Question
stringlengths 15
166
| Answer
stringlengths 3
10.6k
|
|---|---|
Do dividend quotes for U.S. stocks include witheld taxes?
|
The dividend quoted on a site like the one you linked to on Yahoo shows what 1 investor owning 1 share received from the company. It is not adjusted at all for taxes. (Actually some dividend quotes are adjusted but not for taxes... see below.) It is not adjusted because most dividends are taxed as ordinary income. This means different rates for different people, and so for simplicity's sake the quotes just show what an investor would be paid. You're responsible for calculating and paying your own taxes. From the IRS website: Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. They are paid out of earnings and profits and are ordinary income to you. This means they are not capital gains. You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. Now my disclaimer... what you see on a normal stock quote for dividend in Yahoo or Google Finance is adjusted. (Like here for GE.) Many corporations actually pay out quarterly dividends. So the number shown for a dividend will be the most recent quarterly dividend [times] 4 quarters. To find out what you would receive as an actual payment, you would need to divide GE's current $0.76 dividend by 4 quarters... $0.19. So you would receive that amount for each share of stock you owned in GE.
|
How to negotiate when you have something to give back?
|
I don't think that there is a generic answer that will apply to this question across all goods. The answer depends on how the related businesses work, how much insight you have into the true value of the goods, and probably other things. Your car example is a good one that shows multiple options - There are dealers who will buy as a single transaction, sell as a single transaction, or do a simultaneous sell with trade-in. I had a hot tub once, on the other hand, where I could find people who would do a trade-in, but there was no dealer who would just buy my used tub. There's not much parallel between the car and the tub because the options available are very different. To the extent that there is a generic answer, I generally agree with the point in @keshlam's answer about trying to avoid entrapment, but I take a slightly different view. If you want to get your best deal, you need to have an idea going into the process of what you want in net and keep focused on meeting your goal. If for some reason, it's convenient for the dealer to "move money around" between the new car and the trade-in, I'm ok with that as long as I'm getting what I want out of the deal. If possible, I prefer to deal with both transactions at once because it's simpler. At the same time, I'm willing to remove the trade-in from the deal if I'm not getting what I want. (Threatening to do so can also give you some information about where the dealer really puts the value between the new car and trade-in since, if you threaten to pull the trade-in, the price on the car will probably change in response.)
|
Is it usual for a tradesperson not to charge VAT?
|
Assuming this to be in the UK, and I suspect the rules are similar elsewhere, this indeed may be true. There is a threshold beneath which a business does not have to register for VAT - currently a turnover of £81,000. A non VAT registered business does not charge VAT but also cannot reclaim the VAT on their business expenses. For some businesses below the threshold it is worthwhile registering because the amount they can reclaim is significant. However, there are also many small businesses that do a lot of cash only jobs so as to not put the money through the books and therefore avoid any tax liability. There are also many who will get the the customer to buy materials direct to avoid including these in their turnover. Like every type of tax rule there is a grey area between people trying to avoid paying more tax than is needed and dodgy deals to avoid paying their fair share of tax.
|
How to compute for losses in an upside down trade-in of a financed car?
|
I think you are making this more complicated that it has to be. In the end you will end up with a car that you paid X, and is worth Y. Your numbers are a bit hard to follow. Hopefully I got this right. I am no accountant, this is how I would figure the deal: The payments made are irrelevant. The downpayment is irrelevant as it is still a reduction in net worth. Your current car has a asset value of <29,500>. That should make anyone pause a bit. In order to get into this new car you will have to finance the shortfall on the current car (29,500), the price of the vehicle (45,300), the immediate depreciation (say 7,000). In the end you will have a car worth 38K and owe 82K. So you will have a asset value of <44,000>. Obviously a much worse situation. To do this car deal it would cost the person 14,500 of net worth the day the deal was done. As time marched on, it would be more as the reduction in debt is unlikely to keep up with the depreciation. Additionally the new car purchase screen shows a payment of $609/month if you bought the car with zero down. Except you don't have zero down, you have -29,500 down. Making the car payment higher, I estamate 1005/month with 3.5%@84 months. So rather than having a hit to your cash flow of $567 for 69 more months, you would have a payment of about $1000 for 84 months if you could obtain the interest rate of 3.5%. Those are the two things I would focus on is the reduction in net worth and the cash flow liability. I understand you are trying to get a feel for things, but there are two things that make this very unrealistic. The first is financing. It is unlikely that financing could be obtained with this deal and if it could this would be considered a sub-prime loan. However, perhaps a relative could finance the deal. Secondly, there is no way even a moderately financially responsible spouse would approve this deal. That is provided there were not sigificant assets, like a few million. If that is the case why not just write a check?
|
Would I ever need credit card if my debit card is issued by MasterCard/Visa?
|
You ask about the difference between credit and debit, but that may be because you're missing something important. Regardless of credit/debit, there is value in carrying two different cards associated with two different accounts. The reason is simply that because of loss, fraud, or your own mismanagement, or even the bank's technical error, any card can become unusable for some period of time. Exactly how long depends what happened, but just sending you a new card can easily take more than one business day, which might well be longer than you'd like to go without access to any funds. In that situation you would be glad of a credit card, and you would equally be glad of a second debit card on a separate account. So if your question is "I have one bank account with one debit card, and the only options I'm willing to contemplate are (a) do nothing or (b) take a credit card as well", then the answer is yes, take a credit card as well, regardless of the pros or cons of credit vs debit. Even if you only use the credit card in the event that you drop your debit card down a drain. So what you can now consider is the pros and cons of a credit card vs managing an additional bank account -- unless you seriously hate one or more of the cons of credit cards, the credit card is likely to win. My bank has given me a debit card on a cash savings account, which is a little scary, but would cover most emergencies if I didn't have a credit card too. Of course the interest rate is rubbish and I sometimes empty my savings account into a better investment, so I don't use it as backup, but I could. Your final question "can a merchant know if I give him number of debit or credit card" is already asked: Can merchants tell the difference between a credit card and embossed debit card? Yes they can, and yes there are a few things you can't (or might prefer not to) do with debit. The same could even be said of Visa vs. Mastercard, leading to the conclusion that if you have a Visa debit you should look for a Mastercard credit. But that seems to be less of an issue as time goes on and almost everywhere in Europe apparently takes both or neither. If you travel a lot outside the EU then you might want to be loaded down with every card under the sun, and three different kinds of cash, but you'd already know that without asking ;-)
|
Does Apple have $0 of treasury stock?
|
Treasury stock is not really represented in the Balance Sheet as a "Treasury stock" line item in the assets. Some companies will break out Treasury Shares as a line item in the "Shareholders Equity" heading of the balance sheet but Apple hides it in the "Shares Issued and Outstanding" counts under the "Shareholders Equity" heading. As of the most recent Q2 2017 quarterly report There are 5,205,815,000 shares issued against 5,336,166,000 shares outstanding. This indicates that Apple is retaining about 130,351,000 shares in treasury. On the Q1 10-Q you can see that Apple had 5,255,423,000 shares issued which indicates roughly 49mm shares were repurchased by the end of Q2. You can roughly verify this by looking at page 18 of the Q2 filing in the summary of the share repurchase program. Repurchased as part of an Accelerated Share Repurchase arrangement bleeds between quarters but from February 2017 through May 2017 there have been 17.5mm shares repurchased. 31mm shares were also repurchased on the open market in Q2. The "shares issued" total is on a downward trend as part of Apple's share repurchase initiative that has been underway for the last couple of years.
|
What's the best way to make money from a market correction?
|
There are several ways to protect against (or even profit from) a market correction. Hedge funds do this by hedging, that is, buying a stock that they think is strong and selling short a paired stock that is weak. If you hold, say, a strong retail company in your portfolio, you might sell short an equal weight of a weak retail company. These are like buying insurance on your portfolio. If you own 300 shares of XYZ, currently trading at $68, you buy puts at a level at a strike price that lets you sleep at night. For example, you might buy 3 XYZ 6-month puts with a strike price of $60. A disadvantage is that the puts are wasting assets, that is, their time premium (which you paid for at the outset) becomes zero at expiration. (This is why it is like insurance. You wouldn't complain that your insurance premium was lost when you purchase insurance on your house and the house doesn't burn down, would you? Of course not. The purpose of the insurance is to protect your investment.) Note that as these puts are married, they only protect your portfolio. Instead of profiting from a correction, you would merely protect your portfolio during a correction. (No small feat!) If your portfolio is similar to the market, you can buy S&P index puts. If your market reflects a lot of technology, you can buy technology sector puts. Say you have a portfolio of $80K that reflects the market. You could buy out-of-the-market puts (again reflecting your tolerance for loss). Any losses in your portfolio after the puts go in-the-money would be (more or less) offset by gains in the puts. An advantage is that the bid/ask spread is smaller for the S&P. You would pay less for the protection. Also, the S&P puts are cash settled (meaning you get money put in your account on the business day after expiration day). A disadvantage is that the puts do not linearly go up as the market drops. (Delta hedging is a big deal in and of itself.) Another disadvantage is that they are wasting assets (see the Married puts section, previous). While the S&P puts can be used to maintain your market portfolio in the midst of a correction, you could purchase more puts than needed. If you had correctly timed the market, then your portfolio with puts would increase. (Your mileage may vary; some have predicted an imminent market crash way too often.) Collars involve selling out-of-the-money calls and using the premiums to buy out-of-the-money puts. There are many varieties of collars, but the most straightforward is to sell 1 call and buy 1 put for every 100 shares. (This can also be done for index puts and calls.) This has the effect of simultaneously: You get your insurance for almost free. But again, it is protecting your portfolio. As the name implies, you make money when the market goes bearish. Bear put spreads involve buying puts at a close strike price and selling an equal number of puts at a lower strike price than the first. You have a defined maximum loss (the premium you paid for the higher put minus the premium you received for the lower put). You have a defined maximum gain (the difference between strikes minus the defined maximum loss). Buy S&P 500 index puts. If you buy deep out-of-the-money puts, it won't cost much, but you have little probability of it paying off. But if they go in-the-money, there could be a sizable payoff. This is similar to putting one chip on red 18 on the roulette wheel. But rather than paying off 35:1, it is a variable payoff. If you're $1 in the money, you just get $100. If you're $12 in the money, you have a $1200 payoff. If you buy at-the-money puts, it will cost a lot, and your probability will be about 1 in 2 that you will pay off. In our roulette analogy, this is like putting 30 chips on the Even bet of the roulette wheel. The variable payoff is as in the previous paragraph. But you're more likely to get a payoff. And you will lose it all of the roulette ball lands on an Odd number, 0, or 00. (That is, the underlying of your put goes up or stays the same.) If your research shows you what good stocks to buy, it may also tell you which stocks are ripe for a fall. You could short-sell these stocks or buy puts on them. Similar to short-selling stocks or buying puts, you could sell short overpriced sectors or buy puts on them. There are ETFs that will allow you benefit from falling prices without needing to have a margin agreement or options agreement in place. Sorry to have a lengthy answer. Many other answers emphasize that one shouldn't try to time the market. But that is not the OP's question. Provided here are both:
|
Can I get my property taxes lowered?
