" monthly payments. |
Why do stock brokers charge fees | Retail brokers and are generally not members of exchanges and would generally not be members of exchanges unless they are directly routing orders to those exchanges. Most retail brokers charging $7 are considered discount brokers and such brokers route order to Market Makers (who are members of the exchanges). All brokers and market makers must be members of FINRA and must pay FINRA registration and licensing fees. Discount brokers also have operational costs which include the cost of their facilities, technology, clearing fees, regulation and human capital. Market makers will have the same costs but the cost of technology is probably much higher. Discount brokers will also have market data fees which they will have to pay to the exchanges for the right to show customer real time quotes. Some of their fees can be offset through payment for order flow (POF) where market makers pay routing brokers a small fee for sending orders to them for execution. The practice of POF has actually allowed retail brokers to keep their costs lower but to to shrinking margins and spread market makers POF has significantly declined over the years. Markets makers generally do not pass along Exchange access fees which are capped at $.003 (not .0035) to routing brokers. Also note that The SEC and FINRA charges transactions fees. SEC fee for sales are generally passed along to customers and noted on trade confirms. FINRA TAF is born by the market makers and often subtracted from POF paid to routing firms. Other (full service brokers) charging higher commissions are charging for the added value of their brokers providing advice and expertise in helping investors with investment strategies. They will generally also have the same fees associated with membership of all the exchanges as they are also market makers subject to some of the list of cost mentioned above. One point of note is that Market Making technology is quite sophisticates and very expensive. It has driven most of wholesale market makers of the 90s into consolidation. Retail routing firm's save a significant amount of money for not having to operate such a system (as well as worry about the regulatory headaches associated with running such a system). This allows them to provide much lower commissions that the (full service) or bulge bracket brokers. |
How should one structure a portfolio given the possibility that a Total Stock Market Index might decline and not recover for a long time? | Generally, you need something that goes up over time during periods of index decline, but otherwise holds some value. Historically, people tend to use gold for that purpose. But with gold also set up for possible declines, that raises questions. Silver has dropped a bit more than gold in terms of percentages. If you think the downward motion will be in the form of sudden jumps, you can look at putting some of your money in puts away from the current price, but you can easily wind up paying too much for this protection. In the case of a deflation, most things lose value vs. money, and you want all cash. These things might already be obvious. I don't think there is a clear answer to your question. But if the future were clear, the present market could possibly anticipate and adjust... one reason the future of the market always seems a bit murky. |
Oil Price forcasting | In layman's terms, oil on the commodities market has a "spot price" and a "future price". The spot price is what the last guy paid to buy a barrel of oil right now (and thus a pretty good indicator of what you'll have to pay). The futures price is what the last guy paid for a "futures contract", where they agreed to buy a barrel of oil for $X at some point in the future. Futures contracts are a form of hedging; a futures contract is usually sold at a price somewhere between the current spot price and the true expected future spot price; the buyer saves money versus paying the spot price, while the seller still makes a profit. But, the buyer of a futures contract is basically betting that the spot price as of delivery will be higher, while the seller is betting it will be lower. Futures contracts are available for a wide variety of acceptable future dates, and form a curve when plotted on a graph that will trend in one direction or the other. Now, as Chad said, oil companies basically get their cut no matter what. Oil stocks are generally a good long-term bet. As far as the best short-term time to buy in to an oil stock, look for very short windows when the spot and near-future price of gasoline is trending downward but oil is still on the uptick. During those times, the oil companies are paying their existing (high) contracts for oil, but when the spot price is low it affects futures prices, which will affect the oil companies' margins. Day traders will see that, squawk "the sky is falling" and sell off, driving the price down temporarily. That's when you buy in. Pretty much the only other time an oil stock is a guaranteed win is when the entire market takes a swan dive and then bottoms out. Oil has such a built-in demand, for the foreseeable future, that regardless of how bad it gets you WILL make money on an oil stock. So, when the entire market's in a panic and everyone's heading for gold, T-debt etc, buy the major oil stocks across the spectrum. Even if one stock tanks, chances are really good that another company will see that and offer a buyout, jacking the bought company's stock (which you then sell and reinvest the cash into the buying company, which will have taken a hit on the news due to the huge drop in working capital). Of course, the one thing to watch for in the headlines is any news that renewables have become much more attractive than oil. You wait; in the next few decades some enterprising individual will invent a super-efficient solar cell that provides all the power a real, practical car will ever need, and that is simultaneously integrated into wind farms making oil/gas plants passe. When that happens oil will be a thing of the past. |
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. |
How do I account for 100 percent vendor discounts in GnuCash 2.6.5 | I am no expert on the situation nor do I pretend to act like one, but, as a business owner, allow me to give you my personal opinion. Option 3 is closest to what you want. Why? Well: This way, you have both the record of everything that was done, and also IRS can see exactly what happened. Another suggestion would be to ask the GnuCash maintainers and community directly. You can have a chat with them on their IRC channel #gnucash, send them an email, maybe find the answer in the documentation or wiki. Popular software apps usually have both support people and a helpful community, so if the above method is in any way inconvenient for you, you can give this one a try. Hope this helps! Robert |
What should I do with my $25k to invest as a 20 years old? | Investing is really about learning your own comfort level. You will make money and lose money. You will make mistakes but you will also learn a great deal. First off, invest in your own financial knowledge, this doesn't require capital at all but a commitment. No one will watch or care for your own money better than yourself. Read books, and follow some companies in a Google Finance virtual portfolio. Track how they're doing over time - you can do this as a virtual portfolio without actually spending or losing money. Have you ever invested before? What is your knowledge level? Investing long term is about trying to balance risk while reducing losses and trying not to get screwed along the way (by people). My personal advice: Go to an independent financial planner, go to one that charges you per hour only. Financial planners that don't charge you hourly get paid in commissions. They will be biased to sell you what puts the most money in their pockets. Do not go to the banks investment people, they are employed by the banks who have sales and quota requirements to have you invest and push their own investment vehicles like mutual funds. Take $15k to the financial planner and see what they suggest. Keep the other $5K in something slow and boring and $1k under your mattress in actual cash as an emergency. While you're young, compound interest is the magic that will make that $25k increase hand over fist in time. But you need to have it consistently make money. I'm young too and more risk tolerant because I have time. While I get older I can start to scale back my risk because I'm nearing retirement and preserve instead of try to make returns. |
