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Why can't you just have someone invest for you and split the profits (and losses) with him? | The issue is the time frame. With a one year investment horizon the only way for a fund manager to be confident that they are not going to lose their shirt is to invest your money in ultra conservative low volatility investments. Otherwise a year like 2008 in the US stock market would break them. Note if you are willing to expand your payback time period to multiple years then you are essentially looking at an annuity and it's market loss rider. Of course those contacts are always structured such that the insurance company is extremely confident that they will be able to make more in the market than they are promising to pay back (multiple decade time horizons). |
Should I use a credit repair agency? | My sister had a similar problem and went to an actual lawyer, not a "credit repair agency". The lawyers settled her debt for a lot less than she owed, and she also got a bonus: one of the creditors called her repeatedly, even after her lawyers had told them not to. The lawyers ended up getting her an extra $40,000. Combined with the debt settlement, she actually came out ahead. Of course, her credit score went down, but it recovered in a couple of years. |
Should I pay off a 0% car loan? | Ultimately the question is more about your personality and level of discipline than about money. The rational thing to do is hang on to your cash, invest it somewhere else, and pay off the 0% loan as late as possible without incurring penalties or interest. Logically it's a no-brainer. Problem is, we're humans, so there's a risk you'll slip up somewhere along the way and not pay off the loan in time. How much do you trust yourself? |
Pay down on second mortage when underwater? | There are programs out there which will let you refinance even when underwater, under the Government's HARP program. You are overpaying by nearly $7,000 per year compared to a refinance to 4.5%. A classic example of how the bubble hurt people who overextended themselves a bit as housing shot up. The bank risks a $50K loss if you default or short sell this property. I'd go in and sit down with a branch manager and ask what they can do to recast the loan to a lower rate as you are ready, wiling and able to keep the house and make your payments. Good luck. |
Boyfriend is coowner of a house with his sister, he wants to sell but she doesn't | How did the house pass to them? Was it held in Trust? Were they both jointly listed on the deed? If no to both, then the house should have gone into probate..assuming this is going on in the US...where the probate court would reassign ownership. Until this happens the house cannot be sold and is formally owned by the estate. I agree with the former post suggesting you find an estate attorney in the area to see if this dispute can be amicably settled. Tying it up in litigation will be EXPENSIVE and take a great deal of time |
How to Explain “efficient frontier” to child? | I would let them get their hands dirty, learn by practicing. Below you can find a simple program to generate your own efficient frontier, just 29 lines' python. Depending on the age, adult could help in the activity but I would not make it too lecturing. With child-parent relationship, I would make it a challenge, no easy money anymore -- let-your-money work-for-you -attitude, create the efficient portfolio! If there are many children, I would do a competition over years' time-span or make many small competitions. Winner is the one whose portfolio is closest to some efficient portfolio such as lowest-variance-portfolio, I have the code to calculate things like that but it is trivial so build on the code below. Because the efficient frontier is a good way to let participants to investigate different returns and risk between assets classes like stocks, bonds and money, I would make the thing more serious. The winner could get his/her designed portfolio (to keep it fair in your budget, you could limit choices to index funds starting with 1EUR investment or to ask bottle-price-participation-fee, bring me a bottle and you are in. No money issue.). Since they probably don't have much money, I would choose free software. Have fun! Step-by-step instructions for your own Efficient Frontier Copy and run the Python script with $ python simple.py > .datSimple Plot the data with $ gnuplot -e "set ylabel 'Return'; set xlabel 'Risk'; set terminal png; set output 'yourEffFrontier.png'; plot '.datSimple'" or any spreadsheet program. Your first "assets" could well be low-risk candies and some easy-to-stale products like bananas -- but beware, notice the PS. Simple Efficient-frontier generator P.s. do not stagnate with collectibles, such as candies and toys, and retailer products, such as mangos, because they are not really good "investments" per se, a bit more like speculation. The retailer gets a huge percentage, for further information consult Bogleheads.org like here about collectible items. |
In the USA, does the income tax rate on my wages increase with the amount of money in my bank account? | You can call what you're asking about a 'wealth tax', or 'capital tax'. These are taxes not based on income you earned in a year, but some measure of how much you own. Some countries (Italy I believe is a prime example) tax ownership of foreign land. Some countries tax amounts owned by corporations [Canada did this until ~5-10 years ago depending on province]. Some countries strictly tax your wealth above a certain level (Switzerland, as has been mentioned, does this). One form of what you are referring to that does exist in the US is the 'Estate Tax'. This is a tax on the amount of wealth that a person owns, at the time they die. The threshold for when this tax applies has been very volatile over the last 20 years, but it is generally in the multi-millions, and I believe sits somewhere around $5M. If these taxes start to crop up more and more (and I believe they will), don't be shocked at the initial 'sticker price'. Theoretically a wealth tax could replace some of the current income tax regime in many countries without creating a strict increased tax burden on their people. ie: if you owe $10k in income tax this year, but a $2k capital tax is instituted next year, then you are still in the same position as long as your income tax is reduced to $8k. Whether these taxes are effective/preferable or not is really a question of economics, not personal finance, so I will not belabour that point. Note: if the money you have saved earns money (interest, or dividends, or maybe rent from a condo you own), then those earnings are typically taxed alongside your wage income. Any 'wealth/capital tax' as I've described it above would be in addition to income tax on investment earnings. |
Shared groceries expenses between roommates to be divided as per specific consumption ratio and attendance | For a personal finance forum, this is too complicated for sustained use and you should find a simpler solution. For a mathematical exercise, you are missing information required to do the split fairly. You have to know who overlaps and when to know how to do the splits. For an extreme example, take your dates given: Considering 100 days of calculation period, If Roommate D was the only person present for the last 10 days, they should pay 100% of the grocery bill as they are the only one eating. From your initial data set, you can't know who should be splitting the tab for any given day. To do this mathematically, you'd need: But don't forget "In Theory, Theory works. In Practice, Practice works." Good theory would say make a large, complicated spreadsheet as described above. Good practice would be to split up the costs in a much, much simpler way. |
Is 0% credit card utilization worse than 1-20% credit card utilization for any reason other than pure statistics? | I too was very confused when I tried to be tricky and paid down my balance BEFORE the bill date. I thought this would be a great thing because it would show my utilization near zero percent. The opposite happen, it dropped my credit score from 762 to 708. Here is the best example I can come up with when it comes to utilization. Lets pretend you are an insurance company and you trying to figure out who are the best risk drivers. The people that drive 10% of the day are a better risk than the people that drive 50% of the day. The people that drive 50% of the day are a better risk than the people that drive 90% of the day. Here is the rub when people drive 0%. When you look at the people at 0% they appear to be walking, busing or flying. What they are NOT doing is driving. Since they are not driving (using Credit) they are viewed as POOR drivers since they are not keeping up on their driving skills. (Paying bills, watching how they spend, and managing their debt). So, now before the billing date I pay down my balance to something between 5 to 10% of my utilization. After the bill is issued, I pay it off in FULL. ( I am not going to PAY these crazy interest rates). What shows up on my credit report is a person that is driving his credit between 5 and 10% utilization. It shows I know I how to manage my revolving accounts. I know it's dumb, you would think they reward people that have zero debt, I don't hate banks I hate the game. ( I do love me some reward points =)) |
Should I buy a home or rent in my situation? | My experience with owning a home is that its like putting down roots and can be like an anchor holding you to an area. Before considering whether you can financially own a home consider some of the other implications. Once you own it you are stuck for awhile and cannot quickly move away like you can with renting. So if a better job opportunity comes up or your employer moves you to another office across town that doubles your commute time, you'll be regretting the home purchase as it will be a barrier to moving to a more convenient location. I, along with my fiancée and two children, are being forced to move out of my parents home ASAP. Do not rush buying a home. Take your time and find what you want. I made the mistake once of buying a home thinking I could take on some DIY remodeling to correct some features I wasn't fond of. Life intervenes and finding extra time for DIY house updates doesn't come easy, especially with children. Speaking of children, consider the school district when buying a home too. Often times homes in good school districts cost more. If you don't consider the school district now, then you may be faced with a difficult decision when the kids start school. IF you are confident you won't want to move anytime soon and can find a house you like and want to jump into home ownership there are some programs that can help first time buyers, but they can require some effort on your part. FHA has a first time buyer program with a 3.5% down payment. You will need to search for a lender that offers FHA loans and work with them. FHA covers this program by charging mortgage insurance every month that's part of your house payment. Fannie Mae has the HomeReady program where first time home buyers can purchase a foreclosed home from their inventory for as little as 3% down and possibly get up to 3% from the seller to apply toward closing costs. Private mortgage insurance (PMI) is required with this program too. Their inventory of homes can be found on the https://www.homepath.com/ website. There is also NACA, which requires attending workshops and creating a detailed plan to prove you're ready for homeownership. This might be a good option if they have workshops in your area and you want to talk with someone in person. https://www.naca.com/about/ |
What is the correct answer for percent change when the start amount is zero dollars $0? | In computing, you'd generally return naa%, for 'not a number'. Could you not put '-%' to show there is no value at this point? Surely the people seeing this aren't idiots and understand the charge on 0 is 0? |
Why are U.S. credit unions not open to everyone? | Credit unions are mutually-owned (i.e. customer owned) financial institutions that provide banking services. They take deposits from their members (customers) and loan them to other members. Members vote on a board of directors who manage operations. They are considered not-for-profit, but they pay interest on deposits. They get some preferential tax treatment and regulation and their deposits are insured by a separate organization if federally accredited. State-chartered credit unions don't have to maintain deposit insurance at all. Their charters specify who can join. They can be regionally based, employer based, or based on some other group with common interests. Regulators restrict them so that they don't interfere too much with banks. Otherwise their preferential tax and regulatory treatment would leave banks uncompetitive. Other organizations with similar limits have gone on to be competitive when the limits were released. For example, there used to be an insurance company just for government employees, the Government Employees Insurance Company. You may know it better as GEICO (yes, the one with the gecko advertisements). Now they offer life and auto insurance all over. Credit unions would like looser limitations (or no limitations at all), but not enough to give up their preferential tax treatment. Banks oppose looser limitations and have as much political clout as credit unions. |
