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What could cause a stock to trade below book value? | A company's stock value is indicative of the market's collective belief of the future of the company. The relationship of between price and book value will vary according to the quality of the company, the category of stock, etc. In extreme cases, say Bank of America, the stock trades at a fraction of book, because BOA's books are a fantasy by most people's reckoning. |
Can stock brokerage firms fail? | Yes, any company can go under. SIPC offers a level of protection. They don't guarantee against stocks dropping, but will replace stocks that you owned, but the broker stole from you. (overgeneralization). There's a $500K limit, with $250K max in cash. |
Should I replace bonds in a passive investment strategy | I have had similar thoughts regarding alternative diversifiers for the reasons you mention, but for the most part they don't exist. Gold is often mentioned, but outside of 1972-1974 when the US went off the gold standard, it hasn't been very effective in the diversification role. Cash can help a little, but it also fails to effectively protect you in a bear market, as measured by portfolio drawdowns as well as std dev, relative to gov't bonds. There are alternative assets, reverse ETFs, etc which can fulfill a specific short term defensive role in your portfolio, but which can be very dangerous and are especially poor as a long term solution; while some people claim to use them for effective results, I haven't seen anything verifiable. I don't recommend them. Gov't bonds really do have a negative correlation to equities during periods in which equities underperform (timing is often slightly delayed), and that makes them more valuable than any other asset class as a diversifier. If you are concerned about rate increases, avoid LT gov't bond funds. Intermediate will work, but will take a few hits... short term bonds will be the safest. Personally I'm in Intermediates (30%), and willing to take the modest hit, in exchange for the overall portfolio protection they provide against an equity downturn. If the hit concerns you, Tips may provide some long term help, assuming inflation rises along with rates to some degree. I personally think Tips give up too much return when equity performance is strong, but it's a modest concern - Tips may suit you better than any other option. In general, I'm less concerned with a single asset class than with the long term performance of my total portfolio. |
What is the fastest way to retire, using passive income on real estate | Rule of thumb: To retire with a yearly income of $X, you need to save $(20*X) -- in other words, the safe assumption is that you'll average 4% returns on your stabilized savings/investments. In the case of retiring with a $50k passive pretax income, that means you need savings of $1M by the time you retire. If you want the $50,000 to be real post-tax spendable dollars, and your savings aren't in something like a Roth 401k or Roth IRA, increase that proportionately to account for taxes. How you get there depends on what you start with, how much you put into it every year, how you invest it and how many years you have before your retirement date. Passive investment alone will not do it unless you start with a lot of money; passive ongoing investment may depending on how much you can make yourself save when. To find out whether any specific plan will do what you need, you have to work with real numbers. |
Should I negotiate a lower salary to be placed in a lower tax bracket? | No, absolutely not. Income tax rates are marginal. The tax bracket's higher tax rate only applies to extra dollars over the threshold, not to dollars below it. The normal income tax does not have any cliffs where one extra dollar of income will cost more than one dollar in extra taxes. Moreover, you are ignoring the personal exemption and standard deduction. A gross salary of $72,000 is not the same as taxable income of $72,000. The deduction will generally be $12,200 and the exemptions will be $3,900 for you, your spouse, and any kids. So married-filing-jointly with the standard deduction will get an automatic $20,000 off of adjusted gross income when counting taxable income. So the appropriate taxable income is actually going to be more like $52,000. Note that getting your compensation package reshuffled may result in different tax treatment. But simply taking a smaller salary (rather than taking some compensation as stock options, health insurance, or fringe benefits), is not a money-saving move. Never do it. |
What can I replace Microsoft Money with, now that MS has abandoned it? | How complicated is your budget? We have a fairly in depth excel spreadsheet that does the trick for us. Lots of formulas and whatnot for calculating income, outgo, expected and actual expenses, expenses budgeted over time (i.e. planned expenses that are semi-annual or annual) as well as the necessary emergency funds based on expenses. Took me a few hours to initially create and many tweaks over months to get just right but it's reliable and we know we'll never lose support for it. I'd be willing to share it if desired, I'll just have to remove our personal finance figures from it first. |
Is it possible to sell a stock at a higher value than the market price? | Yes You could write a covered call and the stock gets called away at the price + premium. You could convince someone to buy it regardless of the market price. |
Can LLC legally lend money to a friend? | Legally, I can't find any reason that the LLC could not lend money to an individual. However, I believe the simplest course of action is to first distribute money from your company to your personal account, and then make it a personal loan. Whether the loan is done through the business or personally, financially I don't think there is much difference as to which bucket the interest income goes into, since your business and personal income will all get lumped together anyway with a single person LLC. Even if your friend defaults on the loan, either the business or you personally will have the same burden of proof to meet that the loan was not a gift to begin with, and if that burden is met, the deduction can be taken from either side. If a debt goes bad the debtor may be required to report the debt as income. |
Stocks given by company vest if I quit? | Vesting typically stops after you quit. So, if your plan vests 20% per year for 5 years, and you received a one-time stock grant as part of this plan (i.e., ignoring the fact that these often involve new grants each year that vest separately), and you were hired in 2014 and leave at the end of 2016, then you vested 20% in 2015 and 20% in 2016, so would have 40% of the stock vested when you quit, and would never have more than that. |
I have more than $250,000 in a US Bank account… mistake? | Build a trust. I have a trust account under my name and 3 dependents, FDIC confirmed we're good to 1m. Then I have personal accounts for the 4 of us and a corp account, all at the same bank, each also insured. |
Is there any way to attach a statement of explanation while submitting a tax return electronically using Free Fillable Forms? | Depending on what you need to explain, you can submit your electronic return without the supplemental information and subsequently mail a Form 8453 with the additional information. This is helpful for form 8489, for example, where you need to list every transaction reported by your stock broker on a 1099-B. See https://www.irs.gov/pub/irs-pdf/f8453.pdf for more details on this form. If the information you need to submit an attachment for doesn't follow one of the options on that form, you will likely need to file a paper return or use a paid tax preparation service/application. Limitations of FreeFile are explained here, along with a list of forms that are available: https://www.irs.gov/uac/List-of-Available-Free-File-Fillable-Forms The "Attaching Statements" and "Write-in information" sections seem like they might apply to your situation. Attaching Statements - If you need to add statements and you can't use Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, to mail that information, you will not be able to use this program to efile your return Identity Protection PIN's (IP PIN) - This program only supports the entry of a Primary taxpayer's IP PIN. If the spouse or dependents have an IP PIN, you cannot use this program to efile the return. Writing In Information - Your ability to "write in" additional information to explain an entry is generally limited to the 1040 forms and some of the more frequently submitted forms. If you need to write in additional information on a form, other than the 1040 series, you may not be able to use this program to efile your tax return. E-filing Forms - To efile forms, (except Form 4868) they must be attached to a 1040 series form (1040, 1040A or 1040EZ). Form Limitations - There may be Known Limitations of forms you plan to complete. Please review them. A form limitation may keep you from completing or e-filing your return. |
Which banks have cash-deposit machines in Germany? | In my experience Sparkasse or VR Bank have them quite often. They stick out in my mind because when you make a withdrawal you have to reach in to get your money instead of it spitting it out. I'm always afraid its going to chop my hand off. |
Lost credit card replaced with new card and new numbers. Credit score affected? | The true answer is it depends because it is up to the credit card issuer to follow the right path when issuing a replacement credit card. http://www.bankrate.com/finance/credit-cards/will-replacement-card-hurt-my-score.aspx Typically, issuers will transfer the account history to the new trade line, says Barry Paperno, the consumer operations manager at FICO, the creator of the FICO scoring formula. The new account should have the old open date, so you should retain your payment history, he says. The credit limit and balance should also stay the same. http://blog.credit.com/2014/02/lost-or-stolen-credit-card-hurt-your-credit-scores-76724/ How Issuers Report Replacement Cards We asked the major card issuers how they report replacement cards to credit reporting agencies: American Express: The new card has the same open date and “Member Since” year as the previous card. The balance on the old account number is transferred to the new account number. All payment history transfers over. Bank of America: All transactions and account history are transferred to the new account number when there is a card replacement or renewal. Capital One: The new account number with all the original account data (original open date, etc.) is reported along with a notification to the bureaus that the new account number is replacing the old. The two tradelines can then be ‘merged’ into one, so that all the applicable payment history, balance, etc. is now under the new account number. Chase: The original tradeline does not change. The history on the account remains, just the account number field is updated with the new account number. There is no “new” tradeline in this scenario. |
How do I determine ownership split on a franchise model? | There is no one solution to every project finance problem. Two models might make sense in this situation, however. In this case, you would count all the money that you give to your friend as a loan which he will pay back with interest. The interest rate and loan amounts will have to be agreed on by both of you. One one hand, the interest should be high enough to reward you in a successful outcome for the amount of risk that you take on if things don't work out. On the other, the interest rate needs to be low enough where his earnings after loan repayment justify your friend's effort, in addition to being competitive to ant rate your friend could secure from a bank. The downside to this plan is you don't directly benefit from the franchise's profits. In this model, you will record the cash that each of you invests. Since your friend is also adding "sweat equity" by setting up and operating the franchise, you will need to quantify the work that your friend and you invest into the franchise. Then you can determine how much each of you has invested in terms of dollars and split any franchise profits based on those proportions. The downside of this plan is that it is difficult to estimate how much time each of you invests and how much that time is worth. |
Is there any “Personal” Finance app that allows 2 administrators? | The best solution I've been able to find for this is MoneyWiz, where both are logged into the same sync account. |
