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In a buy order with a trigger, will I pay the current ask or the buy price in the order? | I think that if the price does not go very far up, then your order will open on 101, because you are setting a limit order, if suddenly the price goes up very quickly or with a gep even, then you may not be given a position. But this is with a limit order and it is better to check with the broker. There are also warrants in which you can adjust the price range, for example, from 101 to 103, and at a sharp price jump, it is possible for you and would not give a position at a price of 101, but perhaps 103 would get. |
Higher auto insurance costs: keep car or switch to public transit? | I've lived this decision, and from my "anecdata": do #3 I have been car-free since 2011 in a large United States city. I was one month into a new job on a rail line out in the suburbs, and facing a $3000 bill to pass state inspection (the brakes plus the emissions system). I live downtown. I use a combination of transit, a carshare service, and 1-2 day rentals from full service car rental businesses (who have desks at several downtown hotels walking distance from my house). I have not had a car insurance policy since 2011; the carshare includes this and I pay $15 per day for SLI from full service rentals. I routinely ask insurance salesmen to run a quote for a "named non-owner" policy, and would pull the trigger if the premium cost was $300/6 months, to replace the $15/day SLI. It's always quoted higher. In general, our trips have a marginal cost of $40-100. Sure, this can be somewhat discouraging. But we do it for shopping at a warehouse club, visiting parents and friends in the suburbs. Not every weekend, but pretty close. But with use of the various services ~1/weekend, it's come out to $2600 per year. I was in at least $3200 per year operating the car and often more, so there is room for unexpected trips or the occasional taxi ride in cash flow, not to mention the capital cost: I ground the blue book value of the car from $19000 down to $3600 in 11 years. Summary: Pull the trigger, do it :D |
Why do some companies offer 401k retirement plans? | IRA is not always an option. There are income limits for IRA, that leave many employees (those with the higher salaries, but not exactly the "riches") out of it. Same for Roth IRA, though the MAGI limits are much higher. Also, the contribution limits on IRA are more than three times less than those on 401K (5K vs 16.5K). Per IRS Publication 590 (page 12) the income limit (AGI) goes away if the employer doesn't provide a 401(k) or similar plan (not if you don't participate, but if the employer doesn't provide). But deduction limits don't change, it's up to $5K (or 100% of the compensation, the lesser) even if you're not covered by the employers' pension plan. Employers are allowed to match the employees' 401K contributions, and this comes on top of the limits (i.e.: with the employers' matching, the employees can save more for their retirement and still have the tax benefits). That's the law. The companies offer the option of 401K because it allows employee retention (I would not work for a company without 401K), and it is part of the overall benefit package - it's an expense for the employer (including the matching). Why would the employer offer matching instead of a raise? Not all employers do. My current employer, for example, pays above average salaries, but doesn't offer 401K match. Some companies have very tight control over the 401K accounts, and until not so long ago were allowed to force employees to invest their retirement savings in the company (see the Enron affair). It is no longer an option, but by now 401K is a standard in some industries, and employers cannot allow themselves not to offer it (see my position above). |
Any difference between buying a few shares of expensive stock or a bunch of cheap stock | Open Google finance and divide the Market Capitalization by the total price. That will give you the total number of shares outstanding. Now see the number of shares you could buy for $1000(40 shares of $25 each or 10 shares of 100 shares each). Now divide the number of shares you own, by the number of shares outstanding in the company and multiply it by 100(i.e (Shares you own/shares Outstanding) * 100). That will give you the percentage or stake of the company you own(With $1000, don't expect it to be a very large number). Now ask your self the question, Is it worth it if I can buy x % of this company for $1000? If the answer is yes, go ahead and buy it. To answer your question in short, NO! it does not matter whether you buy 10 shares for $100 or 40 shares for $25. Cheers |
For young (lower-mid class) investors what percentage should be in individual stocks? | I don't believe the decision is decided by age or wealth. You only stock pick when a) you enjoy the process because it takes time and if you consider it 'work' then the cost will probably not be offset by higher returns. b) you must have the time to spend trading, monitoring, choosing, etc. c) you must have the skills/experience to 'bring something to the table' that you think gives you an edge over everyone else. If you don't then you will be the patsy that others make a profit off. |
Should I talk about my stocks? | I like your question and think it is a pretty good one. Generally speaking I would not suggest talking about your stock picks or wealth. Here is why: 1) Most people are broke. Seventy-eight percent of the US population report living paycheck to paycheck. More than a majority do not have enough in savings to cover a $500 repair to a car or dryer. What kind of money advice will you get from broke people (the general population)? Answer: Bad. 2) It targets you for jealousy/negative feelings. If you discuss this kind of thing with your broke friends they will have negative feelings toward you. This is not necessarily a bad thing. If you want to build wealth a aspect of that is having wealthy friends. They will have the kind of disposable income to do the kinds of things you want to do. They can alert you to good investment opportunities. And your income will tend to increase. Most people's income resides within 10% of their 10 closest friends. 3) You can be targeted for law suits. Given that personal injury attorneys work on contingent, they are very good at picking on defendants with deep pockets or really good insurance. Knowing that you have significant investments will put a bit of a target on your back. Having said all of that, you could participate in groups with a similar interest in investing. Back in the late 80's investment clubs were all the rage, and you might be able to find one of those online or at the local library or something. That would be a far safer. |
Investment strategies for young adults with entrepreneurial leanings? | I talk about this subject on my blog on investing, I share everything that has worked for me personally and that makes sense. I would say the ideal investment would be to continue the entrepreneur route. Just make sure you have a clear plan and exit strategy. For me it's all about passion, I love blogging about personal experiences with life, money, and anything that affects our lives. Find something that you would talk about whether you were paid or not and create a business off of it. You'll never work a day in your life because you love it. |
What are the easier to qualify home loans in Canada? | Your credit score is really bad, and it's highly unlikely anyone will be willing to give you a mortgage, especially if you still have bad debt showing up on your credit report. What would help? Well, clearing off any bad debt would be a good place to start. Ideally, you want to get your credit rating up above 680, though that may be optimistic here. Note, though, that bad debt falls off your credit report after a while. Exactly how long depends on your province. Note that making partial payment, or even just acknowledging the debt, will reset the 'timer', however. I mention this, though, because you mention some of your debt is from 5 or 6 years ago. It may be just about to fall off. It would also help if you can show that your credit is so bad because of mistakes from a number of years ago, but you've been making payments and staying on top of all debts for the past few years, if that's the case. Also, it would help if you had a reasonable downpayment. 20% minimum, but you'll be a lower credit risk if you are able to put down 50 - 75%. You could also consider having someone with good credit co-sign the mortgage. Note that most people will not be willing to do this, as they take on substantial financial risk. All that said, there are some institutions which specialise in dealing with no credit or bad credit customers. You pay more fees and will pay a vastly higher interest rate, but this may be a good option for you. Check out mortgage brokers specialising in high-risk clients. You can also consider a rent-to-own, but almost all the advice I've ever seen say to avoid these if you can. One late payment and you may lose all the equity you think you've been building up. Note that things may be different if you are moving from the U.S. to Canada, and have no credit history in Canada. In that case, you may have no credit rather than bad credit. Most banks still won't offer you a mortgage in this case, but some lenders do target recent immigrants. Don't rule out renting. For many people, regardless of their credit rating, renting is a better option. The monthly payments may be lower, you don't need a downpayment, you don't have to pay realtor and legal fees (and pay again if you need to move). A couple of sites provide more information on how your credit rating affects your possibility of getting a mortgage, and how to get mortgages with bad credit: http://mortgages.ca/credit-score-needed-mortgage-canada/ and http://mortgages.ca/mortgage-solutions/new-to-canada-financing/, along with http://www.ratehub.ca/mortgage-blog/2013/11/how-to-get-a-mortgage-with-bad-credit/ |
Rules for SEP contributions in an LLC? | From Schwab - What are the eligibility requirements for a business to establish a SEP-IRA? Almost any type of business is eligible to establish a SEP-IRA, from self-employed individuals to multi-person corporations (including sole proprietors, partnerships, S and C corporations, and limited liability companies [LLCs]), tax-exempt organizations, and government agencies. What are the contribution limits? You may contribute up to 25% of compensation (20% if you’re self-employed3) or $49,000 for 2011 and $50,000 for 2012, whichever is less. If we set the PC aside, you and the son have an LLC renting office space, this addresses the ability of the LLC to offer the retirement account. |
Will getting a new credit card and closing another affect my credit? | Several events will always result in a reduction of your score, including: These will show up in the short term, but I don't think it's worth $40 per year in perpetuity to avoid this. These aren't serious "black marks" in the same category as missing payments, carrying too much debt, or foreclosures/evictions, etc. These effects are designed to signal issuers when someone acquires a large amount of credit in a very short period of time, which may indicate a greater risk. If your credit is good and you are using your other cards responsibly, closing the card (given the annual fee) would not cause me great concern if it were me. Since you are so much better of a risk than you likely were in college, you can also call Capital One, ask to speak with a supervisor, and ask them to drop the fee and increase your credit limit. They should be able to easily verify that you meet the requirements for other types of preferred cards they offer, and they should be willing to offer you improved terms rather than losing your business. It is very possible they simply haven't re-evaluated your risk since you initially applied. Also, remember that these types of effects determine only a portion of your overall score. Activity is also a major component. Rather than leaving an unused card open for history and debt-to-limit purposes only, I would also recommend having some minimum level of activity, such as an automatic bill payment, on each card you carry. The effect of using your cards over time will have a significant positive effect on your score. Best of luck! |
