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Electric car lease or buy?
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Electric does make a difference when considering whether to lease or buy. The make/model is something to consider. The state you live in also makes a difference. If you are purchasing a small electric compliance car (like the Fiat 500e), leasing is almost always a better deal. These cars are often only available in certain states (California and Oregon), and the lease deals available are very enticing. For example, the Fiat 500e is often available at well under $100/mo in a three-year lease with $0 down, while purchasing it would cost far more ($30k, minus credits/rebates = $20k), even when considering the residual value. If you want to own a Tesla Model S, I recommend purchasing a used car -- the market is somewhat flooded with used Teslas because some owners like to upgrade to the latest and greatest features and take a pretty big loss on their "old" Tesla. You can save a lot of money on a pre-owned Model S with relatively low miles, and the battery packs have been holding up well. If you have your heart set on a new Model S, I would treat it like any other vehicle and do the comparison of lease vs buy. One thing to keep in mind that buying a Model S before the end of 2016 will grandfather you into the free supercharging for life, which makes the car more valuable in the future. Right now (2016/2017) there is a $7500 federal tax credit when buying an electric vehicle. If you lease, the leasing company gets the credit, not you. The cost of the lease should indirectly reflect this credit, however. Some states have additional incentives. California has a $2500 rebate, for example, that you can receive even if you lease the vehicle. To summarize: a small compliance car often has very good reasons to lease. An expensive luxury car like the Tesla can be looked at like any other lease vs buy decision, and buying a used Model S may save the most money.
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Are there common stock price trends related to employee option plans?
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Say I am an employee of Facebook and I will be able to sell stares at enough of a profit to pay of my mortgage and have enough money left to cover my living costs for many years. I also believe that there is a 95% chance that the stock price will go up in the next few years. Do I take a 5% risk, when I can transform my life without taking any risk? (The USA tax system as explained by JoeTaxpayer increases the risk.) So you have a person being very logical and selling stocks that they believe will go up in value by more than any other investment they could have. It is called risk control. (Lot of people will know the above; therefore some people will delay buying stock until Lock Up expiration day hoping the price will be lower on that day. So the price may not go down.)
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Intrinsic value of non-voting shares which don't pay dividends
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Some companies offer discounts for shareholders. I believe Disney used to do so, for example; if your family was doing the Disneyland-every-year routine that could be a significant benefit.
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Is gold really an investment or just a hedge against inflation?
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Gold is a commodity. It has a tracked price and can be bought and sold as such. In its physical form it represents something real of signifigant value that can be traded for currency or barted. A single pound of gold is worth about 27000 dollars. It is very valuable and it is easily transported as opposed to a car which loses value while you transport it. There are other metals that also hold value (Platinum, Silver, Copper, etc) as well as other commodities. Platinum has a higher Value to weight ratio than gold but there is less of a global quantity and the demand is not as high. A gold mine is an investement where you hope to take out more in gold than it cost to get it out. Just like any other business. High gold prices simply lower your break even point. TIPS protects you from inflation but does not protect you from devaluation. It also only pays the inflation rate recoginized by the Treasury. There are experts who believe that the fed has understated inflation. If these are correct then TIPS is not protecting its investors from inflation as promised. You can also think of treasury bonds as an investment in your government. Your return will be effectively determined by how they run their business of governing. If you believe that the government is doing the right things to help promote the economy then investing in their bonds will help them to be able to continue to do so. And if consumers buy the bonds then the treasury does not have to buy any more of its own.
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Why does the share price tend to fall if a company's profits decrease, yet remain positive?
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Aside from the market implications Victor and JB King mention, another possible reason is the dividends they pay. Usually, the dividends a company pays are dependent on the profit the company made. if a company makes less profit, the dividends turn out smaller. This might incite unrest among the shareholders, because this means that they get paid less dividends, which makes that share more likely to be sold, and thus for the price to fall.
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Optimal way for withdrawing vested company match from my 401k?
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You can borrow against a 401k for 5 years. This defers any penalty fees that the IRS mandates. Put the cash back in your 401k within those 5 years. you can also solo administer 401k plans even if you have an unincorporated business, so you can start one of those if you have any other form of cashflow, and there may be a way to get the other plan rolled into your solo one. http://www.irs.gov/publications/p560/ch04.html#en_US_publink10009053
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Is it better for a public company to increase its dividends, or institute a share buyback?
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I feel dividends are better for shareholders. The idea behind buy backs is that future profits are split between fewer shares, thereby increasing the value (not necessarily price -- that's a market function) of the remaining shares. This presupposes that the company then retires the shares it repurchases. But quite often buybacks simply offset dilution from stock option compensation programs. In my opinion, some stock option compensation is acceptable, but overuse of this becomes a form of wealth transfer -- from the shareholder to management. The opposite of shareholder friendly! But let's assume the shares are being retired. That's good, but at what cost? The company must use cashflow (cash) to pay for the shares. The buyback is only a positive for shareholders if the shares are undervalued. Managers can be very astute in their own sphere: running their business. Estimating a reasonable range of intrinsic value for their shares is a difficult, and very subjective task, requiring many assumptions about future revenue and margins. A few managers, like Warren Buffett, are very competent capital allocators. But most managers aren't that good in this area. And being so close to the company, they're often overly optimistic. So they end up overpaying. If a company's shares are worth, say, $30, it's not unreasonable to assume they may trade all around that number, maybe as low as $15, and as high as $50. This is overly simplistic, but assuming the value doesn't change -- that the company is in steady-state mode, then the $30 point, the intrinsic value estimate, will act as a magnet for the market price. Eventually it regresses toward the value point. Well, if management doesn't understand this, they could easily pay $50 for the repurchased stock (heck, companies routinely just continue buying stock, with no apparent regard for the price they're paying). This is one of the quickest ways to vaporize shareholder capital (overpaying for dubious acquisitions is another). Dividends, on the other hand, require no estimates. They can't mask other activities, other agendas. They don't transfer wealth from shareholders to management. US companies traditionally pay quarterly, and they try very hard not to cut the dividend. Many companies grow the dividend steadily, at a rate several times that of inflation. The dividend is an actual cash expenditure. There's no GAAP reporting constructs to get in the way of what's really going on. The company must be fiscally conservative and responsible, or risk not having the cash when they need to pay it out. The shareholder gets the cash, and can then reinvest as he/she sees fit with available opportunities at the time, including buying more shares of the company, if undervalued. But if overvalued, the money can be invested in a better, safer opportunity.
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Taxation of shares
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If you sell your shares for more than their value at the time you received them (i.e. you make a profit) then you will be liable for capital gains tax - but only if the profit exceeds your annual allowance (£11,100, in tax year 2015-16). This is unrelated to how you came by the shares in the first place. (Note that there are certain exemptions to this, which includes some employer share schemes.)
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Why are the banks and their customers in the United States still using checks? [duplicate]
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Because it makes money for all parties, and because the general public is reluctant to any change. Who should have an interest to change that? People. And they have no say in it. You can actually do a lot without paper checks nowadays (I only use one per year for car taxes, as they do not accept anything else), but many people shake their heads about even online banking and would never trust it.
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How to understand a volatility based ETF like VXX
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The VIX is a mathematical aggregate of the implied volatilities of the S&P 500 Index components. It itself cannot be traded as there currently is no way to only hold a position on an implied volatility alone. Implied volatility can only currently be derived from an option relative to its underlying. Further, the S&P 500 index itself cannot be traded only the attempts to replicate it. For assets that are not tradable, derivatives can be "cash settled" where the value of the underlying is delivered in cash. Cash settlement can be used for underlyings that in fact due trade but are frequently only elected if the underlying is costly to deliver or there is an incentive to circumvent regulation. Currently, only futures that settle on the value of the VIX at the time of delivery trade; in other words, VIX futures holders must deliver on the value of the VIX in cash upon settlement. Options in turn trade on those futures and in turn are also cash settled on the value of the underlying future at expiration. The VXX ETF holds one to two month VIX futures that it trades out of before delivery, so while it is impossible to know exactly what is held in the VXX accounts unless if one had information from an insider or the VXX published such details, one can assume that it holds VIX futures contracts no later than two settlements from the preset. It should be noted that the VXX does not track the VIX over the long run because of the cost to roll the futures and that the futures are more stable than the VIX, so it is a poor substitute for the VIX over time periods longer than one day. "Underlying" now implies any abstract from which a financial product derives its value.
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US Banks offering Security Tokens in 2012
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Bank of America "safe-pass" generates a code that is sent to your phone as a text message. Its an optional feature, this happens during log in, if you enter that code correctly, then you are taken to your more traditional login, which also features the weak (but widely heralded) two-factor authentication which shows a picture you chose and a password field. Some other banks do other things, but yes, your craigslist phone verification is generally more secure.
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When will the U.K. convert to the Euro as an official currency?
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When economies are strong, it is particularly alluring to have a single currency as it makes trade and tourism simpler and helps reduce costs. The problem comes when individual member economies get into trouble. Because the Eurozone is a loose grouping of nations, there is no direct equivalent of the US Federal government to coordinate a response, there is instead an odd mixture of National and Central government that makes it harder to get a unified approach to the economy (OK, it's maybe not so different to the US in reality). This lack of flexibility means that some of the key levers of international finance are compromised, for example a weak economy can't float its currency to improve exports. Similarly individual country's interest rates can't be adjusted to balance spending. I suspect the main reason though is political and based on concepts of sovereignty and national pride. The UK does the majority of its trade with the Eurozone, so the pros would possibly outweigh the cons, but the UK as a whole (and some of our papers in particular) have always regarded Europe with suspicion. Most Brits only speak English and find France and Germany a strange and obtuse place. The (almost) common language makes it easier to relate to the US and Canada than our near neighbours. It seems the perception amongst the political establishment is that any attempt to join the Euro is political suicide, while that is the case it is unlikely to happen. Purely from a personal perspective, I'd welcome the Euro except it means a lot of the products I routinely buy would become a lot more expensive if price is 'harmonised'. For an example compare the price of the iPod Touch in the UK (£209.99) to France(€299). The French pay £262 at the current exchange rate, which is close to 25% more. Ouch. See also my question about Canada adopting the US Dollar
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What exactly is a “derivative”?
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There are a few unsavory factors that have led to the creation of new derivatives:
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Are Forex traders forced to use leverage?
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No one is FORCED to use leverage. But most people do. Trading companies like it because, the more leverage, the more "business" (and total commissions). If someone starts with $1 million and leverages it up ten times to ten million, companies would rather do ten million of business than one. That's a given. On the other hand, if you're Warren Buffett or Bill Gates, and you say I want to do $1 billion of FX, no leverage, no trading company is going to turn it down. More often, it's a company like IBM or Exxon Mobil that wants to do FX, no leverage, because they just earned, say $1 billion Euros. Individuals USUALLY want to use more leverage in order to earn (or lose) more with their capital.
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Can I sell a stock immediately?
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If you place a market order, you are guaranteed to sell your stock unless the stock is in a trading halt. A market order does not guarantee the price you sell the stock at. If you place a market order, even if the stock is very illiquid a market maker will guarantee a market, but will not guarantee a price.
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What happens to all of the options when they expire?
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Firstly "Most option traders don't want to actually buy or sell the underlying stock." THIS IS COMPLETELY UTTERLY FALSE Perhaps the problem is that you are only familiar with the BUY side of options trading. On the sell side of options trading, an options desk engages in DELTA HEDGING. When we sell an option to a client. We will also buy an appropriate amount of underlying to match the delta position of the option. During the life time of the option. We will readjust our hedge position whenever the delta changes (those who follow Black Scholes will know that normally that comes from (underlying) price changes). However, we lose money on each underlying change (we have to cross the bid-ask spread for each trade). That is why we lose money when there is volatility. That is why we are said to be "short VEGA" or "short volatility". So one way to think about "buying" options, is that you are paying someone to execute a specific trading strategy. In general, those who sell options, are also happy to buy options back (at a discount of course, so we make a profit). But when doing so, we need to unroll our hedging position, and that again incurs a cost (to us, the bank). Finally. Since this is "money" stackexchange rather than finance. You are most likely referring to "warrants" rather than "options", which are listed on stock exchanges. The exchange in most regions give us very specific and restrictive regulations that we must abide by. One very common one is that we MUST always list a price which we are willing to buy the warrants back at (which may not be an unreasonable spread from the sell price). Since an Option is a synthetically created investment instrument, when we buy back the Option from the investor, we simply unwind the underlying hedging positions that we booked to synthesize the Options with. Source: I've worked 2 years on a warrant desk, as a desk developer.