What bonds do I keep and which do I cash, why is the interest so different | Bonds released at the same time have different interest rates because they have different levels of risks and liquidity associated. Risk will depend on the company / country / municipality that offers the bond: their financial position, and their resulting ability to make future payments & avoid default. Riskier organizations must offer higher interest rates to ensure that investors remain willing to loan them money. Liquidity depends on the terms of the loan - principal-only bonds give you minimal liquidity, as there are no ongoing interest payments, and nothing received until the bond's maturity date. All bonds provide lower liquidity if they have longer maturity dates. Bonds with lower liquidity must have higher returns to compensate for the fact that you will have to give up your cash for a longer period of time. Bonds released at different times will have different interest rates because of what the general 'market rate' for interest was in those periods. ie: if a bond is released in 2016 with interest rates approaching 0%, even a high risk bond would have a lower interest rate than a bond released in the 1980s, when market rates were approaching 20%. Some bonds offer variable interest tied to some market indicator - those will typically have higher interest at the time of issuance, because the bondholder bears some risk that the prevailing market rate will drop. Note regarding sale of bonds after market rates have changed: The value of your bonds will fluctuate with the market. If a bond was offered with 1% interest, and next year interest rates go up and a new identical bond is offered for 2% interest, when you sell your old bond you will take a loss, because the market won't want to pay full price for it anymore. Whether you should sell lower-interest rate bonds depends on how you feel about the factors above - do you want junk bonds that have stock-like levels of returns but high risks of default, maturing in 30 years? Or do you want AAA+ Bonds that have essentially 0% returns maturing in 30 days? If you are paying interest on debt, it is quite likely that you could achieve a net income benefit by selling the bonds, and paying off debt [assuming your debt has a higher interest rate than your low-rate bonds]. Paying off debt is sometimes referred to as a 'zero risk return', because essentially there is no real risk that your lender would otherwise go bankrupt. That is, you will owe your bank the car loan until you pay it, and paying it is the only thing you can do to reduce it. However, some schools of thought suggest that maintaining savings + liquid investments makes sense even if you have some debt, because cash + liquid investments can cover you in some emergencies that credit cards can't help you with. ie: if you lose your job, perhaps your credit could be pulled and you would have nothing except for your liquid savings to tide you over. How much you should save in this way is a matter of opinion, but often repeated numbers are either 3 months or 6 months worth [which is sometimes taken as x months of expenses, and sometimes as x months of after-tax income]. You should look into this issue further; there are many questions on this site that discuss it, I'm sure. |
Do I have to explain the source of *all* income on my taxes? | You can report it as illegal income and you don't have to elaborate any further. For instance, spirit the cash off to a state where pot is legal and set up a dispensary. That is not legal at the Federal level, so it is in fact "illegal income" vis-a-vis your Form 1040 and that's all you say. Make sure you look, walk, and quack like a fairly successful pot distributor. That will most likely be the end of their inquiry, since they're not terribly driven to investigate the income you do report. Having to give 33% of it to the IRS is generally strong motivation for folks to not report fake income. You're not claiming the money is from pot, you're allowing them to infer it. |
As an employer, how do I start a 401k or traditional IRA plan? | Here is a nice overview from Vanguard on some options for a small business owner to offer retirement accounts. https://investor.vanguard.com/what-we-offer/small-business/compare-plans I would look over the chart and decide which avenue is best for you and then call around to investment companies (Vanguard, Fidelity, etc. etc.) asking for pricing information. |
Why do stock prices of retailers not surge during the holidays? | Your explanation is nearly perfect and not "hand wavy" at all. Stock prices reflect the collective wisdom of all participating investors. Investors value stocks based on how much value they expect the stock to produce now and in the future. So, the stability of the stock prices is a reflection of the accuracy of the investors predictions. Investor naivity can be seen as a sequence of increasingly sophisticated stock pricing strategies: If investors were able to predict the future perfectly, then all stock prices would rise at the same constant rate. In theory, if a particular investor is able to "beat the market", it is because they are better at predicting the future profits of companies (or they are lucky, or they are better at predicting the irrational behavior of other investors......) |
Do Fundamentals Matter Anymore in Stock Markets? | It sounds to me like you may not be defining fundamental investing very well, which is why it may seem like it doesn't matter. Fundamental investing means valuing a stock based on your estimate of its future profitability (and thus cash flows and dividends). One way to do this is to look at the multiples you have described. But multiples are inherently backward-looking so for firms with good growth prospects, they can be very poor estimates of future profitability. When you see a firm with ratios way out of whack with other firms, you can conclude that the market thinks that firm has a lot of future growth possibilities. That's all. It could be that the market is overestimating that growth, but you would need more information in order to conclude that. We call Warren Buffet a fundamental investor because he tends to think the market has made a mistake and overvalued many firms with crazy ratios. That may be in many cases, but it doesn't necessarily mean those investors are not using fundamental analysis to come up with their valuations. Fundamental investing is still very much relevant and is probably the primary determinant of stock prices. It's just that fundamental investing encompasses estimating things like future growth and innovation, which is a lot more than just looking at the ratios you have described. |
When an investor makes money on a short, who loses the money? | Michael gave a good answer describing the transaction but I wanted to follow up on your questions about the lender. First, the lender does charge interest on the borrowed securities. The amount of interest can vary based on a number of factors, such as who is borrowing, how much are they borrowing, and what stock are they trying to borrow. Occasionally when you are trying to short a stock you will get an error that it is hard to borrow. This could be for a few reasons, such as there are already a large amount of people who have shorted your broker's shares, or your broker never acquired the shares to begin with (which usually only happens on very small stocks). In both cases the broker/lender doesnt have enough shares and may be unwilling to get more. In that way they are discriminating on what they lend. If a company is about to go bankrupt and a lender doesnt have any more shares to lend out, it is unlikely they will purchase more as they stand to lose a lot and gain very little. It might seem like lending is a risky business but think of it as occurring over decades and not months. General Motors had been around for 100 years before it went bankrupt, so any lender who had owned and been lending out GM shares for a fraction of that time likely still profited. Also this is all very simplified. JoeTaxpayer alluded to this in the comments but in actuality who is lending stock or even who owns stock is much more complicated and probably doesnt need to be explained here. I just wanted to show in this over-simplified explanation that lending is not as risky as it may first seem. |
What are my investment options in real estate? | I compared investing in real estate a few years ago to investing in stocks that paid double digit dividends (hard to find, however, managing and maintaining real estate is just as hard). After discussing with many in the real estate world, I counted the average and learned that most averaged about 6 - 8% on real estate after taxes. This does not include anything else like Dilip mentions (maintenance, insurance, etc). For those who want to avoid that route, you can buy some companies that invest in real estate or REIT funds like Dilip mentions. However, they are also susceptible to the problems mentioned above this. In terms of other investment opportunities like stocks or funds, think about businesses that will always be around and will always be needed. We won't outgrow our need for real estate, but we won't outgrow our need for food or tangible goods either. You can diversify into these companies along with real estate or buy a general mutual fund. Finally, one of your best investments is your career field - software. Do some extra work on the side and see if you can get an adviser position at a start-up (it's actually not that hard and it will help you build your skill set) or create a site which generates passive revenue (again, not that hard). One software engineer told me a few years ago that the stock market is a relic of the past and the new passive income would be generated by businesses that had tools which did all the work through automation (think of a smart phone application that you build once, yet continues to generate revenue). This was right before the crash, and after it, everyone talked about another "lost decade." While it does require extra work initially, like all things software related, you'll be discovering tools in programming that you can use again and again in other applications - meaning your first one may be the most difficult. All it takes in this case is one really good idea ... |
Is there any algorithm to calculate highest possible return on stock market? | Highest possible is meaningless. Ex: Use 17x Leverage on E-mini S&P 500 Futures, perfectly long before an uptick and short before a downtick every minute. Goes to the moon in a day of 1,440 minutes. You are supposed to use a Buy-and-Hold SPY, with leverage that makes the Standard Deviation of SPY same as your Portfolio/Algorithm, as benchmark. |
How are people able to spend more than what they make, without going into debt? | Rich people use debt for various reasons. The question should not assume that billionaires don't use debt. They also pay lower interest rates on that debt because they have enough collateral that their debt is safer than a typical mortgage. Many rich people will use interest only mortgages on their primary residences so that they can keep their stock earning at higher growth rates than the mortgage interest that they are paying all while writing off a portion of that mortgage interest on their taxes. Taking an artificially low salary and receiving equity for the larger portion of compensation is also a tax strategy to limit the amount of taxes owed on that income. If paid directly in stock grants, that will count as income, but if paid in options, then the purchased stock will only be taxed at the lower capital gains rates if the stock is held for a year after the options are exercised. Every billionaire will have complicated tax avoidance strategies that will require multi-year planning for the best long-term minimization of taxes. Debt is a strategic part of that planning. Also consider that a major part of that upscale lifestyle (corporate jets, fancy meals, etc.) is on the company dime because the CEO is always on the clock. As long as he is meeting with business prospects or doing other company business, those expenses will be justified for the corporation and not attributed as income. |
Capitalize on a falling INR | By no means is this a comprehensive list, but a few items to consider: |
What does a CFP do? | A Certified Financial Planner has passed a licensing exam and will advise you and help you reach your financial goals. A good CFP can help you a lot, especially if you are unsure how to set up your insurance, investment, savings, and financial plans on your own. You do not need a CFP to get a life insurance policy. If you do get a CFP, he or she should help you above and beyond life insurance -- i.e. retirement planning, investment advice, education planning, etc. It's advantageous to you to pay a fixed price for services instead of a percentage or commission. Negotiate fees up front. For life insurance, in most cases a term policy will fit your needs. Whole life, universal life, etc., combine investments and life insurance into a single product and are big commission makers for the salesman. They make it sound like the best thing ever, so be aware. One of my rules of thumb is that, generally speaking, the larger the commission is for the salesperson, the worse the product is for the consumer. Welcome to life insurance pitches. Term life is far less expensive and provides a death benefit and nothing else. If you just had a baby and need to protect your family, for example, term life is often a good solution, easy to buy, and inexpensive. As you stated, any of the major providers will do just fine. |