Financing Education through Credit Card or Student Loans | If you are very sure, say 90%, that you'll pay the zero percent card off before paying interest, that would be my choice. Less certainty than that, I think the 6.8% over a longer term is less of a cash flow issue, and you can still pay it in full upon getting the job bonus. |
Should I finance a new home theater at 0% even though I have the cash for it? | You know what? Pay cash, but ask for a discount. And something fairly hefty. Don't be afraid to bargain. The discount will be worth more than the interest you'd get on the same amount of money. And if the salesman doesn't give you a decent discount, ask to speak to the manager. And if that doesn't work, try another store. Good luck with it! |
Should I sell my stocks when the stock hits a 52-week high in order to “Buy Low, Sell High”? | I primarily intend to add on to WBT's answer, which is good. It has been shown that "momentum" is a very real, tangible factor in stock returns. Stocks that have done well tend to keep doing well; stocks that are doing poorly tend to keep doing poorly. For a long-term value investor, of course fundamental valuation should be your first thing to look at - but as long as you're comfortable with the company's price as compared to its value, you should absolutely hang onto it if it's been going up. The old saying on Wall Street is "Cut your losses, and let your winners ride." As WBT said, there may be some tangible emotional benefit to marking your win while you're ahead and not risking that it tanks, but I'd say the odds are in your favor. If an undervalued company starts rising in stock price, maybe that means the market is starting to recognize it for the deal it is. Hang onto it and enjoy the fruits of your research. |
Pros and Cons of Interest Only Loans | Pros: Cons: Before the housing bubble the conventional wisdom was to buy as much home as you could afford, thereby borrowing as much you can afford. Because variable rates lead to lower mortgages, they were preferred by many as you could buy more house. This of course lead to many people losing their home and many thousands of dollars. A bubble is not necessary to trigger a chain of events that can lead to loss of a home. If an interest only borrower is late on a payment, this often triggers a rate increase. Couple that with some other things that can happen negatively, and you are up $hit's creek. IMO it is not wise. |
Should Emergency Funds be Used for Infrequent, but Likely, Expenses? | I would suggest that you use Emergency Funds for things that have a Low likelihood of happening but if they do happen can be devastating. I used to work as a financial advisor and the sugfestion we gave people is to have about 3 months worth of expenses in cash. This was primarily to cover things luke loss of work or some unforseen even that would prevent you from missing work for an extended period of time. Once you have your emergency fund saved do not touch it! Leave it where it is. Then tou can start working on a savings account for those items that are more likely to happen but dont have as much of a negative impact. |
What are the advantages of paying off a mortgage quickly? | Considering that it's common for the monthly mortgage payment to be 25% of one's income, it's an obvious advantage for that monthly burden to be eliminated. The issue, as I see it, is that this is the last thing one should do in the list of priorities: The idea of 'no mortgage' is great. But. You might pay early and have just a few years of payments left on the mortgage and if you are unemployed, those payments are still due. It's why I'd suggest loading up retirement accounts and other savings before paying the mortgage sooner. Your point, that rates are low, and your expected return is higher, is well presented. I feel no compulsion to prepay my 3.5% mortgage. As the OP is in Canada, land of no mortgage interest deduction, I ignore that, till now. The deduction simply reduces the effective rate, based on the country tax code permitting it. It's not the 'reason' to have a loan. But it's ignorant to ignore the math. |
What does “/” and “^” mean in ticker symbols? How to translate these symbols into yahoo? | There isn't a single universal way to reference a stock, there are 4 major identifiers with many different flavours of exchange ticker (see xkcd:Standards) I believe CUSIPs and ISINs represent a specific security rather than a specific listed instrument. This means you can have two listed instruments with one ISIN but different SEDOLs because they are listed in different places. The difference is subtle but causes problems with settlement Specifically on your question (sorry I got sidetracked) take a look at CQS Symbol convention to see what everything means |
Investing for Dummys | You can't get started investing. There are preliminary steps that must be taken prior to beginning to invest: Only once these things are complete can you think about investing. Doing so before hand will only likely lose money in the long run. Figure these steps will take about 2.5 years. So you are 2.5 years from investing. Read now: The Total Money Makeover. It is full of inspiring stories of people that were able to turn things around financially. This is good because it is easy to get discouraged and believe all kind of toxic beliefs about money: The little guy can't get ahead, I always will have a car payment, Its too late, etc... They are all false. Part of the book's resources are budgeting forms and hints on budgeting. Read later: John Bogle on Investing and Bogle on Mutual Funds One additional Item: About you calling yourself a "dummy". Building personal wealth is less about knowledge and more about behavior. The reason you don't have a positive net worth is because of how you behaved, not knowledge. Even sticking a small amount in a savings account each paycheck and not spending it would have allowed you to have a positive net worth at this point in your life. Only by changing behavior can you start to build wealth, investing is only a small component. |
Is 401k as good as it sounds given the way it is taxed? | You raise a good point about the higher marginal rates for 401K but things will be different, in retirement, than they are for you now. First off you are going to have a "boat load" of money. Like probably a multi-millionaire. Also your ability to invest will (probably) increase greater than the maximum allowable to invest. For this money you might choose to invest in real estate, debt payoff, or non-qualified mutual funds. So fast forward to retirement time. You have a few million in your 401K, you own your house and car(s) outright and maybe a couple of rental properties. For one your expenses are much lower. You don't have to invest, pay social security taxes, or service debt. Clothing, gas, dry cleaning are all lower as well. You will draw some income off of non-qualified plans. This might include rental real estate, business income, or equity investments. You can also draw social security income. For most of us social security will provide sustenance living. Enough for food, medical, transportation, etc. Add in some non-qualified income and the fact that you are debt free, or nearly so, and you might not need to draw on your 401K. Plus if you do need to withdraw you can cherry pick when and what amount you withdraw. Compare that to now, your employer pays you your salary. Most of us do not have the ability to defer our compensation. With a 401K you can! For example lets say you want a new car where you need to withdraw from your 401K to pay for it. In retirement you can withdraw the full amount and pay cash. Part of this money will be taxed at the lowest rate, part at higher rates. (Car price dependent.) In retirement you can take a low interest or free loan and only withdraw enough to make the payments this year. Presumably this will be at the lowest rate. Now you only have one choice: Using your top marginal rate to pay for the car. It doesn't matter if you have a loan or not. |
How do I calculate the dwelling coverage I need from the information I have? | Never take the first quote. Consider what it would really cost to replace the house -- to rebuild and pay for living while you do so (including demolition, etc.) and/or pay off the mortgage and return your equity if it is a financed property. Most insurances will have a limit on how much coverage you can get based on the property value and your goods value estimates. Shop around for a company that will give you a good price but also good customer service and a smooth claims process. They should be solvent (able to pay your claim if, say, a tornado hit the whole neighborhood). And they should cover your reasonable replacement costs. And remember, insurance is about the big losses like fires. Know what you are comfortable self insuring (higher or lower deductibles, optional coverages, etc.) and you will have an easier time getting the coverage you need for the price you want to pay. |
Can a company block a specific person from buying its stock? | In the UK, this is the very definition of a Public Limited Company. A Limited Company can restrict how its stock is trades and who can buy and sell and when, a Public Limited Company cannot. Most stock exchanges will only allow Public Limited Company stock to be traded. Therefore a company can control who its stock holders are or be traded on a Stock Exchange. |
How late is Roth (rather than pretax) still likely to help? | My simplest approach is to suggest that people go Roth when in the 15% bracket, and use pre-tax to avoid 25%. I outlined that strategy in my article The 15% solution. The monkey wrench that gets thrown in to this is the distortion of the other smooth marginal tax curve caused by the taxation of social security. For those who can afford to, it makes the case to lean toward Roth as much as possible. I'd suggest always depositing pretax, and using conversions to better control the process. Two major benefits to this. It's less a question of too late than of what strategy to use. |