Credit card interest calculator with grace period & different interest rate calculation methods? | I thought it was such a useful suggestion that I went ahead and created them. I'm sure you're not the only one who could derive some benefit from them, I know I will. http://www.investy.com/tools When I have some additional time, I will add the option for grace-periods, but for now I wanted to get them up so you could use the calculations as-is from the article. Enjoy. (Disclosure: I'm the founder of the site they are hosted on and I wrote the code for the calculators) |
Car Loan upside down--refinance before selling? | As for refinancing: Many institutions charge up-front fees when doing any type of vehicle loan. Typically this is in the neighborhood of 1% the value of the loan, with a floor of $100 (although this may vary by lender). However, for the loan the be secured by the vehicle, the principle value must be less than the collateral value. In your case, this means there is a collateral shortfall of $4,000. When working with a traditional bank, you would have two options: pay the difference up front (reducing the principle value of the loan), or obtaining a separate loan for the difference. This separate loan would often have a higher interest rate unless you have some other form of collateral to secure it with. I doubt CarMax would do a separate loan. All that being said, if you plan on selling the vehicle within the next twelves months, don't bother refinancing. It won't be worth the hassle. |
What is the US Fair Tax? | The fair tax is a proposal to replace the US income tax with a sales tax. Pros of Fair Tax: It's a large change to the way the United States currently does things. The "Fair Tax Act of 2011" is H.R.25 in the US House and S.13 in the Senate. The full text of the bill is available at the links provided. There are some fairly large consequences of implementing a fair tax. For example, 401ks and Roth IRAs serve no benefit over non-retirement investments. Mortgages would no longer have a tax advantage. Luxury items would get far more expensive. |
Should I get cash from credit card at 0% for 8 months and put it on loans? | If there is any fee at all on the cash advance, and zero interest on the student loans (for now), it's not worth it mathematically. And for only 8 months of "free" money, it's rare for it to be worth it overall. You need to save a significant amount either by having a good net interest rate (e.g., saving 20% on another card and not paying any interest on the new loan) or by saving a lot on principal (e.g., paying off $100k now and not paying the interest on that for the next 8 months). I wouldn't worry about it hurting your credit score unless your credit is going to be evaluated during the time you're maxing your card. Part of your score (20-30% IIRC) is your credit utilization ratio, which is how much you have available vs. how much you're using. It's separate from the part that accounts for history, so it's only relevant at the time you're looked up. |
How to calculate car insurance quote | Does the Insurance value differ from state to state (for example I've a car in Hawaii and there is another car in Illinois with same model, make and same features), does the Insurance vary for both? Yes, quotes will vary based on where you live for various reasons, (propensity for accidents, value of cars, etc.), and state laws regarding required car insurance can vary. How is the insurance quote calculated? It's likely a proprietary formula that the insurance company will not disclose. If they did, they could be giving away a competitive advantage. However, like all insurance, the goal is to determine the probability of the insured having an accident, and the projected cost of such an accident. That will be based on actuarial tables for each of the risk factors you mention. |
Why do stock prices change? [duplicate] | In addition to D. Stanley's very fine answer, the price of stocks change as a result of changing market conditions and the resulting investor estimation of its effect on the company's future earnings. Take these examples. Right now, in the USA, there is a housing shortage; that is, there are fewer houses available for purchase than there are willing buyers. Investors will correctly assume that the future earnings of home builders will be higher than they were, say ten years ago. Seeking to capitalize on these higher earnings, they will try to buy the stocks. However, the current owners of the stock, potentially the sellers, know the same thing as the investor-buyer and therefore demand a premium to entice a sale. The price of the stock has risen. The reverse is true, also. Brick and mortar retailers are declining as more consumers prefer on-line retail shopping. The current owners of these stocks will probably want to sell their stock before it is worth even less. The investor-buyer also knows the same facts; that future earnings will most likely be less for these companies. The potential buyer offers a very low price to entice a sale. The price of the stock has fallen. Finally, the price of stocks rise and fall with general market conditions. As an example, assume that next months jobs report is released showing that 350,000 new jobs were created in July. Investors will believe that if companies are hiring, then the companies are doing well; they are selling products and services at a higher than expected rate, requiring that they add new employees. They will also conclude that those 350,000 new employees will be spending their salaries to buy not just food, clothing and shelter, but also a few luxuries like a newer car, a TV, perhaps even a new home (please see paragraph 2!). All of these companies will have more business, more earnings and, likely, a higher stock price. |
What does Capital Surplus mean? | I think it's easiest to illustrate it with an example... if you've already read any of the definitions out there, then you know what it means, but just don't understand what it means. So, we have an ice cream shop. We started it as partners, and now you and I each own 50% of the company. It's doing so well that we decide to take it public. That means that we will be giving up some of our ownership in return for a chance to own a smaller portion of a bigger thing. With the money that we raise from selling stocks, we're going to open up two more stores. So, without getting into too much of the nitty gritty accounting that would turn this into a valuation question, let's say we are going to put 30% of the company up for sale with these stocks, leaving you and me with 35% each. We file with the SEC saying we're splitting up the company ownership with 100,000 shares, and so you and I each have 35,000 shares and we sell 30,000 to investors. Then, and this depends on the state in the US where you're registering your publicly traded corporation, those shares must be assigned a par value that a shareholder can redeem the shares at. Many corporations will use $1 or 10 cents or something nominal. And we go and find investors who will actually pay us $5 per share for our ice cream shop business. We receive $150,000 in new capital. But when we record that in our accounting, $5 in total capital per share was contributed by investors to the business and is recorded as shareholder's equity. $1 per share (totalling $30,000) goes towards actual shares outstanding, and $4 per share (totalling $120,000) goes towards capital surplus. These amounts will not change unless we issue new stocks. The share prices on the open market can fluctuate, but we rarely would adjust these. Edit: I couldn't see the table before. DumbCoder has already pointed out the equation Capital Surplus = [(Stock Par Value) + (Premium Per Share)] * (Number of Shares) Based on my example, it's easy to deduce what happened in the case you've given in the table. In 2009 your company XYZ had outstanding Common Stock issued for $4,652. That's probably (a) in thousands, and (b) at a par value of $1 per share. On those assumptions we can say that the company has 4,652,000 shares outstanding for Year End 2009. Then, if we guess that's the outstanding shares, we can also calculate the implicit average premium per share: 90,946,000 ÷ 4,652,000 == $19.52. Note that this is the average premium per share, because we don't know when the different stocks were issued at, and it may be that the premiums that investors paid were different. Frankly, we don't care. So clearly since "Common Stock" in 2010 is up to $9,303 it means that the company released more stock. Someone else can chime in on whether that means it was specifically a stock split or some other mechanism... it doesn't matter. For understanding this you just need to know that the company put more stock into the marketplace... 9,303 - 4,652 == 4,651(,000) more shares to be exact. With the mechanics of rounding to the thousands, I would guess this was a stock split. Now. What you can also see is that the Capital Surplus also increased. 232,801 - 90,946 == 141,855. The 4,651,000 shares were issued into the market at an average premium of 141,855 ÷ 4,651 == $30.50. So investors probably paid (or were given by the company) an average of $31.50 at this split. Then, in 2011 the company had another small adjustment to its shares outstanding. (The Common Stock went up). And there was a corresponding increase in its Capital Surplus. Without details around the actual stock volumes, it's hard to get more exact. You're also only giving us a portion of the Balance Sheet for your company, so it's hard to go into too much more detail. Hopefully this answers your question though. |
Hiring a teenager as a household employee | Here is what I was able to find: Yes, but there are special instructions for minors: Working hours: New York State labor laws are slightly more strict than the federal: https://www.labor.state.ny.us/workerprotection/laborstandards/workprot/nyvsfed.shtm Minimum wage: The Dept of Labor's Youth & Labor page states: Occupations such as babysitting are not subject to the minimum wage law. No supporting documentation is given. Another page describes the Youth Minimum Wage Program: A minimum wage of not less than $4.25 may be paid to employees under the age of 20 for their first 90 consecutive calendar days However, I can't find any such exception in New York State minimum wage law. According to Publication 926, Household Employer's Tax Guide: Federal income tax withholding No, I am not required to withhold federal income taxes from a household employee. If we both want them to be withheld, a W-4 should be submitted to me. State income tax withholding No, according to NYS Pub 27: Withholding income tax (federal or New York State) from wages paid to household employees is voluntary on your part and your employee Social security and medicare No, I am not required to withhold FICA taxes because when calculated wages, I should not include: An employee who is under the age of 18 at any time during the year. Exception: Count these wages if providing household services is the employee's principal occupation. If the employee is a student, providing household services is not considered to be his or her principal occupation. Unemployment insurance No, I don't think I have to pay federal unemployment tax. I think the exception for FICA applies to FUTA. For New York (according to Household Employers Guide for Unemployment Insurance), there is an exception for paying state unemployment insurance: Daytime students who attend elementary or high school (However, you must pay UI taxes on wages you pay these students if you are liable under FUTA.) I can't find any specific requirements, but aside from numbers of hours times rate of pay, you might want to consider the information required by the Wage Theft Prevention Act: Also, consider this requirements from the NY Minimum Wage Act Every employer shall keep true and accurate records of hours worked by each employee covered by an hourly minimum wage rate, the wages paid to all employees, and such other information as the commissioner deems material and necessary, and shall, on demand, furnish to the commissioner or his duly authorized representative a sworn statement of the same. |
How credible is Stansberry's video “End of America”? | Predictions, especially doomsday predictions, can go wrong quickly. I would be careful of anyone calling an "end" to a country like the U.S., especially, if they have something to gain and a history of being wrong. On the other hand, someone warning of something with a past of financial credibility can be quite useful. For instance, compare Frank Stansberry to Jesse Colombo (@TheBubbleBubble on Twitter). Jesse was one of the few who predicted the financial crisis in 2004 and is currently warning of new bubbles (ie: the higher education bubble) - even admitting to profiting off of some of them and encouraging others to do the same. However, his assertions can be investigated to verify accuracy, but they are hardly the end of the end (in fact, Jesse likes to boast that he's an optimist and thinks eventually we'll usher in a Golden Age). Frank Stansberry, on the other hand, doesn't seem to carry the credibility; a brief internet search generated some issues he's had with the SEC about misleading investors. (Completely forgot to add, Mike Shedlock - Mish - also has made some predictions that have come true and clashed with some other financial advisers over inflation vs. deflation. While people were screaming "HYPER-INFLATION" back in 2008-2009, Mish constantly attacked them for being wrong, and has continued to be right. Some of his political views, of course, aren't popular, but some of his financial predictions have been stellar.) Anyone who warns of anything should always be checked out for both what they've said, what they are currently saying, and what their agenda is. As one of my mentors warned me, everyone has an agenda and that's not always bad - their agenda may align with yours, just make sure it does. [On a humorous side note, my father has predicted the end of the world every six months since 1994.] |