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Retirement Options for Income
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I agree that you should CONSIDER a shares based dividend income SIPP, however unless you've done self executed trading before, enough to understand and be comfortable with it and know what you're getting into, I would strongly suggest that as you are now near retirement, you have to appreciate that as well as the usual risks associated with markets and their constituent stocks and shares going down as well as up, there is an additional risk that you will achieve sub optimal performance because you are new to the game. I took up self executed trading in 2008 (oh yes, what a great time to learn) and whilst I might have chosen a better time to get into it, and despite being quite successful over all, I have to say it's the hardest thing I've ever done! The biggest reason it'll be hard is emotionally, because this pension pot is all the money you've got to live off until you die right? So, even though you may choose safe quality stocks, when the world economy goes wrong it goes wrong, and your pension pot will still plummet, somewhat at least. Unless you "beat the market", something you should not expect to do if you haven't done it before, taking the rather abysmal FTSE100 as a benchmark (all quality stocks, right? LOL) from last Aprils highs to this months lows, and projecting that performance forwards to the end of March, assuming you get reasonable dividends and draw out £1000 per month, your pot could be worth £164K after one year. Where as with normal / stable / long term market performance (i.e. no horrible devaluation of the market) it could be worth £198K! Going forwards from those 2 hypothetical positions, assuming total market stability for the rest of your life and the same reasonable dividend payouts, this one year of devaluation at the start of your pensions life is enough to reduce the time your pension pot can afford to pay out £1000 per month from 36 years to 24 years. Even if every year after that devaluation is an extra 1% higher return it could still only improve to 30 years. Normally of course, any stocks and shares investment is a long term investment and long term the income should be good, but pensions usually diversify into less and less risky investments as they get close to maturity, holding a certain amount of cash and bonds as well, so in my view a SIPP with stocks and shares should be AT MOST just a part of your strategy, and if you can't watch your pension pot payout term shrink from 26 years to 24 years hold your nerve, then maybe a SIPP with stocks and shares should be a smaller part! When you're dependent on your SIPP for income a market crash could cause you to make bad decisions and lose even more income. All that said now, even with all the new taxes and loss of tax deductible costs, etc, I think your property idea might not be a bad one. It's just diversification at the end of the day, and that's rarely a bad thing. I really DON'T think you should consider it to be a magic bullet though, it's not impossible to get a 10% yield from a property, but usually you won't. I assume you've never done buy to let before, so I would encourage you to set up a spread sheet and model it carefully. If you are realistic then you should find that you have to find really REALLY exceptional properties to get that sort of return, and you won't find them all the time. When you do your spread sheet, make sure you take into account all the one off buying costs, build a ledger effectively, so that you can plot all your costs, income and on going balance, and then see what payouts your model can afford over a reasonable number of years (say 10). Take the sum of those payouts and compare them against the sum you put in to find the whole thing. You must include budget for periodic minor and less frequent larger renovations (your tenants WON'T respect your property like you would, I promise you), land lord insurance (don't omit it unless you maintain capability to access a decent reserve (at least 10-20K say, I mean it, it's happened to me, it cost me 10K once to fix up a place after the damage and negligence of a tenant, and it definitely could have been worse) but I don't really recommend you insuring yourself like this, and taking on the inherent risk), budget for plumber and electrician call out, or for appropriate schemes which include boiler maintenance, etc (basically more insurance). Also consider estate agent fees, which will be either finders fees and/or 10% management fees if you don't manage them yourself. If you manage it yourself, fine, but consider the possibility that at some point someone might have to do that for you... either temporarily or permanently. Budget for a couple of months of vacancy every couple of years is probably prudent. Don't forget you have to pay utilities and council tax when its vacant. For leaseholds don't forget ground rent. You can get a better return on investment by taking out a mortgage (because you make money out of the underlying ROI and the mortgage APR) (this is usually the only way you can approach 10% yield) but don't forget to include the cost of mortgage fees, valuation fees, legal fees, etc, every 2 years (or however long)... and repeat your model to make sure it is viable when interest rates go up a few percent.
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How can I check my credit score?
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Check with your bank. As of January, 2015, the following banks and credit unions are offering free credit-scores: Announced, in the pipeline: Source: Banks to offer FICO credit scores for free Personal Experience: I've been receiving free FICO score from my credit union for more than 6 months now. Advice: Most people have multiple bank/credit-union accounts. The FICO score will be the same whoever offers it. If none of your financial institutions offer you a free credit-score then you may opt for free services like creditkarma.com or other paid services. Please note that a credit-score is number summarizing your credit-report and should not be confused. In the news:
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Where can I find out details about the actual network on which SWIFT banking works?
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The SWIFT network is federated. The connection routing is via country server to regional servers. All these are maintained by SWIFT. The Banks have corresponded relationship with other banks. They play a role in actual settlement and take some risk. L/C is very risky business. It is expensive.
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Is Cash Value Life Insurance (“whole life” insurance) a good idea for my future?
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I have an answer and a few comments. Back to the basics: Insurance is purchased to provide protection in case of a loss. It sounds as though you are doing well, from a financial perspective. If you have $0 of financial obligations (loans, mortgages, credit cards, etc.) and you are comfortable with the amount that would be passed on to your heirs, then you DO NOT NEED LIFE INSURANCE. Life insurance is PROTECTION for your heirs so that they can pay off debts and pay for necessities, if you are the "bread-winner" and your assets won't be enough. That's all. Life insurance should never be viewed as an investment vehicle. Some policies allow you to invest in funds of your choosing, but the fees charged by the insurance company are usually high. Higher than you might find elsewhere. To answer your other question: I think NY Life is a great life insurance company. They are a mutual company, which is better in my opinion than a stock company because they are okay with holding extra capital. This means they are more likely to have the money to pay all of their claims in a specific period, which shows in their ratings: http://www.newyorklife.com/about/what-rating-agencies-say Whereas public companies will yield a lower return to their stock holders if they are just sitting on additional capital and not paying it back to their stock holders.
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What is a good service that will allow me to practice options trading with a pretend-money account?
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Try wallstreetsurvivor.com It gives you $100k of pretend money when you sign up, using which you can take various courses on the website. It will teach you how to buy/sell stocks and build your portfolio. I am not sure if they do have Options Trading specifically, but their course line up is great!
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Are stocks always able to be bought and sold at market price?
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For any large company, there's a lot of activity, and if you sell at "market" your buy or sell will execute in seconds within a penny or two of the real-time "market" price. I often sell at "limit" a few cents above market, and those sell within 20 minutes usually. For much smaller companies, obviously you are beholden to a buyer also wanting that stock, but those are not on major exchanges. You never see whose buy order you're selling into, that all happens behind the curtain so to speak.
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Can someone help me understand my student loans?
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First to actually answer the question "how long at these rates/payments?"- These is nothing magic or nefarious about what the bank is doing. They add accrued interest and take your payment off the new total. I'd make higher payments to the 8.75% debt until it's gone, $100/mo extra and be done. The first debt, if you bump it to $50 will be paid in 147 months, at $75/mo, 92 months. Everything you pay above the minimum goes right to the principal balance and gets you closer to paying it off. The debt snowball is not the ideal way to pay off your debt. Say I have one 24% credit card the bank was nice enough to give me a $20,000 line of credit on. I also have 20 cards each with $1000 in credit, all at 6%. The snowball dictates that the smallest debt be paid first, so while I pay the minimum on the 24% card, the 6% cards get paid off one by one, but I'm supposed to feel good about the process, as I reduce the number of cards every few months. The correct way to line up debt is to pay off the (tax adjusted) highest rate first, as an extra $100 to the 24% card saves you $2/mo vs 50 cents/mo for the 6% cards. I wrote an article discussing the Debt Snowball which links to a calculator where you can see the difference in methods. I note that if the difference from lowest to highest rate is small, the Snowball method will only cost you a small amount more. If, by coincidence, the balances are close, the difference will also be small. The above aside, it's the rest of your situation that will tell you the right path for you. For example, a matched 401(k) deposit should take priority over most debt repayment. The $11,000 might be better conserved for a house downpayment as that $66/mo is student loan and won't count as the housing debt, rather "other debt" and part of the higher ratio when qualifying for the mortgage. If you already have taken this into account, by all means, pay off the 8.75% debt asap, then start paying off the 3% faster. Keep in mind, this is likely the lowest rate debt one can have and once paid off, you can't withdraw it again. So it's important to consider the big picture first. (Are you depositing to a retirement account? Is it a 401(k) and are you getting any matching from the company?)
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Value of tokens bought at an older price
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You will make a profit in nominal dollars (or nominal units of whatever currency you used to buy the token). Whether you'll make a profit in real dollars depends on inflation, and in practice whether it would be possible to sell your existing tokens to someone else for the new price. Suppose when the price was 50 U (50 "units", since you didn't specify a currency), you bought one token. Today you can either spend 52 U for a token, and get a liter of milk, or you can spend your existing token (for which you paid 50 U) and get a liter of milk. It looks like you are making a profit of 2 U by spending your token. However, whether that profit is real or illusory depends on what else you could do with the token. For instance, suppose that, since the price of a token is now 52 U, you will have no trouble finding someone who wants to buy your token from you for 52 U. If you sell your token for 52 U, you'll still only be able to buy 1 L of milk. So if you measure your wealth in milk, you have made no profit: in the past you had a token representing 1 L of milk, and today you still have a token representing 1 L of milk. Suppose now that in the past, when a token cost 50 U, a hamburger also cost 50 U. Suppose further that a hamburger now costs 52 U. So you can sell your token for 52 U, but that 52 U will still only buy you one hamburger. So, again, if you measure your wealth in hamburgers, your have made no profit. In the past, you could have sold your token and bought a hamburger; today, you can still sell your token and buy a hamburger, and you'll have nothing left over, so you have gained nothing. If, on the other hand, the price of a hamburger today is still 50 U, then you call sell your token for 52 U, buy a hamburger for 50 U, and still have 2 U left over. You have made a profit. What this all goes to show is that, in practice, the idea of "profit" depends on the overall economy, and whether you could exchange the currency units you have in your possession for a greater quantity of goods than you could in the past. Whether this is possible depends on the relative changes in price of various goods. In other words, if you get your money by selling Product A, and later you buy Product B, you may or may not make a profit depending on how the prices of the two products moved relative to one another. Also, in your hypothetical setup, the "currency" (the token) is directly linked to the value of a single good, so you can always at least get 1 L of milk for your token. Most real currency is not bound to specific goods like your milk token, so it is possible for your currency to lose value in an absolute sense. For instance, suppose you sell a book for $5. The $5 is not a "book token" and you cannot rely on being able to exchange it for a book in the future; in the future, all books may cost $10, and the prices of all goods may rise similarly, so your currency will actually be worth less no matter how you try to use it. This could happen with the milk token if the milkman announces that henceforth 1 L of milk will cost 2 tokens; your existing token suddenly loses half its value. In sum, it is easy to calculate whether you made a profit in currency units. What is harder is to calculate whether you made a profit in "real terms" (often referred to as "real dollars" or "inflation-adjusted dollars", or the equivalent in your favorite currency). The reason this is hard is because the idea of "real dollars" is fundamentally linked to the possibility of exchanging currency for goods (and services), and so it depends what goods you're buying. Inflation statistics published by governments and the like use a "basket" of goods to approximate the overall price movements in the economy as a whole.