How to interpret these explanatory graphs (about option strategies)? | The blue line is illustrating the net profit or loss the investor will realise according to how the price of the underlying asset settles at expiry. The x-axis represents the underlying asset price. The y-axis represents the profit or loss. In the first case, the investor has a "naked put write" position, having sold a put option. The strike price of the put is marked as "A" on the x-axis. The maximum profit possible is equal to the total premium received when the option contract was sold. This is represented by that portion of the blue line that is horizontal and extending from the point above that point marked "A" on the x-axis. This corresponds to the case that the price of the underlying asset settles at or above the strike price on the day of expiry. If the underlying asset settles at a price less than the strike price on the day of expiry, then the option with be "in the money". Therefore the net settlement value will move from a profit to a loss, depending on how far in the money the option is upon expiry. This is represented by the diagonal line moving from above the "A" point on the x-axis and moving from a profit to a loss on the y-axis. The diagonal line crosses the x-axis at the point where the underlying asset price is equal to "A" minus the original premium rate at which the option was written - i.e., net profit = zero. In the second case, the investor has sold a put option with a strike price of "B" and purchase a put option with a strike price "A", where A is less than B. Here, the reasoning is similar to the first example, however since a put option has been purchase this will limit the potential losses should the underlying asset move down strongly in value. The horizontal line above the x-axis marks the maximum profit while the horizontal line below the x-axis marks the maximum loss. Note that the horizontal line above the x-axis is closer to the x-axis that is the horizontal line below the x-axis. This is because the maximum profit is equal to the premium received for selling the put option minus the premium payed for buying the put option at a lower strike price. Losses are limited since any loss in excess of the strike price "A" plus the premium payed for the put purchased at a strike price of "A" is covered by the profit made on the purchased put option at a strike price of "A". |
Form as LLC or S Corp to reduce tax liability | An LLC or an S corp will result in the same tax obligations because both are pass-through tax entities. An LLC is more flexible for the situation you describe because the member and manager responsibilities can be detailed in the operating agreement. You really should get a business attorney to help you get your operating agreement in order. There's also a startups beta site on Stack Exchange that may be able to help you with questions about ways to handle your operating agreement. |
If Bernie Madoff had invested in Berkshire Hathaway, would the ponzi actually have succeeded? | I could be wrong, but I doubt that Bernie started out with any intention of defrauding anyone, really. I suspect it began the first time he hit a quarter when his returns were lower than everyone else's, or at least not as high as he'd promised his investors they'd be, so he fudged the numbers and lied to get past the moment, thinking he'd just make up for it the next quarter. Only that never happened, and so the lie carried forward and maybe grew as things didn't improve as he expected. It only turned into a ponzi because he wasn't as successful at investing as he was telling his investors he was, and telling the truth would have meant the probability that he would have lost most of his clients as they went elsewhere. Bernie couldn't admit the truth, so he had to keep up the fiction by actually paying out returns that didn't exist, which required constantly finding new money to cover what he was paying out. The source of that money turned out to be new investors who were lured in by people already investing with Bernie who told them how great he was as a financial wizard, and they had the checks to prove it. I think this got so far out of hand, and it gradually dragged more and more people in because such things turn into black holes, swallowing up everything that gets close. Had the 2008 financial crisis not hit then Bernie might still be at it. The rapid downturns in the markets hit many of Bernie's investors with margin calls in other investments they held, so they requested redemptions from him to cover their calls, expecting that all of the money he'd convinced to leave with him really existed. When he realized he couldn't meet the flood of redemptions, that was when he 'fessed up and the bubble burst. Could he have succeeded by simple investing in Berkshire? Probably. But then how many people say that in hindsight about them or Amazon or Google, or any number of other stocks that turned out similarly? (grin) Taking people's money and parking it all in one stock doesn't make you a genius, and that's how Bernie wanted to be viewed. To accomplish that, he needed to find the opportunities nobody else saw and be the one to get there first. Unfortunately his personal crystal ball was wrong, and rather than taking his lumps by admitting it to his investors, his pride and ego led him down a path of deception that I'm sure he had every intention of making right if he could. The problem was, that moment never came. Keep in mind one thing: The $64 billion figure everyone cites isn't money that really existed in the first place. That number is what Bernie claimed his fund was worth, and it is not the amount he actually defrauded people out of. His actual cash intake was probably somewhere in the $20 billion range over that time. Everything else beyond that was nothing more than the fictionalized returns he was claiming to get for his clients. It's what they thought they had in the bank with him, rather than what was really there. |
I started some small businesses but need help figuring out taxes. Should I hire a CPA? | The only professional designations for people allowed to provide tax advice are Attorney, EA or CPA. Attorney and CPA must be licensed in the State they practice in, EA's are licensed by the Federal government. Tax preparers are not allowed to provide any tax advice, unless they hold any of these designations. They are only allowed to prepare your tax forms for you. So no, tax preparer is not a solution. Yes, you need to talk to a tax adviser (EA/CPA licensed in your State, you probably don't need a tax attorney). You should do that before you start earning money - so that you can plan properly and understand what expenses you can incur and how they're handled with regards to your future income tax payments. You might also want to consider a bookkeeping service (many EA/CPA offices offer the bookkeeping as well). But that you can also do yourself, not all that complicated if you don't have tons of transactions and accounts. |
$200k in an IRA, unallocated. What's the safest investment? | Define "risk-sensitive": The point is, define Your risk, and your choices will narrow. Some investors worry more about what next months statement will show & lose sleep over it; some investors do not want to miss the average historical rates of return for equities (stocks) and are willing to tolerate fluctuations in monthly statements. |
US Foreign-Owned LLC that owes no income tax - Do I have to file anything? | If you intend to do business "outside the country", why establish an LLC "here" at all? You should establish a business in your home country if you desire business organization for sequestering liabilities or something. With or without a business organization, you will presumably be taxed for domestic income "there", wherever that is. |
Question about dividends and giant companies [duplicate] | Dividends are a way of distributing profits from operating a business to the business owners. Why would you call it "wasting money" is beyond me. Decisions about dividend distribution are made by the company based on its net revenue and the needs of future capital. In some jurisdictions (the US, for example), the tax policy discourages companies from accumulating too much earnings without distributing dividends, unless they have a compelling reason to do so. Stock price is determined by the market. The price of a stock is neither expensive nor cheap on its own, you need to look at the underlying company and the share of it that the stock represents. In case of Google, according to some analysts, the price is actually quite cheap. The analyst consensus puts the target price for the next 12 months at $921 (vs. current $701). |
Using stock options to lower income tax in the USA? | You're talking about NQO - non-qualified stock options. Even assuming the whole scheme is going to work, the way NQO are taxed is that the difference between the fair market value and the strike price is considered income to you and is taxed as salary. You'll save nothing, and will add a huge headache and additional costs of IPO and SEC regulations. |
Why is everyone saying how desperately we need to save money “in this economy”? | As you point out in your question your risk level is personal. If you really believe your job is stable there is no more risk. However the overall evidence is that most jobs are less stable, and if you do lose your job you're likely going to be out of work for a while. One thing to consider though is that if you have planned on emergency credit in the past, that option is not really viable anymore. |
Is there a way to create a limit order with both an upper and lower limit | Yes there is, it is called a One-Cancels-the-Other Order (OCO). Investopedia defines a OCO order as: Definition of 'One-Cancels-the-Other Order - OCO' A pair of orders stipulating that if one order is executed, then the other order is automatically canceled. A one-cancels-the-other order (OCO) combines a stop order with a limit order on an automated trading platform. When either the stop or limit level is reached and the order executed, the other order will be automatically canceled. Seasoned traders use OCO orders to mitigate risk. I use CMC Markets in Australia, and they allow free conditional and OCO orders either when initially placing a buy order or after already buying a stock. See the Place New Order box below: Once you have selected a stock to buy, the number of shares you want to buy and at what price you can place up to 3 conditional orders. The first condition is a "Place order if..." conditional order. Here you can place a condition that your buy order will only be placed onto the market if that condition is met first. Say the stock last traded at $9.80 and you only want to place your order the next day if the stock price moves above the current resistance at $10.00. So you would Place order if Price is at or above $10.00. So if the next day the price moves up to $10 or above your order will be placed onto the market. The next two conditional orders form part of the OCO Orders. The second condition is a "Stop loss" conditional order. Here you place the price you want to sell at if the price drops to or past your stop loss price. It will only be placed on to the market if your buy order gets traded. So if you wanted to place your stop loss at $9.00, you would type in 9.00 in the box after "If at or below ?" and select if you want a limit or market order. The third condition is a "Take profit" conditional order. This allows you to take profits if the stock reaches a certain price. Say you wanted to take profits at 30%, that is if the price reached $13.00. So you would type in 13.00 in the box after "If at or above ?" and again select if you want a limit or market order. Once you have bought the stock if the stop order gets triggered then the take profit order gets cancelled automatically. If on the other hand the take profit order gets triggered then the stop loss order gets cancelled automatically. These OCO conditional orders can be placed either at the time you enter your buy order or after you have already bought the stock, and they can be edited or deleted at any time. The broker you use may have a different process for entering conditional and OCO orders such as these. |