|
The question is whether the assessment is in line with surrounding homes. If my 1500 sq ft house on 1/4 acre is assessed far higher than a similar sized house/land nearby, I'd have a case. +/- 10% can be for age/quality, but 25% or more, I'd investigate. mhoran is right, values for different purposes need not align. A start would be to use a service like Zillow which offers property tax information, as well as house sizes. Let us know what you discover. Welcome to Money.SE
|
The Benefits/Disadvantages of using a credit card
|
One of the more subtle disadvantages to large credit card purposes purchases (besides what the other answer mentions), is that it makes you less prepared for emergencies. If you carry a large balance on your credit card with the idea that your income can easily handle the payments to beat the no-interest period, you never know when you'll have an unexpected emergency and you'll end up having to pay less, miss the deadline and end up paying huge interest. Even if you are fastidious about saving and budgeting, what if your family comes under a large financial burden (just as one possible example)?
|
Where do short-term traders look for the earliest stock related news?
|
I work for a fund management company and we get our news through two different service providers Bloomberg and Thomson One. They don't actually source the news though they just feed news from other providers Professional solutions (costs ranging from $300-1500+ USD/month/user) Bloomberg is available as a windows install or via Bloomberg Anywhere which offers bimometric access via browser. Bloomberg is superb and their customer support is excellent but they aren't cheap. If you're looking for a free amateur solution for stock news I'd take a look at There are dozens of other tools people can use for day trading that usually provide news and real time prices at a cost but I don't have any direct experience with them
|
Dad paid cash for house and we want to put it in my name
|
If your parents are not on the deed then I am not sure how it could be their house. It seems like the sale was done unofficially. If your parents or aunt pass away this could be a real mess. Make this official ASAP. It might be possible for your aunt to gift you the house. This may have tax implication but the article below suggests that it may not be an issue. http://www.bankrate.com/finance/real-estate/aunt-be-taxed-for-bargain-price-on-house.aspx As you're probably aware, owning a house is expensive. Make sure you can afford taxes, bills, and maintenance. Things add up fast. I should have address the "rent to own" plan. If you plan on transferring the house from your aunt to you by renting with $0 monthly payment and then claiming it is all paid off, then I think this would be considered a gifting of the house from your aunt to you. It sounds like fraud to claim you paid something that you didn't. In the end, it is either a gift from your parents or from your aunt. The sooner you get the house in your name the better
|
Is this comparison of a 15-year vs. a 30-year mortgage reasonable?
|
I think your analysis is very clear, it's a sensible approach, and the numbers sound about right to me. A few other things you might want to think about: Tax In some jurisdictions you can deduct mortgage interest against your income tax. I see from your profile that you're in Texas, but I don't know the exact situation there and I think it's better to keep this answer general anyway. If that's the case for you, then you should re-run your numbers taking that into account. You may also be able to make your investments tax-advantaged, for example if you save them in a retirement account. You'll need to apply the appropriate limits for your specific situation and take an educated guess as to how that might change over the next 30 years. Liquidity The money you're not spending on your mortgage is money that's available to you for other spending or emergencies - i.e. even though your default assumption is to invest it and that's a sensible way to compare with the mortgage, you might still place some extra value on having more free access to it. Overpayments Would you have the option to pay extra on the mortgage? That's another way of "investing" your money that gets you a guaranteed return of the mortgage rate. You might want to consider if you'd want to send some of your excess money that way.
|
Multi-user, non-US personal finance and budget software
|
My wife and I have been ridiculously happy with YNAB. It's not "online," but syncs across our phones & computers using Dropbox. It supposedly supports different locales and currencies, but I have never needed to try that out.
|
Finding a good small business CPA?
|
Consult your local Small Business Administration office - they may have resources that can help you find what you're looking for.
|
How come the government can value a home more than was paid for the house?
|
The property tax valuation and the fair market price are NOT one and the same. They track each other, correlate to each other, but are almost NEVER the same number. In some parts of the USA, a municipality has to re-assess property tax values every ten years. In these places, the tax value of a property is on something like a 10-year moving average, NOT on the volatile daily market price. EDIT: It is easy to fall into the "trap" of thinking that property tax valuation is intended to represent fair market value. It's INTENT is to provide an accurate (or, as accurate as possible) RELATIVE VALUATION of your property compared to the other properties in the municipality. The sum of all the property values is the tax base of the municipality. When the town budget (which is paid in part via property taxes) is set, the town simply divides the tax base into the budget total to arrive at the ratio of tax-to-collect, to the tax base, also called the "tax rate per thousand dollars of valuation." i.e. if the town tax base is US$10,000,000, and the town budget is US$500,000, then the ratio is 0.05, or $50 per thousand dollars of valuation. If your property is assessed at US$100,000, then you would pay 100 x $50, or $5000 in property taxes that year. Since this is the goal of the property tax valuation, NOT deciding what your house is worth on the open market, then we are left with the question of "why use the market value of a house for property assessment?" and the answer is that of all the various schemes and algorithms you can try, "fair market value" is the easiest and most accurate...IF TIME FLUCUTATIONS ARE TAKEN OUT. For example, if I buy a house in a development for $250,000 today, and next summer the housing market crashes, and you buy the identical house next door to me for $150,000, it does NOT stand to reason that you should pay less taxes than me, because your house is "worth" $100,000 less. In fact, BOTH our houses are worth $100,000 less. What matters most in property tax valuation isn't the actual number, but rather, is YOUR valuation the same as other essentially similar properties in your tax base? Getting the RELATIVE ratio of value between you and your neighbors correct is the goal of property tax valuation.
|
Need something more basic than a financial advisor or planner
|
If you are living near a land-grant university, you might be able to find help from the university's Extension Service. In many land-grant universities (the land grants were given to universities formed for the purpose of improving "agricultural and mechanical arts"), the Extension Services have expanded beyond farm-related services to include horticulture, food and nutrition counseling, consumer finance, money management and budgeting advice etc. See, for example this site.
|
Should I fund retirement with a static asset allocation or an age based glide path?
|
I think not. I think a discussion of optimum mix is pretty independent of age. While a 20 year old may have 40 years till retirement, a 60 year old retiree has to plan for 30 years or more of spending. I'd bet that no two posters here would give the same optimum mix for a given age, why would anyone expect the Wall Street firms to come up with something better than your own gut suggests?
|
Is it sensible to redirect retirement contributions from 401(k) towards becoming a landlord?
|
This is going to seem pretty far off the beaten path, but I hope when you finish reading it you'll see the point... Suppose someone offered you a part time job: Walk their dog once per day for at least 20 minutes, and once per week pick up the dog poo from their lawn. Your compensation is $300/month. Now suppose instead you are given two choices for a job: Your preference probably has more to do with your personality and interests than the finances involved.
|
How do brokers make money from margin accounts?
|
nan
|
Can paying down a mortgage be considered an “investment”?
|
Let's start from the premise that the mortgage is something you will have anyway because you need it to live (as opposed to say getting a bigger mortgage initially in the expectation of paying it down faster than scheduled). In that case I think paying down a mortgage certainly is an investment; one with a well-defined interest rate and maturity that depends on the precise terms of the mortgage. For example I have a (UK) mortgage that's fixed for the next two years at about 5%, and allows overpayments of £500 per month, which can be withdrawn at any time. So I treat those overpayments as equivalent to savings with quite a nice interest rate, especially since mortgage interest isn't tax deductible and so I actually get the full benefit of that interest rate.
|
Is an analyst's “price target” assumed to be for 12 months out?
|
I don't think you can always assume a 12-month time horizon. Sometimes, the analyst's comments might provide some color on what kind of a time horizon they're thinking of, but it might be quite vague.
|
Less than a year at my first job out of college, what do I save for first?
|
I recommend saving for retirement first to leverage compound interest over a long time horizon. The historical real return on the stock market has been about 7%. Assuming returns stay at 7% in the future (big assumption, but don't have any better numbers to go off of), then $8,000 saved today will be worth $119,795 in 40 years (1.07^40*8000). Having a sizable retirement portfolio will give you peace of mind as you progress through life and make other expenditures. If you buy assets that pay you money and appreciate, you will be in a better financial position than if you buy assets that require significant cash outflows (i.e. property taxes, interest you pay to the bank, etc.) or assets that ultimately depreciate to zero (a car). As a young person, you are well positioned to pay yourself (not the bank or the car dealership) and leverage compound interest over a long time horizon.
|
What effect does a company's earnings have on the price of its stock?
|
Your autograph analogy seems relevant to me. But it is not just speculation. In the long run, investing in stocks is like investing in the economy. In the long run, the economy is expected to grow , hence stock prices are expected to go up. Now in theory: the price of any financial instrument is equal to the net present value today of all the future cash flows from the instrument. So if company's earnings improve, shareholders hope that the earnings will trickle down to them either in form of dividends or in form of capital gain. So they buy the stock, creating demand for it. I can try to explain more if this did not make any sense. :)
|
Cheapest USD to GBP transfer
|
Use a remitting service such as Ria Money Transfer. Almost all these services allow you to transfer upto $2999 at a time. So, you would be able to transfer the entire amount of $4500 within 2 business days(There is a monthly limit too, but it will definitely be more than $4500). There are no fees to use these services, but they do scrape off a bit on the currency rate. As of today you are getting 624 GBP for $1000 whereas the market rate is $641.95. You still save roughly $17 and 4 transactions, which adds up to more than $100. Here is a link to Ria's website. Other services, include Xoom, Western Union, Money Dart and Money Gram.