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How do I evaluate risk exposure to my U.K. bank in light of the possible collapse of the Euro or Eurozone economies?
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You could evaluate the risk exposure of your UK bank reading this post and this other old one. They basically say that UK bank exposure to Greece is less than 6 billions pounds (BOE data), so there is no reason to be worried now. The main issue of this crisis is not the Greek exit from the Euro on its own (it seems to be considered almost a fact by CITI, and by MS at 35% probability, Profumo ex CEO of UNICREDIT, says the possibility are more than 50%) – the main issue is that other countries like Italy and Spain might follow the same fate. If they do, the exposure of many foreign banks (including the UK ones) to their debts is not negligible (191,80 billions pounds for UK banks) moreover other EU banks (even the German ones) exposed to Italy and to Spain will suffer too, and this suffering will be translated into more suffering for UK banks exposed also to Germany and to France. That's why you read Euro doom articles like this one from Paul Krugman (who won a Nobel Memorial Prize in Economics.)
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If you own 1% of a company's stock, are you entitled to 1% of its assets?
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If you own 1% of a company, you are technically entitled to 1% of the current value and future profits of that company. However, you cannot, as you seem to imply, just decide at some point to take your ball and go home. You cannot call up the company and ask for 1% of their assets to be liquidated and given to you in cash. What the 1% stake in the company actually entitles you to is: 1% of total shareholder voting rights. Your "aye" or "nay" carries the weight of 1% of the total shareholder voting block. Doesn't sound like much, but when the average little guy has on the order of ten-millionths of a percentage point ownership of any big corporation, your one vote carries more weight than those of millions of single-share investors. 1% of future dividend payments made to shareholders. For every dollar the corporation makes in profits, and doesn't retain for future growth, you get a penny. Again, doesn't sound like much, but consider that the Simon property group, ranked #497 on the Fortune 500 list of the world's biggest companies by revenue, made $1.4 billion in profits last year. 1% of that, if the company divvied it all up, is $14 million. If you bought your 1% stake in March of 2009, you would have paid a paltry $83 million, and be earning roughly 16% on your initial investment annually just in dividends (to say nothing of the roughly 450% increase in stock price since that time, making the value of your holdings roughly $460 million; that does reduce your actual dividend yield to about 3% of holdings value). If this doesn't sound appealing, and you want out, you would sell your 1% stake. The price you would get for this total stake may or may not be 1% of the company's book value. This is for many reasons: Now, to answer your hypothetical: If Apple's stock, tomorrow, went from $420b market cap to zero, that would mean that the market unanimously thought, when they woke up tomorrow morning, that the company was all of a sudden absolutely worthless. In order to have this unanimous consent, the market must be thoroughly convinced, by looking at SEC filings of assets, liabilities and profits, listening to executive statements, etc that an investor wouldn't see even one penny returned of any cash investment made in this company's stock. That's impossible; the price of a share is based on what someone will pay to have it (or accept to be rid of it). Nobody ever just gives stock away for free on the trading floor, so even if they're selling 10 shares for a penny, they're selling it, and so the stock has a value ($0.001/share). We can say, however, that a fall to "effectively zero" is possible, because they've happened. Enron, for instance, lost half its share value in just one week in mid-October as the scope of the accounting scandal started becoming evident. That was just the steepest part of an 18-month fall from $90/share in August '00, to just $0.12/share as of its bankruptcy filing in Dec '01; a 99.87% loss of value. Now, this is an extreme example, but it illustrates what would be necessary to get a stock to go all the way to zero (if indeed it ever really could). Enron's stock wasn't delisted until a month and a half after Enron's bankruptcy filing, it was done based on NYSE listing rules (the stock had been trading at less than a dollar for 30 days), and was still traded "over the counter" on the Pink Sheets after that point. Enron didn't divest all its assets until 2006, and the company still exists (though its mission is now to sue other companies that had a hand in the fraud, get the money and turn it around to Enron creditors). I don't know when it stopped becoming a publicly-traded company (if indeed it ever did), but as I said, there is always someone willing to buy a bunch of really cheap shares to try and game the market (buying shares reduces the number available for sale, reducing supply, increasing price, making the investor a lot of money assuming he can offload them quickly enough).
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Investment property refinance following a low appraisal?
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The new payment on $172,500 3.5% 15yr would be $1233/mo compared to $1614/mo now (26 bi-weekly payments, but 12 months.) Assuming the difference is nearly all interest, the savings is closer to $285/mo than 381. Note, actual savings are different, the actual savings is based on the difference in interest over the year. Since the term will be changing, I'm looking at cash flow, which is the larger concern, in my opinion. $17,000/285 is 60 months. This is your break even time to payoff the $17000, higher actually since the $17K will be accruing interest. I didn't see any mention of closing costs or other expenses. Obviously, that has to be factored in as well. I think the trade off isn't worth it. As the other answers suggest, the rental is too close to break-even now. The cost of repairs on two houses is an issue. In my opinion, it's less about the expenses being huge than being random. You don't get billed $35/mo to paint the house. You wake up, see too many spots showing wear, and get a $3000 bill. Same for all high cost items, Roof, HVAC, etc. You are permitted to borrow 50% of your 401(k) balance, so you have $64K in the account. I don't know your age, this might be great or a bit low. I'd keep saving, not putting any extra toward either mortgage until I had an emergency fund that was more than sufficient. The fund needs to handle the unexpected expenses as well as the months of unemployment. In general, 6-9 months of these expenses is recommended. To be clear, there are times a 401(k) loan can make sense. I just don't see that it does now. (Disclaimer - when analyzing refis there are two approaches. The first is to look at interest saved. After all, interest is the expense, principal payments go right to your balance sheet. The second is purely cash flow, in which case one might justify a higher rate, and going from 15 to 30 years, but freeing up cash that can be better deployed. Even though the rate goes up say 1/2%, the payment drops due to the term. Take that savings and deposit to a matched 401(k) and the numbers may work out very well. I offer this to explain why the math above may not be consistent with other answers of mine.)
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Are prepayment penalties for mortgages normal?
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It's not uncommon to have a small penalty if you pre-pay the mortgage in a short time. After all, making the loan isn't free for the bank. But as Nathan says, if a bank is planning to try very hard to stop you from giving them money, there is probably a reason. Try to convince your wife: there is nothing inherently wrong with debt. Like anything, too much can be bad for you, but when debt is deployed wisely -- that is almost always, when it is used to finance a capital asset (an asset that produces value) -- it can be a very good thing.
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Settlement of Shares Underlying a Covered Call Option
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It's a covered call. When I want to create a covered call position, I don't need to wait before the stock transaction settles. I enter it as one trade, and they settle at different times.
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How do I evaluate a health insurance policy that covers a specific disease?
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These policies are usually called dread disease policies or critical illness insurance, and they normally aren't a good deal. Furthermore, with the passage of the Affordable Care Act, such policies may become less common or disappear entirely. These policies aren't a great deal because of the effects of adverse selection and asymmetric information, two closely related concepts in the economics of insurance. When you purchase an insurance policy, the insurance company charges you a premium based on your average risk level or the average risk level of your risk pool, e.g. you and your fellow employees, if you get insurance through your employer. For health insurance, this average risk level is the average probability that you'll incur healthcare costs. The insurer's actuaries calculate this probability from numerous factors, like your age, sex, current health, socioeconomic status, etc. Asymmetric information exists when you know more about this probability than the insurance company does. For example, you may look like a relatively low-risk individual on paper, but little does the insurance company know, BASE jumping is one of your hobbies. Because you know about your hobby and the insurance company doesn't, you secretly know that your risk of incurring healthcare expenses is much higher than the insurance company expects. If the insurance company knew this, they would like to charge you a much higher premium, if they could. However, they can't, because a) they don't know about your hobby, and b) the premium may be decided for the entire group/risk pool, so they can't increase it simply because a few individuals in the group have higher risk levels. Adverse selection occurs when individuals with higher risk levels are more likely to buy insurance. You may decide that because of your dangerous hobby, you do want to take advantage of your employer's healthcare plan. Unfortunately for the insurance company, they can't adjust their price accordingly. Adverse selection is a major factor in insurance markets, so I didn't go into much detail here (too much detail is probably off-topic anyway). I can point you towards more resources on the topic if you're interested. However, the situation is different when you purchase a dread disease policy. By expressing interest in such a specific policy, e.g. a cancer insurance policy, you signal to the insurance company that you feel you have a higher risk of facing that disease. In your case, you're signaling to the insurance company that your family probably has a history of cancer or that you have habits that make you more susceptible to it, and your premiums will be higher to compensate the insurance company for bearing this additional risk. Since the insurance company already has a rough estimate of your chances of developing that illness, they may already know that you have a higher chance of facing it. However, when you express interest in a disease-specific policy, this signals the existence of asymmetric information (your family history or other habits), and the insurer assumes you know something they don't that elevates your risk level of that specific disease. Since these policies are optional policies often sold as riders to existing policies, the insurance company has more flexibility in pricing them. They can charge you a higher premium because you've signaled to the insurer that you have a significantly above-average risk of contracting a specific disease*. Also, the insurer can do a much better job of estimating the expected costs of insuring you since they need only focus on data surrounding one disease. The policy will be priced accordingly, i.e. in such a way that isn't necessarily beneficial to you. Furthermore, most dread disease policies aren't guaranteed renewable, which means that even if you are willing to keep paying the premiums, the insurance company doesn't have to keep insuring you. As your risk of developing the specific disease grows, e.g. with age, it may pass the point where insuring you is no longer an acceptable risk. The company expects you to develop the illness with the next few renewal cycles, so they decide not to renew your policy. The end result? The insurance company has the premiums you've paid previously, but you no longer have coverage for that illness, and ex post, you've suffered a net loss with no reduction of risk for the foreseeable future. Dread disease policies are changing under the Affordable Care Act. According to healthcare.gov Starting in 2014, ... all new health insurance plans sold to individuals and small businesses, and plans purchased in the new Affordable Insurance Exchanges, must include a range of essential health benefits. The essential health benefits include quite a few areas of coverage; since this applies to policies offered on the state insurance exchanges and those offered outside of it, dread disease policies wouldn't seem to qualify. For more information, you can read the linked page on healthcare.gov or see Section 1302, subsection b), titled "Essential Health Benefits Requirements" in the law itself (p87). I imagine more details will be available on a state-by-state basis through 2014 and into 2015. One legal source (see the discussion on p24) states that: whatever else the ACA does with excepted benefit policies, including specific disease and fixed dollar indemnity policies, it does explicitly provide that such policies do not count as minimum essential coverage for purposes of the ACA This seems pretty straightforward; a dread disease (or "specific disease" policy, as it's referred to in the article), won't count towards the minimum essential requirements. This may not be an issue for you, but for others, it's important to understand that you'll still need to pay the penalty if you only purchase one of these policies. The ACA spells this out in Section 5000(f) (see p316, which states that "excepted benefit policies" are excluded and defines them using the definition in the Public Health Service Act (PHSA). **The PSHA specifically includes "Coverage only for a specified disease or illness" in their definition of "excepted benefit policies" (see section 2791(b), paragraph 3A on p82, so it's probably a safe bet that such policies won't count towards the minimum. Also, as Rick pointed out in the comments, the Affordable Care Act also forbids lifetime limits on most insurance plans, so assuming you find an insurance policy with adequate coverage for the specific disease you're worried about, such a plan should cover the related expenses without a lifetime limit. Deductibles, annual limits, and other factors may complicate this somewhat. In the section about lifetime limits (Sec. 2711, p2), the Affordable Care Act states that: A group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish ... lifetime limits on the dollar value of benefits for any participant or beneficiary. However, the law states in the next paragraph that the preceding statement should not be construed to prevent a group health plan or health insurance coverage from placing annual or lifetime per beneficiary limits on specific covered benefits that are not essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act, to the extent that such limits are otherwise permitted under Federal or State law The section also contains similarly vague caveats about annual limits, so the actual details and limits may vary once individual states finalize their policies. The law is intentionally vague because the vast majority of the law's implementation is left up to individual states. Furthermore, certain parts of the law specify actions involving the Secretary of Health and Human Services, so these may require further codification in the future too. You should still read the fine print of any insurance policy you buy and evaluate it as you would any contract (see the next section). Since a dread disease policy probably isn't a good idea, you'll probably want to evaluate the healthcare plans offered by your employer or individual plans offered in your area (if your employer doesn't offer coverage). I've tried to include the basic points offered in these articles to give you or future visitors some idea of where to start. These points may change once the Affordable Care Act is implemented, so I'll try to keep them as general as possible. Services - Above and beyond the minimum essential requirements, what services does the plan offer? Are these services a good match for you and/or your family, or do they add unnecessary cost to the premium with little or no benefit? For example, my health insurance plan offers basic dental coverage with a small co-pay, so I don't need a separate dental plan, even though my employer offers one. Choice - What doctors, clinics, hospitals, etc. are preferred providers under your plan? Do you need a referral from your primary care doctor to see a specialist, or can you find one on your own? Are the preferred providers convenient for you? In my first year of college (about five years ago), my student health insurance only covered a few hospitals that were in the suburbs and somewhat difficult for me to reach. This is something to keep in mind, depending on where you live. Costs - This is a major one, obviously. Deductibles, copays, maximum cost limits over a year or your lifetime, out-of-network costs, etc. are all variables to consider. There are other factors, but since I don't have a family, other members of the site can provide more detailed information about what to look for in family policies. In place of a dread disease policy, you're likely better off purchasing a comprehensive health insurance policy, perhaps a catastrophic coverage policy with a high deductible that will kick in once you've exhausted your standard insurance policy. However, this may be a moot point since the passage of the Affordable Care Act may significantly reduce the availability of such policies anyway.