Taxing GoFundMe Donations | I'm going to post this as an answer because it's from the GoFundMe website, but ultimately even they say to speak with a tax professional about it. Am I responsible for taxes? (US Only) While this is by no means a guarantee, donations on GoFundMe are simply considered to be "personal gifts" which are not, for the most part, taxed as income in the US. However, there may be particular, case-specific instances where the income is taxable (dependent on amounts received and use of the monies, etc.). We're unable to provide specific tax advice since everyone's situation is different and tax rules can change on a yearly basis. We advise that you maintain adequate records of donations received, and consult with your personal tax adviser. Additionally, WePay will not report the funds you collect as earned income. It is up to you (and a tax professional) to determine whether your proceeds represent taxable income. The person who's listed on the WePay account and ultimately receives the funds may be responsible for taxes. Again, every situation is different, so please consult with a tax professional in your area. https://support.gofundme.com/hc/en-us/articles/204295498-Am-I-responsible-for-taxes-US-Only- And here's a blurb from LibertyTax.com which adds to the confusion, but enforces the "speak with a professional" idea: Crowdfunding services have to report to the IRS campaigns that total at least $20,000 and 200 transactions. Money collected from crowdfunding is considered either income or a gift. This is where things get a little tricky. If money donated is not a gift or investment, it is considered taxable income. Even a gift could be subject to the gift tax, but that tax applies only to the gift giver. Non-Taxable Gifts These are donations made without the expectation of getting something in return. Think of all those Patriots’ fans who gave money to GoFundMe to help defray the cost of quarterback Tom Brady’s NFL fine for Deflategate. Those fans aren’t expecting anything in return – except maybe some satisfaction -- so their donations are considered gifts. Under IRS rules, an individual can give another individual a gift of up to $14,000 without tax implications. So, unless a Brady fan is particularly generous, his or her GoFundMe gift won’t be taxed. Taxable Income Now consider that same Brady fan donating $300 to a Patriots’ business venture. If the fan receives stock or equity in the company in return for the donation, this is considered an investment and is not taxable . However, if the business owner does not offer stock or equity in the company, the money donated could be considered business income and the recipient would need to report it on a tax return. https://www.libertytax.com/tax-lounge/two-tax-rules-to-know-before-you-try-kickstarter-or-gofundme/ |
What one bit of financial advice do you wish you could've given yourself five years ago? | I wish I would have: |
Why do people use mortgages, when they could just pay for the house in full? | The advantage of using a mortgage is that you pay for a house at TODAY's price, using TOMORROW's money. Your question suggests that you rightly observed that it was not a good idea around 2006 (the last peak in housing). That was when prices were at their maximum, and had nowhere to go but down. Some experts think that house prices STILL have further to go on the downside. Meanwhile, wages have been going nowhere during that time. This phenomenon seems to happen about every 40 years or so, the 1930s, the 1970s, and around 2010. At MOST other times, say the 1980s, houses are likely to go up for the "foreseeable" future. At those times, you want to buy the house at "today's" price, then pay for it in future dollars when you are earning more money. The irony is that what most people observe as teenagers is usually the wrong thing to do when they are, say, forty. In 2035, it will probably make sense to have a large mortgage in a bull housing market, which is the opposite of what you observed around 2010. So a better rule is to do at age 40 what made sense about the time you were born (in your case, perhaps the 1990s). Whereas the people born in the early 1970s that got "caught" recently, observed the bull market of the 1980s and 1990s in THEIR teens and twenties, rather than the bear market of the 1970s that took place about the time they were born. |
Can I open a Demat account in India from abroad? | Yes NRIs are allowed to open a DEMAT account in India from abroad. Investments can be made under the Portfolio Investment NRI Scheme (PINS) either on repatriation or non-repatriation basis. As per,the guidelines of the Reserve Bank of India it is mandatory for NRIs to open a trading account with a designated institution authorized by the RBI. They must avail either a Non-Resident Ordinary (NRO) or Non-Resident External (NRE) account to route the various investments. |
Is it smart to only invest in mid- and small-cap stock equity funds in my 401(k)? | The benefit of the 401K and IRAs are that reallocating and re balancing are easy. They don't want you to move the funds every day, but you are not locked in to your current allocations. The fact that you mentioned in a comment that you also have a Roth IRA means that you should look at all retirements as a whole. Look at what options you have in the 401K and also what options you have with the IRA. Then determine the overall allocation between bonds, stocks, international, REIT, etc. Then use the mix of funds in the IRA and 401K to meet that goal. Asking if the 401K should be small and mid cap only can't be answered without knowing not just your risk tolerances but the total money in the 401K and IRA. Pick an allocation, map the available funds to that allocation. Rebalance every year. But review the allocation in a few years or after a life event such as: change of job, getting married, having kids, or buying a house. |
Why use accounting software like Quickbooks instead of Excel spreadsheets? | I would say that all of the reasons you list in your question are valid, and I would add the following... You are in the landscaping business, not the accounting business. If you manage everything in spreadsheets, at least one of you has to become the bookkeeper and leave the landscaping to the others. Spreadsheets are "agnostic" in how you use them, so you have to turn them into an accounting system, which means you're now not only more of a bookkeeper, but you're also more of a developer, too, and even less of a landscaper. Accounting software is already developed by developers who understand accounting. Using it requires you to only perform the data entry tasks, and then you can focus on the landscaping, customer service, sales and marketing, etc., things that actually contribute to your business. It is still good for you to understand basic accounting principles. Specialized accounting software will guide you through the process of learning and help you avoid making many of the costly mistakes you might have made in that learning process. |
How is Discover different from a Visa or a MasterCard? | From the business side of credit cards, Discover and American Express carry their own risk. AmEx has lent their logo to banks such as Bank of America (BofA) to use the AmEx transaction network, but the financial risk and customer service is provided by BofA. Visa and MasterCard let banks use their logo and process through their respective networks for a fee. The financial risk of fraud, non-payment from merchants, etc is the risk that the individual banks carry. |
How can home buying be considered a sound investment with all of that interest that needs to be paid? | Since then I wanted to move out of this house because the property taxes are so high and the mortgage payment is a killer. As I understand this is a property jointly owned by your parents and you. As they are not living staying in the house, you have taken over the mortgage payments for this house along with any other maintenance. If you move out of this house; the rent is expected to cover the cost of maintenance and mortgage payments. Are we better of staying in Jersey where our family and friends are? This is an individual decision. It is not just family and friends, but also schooling of kids, penitentially if you change jobs would it also entail changing residence as the workplace would be more near from current home than the new home. I want to convince my wife to make this move because it will save us at least 800 month, but she fails to see how buying a second home is financially sound because we have to lose our savings and we have to pay interest on our second home. There are quite a few posts on first-time-home-buyer Some question like this one and this one and this one are good reads. There are historically times when the Mortgage EMI becomes equal or less than Rent paid. In such times it is good to buy home, than pay rent. Otherwise quite a few invest advisor's mention that fools buy house and wise live in it. There are advantages to buying as well advantages to renting. There is no simple answer and it depends on multitude of factors. |
State tax issues for NJ resident with DC tax withheld, and likely refunded | If you already filed the DC return, you can try and wait with filing the NJ return until you get the answer from DC. You can file an extension request with the NJ division of taxation here. Or, you can file without claiming the credit, and worst case amend later and claim it if DC refuse to refund. I find it highly unlikely that DC will decide that a person staying for a couple of months over the year in hotels will count as a resident. |
Are there any Social Responsibility Index funds or ETFs? | Try this site for the funds http://www.socialinvest.org/resources/mfpc/ I'm not aware of any etfs. I'm sure some exist though. |
Need a formula to determine monthly payments received at time t if I'm reinvesting my returns | How does compounding of annual interest work? answers this question. It's not simple compound interest. It's a time value of money calculation similar to mortgage calculations. Only the cash flow is the other way, a 'deposit' instead of 'payment'. When using a finance calculator such as the TI-BA35 (Note, it's no longer manufactured, but you can find secondhand. It was the first electronic device I ever loved. Seriously) you enter PV (present value) FV (future value) Int (the interest rate) nPer (number of periods) PMT (payment). For a mortgage, there's a PV, but FV = $0. For you, it's reversed. PMT on this model is a positive number, for you it's negative, the amount you deposit. You also need to account for the fact that a mortgage is paid on day 31, but you start deposits on Day 1. See the other answer (I linked at start) for the equations. |
How did I end up with a fraction of a share? | Fractional shares don't occur from Dividend Reinvestment Programs - residual credit is carried over until there is enough to purchase a whole share. |
What's a good personal finance management web app that I can use in Canada? | I use MoneyStrands (formerly called Expensr), but mostly just to track expenses and look at reports on my spending habits. It has some really pretty charts, with the ability to drill down into categories and sub-categories, or graph monthly spending for any custom date range. It does a half-decent job of auto-categorizing the imported bank transactions, and you can set up additional rules for common vendors, but I still have to do some manual work after each import. It does a good job of integrating my credit cards, bank accounts, and I can even manually add cash transactions. It has some basic budgeting capabilities, but they're not very useful for someone who needs to carefully budget thier monthly spending. Another one I've heard about is mint.com, but it only supports American banks (last I heard, anyway). |
What's the best online tool that can track my entire portfolio including gains/losses? | You can use a tool like WikiInvest the advantage being it can pull data from most brokerages and you don't have to enter them manually. I do not know how well it handles dividends though. |
Will Indian young ones lose 18% of their EPF with new tax as per Budget 2016? | Are these calculations correct? These are approximate calculations and are with the assumption that entire corpus will be taxed. The assumption was valid as the wording in the budget speech was not very clear. Subsequently the finance ministry has clarified that only interest generated will be taxed and not the contribution. There are no new calculations done with this assumption. Edit: As per communication from finance ministry this proposal is on hold. |