|
Howto choose a marketplace while submitting an order for a stock trade
|
It depends on your cost structure and knowledge of the exchanges. It could be optimal to make a manual exchange selection so long as it's cheaper to do so. For brokers with trade fees, this is a lost cause because the cost of the trade is already so high that auto routing will be no cheaper than manual routing. For brokers who charge extra to manually route, this could be a good policy if the exchange chosen has very high rebates. This does not apply to equities because they are so cheap, but there are still a few expensive option exchanges. This all presumes that one's broker shares exchange rebates which nearly all do not. If one has direct access to the exchanges, they are presumably doing this already. To do this effectively, one needs: For anyone trading with brokers without shared rebates or who does not have knowledge of the exchange prices and their liquidities, it's best to auto route.
|
Health Insurance and Disability Question
|
Sorry to hear about your spouse's health issues. May he have a speedy and, as far as possible, full recovery. The Patient Protectection and Affordable Care Act (PPACA, aka Obamacare) is now the law of the land. Among its many provisions are that insurers may no longer deny coverage for pre-existing conditions, they may not put lifetime caps on benefits, and they may not charge different premiums based on any criteria except age cohort and geographic area (i.e. rates may be higher for 50 year olds than 30 year olds, but sick and healthy 50 year olds living in the same area pay the same). If he gets government health coverage because he's on disability, this may not matter. On the other hand, you might find it better to put him on your employer's policy, because you like the coverage better, the employer covers part of the dependent premium, or some other reason. In any case, they can't discriminate against him or you based on his condition. ETA: Rates may vary by geography as well as age.
|
Net income correlation with Stock Price
|
Ideally, stock price reflects the value of the company, the dividends it is expected to pay, and what people expect the future value of the company to be. Only one of those (maybe one and a half) is related to current sales, and not always directly. Short-term motion of a stock is even less directly linked, since it also reflects previous expectations. A company can announce disappointing sales and see its stock go up, if the previous price was based on expecting worse news.
|
What is meant by a market that is technically strong
|
A technically strong stock or market is simply a stock or market which is up-trending and has been up-trending for a while. Just as a fundamentally strong stock is one with good fundamentals (a stock that is healthy and making higher profits year after year and continually improving), a technically strong stock has a healthy uptrend that continues to go up and up. Apple was technically strong until it hit $700 (its price stayed above the 200 day MA for a long period until after it hit $700, then broke down through the 200 day MA shortly after - the uptrend was over). I will usually buy stocks which are both fundamentally and technically strong, as a technically strong stock will generally stay technically strong longer if it also has strong and good fundamentals.
|
Fundamentals of creating a diversified portfolio based on numbers?
|
Your question is a complex one because knowledge of the investor's beliefs about the market is required. For almost any quantitative portfolio, one must have a good estimate of the expected return vector and covariance matrix of the assets in question. The expected return vector, in particular, is far from estimable. No one agrees on it and there is no way to know who is right and who is wrong. In a world satisfying the conditions of the CAPM, you can bypass this problem because the main implication of the CAPM is that the market weights are optimal. In that case the answer to your question is that you should determine the market weights of the various assets and use those along with saving in a risk-free account or borrowing, depending on your risk tolerance. This portfolio has the added benefit that you don't need to rebalance much...the weights in your portfolio adjust at the same rate as the market weights. Any portfolio that has something besides this also includes some notion of expected return aside from CAPM fair pricing. The question for you, then, is whether you have such a notion. If you do, you can mix your information with the market weights to come up with a portfolio. This is what the Black-Litterman method does, for example: get the expected return vector implied by market weights and the covariance matrix, mix with your expected return vector, then use mean-variance optimization to come up with your final weights.
|
Is it unreasonable to double your investment year over year?
|
I know it may not last longer but i was able to 2.5x my wealth over last 2 years.(2016, 2017 cont) I was successfully able to convert 70k into 452k in 21months. Now at this amount, I am really worried and want to take all the profit. I agree that I have been lucky with these returns but it was not all outright luck. Now my plan is to take 100k of it and try high risk investments while investing 350k in index funds.
|
Are leverage/ko products the only reasonable way to trade stocks?
|
There's no free lunch. Here are some positions that should be economically equivalent (same risk and reward) in a theoretically-pure universe with no regulations or transaction costs: You're proposing to buy the call. If you look at the equivalent, stock plus protective put, you can quickly see the "catch"; the protective put is expensive. That same expense is embedded in the call option. See put-call parity on Wikipedia for more: http://en.wikipedia.org/wiki/Put%E2%80%93call_parity You could easily pay 10% a year or more for the protection, which could easily eat up most of your returns, if you consider that average returns on a stock index might be about 10% (nominal, not real). Another way to look at it is that buying the long call and selling a put, which is a synthetic long position in the stock, would give you the put premium. So by not selling the put, you should be worse off than owning the stock - worse than the synthetic long - by about the value of the put premium. Or yet another way to look at it is that you're repeatedly paying time value on the long call option as you roll it. In practical world instead of theory world, I think you'd probably get a noticeable hit to returns just from bid-ask and commissions, even without the cost of the protection. Options cost more. Digressing a bit, some practical complications of equivalency between different combinations of options and underlying are: Anyway, roughly speaking, any position without the "downside risk" is going to have an annual loss built in due to the cost of the protection. Occasionally the options market can do something weird due to supply/demand or liquidity issues but mostly the parity relationships hold, or hold closely enough that you can't profit once expenses are considered. Update: one note, I'm talking about "vanilla" options as traded in the US here, I guess there are some somewhat different products elsewhere; I'm not sure exactly which derivatives you mean. All derivatives have a cost though or nobody would take the other side of the trade.
|
Can I buy only 4 shares of a company?
|
I'm not sure it is the best idea, but you can buy only 4 stocks generally. As you alluded to, you should take notice of the fees. Also note that many stocks trade at significantly lower prices than Apple's per shares, so you might want to factor that into your decision. You could probably get a better feel for transactions if you bought say 50 shares of a $30 stock; then it might be easier to see what it's like to sell some, etc. Note that specific trading sites might have various limits in place that would pose as barriers to this sort of behavior though.
|
Am I entitled to get a maintenance loan?
|
According to GOV.UK, you can only apply for Student Finance if: Since you don't fulfill the criterion 2 and 3, you are technically not eligible for Student Finance. Since you have received information from Student Finance England that you can apply for the maintenance loan, you should either write to them or call them again, to confirm the information given to you.
|
How to protect a Stock you still want to own from a downturn?
|
Adding on to all the fine answers, you can consider selling a covered call. You will have to own a minimum of 100 shares. It will offer a bit of protection, but limit your upside. If your confident long term, but expect a broader market pull back then a covered call might give you that small protection your looking for.
|
How to use stocks certificate as a gift to a teenager?
|
Yes, depending on what you're trying to achieve. If its just a symbolic gift - you can use a service like this. There are several companies providing this service, look them up, but the prices are fairly the same. You'll end up getting a real stock certificate, but it will cost a lot of overhead (around $40 to get the certificate, and then another $40 to deposit it into a brokerage account if you want to sell it on a stock exchange). So although the certificate is real and the person whose name on it is a full-blown shareholder, it doesn't actually have much value (unless you buy a Google or Apple stock, where the price is much much higher than the fees). Take into account that it takes around 2 months for the certificate to be issued and mailed to you, so time accordingly. Otherwise, you can open a custodial brokerage account, and use it to buy stocks for the minor. Both ways are secure and legal, each for its own purpose and with its own fees.
|
How does the world - in aggregate - generate a non-zero return?
|
I think you'll find some sound answers here: Money Creation in the Modern Economy by the Bank of England Where does money come from? In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood. The principal way in which they are created is through commercial banks making loans: whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money. This description of how money is created differs from the story found in some economics textbooks.
|
What should I do with my $25k to invest as a 20 years old?
|
Investing is really about learning your own comfort level. You will make money and lose money. You will make mistakes but you will also learn a great deal. First off, invest in your own financial knowledge, this doesn't require capital at all but a commitment. No one will watch or care for your own money better than yourself. Read books, and follow some companies in a Google Finance virtual portfolio. Track how they're doing over time - you can do this as a virtual portfolio without actually spending or losing money. Have you ever invested before? What is your knowledge level? Investing long term is about trying to balance risk while reducing losses and trying not to get screwed along the way (by people). My personal advice: Go to an independent financial planner, go to one that charges you per hour only. Financial planners that don't charge you hourly get paid in commissions. They will be biased to sell you what puts the most money in their pockets. Do not go to the banks investment people, they are employed by the banks who have sales and quota requirements to have you invest and push their own investment vehicles like mutual funds. Take $15k to the financial planner and see what they suggest. Keep the other $5K in something slow and boring and $1k under your mattress in actual cash as an emergency. While you're young, compound interest is the magic that will make that $25k increase hand over fist in time. But you need to have it consistently make money. I'm young too and more risk tolerant because I have time. While I get older I can start to scale back my risk because I'm nearing retirement and preserve instead of try to make returns.
|
To rebalance or not to rebalance
|
Rebalancing is, simply, a way of making sure your risk/reward level is where you want it to be. Let's say you've decided that your optimal mix is 50% stocks and 50% bonds (or 50% US stocks, 50% international, or 30/30/30 US large-cap/US small-cap/US midcap...). So you buy $100 of each, but over time, the prices will of course fluctuate. At the end of the year, the odds that the ratio of the value of your investments is equal to the starting ratio is nil. So you rebalance to get your target mix again. Rebalance too often and you end up paying a lot in transaction fees. Rebalance not often enough and you end up running outsize risk. People who tell you that you should rebalance to make money, or use "dollar cost averaging" or think there is any upside to rebalancing outside of risk management are making assumptions about the market (mean regressing or some such thing) that generally you should avoid.