Home Valuation in a Dodgy neighborhood | Over the last ten years you have reaped the benefits of a good financial decision. (Presumably your low mortgage has freed up money for other financial priorities.) There would be no harm in making a clean break by selling as is. On the other hand, the resale value would probably be rather low considering the condition and the neighborhood. I don't want to assume too much here, but if a potential buyer is interested in the house by virtue of not being able to afford a house in a better neighborhood or better condition, their finances and credit history may make it difficult for them to be approved for a mortgage. That would reduce the potential buyer pool and further reduce the sale price. If you can pull more in rent than the mortgage, you definitely have an opportunity to come ahead. Maybe window A/C units and a repaired chimney are enough if you're renting. Your rental income would pay for that in less than a year even while paying your mortgage for you. (Of course you don't want to become a sleazy slumlord either.) |
How are exchange rates decided for each country? | Today the rates are arrived simply on the basis of demand and supply. Historically rates were pegged to Gold, when all currencies were printed depending on the Gold reserves. So if one country printed 100 units of currency of a 1gm of gold and other country 10 units of currency for 1 gm of gold, the rate would be 1:10. However In the seventies with shortages of Gold and other reasons, USD became the default standard, so the rate started being pegged to the USD reserves the countries started maintaining. However later in the early eighties, US backing out, the rate purely started getting pegged to market demand and supply. So for most currencies there was a default rate to begin with and today its changed ... Incase of USD/EUR, the initial rate was determined by the weighted average of the currencies that it sought to replace. After that its been market supply and demand. Since most of the trade in international market is US denominated, largest being Oil, each country has created a huge reserves of USD. So technically if China were to bank half its USD denominated treasury bills, the USD would come crashing down, but then China itself would be at disadvantage as its value of USD its holding would become less and it cannot buy the same items. Hence all countries keep hording USD and this means US if they print more money, the value will not come down, because it that happens, all countries holding USD would loose their value of reserve. In essence a country can print as much as currency it wants if all(majority) its debts and trades are denominated in local currencies. This is 100% true for US and hence it can get away by printing money. This is also true to a large extent for Japan as bulk of its Debts are denominated in JPY. |
Is it safer to send credit card number via unsecured website form or by e-mail? What safer options are there? | Your biggest risk with a vendor like this is not that your Credit Card Number will be stolen in transit, it is that it will be stolen from the vendor. I agree with @mhoran that using a one-time number is the best plan, provided you have a bank that offers such numbers. Bank of America calls it "Shop Safe" while Citibank calls it "Virtual Account Numbers". I think Discover card has something similar, but less useful, in that they aren't really one-time use, and I think American Express discontinued their service. AFAIK no one else offers anything like it. If you can't get a one-time number, then I was going to suggest buying a Visa gift card, until I put together the fact that you are making a purchase in Asia and the gift cards are not authorized for international payments (due to PATRIOT act restrictions). Visa does offer the V.me service which might help, but I doubt your vendor participates (or would even be allowed to participate) if they don't offer a secure order form. You can open a pre-paid Visa card account, which is probably what I'd do. You can buy pre-paid Visa cards the same way you buy Visa gift cards, the difference being you have to register the pre-paid cards (thanks, PATRIOT act) before you can use them. But it's not that big a deal to register one, you just fill out the online form your your SSN etc and you're good to go. Load it up with enough money to cover your purchase and the FX fees and then cut it up. |
Does my net paycheck decrease as the year goes on due to tax brackets filling up? | No, you will (generally speaking) not see a decrease in your net earnings from crossing a tax bracket: This means that your highest marginal rate (the top bracket you fall into) only applies to the portion of your income that is in that bracket, not your total income. This helps ensure that your total tax burden does not increase measurably from crossing a tax bracket. Be aware that you can still see measurable changes in your total taxes due if increases in income make you no longer eligible for certain deductions and/or benefits that were otherwise reducing your tax burden, but this is not the same as how changes in your highest marginal rate affect your overall average tax rate. Note that when you see a rate table such as the one on efile.com's federal income tax rates page or on Wikipedia's Income tax in the United States page, the rates listed are for each segment of income, not for your overall income: In other words the 15% rate below (for 2014, filing single) only applies to the portion of your income falling between the listed numbers, not to income below it or above it: that would be calculated under the respective rates given. You can use the i1040tt tax tables to gain a sense of how this works in practice: (The linked resource is for 2014 taxes) The threshold in 2014 for the 25% rate vs 15% was $36,900. Using the linked table, if you were single and made between 36,850 and 36,900 in gross income, your tax liability before other considerations was $5,078. If you made between 36,900 and 36,950, your base tax liability was $5,088. |
How to correct a tax return filed electronically and already approved? | Simply file an amended return to correct the mistake. This happens all the time and is a standard procedure that every legitimate tax pro can handle. You can work it out with the tax pro about whose mistake it was and who should pay for the additional service. |
How do I know if refinance is beneficial enough to me? | When evaluating a refinance, you need to figure out the payback time. Refinancing costs money in closing costs. The payback time is the time it takes to recover the closing costs with the amount of money you are saving in interest. For example, if the closing costs are $2,000, your payback time is 2 years if it takes 2 years to save that amount in interest with the new interest rate vs. the old one. To estimate this, look at the difference in interest rate between your mortgage and the new one, and your mortgage balance. For example, let's say that you have $100,000 left on your mortgage, and the new rate is 1% lower than your current rate. In one year, you will save roughly $1,000 in interest. If your closing costs are $2,000, then your payback time is somewhere around 2 years. If you plan on staying in this house longer than the payback time, then it is beneficial to refinance. There are mortgage refinance calculators online that will calculate payback time more precisely. One thing to watch out for: when you refinance, if you expand the term of your mortgage, you might end up paying more interest over the long term, even though your rate is less and your monthly payment is less. For example, let's say you currently have 8 years left on a 15-year mortgage. If you refinance to a new 15-year mortgage, your monthly payment will go down, but if you only pay the new minimum payment for the next 15 years, you could end up paying more in interest than if you had just continued with your old mortgage for the next 8 years. To avoid this, refinance to a new mortgage with a term close to what you have left on your current mortgage. If you can't do that, continue paying whatever your current monthly payment is after you refinance, and you'll pay your new mortgage early and save on interest. |
Does Technical Analysis work or is it just a pointless attempt to “time the market”? | Technical Analysis in general is something to be cognizant of, I don't use a majority of studies and consider them a waste of time. I also use quantitative analysis more so than technical analysis, and prefer the insight it gives into the market. The markets are more about predicting other people's behavior, psychology. So if you are trading an equity that you know retail traders love, retail traders use technical analysis and you can use their fabled channel reversals and support levels against them, as examples. Technical analysis is an extremely broad subject. So I suggest getting familiar, but if your historical pricing charts are covered in various studies, I would say you are doing it wrong. A more objective criticism of technical analysis is that many of the studies were created in the 1980s or earlier. Edges in the market do not typically last more than a few weeks. On the other side of that realization, some technical analysis works if everyone also thinks it will work, if everyone's charts say buy when the stock reaches the $90 price level and everyone does, the then stock will go higher. But the market makers and the actions of the futures markets and the actions of options traders, can undermine the collective decisions of retail traders using technical analysis. |
Should I remodel or buy a bigger house? | I am quite sure you can set up an office in your basement for a lot less than $15,000. Don't build any walls, install any flooring, or upgrade the ceiling. Just install more lights and plugs. Set up your desks, bookshelves and what not in whatever corner is furthest from noises like the laundry room or the furnace. The kids and the nanny get the main floor - just let the whole living room be a giant playroom, for example. This gives you the separation you need to work at home, but you can hear if something really needs your attention. When the kids go off to school, you can refinish the basement into a playroom for kids who don't always need supervision, using the money you are no longer spending on the nanny to install carpeting, real walls, a drop ceiling and so on. Your office stuff can move up to the main floor or to a spare room upstairs if you had one but it wasn't usable during the baby years when upstairs generally has to be quiet. As the kids get older the basement can get tailored to what preteens and teens like. This is essentially what we did, and our square footages and child counts match yours almost precisely. We did eventually convert our garage to carpeted and finished space, and it spent time as an office with staff coming in each day, then some time as a teen playroom (think video games and loud music) after the business rented office space outside the house, but if you don't intend to hire staff for your business you don't need to do this part. We did the majority of the basement wiring ourselves and got an electrician to hook it into the panel and check our work. The budget would probably be less than 10% of the guess from your real estate agent. |
How do I determine how much rent I could charge for a property or location? | Zoopla may not always accurately reflect the market price. Your best bet is to get a quote for local registered) letting agents. That way you know you are close to the real market value. Also, these quotes may come into handy if you have a mortgage on the property. Since most banks will require you to provide proof of rent figures you are projecting by sending in official quotes. Hope this helps.. |
Does investing in a company support it? | As said by others, buying shares of a company will not support it directly. But let's think about two example companies: Company A, which has 90 % stocks owned by supporters, and Company B, which has only 1 % of stocks owned by supporters. Both companies release bad news, for example profits have decreased. In Company B, most investors might want to sell their stock quickly and the price will plummet. In Company A, the supporters continue believing in the company and will not want to sell it. The price will drop less (usually, but it can drop even more if the sellers of Company A are very desperate to get rid of the stock). So, why is it important for the company to have a high stock price? In the short-term, it's not important. One example is that the company can release more stocks and receive more financing by doing that. Other reasons are listed here: http://www.investopedia.com/articles/basics/03/020703.asp |
The Benefits/Disadvantages of using a credit card | An advantage of using a major credit card is that they act as a buffer and source of recourse between you and the merchant. Cheated and the store won’t answer you letters? Call Visa (or more accuratly, call the number on the back of the card). (That is, #2 on this answer, which you can also reference for a whole list of benefits.) |