I just “paid” online with a debit card with no funds. What now? | There are a few factors at play here. Depending on the bank that has offered you the card there are different types of overdraft protection that may have been set up. Typically, if they attempt to run the card with no money, if one of these is in play, you will be spared any overdraft fees by the transaction charging to a designated overdraft account, usually savings, or by the transaction failing due to insufficient funds. If you know the transaction went through, and you know there were not enough funds in the account to cover the transactions, then you have a few options. If you have overdraft protection that auto charges insufficient funds charges to a separate account, then you have nothing to worry about. If you do not, most banks offer a grace period where you have until the end of the day to zero out your account, that is to say pay the overdraft amount and bring your balance to at least $0. If this is a charge that occurred in the past, and you have already been charged an overdraft fee, there may still be hope. I cannot speak for all banks, but I know that Chase Bank offers a once per year overdraft forgiveness, where they will get rid of the charges if you agree to bring the account out of the negative. There is a chance other banks will do the same if you call their customer service. |
What tax software automatically determines the best filing status, etc? | Rob - I'm sorry your first visit here has been unpleasant. What you are asking for is beyond the capability of most software. If you look at Fairmark.com, you find the standard deduction for married filing joint is $12,200 in 2012, and $12,400 in 2013. I offer this anecdote to share a 'deduction' story - The first year I did my MIL's taxes, I had to explain that she didn't have enough deductions to itemize. Every year since, she hands me a file full of paper substantiating medical deductions that don't exceed 7.5% of her income. In turn, I give her two folders back, one with the 5 or so documents I needed, and the rest labeled "trash". Fewer than 30% of filers itemize. And a good portion of those that do, have no question that's the right thing to do. e.g. my property tax is more than the $12K, so anything else I have that's a deduction adds right to the number. It's really just those people who are at the edge that are likely frustrated. I wrote an article regarding Standard Deduction vs Itemizing, in which I describe a method of pulling in one's deductible expenses into Odd years, reducing the number in Even years, to allow a bi-annual itemization. If this is your situation, you'll find the concept interesting. You also ask about filing status. Think on this for a minute. After pulling in our W2s (TurboTax imports the data right from ADP), I do the same for our stock info. The stock info, and all Schedule A deductions aren't assigned a name. So any effort to split them in search of savings by using Married Filing Separate, would first require splitting these up. TurboTax has a 'what-if' worksheet for this function, but when the 'marriage penalty' was lifted years ago, the change in status had no value. Items that phaseout over certain income levels are often lost to the separate filer anyway. When I got married, I found my real estate losses each year could not be taken, they accumulated until I either sold, or until our income dropped when the Mrs retired. So, while is respect your desire for these magic dials within the software, I think it's fair to say they would provide little value to most people. If this thread stays open, I'd be curious if anyone can cite an example where filing separately actually benefits the couple. |
Why do gas stations charge different amounts in the same local area? | Location, Location, Location. The closer to the highway, the more they can charge. People want to go less than a mile from the exit to get gas. Therefore they save time, but spend more money. That is understandable, so the gas station takes advantage of the situation. |
Advice on strategy for when to sell | You sell when you think the stock is over valued, or you need the money, or you are going to need the money in the next 5 years. I buy and hold a lot. I bought IBM in 8th grade 1980. I still own it. I bought 3 share it from $190 and its now worth $5,000 do to dividend reinvestment and splits. That stock did nothing for a thirteen years except pay a dividend but then it went up by 1800% the next 20 and paid dividends. So I agree with other posters the whole pigs get slaughtered thing is silly and just makes fund managers more money. Think if you bought aapl at $8 and sold at $12. The thing went to 600 and split 7-1 and is back to $120. My parents made a ton holding Grainger for years and I have had good success with MMM and MSFT owning those for decades. |
How do Islamic Banking give loans for housing purposes? | As I understand it, if the "borrower" puts a down payment of 20% and the bank puts down 80%, then the bank and the "borrower" own the home jointly as tenants in common with a 20%-80% split of the asset amongst them. The "borrower" moves into the home and pays the bank 80% of the fair rental value of the home each month. {Material added/changed in edit: For the purposes of illustration, suppose that the "borrower" and the bank agree that the fair rental per month is 0.5% of the purchase cost. The "borrower" pays 80% of that amount i.e. 0.4% of the purchase cost to the bank on a monthly basis. The "borrower" is not required to do so but may choose to pay more money than this 0.4% of the purchase cost each month, or pay some amount in a lump sum. If he does so, he will own a larger percentage of the house, and so future monthly payments will be a smaller fraction of the agreed-upon fair rental per month. So there is an incentive to pay off the bank.} If and when the house is sold, the sale price is divided between "borrower" and bank according to the percentage of ownership as of the date of sale. So the bank gets to share in the profits, if any. On the other hand, if the house is sold for less than the original purchase price, then the bank also suffers in the loss. It is not a case of a mortgage being paid off from the proceeds and the home-owner gets whatever is left, or even suffering a loss when the dust has settled; the bank gets only its percentage of the sale price even if this amount is less than what it put up in the first place minus any additional payments made by the "borrower". I have no idea how other costs of home ownership (property taxes, insurance, repair and maintenance) or improvements, additions, etc are handled. Ditto what happens on Schedule A if such a "loan" is made to a US taxpayer. |
How can people have such high credit card debts? | In the United States, when applying for credit cards, proof of income is on an honor system. You can make $15k a year and write on your application that you make $150k a year. They don't check that value other than to have their computer systems figure out risk and you get a yes or no. It was traditionally easy to attain credit, but that got tightened in 2008/2009 with the housing crisis. This is starting to change again and credit is flowing much more easily. |
401(k) Investment stategies | You could end up with nothing, yes. I imagine those that worked at Enron years ago if their 401(k) was all in company stock would have ended up with nothing to give an example here. However, more likely is for you to end up with less than you thought as you see other choices as being better that with the benefit of hindsight you wish you had made different choices. The strategies will vary as some people will want something similar to a "set it and forget it" kind of investment and there may be fund choices where a fund has a targeted retirement date some years out into the future. These can be useful for people that don't want to do a lot of research and spend time deciding amongst various choices. Other people may prefer something a bit more active. In this case, you have to determine how much work do you want to do, do you want to review fund reviews on places like Morningstar, and do periodic reviews of your investments, etc. What works best for you is for you to resolve for yourself. As for risks, here are a few possible categories: Time - How many hours a week do you want to spend on this? How much time learning this do you want to do in the beginning? While this does apply to everyone, you have to figure out for yourself how much of a cost do you want to take here. Volatility - Some investments may fluctuate in value and this can cause issues for some people as it may change more than they would like. For example, if you invest rather aggressively, there may be times where you could have a -50% return in a year and that isn't really acceptable to some people. Inflation - Similarly to those investments that vary wildly there is also the risk that with time, prices generally rise and thus there is something to be said for the purchasing power of your investment. If you want to consider this in more detail consider what $1,000,000 would have bought 30 years ago compared to now. Currency risk - Some investments may be in other currencies and thus there is a risk of how different denominations may impact a return. Fees - How much do your fund's charge in the form of annual expense ratio? Are you aware of the charges being taken to manage your money here? |
Investing in real estate when the stock market is high, investing in stocks when it's low? | The price of real estate reacts to both demand for property and the rate of inflation and rate of income growth. Mortgage rates generally move as treasury rates move. See this paragraph: As we mentioned, intermediate term bonds and long-term mortgages (more properly, Mortgage-Backed Securities, or MBS) compete for the same fixed-income investor dollar. Treasury issues are 100% guaranteed to be repaid, but mortgages are not; therefore mortgages carry more risk of default or early repayment, which could potentially disturb the return on the investment. Therefore, mortgage rates must be priced higher to compensate for that risk. But how much higher are mortgages priced? In a normal market, the average "spread" or markup above the 100% secured Treasury is about 170 basis points, or 1.7%. That markup -- the spread relationship -- widens and contracts with a range of market conditions, investor appetites and supply of available product -- as well as the presence of competing investment opportunities, like corporate bonds or domestic (or foreign) equity markets Source: What Moves Mortgage Rates? And when the stock market crashes, investors tend to run to bonds and treasuries, which causes prices to go up and treasury yields to drop. Theoretically, this would also cause mortgage rates to drop, although most mortgage rates have a base price below which they cannot fall. How easy is it to profit from recent stock market drops and at what frequency? Incredibly difficult. The issue with your strategy is that you cannot predict the bottom of the market (at least us mortals can't). Just take the month of August for example. Stocks fell something like 15%? After the first 5-10% drop, people felt that the bottom was there, so they rushed in, only to have the market fall even more. How will you know when to invest? Even if the market falls by 50%, and there's a huge buying opportunity, and you increase the mortgage on your house, odds are your rates will increase because of the equity you take out. What if the market stays low for a very long time? Will you be able to maintain mortgage payments? Japan's stock bubble popped in the early 90's, and they've had two lost decade's now. Furthermore, there are issues of liquidity. What if you need more capital? Can you just sell a property or can you buy now property to draw equity against? What if the market is moving too fast for you to take advantage of. Don't ignore transaction costs and taxes either. Overall, there are a lot of ways that your idea can go wrong, and not many ways it can go right. |