|
Common Stock Options Value
|
Par value of common stock is essentially a historical artifact; it is a price at which the company will redeem shares directly. If common stock has any par value at all, it is always so low that no one would ever redeem, preferring to sell in the market at a better price. Par is obviously much more relevant to debt securities than equities. So you do need a strike price. ljwobker's letter is a typical one, in that companies often make the strike price for granted options a formula based on the market price of the stock at the time of the grant, say 100% of market or 110% of market. But you will obviously need to find out what strike your company is offering.
|
Why index funds have different prices?
|
To add on to the other answers, in asking why funds have different price points one might be asking why stocks aren't normalized so a unit price of $196 in one stock can be directly compared to the same price in another stock. While this might not make sense with AAPL vs. GOOG (it would be like comparing apples to oranges, pun intended, not to mention how would two different companies ever come to such an agreement) it does seem like it would make more sense when tracking an index. And in fact less agreement between different funds would be required as some "natural" price points exist such as dividing by 100 (like some S&P funds do). However, there are a couple of reasons why two different funds might price their shares of the same underlying index differently. Demand - If there are a lot of people wanting the issue, more shares might be issued at a lower price. Or, there might be a lot of demand centered on a certain price range. Pricing - shares that are priced higher will find fewer buyers, because it makes it harder to buy round lots (100 shares at $100/share is $10,000 while at $10/share it's only $1000). While not everyone buys stock in lots, it's important if you do anything with (standardized) options on the stock because they are always acting on lots. In addition, even if you don't buy round lots a higher price makes it harder to buy in for a specific amount because each unit share has a greater chance to be further away from your target amount. Conversely, shares that are priced too low will also find fewer buyers, because some holders have minimum price requirements due to low price (e.g. penny) stocks tending to be more speculative and volatile. So, different funds tracking the same index might pick different price points to satisfy demand that is not being filled by other funds selling at a different price point.
|
Indian resident owning dividend-paying shares in company based in France: Can I save on withholding tax?
|
France taxes capital / dividend gains accrued in France. Hence you will not be able to reduce this liability. India does have a Double Tax Avoidance Treaty with France and you can claim relief for the tax paid in France.
|
Is stock trading based more on luck than poker playing?
|
I'd say that it cannot be meaningfully calculated or measured because the two are just too different in every way. Poker Stock trading I guess the last point (that someone relying on luck is exploitable in poker but not in stock trading) could be interpreted as stock trading being based more on luck, while the second and third points indicated that poker has more true randomness and is thus based more on luck. Something both have in common is that people who have been losing money are often tempted to take stupid risks which lose them everything.
|
Comparing ETFs following the same index
|
The key two things to consider when looking at similar/identical ETFs is the typical (or 'indicative') spread, and the trading volume and size of the ETF. Just like regular stocks, thinly traded ETF's often have quite large spreads between buy and sell: in the 1.5-2%+ range in some cases. This is a huge drain if you make a lot of transactions and can easily be a much larger concern than a relatively trivial difference in ongoing charges depending on your exact expected trading frequency. Poor spreads are also generally related to a lack of liquidity, and illiquid assets are usually the first to become heavily disconnected from the underlying in cases where the authorized participants (APs) face issues. In general with stock ETFs that trade very liquid markets this has historically not been much of an issue, as the creation/redemption mechanism on these types of assets is pretty robust: it's consequences on typical spread is much more important for the average retail investor. On point #3, no, this would create an arbitrage which an authorized participant would quickly take advantage of. Worth reading up about the creation and redemption mechanism (here is a good place to start) to understand the exact way this happens in ETFs as it's very key to how they work.
|
Why are credit cards preferred in the US?
|
There are several reasons why credit cards are popular in the US: On the other hand, debit cards do not have any of these going for them. A debit card doesn't make much money for the bank unless you overdraw or something, so banks don't have incentive to push you to use them as much. As a result they don't offer rewards other benefits. Some people say the ability to spend more than you have is a downside of a credit card. But it's really an upside. The behavior of doing that when it isn't needed is bad, but that's not the card's fault, it's the users'. You can get a credit card with a very small limit if this is an issue for you. The question I find interesting is why debit cards are more popular in your home country. I can't think of any advantage they offer besides free cash back. But most people in the US don't use cash much either. I have to think in your home country the banks have a different revenue model or perhaps your country isn't as eager to offer tons of easy credit to everyone as the US is.
|
On what time scales are stock support and resistance levels meaningful?
|
Stock support and resistance levels mean that historically, there was "heavy" buying/selling at those levels. This suggests, but does not guarantee, that "someone" will buy at "support" levels, and "someone" will sell at "resistance levels. Any "history" is meaningful, but most analysts will say that after six months to a year, the impact of events declines the further back in time you go. They can be meaningful for periods as short as days.
|
How to help a financially self destructive person?
|
Wow. Just ... wow. We all must start where we are, I guess. The past is the past. There almost certainly isn't a cheap way to fix this. You're already on the hook for $4k per month. Your money is enabling her behavior. You'd rather not enable her behavior, but the money is part of the consequences of your divorce, so into her bank account it goes. Those who control how much alimony your ex-wife receives might reach the conclusion she needs more. That's not a hard conclusion for them to make. It's not their money. The living conditions are hurting your kids, and that's unfortunate, but that's also part of the consequences of your divorce. If it's deemed that your kids are better off not visiting her, then you might be relieved of paying child support (since you're supporting them at that point) but you might still be supporting her until some trigger is met, which might be never. (You know those details better than I do, of course.) If she's already lost her house, filed for bankruptcy, borrowed money from people that she hasn't paid back, and gets a check from you each month and still has utilities shut off, she'll continue to deteriorate financially until she hits rock bottom. Then, and only then, will she see the need to fix her behavior. Now, the (possibly) million dollar question for you is, "Where is rock bottom?" Do what you can to make that happen sooner rather than later, because you'll likely be subsidizing her all the way down, and part of the way back up. You've lost most of the leverage you once had to change her behavior, but try every way you can. You might hit the jackpot.
|
“Inflation actually causes people not to spend”… could it be true?
|
Not always. You always consider economic factors in conjunction with each other rather than in isolation, which leads to weird assumptions. People spending isn't what you should look at always. When inflation is high, means government is spending. Government is spending on public projects, creating employment, increasing salaries, doling out loans. So you are putting money into the economy and into people's hands. Everybody will be spending, so it will also drive demand(Demand Pull inflation). But there are differences among economists regarding Cost push inflation, which is a dangerous phenomena. At the same time the interest rates, which are a monetary tool for central banks to increase(decrease) the money flow in the economy, are low. Under low interest rate conditions, businesses take loans to invest in projects. Because interest rates are low, people find it logical to spend now than spend later. As interest rates are low, there is an expectation that they cannot earn more in savings than investing in products which will generate benefits in the near term. These all goes on in cycles and after a period of inflation, you will see government taking action to rein in inflation. It will increase interest rates to suck money out of the economy. This is when people will curb spending, because they know they will earn a higher return while saving rather than investing.
|
Why invest in becoming a landlord?
|
why does it make sense financially to buy property and become a landlord? Because then your investment generates cash instead of just sitting idle. All taxes, fees and repairs aside it would take almost 21 years before I start making profits. No - your profit will be the rents that you collect (minus expenses). You still have an asset that is worth roughly what you paid for it (and might go up in value), so you don't need to recoup the entire cost of the property before making a profit. Compared to investing the same 150k in an ETF portfolio with conservative 4% in annual returns I would have made around 140k € after taxes in the same 21 years i.e. almost doubled the money. If you charge 600 € / month (and never miss a month of rental income), after 21 years you have made 151k € in rents plus you still have a property. That property is most likely going to be worth more than you paid for it, so you should have at least 300k € in assets. Having said all that, it does NOT always make sense to invest in rental property. Being a landlord can be a hard job, and there are many risks involved that are different that risks in financial investments.
|
TOCOM oil in USD
|
TOCOM Crude is a cash-settled blend of Oman and Dubai crude oil, both quoted in USD. The daily settlement price is mark to market, but the final settlement price is based on reported prices from Dubai and Oman (or calculated in some cases with a known procedure), averaged and then converted to Yen using monthly average exchange rates as published by a reference bank (see Detailed Rules) You're trying to go all the way back and unfuddle quotes into a blend of USD-quoted oils. The correct procedure here would be to go with the Oman and Dubai prices in the first place (unless you're trying to arbitrage the TOCOM market). As to why they do it this way? It's a service. TOCOM takes on all the challenges to provide customers with a steady and consistent way of trading cash-oil. For physical oil, all you'd have to do is buy the blend on Dubai's and Oman's spot market. You trust TOCOM's price finding process, i.e. there will be no discrepancies between your TOCOM cash-oil and the Middle East physical oil. Edit: As to why Japan isn't buying WTI directly: There's a considerable cost of carry. WTI delivery location is Cushing, OK; there are pipelines but it's still a logistics act to get the oil to a port on the West Coast and then have it shipped to Japan. Dubai's delivery is at Jebel Ali (Persian Gulf), Omani crude can be shipped straight from Mina Al Fahal. Not only is it a shorter trip but also there are more shipping companies specialised in oil deliveries to the Asian hotspots. Why they pay in USD? Persian oil is highly sought after in nearly all of Asia's economies but there's little other exported goods from there. So naturally the market for currency crosses (AEDJPY, OMRJPY, AEDINR, OMRINR, etc.) is not that liquid. At least not as liquid as to make buying Persian oil a smooth deal. Anyway, both Dubai and Oman chose to follow Western practice to quote their contracts in USD and (maybe because of liquidity concerns) also to accept USD for payment only.