Is 401k as good as it sounds given the way it is taxed? | When you are investing for 40 years, you will have taxable events before retirement. You'll need to pay tax along the way, which will eat away at your gains. For example, in your taxable account, any dividends and capital gain distributions will need taxes paid each year. In your 401(k) or IRA, these are not taxable until retirement. In addition, what happens if you want to change investments before retirement? In your taxable account, taxes on the capital gains will be due at that time, but in a retirement account, you can change investments anytime you like without having to pay taxes early. Finally, when you do pull money out of your 401(k) at retirement, it will be taxed at whatever your tax rate is at retirement. After you retire, your income will probably be lower than when you were working, so your tax rate might be less. |
How to deal with the credit card debt from family member that has passed away? | First off, very sorry for your loss. I lost my father a few years ago and I know it can be tough. My father also had a lot of credit card debt. They attempted to collect the debt from my mother, who was no longer on the account (for over a decade). It was just an attempt to recoup as much money as they could before dealing with a probate court. As others have said, it depends on your state law. You will want to talk to a lawyer, figure out who is going to be the executor of the estate, and determine the next steps in starting to settle debts that your father had. If you want to take possession of the house, then you will likely need to work with the executor and perhaps purchase the house from the estate (which would then use the money to pay off debts). |
If you own 1% of a company's stock, are you entitled to 1% of its assets? | No. If the share price drops to $0, it's likely that the company is in bankruptcy. Usually, debt holders (especially holders of senior debt) are paid first, and you're entitled to whatever the bankruptcy proceedings decide to give holders of equity after the debt holders are paid off. More often than not, equity holders probably won't get much. To give an example, corporate bankruptcy usually involves one of two options: liquidation or reorganization. In the US, these are called Chapter 7 and Chapter 11 bankruptcy, respectively. Canada and the United Kingdom also have similar procedures for corporations, although in the UK, reorganization is often referred to as administration. Many countries have similar procedures in place. I'll use the US as an example because it's what I'm most familiar with. In Chapter 7 bankruptcy, the company is liquidated to pay its debts. Investopedia's article about bankruptcy states: During Chapter 7 bankruptcy, investors are considered especially low on the ladder. Usually, the stock of a company undergoing Chapter 7 proceedings is usually worthless, and investors lose the money they invested. If you hold a bond, you might receive a fraction of its face value. What you receive depends on the amount of assets available for distribution and where your investment ranks on the priority list on the first page. In Chapter 11 bankruptcy, the company is turned over to a trustee that guides it through a reorganization. The Investopedia article quotes the SEC to describe what happens to stockholders when this happens: "During Chapter 11 bankruptcy, bondholders stop receiving interest and principal payments, and stockholders stop receiving dividends. If you are a bondholder, you may receive new stock in exchange for your bonds, new bonds or a combination of stock and bonds. If you are a stockholder, the trustee may ask you to send back your stock in exchange for shares in the reorganized company. The new shares may be fewer in number and worth less. The reorganization plan spells out your rights as an investor and what you can expect to receive, if anything, from the company." The exact details will depend on the reorganization plan that's worked out, local laws, court agreements, etc.. For example, in the case of General Motor's bankruptcy, stockholders in the company before reorganization were left with worthless shares and were not granted shares in the new company. |
How to measure how the Australian dollar is faring independent of the US dollar | If you're interested in slower scale changes, one option is to use indexes that value a common commodity in different currencies such as the Big Mac Index. If a Big Mac costs more in AUD but stays the same in USD, then AUD have gone up. |
Is it irresponsible for me to lease a $300/month car for 18 months? | With a gross income of $ 95,000 per year, and a net savings rate of over $ 18,000 per year, a budget of $ 3,600 per year for automobile interest and depreciation is not irresponsible. But poor car choices, poor car maintenance habits, and driving habits that risk totalling cars are irresponsible. Also, not fully understanding a lease deal is irresponsible. The "great lease deal" might be encouraging you to make a different "poor car choice" than you made last time. A "great deal" on a bad car is not really a great deal. Also, depending on the contract and your driving habits, you might have a surprising cost at the end of the lease. |
Long term investment for money | Say you have $15,000 of capital to invest. You want to put the majority of your capital into low risk investments that will yield positive gains over the course of your working career. $5,000: Government bonds and mutual funds, split how you want. $9,500: Low risk, trusted companies with positive historical growth. If the stock market is very unfamiliar for you, I recommend Google Finance, Yahoo Finance, and Zack's to learn about smart investments you can make. You can also research the investments that hedge fund managers and top investors are making. Google "Warren Buffett or Carl Icahn portfolio", and this will give you an idea of stocks you can put your money into. Do not leave your money into a certain company for more than 25 years. Rebalance your portfolio and take the gains when you feel you need them. You have no idea when to take your profits now, but 5 years from now, you will be a smart and experienced investor. A safe investment strategy to start is to put your money into an ETF that mimics the S&P 500. Over the past 20 years, the S&P 500 has yielded gains of about 270%. During the financial crisis a few years back, the S&P 500 had lost over 50% of its value when it reached its low point. However, from when it hit rock bottom in 2009, it has had as high percentage gains in six years as it did in 12 years from 1995 to 2007, which about 200%. The market is very strong and will treat your money well if you invest wisely. $500: Medium - High risk Speculative Stocks There is a reason this category accounts for only approximately 3% of your portfolio. This may take some research on the weekend, but the returns that may result can be extraordinary. Speculative companies are often innovative, low priced stocks that see high volatility, gains or losses of more than 10% over a single month. The likelihood of your $500 investment being completely evaporated is very slim, but if you lose $300 here, the thousands invested in the S&P 500, low risk stocks, government bonds, and mutual funds will more than recuperate the losses. If your pick is a winner, however, expect that the $500 investment could easily double, triple, or gain even more in a single year or over the course of just a few, perhaps, 2-4 years will see a very large return. I hope this advice helps and happy investing! Sending your money to smart investments is the key to financial security, freedom, and later, a comfortable retirement. Good luck, Matt McLaughlin |
How to minimise the risk of a reduction in purchase power in case of Brexit for money held in a bank account? | GBP has already lost part of his value just because of the fear of Brexit. An actual Brexit may not change GBP as much as expected, but a no-Brexit could rise GBP really a lot. |
What to do when paying for an empty office space? | This sounds obvious, but: If the landlord is easygoing, you could ask him if he's okay with you subletting the space, and then you could sublet it. Of course you may have to do some work yourself to find an appropriate tenant and make sure you're doing everything legally, but if it works, it's better than paying rent for nothing. |
Why do banks encourage me to use online bill payment? | One other aspect of this is that the bank will plan to eventually approach the merchant that they are sending paper checks to and say "why don't you sign up with us and give us your ACH info, and we won't send you checks?" And a lot of merchants will say "sure", because someone has to open those checks and take them down to the bank, and that isn't free. And that time while the money is in the mail, or sitting on someone's desk to be deposited, that is money that isn't working for you. So everyone wins. |
File bankruptcy, consolidate, or other options? | A couple of thoughts from someone who's kind of been there... Is the business viable at all? A lot of people do miss the jumping-off point where the should stop throwing good money after bad and just pull the plug on the business. If the business is not that viable, then selling it might not be an option. If the business is still viable (and I'd get advice from a good accountant on this) then I'd be tempted to try and pull through to until I'd get a good offer for the business. Don't just try to sell it for any price because times are bad if it's self-sustaining and hopefully makes a little profit. I does sound like their business is on the up again and if that's a trend and not a fluke, IMHO pouring more energy into (not money) would be the way to go. Don't make the mistake of buying high and selling low, so to speak. I'm also a little confused re their house - do they own it or do they still owe money on it? If they owe money on it, how are they making their payments? If they close the business, do they have enough income to make the payments still? Before they find another job, even if it's just a part-time job? As to paying off their debts or at least helping with paying them off, I'd only do that if I was in a financial position to gift them the money; anything else is going to wreak havoc with the family dynamics (including co-signing debt for them) and everybody will wish they didn't go there. Ask me how I know. Re debt consolidation, I don't think it's going to do much for them, apart from costing them more money for something they could do themselves. Bankruptcy - well, are they bankrupt or are they looking for the get-out-of-debt-free card? Sorry to be so blunt, but if they're so deep in the hole that they truly have no chance whatsoever to pay off their debt ever, then they're bankrupt. From what you're saying they're able to make the minimum payments they're not really what I'd consider bankrupt... Are your parents on a budget? As duffbeer703 said, depending on how much money the business is making they should be able to pay off the debt within a reasonable amount of time (which again doesn't make them bankrupt). |
What factors you have do you count on to speculate effectively? | Strategy would be my top factor. While this may be implied, I do think it helps to have an idea of what is causing the buy and sell signals in speculating as I'd rather follow a strategy than try to figure things out completely from scratch that doesn't quite make sense to me. There are generally a couple of different schools of analysis that may be worth passing along: Fundamental Analysis:Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis. The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis. Technical Analysis:In finance, technical analysis is a security analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis use many of the same tools of technical analysis, which, being an aspect of active management, stands in contradiction to much of modern portfolio theory. The efficacy of both technical and fundamental analysis is disputed by the efficient-market hypothesis which states that stock market prices are essentially unpredictable. There are tools like "Stock Screeners" that will let you filter based on various criteria to use each analysis in a mix. There are various strategies one could use. Wikipedia under Stock Speculator lists: "Several different types of stock trading strategies or approaches exist including day trading, trend following, market making, scalping (trading), momentum trading, trading the news, and arbitrage." Thus, I'd advise research what approach are you wanting to use as the "Make it up as we go along losing real money all the way" wouldn't be my suggested approach. There is something to be said for there being numerous columnists and newsletter peddlers if you want other ideas but I would suggest having a strategy before putting one's toe in the water. |