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Are stories of turning a few thousands into millions by trading stocks real?
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10k in taser stock at $1.00 per share made those who held into the hundreds per share made millions. But think about the likelihood of you owning a $1 stock and holding it past $10.00. They (taser millionaires) were both crazy and lucky. A direct answer, better off buying a lottery ticket. Stocks are for growing wealth not gaining wealth imho. Of course there are outliers though. To the point in the other answer, if it was repeatable the people teaching the tricks (if they worked) would make much more if they followed their own advice if it worked. Also, if everyone tells you how good gold is to buy that just means they are selling to get out. If it was that good they would be buying and not saying anything about it.
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How are option contracts enforced?
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By their agreements with the central counterparty - in the US, the exchange or the Options Clearing Corporation, which interposes itself between the counterparties of each trade and guarantees that they settle. From the CCP article: A clearing house stands between two clearing firms (also known as member firms or participants). Its purpose is to reduce the risk a member firm failing to honor its trade settlement obligations. A CCP reduces the settlement risks by netting offsetting transactions between multiple counterparties, by requiring collateral deposits (also called "margin deposits"), by providing independent valuation of trades and collateral, by monitoring the credit worthiness of the member firms, and in many cases, by providing a guarantee fund that can be used to cover losses that exceed a defaulting member's collateral on deposit. Exercisers on most contracts are matched against random writers during the assignment process, and if the writer doesn't deliver/buy the stock, the OCC does so using its funds and goes after the defaulting party.
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How credible is Stansberry's video “End of America”?
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I listened to about 15 minutes of the video, but then I read your other link, which gives a much better summary. This guy is an idiot. Just consider this statement: "If everyone was taxed at 100%, it wouldn't be enough to balance the federal budget." This is true to some extent. It wouldn't be enough to balance the federal budget in one year. Experts often cite things like debt to GDP to show that a country's debt is ballooning, but they don't mention this obvious fact: We don't have to pay off our debts in a single year. Nobody does. Debt to GDP is a ratio and not the end all be all. Reinhart & Rogoff wrote a paper about how countries with high debt to GDP tend to have slower economic growth, but they don't mention that this occurs at every stage of debt growth. See Debt & Delusion by Dr. Robert Shiller for a great article on this subject. The daily kos article goes over most of the points I would make, but let me generalize a little: Always be wary of doomsday-predictors and free advice. This guy talks about correctly calling Fannie and Freddie. Even if he's right, why is he mentioning it? If he's such a good accountant and financial expert, surely he could've seen the tech bubble before the housing bubble right? It took a lot of analysis to figure out that CDO's were junk - anybody with the ability to read a balance sheet could see that many tech companies were overvalued. Every now and then, you get one hit wonders. They might never be right again, but they have the "credentials." If these people were really that good, they wouldn't be selling investment newsletters. They'd be applying their strategies and getting rich. Buffett has been getting rich for over 50 years, and he's not publishing newsletters with "secret, genius" strategies. He's made it pretty clear what his philosophy is, and anyone who follows it patiently will make money. Stransberry's argument only makes sense if you agree with the assumptions. The US will implode if nobody accepts our money. Nobody will accept our money if we're no longer the reserve currency or hyperinflation occurs or something like that. People have been predicting doom after every bubble, but that doesn't make it true. Some of his points (like the fact that we have too much debt) are valid, and I predict that the world will go into a period of deleveraging now. Nonetheless, the whole "we will implode" story is a scary picture, but it's just that - a picture.
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How would one follow the “smart money” when people use that term?
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Smart money (Merriam-Webster, Wiktionary) is simply a term that refers to the money that successful investors invest. It can also refer to the successful investors themselves. When someone tells you to "follow the smart money," they are generally telling you to invest in the same things that successful investors invest in. For example, you might decide to invest in the same things that Warren Buffett invests in. However, there are a couple of problems with blindly following someone else's investments without knowing what you are doing. First, you are not in the same situation that the expert is in. Warren Buffett has a lot of money in a lot of places. He can afford to take some chances that you might not be able to take. So if you choose only one of his investments to copy, and it ends up being a loser, he is fine, but you are not. Second, when Warren Buffett makes large investments, he affects the price of stocks. For example, Warren Buffett's company recently purchased $1 Billion worth of Apple stock. As soon as this purchase was announced, the price of Apple stock went up 4% from people purchasing the stock trying to follow Warren Buffett. That having been said, it is a good idea to watch successful investors and learn from what they do. If they see a stock as something worth investing in, find out what it is that they see in that company.
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Having a separate bank account for business/investing, but not a “business account?”
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You don't specify which country you are in, so my answers are more from a best practice view than a legal view.. I don't intend on using it for personal use, but I mean it's just as possible. This is a dangerous proposition.. You shouldn't co-mingle business expenses with personal expenses. If there is a chance this will happen, then stop, make it so that it won't happen. The big danger is in being able to have traceability between what you are doing for the business, and what you are doing for yourself. If you are using this as a "staging" account for investments, etc., are those investments for yourself? Or for the business? Is tax treatment on capital gains and/or dividends the same for personal and business in your jurisdiction? If you buy a widget, is the widget an expense against business income? Or is it an out of pocket expense for personal consumption? The former reduces your taxable income, the latter does not. I don't see the benefit of a real business account because those have features specific to maybe corporations, LLC, and etc. -- nothing beneficial to a sole proprietor who has no reports/employees. The real benefit is that there is a clear delineation between business income/expenses and personal income/expenses. This account can also accept money and hold it from business transactions/sales, and possibly transfer some to the personal account if there's no need for reinvesting said amount/percentage. What you are looking for is a commonly called a current account, because it is used for current expenses. If you are moving money out of the account to your personal account, that speaks to paying yourself, which has other implications as well. The safest/cleanest way to do this is to: While this may sound like overkill, it is the only way to guarantee that income/expenses are allocated to the correct entity (i.e. you, or your business). From a Canadian standpoint:
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Why do grocery stores in the U.S. offer cash back so eagerly?
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It doesn't cost them anything, they don't pay commission on you taking cash-back. But it brings customers to the stores because these customers would rather buy something and use cash-back to get cash, than go to an ATM and pay the ATM commission.
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401k compound interest vs other compound interest
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A 401K (pre-tax or Roth) account or an IRA (Deductible or Roth) account is a retirement account. Which means you delay paying taxes now on your deposits, or you avoid paying taxes on your earnings later. But a retirement account doesn't perform any different than any other account year-to-year. Being a retirement account doesn't dictate a type of investment. You can invest in a certificate of deposit that is guaranteed to make x% this year; or you can invest in stocks, bonds, mutual funds that infest in stocks or bonds. Those stocks and bonds can be growth focused, or income focused; they can be from large companies or small companies; US companies or international companies. Or whatever mix you want. The graph in your question shows that if you invest early in your adulthood, and keep investing, and you make the average return you should make more money than starting later. But a couple of notes: So to your exact questions: An S&P 500 investment should perform exactly the same this year if it is in a 401K, IRA, or taxable account With a few exceptions: Yes any investment can lose money. The last 6 months have been volatile and the last month and a half especially so. A retirement account isn't any different. An investment in mutual fund X in a retirement account is just as depressed a one in the same fund but from a taxable account.
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Capital Gains Tax with Multiple 'buy' Transactions per Stock (U.S.)
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From 26 CFR 1.1012(c)(1)i): ... if a taxpayer sells or transfers shares of stock in a corporation that the taxpayer purchased or acquired on different dates or at different prices and the taxpayer does not adequately identify the lot from which the stock is sold or transferred, the stock sold or transferred is charged against the earliest lot the taxpayer purchased or acquired to determine the basis and holding period of the stock. From 26 CFR 1.1012(c)(3): (i) Where the stock is left in the custody of a broker or other agent, an adequate identification is made if— (a) At the time of the sale or transfer, the taxpayer specifies to such broker or other agent having custody of the stock the particular stock to be sold or transferred, and ... So if you don't specify, the first share bought (for $100) is the one sold, and you have a capital gain of $800. But you can specify to the broker if you would rather sell the stock bought later (and thus have a lower gain). This can either be done for the individual sale (no later than the settlement date of the trade), or via standing order: 26 CFR 1.1012(c)(8) ... A standing order or instruction for the specific identification of stock is treated as an adequate identification made at the time of sale, transfer, delivery, or distribution.
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Are there any Social Responsibility Index funds or ETFs?
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TIAA-Cref has their Social Choice Equity Fund, which is a Large Blend primarily equity fund that invests given the following consideration: The Fund primarily invests in companies that are screened by MSCI Inc. (“MSCI”) to favor companies that meet or exceed certain environmental, social and governance (“ESG”) criteria. The Fund does this by investing in U.S. companies included in one or more MSCI ESG Indices that meet or exceed the screening criteria described below. Prior to being eligible for inclusion in the MSCI ESG Indices, companies are subject to an ESG performance evaluation conducted by MSCI, consisting of numerous factors. The ESG evaluation process favors companies that are: (i) strong stewards of the environment; (ii) devoted to serving local communities where they operate and to human rights and philanthropy; (iii) committed to higher labor standards for their own employees and those in the supply chain; (iv) dedicated to producing high-quality and safe products; and (v) managed in an exemplary and ethical manner. https://www.tiaa.org/public/offer/products/mutual-funds/responsible-investing
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How does a brokerage firm work?
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The brokerage executes the transactions you tell them to make on your behalf. Other than acting as your agent for those, and maintaining your account, and charging a fee for the service, they have no involvement -- they do not attempt to predict optimal anything, or hold any assets themselves.
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Where can I find accurate historical distribution data for mutual funds?
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In the case of a specific fund, I'd be tempted to get get an annual report that would disclose distribution data going back up to 5 years. The "View prospectus and reports" would be the link on the site to note and use that to get to the PDF of the report to get the data that was filed with the SEC as that is likely what matters more here. Don't forget that mutual fund distributions can be a mix of dividends, bond interest, short-term and long-term capital gains and thus aren't quite as simple as stock dividends to consider here.