|
Analyst estimates for an insurance company
|
Something to consider is how broad is Yahoo! Finance taking in their data for making some comparisons. For example, did you look at the other companies in the same industry? On the Industry page, the Top Life Insurance Companies by Market Cap are mostly British companies which could make things a bit different than you'd think. Another point is how this is just for one quarter which may be an anomaly as the data could get a bit awkward if some companies are just coming back to being profitable and could have what appears to be great growth but this is because their earnings grow from $.01/share to $1/share which is a growth of $10,000 percent as this is an increase of 100 times but really this may just be from various accounting charges the company had that hit its reserves and caused its earnings to dip temporarily.
|
What happens to my stocks when broker goes bankrupt?
|
If you are using a US broker, you are protected by SIPC up to $500,000. SIPC also oversees the liquidation of the broker itself, either by appointing a trustee, or by directly contacting clients. If they are able to transfer accounts to a healthy broker before bankruptcy, they will do so, but if not, you will need to file a claim with them.
|
What is a call spread and how does it work?
|
A bullish (or 'long') call spread is actually two separate option trades. The A/B notation is, respectively, the strike price of each trade. The first 'leg' of the strategy, corresponding to B, is the sale of a call option at a strike price of B (in this case $165). The proceeds from this sale, after transaction costs, are generally used to offset the cost of the second 'leg'. The second 'leg' of the strategy, corresponding to A, is the purchase of a call option at a strike price of A (in this case $145). Now, the important part: the payoff. You can visualize it as so. This is where it gets a teeny bit math-y. Below, P is the profit of the strategy, K1 is the strike price of the long call, K2 is the strike price of the short call, T1 is the premium paid for the long call option at the time of purchase, T2 is the premium received for the short call at the time of sale, and S is the current price of the stock. For simplicity's sake, we will assume that your position quantity is a single option contract and transaction costs are zero (which they are not). P = (T2 - max(0, S - K2)) + (max(0, S - K1) - T1) Concretely, let's plug in the strikes of the strategy Nathan proposes, and current prices (which I pulled from the screen). You have: P = (1.85 - max(0, 142.50 - 165)) - (max(0, 142.50 - 145)) = -$7.80 If the stock goes to $150, the payoff is -$2.80, which isn't quite break even -- but it may have been at the time he was speaking on TV. If the stock goes to $165, the payoff is $12.20. Please do not neglect the cost of the trades! Trading options can be pretty expensive depending on the broker. Had I done this trade (quantity 1) at many popular brokers, I still would've been net negative PnL even if NFLX went to >= $165.
|
LLC Partnership Earned Income vs. Partnership Share
|
It would appear that you are not actually "equal" partners. You have differently valued interests and those values fluctuate based on individual performance. The TurboTax advice is simplified for entities that don't track interests relative to partner inputs. IRC § 704(a), partner's distributive share is set by the partnership agreement, and § 704(b), failing an allocation by the agreement it is set by the partner's interest in the partnership. But note § 704(b)(2), which prevents blatant tax-rigging in the partnership agreement.
|
Where can I invest my retirement savings money, where it is safer than stocks?
|
There are many questions and good answers here regarding investment choices. The first decision you need to make is how involved do you intend to be in investment activity. If you plan to be actively investing by yourself, you should look for questions here about making investment choices. If you intend to be a more passive investor, look for posts by "Bogleheads", who focus on broad-focused, low cost investments. This is the optimal choice for many people. If you are not comfortable managing investments at all, you need to figure out how to find a competent and reasonably priced financial advisor to meet with and guide your investment strategy. This advice generally costs about 1-2% of your total managed assets annually.
|
What are the reasons to get more than one credit card?
|
3 reasons I can think of: I once worked for a bank and when credit scoring for loans, if you had been approved by different institutions, you were given a better score. So if you held a Visa and Mastercard (as opposed to two Visa cards) your credit score would go higher. More than 6 cards though looked suspicious and your score would take a big hit. Having more than card has helped me when getting special offers multiple times from some websites where it was limited to "one per customer" though most just used your address or email account. If you owed $1000 in total which you can't pay off in one go, it is better to have that split across two cards. You would be paying interest on $500 on each card but when you have one card paid off, the interest you would be paying on the other would be based on the original debt to that one card of $500 (not $1000). I hope that makes sense.
|
I'm 23 and was given $50k. What should I do?
|
I'll add 2 observations regarding current answers. Jack nailed it - a 401(k) match beats all. But choose the right flavor account. You are currently in the 15% bracket (i.e. your marginal tax rate, the rate paid on the last taxed $100, and next taxed $100.) You should focus on Roth. Roth 401(k) (and if any company match, that goes into a traditional pretax 401(k). But if they permit conversions to the Roth side, do it) You have a long time before retirement to earn your way into the next tax bracket, 25%. As your income rises, use the deductible IRA/ 401(k) to take out money pretax that would otherwise be taxed at 25%. One day, you'll be so far into the 25% bracket, you'll benefit by 100% traditional. But why waste the opportunity to deposit to Roth money that's taxed at just 15%? To clarify the above, this is the single rate table for 2015: For this discussion, I am talking taxable income, the line on the tax return designating this number. If that line is $37,450 or less, you are in the 15% bracket and I recommend Roth. Say it's $40,000. In hindsight on should put $2,550 in a pretax account (Traditional 401(k) or IRA) to bring it down to the $37,450. In other words, try to keep the 15% bracket full, but not push into 25%. Last, after enough raises, say you at $60,000 taxable. That, to me is "far into the 25% bracket." $20,000 or 1/3 of income into the 401(k) and IRA and you're still in the 25% bracket. One can plan to a point, and then use the IRA flavors to get it dead on in April of the following year. To Ben's point regarding paying off the Student Loan faster - A $33K income for a single person, about to have the new expense of rent, is not a huge income. I'll concede that there's a sleep factor, the long tern benefit of being debt free, and won't argue the long term market return vs the rate on the loan. But here we have the probability that OP is not investing at all. It may take $2000/yr to his 401(k) capture the match (my 401 had a dollar for dollar match up to first 6% of income). This $45K, after killing the card, may be his only source for the extra money to replace what he deposits to his 401(k). And also serve as his emergency fund along the way.
|
Large volume options sell
|
It depends upon who the counterparty is. If the counterparty is the OCC, they would most likely call force majeure if their finances were at serious risk. They could be forced to take a loss but not to be pulled apart. Villain could always try to take the OCC to court, but then his plot would probably be exposed in discovery. The need to involve the courts is even greater if these are private contracts. If the options were on one security, they would be difficult to sell in one day. If they were spread across the most liquid ETFs and equities, they could be sold in one day easily, the above solvency problems notwithstanding.
|
Is there a NY tax form to use when one is missing a K-1 (or 1065) from an LLC?
|
Form 10-K is filed by corporations to SEC. You must be thinking of form 1065 (its schedule K) that a partnership (and multi-member LLC) must file with the IRS. Unless the multi-member LLC is legally dissolved, it must file this form. You're a member, so it is your responsibility, with all the other members, to make sure that the manager files all the forms, and if the manager doesn't - fire the manager and appoint another one (or, if its member managed - chose a different member to manage). If you're a sole member of the LLC - then you don't need to file any forms with the IRS, all the business expenses and credits are done on your Schedule C, as if you were a sole propriator.
|
Does inflation equal more loans?
|
What is the relationship between inflation and interest rates? notes a relationship between inflation and interest rates that would suggest high inflation would imply higher interest rates that would mean less loans as money becomes more expensive in a sense. In contrast, in times of low inflation then rates may be low and thus there is a greater chance of people and businesses wanting loans.
|
How to start investing/thinking about money as a young person?
|
nan
|
Would I ever need credit card if my debit card is issued by MasterCard/Visa?
|
I was hoping to comment on the original question, but it looks to me like the asker lives in the EU, where credit cards are a lot less common and a lot of the arguments (car rental, building up of credit etc) brought forward by people living in the US just don't apply. In fact especially airlines (and other merchants) will charge you extra when using a credit card instead of a debit card and this can add up fairly quickly. I hold a credit card purely for travelling outside the EU and occasionally I will travel for work and make my own arrangements, then it can come in handy as I am able to reclaim my expenses before I have to pay my credit card bill (in this case I will also claim the extra credit card fees from my employer). This however is for my personal convenience and not strictly necessary. (I could fill out a bunch of paperwork and claim the costs from my employer as an advance.) In the EU I find that if my VISA debit card will not work in a shop, neither will my credit card, so on that note it's pretty pointless. So to answer the asker question: If you live (and travel) in the EU you don't need a credit card, ever. If you travel to the US, it would be advantageous to get one. Occasionally banks will offer you a credit card for free and there's no harm in taking it (apart from the fact that you have one more card to keep track off), but if you do, set up a direct debit to pay it off automatically. And as other people have said: Don't spend money you don't have. If you are not absolutely sure you can't do this, don't get a credit card.
|
Can you recommend some good websites/brokers for buying/selling stocks in India?
|
Most of the Indian Brokers started offering API's to retail client these days. And NSE Exchange also supports algo trading at retail level. Currently two levels of API are offered. 1)Semi-automatic or one touch trading (Retail Traders) 2)Fully Automatic ( Dealers) I had tested the API with a discount broker www.tradejini.com and it is good at retail level. But to make your trading systems fully automatic you need to pass NISM Series VIII certification (Dealer Certification) and have to take dealer terminals from the broker. You also have to register as a dealer and have to take permission from exchange to run your algos fully automated. Without Exchange permission it is illegal to involve in algo trading.
|
Previous owner of my home wants to buy it back but the property's value is less than my loan… what to do?
|
A short-sale seems like an extreme and unethical course to take. You should read your mortgage documents or work with your attorney to read the mortgage and determine whether it is an "assumable" mortgage. If so, you might be able to get the former owner to take over the mortgage.
|
Can you deduct hobby expenses up to hobby income in Canada?