Are parking spaces and garage boxes a good investment? | In Italy (even with taxes that are more than 50% on income) owning garages is generally a good business, as you said: "making money while you sleep", because of no maintainance. Moreover garages made by real concrete (and not wood like in US) are still new after 50 years, you just repaint them once every 20 years and you change the metal door gate once every 30 years. After 20 years you can be sure the price of the garage will be higher than what you paied it (at least for the effect of the inflation, after 20 years concrete and labour work will cost more than today). The only important thing before buying it is to make sure it is in an area where people are eager to rent it. This is very common in Italian cities' downtown because they were built in dark ages when cars did not exists, hence there are really few available parkings. |
Multiple SEO companies claiming I have a past-due invoice | Reading stuff like this makes me want to go into the debt collection business. Just send letters to random people demanding money. Sounds like an easy way to make a living. What's your name and address? Just kidding. If they are sending stuff to a Virginia PO Box, close the box with no forwarding address and consider it case closed. If they are targetting you personally in New Hampshire, the best thing to do is to sue proactively before it goes to collection. New Hampshire has strict anti-debt-collection laws. Basically, what you do is go to small claims court and fill out a one-page form. Sue them for $2000, $3000 or whatever is convenient. Do not hire a lawyer. You can do this in 2 hours of your own time. Your grounds are: (1) Violation of the creditor of NH FDCA laws. According to the laws the creditor has to put all kinds of specific stuff in their threat letters. Since they are not doing this, they have violated NH FDCA. Read the FDCA so you know which specific items they are violating. (2) Extortion. Since you do not owe them any money, demanding money from you is extortion which is both criminally and civilly actionable. You sue them for mental anguish due to extortion. The validity of your claims is irrelevant. You just need to get them in court. There are two possibilities: (A) They fail to show up. In this case you win and they owe you $3000 or whatever. Not only that if they later try to collect from you send a copy of the judgement to the credit bureau or collector or whatever and that is proof you owe them no money. (B) They hire some stooge local lawyer who appears. Accept the court's offer for arbitration. When you go into arbitration with the lawyer tell him you will drop the lawsuit if they send you a check for $500 and a hand-written guarantee from him that you will never hear from his client again. Either way, you come out ahead. By the way, it is absolutely guaranteed that the enemy lawyer will accept your offer in (B) above because the SEO company is already paying him $5000 to show up to answer your lawsuit, and the lawyer does not want to hang around all morning in court waiting for the case to be heard. If he can get out of there in half an hour for only $500 he will do it. -------------------------------UPDATE If all you are getting is calls and the caller refuses to identify themself, then it is definitely an illegal scam. It is illegal in New Hampshire to make collection calls and refuse to full identify who is calling. The phone company has methods for dealing with illegal calls. First you have to file a police report. Then you call Verizon Security at 1-800-518-5507 (or whatever your phone company is). They will trace the call and identify the caller. They you can make a criminal complaint in their jurisdiction unless the call is from Pakistan or something. |
What can I replace Microsoft Money with, now that MS has abandoned it? | If you would like to use linux I suggest you to use KMyMoney http://kmymoney2.sourceforge.net/ It is based on gnucash but it is easier to use IMO |
Financed medical expenses and tax deductions | You deduct expenses when you incur them (when you pay the hospital, for example). Medical expenses are deducted on Schedule A, subject to 7.5% AGI threshold. Financed or not - doesn't matter. The medical expense is deductible (if it is medically necessary), the loan interest is not. |
Do people tend to spend less when using cash than credit cards? | Unless a study accounts for whether the users are following a budget or not, it is irrelevant to those who are trying to take their personal finances seriously. I can certainly believe that those who have no budget will spend more on a credit card than they will on a debit card or with cash. Under the right circumstances spending with cards can actually be a tool to track and reduce spending. If you can see on a monthly and yearly basis where all of your money was spent, you have the information to make decisions about the small expenses that add up as well as the obvious large expenses. Debit cards and credit cards offer the same advantage of giving you an electronic record of all of your transactions, but debit cards do not come with the same fraud protection that credit cards have, so I (and many people like me) prefer to use credit cards for security reasons alone. Cash back and other rewards points bolster the case for credit cards over debit cards. It is very possible to track all of your spending with cash, but it is also more work. The frustration of accounting for bad transcriptions and rechecking every transaction multiple times is worth discussing too (as a reason that people get discouraged and give up on budgeting). My point is simply that credit cards and the electronic records that they generate can greatly simplify the process of tracking your spending. I doubt any study out there accounts for the people who are specifically using those benefits and what effect it has on their spending. |
If I have $1000 to invest in penny stocks online, should I diversify risk and invest in many of them or should I invest in just in one? | I've never invested in penny stocks. My #1 investing rule, buy what you know and use. People get burned because they hear about the next big thing, go invest! to just end up losing everything because they have no clue in what they're investing in. From what I've found, until you have minimum of $5k to invest, put everything in a single investment. The reason for this, as others have mentioned, is that commissions eat up just about all your profits. My opinion, don't put it in a bond, returns are garbage right now - however they are "safe". Because this is $1000 we're talking about and not your life savings, put it in a equity like a stock to try and maximize your return. I aim for 15% returns on stocks and can generally achieve 10-15% consistently. The problem is when you get greedy and keep thinking it will go above once you're at 10-15%. Sell it. Sell it right away :) If it drops down -15% you have to be willing to accept that risk. The nice thing is that you can wait it out. I try to put a 3 month time frame on things I buy to make money. Once you start getting a more sizable chunk of money to play around with you should start to diversify. In Canada at least, once you have a trading account with a decent size investment the commissions get reduced to like $10 a trade. With your consistent 10% returns and additional savings you'll start to build up your portfolio. Keep at it and best of luck! |
Why can't house prices be out of tune with salaries | Your friends are overlooking a couple of problems with house prices and salaries being out of whack: Home 'equity' is a paper gain unless you realize it by selling the house. If you don't, but use the 'home ATM', all you're doing is piling up more debt that's secured on an asset that has downside risk. Ask anybody who's refinanced their house to buy a new boat or SUV in 2006/2007. In other words you're remortgaging the chickens before the eggs hatched. Of course they're also forgetting that all this debt will have to be paid back at some point, and that usually takes income, not equity. In a certain sense the housing market is a pyramid scheme that requires an influx of new buyers to maintain prices. Very simply, if you can't sell your house to buy a bigger one because the first time buyer you're trying to sell it to can't afford the down payment or the payment on the mortgage, then you can't sell your house to buy a bigger/better/nicer one and the next person in the chain can't sell his/hers. Cue the domino effect. House prices are only sustainable if people actually can afford to buy houses and if there's a massive disconnect between house prices and salaries, then house prices will fall eventually. It might just take a little longer depending on the amount of creative financing options that will eventually dry up. |
What are the differences between an investment mortgage and a personal mortgage? | If you are going to live in the house for awhile, you can probably use a regular mortgage. Shop around and look for a mortgage program that works. Look at local banks/credit unions, particularly those with community development programs. Usually an investment mortgage is higher rate, higher payment and has higher underwriting standards. |
Who receives the money when one company buys another? | It's tempting to think of a corporation as a real thing, because in many respects it seems to be. But it isn't a corporeal thing (despite the root word of the name). It may own corporeal things, and employ corporeal people, but it is not itself a real thing. Borrowing heavily from Prof Joseph Heath: It might be better to think of a corporation as the nexus of four separate entities: investors who provide capital, employees who do the work, suppliers who provide raw material, etc., and customers who purchase the products or services the corporation buys. In different organizations the 'owners' are different: in co-ops it's the suppliers, mutual insurance companies the customers, in employee-owned companies the employees, but in 90% of cases (including Monsanto) it's the investors. The investors who provided capital by buying shares of stock are the owners, and will be compensated. This frequently happens indirectly: You may own Monsanto stock through a mutual fund or other such aggregate which means that your mutual fund will get the money. Whether that winds up being a profit or loss is more complicated. |
Getting started in stock with one special field of activity | Investing only in one industry may be problematic as it is highly correlated. There are factor outside your (or anyones) knowledge which may affect all the industry: If you are familiar with the industry it may happen that you work in that (ignore rest of paragraph if this is not the case). In such case you are likely to have problems at work (frozen salary, no bonus, position terminated) and you need to liquidate the investments at that point (see many advice regarding ESPP). Depending on your field you may have some inside knowledge so even if you would took a position without it you may need to somehow prove it. On the other hand diversifying the investment might reduce the volatility of investment. Rise in oil will cause problems for air industry but will be a boom for oil industry etc. In this way you smooth the grow of the investments. Investing part of portfolio into specific industry may make more sense. It still possibly worth to avoid it at the beginning investor may have trouble to beat the market (for example according to behavioural economics you are exposed to various biases, or if markets are efficient then prices most likely already take into account any information you may have). (I'm still new to all this so it's mostly based on what I read rather then any personal experience. Also a standard disclaimer that this is not an investment, or any other, advice and I'm not licensed financial advisor in any jurisdiction) |
How to make money from a downward European market? | The best way to make money on a downward market is to buy at the bottom, sell at the top. Lather, rinse, repeat. |
Auto insurance on new car | $600 a month is high, but may be the best you can do. When I moved from UK to Canada my first insurance quote was $3000 a year, but that was 20 years ago and I was older than 27. The rates go down substantially after you have had a local license for a few years. Best tips for minimising this: |
Snowball debt or pay off a large amount? | I agree with the Dave Ramsey method as well. If you don't have $1k in the bank already, do that. Total up the smaller debts and the best buy card. if they are $4k all together, then pay them off. Don't get caught up in keeping the smaller one around because they are at zero percent. If they exceed $4k, then payoff the interest bomb best buy card, then pay off the smaller ones, starting with the smaller balance. That is the only tweak I will make here. Dropping any amount into the Citi balance is pointless because it only reduces the amount, not the total number of hands reaching into your bank account. |