I'm in Australia. What should I look for in an online stock broker, for trading mostly on the ASX? | If you want the cheapest online broker in Australia, you can't go past CMC Markets, they charge $9.90 upto a $10,000 trade and 0.1% above that. There is no ongoing fees unless you choose to have dynamic data (stock prices get updated automatically as they change). However, the dynamic data fee does get waived if you have about 10 or more trades per month. You don't really need the dynamic data unless you are a regular trader anyway. They also provide some good research tools and some basic charting. Your funds with them are kept segragated in a Bankwest Account, so are resonably safe. They don't provide the best interest on funds kept in the account, so it is best to just deposit the funds when you are looking to buy, and move your funds elswhere (earning higher interest) when selling. Hopes this helps, regards Victor. Update They have now increased their basic brokerage to a minimum of $11 per trade unless you are a frequent trader. |
Opening a Roth IRA account, what is the fee structure for Vanguard, Scottrade and TIAA-CREF | This answer is somewhat incomplete as I don't have definitive conclusions about some parts of your question. Your question includes some very specific subquestions that may best be answered by contacting the investment companies you're considering. I don't see any explicit statement of fees for TIAA-CREF either. I suggest you contact them and ask. There is mention on the site of no-transaction-fee funds (NTF), but I wasn't able to find a list of such funds. Again, you might have to ask. Vanguard also offers some non-Vanguard funds without transaction fees. If you go the Vanguard page on other mutual funds you can use the dropdown on the right to select other fund companies. Those with "NTF" by the name have no transaction fees. Scottrade also offers NTF funds. You can use their screener and select "no load" and "no transaction fee" as some of your filters. You are correct that you want to choose an option that will offer a good lineup of funds that you can buy without transaction fees. However, as the links above show, Vanguard and TIAA-CREF are not the only such options. My impression is that almost any firm that has their own funds will sell them (or at least some of them) to you without a transaction fee. Also, as shown above, many places will sell you other companies' funds for free too. You have plenty of options as far as free trades, so it really depends on what funds you like. If you google for IRA providers you will find more than you can shake a stick at. If you're interested in low-cost index funds, Vanguard is pretty clearly the leader in that area as their entire business is built around that concept. TIAA-CREF is another option, as is Fideltiy (which you didn't mention), and innumerable others. Realistically, though, you probably don't need a gigantic lineup of funds. If you're juggling money between more than a handful of funds, your investment scheme is probably needlessly complex. The standard advice is to decide on a broad allocation of money into different asset classes (e.g., US stocks, US bonds, international stocks, international bonds), find a place that offers funds in those areas with low fees and forget about all the other funds. |
What to sell when your financial needs change, stocks or bonds? | You are right about the stock and index funds, with dollar cost averaging over several years, the daily price of the security (especially a dividend paying security) will not matter* because your position will have accumulated larger over several entry points, some entries with cheaper shares and some entries with more expensive shares. In the future your position will be so large that any uptick will net you large gains on your original equity. *not matter being a reference to even extreme forms of volatility. But if you had all your equity in a poor company and tanked, never to rise again, then you would still be in a losing position even with dollar cost averaging. If your only other holdings are bonds, then you MAY want to sell those to free up capital. |
Should I buy a home or rent in my situation? | You said 2 things that made me think you are one of the rare young couples barely making it but should attempt to buy rather than rent anyway.... Around my area, renting a place is about equivalent to just paying a monthly mortgage of a 30yr 3.5% APR of a home priced at around $250,500. and... Our ideal price range would be $100,000-160,000 with a 25-30yr mortgage at 3.5 - 5.4% The other answers suggesting that you should rent and the reasons given were excellent ones but because of those 2 points you made, this tells me that you would be willing to live in a much much more basic house if you owned rather than rented. Many renters rent rather than buy because they want a really nice place for their money and are willing to spend what it takes to get a nice place, but not you. If you buy, you would be willing to take a place worth half or even less than half what you would get if you rented. That tells me you might accept a place that needs a little work. Perhaps you and/or your fiancée have some skills needed to do a little of the work yourself. I hope you decide to buy rather than rent if you can swing it, and instead of taking a 2nd job, spend all your spare time working on your little investment. It's possible that by the time you're done fixing that house up some, through your own creative efforts or through the help you might get from your friends, you could end up with a $250,000 house, own it, and reap all the great benefits of owning rather than renting...or...better yet, sell that place for a nice profit, then turn around and buy the next one already fixed up with your newly acquired great credit to help you with the new mortgage, and ready for you to move in and enjoy. It's how my wife and I got started (only we didn't have the benefit of historically low interest rates) and if we can do it, I believe you can too. Here are a couple tips that might help out....1) Don't spend a lot of money to fix the place...try to find the time to do the simpler tasks yourself. If you don't have the skills, you can learn them on youtube or by picking the brains of all the great willing people working at your local discount home project superstore. 2) Cosmetics go a long way towards increasing the value of a house. a) needs paint and b) needs carpet but not a) major structural damage and b) needs roof. Regarding some of your other points... HOA, hopefully if you buy in a formal community, the HOA should be less than $200. If it's more than that, it might be harder to do as I suggest. Closing Costs, probably more like 4 - 5% Taxes, monthly if included in mortgage, normally quarterly or semi-annually if not Utilities...you're budgeting quite high for that. Depending on your area, you might only spend an average of $200/month, maybe even less. Insurance...see answer for taxes Regular maintenance, $1K a year might be about right but we better include irregular also, which comes up more often than you might think when owning, let's say $2 - $3 a year. Unexpected costs. Expect the unexpected but if the place needs a new roof or something big like that, then you didn't do your homework before buying. |
How to get the lowest mortgage rate on a new purchase? | Start with the bank where you have your checking and savings account. They can streamline some of the paperwork, because they can see how much you make, and have access to several years worth of bank statement. Legitimate mortgage companies do publish their rates. But there is no guarantee that you will qualify for the best rate without them knowing your credit score, salary, and down payment information. There is no way to know that you have the best rate because of the time lag involved. You will pick the best one you can work with, but the rates can change every day. Even when you lock in the rates, other companies can drift lower. Once you have started down the application process you will reach a point where switching companies will cost you time and money. Once you decide to purchase a house, the contract usually only gives you a few weeks to prove that you have financing in place. Therefore you will have to start the process before deciding on the house. Some advance work is needed to give you an idea of the maximum monthly payment you can afford, which will then based on the rate and down payment determine the maximum house you can buy. I have had good luck with my credit union, but there is no guarantee that yours will be competitive. Keep in mind that while rates are very important, some people also value customer service, and also like that the mortgage won't be sold to out of town investors. |
Why is a stock trade flat on large volume? | Large volume just means a lot of market participants believe they know where the stock price will be (after some amount of time). The fact that the price is not moving just means that about 50% of those really confident traders think the stock will be moving up, and about 50% of those really confident traders think the stock will be moving down. |
Using business check to pay at retail | You can just buy the items personally and then submit an expense report to the company to get reimbursed. Keep all the receipts. Paying with a company check is also fine, but you might run into problems with stores not accepting checks. |
How profitable is selling your customer base? | There are business that exist by harvesting leads and selling them to other companies. These leads can be access to resumes they sell to business looking for employees; they can be eyeballs that view their adds; they can be list of people that meet a specific credit profile. All are legitimate business and many are growing businesses. But in all these cases they are upfront with the things they are doing. They all have escape mechanisms for you to either stop them from selling your info to other customers, or to restrict the ability of those customers to contact you. There are also companies that are less honest with their collecting and selling of information. They are not honest about what they are collecting, and they have no care about how others use it. There are also cases where when a company buys another company, and one main item in the transaction is the current and potential list of customers. Business with a legitimate product to sell, protect that customer list, that is the keys to the kingdom. They are the likely people who will buy the next version; they are also the ones that their competitors would love to target to convert them to another product. In some businesses, the company that develops the platform will sell to developers of add ons access to the marketplace. They may charge a flat fee for access, or charge a percentage of sales, or both. What you can do, and how you are allowed to do it, and what mechanisms are in place to protect people, are dependent on the country you operate in. |
What happens if someone destroy money? | Depending on the country, nothing. For example, the US has about $1.3 trillion dollars of cash in circulation. Which means that if you were to burn a million dollars of it, that would be 0.000077% of the circulating cash. But cash is a small portion of the actual money in the US. Only about 8% of all money is in cash, the rest is in other forms of value, which means that you'd only be destroying 0.0000062% of the US's money if you burned a full $1,000,000. |
Why would my job recruiter want me to form an LLC? | This sounds very like disguised employment. You act like an employee of the company, but your official relationship with them is as a contractor. You gain none of the protection you get from being an employee, and this may make you cheaper, less risky and more desirable for the company who is hiring you. Depending on your country you may also pay corporation tax rather than income tax, which may represent a very significant saving. Also, the company hiring you may not have to pay PAYE, national insurance, stakeholder pension, etc. This arrangement is normal and legal providing you genuinely are acting as a subcontractor. However if you are behaving as an employee (desk at the company, company email, have to work specific hours in a specific location, no ability to subcontract, etc.) you may be classified as a disguised employee. In the UK it used to be common practice for highly paid employees to set up shell companies to avoid tax. This will now get you into hot water. Google IR35 It sounds like your relationship in this case is directly with the recruiter. You will have to consider if the recruiter is acting as your employer, or if you remain a genuinely independent agent. The duration of your contract with the recruiter will have a bearing on this. In the UK there are a whole series of tests for disguised employment. This is a good arrangement provided you go in with your eyes open and an awareness of the legislation. However you should absolutely check the rules that apply in your country before entering into this agreement. You could potentially be stung very badly indeed. |