|
Yes, your business needs to be in the business of making money in order for you to deduct the expenses associated with it. I suppose in theory this could mean that if you take in $10,000 and spend $30,000 every year, you not only don't get a net deduction of $20,000 (your loss) but you have to pay tax on $10,000 (your revenue). However this is super fixable. Just only deduct $9500 of your expenses. Tada! Small profit.For all the gory details, including how they consider whether you have an expectation of profits, see http://www.cra-arc.gc.ca/E/pub/gl/p-176r/p-176r-e.html This "expectation of profit" rule appears to apply to things like "I sell home décor items (or home decorating advice) and therefore need to take several multi week trips to exotic vacation destinations every year and deduct them as business expenses." If you're doing woodworking or knitting in your home and selling on Etsy you don't particularly have any expenses. It's hard to imagine a scenario where you consistently sell for less than the cost of materials and then end up dinged on paying tax on revenue.
|
Is there a way to open a U.S. bank account for my LLC remotely?
|
Yes, it is possible. Although there may be red tape for a business account, Alliant Credit Union offers completely online signup and their representatives are reachable by email. You'll probably need to send in the LLC articles this way http://www.alliantcu.com/checking-accounts.html (as pointed out by @littleadv this site defaults to "personal checking" accounts, there is a business checking tab which doesn't generate a direct link, some might miss that) And even if there are a ton of regulations that some pencil pushers at larger banks anecdotally cite (without citing), there will be enough banks that don't care. Good Luck
|
How to help a financially self destructive person?
|
I'm afraid your best recourse may be legal. I don't know that internet is a necessity, but the court would frown upon anyone paying $4K for rent but not being able to afford to heat the water or turn the lights on. $48K a year net should be enough for her to at least keep the kids with these things. I don't know that you can educate her. Her issue is very deep-seated and far beyond a good financial planning type session.
|
How to calculate car insurance quote
|
First you should understand the basics of how insurance companies make money: In a simple scenario, assume 1,000 have car insurance. Assume that on average, 100 people have accidents per year, and that each accident costs $10,000. So, we can expect total costs to be $1,000,000 per year. Some of those costs will be paid by the drivers, who have some sort of 'deductible'. That is - the insurance company will only cover costs after the driver has themself paid some initial amount [something like, the first $1,000 of repairs is paid by the driver]. So now the insurance company expects to have to pay out $900,000 in total claims this year. If they want to pay those claims (and also pay their administrative costs, and earn a profit), they might want to have $1,250,000 in revenue. Across 1,000 people, that would be $1,250 / year in insurance premiums. Of course, the big question for the insurance company is: how much will they really need to pay out in insurance claims each year? The better they can predict that number, the more profitable they can be [because they can charge a much more accurate amount, which can earn them new customers and gives them insurance {pun} that each new customer is actually profitable to them on average]. So the insurance company spends a lot of time and money trying to predict your likelihood of a car accident. They use a lot of metrics to do this. Some might be statistical hogwash that they charge you because they feel they can [if every insurance company charges you extra for driving a 2-door instead of a 4-door, then they all will], and some might be based in reality. So they attempt to correlate all of the items in your list, to see if any of those items indicates that you should be charged more (or less) for your insurance. This is equal parts art and science, and a lot of it comes down to how they market themselves. ie: if an insurance company gives a discount for being in college, is that because college drivers are better drivers, or is it because they want to increase the number of young customers they have, so they can keep those customers for life? Therefore how each metric factors into your calculation will be based on the company using it. It would basically be impossible to 'come up with' the same answer as the insurance company by having the information you provided, because of how heavily dependant that answer is on statistics + marketing. As for how your state matters - some states may have different accident rates, and different payout systems. For example - is Hawaii driving more dangerous because of all the tourists driving rented cars faster than they should? Is New York less expensive to insure because better public health care means less cost is borne by the insurance company in the event of an accident [I have no idea if either of these things are the case, they are purely for hypothetical discussion purposes]. In short, make sure you get quotes from multiple providers, and understand that it isn't just the cost that changes. Check changes in coverage and deductibles as well [ie: if one company charges you $100 / month when everyone else charges $200 / month - make sure that the cheaper company doesn't limit its coverage in ways that matter to you].
|
When I google a ticker like XLE or something, I see a price which updates frequently (about every second or so), where can I find this for options?
|
you can try CME DataSuite. Your broker gives you real time options quotes. If you do not have one you can open a scottrade account with just $500 deposit. When I moved my money from scottrade to ameritrade they did not close my account even till this day I can access my scottrade account and see real time quotes and the same research they offered me before. You can try withdrawing your deposit and see if it stays open like mine did.
|
How can I withdraw money from my LLC?
|
There are TWO parts to an LLC or any company structure. This being the entire point of creating an LLC. The context is that a lawyer is after your LLC, and he's arguing that the LLC is not genuine, so he can go after your personal assets - your house, car, IRAs, tap your wife's salary etc. This is called "piercing the corporate veil". What would he use to claim the LLC is not genuine? The determination here is between you and the judge in a lawsuit. Suffice it to say, the way you withdraw money must consider the above issues, or you risk breaking the liability shield and becoming personally liable, which means you've been wasting the $25 every year to keep it registered. The IRS has a word for single member LLCs: "Disregarded entity". The IRS wants to know that the entity exists and it's connected to you. But for reporting tax numbers, they simply want the LLC's numbers folded into your personal numbers, because you are the same entity for tax purposes. The determination here is made by you. *LLCs are incredible versatile structures, and you can actually choose to have it taxed like a corporation where it is a separate "person" which files its own tax return. * The IRS doesn't care how you move money from the LLC to yourself, since it's all the same to them. The upshot is that while your own lawyer prohibits you from thinking of the assets as "all one big pile", IRS requires you to. Yes, it's enough to give you whiplash.
|
Pros and Cons of Interest Only Loans
|
The advantage of interest only mortgages is that they can increase your cashflow as you are only paying the interest and not any part of the principle. We have most of our investment loans on interest only for 10 years. When we got the loans about 6 to 7 years ago our LVR was only 60% and the property prices have increased by about 40% in that time. We also place our excess cashflow into offset accounts linked to the investment loans, so there is extra cash available in case things go bad. The disadvantage of interest only mortgages is that you are not paying off any principal for the length of the interest only period. If you are over extended this could cause problems as you need to rely totally on the price of the property going up for your equity to increase. As you are currently paying mortgage insurance leads me to believe your LVR is above 80%, so you would not have much equity available in your home. With an interest only loan this could pose you some problems. You should never try to over extend yourself, the slightest thing that goes wrong could get you into financial troubles. Always try to have some buffer to help you stay on your feet if circumstances do change for the worst.
|
Are Index Funds really as good as “experts” claim?
|
Here is my simplified take: In any given market portfolio the market index will return the average return on investment for the given market. An actively managed product may outperform the market (great!), achieve average market performance (ok - but then it is more expensive than the index product) or be worse than the market (bad). Now if we divide all market returns into two buckets: returns from active investment and returns from passive investments then these two buckets must be the same as index return are by definition the average returns. Which means that all active investments must return the average market return. This means for individual active investments there are worse than market returns and better then market returns - depending on your product. And since we can't anticipate the future and nobody would willingly take the "worse than market" investment product, the index fund comes always up on top - IF - you would like to avoid the "gamble" of underperforming the market. With all these basics out of the way: if you can replicate the index by simply buying your own stocks at low/no costs I don't see any reason for going with the index product beyond the convenience.
|
Received a call to collect on a 17 year old, charged off debt. What do I do?
|
If they are a debt collector, they must follow the requirements of the Fair Debt Collection Practices Act. In particular, they must provide you with verification of the debt at your written request. If they won't give you a way to do this, they are in violation of the law, and you should contact proper authorities. If they are not a debt collection agency, it does sound like a scam, in which case you should also contact the appropriate law enforcement agency.
|
If banks offer a fixed rate lower than the variable rate, is that an indication interest rates may head down?
|
Usually that is the case that when fixed rates are lower than the variable rates, it is an indication that the banks feel the next movement in rates could be down. You also need to look at the fixed rates for different periods, for example 1 year fixed compared to 3 year fixed and 5 year fixed rates. If you find the 3 and 5 year fixed rates are higher than the 1 year fixed rates this could be an indication that the banks feel rates will fall in the short term but the falls won't last long and will continue to rise after a year or so. If the 3 year fixed rates are also low in comparison, then the banks may feel that the economy is heading for a longer term down trend. The banks won't want to lose out, so will change their fixed rates on their perception of where they feel the economy is headed. Since your post in May 2011, the standard variable rate has since dropped twice (in November and December) to be at 7.30%. You will also find that fixed rates have also been dropped further by the banks, indicating additional future cuts in the variable rates. Regards, Victor
|
How should I record invoices in foreign currency in GNUCash?
|
The solution I've come up with is to keep income in CAD, and Accounts Receivable in USD. Every time I post an invoice it prompts for the exchange rate. I don't know if this is "correct" but it seems to be preserving all of the information about the transactions and it makes sense to me. I'm a programmer, not an accountant though so I'd still appreciate an answer from someone more familiar with this topic.
|
Mutual fund capital gain on my 1099-DIV : no cost basis?
|
The capital gain is either short-term or long-term and will be indicated on the 1099-DiV. You pay taxes on this amount as the capital gain was received in a taxable account (assuming since you received a 1099-DIV). More info here: https://www.mutualfundstore.com/brokerage-account/capital-gains-distributions-taxable
|
How much can I withdraw from Betterment and be considered long-term investment?