Got a “personal” bonus from my boss. Do I have to pay taxes and if so, how do I go about that? | If you are in the US and a regular employee, this will have to show up on your year-end W2 form as income. If it doesn't, there is some funky accounting business going and you should probably consult a professional for advice. |
Should I invest my money in an ISA or Government bonds? (Or any other suggestion) | There are a number of UK banks that offer what passes for reasonable interest on an amount of cash held in their current accounts. I would suggest that you look into these. In the UK the first £1000 of bank or building society interest is paid tax-free for basic rate taxpayers (£500 for higher rate tax-payers) so if your interest income is below these levels then there is no point in investing in a cash ISA as the interest rate is often lower. At the moment Santander-123 bank account pays 1.5% on up to £20000 and Nationwide do 5% on up to £2500. A good source if information on the latest deals is Martin Lewis' Moneysaving Expert Website |
Roth IRA - Vanguard or Fidelity? If a college student had to pick one? | The minimum at Schwab to open an IRA is $1000. Why don't you check the two you listed to see what their minimum opening balance is? If you plan to go with ETFs, you want to ask them what their commission is for a minimum trade. In Is investing in an ETF generally your best option after establishing a Roth IRA? sheegaon points out that for the smaller investor, index mutual funds are cheaper than the ETFs, part due to commission, part the bid/ask spread. |
Can I trust the Motley Fool? | I would personally beware of the Motley Fool. Their success is based largely on their original investment strategy book. It had a lot of good advice in it, but it pushed a strategy called "The Foolish Four" which was an investing strategy. Since it was based on a buy-and-hold method with 18-month evaluation intervals, it was not a get-rich-quick scheme. However, its methods were validated through data mining and subsequently turned out to be not so good. At least they admit this: http://www.fool.com/ddow/2000/ddow001214.htm |
Trading : how to deal with crashes (small or big) | caveat: remember that complex derivatives can be very bad for your wealth (even if you FULLY understand them). |
Relation between inflation rates and interest rates | Possibly but not necessarily, though that can happen if one looks at the US interest rates in the late 1970s which did end with really high rates in the early 1980s. Generally interest rates are raised when inflation picks up as a way to bring down inflation. |
How should I report my RSUs in my tax return | Here's an article on it that might help: http://thefinancebuff.com/restricted-stock-units-rsu-sales-and.html One of the tricky things is that you probably have the value of the vested shares and withheld taxes already on your W-2. This confuses everyone including the IRS (they sent me one of those audits-by-mail one year, where the issue was they wanted to double-count stock compensation that was on both 1099-B and W-2; a quick letter explaining this and they were happy). The general idea is that when you first irrevocably own the stock (it vests) then that's income, because you're receiving something of value. So this goes on a W-2 and is taxed as income, not capital gains. Conceptually you've just spent however many dollars in income to buy stock, so that's your basis on the stock. For tax paid, if your employer withheld taxes, it should be included in your W-2. In that case you would not separately list it elsewhere. |
Should I purchase a whole life insurance policy? (I am close to retirement) | There's nothing new about Whole Life Insurance. The agent stands to earn a pretty hefty commission if he can sell it to you. I don't think your assets warrant using it for avoiding the taxes that would be due on a larger estate. I don't see a compelling reason to buy it. |
How much money are you actually trading with options? | You would have paid $880.00 plus commission in this case, and made $85 before commissions. How much you would have made on expiration depends on the price that TSLA has on April 1, which hasn't come yet. If it expires worthless, you typically don't pay a commission but you will have lost the full $880. If it expires in the money and you want to exercise it, then you would pay a commission (often different than the commission to buy/sell the option itself) and you would have 100 shares of TSLA. You won't know how much you make or lose in this case until you ultimately sell the shares of TSLA. |
Is there a debit card that earns miles (1 mile per $1 spent) and doesn't have an annual fee? | I don't know of any that are comparable to credit cards. There's a reason for that. Debit cards, being newer, have a much lower interchange rate. Since collecting on debt is risky and less predictable, rewards / miles are paid from those interchange fees. This means with a debit card there's less money to pay you with. So what can you do? Assuming your credit isn't terrible, you can just open a credit card account and pay in full for purchases by the grace period. I don't know how all cards work, but my grace period allows me to pay in full by the billing date (roughly a month from purchase) and incur no finance charges. In effect, I get a small 30 day loan with no interest, and a cash back incentive (I dislike miles). You're also less liable for fraud via CC than debit. |
Is it beneficial to my credit score if I close my youngest credit lines while preserving my current credit utilization rate? | Credit Score is rather misleading, each provider of credit uses their own system to decide if they wish to lend to you. They will also not tell you how the combine all the factoring together. Closing unused account is good, as it reduced the risk of identity theft and you have less paperwork to deal with. It looks good if a company that knows you will agrees to give you more credit, as clearly they think you are a good risk. Having more total credit allowed on account is bad, as you may use it and not be able to pay all your bills. Using all your credit is bad, as it looks like you are not in control. Using a “pay day lender” is VERY bad, as only people that are out of control do so. Credit cards should be used for short term credit paying them off in full most months, but it is OK to take advantage of some interest free credit. |
GAAP for items that you both sell and make? | First, please allow me to recommend that you do not try gimmickry when financials do give expected results. It's a sure path to disaster and illegality. The best route is to first check if accounts are being properly booked. If they are then there is most likely a problem with the business. Anything out of bounds yet properly booked is indeed the problem. Now, the reason why your results seem strange is because investments are being improperly booked as inventory; therefore, the current account is deviating badly from the industry mean. The dividing line for distinguishing between current and long term assets is one year; although, modern financial accounting theorists & regulators have tried to smudge that line, so standards do not always adhere to that line. Therefore, any seedlings for resale should be booked as inventory while those for potting as investment. It's been some time since I've looked at the standards closely, but this used to fall under "property, plant, & equipment". Generally, it is a "capital expenditure" by the oldest definition. It is not necessary to obsess over initial bookings because inventory turnover will quickly resolve itself, so a simple running or historical rate can be applied to the seedling purchases. The books will now appear more normal, and better subsequent strategic decisions can now be made. |