How can you possibly lose on investments in stocks? | In your own example of VW, it dropped from its peak price of $253 to $92. If you had invested $10,000 in VW in April 2015, by September of that year it would have gone down to $3,600. If you held on to your investment, you would now be getting back to $6,700 on that original $10,000 investment. Your own example demonstrates that it is possible to lose. I have a friend who put his fortune into a company called WorldCom (one of the examples D Stanley shared). He actually lost all of his retirement. Luckily he made some money back when the startup we both worked for was sold to a much larger company. Unsophisticated investors lose money all the time by investing in individual companies. Your best bet is to start searching this site for answers on how to invest your money so that you can see actual strategies that reduce your investment risk. Here's a starting point: Best way to start investing, for a young person just starting their career? If you want to better illustrate this principle to yourself, try this stock market simulation game. |
To whom should I report fraud on both of my credit cards? | You need to run a virus scan on your computers to make sure you do not have a key-logger program running on either. I would also think about designating one old computer to only access your bank accounts and not do anything but that. If your computer is infected then every time you login your credit cards can be compromised. |
Which shareholders cause news-driven whole market stock swings? | The people who cause this sort of sell-off immediately are mostly speculators, short-term day-traders and the like. They realize that, because of the lowered potential for earnings in the future, the companies in question won't be worth as much in the future. They will sell shares at the elevated price, including sometimes shares that they borrow for the explicit purpose of selling (short selling), until the share price is more reasonable. Now, the other question is why the companies in question won't sell for as much in the future: Even if every other company in the world looks less attractive all at once (global economic catastrophe etc) people have other options. They could just put the money in the bank, or in corporate bonds, or in mortgage bonds, or Treasury bonds, or some other low-risk instrument, or something crazy like gold. If the expected return on a stock doesn't justify the price, you're unlikely to find someone paying that price. So you don't actually need to have a huge sell-off to lower the price. You just need a sell-off that's big enough that you run out of people willing to pay elevated prices. |
Financing with two mortgages: a thing of the past? | Depends on where we are in the credit cycle. When banks are scared like in 07 to 11, good luck. Now (13), they'll probably start begging you. There are more regulations that prevent it now, but they'll probably be eased as they usually are during good times. If the banks won't help you, private investors might. Just find your local mortgage investor club. |
What are the alternatives to compound interest for a Muslim? | There are lot of options. I personally avoid keeping money in bank accounts and invest in one of the funds. It's just my personal opinion, you can ask your Ulamas |
Is there an online cost-basis calculator that automatically accounts for dividend re-investments and splits? | Calculating and adjusting cost basis accurately is a daunting task, but there is a (paid) online tool, NetBasis, which will automatically calculate and adjust your cost basis. It is used by brokerage firms and Fortune 500 companies and is available to the public. Go to netbasis.com. All you need are the purchase and sale dates and shares of the stock or mutual fund and the system has the rest of the information, such as corporate actions (splits, spin-offs, etc), pricing, and dividends and it also will apply the appropriate IRS rules for inherited and gifted shares. The regulation also gives investors the option to choose calculation methods. Not only does NetBasis automatically calculate the method you choose, it will also give the results for all options and allow you to choose the best result. NetBasis also provides you with detailed supporting documentation which shows all of the calculations and the adjustments in chronological order. NetBasis has data going back as far as 1925, so it will accurately calculate cost basis for your old American Telegraph and Telephone shares. NetBasis also handles complex investment scenarios such as wash sales, short sales, return of capital, etc. Moderator's note: Disclosure: The answerer's profile indicates they are affiliated with NetBasis. |
What are institutional investors? | Professional investors managing large investment portfolios for "institutions" -- a college, a museum, a charitable organization, et cetera. I'm not sure whether those managing investments for a business are considered institutional investors or not. The common factor tends to be large to immense portfolios (let's call it $100M and up, just for discussion) and concern with preserving that wealth. Having that much money to work with allows some investment strategies that don't make sense for smaller investors, and makes some others impractical to impossible. These folks can make mistakes too; Madoff burned a lot of charities when his scam collapsed. |
Can used books bought off Amazon be claimed as a tax deduction in Australia? | VAT = Value Added Tax (as an Aussie think "GST") This is applicable in Britain. Basically, if you were in Britain, and if you could claim VAT as a deduction, that invoice is not sufficient proof to make the claim. But you're in Oz so it doesn't apply to you in any case. For work-related deductions like book purchases, see http://www.ato.gov.au/individuals/content.asp?doc=/content/00216829.htm&pc=001/002/068/001/002&mnu=&mfp=&st=&cy=1 Issues such as the books being second hand or purchased online are not cited in the instructions as relevant/limiting factors. In fact, if you really want to get into the nitty gritty, you could claim the work-related proportion of your internet access fees as a deduction (question D5 instructions, above, cover that as well). |
Why is day trading considered riskier than long-term trading? | Often times the commission fees add up a lot. Many times the mundane fluctuations in the stock market on a day to day basis are just white noise, whereas long term investing generally lets you appreciate value based on the market reactions to actual earnings of the company or basket of companies. Day trading often involves leverage as well. |
Advantage of Financial Times vs. free news sources for improving own knowledge of finance? | I recommend using Morning Brew. They email you a free daily newsletter with the top financial news stories and earnings events. I have subscribed to the Wall Street Journal and Financial Times before. Morning Brew basically covers all of the headlines you would see on those sites. |
Pay off credit cards in one lump sum, or spread over a few months? | I have heard that it is better for your credit score to pay them down over time. Will it make much of a difference? I have never heard that, however, the financial institutions (who are charging you an amount of interest which was at one time in the not so distant past classified and punishable in state criminal codes) really enjoy you thinking that way. You are clearly capable of doing the math yourself. While I don't know the exact numbers, I am totally confident that you will find in about 5 or 10 minutes (if that long) that eliminating debt of any kind in your life will pay an immediate return that beats the great majority of other investments in terms of risk/reward. After the immediate financial return, there is a quieter, subtler, and even greater long term benefit. Basic principle: Highest Rates First Perhaps this decision could be considered slightly less important than deciding not to smoke during your youth; but I would put it as a close second. You are already in a position where you can see the damage that your prior decisions (about financial debt) have produced. Run the clock back to the time in your life when you were debt free. Now, pay off that debt with the big check, and start from zero. Now, turn on your psychic powers and predict the same amount of time, in the future, with the same amount of money (don't even try to adjust for inflation; just use flat dollars) WITHOUT losing the money which you have given to the financial institutions during this previous part of your life. Do you now see why the financial institutions want you to think about slowly paying them off instead of waking up tomorrow without owing them anything ? |
How can I find the historical stock price for a specific stock on a specific date? | Go to a large reference library and ask to see the Wall Street Journal for October 13 1992. |
Are services provided to Google employees taxed as income or in any way? | Companies often provide cafeteria, or catering services, to employees tax-free at subsidized rates. I'll use "cafeteria" as an illustration. The IRS says that in order to avoid lunch being taxed as income, the employees must pay the "direct costs" of the lunch, food and labor. In addition to those costs, cafeterias add two more items to come up with the total tab; "overhead," (the cost of renting the space), and of course, profit. The company can waive the last two, and charge employees only materials and labor. That's why subsidized cafeteria food can cost as little as half of what it would cost elsewhere. |
How do I begin investment saving, rather than just saving in a bank account? | CDs may be one good option if you have a sense of when you may need the money(-ish), especially with more generous early withdrawal penalties. You can also take a look at investing in a mix of stock and bond funds, which will lower you volatility compared to stocks, but increase your returns over bonds. |
Does being on the board of a bankruptcy-declaring company affect my credit rating? | The answer to your question is governed by the structure of the company and your ownership or lack thereof in the business. Australian business can be structured the same way U.S. ones are, as a sole proprietorship, partnership, LLC, or company. If you are only on the board and have no equity, you cannot be affected. You must have some amount of equity in the business to have any chance of being affected. If the business is a sole proprietorship, then the single individual running the business is personally responsible for all debt and the inability to pay obligations would result in personal bankruptcy which would in all likelihood affect your credit score (it would in the U.S.). If it is a partnership, then anyone holding stock in the company is likewise personally responsible for a portion of the debt, and can be subject to bankruptcy and credit score implications. If the business is structured as a limited liability company or a corporation, a stakeholder's personal finances are separate from the business's and their credit score cannot be affected. |
Is inflation a good or bad thing? Why do governments want some inflation? | In general the consensus is that a small amount of inflation (usually 1.5-2% per year) is desirable. That is why the Federal Reserve sets its inflation target in that range. The reasons why are quite complex though. One reason is "wage stickiness" - ie., the observed phenomenon that employers don't like to cut wages. Having a small rate of inflation means that when wages are steady in nominal terms, they are actually falling in real terms. This gives employers more flexibility. |
Can I pay off my credit card balance to free up available credit? | The card you have is one where you had to deposit an amount equivelent to your card limit -a secured limit credit card. Capital One is one if the primary cards of this type. The typical rules of credit card usage and building your credit, do not apply. So, yes, you want to use the card as much as possible and pay off your balance as often as is necessary to keep your limit freed up. You can actually pay the full balance plus 10%, and gain a little extra limit. Use your card as much as possible and call them and ask for a limit increase every three months. usually about 4 - 5 months in, they will increase your limit and do so without asking for a corresponding security deposit. This is really cool, because it means you are becoming credit-worthy. I know so much about this because I applied for this card for my son and am helping him in his attempt to repair his credit. His score increased by almost 200 points last year. |