|
This question and your other one indicate you're a bit unclear on how capital gains taxes work, so here's the deal: you buy an asset (like shares of stock or a mutual fund). You later sell it for more than you bought it for. You pay taxes on your profit: the difference between what you sold it for and what you bought it for. What matters is not the amount of money you "withdraw", but the prices at which assets are bought and sold. In fact, often you will be able to choose which individual shares you sell, which means you have some control over the tax you pay. For a simple example, suppose you buy 10 shares of stock for $100 each in January (an investment of $1000); we'll call these the "early" shares. The stock goes up to $200 in July, and you buy 10 more shares (investing an additional $2000); we'll call these the "late" shares. Then the stock drops to $150. Suppose you want $1500 in cash, so you are going to sell 10 shares. The 10 early shares you bought have increased in value, because you bought then for $100 but can now sell them for $150. The 10 late shares have decreased in value, because you bought them for $200 but can now only sell them for $150. If you choose to sell the early shares, you will have a capital gain of $500 ($1500 sale price minus $1000 purchase price), on which you may owe taxes. If you sell the late shares, you will have a capital loss of $500 ($1500 sale price minus $2000 purchase price is -$500), which you can potentially use to reduce your taxes. Or you could sell 5 of each and have no gain or loss (selling five early shares for $150 gives you a gain of $250, but selling five late shares for $150 gives you a loss of $250, and they cancel out). The point of all this is to say that the tax is not determined by the amount of cash you get, but by the difference between the sale price and the price you purchased for (known as the "cost basis"), and this in turn depends on which specific assets you sell. It is not enough to know the total amount you invested and the total gain. You need to know the specific cost basis (i.e., original purchase price) of the specific shares you're selling. (This is also the answer to your question about long-term versus short-term gains. It doesn't matter how much money you make on the sale. What matters is how long you hold the asset before selling it.) That said, many brokers will automatically sell your shares in a certain order unless you tell them otherwise (and some won't let you tell them otherwise). Often they will use the "first in, first out" rule, which means they will always sell the earliest-purchased shares first. To finally get to your specific question about Betterment, they have a page here that says they use a different method. Essentially, they try to sell your shares in a way that minimizes taxes. They do this by first selling shares that have a loss, and only then selling shares that have a gain. This basically means that if you want to cash out $X, and it is possible to do it in a way that incurs no tax liability, they will do that. What gets me very confused is if I continue to invest random amounts of money each month using Betterment, then I need to withdraw some cash, what are the tax implications. As my long answer above should indicate, there is no simple answer to this. The answer is "it depends". It depends on exactly when you bought the shares, exactly how much you paid for them, exactly when and how much the price rose or fell, and exactly how much you sell them for. Betterment is more or less saying "Don't worry about any of this, trust us, we will handle everything so that your tax is minimized." A final note: if you really do want to track the details of your cost basis, Betterment may not be for you, because it is an automated platform that may do a lot of individual trades that a human wouldn't do, and that can make tracking the cost basis yourself very difficult. Almost the whole point of something like Betterment is that you are supposed to give them your money and forget about these details.
|
How to avoid tax when taking a windfall in small chunks?
|
I agree with the other posters that you will need to seek the advice of a tax attorney specializing in corporate taxation. Here is an idea to investigate: Could you sell the company, and thereby turn the profits that are taxed as ordinary income into a long-term capital gain (taxed at 15%, plus state income tax, if any)? You can determine the value of a profitable business using discounted cash flow analysis, even if you expect that the revenue stream will dry up due to product obsolescence or expiry of licensing agreements. To avoid the capital gains taxes (especially if you live in a high-tax state like California), you could also transfer the stock to a Charitable Remainder Trust. The CRT then sells the shares to the third-party acquirer, invests the proceeds and pays you annual distributions (similar to an annuity). The flip side of a sale is that now the acquiring party will be stuck with the taxes payable on your company's profits (while being forced to amortize the purchase price over multiple years -- 15, if I recall correctly), which will factor into the valuation. However, it is likely that the acquirer has better ways to mitigate the tax impact (e.g. the acquirer is a company currently operating at a loss, and therefore can cancel out the tax liabilities from your company's profits). One final caveat: Don't let the tax tail wag the business dog. In other words, focus your energies on extracting the maximum value from your company, rather than trying to find convoluted tax saving strategies. You might find that making an extra dollar in profits is easier than saving fifty cents in taxes.
|
How do I find a legitimate, premium credit repair service?
|
If the bad credit items are accurate, disputing the accuracy of the items seems at best, unethical. If the bad credit items are inaccurate, the resolution process provided by each of the 3 credit bureaus, while time consuming, seems the way to go.
|
Buying Fixed Deposit in India from Europe
|
You could go further and do a carry trade by borrowing EUR at 2% and depositing INR at 10%. All the notes above apply, and see the link there.
|
How does “taking over payments” work?
|
The phrase doesn't mean anything specifically. Your SO could start paying the payments, but the title and lien would remain in your name. If you wanted to change the title or lien to be in her name, you would have to sell the car to her (sales tax would be involved but the process would be relatively painless). You could sell her the car for a pretty cheap price, but not $1. (unless the depreciated value of the car was less than the rest of the loan amount). You could draft up an agreement that if you break up or something, she agrees to buy the car from you for $x dollars minus all the payments she has made on the car.
|
Is real (physical) money traded during online trading?
|
I think you need to define what you mean by "buy currency online using some online forex trading platform" ... In large Fx trades, real money [you mean actual electronic money, as there is not paper that travels these days]... The Fx market is quite wide with all kinds of trades. There are quite a few Fx transactions that are meant for delivery. You have to pay in the currency for full amount and you get the funds electronicall credited to you in other currency [ofcouse you have an account in the other currency or you have an obligation to pay]. This type of transaction is valid in Ismalic Banking. The practise of derivaties based on this or forward contracts on this is not allowed.
|
Investing in the stock market during periods of high inflation
|
The answer would depend on the equities held. Some can weather inflation better than others (such as companies that have solid dividend growth) and even outpace inflation. Some industries are also safer against inflation than others, such as consumer staples and utilities since people usually have to purchase these regardless of how much $ they have. In looking over the data comparing S&P 500 returns, dividends, and inflation, the results are all over the map. In the 50's the total return was 19.3% with inflation at 2.2%. Then in the 70's returns were 5.8% with inflation at 7.4 percent, leading one to think that inflation diminished returns. But then in the 80's inflation was 5.1%, yet the return on the S&P was up to 17.3% Either way, aside from the 70's every other decade since 1950 has outpaced inflation (as long as you are including dividends; hence my first paragraph). S&P 500: Total and Inflation-Adjusted Historical Returns Also, the 7% average stock appreciation you mention is just that, an average. You are comparing a year-over-year number (7% inflation) with an aggregated one (stock performance over x number of years) and that is a misrepresentation and is not being weighted for the difference in what those numbers mean. Finally, there are thousands of things that have an effect on the stock market and stocks. Some are controllable and others are not. The idea that any one of them, such as inflation, has any sort of long-term, everlasting effect on prices that they cannot outmaneuver is improbable. This is where researching your stocks comes in...and if done prudently, who cares what the inflation rate is?
|
HSBC Hong Kong's “Deposit Plus” Product: What is it, and what strategies to employ?
|
15-19% gains also includes 15-19% and greater losses. They may not be required to disclose that to you in Hong Kong. If it isn't a leveraged account then that isn't too bad. Hong Kong is a nice jurisdiction, The US Federal Government is the only person you don't hide your assets from - but they dont want anything - so just report the accounts as commanded and you'll be A-Okay.
|
Is Stock Trading legal for a student on F-1 Visa in USA? [duplicate]
|
You can buy and sell stocks, if you like. You'll have to pay taxes on any profits. And short-term is speculating, not investing, and has high risk
|
Why do I see multiple trades of very small quantities?
|
Or it could be a Robinhood user just messing around with their free commissions. I've seen "people that work for organizations" and other analysts go crazy over some completely benign activity. It is like playing poker with a newbie, unpredictable.
|
Why do consultants or contractors make more money than employees?
|
The "more money" aspect is only true if you ignore the lack of symmetry between employment and contracting. Consulting is another story altogether. Companies are willing to pay consultants for a number of reasons but the most important is deniability. If a decision is recommended and goes wrong then the consultants can be sued. Liability cover is expensive. Cynicism aside, it often isn't cost-effective to keep specialists permanently on the payroll for tasks that are performed once a year. Recently I've noticed that the nature of consulting is changing. Companies are starting to assemble brains-trusts of internal consultants who can create and manage projects while outsourcing only the labour-intensive data-collection roles. Expect this to have a big impact on the management consulting industry.
|
Is This A Scam? Woman added me on LinkedIn first, then e-mailed offering me millions of dollars [duplicate]
|
This is totally a scam. I didn't read the whole thing. Didn't need to after I read "abandoned sum of 22.5 million" which implied part of it was yours to take after you do something for them.. Logically speaking.. No stranger would disclose this to you.
|
What should I do with my $10K windfall, given these options?
|
Hard to give an answer without knowing more details (interest rates, remaining principle on loans, especially how soon the new roof is needed). Maintaining the value in your home (unless you are planning to walk away from it or short-sell or something) is of paramount importance, and the cost of a leak should it happen can be substantial. If the roof is a few years out, and you have loans with interest rates about oh I'd say around 6%or more then I would pay off those loans and take the money you were paying there and start putting it into a fund to pay for the roof. I am also a huge fan of doing whatever you can to max out your 401K contributions. Money put into a 401K early has a LOT more value than money put in later, and since you don't pay taxes on it, the cost out of your pocket is much lower (eg. at a 20% tax rate it costs you only $80 out of pocket to put $100 into your 401.. (look at that, you just made like 25% return on that $80) Paying off loans is pretty much equivalent to making a risk free return on the money equal to the interest rate on the loan. But to REALLY make that work, what you need to do is in a virtual sense, keep making the loan payment just now pay it to yourself, putting that money into a savings account, or towards your 401K or whatever. If you just torn around and start spending that money, then you are not really getting as much value to paying off the loan early.
|
Why is “cheque cashing” a legitimate business?
|
How does this get any business? You'd be surprised on how much profit these type of businesses can bring in and the number of people who cash their checks this way. They make profit off people who want their checks cashed ASAP. Usually cheques written to "cash" or something can just be cashed for free at the bank right? Yes, most banks cash your check for free. Some may not cash it right away and may require a few days to process. Some charge a small fee if the check is not from the same bank. Some personal checks may not even be processed the same day as well. Wouldn't the only cheques that people would cash at these places be bad cheques? Yes and no. Yes because it may be "easier" to try to cash a fraudulent check at these type of check cashing places. However, some places may only cash business checks and require your ID in which they write down the information in order to possibly track you down in the future. Also some places only cash a check to a certain amount. And wouldn't this mean that the business will lose a lot of money since it pays out cash but then has the cheque bounce? Of course the business loses money if the check bounces or is fake. That is why they try to minimize their losses with certain requirements that needs to met before the check can be cashed. Who uses these services exactly? Just about anyone who needs their check cashed ASAP or like ChrisW stated in his answer is trying to keep their money on the low. There is a demand for this service even though it may seem shady to you.