Why do companies have a fiscal year different from the calendar year? | I can think of a few good reasons: A company, especially public, usually wants their fourth-quarter earnings to be the strongest of the year. That ends each fiscal year on a high note for the company and its investors, which helps public sentiment and boosts stock prices. So, travel agencies and airlines usually like ending their year in October or March, in the lull between the summer and winter travel seasons with a large amount of that revenue falling within the company's fiscal Q4. Oil companies sometimes do the same because fuel prices are seasonal for much the same reasons. December is a really bad month to try to close out an entire year's accounting books. Accountants and execs are on vacation for large parts of the month, most retail stores are flooded with revenue (and then contra-revenue as items are returned) that takes time to account at the store level and then filter up to the corporate office, etc etc. It also doesn't tell the whole story for most retail outfits; December sales are usually inflated by purchases that are then returned in January after all the hullaballoo. As a result, a fiscal year end in January or even February keeps the entire season's revenues and expenses in one fiscal year. |
What is quotational loss in stock market? | Been a long while since I've read it but if I remember correctly with quotational loss Graham refers to an unjustified decline in stock price because of Mr. Market's fear and loathing where the business prospects of the company are actually still sound. This is opposed to "actual" loss of capital which he would consider to be a company going bankrupt or just more generally turning out to have way worse business prospects than expected with the justified decline in stock price that entails. |
How does remittance work? How does it differ from direct money transfer? | The Option 2 in your answer is how most of the money is moved cross border. It is called International Transfer, most of it carried out using the SWIFT network. This is expensive, at a minimum it costs in the range of USD 30 to USD 50. This becomes a expensive mechanism to transfer small sums of money that individuals are typically looking at. Over a period of years, the low value payments by individuals between certain pair of countries is quite high, example US-India, US-China, Middle-East-India, US-Mexico etc ... With the intention to reduce cost, Banks have built a different work-flow, this is the Option 1. This essentially works on getting money from multiple individuals in EUR. The aggregated sum is converted into INR, then transferred to partner Bank in India via Single SWIFT. Alongside the partner bank is also sent a file of instructions having the credit account. The Partner Bank in India will use the local clearing network [these days NEFT] to credit the funds to the Indian account. Option 3: Other methods include you writing a check in EUR and sending it over to a friend/relative in India to deposit this into Indian Account. Typically very nominal costs. Typically one month of timelines. Option 4: Another method would be to visit an Indian Bank and ask them to issue a "Rupee Draft/Bankers Check" payable in India. The charges for this would be higher than Option 3, less than Option 1. Mail this to friend/relative in India to deposit this into Indian Account. Typically couple of days timelines for transfer to happen. |
Why do people use mortgages, when they could just pay for the house in full? | Good question. If a person has a choice, it is probably better to pay cash. But not always. If your large pile of cash can earn more being invested than cost of the interest to borrow a similar large pile of cash, it is beneficial to get a mortgage. Otherwise pay cash. EXAMPLE: A house costs $100,000. I have $100,000 in extra money. I can invest that at 5% per year, and I can borrow an additional $100,000 at 2% per year. Since I can make more on my pile of cash than it costs to borrow another pile of cash, borrowing is better. Compound interest is the most powerful force on the planet according to Albert Einstein (maybe). That isn't likely for most people though. Here is the results from some online financial calculators. http://www.calcxml.com/do/hom03 Borrowing $100,000 with 2% interest for 30 years will cost a total of $148.662. You get $100,000, but it cost you $48,662 to do it. http://www.calcxml.com/do/sav07 Saving $100,000 in a bank account with an interest rate of %5 will be worth $432,194 in 30 years. By not spending the money you will earn $332,194 over the course of 30 years. So if you can invest at 5% and borrow at 2% you will end up with $283,532 more than if you didn't. It is a pretty extreme example, and financial advisers make a lot of money figuring out the complex nature of money to make situations like that possible. |
How much time would I have to spend trading to turn a profit? | Probably several years at least. Maybe more like ten years. You need to watch a market for a substantial period of time to make money consistently. If you hit it big before then, you beat the odds that were against you. |
Do my 401k/Roth accounts benefit from compounding? | You buy a share of something for $100. It goes up by 10% over a year, and you now have $110 in value. It goes up by 10% next year and you now have $121. That original $10 increase was compounded even though you're not earning interest because the gains are measured as a percentage. If, instead, you'd only invested the second year you'd have less value. Assuming the markets average a positive gain (above inflation) you see greater gains the earlier you're invested. |
Why don't banks give access to all your transaction activity? | One reason why they limit it is to protect you. If I hack your account, I get your entire financial history. I can see a copy of every check you ever wrote. I can see the account number with every doctor, utility, and credit card. I can also see the account information on the back of those checks for all your relatives who you sent $10 for their birthday. I can use the information in those accounts to see where you used to live, this allows me to spoof you when applying for new credit. If they ask if I ever lived on Main street in Anytown USA. I can confidently say yes. If I only let you download a window of time, the responsibility is on you to protect that data that is before the window. They protect it in file isolated from the internet, and finally only in archive locations. Some of the information doesn't exists in electronic form. Data from the 1990's and earlier may not exist in the form you want. They have been expanding the windows over time. I can see/download a pdf of my monthly statement going back 7 years. Of course that data can't go directly into quicken. Some places do let you get a file that goes back farther, but they charge you for it, and it can only be done by them sending you the file. That prevents you from downloading your entire history everyday. That times 70 Million customers would overwhelm their server and other infrastructure. Regarding the amount of data: |
New vending route business, not sure how to determine taxes | Actually, calculating taxes isn't that difficult. You will pay a percentage of your gross sales to state and local sales tax, and as a single-owner LLC your profits (after sales taxes) should pass through to your individual tax tax return (according to this IRS article. They are not cumulative since they have different bases (gross sales versus net profit). That said, when determining if your future business is profitable, you need to ask "what aspects of the business can I control"? Can you control how much each item sells for? Increasing your prices will increase your gross margins, which should be higher than your fixed and variable costs. If your margins do not exceed your costs, then you will note be profitable. Note that as a vendor you are at a slight disadvantage to a retailer, since tax has to be baked in to your prices. A retailer can advertise the pre-tax price, and pass-through sales tax at the point of sale. However, people expect to pay more at a vending machine, so the disadvantage is very small (you aren't directly competing with retailers anyways). |