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Best buying price on stock marketing based on market depth detail (CSE atrad tool)
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If you are buying your order will be placed in Bid list. If you are selling your order will be placed in the Ask list. The highest Bid price will be placed at the top of the Bid list and the lowest Ask price will be placed at the top of the Ask list. When a Bid and Ask price are matched a transaction will take place and it will the last traded price. If you are looking to buy at a lower price, say $155.01, your Bid price will be placed 3rd in the Bid list, and unless the Ask prices fall to that level, your order will remain in the list until it trades, it expires or you cancel it. If prices don't fall to you Bid price you will not get a trade. If you wanted your trade to go through you could either place a limit buy order closer to the lowest Ask price (however this is still not a certainty), or to be certain place a market buy order which will trade at the lowest Ask price.
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Can stock brokerage firms fail?
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Yes, the entire financial system is based on trust. As we have seen repeatedly, even the ratings agencies can be wrong and in collusion. You need to understand what products have any insurance/contingency/recourse if things don't go as planned. A lot of people were surprised when they found out SIPC didn't ensure futures when MF Global declared bankruptcy last fall.
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Is my stock gone forever from a reverse split / bought by another company?
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You can't own fractional shares. If the Reverse Split resulted in you having less a full share (for example, if you had 500 shares, and they did a 1000:1 reverse split), your fractional share was cashed in (sold). That could be that 'money market' activity shown on the next day? It is your responsibility to be prepared for a reverse split, by either selling at your desired price, or buying more shares, so you end with an integer number of shares after the reverse split.
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I'm 23 and was given $50k. What should I do?
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First of all, I am sorry for your loss. At this time, worrying about money is probably the least of your concerns. It might be tempting to try to pay off all your debts at once, and while that would be satisfying, it would be a poor investment of your inheritance. When you have debt, you have to think about how much that debt is costing you to keep open. Since you have 0%APR on your student loan, it does not make sense to pay any more than the minimum payments. You may want to look into getting a personal loan to pay off your other personal debts. The interest rates for a loan will probably be much less than what you are paying currently. This will allow you to put a payment plan together that is affordable. You can also use your inheritance as collateral for the loan. Getting a loan will most likely give you a better credit rating as well. You may also be tempted to get a brand new sports car, but that would also not be a good idea at all. You should shop for a vehicle based on your current income, and not your savings. I believe you can get the same rates for an auto loan for a car up to 3 years old as a brand new car. It would be worth your while to shop for a quality used car from a reputable dealer. If it is a certified used car, you can usually carry the rest of the new car warranty. The biggest return on investment you have now is your employer sponsored 401(k) account. Find out how long it takes for you to become fully vested. Being vested means that you can leave your job and keep all of your employer contributions. If possible, max out, or at least contribute as much as you can afford to that fund to get employee matching. You should also stick with your job until you become fully vested. The money you have in retirement accounts does you no good when you are young. There is a significant penalty for early withdrawal, and that age is currently 59 1/2. Doing the math, it would be around 2052 when you would be able to have access to that money. You should hold onto a certain amount of your money and keep it in a higher interest rate savings account, or a money market account. You say that your living situation will change in the next year as well. Take full advantage of living as cheaply as you can. Don't make any unnecessary purchases, try to brown bag it to lunch instead of eating out, etc. Save as much as you can and put it into a savings account. You can use that money to put a down payment on a house, or for the security and first month's rent. Try not to spend any money from your savings, and try to support yourself as best as you can from your income. Make a budget for yourself and figure out how much you can spend every month. Don't factor in your savings into it. Your savings should be treated as an emergency fund. Since you have just completed school, and this is your first big job out of college, your income will most likely improve with time. It might make sense to job hop a few times to find the right position. You are much more likely to get a higher salary by changing jobs and employers than you are staying in the same one for your entire career. This generally is true, even if you are promoted at the by the same employer. If you do leave your current job, you would lose what your employer contributed if you are not vested. Even if that happened, you would still keep the portion that you contributed.
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What does inflation mean to me?
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It means that your money does not have the same amount of buying power.
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Why big clients want the contractor to be incorporated before giving them work
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They believe that it reduces the risk that Revenue Canada will deem you to be an employee and make them pay a whole pile of tax, EI, CPP and so on that should have been paid if you had been hired as an employee. It's my recollection that the employer gets dinged for both the employee and employer share of those withholdings (and generally the employer's share is larger than yours) so they really want to prevent it. There's a Revenue Canada publication about whether you're an employee or not. There's nothing on it about being incorporated, but still employers feel more protected when their contracts are incorporated. We did work as a sole proprietorship at the very beginning, so that we could deduct our losses against employment income earned earlier in the year, before we started the business. You can find clients who will take you on. We incorporated once the losses were over with (basically we had bought the equipment and office supplies we needed to get started.) It's a simple and relatively inexpensive thing to do, and gives clients a sense of protection. It won't protect you from your own poor decisions since you'll be a director of the firm.
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How can I save money on a gym / fitness membership? New Year's Resolution is to get in shape - but on the cheap!
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Look for discounts from a health insurance provider, price club, professional memberships or credit cards. That goes for a lot of things besides health memberships. My wife is in a professional woman's association for networking at work. A side benefit is an affiliate network they offer for discounts of lots of things, including gym memberships.
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What evidence or research suggests that mid- or small-capitalization stocks should perform better than large caps?
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From Dimson, Elroy, Paul Marsh, and Mike Staunton. Triumph of the Optimists: 101 Years of Global Investment Returns. Princeton, N.J: Princeton University Press, 2002: Disappointingly, the small firm effect has not proved the road to great riches since soon after its discovery, the US size premium went into reverse. This was repeated in the United Kingdom and virtually all other markets around the world. Despite their disappointing performance in recent years, the very long-run record of small-caps remains one of outperformance in both the United States and the United Kingdom. Furthermore, mid- and small-size companies are still an important asset class. Their differential performance over long periods of history shows that there is useful scope for investors to reduce risk by diversifying across the “large” and the “small” capitalization sectors of the market. Furthermore, given the pervasiveness of the size effect across the entire size spectrum, it is important to all investors since the size tilt of any portfolio will strongly influence its short- and long-run performance. This holds true whether there is a size premium or a size discount. The size effect has certainly proved persistent and robust. What is at issue is whether we should continue to expect a size premium over the longer haul. And accompanying charts: And one chart from BlackRock:
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Pay off credit cards in one lump sum, or spread over a few months?
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Should I allow the credit cards to be paid out of escrow in one lump sum? Or should I take the cash and pay the cards down over a few months. I have heard that it is better for your credit score to pay them down over time. Will it make much of a difference? Will the money you save by increasing your credit score (assuming this statement is true) be larger than by eliminating the interest payments for the credit card payments over "a few months" (13% APR at $24,000 is $3120 a year in interest; $260 a month, so if "a few months" is three, that would cost over $700 - note that as you pay more principal the overall amount of interest decreases, so the "a year" in interest could go down depending on the principal payments). Also, on a related note regarding credit score, it doesn't look good to have more than a third of a credit line available balance exceeded (see number 2 here: http://credit.about.com/od/buildingcredit/tp/building-good-credit.htm).
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If a put seller closes early, what happens to the buyer?
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The original option writer (seller) can close his short position in the contracts he wrote by purchasing back matching contracts (i.e. contracts with the same terms: underlying, option type, strike price, expiration date) from any others who hold long positions, or else who write new matching contract instances. Rather than buyer and seller settling directly, options are settled through a central options clearing house, being the Options Clearing Corporation for exchange-listed options in the U.S. See also Wikipedia - Clearing house (finance). So, the original buyer of the put maintains his position (insurance) and the clearing process ensures he is matched up with somebody else holding a matching obligation, if he chooses to exercise his put. I also answered a similar question but in more detail, here.
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Economics Books
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i'm absolutely a newcomer in economics and i wish to understand how things work around finance. This is a pretty loaded question. To understand finance, you need the basics of economics. In almost every economics school in the country, you first study microeconomics and then economics. So, we'll start with micro. One of, if not the, most popular books is "Principles of Microeconomics" by Mankiw. This book covers the fundamentals of micro econ (opportunity, supply, demand, consumer choice, production, costs, basic game theory, and allocation of resources) in a clear and effective manner. It's designed for the novice and very easy to read. Like Mankiw's other book, "Principles of Macroeconomics" is also top notch. There is some overlap in key areas (i.e. opportunity cost, supply, demand, indifference curves, elasticity, taxation) because they are fundamental to economics and the overlap will always be there, but from there the book goes into key macro concepts like GDP, CPI, Employment, Monetary and Fiscal policy, and Inflation. An excellent intro primer indeed. Now that you have the fundamentals down, it's time to learn about finance. The best resource, in my opinion, is "Financial Markets" by Robert Shiller on Open Yale Courses. I've personally taken Prof. Shiller's class last semester, and the man is brilliant. The lectures cover every single aspect of finance and can turn the complete novice into a fairly experienced finance student. The first lecture also covers all the math required so you don't get lost at any point. Be warned, however, that the course is very deep. We used Fabozzi's textbook "Foundations of Financial Markets and Institutions," which is over 600 pages deep and we were required to know essentially all of it. Watch the videos and follow the readings and you'll be a finance whiz soon! Financial Markets on Open Yale And that's your roadmap to what you want. There are other economics books and it's true that the first few chapters of both Mankiw books are largely the same, but that's because any economics course always covers the basics first. If you want to look at other books, Krugman has written some good books as well. Be sure to read reviews because some books are meant for 2nd/3rd year econ students, so you don't want to get a too advanced book. At the novice level, we're interested in understanding the basic concepts so we can master Fabozzi. As for finance books - Fabozzi teaches you all the fundamentals of financial markets so you've got a powerful foundation. From there you can expand to more niche books such as books on investing or on monetary policy or whatever you want. Best of luck!
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What factors make someone buy or sell a stock?
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why sell? Because the stock no longer fits your strategy. Or you've lost faith in the company. In our case, it's because we're taking our principal out and buying something else. Our strategy is, basically, to sell (or offer to sell) after the we can sell and get our principal out, after taxes. That includes dividends -- we reduce the sell price a little with every dividend collected.
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How can I remove the movement of the stock market as a whole from the movement in price of an individual share?
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I use StockCharts for spread charting. To take your question as an example, here is the chart of Apple against Nasdaq.
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What's the appropriate way to signify an S-Corp?
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S-Corp is a corporation. I.e.: you add a "Inc." or "Corp." to the name or something of that kind. "S" denotes a specific tax treatment which may change during the lifetime of the corporation. It doesn't refer to a legal status.
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Investments beyond RRSP and TFSA, in non-registered accounts?
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You haven't looked very far if you didn't find index tracking exchange-traded funds (ETFs) on the Toronto Stock Exchange. There are at least a half dozen major exchange-traded fund families that I'm aware of, including Canadian-listed offerings from some of the larger ETF providers from the U.S. The Toronto Stock Exchange (TSX) maintains a list of ETF providers that have products listed on the TSX.
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Legal restrictions for EU-foreigners to setup bank account in Czech republic
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It depends on what exactly do you mean by "seat of residence". That term has different meanings (legally) in different countries and different contexts. If you're foreigner (even from within the EU), any czech bank will most likely ask you to provide a residence permit. Here are some details: http://www.mvcr.cz/mvcren/article/third-country-nationals-long-term-residence.aspx http://www.czech.cz/en/Business/How-it-works-here/Making-business/How-to-open-a-bank-account-%E2%80%93-Part-1
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If I buy a share from myself at a higher price, will that drive the price up so I can sell all my shares the higher price?
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Yes it is possible but with a caveat. It is a pattern that can be observed in many lightly traded stocks that usually have a small market cap. I am talking about a stock that trades less than 2,000 shares per day on average.
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Using stock markets in Europe, how can I buy commodities / resources, to diversify my portfolio?