If early exercise is a bad idea, why American option is more expensive than European [duplicate] | There are a few situations in which it may be advantageous to exercise early. Wikipedia actually has a good explanation: Option Style, Difference in value To account for the American's higher value there must be some situations in which it is optimal to exercise the American option before the expiration date. This can arise in several ways, such as: An in the money (ITM) call option on a stock is often exercised just before the stock pays a dividend that would lower its value by more than the option's remaining time value. A put option will usually be exercised early if the underlying asset files for bankruptcy.[3] A deep ITM currency option (FX option) where the strike currency has a lower interest rate than the currency to be received will often be exercised early because the time value sacrificed is less valuable than the expected depreciation of the received currency against the strike. An American bond option on the dirty price of a bond (such as some convertible bonds) may be exercised immediately if ITM and a coupon is due. A put option on gold will be exercised early when deep ITM, because gold tends to hold its value whereas the currency used as the strike is often expected to lose value through inflation if the holder waits until final maturity to exercise the option (they will almost certainly exercise a contract deep ITM, minimizing its time value).[citation needed] |
Should I get an accountant for my taxes? | I don't know if I would go so far as to hire an accountant. None of those things you listed really complicates your taxes all that much. If you were self-employed, started a business, got a big inheritance, or are claiming unusually large deductions, etc. then maybe. The only thing new from your post seems to be the house and a raise. The 3rd kid doesn't substantially change things on your taxes from the 2nd. I'd suggest just using tax preparation software, or if you are especially nervous a tax-preparation service. An accountant just seems like overkill for an individual. |
Gift card fraud: To whom to report? How to recover funds? Is the party which issued me the card liable? | Have you checked to see if anything else went missing? Walmart says that because I was not the original purchaser of the gift card, they could not help me directly Just to build on what @littleadv already gave you, my personal experience on this is that none of the companies that you'll likely be dealing with in a situation like this will be falling over themselves to help you out. Unless it also helps them for some reason, or if they're compelled by consumer laws. If you think you should be protected from this sort of thing happening, feel free to reference the FCRA to see if you might get any consumer protections. But just from what you've said here, it doesn't sound like you do. So if anything else went missing (or even if not), it might have been someone working for Citi, who may have had access to more of your personal information than just your card. ID theft is unfortunately common, as a fairly easy crime to commit, a hard one to protect yourself against, and a very hard one to prosecute. When did you last check your credit report? |
Should I pay off my 50K of student loans as quickly as possible, or steadily? Why? | The definitive answer is: It Depends. What are your goals? First and foremost, you need to have at least 3 months expenses in cash or equivalent. (i.e. an investment that you can withdraw from quickly, and without penalty). The good news is that you don't have to come up with it instantly. Set a time frame - one year - for creating this safety net, and pay towards that goal. This is the single most important piece of financial advice you will receive. Now determine what you need to do. For example, you may need a car. Compare interest rates on your student loan and the car loan. Put your cash towards whichever is higher. If you don't need a car or other big ticket item, then you may consider sticking your surplus into the student loans. 50k at $1650 a month will be paid down in about 3 years, which might be a bit long to live the monastic lifestyle. I'd look at paying down the smallest loan first (assuming relatively similar rates), and freeing up that payment for yourself. So if you can pay off 1650 a month, and free up $100 of that in six months, then you can reward yourself with half that surplus, and apply the other half to the next loan. (This is different than some would suggest because you're talking about entering severe spartan mode, which is not sustainable.) Remember that life happens. You'll meet someone. You'll have an accident, your brother will get sick and you'll give him some money to help out. You've got to be prepared for these events, and for these reasons, I don't recommend living that close to the edge. Remember, you're not in default, and you do have the option of continuing to pay the minimum for a long time. |
Shouldn't a Roth IRA accumulate more than 1 cent of interest per month? | The term 'interest' tends to be used loosely when discussing valuation of stocks. Especially when referring to IRAs which are generally the purvey of common-folk who aren't in the finance industry. Often it is used colloquially to include: Using this definition (which is what I'm guessing your IRA Calculator is doing), your stock would have increased in value by a total of $26 over the course of 10 months. Still not terribly good (only a couple percent increase), but certainly not a couple cents. |
Moonlighting as a software developer: employee or independent contractor w/ LLC? | I've been in a similar situation before. While contracting, sometimes the recruiting agency would allow me to choose between being a W2 employee or invoicing them via Corp-2-Corp. I already had a company set up (S-Corp) but the considerations are similar. Typically the C2C rate was higher than the W2 rate, to account for the extra 7.65% FICA taxes and insurance. But there were a few times where the rate offered was identical, and I still choose C2C because it enabled me to deduct many of my business expenses that I wouldn't have otherwise been able to deduct. In my case the deductions turned out to be greater than the FICA savings. Your case is slightly different than mine though in that I already had the company set up so my company related costs were "sunk" as far as my decision was concerned. For you though, the yearly costs associated with running the business must be factored in. For example, suppose the following: Due to these expenses you need to make up $3413 in tax deductions due to the LLC. If your effective tax rate on the extra income is 30%, then your break even point is approximately $8K in deductions (.3*(x+3413)=3413 => x = $7963) So with those made up numbers, if you have at least $8K in legitimate additional business expenses then it would make sense to form an LLC. Otherwise you'd be better off as a W2. Other considerations: |
Does a stock really dip in price on the ex-dividend date? And why would it do this? | Suppose the price didn't drop on the ex-dividend date. Then people wanting to make a quick return on their money would buy shares the day before, collect the dividend, and then sell them on the ex-dividend date. But all those people trying to buy on the day before would push the price up, and they would push the price down trying to sell on the date. |
Why do people take out life insurance on their children? Should I take out a policy on my child? | It's Permanent Insurance, sold as a savings scheme that is a bad deal for most people. The insurance aspect really doesn't mean much to most people. The classic example that's been around for decades is the "Gerber Grow Up Plan". Basically, it's a whole-life policy that accumulates a cash value. The pitch is typically given to grandparents, who kick in $10/mo and end up with a policy that is worth a little more than what was paid in. Why do people do it? Like most permanent life, it's usually an expensive investment choice. |
What's a reliable way for a non-permanent resident alien in the USA to get an auto loan? | You have figured out most of the answers for yourself and there is not much more that can be said. From a lender's viewpoint, non-immigrant students applying for car loans are not very good risks because they are going to graduate in a short time (maybe less than the loan duration which is typically three years or more) and thus may well be leaving the country before the loan is fully paid off. In your case, the issue is exacerbated by the fact that your OPT status is due to expire in about one year's time. So the issue is not whether you are a citizen, but whether the lender can be reasonably sure that you will be gainfully employed and able to make the loan payments until the loan is fully paid off. Yes, lenders care about work history and credt scores but they also care (perhaps even care more) about the prospects for steady employment and ability to make the payments until the loan is paid off. Yes, you plan on applying for a H1-B visa but that is still in the future and whether the visa status will be adjusted is still a matter with uncertain outcome. Also, these are not matters that can be explained easily in an on-line application, or in a paper application submitted by mail to a distant bank whose name you obtained from some list of "lenders who have a reliable track record of extending auto loans to non-permanent residents." For this reason, I suggested in a comment that you consider applying at a credit union, especially if there is an Employees' Credit Union for those working for your employer. If you go this route, go talk to a loan officer in person rather than trying to do this on the phone. Similarly, a local bank,and especially one where you currently have an account (hopefully in good standing), is more likely to be willing to work with you. Failing all this, there is always the auto dealer's own loan offers of financing. Finally, one possibility that you might want to consider is whether a one-year lease might work for you instead of an outright purchase, and you can buy a car after your visa issue has been settled. |
Is CLM a stock or an ETF? | CLM is a Closed End Fund. It is a collection of other securities that trades as if it were stock issued by a single company. NASDAQ cares about how it trades, so that would be why they list it as you say they do. Here is a list of their top 25 holdings: http://portfolios.morningstar.com/fund/holdings?t=CLM®ion=usa&culture=en-US |
Technical Analysis: the concepts of overbought / oversold don't make sense | Some technical indicators (e.g. Williams %R) indicate whether the market is overbought or oversold. ... Every time a stock or commodity is bought, it is also sold. And vice versa. So how can anything ever be over-bought or over-sold? But I'm sure I'm missing something. What is it? You're thinking of this as a normal purchase, but that's not really how equity markets operate. First, just because there are shares of stock purchased, it doesn't mean that there was real investor buyer and seller demand for that instrument (at that point in time). Markets have dedicated middlemen called Market Makers, who are responsible to make sure that there is always someone to buy or sell; this ensures that all instruments have sufficient liquidity. Market Makers may decide to lower their bid on a stock based on a high number of sellers, or raise their ask for a high number of buyers. During an investor rush to buy or sell an instrument (perhaps in response to a news release), it's possible for Market Makers to accumulate a large number of shares, without end-investors being involved on both sides of the transaction. This is one example of how instruments can be over-bought or over-sold. Since Williams %R creates over-bought and over-sold signals based on historical averages of open / close prices, perhaps it's better to think of these terms as "over-valued" and "under-valued". Of course, there could be good reason for instruments to open or close outside their expected ranges, so Williams %R is just a tool to give you clues... not a real evaluation of the instrument's true value. |
What are the typical repayment plans for Credit Cards in the United States? | In the U.S., when you receive your credit card bill each month there's a "minimum payment amount." That minimum payment is usually the greater of $25 or 1% of the new balance on the card plus new interest and fees. As long as you pay the minimum payment amount, you can pay as much as you want each month. Note, in your example, you would be required to pay more than $1000 to pay off the balance, as interest would accrue each month on the unpaid principal. How much more is dependent on the interest rate of the card. |