Any difference between buying a few shares of expensive stock or a bunch of cheap stock | You are correct in thinking actual number of shares do not matter, the value is the value. However there are cases where share price does play a role. Berkshire Hathaway for example has not split because Warren Buffet believes it has cut down on the liquidity of the stock, as well as attracting investors with an eye for the longer term. There have also been things written on the psychology of a share price. For example, some people are attracted to shares that split, because it reflects a company is growing. |
~$75k in savings - Pay off house before new home? | As others have said, congratulations on saving up 75K in cash while seemingly not neglecting other areas of personal finance. Considering that only 15% of Americans have more than 10K saved this is quite a feat. source If you sell your old house, and buy the new one you will still be in really good financial shape. No need to comment further. Renting your current home and buying a new home introduces a great amount of risk into your life. The risk in this case is mitigated by cash. As others have pointed out, you will need to save a lot more to remove an acceptable amount of risk. Here is what I see: So without paying off your existing house I would see a minimum savings account balance of about double of what you have now. Once you purchase the new house, the amount would be reduced by the down payment, so you will only have about 50K sitting around. The rental emergency fund may be a little light depending on how friendly your state is to landlords. Water heaters break, renters don't pay, and properties can sit vacant. Also anytime you move into a new business there will be mistakes made that are solved by writing checks. Do you have experience running rentals? You might be better off to sell your existing home, and move into a more expensive home than what you are suggesting. You can continue to win at money without introducing a new factor into your life. Alternatively, if you are "bitten by the real estate bug" you could mitigate a lot risk by buying a property that is of similar value to your current home or even less expensive. You can then choose which home to live in that makes the most financial sense. For example some choose to live in the more dilapidated home so they can do repairs as time permits. To me upgrading the home you live in, and renting an expensivish home for a rental is too much to do in such a short time frame. It is assuming far too much risk far to quickly for a person with your discipline. You will get there. |
Do common stocks and preferred stocks have any differences in terms of percentage of the company per unit they represent? | Preferred stocks are, err... Preferred. The whole point of preferred stocks is that they have some preference over other classes of stocks (there may be more than 2, by the way). It can be more voting rights, more dividends or priority on dividends' distribution (common with VC investments), or priority on liquidations (in bankruptcy, preferred stock holders are ranked higher than common). Many times initial or critical investments are made on preferred terms, and the stocks are converted to common when certain thresholds are met. Obviously all these benefits require a premium on the price. |
Finance, Cash or Lease? | Now, to buy in full (and essentially have zero savings), buy in part (£10000 deposit, followed by a loan of £4000) or PCP/HP more of the value? So, you are assessing if the car is worth having with either none or only 4,000 in savings. This is the most critical information you have provided. My outright opinion is to always buy a mildly used car as I hate the idea of loans and interest. With the amount of money that you currently possess, I believe the "Buy-in-part" option is best as it reduces your interest liability; but, I don't believe you should do it currently. 4,000 is a rather small cash fund for if something were to go boom in the night. As for your question of interest: This is completely dependent on the amount you are able to pay per period and the total interest you are willing to spend, rows four and seven respectively. This is your money, and no one can tell you what's best to do with it than yourself. Keep looking for good leasing deals or if you think you can survive financial strife with 4,000 then follow your heart. "Depreciation" fluctuates to the buyer, so never assume what the car may lose in the next 2-3 years. Hope it all goes well my friend. |
What makes a Company's Stock prices go up or down? | It's been said before, but to repeat succinctly, a company's current share price is no more or less than what "the market" thinks that share is worth, as measured by the price at which the shares are being bought and sold. As such, a lot of things can affect that price, some of them material, others ethereal. A common reason to own stock is to share the profits of the company; by owning 1 share out of 1 million shares outstanding, you are entitled to 1/1000000 of that company's quarterly profits (if any). These are paid out as dividends. Two key measurements are based on these dividend payments; the first is "earnings per share", which is the company's stated quarterly profits, divided by outstanding shares, with the second being the "price-earnings ratio" which is the current price of the stock divided by its EPS. Your expected "yield" on this stock is more or less the inverse of this number; if a company has a P/E ratio of 20, then all things being equal, if you invest $100 in this stock you can expect a return of $5, or 5% (1/20). As such, changes in the expected earnings per share can cause the share price to rise or fall to maintain a P/E ratio that the pool of buyers are willing to tolerate. News that a company might miss its profit expectations, due to a decrease in consumer demand, an increase in raw materials costs, labor, financing, or any of a multitude of things that industry analysts watch, can cause the stock price to drop sharply as people look for better investments with higher yields. However, a large P/E ratio is not necessarily a bad thing, especially for a large stable company. That stability means the company is better able to weather economic problems, and thus it is a lower risk. Now, not all companies issue dividends. Apple is probably the most well-known example. The company simply retains all its earnings to reinvest in itself. This is typically the strategy of a smaller start-up; whether they're making good money or not, they typically want to keep what they make so they can keep growing, and the shareholders are usually fine with that. Why? Well, because there's more than one way to value a company, and more than one way to look at a stock. Owning one share of a stock can be seen quite literally as owning a share of that company. The share can then be valued as a fraction of the company's total assets. Sounds simple, but it isn't, because not every asset the company owns has a line in the financial statements. A company's brand name, for instance, has no tangible value, and yet it is probably the most valuable single thing Apple owns. Similarly, intellectual property doesn't have a "book value" on a company's balance sheet, but again, these are huge contributors to the success and profitability of a company like Apple; the company is viewed as a center of innovation, and if it were not doing any innovating, it would very quickly be seen as a middleman for some other company's ideas and products. A company can't sustain that position for long even if it's raking in the money in the meantime. Overall, the value of a company is generally a combination of these two things; by owning a portion of stock, you own a piece of the company's assets, and also claim a piece of their profits. A large company with a lot of material assets and very little debt can be highly valued based solely on the sum of its parts, even if profits are lagging. Conversely, a company more or less operating out of a storage unit can have a patent on the cure for cancer, and be shoveling money into their coffers with bulldozers. |
Is it normal for brokers to ask whether I am a beginner? | In Canada, for example, they are expected or required to find out. They call it, The “Know Your Client” rule, part of which is knowing your "Investment knowledge and experience". They say it is, "to ensure their advice is suitable for you". I have always been given that kind of form to fill in, when opening an account. |
Trading an FHA loan to bank for an REO | What you are suggesting will not work. Banks have strict guidelines about what they can and cannot do with an FHA loan property. Remember the FHA is only an insurance policy to the bank saying that if you default they will cover a high percentage of the loan. The bank won't take the risk of violating their insurance policy and the government refusing to pay them off if you default. Instead, consider doing a creative sale on your property, maybe a rent to own deal or owner financing. As long as you pay the mortgage the bank won't even know you don't live there and you can rent the house out to someone who eventually will buy it after the timeframe expires. Meanwhile you can go and get a new home or condo either thru regular financing or owner financing(search the internet to see how to do this) and you can use owner financing until you complete the sale of the first house. Otherwise just tough it out in the house you are in until the time expires and then sell. You made no mention of the property value but I am assuming if you bought it 3 years ago that you may have a little equity. Pleas note that if you sell at that time though you will likely have to come out of cash because your equity won't cover the realtor fee and closing cost. But if you do the rent to own I suggested earlier you can sell at a slightly higher price making sure you can cover those cost. I realize this answer is a little out the box but I deal with people who don't want properties all day and I have completed transactions like this many times. Good Luck and God Bless! |
Can I do periodic rollovers from my low-perfoming 401k to an IRA? | My two-cents, read your plan document or Summary Plan Description. The availability of in-service withdrawals will vary by document. Moreover, many plans, especially those compliant with 404(c) of ERISA will allow for individual brokerage accounts. This is common for smaller plans. If so, you can request to direct your own investments in your own account. You will likely have to pay any associated fees. Resources: work as actuary at a TPA firm |
What's the best online tool that can track my entire portfolio including gains/losses? | Mint.com does this quite well. The graph views of your budgets, investments, debts, and other aspects of your financial life can be shown in gestalt, or on a per-account basis (at least, it does for me). See the investment "how it works" page for more information. "Find out whether you're beating the market–or it's beating you. Compare your portfolio to market benchmarks, and instantly see your asset allocation across all your investment accounts: 401k, mutual funds, brokerage accounts, even IRAs." |