Tax planning for Indian TDS on international payments | I am an Israeli based citizen who represents and Indian company who sells its products in Israel. As an agent I am entitled to commission on sales on behalf the Indian company who advised that. Any commission paid to you will be applicable to TDS at 20.9% of the commission amount, the tax will be paid and a Tax paid certificate will be given to you. According to a Bilateral Double tax avoidance treaty if the tax has been deducted in India you will get credit for this tax in Israel. |
How to get a credit card as a minor? | In general, minors cannot enter into legally binding contracts -- which is what credit accounts are -- so an individually held card is probably not an option for you right now. You will not be approved for a credit card because you are minor. The only option credit card wise for you is for your parents to add you on as an authorized user onto their accounts. The upside is that you and your parents can work out a monthly payment for the amount you spend on your equipment, the downside is that if your parents don't pay their credit card bill, your credit score/report can be negatively affected. (This also depends on the bank, however, all the banks I bank with report monthly payment activities on authorized users' credit reports as well. There might be a bank that doesn't.) In terms of credit cards, there is nothing you can do. What you could do as the comments have suggested is either save up money for the equipment you want, or buy something cheaper. |
FICA was not withheld from my paycheck | Should I have a W-2 re-issued? A W-2 can be corrected and a new copy will be filed with the IRS if your employer incorrectly reported your income and withholding on a W-2 that they issued. In this case, though the employer didn't withhold those taxes, they should not reissue the W-2 unless they plan to pay your portion of the payroll taxes that were not withheld. (If they paid your share of the taxes, that would increase your gross income.) Who pays for the FICA I should have paid last year? Both you and your employer owe 7.65% each for FICA taxes. By law your employer is required to pay their half and you are required to pay your half. Both you and your employer owe additional taxes because of this mistake. Your other questions assume that your employer will pay your portion of the taxes withheld. You employer could decide to do that, but this also assumes that it was your employer's fault that the mistakes were made. If you transitioned to resident alien but did not inform your employer, how is that your employer's fault? |
Do I even need credit cards? | Eventually you are going to need some sort of real credit history. It is possible that you will be able to evade this if you never buy a house, or if you pay cash for any house/condo/car/boat/etc that you buy. Even employers check credit history these days. I wouldn't be surprised if some medical professionals such as surgeons check it also. Obviously if you have a mortgage and car loan this doesn't apply, but I'd be curious how you acquired those unless you have substantial income and/or assets. Combine this with the fact that certain things like renting a car essentially require a credit card (because they need to put a hold on more money than they are actually going to take out of your card, so they can take that money if you don't bring the car back), and I think you should have a credit card unless you and your wife are individuals with zero impulse control, which sounds highly improbable. If your concern is the financial liability of the credit line, just keep the credit line low. |
Is having a 'startup fund' a good idea? | Saving money for the future is a good thing. Whether spending those savings on a business venture makes sense, will depend on a few factors, including: (1) How much money you need that business to make [ie: will you be quitting your job and relying on the business for your sole income? Or will this just be a hobby you make some pocket change from?] (2) How much the money the business needs up front [some businesses, like simple web design consulting, might have effectively $0 in cash startup costs, where starting a franchise restaurant might cost you $500k-$1M on day 1] (3) How risky it is [the general stat is that something like 50% of all new businesses fail in their first year, and I think for restaurants that number is often given as 75%+] But if you don't have a business idea yet, and save for one in the future but never get that 'perfect idea', the good news is that you've saved a bunch of money that you can instead use for retirement, or whatever other financial goals you have. So it's not the saving for a new business that is risky, it's the spending. Part of good personal financial management is making financial goals, tracking your progress to those goals, and changing them as needed. In a simpler case, many people want to own their own home - this is a common financial goal, just like early retirement, or starting your own business, or paying for your kids' college education. All those goals are helped by saving money, so your job as someone mindful of personal finances, is to prioritize those goals in accordance to what is important for you. |
What's the catch with biweekly mortgage payments? | When you pay monthly, you're making 12 payments / year. Assuming you have a payment of $1000/mo, that's $12,000/year that you're paying for your mortgage. When you opt for bi-weekly, they're saying that you can pay half of your mortgage ($500) bi-weekly (can be configured to align with your paycheck). Since there are ~26 bi-weekly periods in a year, you're making 26 * $500 = $13,000 in mortgage payments each year. Some of these companies charge a fee for you to utilize this service. The main concept behind this is that people are horrible at budgeting on their own, so when $500 is immediately taken from your paycheck, you'll be able to budget around what's left and be able to make that extra payment each year without thinking about it or realizing it. |
How to avoid getting back into debt? | Congratulations on seeing your situation clearly! That's half the battle. To prevent yourself from going back into debt, you should get rid of any credit cards you have and close the accounts. Just use your debit card. Your post indicates you're not the type to splurge and get stuff just because you want it, so saving for a larger purchase and paying cash for it is probably something you're willing to do. Contrary to popular belief, you can live just fine without a credit card and without a credit score. If you're never going back into debt, you don't need a credit score. Buying a house is possible without one, but is admittedly more work for you and for the underwriters because they can't just ask the FICO god to bless you -- they have to actually see your finances, and you have to actually have some. (I realize many folks will hate this advice, but I am actually living it, and life is pretty good.) If you're in school, look at how much you spend on food while on campus. $5-$10/day for lunch adds up to $100-$200 over a month (M-F, four weeks). Buy groceries and pack a lunch if you can. If your expenses cannot be reduced anymore, you're going to have to get a job. There is nothing wrong with slowing down your studies and working a job to get your income up above your expenses. It stinks being a poor student, but it stinks even more to be a poor student with a mountain of debt. You'll find that working a job doesn't slow you down all that much. Tons of students work their way through school and graduate in plenty of time to get a good job. Good luck to you! You can do it. |
Do market shares exhaust? | If the share is listed on a stock exchange that creates liquidity and orderly sales with specialist market makers, such as the NYSE, there will always be a counterparty to trade with, though they will let the price rise or fall to meet other open interest. On other exchanges, or in closely held or private equity scenarios, this is not necessarily the case (NASDAQ has market maker firms that maintain the bid-ask spread and can do the same thing with their own inventory as the specialists, but are not required to by the brokerage rules as the NYSE brokers are). The NYSE has listing requirements of at least 1.1 million shares, so there will not be a case with only 100 shares on this exchange. |
If a stock doesn't pay dividends, then why is the stock worth anything? | It seems to me that your main question here is about why a stock is worth anything at all, why it has any intrinsic value, and that the only way you could imagine a stock having value is if it pays a dividend, as though that's what you're buying in that case. Others have answered why a company may or may not pay a dividend, but I think glossed over the central question. A stock has value because it is ownership of a piece of the company. The company itself has value, in the form of: You get the idea. A company's value is based on things it owns or things that can be monetized. By extension, a share is a piece of all that. Some of these things don't have clear cut values, and this can result in differing opinions on what a company is worth. Share price also varies for many other reasons that are covered by other answers, but there is (almost) always some intrinsic value to a stock because part of its value represents real assets. |
Why does the biotechnology industry have such a high PE ratio? | Residential Construction at 362x, by the way. I'm going to hazard a guess here - Say XYZ corp trades at $100, and it's showing a normal earnings of $10 the last few years. Its industry falls on hard times, and while it makes enough to keep its doors open, profits fall to $1. The company itself is still sound, but the small earnings result in a high P/E. By the way, its book value is $110, and they have huge cash on the books along with real estate. I offer these details to show why the price doesn't drop like a rock. Now, biotech may be in a period of low reported earnings but with future results expected to justify the price. On one hand it may be an anomaly, with earnings due to rise, or it may be a bit of a bubble. An analyst for this sector should be able to comment if I'm on the right track. |
Condo Purchase - Tax Strategies [US] | If it's a rental, you will write off the losses via Schedule E. You should read this document and its instructions to understand this fully. You will also take depreciation on the value of the building, not the land, over 27.5 years. If you don't understand this, search here, there are discussions that cover this. If it's not a rental, but your home or second home, you take the interest and real estate tax off you tax via Schedule A, if you itemize. (I see the tag 'rental' but leave this line for sake of a complete answer.) |
Paying myself a dividend from ltd company | manage the company properly. If you aren't much aware about company rules and regulation or tax matters, get an accountant so that you don't mess up later. better off paying my self a dividend of 100% profit or as an employee? That depends on how much salary you intend to pay yourself, your dividend or how much business expenses you will incur while running the business. Generally speaking you are better off paying your self a minimum salary and pay the rest as dividends. But check out the dividend tax and the income tax you might need to pay and compare which situation you are better off. If you have a partner, using the dividend way will reduce your NI outgoes. ethical and legal? Ethically the dividend way might burn your conscience but it is perfectly legal way of doing things. |
Multi-Account Budgeting Tools/Accounts/Services | I sort of do this with credit cards. I actually have 4 AMEX cards that I've accumulated over the years. Certain types of expenses go on each card ("General expenses", recurring bills, car-related and business-related) I use AMEX because they have pretty rich iPhone/Android applications to access your accounts and a rich set of alerts. So if we exceed our budget for gas, we get an email about it. Do whatever works for you, but you need to avoid the temptation to over-complicate. |
What is the easiest way to back-test index funds and ETFs? | check pastsat-backtesting , backtesting tool, where one can can test on well known technical indicators without coding skills |
Does revenue equal gross profit for info product business? | What about web-hosting fees? Cost of Internet service? Cost of computer equipment to do the work? Amortized cost of development? Time for support calls/email? Phone service used for sales? Advertising/marketing expenses? Look hard--I bet there are some costs. |
Opening American credit cards while residing in the UK | Go to the states on vacation. Get a virtual (or friend's) address. Get an ITIN from the IRS. Open a bank account. Get a secured credit card on your next trip from Capital One – add as much money as you can afford. One year later, you should have a decent credit score. |
Calculating Future Value: Initial deposit and recurring deposits of a fixed but different Value | But how do I bring the initial deposit into the equation? Basically, you can't. Unless you combine two different formulas from Math of Finance into a single expression. The single initial deposit of $1000 will compound for 20 years at 5% compounded annually. The final amount for this part of the deposit will be: V1 = 1000 x (1.05)^20 In addition the series of 20 payments will be an ordinary annuity with a regular payment of $100, with the value on the occasion of the 20th payment given by: So the final total amount in the account at the end of 20 years will be the sum of these two values... |