Rolled over husband's 401(k) to IRA after his death. Can I deduct a loss since? | First: In most cases when you inherit stocks the cost basis is stepped up to the date of the death of the person you inherited them from. So the capital gain/loss is likely reset to zero. The rules vary a bit for joint accounts, but retirement accounts (401k/ROTH) are considered individual accounts by the IRS. The rules on this have changed a lot in recent history, so it may depend on when he died. Update: As JoeTaxpayer pointed out and I confirmed via this site , the gains are NOT stepped up for retirement accounts, so this is a moot point anyway. Further evidence that retirement accounts can be complicated and seeking professional guidance is a good idea. ...[T]here is no step-up in cost basis upon the death of the IRA owner. Most other assets owned by an individual receive a step-up in cost basis upon the death of the person, eliminating all capital gains on those assets up to that point in time. Second: Even if you can deduct an investment (capital) loss, you can only deduct it to offset capital gains on another investments. Also you can only do this up to $3k per year, though you can roll over excess capital losses into future years. Bottom line: I really doubt you are going to be able to claim a deduction. However, due to the complexity of the situation and the amount of money involved. I strongly suggest you talk to a qualified tax adviser and not rely solely on information you gather through this site. |
Capital gains tax: Retirement vehicle (IRA, 401k) vs. anything else? | First of all, there are some differences between the retirement accounts that you mentioned regarding taxes. Traditional IRA and 401(k) accounts allow you to make pre-tax contributions, giving you an immediate tax deduction when you contribute. Roth IRA, Roth 401(k) are funded with after tax money, and a non-retirement account is, of course, also funded with after tax money. So if you are looking for the immediate tax deduction, this is a point in favor of the retirement accounts. Roth IRA & Roth 401(k) accounts allow the investment to grow tax-free, which means that the growth is not taxed, even when taking the investment out at retirement. With Traditional IRA and 401(k) accounts, you need to pay tax on the gains realized in the account when you withdraw the money, just as you do with a non-retirement account. This is a point in favor of the Roth retirement accounts. To answer your question about capital gains, yes, it is true that you do not have a capital gain until an investment is sold. So, discounting the contribution tax deductions of the retirement accounts, if you only bought individual stocks that never paid a dividend, and never sold them until retirement, you are correct that it really wouldn't matter if you had it in a regular brokerage account or in a traditional IRA. However, even people dedicated to buy-and-hold rarely actually buy only individual stocks and hold them for 30 years. There are several different circumstances that will generally happen in the time between now and when you want to withdraw the money in retirement that would be taxable events if you are not in a retirement account: If you sell an investment and buy a different one, the gains would be taxable. If you want to rebalance your holdings, this also involves selling a portion of your investments. For example, if you want to maintain an 80% stock/20% bond ratio, and your stock values have gone up to 90%, you might want to sell some stock and buy bonds. Or if you are getting closer to retirement, you might decide to go with a higher percentage of bonds. This would trigger capital gains. Inside a mutual fund, anytime the management sells investments inside the fund and realizes capital gains, these gains are passed on to the investors, and are taxable. (This happens more often with managed funds than index funds, but still happens occasionally with index funds.) Dividends earned by the investments are taxable. Any of these events in a non-retirement account would trigger taxes that need to be paid immediately, even if you don't withdraw a cent from your account. |
Is there a kind of financial advisor for stock investors? How to find a good one? | I'm a retired stockbroker/Registered Investment Advisor. My initial discussions with prospects never had a fee. Restricted stock is unsaleable without specific permission from the issuing company, and typically involves time specifc periods when stock can be sold and/or amounts of stock that can be sold. Not for DIY. Financial planners may be able to assist you, if they are conversant in restricted stock, though that's not a common situation for most clients. Any stockbroker at a major firm (Merrill Lynch, UBS, Royal Bank of Canada, Morgan Stanley, JP Morgan, etc.) will be knowledgeable and advise you (w/o charge) how to trade the stock. Always talk to more than one firm, and don't be in a hurry. If you feel comfortable with the discussion, you can pursue a deeper relationship. In my professional experience, clients valued service, accessibility, knowledge. Price was way down on the list; many of my clients were not wealthy people- they just needed help navigating a very confusing (and necessary) part of their lives. Good luck. |
Calculate price to earning and price to sale value for given dataset | Too calculate these values, information contained in the company's financial statements (income, balance, or cashflow) will be needed along with the price. Google finance does not maintain this information for BME. You will need to find another source for this information or analyze another another symbol's financial section (BAC for example). |
What should I be aware of as a young investor? | You can't get much better advice for a young investor than from Warren Buffet. And his advice for investors young and old, is "Put 10% of the cash in short‑term government bonds, and 90% in a very low‑cost S&P 500 index fund." Or as he said at a different time, "Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees". You are not going to beat the market. So just save as much money as you can, and invest it in something like a Vanguard no-load, low-cost mutual fund. Picking individual stocks is fun, but treat it as fun. Never put in more money than you would waste on fun. Then any upside is pure gravy. |
Tax implications of restricted stock units | With the Employee Stock Purchase Plan stock, if you sell it in less than 18 months from exercise, the discount you bought it at (normally 15%) becomes taxable income and included in your W-2. |
Opening American credit cards while residing in the UK | nan |
Best way to buy Japanese yen for travel? | I already commented the best existing answers, however let me note a couple of other things. Some of my friends in the past have wanted to do one of the following: |
What is the difference between speculating and investing? | I consider speculation to be a security purchase where the point is to sell it to someone for a higher price. Day-trading is completely speculative. I consider Investment to be a purchase you make for its underlying value. You are buying it at that price because you believe the present value of the future payments is higher than the price you are paying. I may sell an investment if a higher price is offered than I think it's worth, or if the business situation changes, but I don't plan on it. Hedging is a third type of security purchase, where you are decreasing your overall risk. If you are a hog farmer, selling hog futures on the CME is hedging, because it locks in the amount you get per hog, regardless of what the price of hogs does. Commodities markets only have hedgers and speculators. Investors don't make sense, it doesn't have an underlying value. |
What argument(s) support the claim that long-term housing prices trend upward? | Several people have mentioned the obvious: inflation. But let's assume we are talking about real (inflation adjusted) prices. One argument is that populations keep rising while the land does not change. So the price of homes in desirable places gets pushed up and people move to second-best locations, pushing those prices up, etc. Similar Malthusian argument holds for raw materials (steel, granite, fine wood, etc.). Another argument is that the economy has a long-term upward trajectory (that's the assumption). So each generation, as a whole, has more disposable real income than the previous. As disposable income increases, people tend to put more and more money into their homes, pushing prices up. True for all goods, of course, but it may be more true for real estate than for other types of goods. |
Starting with Stocks or Forex? | I would advise against both, at least in the way you are discussing it. You seem to be talking about day-trading (speculating) in either stock or currency markets. This seems ill-advised. In each trade, one of three things will happen. You will end up ahead and the person you buy from/sell to will end up behind. You will lose and the counterparty will win. Or you both will lose due to trading fees. That said, if you must do one, stick with stocks. They have a reason to have positive returns overall, while currency trade is net-zero. Additionally, as you said, if it sounds like you can gain more with less money, that means that there are many more losers than winners. How do you know you will be a winner? A lot of the reason for this idea that you can gain a lot with less is leverage; make sure you understand it well. On the other hand, it may make sense to learn this lesson now while you have little to lose. |
What actions can I take against a bank for lack of customer service? | You can complain to the Financial Ombudsman Service in Australia. I've never used them in particular but generally organizations will respond much faster once you get the ombudsman involved. However, since you say they've now kept their promises, the ombudsman is unlikely to do much more than listen sympathetically. |
How to evaluate an annuity | You can get no load annuities through some no-load financial companies like Vanguard so to start with I'd see how what she is being offered compares with something that comes free of a sales load. I'd also question that fixed rate, seems pretty impossible to me, which makes me think there is some catch or 'gotcha' that we are not seeing that either brings down that rate, or makes it delusional (they are kidding themselves) or deceptive in some way. In any case it's setting off my 'too good to be true' alarm at full volume, along with the 'shark attack' alarm as well. (I would strongly suspect the 'advisor' is advising the product that makes the most money for him, NOT what is in your mother's best interest) A fixed annuity is an insurance product, not a security, because the insurance company must credit the annuity holder’s account with the specified interest rate for the contractually-stipulated time period, regardless of market fluctuations in actual interest rates. It is the insurance company that bears the investment risk, which it does by investing the annuity holder’s purchase proceeds in fixed-income instruments that the company hopes will provide sufficient return to fulfill its contractual representations to the holder. THIS is why there is no prospectus (it's not a 'security' they are not required to provide one by SEC) because the risk is entirely with the company. Obviously as pointed out in the comments, the company could easily go out of business (especially of they sell a lot of these and can't find a way to get that kind of return on the invested money). Now, ask yourself, if I was the insurance company, would I be comfortable guaranteeing that level of return over that much time if I intend to make a profit from it, pay sales comissions, and stay in business? In terms of 'will they stay in business' I'd have a hard look at their ratings, and go compare where that is on the total range for AM Best (they are lowest 'secure' rating, next thing down is in the 'vulnerable' category) and Standard and Poors (4 places down from their best rating, next thing down is 'marginal' followed by 'poor') You might also want to see if you can get any idea of historical ratings, is this company's ratings falling, or rising? Personally, for the amount of money involved, I'd want a company with MUCH higher ratings than these guys.. THEN maybe someone could say 'no risk', but with those ratings? an no, I don't think so! BTW I'd check over what this bozo (um sorry, that's not fair to clowns) is recommending she do with her own funds as well. For example is he recommending she take something that is already tax sheltered such as an IRA and investing the stuff inside that in an annuity (kind of pointless to 'double shelter' the money, or lock it up for a period of time when she may be required to make withdrawals) make sure you don't see something there that is actually against what is in her best interest and is only done to make him a comission. |