What should a 21 year old do with £60,000 ($91,356 USD) inheritance? | I assume you've no debt - if you do then pay that off. I'd be tempted to put the money into property. If you look at property prices over the past 20 years or so, you can see returns can be very good. I bought a house in 1998 and sold it in 2003 for about 110% of the purchase price. Disclaimer, past performance is no guarantee of future returns! It's a fairly low risk option, property prices appear to be rising currently and it's always good to get your foot on the housing ladder as quickly as you can as prices can rise to the stage where even those earning quite a good salary cannot afford to buy. Of course you don't have to live in the house, a rental income can be very handy without tying you down too much. There are plenty of places in the UK where £60k will buy you a reasonable property with a rental income of £400-£500, it doens't have to be near where you live currently. Just to put a few more figures in - if you get a house for £50k and rent it for £400 a month (perfectly feasible where I live) then that's very close to a 10% return year on year. Plus any gains made by the price of the house. The main downside is you won't have easy access to the money and you will have to look after a tenant if you decide to rent it out. Also if you do buy a property make sure it is in a good state of repair, you don't want to have to pay for a new roof for example in a couple of years time. Ideally you would then sell the house around the time property prices peak and buy another when they bottom out again. Not easy to judge though! I'd review the Trust Fund against others if you decide to keep it there as 12% over 6 years isn't great, although the stock market has been depressed so it may compare favouribly. Keep some "rainy day" money spare if you can. |
Online stock screener to find stocks that are negatively correlated to another stock/index? | SeekingAlpha has a section dedicated to Short ETFs as well as others. In there you will find SH, and SDS. Both of which are inverse to the S&P 500. Edit: I linked to charts that compare SH and SDS to SPY. |
Is A Company Abusing The Tax Code When It Does This, And How Does The IRS Prevent It? | A rather good IRS paper on the topic states that a donation of a business' in-kind inventory would be Under IRC 170(e)(1), however, the fair market value must be reduced by the amount of gain that would not be long-term capital gain if the property had been sold by the donor at the property's fair market value (determined at the time of the contribution). Under this rule, deductions for donated inventory are limited to the property's basis (generally its cost), where the fair market value exceeds the basis. There are references to IRC regulations in a narrative context you may find helpful: This paper goes on for 16 pages describing detailed exceptions and the political reasons for the exceptions (most of which are concerned with encouraging the donation of prepared food from restaurants/caterers to hunger charities by guaranteeing a value for something that would otherwise be trashed valueless); and a worked out example of fur coats that had a cost of goods of $200 and a market value of $1000. |
How to make an investment in a single company's stock while remaining market-neutral? | For the type of market neutrality you desire, free from crash risk, it's best to hedge the shares with covered calls when implied volatility is expensive and puts when implied volatility is cheap with the nearest at the money expirations. A put only strategy can be very expensive and should only be used with the longest term options available since they can cost many tens of % per year. Securities become almost perfectly correlated during a crash; therefore, market crash risk of one security is essentially equal to the market crash risk, so hedging the security itself makes a position market neutral for crash risk. This strategy will have intermittent opportunity cost risk in the form of slower returns during market expansion to pay for smaller losses during a crash; however, the expected long run return hedged this way should be greater than the underlying's expected long run return with less volatility. |
What happens if a Financial Services Company/Stockbroker goes into administration in the UK? | Although I posted this question more than a year ago, I subsequently read information which may be of use as an answer, specifically regarding Pritchard Stockbrokers in the UK several years ago, in which the FSCS stepped in to compensate investors, as detailed in the following: http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-pritchard-stock-6n940n01k/ http://www.ft.com/cms/s/0/89957c56-21e4-11e3-9b55-00144feab7de.html#axzz3crZYbGZ9 For reference, in case the links above are at some point in future taken offline, the FSCS FAQ states: Q: I had “deposited” money with Pritchard so can I expect £85,000 compensation from FSCS? A: No. Pritchard was not a deposit-taker so the money held does not qualify under regulatory rules as a deposit. The money will be treated as an investment, which carries maximum FSCS compensation of £50,000 per person. FSCS has no discretion to pay any more. Q: What happens if my losses are over the FSCS maximum of £50,000 and I accept the FSCS’s compensation? A: If you choose to accept compensation from FSCS, you will be required to assign (or legally transfer) to FSCS all of your rights to claim in the Administration. FSCS will then claim in the Administration standing “in your shoes” and will claim for the whole of your loss, even if it was over £50,000. When FSCS receives the dividends in your place it will then pay to you any amounts recovered to ensure that you do not suffer a disadvantage for having accepted FSCS compensation first. Example 1: Loss = £80,000 FSCS compensation = £50,000 Dividend of 50p/£ received by FSCS = £40,000 FSCS pays £30,000 to claimant so he is fully compensated (total £80,000), and retains £10,000 recovery for itself Example 2: Loss = £100,000 FSCS compensation = £50,000 Dividend of 50p/£ received by FSCS = £50,000 FSCS pays £50,000 to claimant so he is fully compensated (total £100,000), and retains nothing for itself FSCS does not have to have make a full recovery of its £50,000 before it starts paying its dividend recovery on to claimants. Claimants are not compelled to claim from FSCS, or to accept the FSCS offer of compensation. If a person does not want to transfer his legal rights to claim in the Administration to FSCS in return for accepting the payment of compensation, then s/he can decline our compensation and continue his claim in the Administration. After s/he has received the dividend(s), s/he can then return to FSCS to claim for any remaining shortfall. Therefore, the answer provided by @DumbCoder was correct, but in circumstances where fraudulent activity would mean otherwise, the FSCS was willing to intervene on the behalf of investors. |
How to protect your parents if they never paid Social Security? | I'm not unsympathetic, but insurance of what kind? I don't know how he'd have owned a restaurant but failed to pay into the social security system. Was he paying taxes at all? As for the 'why,' there's not enough checks and balances to make sure that nothing is done under the table. I believe 40 quarters of work would have qualified her for a benefit of some kind, but you say she didn't pay in either. Both people didn't pay into the system, either on purpose or by not understanding the need to do so. This is a sad situation. |
Is there any truth to the saying '99% of the world's millionaires have become rich by doing real estate'? | 78.84% of statistics are made up on the spot. |
Does this sound like a great idea regarding being a landlord and starting a real estate empire? | BEFORE you invest in a house, make sure you account for all the returns, risks and costs, and compare them to returns, risks and costs of other investments. If you invest 20% of a house's value in another investment, you would also expect a return. You also probably will not have the cost interest for the balance (80% of ???). I have heard people say "If I have a rental property, I'm just throwing away money - I'll have nothing at the end" - if you get an interest-only loan, the same will apply, if you pay off your mortgage, you're paying a lot more - you could save/invest the extra, and then you WILL have something at the end (+interest). If you want to compare renting and owning, count the interest against the rental incoming against lost revenue (for however much actual money you've invested so far) + interest. I've done the sums here (renting vs. owning, which IS slightly different - e.g. my house will never be empty, I pay extra if I want a different house/location). Not counting for the up-front costs (real estate, mortgage establishment etc), and not accounting for house price fluctuations, I get about the same "return" on buying as investing at the bank. Houses do, of course, fluctuate, both up and down (risk!), usually up in the long term. On the other hand, many people do lose out big time - some friends of mine invested when the market was high (everyone was investing in houses), they paid off as much as they could, then the price dropped, and they panicked and sold for even less than they bought for. The same applies if, in your example, house prices drop too much, so you owe more than the house is worth - the bank may force you to sell (or offer your own house as collateral). Don't forget about the hidden costs - lawn mowing and snow shoveling were mentioned, insurance, maintenance, etc - and risks like fluctuating rental prices, bad tenants, tenants moving on (loss of incoming, cleaning expenses, tidying up the place etc).... |
Should I cancel an existing credit card so I can open another that has rewards? | Cancelled cards don't fall off the system for a long time, up to ten years. Card terms change, with notice of course, but it can happen at any time. I had a card with a crazy perk, 5% back in Apple Gift cards. This was pre-iPod days, but it was great to get a new computer every two years for free. But it was short lived. Three years into it, the cards were changed, a no-perk card from the bank. That is now my oldest account, and it goes unused. Instead of holding cards like this, I wish I had flipped it to a different card years ago. Ideally, your mix of cards should provide value to you, and if they all do, then when one perk goes away, it's time to refresh that card. This is a snapshot from my report at CreditKarma. (Disclosure, I like these guys, I've met their PR folk. I have no business relationship with them) Elsewhere on the page it's noted that average card age is a 'medium impact' item. I am 50, but I use the strategy above to keep the cards working for me. My current score is 784, so this B on the report isn't hurting too much. The tens of thousands I've saved in mortgage interest by being a serial refinancer was worth the hit on account age, as was the credit card with a 10% rebate for 90 days, the 'newest account' you see in the snapshot. In the end, the score manipulation is a bit of a game. And some of it is counter-intuitive. Your score can take a minor hit for actions that would seem responsible, but your goal should be to have the right mix of cards, and the lowest interest (long term) loans. |
Stocks and bonds have yields, but what is a yield? | Yield can be thought of as the interest rate you would receive from that investment in the form of a dividend for stocks or interest payments on a bond. The yield takes into account the anticipated amount to be received per share/unit per year and the current price of the investment. Of course, the yield is not a guaranteed return like a savings account. If the investment yield is 4% when you buy, it can drop in value such that you actually lose money during your hold period, despite receiving income from the dividend or interest payments. |