What does Chapter 11 Bankruptcy mean to an investor holding shares of a Chapter 11 Company? | I held shares in BIND Therapeutics, a small biotechnology company on the NASDAQ that was liquidated on the chapter 11 auction block in 2016. There were sufficient proceeds to pay the debts and return some cash to shareholders, with payments in 2016 and 2017. (Some payments have yet to occur.) The whole process is counter-intuitive and full of landmines, both for tax preparation & planning and receiving payments: Landmine 0: Some shareholders will sell in a panic as soon as the chapter 11 is announced. This would have been a huge mistake in the case of BIND, because the eventual liquidation payments were worth 3 or so times as much as the share price after chapter 11. The amount of the liquidation payments wasn't immediately calculable, because the company's intellectual property had to be auctioned. Landmine 1: The large brokerages (Vanguard, Fidelity, TDA, and others) mischaracterized the distributions to shareholders on form 1099, distributed to both shareholders and the IRS. The bankruptcy trustee considered this to be their responsibility. According to the tax code and to the IRS website, the liquidation is taxed like a sale of stock, rather than a dividend. "On the shareholder level, a complete liquidation can be thought of as a sale of all outstanding corporate stock held by the shareholders in exchange for all of the assets in that corporation. Like any sale of stock, the shareholder receives capital gain treatment on the difference between the amount received by the shareholder in the distribution and the cost or other basis of the stock." Mischaracterizing the distributions as dividends makes them wrongly ineligible to be wiped out by the enormous capital loss on the stock. Vanguard's error appeared on my own 1099, and the others were mentioned in an investor discussion on stocktwits. However, Geoffrey L Berman, the bankruptcy trustee stated on twitter that while the payments are NOT dividends, the 1099s were the brokers' responsibility. Landmine 2: Many shareholders will wrongly attempt to claim the capital loss for tax year 2016, or they may have failed to understand the law in time for proper tax planning for tax year 2016. It does not matter that the company's BINDQ shares were cancelled in 2016. According to the IRS website "When a shareholder receives a series of distributions in liquidation, gain is recognized once all of the shareholder's stock basis is recovered. A loss, however, will not be recognized until the final distribution is received." In particular, shareholders who receive the 2017 payment will not be able to take a capital loss for tax year 2016 because the liquidation wasn't complete. Late discovery of this timing issue no doubt resulted in an end-of-year underestimation of 2016 overall capital gains for many, causing a failure to preemptively realize available capital losses elsewhere. I'm not going to carefully consider the following issues, which may or may not have some effect on the timing of the capital loss: Landmine 3: Surprisingly, it appears that some shareholders who sold their shares in 2016 still may not claim the capital loss for tax year 2016, because they will receive a liquidation distribution in 2017. Taken at face value, the IRS website's statement "A loss, however, will not be recognized until the final distribution is received" appears to apply to shareholders of record of August 30, 2016, who receive the payouts, even if they sold the shares after the record date. However, to know for sure it might be worth carefully parsing the relevant tax code and treasury regs. Landmine 4: Some shareholders are completely cut out of the bankruptcy distribution. The bankruptcy plan only provides distributions for shareholders of record Aug 30, 2016. Those who bought shares of BINDQ afterwards are out of luck. Landmine 5: According to the discussion on stocktwits, many shareholders have yet to receive or even learn of the existence of a form [more secure link showing brokers served here] required to accept 2017 payments. To add to confusion there is apparently ongoing legal wrangling over whether the trustee is able to require this form. Worse, shareholders report difficulty getting brokers' required cooperation in submitting this form. Landmine 6: Hopefully there are no more landmines. Boom. DISCLAIMER: I am not a tax professional. Consult the tax code/treasury regulations/IRS publications when preparing your taxes. They are more trustworthy than accountants, or at least more trustworthy than good ones. |
Should you always max out contributions to your 401k? | I think better advice would be always max out your 401K at least to the level that the company provides a match. For example, my company will match 50% up to 10% of your salary. Good luck finding another investment with a guaranteed immediate 50% return. Beyond the company match, it is probably good advice to put as much in the 401K as you can afford if you aren't disciplined enough to invest that money on your own. Otherwise it depends on a number of factors as to whether it is better to invest on your own or in the company plan. |
First time investor wanting to invest in index funds especially Vanguard | Congratulations on deciding to save money and choosing to invest it. One thing to know about mutual funds including index funds is that they typically require a minimum investment of a few thousand dollars, $3000 being a typical amount, unless the investment is in an IRA in which case $1000 might be a minimum. In some cases, automated monthly investments of $50 or $100 might need to be set up if you are beginning with a small balance. There is nothing wrong with your approach. You now should go and look at the various requirements for specific index funds. The Fidelity and Vanguard families are good choices and both offer very low-cost index funds to choose from, but different funds can have different requirements regarding minimum investments etc. You also have a choice of which index you want to follow, the S&P 500 Index, MidCap Indexes, Small-Cap Indexes, Total Stock Market Indexes etc., but your choice might be limited until you have more money to invest because of minimum investment rules etc. Most important, after you have made your choice, I urge you to not look every day, or even every month, to see how your investment is doing. You will save yourself a lot of anxiety and will save yourself from making wrong decisions. Far too many investors ignore the maxim "Buy Low, Sell High" and pull money out of what should be long-term investments at the first flicker of a downturn and end up buying high and selling low. Finally, the time is approaching when most stock funds will be declaring dividends and capital gains distributions. If you invest now, you may end up with a paper profit on which you will have to pay taxes (in non-tax-advantaged accounts) on your 2012 tax return (this is called "buying a dividend"), and so you might want to spend some time investigating now, but actually make the investment in late December after your chosen fund has made its distributions (the date for this will be on the fund's web site) or in early 2013. |
What is a stock warrant? How do warrants work? | In general, a warrant is a security issued by a company allowing the holder to purchase a certain number of a particular class of shares at a certain price for a particular period of time. They differ from exchange traded options (i.e. calls and puts) in that they are issued by the company that issued the underlying shares that they allow you to purchase whereas calls and puts are generally written by other investors. The other big difference between options and warrants is that options are standardized. Any call or put you buy on a particular exchange has basically the same set of rules governing use. By contrast, a warrant may have all kinds of stipulations that must occur before you can execute, such as price events (e.g. only if the stock hits a certain price) or business events (e.g. only if the company elects to defer payment on a bond issued at the same time as the warrant). Warrants are generally a bad choice for small and inexperienced investors since each warrant issue is different and you often need a lawyer or other qualified professional to fully understand all to possible outcomes. |
How to decide which private student loan is right for me? | I speak from a position of experience, My BS and MS are both in Comp Sci. I know very little about loans or finances. That is very unfortunate as you are obviously an intelligent human being. Perhaps this is a good time to pause your formal education and get educated in personal finance. To me, it is that important. I study computer science, and am thus confident that I will be able to find work after I finish school. This kind of attitude can lead to trouble. You will likely have a high salary, but that does not always translate into prosperity. Personal finance is more about behavior then mathematics. I currently work with people that have high salaries in a low cost of living area. Some have lost homes due to foreclosure some are very limited in their options because of high student loan balances. Some are millionaires without hitting the IPO/startup lotto. The difference is behavior. It's possible that someone in my family will be able to cosign and help me out with this loan. This is indicative of lack of knowledge and poor financial behavior. This kind of thing can lead to strained relationships to the point where people don't talk to each other. Never co-sign for anyone, and if you value the relationship with a person never ask them to co-sign. I'll be working as a TA again for a $1000 stipend. Yikes! Why in the world would you work for 1K when you need 4K? You should find a way to earn 6K this semester so you can save some and put some toward the loans you already acquired. Accepting this kind of situation "raises red flags" on your attitude towards personal finance. And yes it is possible, you can earn that waiting tables and if you can find a part time programming gig you can make a lot more then that. Consider working as a TA and wait tables until you find that first programming gig. I am just about done with my undergraduate degree, and will be starting graduate school at the same university next semester. To me this is a recipe for failure in most cases. You have expended all your financing options to date and are planning to go backwards even more. Why not get out of school with your BS, and go to work? You can save up some of your MS tuition and most companies will provide tuition reimbursement. Computer Science/Software Engineering can be a fickle market. Right now things are going crazy and times are really good. However that was not always the case during my career and unlikely for yours. For example, Just this year I bypassed my highest rate of pay that occurred in 2003. I was out of work most of 2004, and for part of 2005 I actually made less then when I was working while in college. In 2009 my company cut our salaries by 5%, but the net cost to me was more like a 27% cut. In 2001 I worked as a contractor for a company that had a 10% reduction in full time employees, yet they kept us contractors working. Recently I talked with a recruiter about a position doing J2EE, which is what I am doing now. It required a high level security clearance which is not an easy thing to get. The rub was that it was located in a higher cost of living area and only paid about 70% of what I am making now. They required more and paid less, but such is the market. You need to learn about these things! Good luck. |
Impact on Credit Worthiness (Getting A Loan with a Co-signer vs without) | It doesn't matter to the credit agencies if there is a co-signer or not. However, your family member will need to take into consideration if they are willing to be responsible for the loan in the event you are unable to make payments. Being a co-signer means they are agreeing to pay the loan amount. It will also impact their credit score/report, either improve it if all goes well, or destroy it if neither one of you are able to pay the loan. So to you, assuming you can pay all the payments and not default, it makes no difference. But to the co-signer, it could create a huge impact. https://www.thebalance.com/does-co-signing-affect-credit-315368 |
Is it possible to create a self-managed superannuation fund to act as a mortage offset? (Australia) | You can set up a Self Managed Super Fund (SMSF) and use it to buy residential investment property, and as Justin has mentioned even borrow to acquire the investment property through the SMSF. However, you cannot hold your home in the SMSF, as this would be classed as an in-house asset, and you are only allowed to hold a maximum of 5% of the total market value of SMSF as in-house assets. Furthermore, as you already own your house, you are not allowed to transfer residential property into a SMSF from a related party, even if done at current market value (you are allowed to transfer business real property from a related party at current market value). Regarding loans, you are not allowed to lend money from your SMSF to a related party as well. |