Is Bogleheadism (index fund investing) dead? | I think you can do better than the straight indexes. For instance Vanguard's High Yield Tax Exempt Fund has made 4.19% over the past 5 years. The S&P 500 Index has lost -2.25% in the same period. I think good mutual funds will continue to outperform the markets because you have skilled managers taking care of your money. The index is just a bet on the whole market. That said, whatever you do, you should diversify. List of Vanguard Funds |
Is CFD a viable option for long-term trading? | Something really does seem seedy that if I invest $2500, that I'll make above 50k if the stock doubles. Is it really that easy? You only buy or sell on margin. Think of when the stock moves in the opposite direction. You will loose 50k. You probably didn't look into that. Investment will vanish and then you will have debt to repay. Holding for long term in CFD accounts are charged per day. Charges depends on different service providers. CFD isn't and should not be used for long term. It is primarily for trading in the short term, maybe a week at the maximum. Have a look at the wikipedia entry and educate yourself. |
Is threatening to close the account a good way to negotiate with the bank? | Take your business elsewhere, where the products and services are priced at a level you agree to pay. This does two things. First, you end a bad business relationship. Why bad? Because you're not happy with the deal. Second, it sends an unambiguous signal to the losing bank that you were unhappy with their service. If they offer an exit survey, complete it, and be sure to tell them what made you unhappy with their service. In a free market economy, if consumers all take their business where the terms are favorable, supply and demand would force the banks to compete for consumers' business. |
Are PINs always needed for paying with card? | For the first part of your question; Refer to related question Why do some online stores not ask for the 3-digit code on the back of my credit card? The other case of Airport ticket machines, requires the physical presence of card. The assumption is that if you had the card before and after the transaction, it was you who used it for transaction. As the amounts are small its really easy by anyone [merchant, Banks] to write this off. The only way to misuse would be if you lost the card and someone used it. Also these ticket machines would have built in feature where by you cannot buy more than "X" tickets for the day. Ensuring max loss on a stolen card is limited to a small amount. |
Home owners association for houses, pro/cons | As I understand it the basic premiss of a HOA is to ease communication between neighbors and help work towards common community goals. As I understand it the reality is that the HOA works to keep the community homogenous so there are no "sore thumb" neighbors. As to why look for one or avoid one. If you would want a uniform image out of your neighbors and don't mind towing the party line, then they are for you. If you don't care about what your neighbors do with their property (within civic ordinance) and would like freedom to do things different from your neighbors (paint your house blue, hang a clothes line, increase the size of your flower beds), then they are to be avoided. |
What are the differences between an investment mortgage and a personal mortgage? | It's just a guess, as I'm from the UK and am unfamiliar with the term "investment" mortgage but is it one where you are buying the property in order to rent it out, and make money from it, rather than to live in? In the UK we call those "buy to let" mortgages and one of the main differences is that you have to have a higher deposit to get that type. |
Can i have NRE accounts without OCI card? | No, you do not need an OCI card to continue to have an NRE or NRO account. You are now classified as a PIO -- Person of Indian Origin -- (and you don't need to have a PIO card issued by the Government of India to prove it) and are entitled to use NRE and NRO accounts just as you were when you were a NRI (NonResident Indian). But, you should inform the banks where you have NRE and NRO accounts that you have changed citizenship, and they may need to go through their KYC (Know Your Customer) process with you all over again. If you don't get an OCI Card, you will need to have an Indian visa stamped into your new US passport to visit India, and please do remember to send your Indian passport to the nearest Indian Consulate for cancellation. Keep the surrender certificate and cancelled passport in your safe deposit box forever; your grandchildren will need it to get visas to visit India. (My granddaughter just did). If you do get an OCI Card, you will need to have an OCI stamp put into your new US passport, and when you renew your US passport, you will need to get the new one stamped too (and pay the fee for that, of course). You cannot enter India with just an OCI Card and a US passport without the OCI stamp in it; that stamp is vital. If you move from one residential address in the US to another, you will need to get a new OCI Card issued because, unlike the US "green card", the OCI card has your residential address on it. Once again, a fee is involved. All these processes take many weeks because the whole paperwork has to go to the Ministry of External Affairs in New Delhi, and meanwhile, your passport is not available to you for a trip to Europe or Japan or Taiwan or China if you need to go there on business (or for pleasure). |
Is my employee stock purchase plan a risk free investment? | There would be small generic risk that the company stock goes down real fast by more than 15% in a specific event to the company [fraud, segment company operates suffers a shock, etc] or a generic event to the stock market like recent events of Greece etc. |
US Double Taxation - Business Trips and the Foreign Tax Credit | If you're a US citizen, money earned while in the US is sourced to the US. So you can't apply FTC/FEIE to the amounts attributable to the periods of your work while in the US even if it is a short business trip. Tax treaties may affect this. Most tax treaties have explicit provisions to exclude short trips from the sourcing rules, however due to the "saving clause" these would probably not apply to you if you're a US citizen - you'll need to read the relevant treaty. Your home country should allow credit for the US taxes paid on the US-sourced income, and the double-taxation avoidance provision should apply in this case. The technicalities depend on your specific country. You would probably not just remove it from the taxable income, there probably is a form similar to the US form 1116 to calculate the available credit. |
How is stock price determined? | You can interpret prices in any way you wish, but the commonly quoted "price" is the last price traded. If your broker routes those orders, unlikely because they will be considered "unfair" and will probably be busted by the exchange, the only way to drive the price to the heights & lows in your example is to have an overwhelming amount of quantity relative to the order book. Your orders will hit the opposing limit orders until your quantity is exhausted, starting from the best price to the worst price. This is the functional equivalent to a market order. |