|
Can saving/investing 15% of your income starting age 25, likely make you a millionaire?
|
It depends on how much you save, how much your savings earns each year. You can model it with a very simple spreadsheet: Formula view: You can change this simple model with any other assumptions you wish to make and model. This spreadsheet presumes that you only make $50,000/year, never get a raise, that your savings earns 6% per year and that the market never has a crash like 2008. The article never states the assumptions that the author has made, and therefore we can't honestly determine how truthful the author is. I recommend the book Engineering Your Retirement as it has more detailed models and goes into more details about what you should expect. I wrote a slightly more detailed post that showed a spreadsheet that is basically what I use at home to track my retirement savings.
|
Unmarried Couple Splitting up with Joint Ownership of Home
|
Despite the unmarried status, you need to see a lawyer. Essentially you have a business with this person owning a home as the asset, and a mortgage for which you are responsible for. A lawyer needs to examine any paperwork you have and with knowledge of your particular jurisdiction's laws can advise you on the proper course of action. You paint a really ugly picture of this guy. I bet you are correct that he is kind of a horrible person. "Tough love" time: You willingly entered into a long term contract with this person. Why would you do such a thing? Perhaps some self reflection and counseling is in order. This is probably more important than worrying about your credit. All that being said, it is good of you to want to break ties with this person. You can rebuild. All will be good if you concentrate on the right things.
|
Why does Yahoo Finance and Google Finance not match historical prices?
|
The difference is that Yahoo is showing the unadjusted price that the security traded for on that date, while google is adjusting for price splits. This means that Google is showing how much you would have had to pay to get what is now one share. Since 1979, JNJ has split 3-for-1 once, and 2-for-1 four times. 3x2x2x2x2 = 48. If you bought 1 share at that time, you would now have 48 shares today. Yahoo is showing a price of $66 for what was then 1 share. $66/48 = 1.375, which Google rounds to 1.38. You can see this if you get the prices from May 14-21, 1981. The stock split 3-for-1, and the price dropped from 108 to 36.38. Yahoo's adjusted close column has not been accurate since they re-wrote the Finance website. It now just represents the closing price. The other relevant field on Yahoo is the Adj. Close. This adjusts for splits, but also adjusts for dividends. Hence why this doesn't match either the Google or Yahoo numbers.
|
How do online referal systems work?
|
Yeah, I'll take the challenge...:) How trustworthy these are and what are their sources of income? These are in fact two separate questions, but the answers are related. How trustworthy? As trustworthy as they're clear about their own sources of income. If you cannot find any clue as to why, what for and how they're paying you - you probably should walk away. What's too good to be true usually is indeed too good to be true. For those of the sites that I know of their sources of income, it is usually advertisements and surveys. To get paid, you have to watch advertisements and/or answer surveys. I know of some sites who are legit, and pay people (not money, but gift cards, airline miles, etc) for participating in surveys. My own HMO (Kaiser in California) in fact pays (small amounts) to members who participate in enough surveys, so its legit. Are these sites worthwhile to consider for extra income? Not something you could live off, but definitely can get you enough gift cards for your weekly trip to Starbucks. What do I need to consider tax wise? Usually the amounts are very low, and are not paid in cash. While it is income, I doubt the IRS will chase you if you don't report the $20 Amazon gift card you got from there. It should, strictly speaking, be reported (probably as hobby income) on your tax return. Most people don't bother dealing with such small amounts though. In some cases (like the HMO I mentioned), its basically a rebate of the money paid (you pay your copays, deductibles etc. Since the surveys are only for members, you basically get your money back, not additional income). This is in fact similar to credit card rebates. Is there a best practice for handling the income? If we're talking about significant amounts (more than $20-30 a year), then you need to keep track of the income and related expenses, and report it as any other business income on your taxes, Schedule C. Is there a good test to determine what is and isn't a scam? As I said - if it looks too good to be true - it most likely is. If you're required to provide your personal/financial information without any explanation as to why, what it will be used for, and why and what for you're going to be paid - I'd walk away. Otherwise, you can also check Internet reviews, BBB ratings, FTC information and the relevant state agencies and consumer watchdogs (for example: http://www.scamadviser.com) whether they've heard of that particular site, and what is the information they have on it. A very good sign for a scam is contact information. Do they have a phone number to call to? Is it in your own country? If its not in your own country - definitely go away (for example the original link that was in the question pointed to a service whose phone number is in the UK, but listed address is in Los Angeles, CA. A clear sign of a scam). If they do have a phone number - try it, talk to them, call several times and see how many different people you're going to talk to. If its always the same person - run and hide. Do they have an address? If not - walk away. If they do - look it up. Is it a PMB/POB? A "virtual" office? Or do they have a proper office set up, which you can see on the map and in the listings as their office? And of course your guts. If your guts tell you its a scam - it very likely is.
|
Buy small-cap ETF when you already have large-cap of the same market
|
Yes, you should own a diverse mix of company sizes to be well diversified. While both will probably get hit in a recession, different economies suit different sized companies very differently in many cases, and this diversity positions you best to not only not miss out in cases where small companies do better out of recessions than large, but also in environments where small companies rate of growth is larger in bull markets.
|
How do multi-currency bank accounts work? What is the advantage?
|
Today typically a Business needs to hold accounts in more than one currency. Banks in certain countries are offering what is called a dual currency account. It is essentially 2 accounts with same account number but different currency. So One can have an account number say 123456 and have it in say AUD and USD. So the balance will always show as X AUD and Y USD. If you deposit funds [electronic, check or cash] in USD; your USD balance goes up. Likewise at the time of withdrawal you have to specify what currency you are withdrawing. Interest rates are calculated at different percentage for different currencies. So in a nutshell it would like operating 2 accounts, with the advantage of remembering only one account number. Designate a particular currency as default currency. So if you don't quote a currency along with the account number, it would be treated as default currency. Otherwise you always quote the account number and currency. Of-course bundled with other services like free Fx Advice etc it makes the entire proposition very attractive. Edit: If you have AUD 100 and USD 100, if you try and withdraw USD 110, it will not be allowed; Unless you also sign up for a auto sweep conversion. If you deposit a GBP check into the account, by default it would get converted into AUD [assuming AUD is the default currency]
|
What happened to Home Depot's Stock in 1988?
|
So a major problem with looking at historical stock data on these graphs is that they set the stock price based off of current market volumn. If I was to say look at Majesco Entertainment (COOL) in june of 2016. It would say that the stock as trading between $5-6. In reality it was between .50-$1. But in august there was a 6:1 reverse split. So June's value based on todays current share count would be about $5-6 per one share. 1988 for home depot must have been a really bad year for them, and because of all the splits they've had over the years already screws that estimate of what one share is worth. There's a lot of variance in 1988, but you have to be looking at only 1988. 87 and 89 really screws the the chart's scale.
|
First time home buyer. How to negotiate price?
|
As far as the specific price - it depends so much on the area and the house and other things. 70k could be a perfectly reasonable offer, or it could be an insulting lowball. If they just lowered it from 95 to 85 for example, 70 is pretty low to start off. But who knows. To answer the closing costs side of things, though, the reason those are sometimes paid by seller (rather than just dropping the sales price some) is that it makes it easier for the buyer if the buyer doesn't have much cash on hand. From the seller's point of view it's all the same money - giving you a discount on the sale price vs. covering closing costs - except for the small difference of the realtor's commission (which would be slightly lower in the lower-sales-price example, but usually that's not a significant factor in total cost). IE: vs How much having the 3k less on hand (and instead in your mortgage) is worth to you as a buyer is, of course, up to you. If you have plenty of cash on hand for the down payment and closing costs, then paying closing costs yourself is probably in your best interest as the seller typically assumes buyers value reduced/zero closing costs at more than 100% face value.
|
Do I owe taxes in the US for my LLC formed in the US but owned by an Indian citizen?
|
This is a complicated question that relies on the US-India Tax Treaty to determine whether the income is taxable to the US or to India. The relevant provision is likely Article 15 on Personal Services. http://www.irs.gov/pub/irs-trty/india.pdf It seems plausible that your business is personal services, but that's a fact-driven question based on your business model. If the online training is 'personal services' provided by you from India, then it is likely foreign source income under the treaty. The 'fixed base' and '90 days' provisions in Article 15 would not apply to an India resident working solely outside the US. The question is whether your US LLC was a US taxpayer. If the LLC was a taxpayer, then it has an obligation to pay US tax on any worldwide income and it also arguably disqualifies you from Article 15 (which applies to individuals and firms of individuals, but not companies). If you were the sole owner of the US LLC, and you did not make a Form 8832 election to be treated as subject to entity taxation, then the LLC was a disregarded entity. If you had other owners, and did not make an election, then you are a partnership and I suspect but cannot conclude that the treaty analysis is still valid. So this is fact-dependent, but you may be exempt from US tax under the tax treaty. However, you may have still had an obligation to file Forms 1099 for your worker. You can also late-file Forms 1099 reporting the nonemployee compensation paid to your worker. Note that this may have tax consequences on the worker if the worker failed to report the income in those years.
|
What happens when a calendar spread is assigned in a non-margin account?
|
I can't speak for all brokerages but the one I use requires cash accounts to have cash available to purchase the stock in this situation. With the cash available you would be able to purchase the stock if the option was exercised. Hope this helps
|
Why don't banks print their own paper money / bank notes?
|
Who says they don't? In the United Kingdom the Bank of England and the Bank of Scotland print the money. In some other countries (like Hong Kong, Israel, and the US) commercial banks were issuing the currency at some point of time, but now the governments do that. The problem with commercial banks issuing currency is the control. If a bank is allowed to print money - how can the amount of currency be controlled? If it is controlled by the government then the bank will be just a printing press, so what's the point? And since governments now want to control the monetary policy, banks have no reason to just be printing presses for the government, the governments have their own. edit Apparently in Hong Kong it is still the case, as I'm sure it is in some other places in the world as well.
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.