Should my husband's business pay my business? | I agree with some of the points of the other answers but why not avoid all the guesswork? I highly recommend you not charge him now. Wait until the end of the year when you have much more information about both of your companies and then you can run the numbers both ways and decide if it would benefit you (collectively). If either of your businesses runs on a cash basis and you decide to invoice, just make sure the check is deposited before Dec 31. Update: If you want to do this for 2016, at least your husband's business would have to be using an accrual basis (since it's too late to take the deduction on a cash basis). Simply run the numbers both ways and see if it helps you. If it doesn't help enough to warrant it for 2016 you could rerun the numbers near the end of 2017 to see if it helps then. Diclaimer: I think it's OK to do this type of manipulation for the scenario you described since you have done (or are doing) the work and you are charging a reasonable fee, but realize that you shouldn't manipulate the amount of the invoice, or fabricate invoices. For example, you shouldn't ever think about such things as: "If I invoice $50K instead of $3K, will that help us?" |
Shouldn't a Roth IRA accumulate more than 1 cent of interest per month? | Unfortunately for investors, returns for equity-based investments are not linear - you'll see (semi-random) rises and dips as you look at the charted per-share price. Without knowing what the investments are in the target date retirement fund that you've invested in, you could see a wide range of returns (including losses!) for any given period of time. However, over the long term (usually 10+ years), you'll see the "average" return for your fund as your gains and losses accumulate/compound over that period. |
Strategic countermeasures to overcome crisis in Russia | You could do nothing for a while longer. Foreign exchange simply means your services are cheaper and imports and more expensive, local transactions are otherwise unaffected. Your main worry is whether the government's attempts to revert these issues will create inflation within Russia. Local clients will likely not care to pay you in Euros, Dollars, or Pounds (as it will cost them significantly more, they'd have to acquire the currency to pay you with) but does it matter if they pay in Roubles? The financial crisis in more an international thing, not a local one. Now it is possible there will be inflation setting in but I doubt the powers that be will allow that to happen... If you are concerned about it, buying non-liquid assets are the thing to do - a house will still be worth "1 house" no matter what a 1-million rouble note will buy you in a year's time. Similarly, you can invest in 'blue-chip' stocks that should be a good hedge against any further inflation (the rich don't tend to turn poor in difficult times!) In the meantime, get some international clients - as the Rouble is so low, relatively speaking, your services are very competitive. The rest of the time, is to wait it out a little - nobody knows what will happen, but in my knowledge of history interest rates like this drop back to something much closer to normal quite quickly. |
How websites like Google have access to stock market data? | To quote their disclaimer: Data is provided by financial exchanges and may be delayed as specified by financial exchanges or our data providers. Google does not verify any data and disclaims any obligation to do so. That means that they buy it from a reseller such as IDC. It probably differs in source between the different exchanges depending on price and availability factors. They do specify in some cases which reseller they use and one of those happens to be Interactive Data (IDC) who are also the data provider used in my day job! |
5/1 ARM: Lifetime cap, First Adjustment Cap, Margin, and Annual Cap? | If the base rate is USD LIBOR, you can compute this data directly on my website, which uses futures contracts and historical data to create interest rates scenarios for the calculations: http://www.mortgagecalculator3.com/ If your rate index is different, you can still create your own scenarios and check what would happen to your payments. |
How to determine how much to charge your business for rent (in your house)? | To be confident in your solution, and get the best solution for you, consult a local accountant, preferably one who is specialized in taxes for businesses. Or muddle through the code and figure it out for yourself. The primary advantage in consulting with an accountant is that you can ask them to point out ways you can restructure your expenses, debts and income in order to minimize your tax burden. They can help you run the numbers for the various options and choose the one that is right, numerically. |
What extra information might be obtained from the next highest bids in an order book? | The Level 2 data is simply showing the depth of the market. If I am trading shares with my broker I have the option of viewing only the top 10 bid/ask prices in the depth or all of the data (which sometimes can be a very long list). With another broker I get the top ten bid and ask prices and how many orders are available for each price level, or I have the option of listing each order separately for each price level (in order of when the order was placed). I get the same kind of data if trading options. I do not know about futures because I don't trade them. Simply this data may be important to a trader because it may give an indication of whether there are more buyers or sellers in the market, which in turn may (but not always) give an indication of which way the market may be moving. As an example the price depth below shows WBC before market open with sellers outweighing the buyers in both numbers and volume. This gives an indication that prices may drop when the market opens. Of course there could be some good news coming out prior to market open or just after, causing a flood of buyers into the market and sellers to cancel their orders. This would change everything around with more buyers than sellers and indicate that prices may now be going up. The market depth is an important aspect to look at before putting an order in, as it can give an indication of which way the market is moving, especially in a very liquid security or market. |
What is the meaning of the net worth of a person? | An individual's net worth is the value of the person's assets minus his debt. To find your net worth, add up the value of everything that you own: your house, your cars, your bank accounts, your retirement investments, etc. Then subtract all of your debt: mortgage, student loans, credit card debt, car loans, etc. If you sold everything you own and paid off all your debts, you would be left with your net worth. If Bill Gates' net worth is $86 Billion, he likely does not have that much cash sitting in the bank. Much of his net worth is in the form of assets: stocks, real estate, and other investments. If he sold everything that he has and paid any debts, he would theoretically have the $86 Billion. I say "theoretically" because in the amounts of stock that he owns, he could cause a price drop by selling it all at once. |
Equity As Part of Compensation | With LLCs, the operation agreement can define different shares for different kinds of income or equity, and different partners may be treated differently. In essence, you can end up with a different stock class for each partner/member. So you need to read the grant document and the OA really carefully to know what you're getting. You may want to have a lawyer read through it for you. This may be way more complicated than classes of shares in a corporation. |
Should I use a credit repair agency? | Here's what my wife and I did. First, we stopped using credit cards and got rid of all other expenses that we absolutely didn't need. A few examples: cable TV, home phone, high end internet - all shut off. We changed our cell phone plan to a cheap one and stopped going out to restaurants or bars. We also got rid of the cars that had payments on them and replaced them with ones we paid cash for. Probably the most painful thing for me was selling a 2 year old 'vette and replacing it with a 5 year old random 4 door. Some people might tell you don't do this because older cars need repairs. Fact is, nearly all cars are going to need repairs. It's just a matter of whether you are also making payments on it when they need them and if you can discipline yourself enough to save up a bit to cover those. After doing all this the only payments we had to make were for the house (plus electric/gas/water) and the debt we had accumulated. I'd say that if you have the option to move back into your parent's house then do it. Yes, it will suck for a while but you'll be able to pay everything off so much faster. Just make sure to help around the house. Ignore the guys saying that this tanks your score and will make getting a house difficult. Although they are right that it will drop your score the fact is that you aren't in any position to make large purchases anyway and won't be for quite some time, so it really doesn't matter. Your number one goal is to dig yourself out of this hole, not engage in activity that will keep you in it. Next, if you are only working part time then you need to do one of two things. Either get a full time job or go find a second part time one. The preference is obviously on the first, which you should be able to do in your spare time. If, for some reason, you don't have the tech skills necessary to do this then go find any part time job you can. It took us about 3 years to finally pay everything (except the house) off - we owed a lot. During that time everything we bought was paid for in cash with the vast majority of our money going to pay off those accounts. Once the final account was paid off, I did go ahead and get a credit card. I made very minor purchases on it - mostly just gas - and paid it off a few days before it was due each month. Every 4 months they increased my limit. After around 18 months of using that one card my credit score was back in the 700+ range and with no debt other than the mortgage. *note: I echo what others have said about "Credit Repair" companies. Anything they can do, you can too. It's a matter of cutting costs, living within your means and paying the bills. If the interest rates are killing you, then try to get a consolidation loan. If you can't do that then negotiate settlements with them, just get everything in writing prior to making a payment on it if you go this route. BTW, make sure you actually can't pay them before attempting to settle. |
First time home buyer. How to negotiate price? | Do some homework to determine what is really a fair price for the house. Zillow helps. County tax records help, including last sale price and mortgage, if any (yes, it's public). Start at the low end of fair. Don't rely on the Realtor. He gets paid only if a sale occurs, and he's already coaxing you closer to a paycheck. He might be right with the numbers, though, so check for yourself. When you get within a thousand or two of acceptance, "shut up". I don't mean that in a rude way. A negotiating class I took taught me how effective silence can be, at the right time. The other side knows you're close and the highest you've offered. If they would be willing to find a way to come down to that, this is the time. The awkward silence is surprisingly effective. |
What happens if one brings more than 10,000 USD with them into the US? | Since all the other answers thus far seem to downplay the risk (likelihood) of the money being seized, I figure I may as well make my comment an answer. Unless you happen to have your legal team travelling with you and your suitcase of cash, you should expect that you'll be questioned extensively, so that any sign of nervousness, inconsistency in your answers or anything you say that doesn't "make sense" to the officer will be used as an excuse to seize your money, and you'll learn an expensive lesson in civil asset forfeiture. The government will file a complaint against your money, leading to a ridiculously named case, such as United States v. $124,700 in U.S. Currency. Worth noting that while the outcome in this case was not in the government's favor, in the vast majority of cases, the government keeps the cash. Between 9/11 and 2014, U.S police forces have seized over 2.5 billion dollars in cash without search warrants or indictments and returned the money in less than 10% of cases. That last link is kind of a long read, but contains cases where people with completely legitimate money and documentation for their money had it seized anyway, and were only able to recover it after months or years in court. |