What do I need to start trading in the NSE (National Stock Exchange)? | Yes, you can open a Trading Account at one place and a Demat Account at another place. Therefore you can open Trading Account at Sharekhan and Demat Account at OBC. However, it would be more convenient for you if both the accounts are opened at the same place which would reduce unnecessary work after every transaction. |
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) |
Investing in hemp producers in advance of possible legalization in Canada? | It is such a touchy subject for many people, I have to say that simple "set it and forget it" kind of investing isn't likely in the near term. Instead, if this is something you believe in, treat it like any other business opportunity and do some detailed research into people operating in the field. Look into their business plans and visit their operations. If there is a plan, and idea, a team and the intangible it you might consider doing some direct investing with a local company. Basically become a small business owner, silent partner or investor. If you believe in it go for it. If you don't believe in it that much, I think this is a market somebody else needs to develop before we invest. |
How did this day trader lose so much? | The day trader in the article was engaging in short selling. Short selling is a technique used to profit when a stock goes down. The investor borrows shares of a stock from someone else and sells them. After the stock price goes down, the investor buys the shares back and returns them, pocketing the difference. As the day trader in the article found out, it is a dangerous practice, because there is no limit to the amount of money you can lose. The stock was trading at $2, and the day trader thought the stock was going to go down to $1. He borrowed and sold 8,400 shares at $2. He hoped to buy them back at $1 and earn $8,400 profit. Instead, the stock went up a lot, and he was forced to buy back the shares at $18.50 per share, or about $155,400. He had had $37,000 with E-Trade, which they took, and he is now over $100,000 in debt. |
Cash flow implications of converting primary mortgaged residence to rental | The rental income is indeed taxable income, but you reduce the taxable portion of it by deducting expenses (including mortgage interest, maintenance, insurance, HOA, real estate tax, and of course depreciation). Due to the depreciation, you may end up breaking even, or having very little taxable income. Note that when you sell the property, your basis is reduced by the depreciation you were allowed to deduct (even if you haven't deducted it for whatever reason), and also the personal residence exclusion might no longer be applicable - i.e.: you'll have to pay capital gains tax. You will not be able to deduct a loss though if you sell now, so it may be better to depreciate it as a rental, rather then sell at a loss that won't affect your taxes. Also, consider the fact that the basis for the depreciation is not the basis you currently have in the property (because you're under water). You have to remember that when calculating the taxes. This is not a tax advice, and you should seek a professional help. |
Why are there many small banks and more banks in the U.S.? | First, is population density. You didn't say where exactly, but for example here in Tampa, Wells Fargo has 25 branches in the area (though that is a bit larger then what I would think of the Tampa area as a local) Second, we can mix in service expectation. I expect that in addition to "good" online service, "great" phone service, "great" email service, that when I have a problem, don't understand something, or want to talk about my options for investing or choosing account types, that I am able to go into a branch. That I can "walk in" and see someone quickly, or schedule an appointment and see some one right away (at my appointment time). Together, these two options means that on a busy day, the nearest Wells Fargo Branch to me has at any one time, 50 - 60 people in it. Smaller branches, of course have less, and larger branches exist. So it just takes that many branches to address the number of people and their expected needs. As to why there are so many different brands/banks Well that's just the USA. We believe in capitalism. We have believed in it much stronger in the past, but banks are the central to capitalism so why shouldn't they serve as an example. At it's core (a very simplistic look) Capitalism and a free market means that we as customers are better served by having lots of different brands fighting for our business. It should drive more consumer desired features (like lower prices, higher interest rates, better fee schedules, etc.) while forcing those brands to operate "better". (Just ignore the bail out, that's a loaded topic) So for some of us, we want a big bank like Wells Fargo, because we want the rates, structure, and service they can provide as a "big bank". For others they want the more personal touch of a "small bank". There are benefits both ways. For example there may be a bank that only allows people with excellent credit to open accounts. That allows they to have lower over all mortgage rates, but means their checking accounts have higher minimums. While the next bank may be more inclusive, and have smaller minimum balances, but as a result charge more for loans. We like our options, and rest assured all those "brands" offer products that have differences that attract customers. |
Will the stock market continue to grow forever? | The answer to your question depends on what you mean when you say "growth". If you mean a literal increase in the aggregate market capitalization of companies, across the entire market, then, no, this sort of growth is not possible without concomitant economic growth. The reason why is that the market capitalization of each company is proportional to its gross revenue, and the sum of all revenue from selling "final goods" (i.e., things purchased and used by consumers) is, apart from a few technicalities, the definition of GDP. The exact multiplier might fluctuate up or down depending on investors' expectations about how sales will grow or decline going forward, but in a zero-growth economy this multiplier should be stable over the long run. It might, however, still fluctuate over the short term, but more about that in a minute. Note that all of this applies to aggregate growth across all firms. Individual firms can still grow, of course, but as they must do this by gaining market share from other companies such growth would be balanced by a decline for some other firm. Also, I've assumed zero net exports (that's one of the "technicalities" I mentioned above) because obviously you could have export-driven growth even if the domestic economy were stationary. However, often when people talk about "growth" in the market, what they really mean is "return". That is, how much does your investment earn for you. This isn't really the same thing as growth, but people often think of it that way, particularly in the saving phase of their investing career, when they are reinvesting their returns, and therefore their account balances are growing. It is possible to have a positive return, averaged across the market, even in a stationary economy. The reason why is that there are really only two things a firm can do with its net profits. One possibility is that it could invest it in growing the business. However, there is not much point in doing that in a stationary economy because by assumption no increase in aggregate consumption (and therefore, in the long run, aggregate production) are possible. Therefore, firms are left with only the second option, which is to pay them out to investors as dividends. Those dividends provide a return that is independent of economic growth. Would the stock market still be a good investment in such an economy? Yes. Well, sort of. The rate of return from firms' dividend payouts will depend on investors' demand (in aggregate) for returns on their investments. Stock prices will rise or fall, causing returns to respectively fall or rise, to find that level. If your personal desire for returns is lower than the average across the investing public, then the