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I recommend avoiding trading directly in commodities futures and options. If you're not prepared to learn a lot about how futures markets and trading works, it will be an experience fraught with pitfalls and lost money – and I am speaking from experience. Looking at stock-exchange listed products is a reasonable approach for an individual investor desiring added diversification for their portfolio. Still, exercise caution and know what you're buying. It's easy to access many commodity-based exchange-traded funds (ETFs) on North American stock exchanges. If you already have low-cost access to U.S. markets, consider this option – but be mindful of currency conversion costs, etc. Yet, there is also a European-based company, ETF Securities, headquartered in Jersey, Channel Islands, which offers many exchange-traded funds on European exchanges such as London and Frankfurt. ETF Securities started in 2003 by first offering a gold commodity exchange-traded fund. I also found the following: London Stock Exchange: Frequently Asked Questions about ETCs. The LSE ETC FAQ specifically mentions "ETF Securities" by name, and addresses questions such as how/where they are regulated, what happens to investments if "ETF Securities" were to go bankrupt, etc. I hope this helps, but please, do your own due diligence.
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How to pay with cash when car shopping?
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I have in the last few years purchased several used cars from dealers. They have handled it two different ways. They accepted a small check ~$1,000 now, and then gave me three business days to bring the rest as a cashiers check. They also insisted that I submit a application for credit, in case I needed a loan. They accepted a personal check on the spot. Ask them before you drive to the dealer. Of course they would love you to get a loan from them.
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What is a checking account and how does it work?
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As others have noted, in the U.S. a checking account gives you the ability to write a check, while a savings account does not. I think you know what a check is even if you don't use them, right? Let me know if you need an explanation. Personally, I rarely write paper checks any more. I have an account for a small side business, and I haven't bothered to get new checks printed since I moved 6 years ago even though the checks still have my old address, because I've only written I think 3 paper checks on that account in that time. From the bank's point of view, there are all sorts of government regulations that are different for the two types of accounts. But that is probably of little concern to you unless you own a bank. If the software you have bought allows you to do the things you need to do regardless of whether you call the account "savings" or "checking", then ... who cares? I doubt that the banking software police will come to your house and beat you into unconsciousness and arrest you because you labeled an account "checking" that you were supposed to label "savings". If one account type does what you need to do and the other doesn't, then use the one that works.
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What exactly is a wealth management platform?
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It's a tech buzzword. OK I'm being a bit glib. A Wealth Management Platform is a software system designed to help people track their investment portfolios and research new investments. Sometimes, trusts and small investment firms will use these platforms as well but they will often have more specialized separate systems for portfolio tracking and research. There is a large variety of platforms out there all trying to be the best platform for you... or someone else. Some will have websites and be open to all with money and some will be applications and only target some types of investors. Some will have robo-advising (Wealthfront), a human adviser (Merrill) or have none at all. Some will have nice graphical tools to track your portfolio or great research tools or both (I try not to recommend products on this site). Some can be designed to nudge you into their ideology (Vanguard). All, though, have a technology team behind them to make investing easier for you (or their investment advisers) or to sell you their products. You get the picture.
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Where do countries / national governments borrow money from?
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Sovereign states borrow money explicitly in a two primary ways: A sovereign cannot be compelled to repay debt, and there isn't a judicial process like bankruptcy to erase debt. When sovereigns default, they negotiate new terms with creditors and pay back some fraction of the actual debt owed. They can also print money to repay debt, which has other nasty consequences. But, while a state cannot be compelled to repay a debt, creditors cannot be compelled to loan money to the state either! Any enterprise of sufficient size needs access to capital via loans to meet daily obligations in anticipation of revenue -- even when times are good. Defaulting makes borrowing impossible or expensive, and is avoided. Regarding using your military to avoid repaying debt... remember what Napoleon said: "An army travels on its stomach". Military campaigns are expensive... no borrowing ability means the soldiers don't get paid and the food, fuel and ammo don't get delivered. Smaller countries have other risks as well. Many nations are essentially forced to use US Dollars as a reserve currency, or are forced by the market to borrow money in a foreign currency. This creates a situation where any risk of non-payment results in a deep devaluation of the local currency. When your debt is denominated in dollars, these shifts can dramatically increase your debt obligations from a local currency point of view. You also run the risk that a larger or richer company will park warships in your harbor and seize assets as payment -- the US and Britain engaged in this several times during the 19th and 20th centuries. In general, not paying the bills has a cascading effect. Bad situations get worse, and they do so quickly.
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So the vending machine tore my $5 in pieces. What now?
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There is usually contact information for the owner of the machine printed somewhere on it. Call that number. If it is in a business you could always try the clerk. Whether you get your money back is up to that person, I suppose.
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How to contribute to Roth IRA when income is at the maximum limit & you have employer-sponsored 401k plans?
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From the way you frame the question it sounds like you more or less know the answer already. Yes - you can make a non-deductable contribution to a traditional IRA and convert it to a Roth IRA. Here is Wikipedia's explanation: Regardless of income but subject to contribution limits, contributions can be made to a Traditional IRA and then converted to a Roth IRA.[10] This allows for "backdoor" contributions where individuals are able to avoid the income limitations of the Roth IRA. There is no limit to the frequency with which conversions can occur, so this process can be repeated indefinitely. One major caveat to the entire "backdoor" Roth IRA contribution process, however, is that it only works for people who do not have any pre-tax contributed money in IRA accounts at the time of the "backdoor" conversion to Roth; conversions made when other IRA money exists are subject to pro-rata calculations and may lead to tax liabilities on the part of the converter. [9] Do note the caveat in the second paragraph. This article explains it more thoroughly: The IRS does not allow converters to specify which dollars are being converted as they can with shares of stock being sold; for the purposes of determining taxes on conversions the IRS considers a person’s non-Roth IRA money to be a single, co-mingled sum. Hence, if a person has any funds in any non-Roth IRA accounts, it is impossible to contribute to a Traditional IRA and then “convert that account” to a Roth IRA as suggested by various pundits and the Wikipedia piece referenced above – conversions must be performed on a pro-rata basis of all IRA money, not on specific dollars or accounts. Say you have $20k of pre-tax assets in a traditional IRA, and make a non-deductable contribution of $5k. The account is now 80% pre-tax assets and 20% post-tax assets, so if you move $5k into a Roth IRA, $4k of it would be taxed in the conversion. The traditional IRA would be left with $16k of pre-tax assets and $4k of post-tax assets.
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Intro to Investment options for a Canadian
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I got started by reading the following two books: You could probably get by with just the first of those two. I haven't been a big fan of the "for dummies" series in the past, but I found both of these were quite good, particularly for people who have little understanding of investing. I also rather like the site, Canadian Couch Potato. That has a wealth of information on passive investing using mutual funds and ETFs. It's a good next step after reading one or the other of the books above. In your specific case, you are investing for the fairly short term and your tolerance for risk seems to be quite low. Gold is a high-risk investment, and in my opinion is ill-suited to your investment goals. I'd say you are looking at a money market account (very low risk, low return) such as e.g. the TD Canadian Money Market fund (TDB164). You may also want to take a look at e.g. the TD Canadian Bond Index (TDB909) which is only slightly higher risk. However, for someone just starting out and without a whack of knowledge, I rather like pointing people at the ING Direct Streetwise Funds. They offer three options, balancing risk vs reward. You can fill in their online fund selector and it'll point you in the right direction. You can pay less by buying individual stock and bond funds through your bank (following e.g. one of the Canadian Couch Potato's model portfolios), but ING Direct makes things nice and simple, and is a good option for people who don't care to spend a lot of time on this. Note that I am not a financial adviser, and I have only a limited understanding of your needs. You may want to consult one, though you'll want to be careful when doing so to avoid just talking to a salesperson. Also, note that I am biased toward passive index investing. Other people may recommend that you invest in gold or real estate or specific stocks. I think that's a bad idea and believe I have the science to back this up, but I may be wrong.
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Hypothetical: can taxes ever cause a net loss on otherwise-profitable stocks?
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You have a sequence of questions here, so a sequence of answers: If you stopped at the point where you had multiple wins with a net profit of $72, then you would pay regular income tax on that $72. It's a short term capital gain, which does not get special tax treatment, and the fact that you made it on multiple transactions does not matter. When you enter your next transaction that takes the hypothetical loss the question gets more complicated. In either case, you are paying a percentage on net gains. If you took a two year view in the second case and you don't have anything to offset your loss in the second year, then I guess you could say that you paid more tax than you won in the total sequence of trades over the two years. Although you picked a sequence of trades where it does not appear to play, if you're going to pursue this type of strategy then you are likely at some point to run into a case where the "wash sale" rules apply, so you should be aware of that. You can find information on this elsewhere on this site and also, for example, here: http://www.marketwatch.com/story/understanding-the-wash-sale-rules-2015-03-02 Basically these rules require you to defer recording a loss under some circumstances where you have rapid wins and losses on "substantially identical" securities. EDIT A slight correction, you can take part of your losses in the second year even if you have no off-setting gain. From the IRS: If your capital losses exceed your capital gains, the amount of the excess loss that you can claim on line 13 of Form 1040 to lower your income is the lesser of $3,000, ($1,500 if you are married filing separately)
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How can I find/compare custodians for my HSA in the United States?
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The account I have found that works best as a HSA is Alliant Credit Union. They have fee-free HSA (no fees for almost all types of transactions or monthly fees) and a fairly decent online banking website. I've been with them for about 5 years now without trouble. FYI - They are a credit union not a bank so you do have to make a small $10 donation to one of their charities to become "eligible" for opening the account.
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Why is the price of my investment only updated once per day?
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I strongly suggest you go to www.investor.gov as it has excellent information regarding these types of questions. A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates. When you buy shares of a mutual fund you're buying it at NAV, or net asset value. The NAV is the value of the fund’s assets minus its liabilities. SEC rules require funds to calculate the NAV at least once daily. Different funds may own thousands of different stocks. In order to calculate the NAV, the fund company must value every security it owns. Since each security's valuation is changing throughout the day it's difficult to determine the valuation of the mutual fund except for when the market is closed. Once the market has closed (4pm eastern) and securities are no longer trading, the company must get accurate valuations for every security and perform the valuation calculations and distribute the results to the pricing vendors. This has to be done by 6pm eastern. This is a difficult and, more importantly, a time consuming process to get it done right once per day. Having worked for several fund companies I can tell you there are many days where companies are getting this done at the very last minute. When you place a buy or sell order for a mutual fund it doesn't matter what time you placed it as long as you entered it before 4pm ET. Cutoff times may be earlier depending on who you're placing the order with. If companies had to price their funds more frequently, they would undoubtedly raise their fees.
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If our economy crashes, and cash is worthless, should i buy gold or silver
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Neither. Food, fuel, and tools. Books on how to make and use basic tools -- the books published for farmers who want to kluge their own solutions might be helpful. Heck, help defend a library; it will be beyond price as soon as things settle out a bit. Having skills like blacksmithing and knowing how to teach could go a long way. SF really has explored this in better detail than we could possibly cover here.
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What do I need as documentation in order to pay taxes in the Netherlands?
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The Dutch tax office is pretty decent, although slightly overburdened. Don't expect a lot of help, but they're not generally known for making a lot of problems. Digital copies are fine, for instance. They will send you your first VAT notice. You probably would have known if your company would have been incorporated, so I'll assume you're just trading as a natural person. That means you still have to file VAT returns, but the business income is just filed annually as "other income". For the VAT part, you'll need to invoice your customers. Keep a copy of those invoices for your own bookkeeping, and keep track of the matching customer payments. Together these form the chief evidence of your VAT obligation. You also have a VAT deduction from your purchases (it's a Value-Added Tax, after all). Again, keep receipts. The usual VAT period is 3 months, so you'd pay VAT 4 times a year. But if you would pay less than 1883 euro, you might not need to pay at all and just need to file annually The income part is easy with the receipts you had for VAT purposes anyway. Dutch Tax Office, VAT, in English
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~$75k in savings - Pay off house before new home?