Resources to begin trading from home? | So you're 23 with no higher graduation, certificates etc which would allow you to study / training but with a high passion for logical thinking and math? Im 31 now, i was in a similar position back then when i was 23. The very best thoughts i want to throw you over: FORGET IT (AT LEAS THIS WAY) - You need cash equity (not borrowed) to even get a foot in the door (read on why) . The fact that you even consider to trade with a few hundred dollar shows how desperate you're, it would very likely result in loss, resignation and mental pain. Let me get you a reality check: If you think you can quadruple your money within months with ease and no risk your wrong - this mindset is gambling - don't end up as gambler. To make 24K a year or 2K a month (taxes are not included) would mean 10% a month on a 20K account which would be almost impossible on a long run (show me a hedge-fund with that performance) - What do you do on draw down months - 3 months no profit would mean you're 8K behind - you wont make a living wit ha 20K account in a western civilization and normal lifestyle. Big question, how do you want to trade? Everything newsfeed / latency based is very hard to compete in. So called technical systems drawing lines, fancy indicators etc are bogus in my opinion (read taleb black swan). Trading/speculation based on fundamentals is a different animal - It to be able to do that you would need to understand the market you trade and what influences it, takes lot time, brainpower , tools ready (ugh, hard to write the picture on my mind). Im 31 years into trading now, seen so many faces come and most of them go in that time , to me it sounds like you quietly hope for a lotto ticket. To speak about hardware, ie the tools you need depends on your trading style (again a hint that a lot more study is needed. If you're really hooked, readreadread and get in touch with people - always question yourself. |
Does girlfriend have too much savings, time to invest? | It's time she look into what employer provided retirement plan she can use. She's at the point where she should think about investing for the long term, with retirement in mind. |
If something is coming into my account will it be debit or credit in my account? | Most bank registers (where you write down entries) show deposits (+) to account as a CREDIT. Payments, fees, and withdrawals are DEBITs to your bank accounnt. On loans such as credit card accounts, a credit to your loan account is a payment or other reductions of the amount you owe. A charge to your account is a DEBIT to you loan account. They did this just to confuse us! |
Roth IRA all in one fund, or not? [duplicate] | In your case, you could very well leave it in something like FFFFX, which for readers is a self balancing fund with a target retirement date of 2040. These funds are a conglomeration of other funds that tend to move more conservatively as time passes. However, I like to put no more than 10% of my portfolio in one fund with exceptions made for balances less than 20K. So If I had 18K it really wouldn't matter if it was in FUSEX a S&P 500 index fund. However by investing in FFFFX you pretty much meet that requirement. So you are golden if that fund meets your goals. For me, I kind of hate bonds and despite being of similar age, I have almost no money invested in bonds. |
Why would you ever turn down a raise in salary? | At least with US tax law where you only pay taxes at the higher rate for the income above the minimum for that tax bracket, you will always wind up ahead taking the raise if you are simply concerned with after tax (FICA) income. For example, assume you were making $8,350 (the top end of the 10% bracket in the US), and got a $100 raise, you would be taxed roughly as follows: After Tax Income Before Raise: $8,350 x (100% - 10%) After Tax Income After Raise: $8,350 x (100%-10%) + $100 x (100%-15%) You can easily see that the second number is always higher than the first as long as the raise is a positive amount (obviously). |
How to know if two ETFs are 'substantially identical' according to wash sale rules? | Nobody knows for sure what "substantially identical" means because the IRS hasn't officially defined it. Until they do so, it would come down to the decision of an auditor or a tax court. The rule of thumb that I have always heard is if the funds track the same index, they are probably substantially identical. I think most people wouldn't consider any pair of AGG, CMF, and NYF to be substantially identical, so you should be safe with your tax-loss harvesting strategy. |
Are warehouse clubs like Costco and Sam's Club worth it? | Whether or not they are worth it depends entirely on your situation. For my family, they are worth it, but I know a number of people who it would not be worthwhile for. The big things that we find are cheaper to get at bulk stores are toiletries, detergents (laundry, dishwasher), meats (only if you have a big freezer), bread, and certain types of prepackaged foods. Right now, it's just my wife and me, but once we have kids it will become even more worthwhile with things like diapers, wipes, and various other items. If you have a large family, or a large freezer odds are they are worth it. One thing to be careful of however is that they usually don't accept coupons. So if you're a big time deal shopper the gain may be minimal. They only cost $40 a year, so worst case scenario if you don't get back your full investment you're not out too much. |
If stock price drops by the amount of dividend paid, what is the use of a dividend | Best as i can tell, the simple answer is: the smartest approach to investing for dividends is to pick a company that is, has, and will continue to make a solid profits. there are lots of them out there. specifically, companies with no debt, a history of long-term and steady growth and a stable market share will, almost always recoup any drop in stock valuation due to a dividend payout...and usually in short order. this is why dividends were created...as a mechanism for distributing profits back to investor without diminishing thier stake in the company. the trick then, is to find such companies with the best ratio between stock price and dividend payout. and again, there are a lot of good options out there. All the trepidation is justified however, as many unscrupulous companies will try to pull investors in with high dividends as a means to simply generate capital. these companies have few of the quality attributes mentioned above. instead, High debt, fluctuating or negative profits, minimal market share or diminishing growth present a very risky long term play and will be avoided by this conservative investor. |
How to share income after marriage and kids? | My own personal point of view. I earn about twice what my wife to be earns. We are planning on getting married next year. I ultimately do all the finances (basically because she hates that kind of thing) not because I'm in charge or whatever. To work out how we do this I wrote a spreadsheet: At the top it has my monthly pay in one column and her's in another. I add all our bills (against me initally). At the bottom I have a total of both of our "spending money". Spending money is wage - bills - savings I then move money out of my column into her column. My goal is that we pay all the bills and save a decent amount and have roughly the same amount to spend each month. So each persons spending money should be roughly equal. I then fine tune this as things change (if we get a pay rise we alter it, if a bill goes up or down we alter it) To manage this we have 4 accounts, a joint account to pay bills (both give a set amount to each mont), a savings acount (both give a set amount to each month) and our own accounts (where we get paid and where our spending money lives). Like everyone else says, this seems fair to me. I don't earn more, we both earn "an amount" and this should be split equally. |
How to gift money anonymously to an individual after collection thru a donation site? | Regarding the tax implications half of your question ... There seem to be a lot of articles that say there's not yet any established law concerning the tax treatment of crowdsourced funds. Since your objective is gift-giving rather than business purposes, it would seem that the gift tax rules would apply, and gift taxes are charged to the donor not the donee. (But I am not a tax attorney.) |
What's the difference between TaxAct and TurboTax? | Like most software it's about what you put in to them. We use ProSeries software which is like TurboTax but $4500 with no questions. I would do your taxes on online and then have a professional do them. You then can ask any questions you may have to better understanding of what's going on. Only take copies of your documents because some unprofessional places will try to keep them. Do this each time something big changes in your life, you have a baby, buy a house or start a business. May cost more but could save you thousands in the long run. I have been doing taxes professionally for 7 years. |
Taxes for citizen of EU country #1 living in EU country #2 and working from home for non-EU country #3? | You will almost certainly be paying taxes in Czech Republic, short of being American of Eritrean, citizenship has little to no bearing on tax. If you are working from home, you will probably be a contractor. In Romania you would work through either an SRL or you would set up a PFA. Essentially a limited company or a sole trader. You will need to find the Czech equivalents. I would advise finding a small business accountant. They will be able to advise what is the most cost effective solution, in some countries (like my one) you can save considerable amounts of tax by working through a company. There is a link with some information. |
Why are interest rates on saving accounts so low in USA and Europe? | The 8% rate offered by Russian banks on US Dollar accounts reflects the financial problems they have. They would prefer to lend US Dollars on the international financial markets at the same rate as US banks, but loans to Russian banks are considered to be more risky. In fact, the estimated "default" risk is ~6%. Your ruble deposits at Russian banks are most likely backed by state guarantees, which reduces the risk and therefore the effective interest rate. |
Why does gold have value? | To start with gold has value because it is scarce, durable, attractive and can be made into jewellery. But that does not explain its current value. In the current economic climate, it is difficult for many investors to get a positive return on conventional investments such as equities or bonds. I theorise that, in such conditions, investors decide to park their money in gold simply because there are few other good options. This in itself drives the price of gold up, making it a better investment and causing a speculative boom. As you will see here, here, and here the gold price is negatively correlated with stock market indices. |
Investing/business with other people's money: How does it work? | You can either borrow money... credit card, line of credit, re-finance your home, home equity line of credit, loan, mortgage, etc. Or you have other invest in your company as equity. They will contribute $X to get Y% of your company and get Z% of the profits. Note amount of profits does not necessarily have to equate to percentage owned. This makes sense if they are a passive investor, where they just come up with the money and you do all the work. Also voting rights in a company does not have to equate to percentage owned either. You can also have a combination of equity and debt. If you have investors, you would need to figure out whether the investor will personally guarantee the debt of your company - recourse vs non-recourse. If they have more risk, they will want more of a return. One last way to do it is crowdfunding, similar to what people do on Kickstarter. Supporters/customers come up with the money, then you deliver the product. Consulting practices do something similar with the concept of retainers. Best of luck. |
Why is being “upside down” on a mortgage so bad? | For most people "home ownership" is a long term lifestyle strategy (i.e. the intention is to own a home for several decades, regardless of how many times one particular house might be "swapped" for a different one. In an economic environment with steady monetary inflation, taking out a long-term loan backed by a tangible non-depreciating "permanent" asset (e.g. real estate) is in practice a form of investing not borrowing, because over time the monetary value of the asset will increase in line with inflation, but the size of the loan remains constant in money terms. That strategy was always at risk in the short term because of temporary falls in house prices, but long-term inflation running at say 5% per year would cancel out even a 20% fall in house prices in 4 years. Downturns in the economy were often correlated with rises in the inflation rate, which fixed the short-term problem even faster. Car and student loans are an essentially different financial proposition, because you know from the start that the asset will not retain its value (unless you are "investing in a vintage car" rather than "buying a means of personal transportation", a new car will lose most of its monetary value within say 5 years) or there is no tangible asset at all (e.g. taking out a student loan, paying for a vacation trip by credit card, etc). The "scariness" over home loans was the widespread realization that the rules of the game had been changed permanently, by the combination of an economic downturn plus national (or even international) financial policies designed to enforce low inflation rates - with the consequence that "being underwater" had been changed from a short term problem to a long-term one. |
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