stock market would look like a good investment. If your desired return is higher than the average, then it will look like a poor investment. The marginal investor will, of course be indifferent. The practical upshot of this is that the people who invest in the stock market in this scenario will be precisely the ones for whom the stock market is a good investment, given their personal propensity to save and desire for returns, and so forth. Finally, you mentioned that in your scenario the GDP stagnation is due to declining population. I am less certain what this means for investment, but my first thought is that you would have a large retired population selling its investments to fund late-life consumption, and you would have a comparatively small (relative to history) working population buying those assets. This would lead to low asset prices, and therefore high rates of return. However, that's assuming that retirees need to sell assets to fund their retirement consumption. If the absolute returns on retirees' assets are large enough to fund their retirement consumption then you would wind up with relatively few sellers, resulting in high prices and therefore relatively low rates of return. It's not obvious to me which effect would dominate, and so it's hard to say whether or not the resulting returns would look attractive to the working-age population. |
Is it possible to make money off of a private company? | Yes, but only if they're looking for investors. You would need to contact them directly. Unless you're looking to invest a significant sum, they may not be interested in speaking with you. (Think at least 6 figures, maybe 7 depending on their size and needs). This is otherwise known as being a Venture Capitalist. Some companies don't want additional investors because the capital isn't yet needed and they don't want to give up shares in the profit/control. Alternatively, you could try and figure out which investment groups already have a stake in the company you're interested in. If those companies are publicly traded, you could buy stocks for their company with the expectation that their stock price will increase if the company you know of does well in the long run. |
Do property taxes get deducted 100% from the Annual Tax Return or only a fraction of them? | In 2012, the standard deduction is $5950 for a single person. Let's assume you are very charitable, and by coincidence you donate exactly $5950 to charity. Everything that falls under itemized deductions would then be deductible. So, if your property tax is $6000, in your example - Other adjustments come into play, including an exemption of $3850, I am just showing the effect of the property tax. The bottom line is that deductions come off income, not off your tax bill. The saving from a deduction is $$ x your tax bracket. |
Using stock markets in Europe, how can I buy commodities / resources, to diversify my portfolio? | I recommend avoiding trading directly in commodities futures and options. If you're not prepared to learn a lot about how futures markets and trading works, it will be an experience fraught with pitfalls and lost money – and I am speaking from experience. Looking at stock-exchange listed products is a reasonable approach for an individual investor desiring added diversification for their portfolio. Still, exercise caution and know what you're buying. It's easy to access many commodity-based exchange-traded funds (ETFs) on North American stock exchanges. If you already have low-cost access to U.S. markets, consider this option – but be mindful of currency conversion costs, etc. Yet, there is also a European-based company, ETF Securities, headquartered in Jersey, Channel Islands, which offers many exchange-traded funds on European exchanges such as London and Frankfurt. ETF Securities started in 2003 by first offering a gold commodity exchange-traded fund. I also found the following: London Stock Exchange: Frequently Asked Questions about ETCs. The LSE ETC FAQ specifically mentions "ETF Securities" by name, and addresses questions such as how/where they are regulated, what happens to investments if "ETF Securities" were to go bankrupt, etc. I hope this helps, but please, do your own due diligence. |
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. |
Can There Be Partial Trade Fill Percentage? | I place a trade, a limit order on a thinly traded stock. I want to buy 1000 shares at $10. The current price is $10.50. Someone places a market order for 500 shares. Another trader has a limit order for $10.10 for 400 shares. His order fills, and I get 100 at my price. I wait another day to see if I get any more shares. This is just an example of how it can work. I can place my order as "all or none" if I wish to avoid this. |
Missing 401(k) dividends | Your investment is probably in a Collective Investment Trust. These are not mutual funds, and are not publicly traded. I.e. they are private to plan participants in your company. Because of this, they are not required* to distribute dividends like mutual funds. Instead, they will reinvest dividends automatically, increasing the value of the fund, rather than number of shares, as with dividend reinvestment. Sine you mention the S&P 500 fund you have tracks closely to the S&P Index, keep in mind there's two indexes you could be looking at: Without any new contributions, your fund should closely track the Total Return version for periods 3 months or longer, minus the expense ratio. If you are adding contributions to the fund, you can't just look at the start and end balances. The comparison is trickier and you'll need to use the Internal Rate of Return (look into the XIRR function in Excel/Google Sheets). *MFs are not strictly required to pay dividends, but are strongly tax-incentivized to do so, and essentially all do. |
Recent college grad. Down payment on a house or car? | Not long after college in my new job I bought a used car with payments, I have never done that since. I just don't like having a car payment. I have bought every car since then with cash. You should never borrow money to buy a car There are several things that come into play when buying a car. When you are shopping with cash you tend to be more conservative with your purchases look at this Study on Credit card purchases. A Dunn & Bradstreet study found that people spend 12-18% more when using credit cards than when using cash. And McDonald's found that the average transaction rose from $4.50 to $7.00 when customers used plastic instead of cash. I would bet you if you had $27,000 dollars cash in your hand you wouldn't buy that car. You'd find a better deal, and or a cheaper car. When you finance it, it just doesn't seem to hurt as bad. Even though it's worse because now you are paying interest. A new car is just insanity unless you have a high net worth, at least seven figures. Your $27,000 car in 5 years will be worth about $6500. That's like striking a match to $340 dollars a month, you can't afford to lose that much money. Pay Cash If you lose your job, get hurt, or any number of things that can cost you money or reduce your income, it's no problem with a paid for car. They don't repo paid for cars. You have so much more flexibility when you don't have payments. You mention you have 10k in cash, and a $2000 a month positive cash flow. I would find a deal on a 8000 - 9000 car I would not buy from a dealer*. Sell the car you have put that money with the positive cash flow and every other dime you can get at your student loans and any other debt you have, keep renting cheap keep the college lifestyle (broke) until you are completely out of debt. Then I would save for a house. Finally I would read this Dave Ramsey book, if I would have read this at your age, I would literally be a millionaire by now, I'm 37. *Don't buy from a dealer Find a private sale car that you can get a deal on, pay less than Kelly Blue Book. Pay a little money $50 - 75 to have an automotive technician to check it out for you and get a car fax, to make sure there are no major problems. I have worked in the automotive industry for 20 + years and you rarely get a good deal from a dealer. “Everything popular is wrong.” Oscar Wilde |