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Congratulations on saving up $75,000. That requires discipline and tenacity. There are a lot of factors that would go into making your decision. First and foremost is the security of the income stream you have now. Being leveraged during times of hardship is not a pleasant experience. Unexpected job losses can and do happen. Only you can determine how secure your and your spouse's situation is. Second, I would consider the job market in the location that you live. If you live in a small town it will be hard to find income levels like you have now. Rental properties are additional ties to an area. Are you happy in the area in which you live? If you were laid off are there opportunities in the same area. Being a long distance landlord is again not a pleasant experience. I can throw being forced to sell to relocate at a reduced price into this same bucket. Third, you need to have 3 to 6 months of expenses saved for emergencies. This is in addition to having no consumer debt (credit cards, car loans, student loans). $75,000 feels like a lot. Life can throw you curve balls. You need to be prepared for them because of the fundamental nature of Murphy's Law. If you were to be a landlord you should err closer to the six month end of the scale. I own two rentals and can speak to people being late a given month, heating and air problems, plumbing issues, washers and dryers breaking, weather related issues, and even a tenant leaving behind for truckloads of trash. Over 20 years I guess I have seen it all. A rental agency will only act as a minor buffer. Fourth, your family situation is important. I personally save 10% of my income for my child's education. If you haven't started doing so or have different feelings on what you might contribute think about it before any financial move. Fifth, any mortgage payment you are making should be 25% or less than your take home pay for a 15 year fixed rate mortgage. Anything less than 20% down and you start burning up money on PMI insurance. 'House Poor' is a term for people that make high incomes but have too much being spent for housing. It is the cause of a lot of financial stress. Sixth, you need to save for retirement. The absolute minimum I recommend is 15% of your income. Even if the match is 6% you should invest the full 15% making it 21%. Social Security is a scary thing and depending on it is not wise. I think your income still qualifies you for contributions to a Roth IRA. If you aren't personally contributing 15% do so before making a move. There is an old joke that homeless people who have a 0 net worth often are richer than people driving fancy cars and living in fancy houses. Ultimately no one can tell you the right answer. Every situation is unique. You have a complex tapestry to your financial life that no else one knows.
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Where to Park Proceeds from House Sale for 2-5 Years?
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There are some high-yield savings accounts out there that might get you close to 1 percent. Shorter term CDs might also serve you well here- rates are above 1 percent, even with 1-2 year terms: http://www.nerdwallet.com/rates/cds/best-cd-rates/
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Dispute credit card transaction with merchant or credit card company?
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It's very straightforward for an honest vendor to refund the charge, and the transaction only costs him a few pennies at most. If you initiate a chargeback, the merchant is immediately charged an irreversible fee of about $20 simply as an administrative fee. He'll also have to refund the charge if it's reversed. To an honest merchant who would've happily refunded you, it's unfair and hurtful. In any case, now that he's out-of-pocket on the administrative fee, his best bet is to fight the chargeback - since he's already paid for the privilege to fight. Also, a chargeback is a "strike" against the merchant. If his chargeback rate is higher than the norm in his industry, they may raise his fees, or ban him entirely from taking Visa/MC. For a small merchant doing a small volume, a single chargeback can have an impact on his overall chargeback rate. The "threshold of proof" for a chargeback varies by patterns of fraud and the merchant's ability to recover. If you bought something readily fungible to cash - like a gift card, casino chips, concert tickets etc., forget it. Likewise if you already extracted the value (last month's Netflix bill). Credit card chargeback only withdraws a payment method. Your bill is still due and payable. The merchant is within his rights to "dun" you for payment and send you to collections or court. Most merchants don't bother, because they know it'll be a fight, an unpleasant distraction and bad for business. But they'd be within their rights. Working with the merchant to settle the matter is a final resolution.
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Buy Php in Malaysia and sell to Philippines
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I noticed the buy/sell board table. Where did you notice this. Generally for a pair of currencies, there is Unit associated along with direction. The Unit is generally constant. These are only revised when there is large devaluation of a particular currency. Buying Php for MYR 8.52, Selling MYR 8.98. So in this case the Unit of PHP is 100, so Bank is Buying 100 PHP from you [you are selling PHP] and will give you MYR 8.52. If you now want to buy 100 PHP [so the Bank is selling you], you have to pay MYR 8.98. So you loose MYR 0.46 Why are they selling it way beyond the exchange rate? Why is this? As explained above, they are not. Its still within the range. The quote on internet are average price. This means before going back to Philippines, I can buy a lot of peso that I can buy and exchange it for higher price right? Generally an individual cannot make money by buying in one currency and selling in other. There are specialist who try and find arbitrage between multiple pair of currencies and make money out of it. Its a continuous process, if they start making profit, the market will react and put pressure on a pair and the prices would move to remove the arbitrage.
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How to calculate the value of a bond that is priced to yield X%
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The idea is correct; the details are a little off. You need to apply it to the actual cash flow the bond would create. The best advice I can give you is to draw a time-line diagram. Then you would see that you receive £35 in 6 months, £35 in 12 months, £35 in 18 months, and £1035 in 24 months. Use the method you've presented in your question and the interest rate you've calculated, 3% per 6 months, to discount each payment the specified amount, and you're done. PS: If there were more coupons, say a 20 year quarterly bond, it would speed things up to use the Present Value of an Annuity formula to discount all the coupons in one step...
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Pay bill now or later?
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Another, perhaps simpler approach to the same result as @BenMiller. Firstly, if you can pay off the debt today, for 1695.70 cash, then that is the amount of your debt to the hospital. There is no such thing as a discount for cash; just extra money to pay if don't pay immediately. This extra money is called interest, and the hospital is indeed charging you interest. Use any mortgage program to find the interest rate if you pay off a debt of 1695.70 with 60 monthly payments of 37.68. The program should tell you that you are paying 12.64% effective annual interest. If you can earn more than that, after taxes, with your money somewhere else, then invest the cash there and pay off the hospital over time. If you can't, then pay off the debt immediately, and avoid writing 60 cheques. EDIT: Incorrect calculation revised as per @Ben Miller
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Pay down on second mortage when underwater?
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I'd split whatever cash flow you have between saving money and paying down the 20% loan. The fact that you are carrying an unrealized loss isn't really too relevant -- unless you have plans to walk away from the loan or go bankrupt, it doesn't really matter until you sell. You're either going to repay now or later.
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How to trade fundamentally good stocks over the short to medium term?
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Using Fundamental and Technical Analysis together is actually a good idea for longer term trading of up to 6 months or longer. The whole idea behind trading with Technical Analysis is to increase the probabilities of a trade going in the desired direction by using uncorrelated indicators that produce the same signal to buy or sell at the same time. For example, you might use a Moving Average (MA) as a buy signal when the price falls for a few days, hits the MA and then reverses and starts moving back up. If however, you also include a Stochastic Oscillator (SO) to indicate when the stock is oversold (under 20%), and if the price rebounds from the MA average at the same time as the Stochastic is crossing over in the oversold position, then this may be a higher probability trade. If you also only trade stocks that are Fundamentally healthy (as fundamentally good stocks are more likely to go up than fundamentally bad stocks) then this might increase the probabilities again. Then if you only buy when the market as a whole is moving up, then this will increase your chances again. A few weeks ago at a seminar, the presenter totalled the men in the room to be 76 and the women in the room to be 8. He then asked what will most likely be the next person to walk in the room - a man or a woman? The statistics are on the side of a wan walking in next. This is what we try to do with Technical Analysis, increase our chances when we take a trade. Of course a woman could be the next person to walk in the room, just like any trade can go against you, and this is why we use money management and risk management and take a small loss when a trade does go against you. Lets look at an example where you could incorporate FA with TA to increase your chances of profits: Above is a candlestick chart of Select Harvest (SHV), the green line above the price is the perceived value, the pink line is the 40 day MA, the blue line is the EPS, and the white lines is the Stochastic Oscillator (above 80% being overbought and below 20% is oversold). From Feb 2015 to start of Aug 2015 the stock was uptrending, since then the price reversed and started to downtrend. The stock was determined to be fundamentally good early in 2015 with the perceived value gradually increasing and greater than the share price, and the EPS starting to increase regularly from mid April. Thus, as the stock is seen as fundamentally healthy any price reversal in the vicinity of the MA could be seen as a buy opportunity. In fact there where 2 such opportunities on 31st March and 11th June where price had reversed and rebounded off the MA whist the SO crossed over in or near the oversold area. The price did reverse and then rebounded off the MA again on 9th July, however the SO was not in or near the oversold area on this occasion, so not as high in probability terms. The price still rebounded and went up again, however another momentum indicator (not shown here) shows some bearish divergence in this case - so another reason to possibly keep away at this point in time. A good signal to get out of the trade, that is your stop loss has not already taken you out, is when the price breaks and closes below the MA line. This occurred on 7th August. So if we had bought on the first signal on 31st March for $7.41 and sold when the priced broke through the MA on 7th August for $11.76, we would have made a profit of approx. 59% in just over 4 months. If bought on the second signal on 11th June for $9.98 and again sold on 7th August for $11.76, we would have made about 18% in under 2 months. So the fundamentals, the Price (in relation to MA) and the SO where all lining up to provide two high probability trades. Of course you would need to incorporate you risk management (including stops) in case the price did not continue upwards after you bought. If the market is also moving up on the day of the signal this will further increase your chances. Unless you day trade, which I would avoid, a good way to enter your trades after a signal is to enter a stop buy order after market close to buy if the price moves above the high of the signal day. That way if the market and the stock open and move lower during the day after the signal you avoid entering the trade altogether. This can be incorporated as part of your risk management and trading rules. After the price broke down through the MA we can see that a downtrend commenced which is still current today (in fact I just took a short trade on this stock yesterday). We can also see that the perceived value, whilst still above the price, has reached a peak and is currently moving downwards and the EPS after being flat for a few months has just moved down for the first time in 10 months. So maybe the fundamentals are starting to waver a bit on this stock. It may be a good stock to continue shorting into the future. So basically you can continue using Fundamental Analysis to select which stocks to buy, place them in a watch-list, and then use Technical Analysis to determine when these stocks are starting to uptrend and use a combination of uncorrelated indicators to produce higher probability signals for when to enter your trades.
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What are “trailing 12-month total returns”?
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( t2 / t1 ) - 1 Where t2 is the value today, t1 is the value 12 months ago. Be sure to include dividend payments, if there were any, to t2. That will give you total return over 12 months.
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Do I have to pay a capital gains tax if I rebuy different stocks?
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Yes (most likely). If you are exchanging investments for cash, you will have to pay tax on that - disregarding capital losses, capital loss carryovers, AGI thresholds, and other special rules (which there is no indication of in your question). You will have to calculate the gain on Schedule D, and report that as income on your 1040. This is the case whether you buy different or same stocks.
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Is laminate flooring an “Improvement” or “Depreciable Property”?
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Aesthetics aside, laminate floor is attached to the floor and as such is a part of the building. So you depreciate it with the building itself, similarly to the roof. I believe the IRS considers these permanently attached because the foam itself is permanently attached, and is a part of the installation. To the best of my knowledge, the only flooring that is considered as a separate unit of property is tucked-in carpet or carpet pads (typically installed in commercial buildings, not homes). Everything else you'll have to prove to be an independent separate unit of property. Technically, you can take the tucked in carpet, and move it elsewhere as-is and be able to install it there assuming the size fits. You cannot do it with the foam (at the very least you'll need a new foam cover in the new location since you cannot take the foam with you from the old one). That's the difference between a "separate unit of property" and "part of the building". Note that the regulations in this area have changed significantly starting of 2014, so you may want to talk to a professional.
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Switch from DINK to SIWK: How do people afford kids?
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With your wife's income, you're not doing to see a net difference if she stops working that job. You may actually yield a little more. At the end of the day, it's doable, but you're going to have to rationalize your spending and one or both of you should pick up a part-time job. Do you remember the last time you bought lunch or went out to dinner? You're wasting money. Even a 50% gig at a quality employer like Starbucks or Home Depot will let you make $15-20k. I respect your religious beliefs, but 17% of your income is steep, and you may want to revisit that.