Solid reading/literature for investment/retirement/income taxes? | You bring up some very high level stuff, each of which can be the subject of a life's work. For taxes, I first read J.K. Lasser's Your Income Tax. I actually read it cover to cover instead of using it as a reference guide. I hit topics that I'd otherwise have never looked up on purpose. Once you familiarize yourself with the current tax code, keeping up on changes to the code goes pretty well. As far as investing goes, William Bernstein has two titles, “The Four Pillars of Investing” and “The Intelligent Asset Allocator”. Others have liked “Personal Finance for Dummies” by Eric Tyson. These are great introductory books, the classic is “Security Analysis” by Graham & Dodd. Warren Buffet was a student of Benjamin Graham and he did fine applying these principals. For retirement, The Number by Lee Eisenberg was a good read. I consider retirement an extension of the investing education, only the money flow is reversed, withdrawals, no new deposits. Of course this is an oversimplification. In my own reading list, I include books such as “Extraordinary Popular Delusions & the Madness of Crowds” by Charles MacKay and “The Great Crash 1929″ by John Kenneth Galbraith. Understanding how these bubbles happen is critical to a complete education. I'm convinced that when it comes to investing if I can teach my daughter to understand the concept of Risk and Reward and to understand there are certain common alerts to such bubbles, the simplest of which is the term "this time is different" as though a hundred years of market dynamics can change in a matter of a few years. Last, there are books like "Stop Acting Rich" by Dr Thomas Stanley. Not quite investing, per se, but a good read to get an idea of how we have a distorted view of certain signs of wealth. Keep reading, no harm in taking books out of the library and returning if the first chapter or two disappoints. |
How to trade “exotic” currencies? | There are firms that let you do this. I believe that Saxo Bank is one such firm (note that I'm not endorsing the company at all, and have no experience with it) Keep in mind that the reason that these currencies are "exotic" is because the markets for trading are small. Small markets are generally really bad for retail/non-professional investors. (Also note: I'm not trying to insult Brazil or Thailand, which are major economies. In this context, I'm specifically concerned with currency trading volume.) |
Why can't you just have someone invest for you and split the profits (and losses) with him? | For one thing fund managers, even fund management companies, own less money than their clients put together. On the whole they simply cannot underwrite 50% of the potential losses of the funds they manage, and an offer to do so would be completely unsecured. Warren Buffet owns about 1/3 of Berkshire Hathaway, so I suppose maybe he could do it if he wanted to, and I won't guess why he prefers his own business model (investing in the fund he manages, or used to manage) over the one you propose for him (keeping his money in something so secure he could use it to cover arbitrary losses on B-H). Buffett and his investors have always felt that he has sufficient incentive to see B-H do well, and it's not clear that your scheme would provide him any useful further incentive. You say that the details are immaterial. Supposing instead of 50% it was 0.0001%, one part in a million. Then it would be completely plausible for a fund manager to offer this: "invest 50 million, lose it all, and I'll buy dinner to apologise". But would you be as attracted to it as you would be to 50%? Then the details are material. Actually a fund manager could do it by taking your money, putting 50% into the fund and 50% into a cash account. If you make money on the fund, you only make half as much as if you'd been fully invested, so half your profit has been "taken" when you get back the fund value + cash. If you lose money on the fund, pay you back 50% of your losses using the cash. Worst case scenario[*], the fund is completely wiped out but you still get back 50% of your initial investment. The combined fund+cash investment vehicle has covered exactly half your losses and it subtracts exactly half your profit. The manager has offered the terms you asked for (-50% leverage) but still doesn't have skin the game. Your proposed terms do not provide the incentive you expect. Why don't fund managers offer this? Because with a few exceptions 50% is an absurd amount for an investment fund to keep in cash, and nobody would buy it. If you want to use cash for that level of inverse leverage you call the bank, open an account, and keep the interest for yourself. You don't expect your managed fund to do it. Furthermore, supposing the manager did invest 100% of your subscription in the fund and cover the risk with their own capital, that means the only place they actually make any profit is the return on a risk that they take with their capital on the fund's wins/losses. You've given them no incentive to invest your money as well as their own: they might as well just put their capital in the fund and let you keep your money. They're better off without you since there's less paperwork, and they can invest whatever they like instead of carefully matching whatever money you send them. If you think they can make better picks than you, and you want them to do so on your behalf, then you need to pay them for the privilege. Riding their coattails for free is not a service they have any reason to offer you. It turns out that you cannot force someone to expose themselves to a particular risk other than by agreeing that they will expose themselves to that risk and then closely monitoring their investment portfolio. Otherwise they can find ways to insure/hedge the risk they're required to take on. If it's on their books but cancelled by something else then they aren't really exposed. So to provide incentive what we normally want is what Buffett does, which is for the fund manager to be invested in the fund to keep them keen, and to draw a salary in return for letting you in[**]. Their investment cannot precisely match yours because the fund manager's capital doesn't precisely match your capital. It doesn't cover your losses because it's in the same fund, so if your money vanishes the fund manager loses too and has nothing to cover you with. But it does provide the incentive. [*] All right, I admit it, worst case scenario there's a total banking collapse, end of civilization as we know it, and the cash account defaults. But then even in your proposed scheme it's possible that whatever assets the fund manager was using as security could fail to materialise. [**] So why, you might ask, do individual fund managers get bonuses in return for meeting fixed targets instead of only being part-paid in shares in their own fund whose value they can then maximise? I honestly don't know, but I suspect "lots of reasons". Probably the psychology of rewarding them for performance in a way that compares with other executive posts or professions they might take up instead of fund management. Probably the benefit to the fund itself, which wants to attract more clients, of beating certain benchmarks. Probably other things including, frankly, human error in setting their compensation packages. |
New 1099 employee with Cobra insurance | While COBRA premiums are not eligible to be a "business" expense they can be a medical expense for personal deduction purposes. If you're itemizing your deductions you may be able to deduct that way. However, you will only be able to deduct the portion of the premium that exceeds 10% of your AGI. Are you a full time employee now or are you a 1099 contractor? Do you have access to your employers health plan? |
Is there any way to pay online in a country with no international banking system | paypal says it works with CBE but can't seem to link my account with them, but skrill works perfectly just go to www.skrill.com sign up and you can link your bank account with your skrill account, i've had a few transactions so it should work for you too. |
Are 'per trade' fees charged on every order or just once per stock? | You will be hit every time, once every buy order and once every sell order. Commissions to the broker are paid every time they do something for you. This is true regardless if it is a security in which you are already invested. It is true regardless if you make or lose money. It is just as sure as death and taxes. |
Bi-weekly payment option | One point that I don't see covered in the other answers yet: How does this affect the months that have 5 weeks. Do we actually lose two weeks a year? I get paid every two weeks, and pay day is always a Friday. Some months, I get paid 3 times - which is always great. If you live within your means, it's like an extra paycheck. All other months, I get paid two times. How many months a year do I get paid 3 times? 2. It will always be two, because there are 12 months. If you get paid twice a month, that's 24 pay checks, which is 2 shy of 26 pay checks - what we would expect if we were paid every two weeks. That means those 2 extra pay checks need to fall somewhere, and they will be on the months where your pay day is hit 5 times. For example, in 2014, there are 4 months with 5 Fridays: Jan May Aug Oct I got paid the second Friday of January, so I only got 2 checks in January. I will be paid on the first Friday of May, which means I will get 3 checks in May. My other triple-check month this year is October, so of course I am only going to be paid twice in August. |
How do I get into investing in stocks? | Read "The intelligent Investor" book before you do anything. I started when I really didn't understand anything about stocks. I bought an internet stock for $150 per share which sold at 75cents a year later. I sold it for a profit but would've been a disaster. |
How does one interpret financial data for stocks listed on multiple exchanges? | First and foremost you need to be aware of what you are comparing. In this case, HSBC as traded on the NYSE exchange is not common shares, but an ADR (American Depository Receipt) with a 5:1 ratio from the actual shares. So for most intents and purposes owning one ADR is like owning five common shares. But for special events like dividends, there may be other considerations, such as the depository bank (the institution that created the ADR) may take a percentage. Further, given that some people, accounts or institutions may be required to invest in a given country or not, there may be some permanent price dislocation between the shares and the ADR, which can further lead to discrepancies which are then highlighted by the seeming difference in dividends. |
What happens if my order exceeds the bid or ask sizes? | You should check with your broker. I asked my broker a similar question just 2 weeks ago. With their market orders they will be filled within 3 points from the current market bid/ask. If there is any remaining it will be placed as a limit order at 3 points away from the bid/ask price. For example, if the current ask is 100 @ $1.00 followed by 500 @ $1.01, 300 @ $1.02 and 100 @ $1.03; if you were to place a buy market order for 1000 shares you would get 100 filled at $1.00, 500 filled at $1.01, 300 filled at $1.02 and 100 filled at $1.03. If, on the other hand, you were to place a buy market order for 2000 shares you would get 100 filled at $1.00, 500 filled at $1.01, 300 filled at $1.02 and 100 filled at $1.03, with the remaining 1000 of your order being placed as a limit order at $1.03. Again, check with your broker, as they may be different in how they treat their market orders. |
Why are some funds only recommended for investors starting out? | The simple answer is that whatever strategy is implemented with e-series, could be implemented at a lower cost with ETFs. |
How much should a new graduate with new job put towards a car? | In a very similar situation as yours, I bought a used motorcycle for $3000. It was still reasonably new, very reliable, and with California weather, you can use it year-round. It reduced my time in traffic, and it had very low fuel and maintenance costs. The biggest expense was tires. The biggest pitfall in buying a motorcycle is auto-insurance. Do your research and ask for quotes from your broker before even considering a particular model of bike. When I decided that my finances justified a new motorcycle, I was surprised that full collision coverage cost about $3000/year on a lower powered bike that had a bad accident record because it appealed to new riders. I got a much more powerful bike that appealed to more experienced riders and the premium was only $500/year. Is this answer not what you were looking for? Spend as little as you can on a 4-6 year old car. Drive it until you can save enough cash to buy the one you really want. I'm currently driving a 2007 Corolla, and I'm waiting until I can get a new civic turbo with a manual transmission to replace it. (They currently only offer them with a CVT, but next fall they'll have them with the MT, so I'm probably 2 1/2 years out from buying one used.) |
Why is auto insurance ridiculously overpriced for those who drive few miles? | Other people lie to the companies about how many miles they drive, so they can't take the mileage figures literally. You aren't specifying whether you want liability only, or more-comprehensive insurance. Stuff happens when you aren't driving. Cars get stolen. Other drivers hit parked cars and leave. Trees fall on parked cars. Move to Virginia where insurance is not required. Just pay $500 a year for not having insurance, and be careful. |
Would it make sense to take a loan from a relative to pay off student loans? | I have recently been the lender to a couple people. It was substantially less money (~$3k), but I was trusting their good faith to pay me back. As a lender, I will never do it again. Reasons, Overall, not worth it. |
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