Who gets the periodic payments when an equity is sold on an repurchase agreement? | The Wikipedia page for Repurchase Agreement has two relevant pointers on this topic: The legal title for any securities used in a repo actually pass from seller to buyer during the term of the agreement. In basic terms this means that if one sells a bond on repo with a promise to buy it back, then the ownership actually transfers to the buyer for that period of time. If a coupon is paid during this time period, it can either go to the buyer or the seller. Usually, the coupon payment goes to the initial owner of the security pre-repo (our "seller"). But sometimes the repurchase agreement will specify otherwise. So, again in basic terms, usually the repo seller/initial security owner receives any payments made during the term of the repurchase agreement. (Both points are in the first paragraph of the section "Structure and Terminology".) |
If the put is more expensive than the call, what does it mean | It is a fool's errand to attribute abnormal option volume or volatility to any meaningful move in the stock. One side of the chain is frequently more expensive than the other. The relationship between historical volatility and implied volatility is dubious at best, and also a big area of study. |
US Bank placing a hold on funds from my paycheck deposit: Why does that make sense? | It is possible that they only do the hold on the first deposit from a given source. It is probably worth asking if they intend to do the hold on every paycheck or just the first one. |
Freelancer in India working for Swiss Company | I am a freelancer based in Europe and I want to tell you: - if you are a freelancer, then you INVOICE your Swizzerland based client The word salary is improper. - So your client will DEDUCE the invoice from its taxes, and NOT pay income tax on top of that invoice. Because invoice = expense. So, ONLY YOU pay income tax in India. Your client pays no tax at all, not in India, not in Swizzerland. As you are a freelancer and not employee, the company has no obligation to pay employer taxes for you. A company has financial benefits from working with a freelancer. |
What is street-side booking? | This is a technical term referring to the "double entry"-styled book keeping of trades by brokers. Suppose a client executes a buy order with their broker. The broker's accounting for this "trade" will be recorded as two different "deals" : One "deal" showing the client as buyer and the broker as seller, and a second "deal" showing the broker as buyer and the clearing house as seller. The net result of these two deals is that the broker has no net position while the client has a net buy and the clearing house has a net sell with respect to this broker's account as accounted for internally by the broker. (And the same methods apply for a client sell order.) The client/broker "deal" record - i.e., the client side of the trade - is called the "client side booking", while the broker/clearing house "deal" record is called the "street side booking". |
What happens if I just don't pay my student loans? | Collection agencies will eventually find you if you work for an employer that uses the credit bureaus for pre-employment screening, or you sign up for utilities or services that check your credit, or you enter into public record any other way (getting arrested, buying land, etc.). Such inquiries will put you on the grid where the collection agencies can find you and/or sue you. Two years out is about the point where they're looking for blood. The next time your friend applies for an apartment, utilities or cell phone service, she's going to get some calls. |
Ethics and investment | Avoiding tobacco, etc is fairly standard for a fund claiming ethical investing, though it varies. The hard one on your list is loans. You might want to check out Islamic mutual funds. Charging interest is against Sharia law. For example: http://www.saturna.com/amana/index.shtml From their about page: Our Funds favor companies with low price-to-earnings multiples, strong balance sheets, and proven businesses. They follow a value-oriented approach consistent with Islamic finance principles. Generally, these principles require that investors avoid interest and investments in businesses such as liquor, pornography, gambling, and banks. The Funds avoid bonds and other conventional fixed-income securities. So, it looks like it's got your list covered. (Not a recommendation, btw. I know nothing about Amana's performance.) Edit: A little more detail of their philosophy from Amana's growth fund page: Generally, Islamic principles require that investors share in profit and loss, that they receive no usury or interest, and that they do not invest in a business that is prohibited by Islamic principles. Some of the businesses not permitted are liquor, wine, casinos, pornography, insurance, gambling, pork processing, and interest-based banks or finance associations. The Growth Fund does not make any investments that pay interest. In accordance with Islamic principles, the Fund shall not purchase conventional bonds, debentures, or other interest-paying obligations of indebtedness. Islamic principles discourage speculation, and the Fund tends to hold investments for several years. |
Job Offer - Explain Stock Options [US] | There are a few other items that you should be aware of when getting options: The strike price is usually determined by an independent valuation of the common shares (called a 409a valuation). This should give you a sense on what the options are worth. Obviously you are hoping that the value becomes many multiple of that. There are two kinds in the US: Non-quals (NQO) and Incentive Stock Options (ISOs). The big difference is that when you exercise Non-quals, you have to pay the tax on the difference between the "fair" market value on the shares and what you paid for them (the strike price). This is important because if the company is private, you likely can not sell any shares until it is public. With ISOs, you don't pay any tax (except AMT tax) on the gain until you actually sell the shares. You should know what kind your getting. Some plans allow for early exercise, essentially allowing you to buy the shares early (and given back if you leave before they vest) which helps you establish capital gains treatment earlier as well as avoid AMT if you have ISOs. This is really complicated direction and you would want to talk to a tax professional. And always a good idea to know how many total shares outstanding in the Company. Very few people ask this question but it is helpful for you to understand the overall value of the options. |
I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment? | I had a coworker whose stock picking skills were clearly in the 1% level. I had a few hundred shares of EMC, bought at $10. When my coworker bought at $80, I quietly sold as it spiked to $100. It then crashed, as did many high tech stocks, and my friend sold his shares close to the $4 bottom advising that the company would go under. So I backed up the truck at $5, which for me, at the time, meant 1000 shares. This was one of nearly 50 trades I made over a good 10 year period. He was loud enough to hear throughout the office, and his trades, whether buy or sell, were 100% wrong. Individual stocks are very tough, as other posters have offered. That, combined with taking advice from those who probably had no business giving it. For the record, I am semi-retired. Not from stock picks, but from budgeting 20% of income to savings, and being indexed (S&P) with 90% of the funds. If there are options on your stock, you might sell calls for a few years, but that's a long term prospect. I'd sell and take my losses. Lesson learned. I hope. |