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Where can I borrow money for investing?
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Borrow money and start a business. Follow your business plan and invest in yourself and your entrepreneurship. If you mean invest in the market, do not borrow money. In your plan, you are willing to make payments right? There are lots of things you can do better, but borrowing money to invest in the market for a couple of years is not one of them. Investing is boring, saving is boring, and planning your financial future is boring. It takes a consistent effort and you aren't going to get rich quick.
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How should I be investing in bonds as part of a diversified portfolio?
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Buy a fund of bonds, there are plenty and are registered on your stockbroker account as 'funds' rather than shares. Otherwise, to the individual investor, they can be considered as the same thing. Funds (of bonds, rather than funds that contain property or shares or other investments) are often high yield, low volatility. You buy the fund, and let the manager work it for you. He buys bonds in accordance to the specification of the fund (ie some funds will say 'European only', or 'global high yield' etc) and he will buy and sell the bonds regularly. You never hold to maturity as this is handled for you - in many cases, the manager will be buying and selling bonds all the time in order to give you a stable fund that returns you a dividend. Private investors can buy bonds directly, but its not common. Should you do it? Up to you. Bonds return, the company issuing a corporate bond will do so at a fixed price with a fixed yield. At the end of the term, they return the principal. So a 20-year bond with a 5% yield will return someone who invests £10k, £500 a year and at the end of the 20 years will return the £10k. The corporate doesn't care who holds the bond, so you can happily sell it to someone else, probably for £10km give or take. People say to invest in bonds because they do not move much in value. In financially difficult times, this means bonds are more attractive to investors as they are a safe place to hold money while stocks drop, but in good times the opposite applies, no-one wants a fund returning 5% when they think they can get 20% growth from a stock.
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As a total beginner, how do I begin to understand finance & stocks?
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Your understanding of the stock market is absolutely correct theoretically. However there is a lot more to it. A stock on a given day is effected by a lot of factors. These factors could really be anything. For example, if you are buying a stock in an agricultural company and there was no rainfall this year, there is a big chance that your stock will lose value. There is also a chance that a war breaks out tomorrow and due to all the government spending on the war, the economy collapses and effects the prices of stocks. Why does this happen? This happens because bad rainfall or war can get people to lose confidence in a stock market. On the other hand GDP growth and low unemployment rates can make people think positive and increase the demand in a stock driving the prices up. The main factor in the stock market is sentiment(How people perceive certain news). This causes a stock to rise or fall even before the event actually happens. (For example:- Weather pundits predicted good rainfall for next year. That news is already known to people, so if the weather pundit was correct, it might not drive the prices up. However, if the rainfall was way better than people expected it to be it would drive the price up and vice versa. These are just examples at a basic level. There are a lot of other factors which determine the price of the stock. The best way to look at it(In my personal opinion) is the way Warren Buffet puts it, i.e. look at the stock as a business and see the potential growth over a long period of time. There will be unexpected events, but in the long run, the business must be profitable. There are various ways to value a company such as Price to earnings ratios, PEG ratios, discounted cash flows and you can also create your own. See what works best for you and record your success/failure ratio before you actually put money in. Good Luck,
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Buying insurance (extended warranty or guarantee) on everyday goods / appliances?
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I decline politely. The cost of the insurance policy has two components: The actual cost of a likely repair + profit. If I set aside the cost of a likely repair myself, then I get to keep the profit. If the item doesn't break, I get to keep the "repair" money too :)
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Should I sell my stocks when the stock hits a 52-week high in order to “Buy Low, Sell High”?
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Obviously a stock that's hit a high is profit waiting to be taken, be safe, take the money, Sell Sell Sell!! Ah.. but wait, they say "run your winners, cut your losers", so here this stock is a winner... keep on to it, Hold Hold Hold!!!!! Of course, if you're holding, then you think it's going to return even higher.... Buy Buy Buy!!!! So, hope that's clears things up for you - Sell, Hold, or maybe Buy :-) A more serious answer is not ever to worry about past performance, if its gone past a reasonable valuation then consider selling, but never care about selling out just because its reached some arbitrary share price. If you are worried about losses, you might like to set a trailing stop and sell if it drops, but if you're a LTBH type person, just keep it until you feel it is overvalued compared to its fundamentals.
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Are COBRA premiums deductible when self-employed?
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http://www.ehow.com/about_4625753_cobra-as-selfemployed-health-insurance.html This link makes it clear... it has to be itemized, and is subject to the > than 7.5% AGI rule.
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Single investment across multiple accounts… good, bad, indifferent?
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The other issue you could run into is that each deferred account is going to be subject to its own RMD's (Required Minimum Distributions) when you've retired or hit 70.5 years of age. Roth's don't generally care about RMD's at first, but are still subject to them once the person that created the Roth has passed. Having fewer accounts will simplify the RMD stuff, but that's really only a factor in terms of being forced to sell 'something' in each account in order to make the RMD. Other than that, it's just a matter of remembering to check each account if you come to a decision that it's time to liquidate holdings in a given security, lest you sell some but forget about the rest of it in another account. (and perhaps as Chris pointed out, maybe having to pay fee's on each account for the sale) Where this really can come into play is if you choose to load up each individual account with a given kind of investment, instead of spreading them across the accounts. In that case RMD's could force you into selling something that is currently 'down' when you want to hold onto it, because that is your only choice in order to meet RMD's for account X. So if you have multiple accounts, it's a good idea to not 'silo' particular vehicles into a single account, but spread similar ivestments across multiple accounts, so you always have the choice in each account of what to sell in order to meet an RMD. If you have fewer accounts, it's thus a lot easier to avoid the siloing effect
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1040 Schedule A Un-Reimbursed Business Expense Reporting
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It would be unusual but it is possible that the expenses could be very high compared to your income. The IRS in pub 529 explains the deduction. You can deduct only unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense doesn't have to be required to be considered necessary. The next part lists examples. I have cut the list down to highlight ones that could be large. You may be able to deduct the following items as unreimbursed employee expenses. Damages paid to a former employer for breach of an employment contract. Job search expenses in your present occupation. Legal fees related to your job. Licenses and regulatory fees. Malpractice insurance premiums. Research expenses of a college professor. Rural mail carriers' vehicle expenses. Tools and supplies used in your work. Work clothes and uniforms if required and not suitable for everyday use. Work-related education. If the term of employment was only part of the year, one or more of the these could dwarf your income for the year. Before deducting something that large be sure you can document it. I believe the IRS computers would flag the return and I wouldn't be surprised if they ask for additional proof.
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When Employees are “Granted” Stock Options, is the Company encouraging Long-Term investments from them?
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There are two things to consider: taxes - beneficial treatment for long-term holding, and for ESPP's you can get lower taxes on higher earnings. Also, depending on local laws, some share schemes allow one to avoid some or all on the income tax. For example, in the UK £2000 in shares is treated differently to 2000 in cash vesting - restricted stocks or options can only be sold/exercised years after being granted, as long as the employee keeps his part of the contract (usually - staying at the same place of works through the vesting period). This means job retention for the employees, that's why they don't really care if you exercise the same day or not, they care that you actually keep working until the day when you can exercise arrives. By then you'll get more grants you'll want to wait to vest, and so on. This would keep you at the same place of work for a long time because by quitting you'd be forfeiting the grants.
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How can I live outside of the rat race of American life with 300k?
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the short answer: yes. The long answer depends on what you mean by modest living. As others have noted, living off a $300k principle involves risks, but the entire future has risk. By "getting out of the rat race" I hope you don't mean become a slug on the couch. Peruse mr. Money Mustache at https://www.mrmoneymustache.com/. One can live very frugally yet very well in some parts of the US.
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Can we compare peer-to-peer loans to savings accounts?
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Peer to peer lending isn't FDIC insured. You can lose all your investment with peer to peer lending, whereas you will not lose your deposited money in a savings account, even if it doesn't grow very fast.
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Which technical indicators are suitable for medium-term strategies?
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Speaking from stock market point of view, superficially, TA is similarly applicable to day trading, short term, medium term and long term. You may use different indicators in FX compared to the stock market, but I would expect they are largely the same types of things - direction indicators, momentum indicators, spread indicators, divergence indicators. The key thing with TA or even when trading anything, is that when you have developed a system, that you back test it, to prove that it will work in bear, bull and stagnant markets. I have simple systems that are fine in strong bull markets but really poor in stagnant markets. Also have a trading plan. Know when you are going to exit and enter your trades, what criteria and what position size. Understand how much you are risking on each trade and actively manage your risk. I urge caution over your statement ... one weakened by parting the political union but ought to bounce back ... We (my UK based IT business) have already lost two potential clients due to Brexit. These companies are in FinServ and have no idea of what is going to happen, so I would respectfully suggest that you may have less knowledge than professionals, who deal in currency and property ... but one premise of TA is that you let the chart tell you what is happening. In any case trade well, and with a plan!
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Does a company's stock price give any indication to or affect their revenue?
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Look at the how the income statement is built. The stock price is nowhere on it. The net income is based on the revenue (money coming in) and expenses (money going out). Most companies do not issue stock all that often. The price you see quoted is third parties selling the stock to each other.
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Low risk hybrid investment strategy
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I recall similar strategies when (in the US) interest rates were quite a bit higher than now. The investment company put 75% or so into into a 5 year guaranteed bond, the rest was placed in stock index options. In effect, one had a guaranteed return (less inflation, of course) of principal, and a chance for some market gains especially if it went a lot higher over the next 5 years. The concept is sound if executed correctly.
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How is a stop order price different from an ask price
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Stop order is triggered when the market reaches the price you set. Until then - its not on the books. Your understanding is wrong in that you don't go to read the definition of the term.
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Would you withdraw your money from your bank if you thought it was going under?
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To the average consumer, the financial health of a bank is completely irrelevant. The FDIC's job is to make it that way. Even if a bank does go under, the FDIC is very good at making sure there is little/no interruption in service. Usually, another bank just takes over the asset of the failing bank, and you don't even notice the difference. You might have a ~24 hour window where your local ATM doesn't work. I also really question the "FDIC is broke" statement. The FDIC has access to additional funding beyond the Deposit Insurance Fund mentioned in your link. It also has the ability to borrow from the Treasury. If you look into the FDIC's report a bit closer, the amount in the "Provision for Insurance Losses" is not just money spent on failing banks. It also includes money that has been set aside to cover anticipated failures and litigation. Saying the FDIC is "broke" is like saying I am "broke" because my checking account balance went down after I moved some money into a rainy-day fund. Failure of the FDIC would signal a failure of our financial system and the government that backs it. If the FDIC fails, your petty checking account would be meaningless anyway. The important things would be non-perishable food, clean water, and guns/ammo. That said, it will be interesting to see the latest quarterly report for the FDIC when it is released next week. The article implies things will look a little better for the FDIC, but we'll see.
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Recommended education path for a future individual investor?
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My plan is that one day I can become free of the modern day monetary burdens that most adults carry with them and I can enjoy a short life without these troubles on my mind. If your objective is to achieve financial independence, and to be able to retire early from the workforce, that's a path that has been explored before. So there's plenty of sources that you might want to check. The good news is that you don't need to be an expert on security analysis or go through dozens of text books to invest wisely and enjoy the market returns. This is the Bogleheads philosophy. It's widely accepted by people in academia, and thoroughly tested. Look into it further if you want to see the rationale behind, but, to sum it up: It doesn't matter how expert you are. The idea of beating the market, that an index fund tracks, is about 'outsmarting' the rest of investors. That would be difficult, even if it was a matter of skill, but when it comes to predicting random events we're all equally clueless. *Total Expense Ratio: It gives an idea of how expensive is a given fund in terms of fees. Actively managed funds have higher TER than indexed ones. This doesn't mean there aren't index funds with, unexplainable, high TER out there.
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