Pay cash for a home, get a reverse mortgage, and buy stock | I think you're missing a couple of things. First - why do you think its a reverse mortgage? More likely than not its a regular mortgage - home equity loan. If so, if they expect the stock market to rise significantly more than the amount of interest they pay on the loan - then its a totally sensible course of action. Second - the purchase in cash only to take out a loan later can definitely be a sensible way to do things. For example, if the seller wants to close fast, or if there are competing offers where not having a contingency is the tipping point. Another reason might be purchasing in an entity name (for example holding the title as an LLC), and in this case it is easier to get a loan if you already have the house, since the banks see the owner's actual commitment and not just promises. |
How should I pay off my private student loans that have a lot of restrictions? | It's definitely NOT a good idea to pay off one of the smaller loans in your case - a $4k payment split across all the loans would be better than repaying the 5% / $4k loan completely, as it's the most beneficial of your loans and thus is last priority for repayment. A payment that splits across all the loans equally is, in effect, a partial repayment on a loan with an interest rate of 6.82% (weighed average rate of all your loans). It's not as good as repaying a 7% loan, but almost as good. It might be an option to save up until you can repay one of your 7% loans, but it depends - if it takes a lot of time, then you would've paid unneccessary interest during that time. |
How can risk-reward relationship exist, since the losses due to the risk should offset the reward? | Risk in finance is defined as standard deviation of returns. This is a measure of size of your returns, both negative and positive. Since the mean return is positive (at least for the stock market and fixed income), if you double the standard deviation your mean return also doubles along with it. In this way you are compensated by the market for taking on more risk. |
Does Degiro charge per order or per transaction? | An order is not a transaction. It is a request to make a transaction. If the transaction never occurs (e.g. because you cancel the order), then no fees should be charged. will I get the stamp duty back (the 0.5% tax I paid on the shares purchase) when I sell the shares? I'm not a UK tax expert, but accorging to this page is seems like you only pay stamp tax when you buy shares, and don't get it back when you sell (but may be responsible for capital gains taxes). That makes sense, because there's always a buyer and a seller, so if you got the tax back when you sold, the tax would effectively be transferred from the buyer to the seller, and the government would never collect anything. |
Why is RSU tax basis based on remaining shares after shares are witheld? | You only got 75 shares, so your basis is the fair market value of the stock as of the grant date times the number of shares you got: $20*75. Functionally, it's the same thing as if your employer did this: As such, the basis in that stock is $1,500 ($20*75). The other 25 shares aren't yours and weren't ever yours, so they aren't part of your basis (for net issuance; if they were sell to cover, then the end result would be pretty similar, but there'd be another transaction involved, but we won't go there). To put it another way, suppose your employer paid you a $2000 bonus, leaving you with a $1500 check after tax withholding. Being a prudent person and not wishing to blow your bonus on luxury goods, you invest that $1500 in a well-researched investment. You wouldn't doubt that your cost basis in that investment at $1500. |
What is the principle of forming an arbitrage strategy? | Arbitrage is basically taking advantage of a difference in price. Generally extending to "in different places for the same thing". A monetary version would be interlisted stocks, that is stocks in companies that are on both the NYSE/Nasdaq and Toronto stock exchanges. If somebody comes along and buys a large number of shares in Toronto, that will tend to make the price go up - standard supply and demand. But if someone else can buy shares instead in NY, and then sell them in Toronto where the first person is buying up shares, where the price is higher, they the the arbitrageur (second person) can make pretty easy money. By its very nature, this tends to bring the prices back in line, as NY will then go up and Toronto will then go down (ignoring FX rates and the like for ease of explanation). The same can work for physical goods, although it does tend to get more complex with taxes, duties, and the like. |
Is there a legal deadline for when your bank/brokerage has to send your tax forms to you? | I can't find specific information for Form 1099-DIV for this tax year. However, I found this quote for next tax season that talks about Form 1099-B: Due date for certain statements sent to recipients. The due date for furnishing statements to recipients for Forms 1099-B, 1099-S, and 1099-MISC (if amounts are reported in box 8 or 14) is February 15, 2018. [emphasis added] I know many brokerages bundle the 1099-DIV with the 1099-B, so one might assume that the deadlines are the same. February 15 seems consistent with the messages I got from my brokerages that said the forms will be mailed by mid-February. |
How long should I keep my bills? | I'd imagine you want to keep the utility bills around to dispute any historical billing errors or anomalies for perhaps 6 months to a year. Beyond that, you always have the financial records of making the payments -- namely, your bank statements. So what benefit is there in keeping the paper receipts for utility payments around for longer than that? I say shred them, with extreme prejudice -- while wearing black Chuck Norris style. |
In a competitive market, why is movie theater popcorn expensive? | In my experience, there's usually only one or two theatres within a small city. Maybe a few more in larger cities, but those are also larger areas. So there really isn't much competition. Sure, there are other places to get popcorn, but not movie theatre popcorn. It won't be lathered with 4000 calories worth of tasty butter and salt. Even if you make it at home that can be difficult to accomplish (and then you have to invest the time to make it). Besides, when I go to the movies, I don't go just to see a movie. If I just want to see a movie I can watch it at home. The junk food they sell is part of the experience. Even then, people do smuggle their own food into theatres all the time - but it's hard to smuggle in a bag of popcorn, and again, ordinary popcorn just isn't the same. So, I think the answer boils down to: it's expensive because people are willing to pay for it. And they're willing to pay for it because it's not really available elsewhere at any better price, and it's part of what they come for. |
Class of shares specifically for retirement accounts with contribution limits | The fair price of a stock is the present value of its future payments. That means the stock you have described would have a "fair" value that is quite high and you wouldn't be able to put much of it in your 401(k) or IRA. The IRS requires that "fair value" be used for calculating the value of IRA and 401(k) assets. Of course, if the stock is not publicly traded, then there's not an obvious price for it. I'm sure in the past people have said they spent a small amount of money for assets that are actually worth much more in order to get around IRS limits. This is illegal. The IRS can and sometimes will prosecute people for this. In order to address abuses of the system by inclusion of hard to value assets in retirement accounts, the IRS has additional reporting requirements for these assets (nonpublic stock, partnerships, real estate, unusual options, etc.) and those reporting requirements became more stringent in 2015. In other words, they are trying to clamp down on it. There are also likely problems with prohibitions against "self-dealing" involved here, depending on the specifics of the situation you are describing. |
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