Why don't banks print their own paper money / bank notes? | In the US, this was the case during the 19th century. There was a system of "subscriptions" between banks, where larger banks backed the smaller banks to some extent. In trade, notes from distant banks were not accepted or discounted relative to known local banks, or silver/gold coinage. There were a number of problems with this system which came to a head during the Panic of 1907. During this crisis, a cascading series of banking failures was only stopped by the personal intervention of JP Morgan. Even when Morgan intervened, it was very difficult to make capital available in a way that avoided the panic. The subsequent creation of the Federal Reserve was a response to that crisis. |
How can I pay for school to finish my degree when I can't get a student loan and have bad credit? | Wesley gave a great answer and a follow up comment. Heed his advice. If you cannot make ends meet by working two jobs, either you are working very few hours or you have a spending problem. I feel it is more of a spending problem as you should have been able to complete your program and stay within the FAFSA limit. This is a tough situation of your own making. If you are at UNC and an engineering student, you have a good mind. You should use it to find a solution. Then learn the lessons and do not make those decisions again. While many people in authority told you that it was a good idea to go to school on student loans one of the paramount lessons to learn is that sometimes those people give bad advice. In your case that is exactly what happened. |
Blog income taxes? | If the money comes to you, then it's income. If the money goes out from you, it's an expense. You get to handle the appropriate tax documentation for those business transactions. You may also have the pleasure of filing 1099-MISC forms for all of your blogging buddies if you've paid them more than $600. (Not 100% sure on this one.) I was in a blog network that had some advertising deals, and we tried to keep the payments separate because it was cleaner that way. If I were you, I'd always charge a finder's fee because it is extra work for you to do what you're doing. |
Research for Info | quid's link should give you a definitive answer, but just to set expectations, here's an article from the UPI: Essex Chemical Corp. has agreed to be acquired by Dow Chemical Co. in a $366 million, $36-a-share deal ... Any shares that remain outstanding after the merger will be converted into the right to receive $36 each in cash, the companies said. There's no mention of exchange for Dow stock, so it's likely that you would get $36 for this share of stock, if anything. |
Should I keep copies of my business's invoices for tax records? | It's always beneficial to have detailed business records. There are any number of reasons where you'd need to prove both the types of services you've rendered and the payment history - you've already noted audits (for IRS taxes). Other possibilities: Whether these records need to be original or electronic might be the topic for another question. |
What is the best way for me to invest my money into my own startup? | Ask your accountant about convertable preference shares. This would permit you to loan money to your company and then convert the debt to equity, should you so choose, at a later stage. As with the answer by bstpierre, these are all contractual arrangements conducted at arms-length. |
Why is auto insurance ridiculously overpriced for those who drive few miles? | Not all miles carry the same amount of risk. A survey by Progressive indicated that accidents are most likely to occur within 5 miles of home, and 77% of accidents occur within 15 miles of home. Only 1% of accidents occurred 50 or more miles from home. That's from 2002, but it seems unlikely to have changed much. Since the miles closest to your home carry more risk, they cost more, and low-mileage discounts reflect that. There are per-mile insurance options in a few states which could save you money, but they do constant monitoring via that ODB2 telematics device, and other insurers offer discounts if you accept their monitoring either in perpetuity or for a limited period of time. Without monitoring, insurers don't know if that 4,000 miles of driving is spread into a few mid-day trips each week, or maybe you're doing all that driving from midnight to 4am on weekends (fatalities far more likely), or from 5-7pm during weekdays (accidents far more likely). Personally, I save ~10% by being a 'low-mileage' driver, and am currently in the middle of a 90-day monitoring, so might go lower, but given that accidents are far more likely close to home, 10% feels pretty significant and appropriate. |
How do I figure out if I will owe taxes | The short answer is - "Your employer should typically deduct enough every paycheck so you don't owe anything on April 15th, and no more." The long answer is "Your employer may make an error in how much to deduct, particularly if you have more than 1 job, or have any special deductions/income. Calculate your estimated total taxes for the year by estimating all your income and deductions on a paper copy of a tax return [I say paper copy so that you become familiar with what the income and deductions actually are, whereas plugging into an online spreadsheet makes you blind to what's actually going on]. Compare that with what your employer deducts every paycheck, * the number of paychecks in the year. This tells you how much extra you will pay / be refunded on April 15th, as accurately as you can estimate your income and deductions." |
Should I buy a home or rent in my situation? | MY recommendation is simple. RENT The fact that you have to ask the question is a clear sign that you have no business buying a home. That's not to say that it's a bad question to ask though. Far more important then rather it's finically wise for you to buy a home, is the more important question of "are you emotionally ready for the responsibility and permanence" of a home. At best, you are tying your self to the same number of rooms, same location, and same set of circumstances for the next 5-7 years. In that time it will be very unlikely that you will be able to sell the house for a profit, get your minor equity back, or even get a second loan for any reason. You mentioned getting married soon, that means the possibility of more children, divorce, and who knows what else. You are in an emotionally and financially turblunt time in your life. Now is not the right time to buy anything large. Instead rent, and focus on improving your credit rating. In 5 years time you will have a much better credit rating, get much better rates and fees, and have a much better handle on where you want to be with your home/family situation. Buying a house is not something you do on a weekend. For most people it's the culmination of years of work, searching, researching, and preparation. Often times people that buy before they are ready, will end up in foreclosure, and generally have a crappy next 15 years, as they try to work themselves out of the issue. |
How should I report my RSUs in my tax return | Your employer should send you a statement with this information. If they didn't, you should still be able to find it through E*Trade. Navigate to: Trading & Portfolios>Portfolios. Select the stock plan account. Under "Restricted Stock", you should see a list of your grants. If you click on the grant in question, you should see a breakdown of how many shares were vested and released by date. It will also tell you the cost basis per share and the amount of taxes withheld. You calculate your cost basis by multiplying the number of released shares by the cost basis per share. You can ignore the ordinary income tax and taxes withheld since they will already have been included on your W2 earnings and withholdings. Really all you need to do is report the capital gain or loss from the cost basis (which if you sold right away will be rather small). |
Automate Savings by Percentage on varying paychecks? | When I have been faced with this sort of situation I have done the split at the bank. They had the ability to recognize the deposit as a payroll transfer and split it the way I wanted. I put a specific amount of money into checking, another amount of money into the mortgage, and a specific amount of money into another fund. The balance, whether it was $1 or any other amount, went in to savings. That meant that I transferred the amounts I needed to pay my budgeted living expenses and what ever I made above that went to savings. In months I made extra, more was available to be saved. |
What's are the differences between “defined contribution” and “defined benefit” pension plans? | Defined Benefit - the benefit you receive when you retire is defined e.g. $500 a month if you retire at age 65. It is up to the plan administrators to manage the pension fund, and ensure that there is enough money to cover the benefits based on the life expectancy of the retiree. Defined Contribution - the amount you contribute to the plan is defined. The benefit you receive at retirement depends on how well the investments do over the years. |
How to maximize small business 401k contribution? | My understanding is that to make the $18,000 elective deferral in this case, you need to pay yourself at least $18,000. There will be some tax on that for social security and Medicare, so you'll actually need to pay yourself a bit more to cover that too. The employer contribution is limited to 25% of your total compensation. The $18,000 above counts, but if you want to max out on the employer side, you'll need to pay yourself $140,000 salary since 25% of $140,000 is the $35,000 that you want to put into the 401k from the employer side. There are some examples from the IRS here that may help: https://www.irs.gov/retirement-plans/one-participant-401-k-plans I know that you're not a one-participant plan, but some of the examples may help anyway since they are not all specific to one-participant plans. |
I'm 23 and was given $50k. What should I do? | If your employer is matching 50 cents on the dollar then your 401(k) is a better place to put your money than paying off credit cards This. Assuming you can also get the credit cards paid off reasonably soon too (say, by next year). Otherwise, you have to look at how long before you can withdraw that money, to see if the compounded credit card debt isn't growing faster than your retirement. But a guaranteed 50% gain, your first year is a pretty hard deal to beat. And if you currently have no savings, unless all of your surplus income has been reducing your debt, you're living beyond your means. You should be earning more than you're (going to be) spending, when you start paying rent/car bills. If you don't know what this is going to be, you need to be budgeting. Get this under control, by any means necessary. New job/career? Change priorities/expectations? Cut expenses? Live to your budget? Whatever it takes. I don't think you should be in any investment that includes bonds until you're 40, and maybe not even then - equities and cash-equivalents all the way (cash is for emergency funds, and for waiting for buying opportunities). Otherwise Michael has some good ideas. I would caveat that I think you should not buy any investments in one chunk, but dollar average it over some period of time, in case the market is unnaturally high right when you decide to invest. You should also gauge possible returns and potential tax liabilities. Debt is good to get rid of, unless it is good debt (very low interest rates - ie: lower than you could borrow the money for). Good debt should still get paid off - who knows how long your job could last for - but maybe not dump all of your $50K on it. Roth is amazing. You should be maxing that contribution out every year. |
Where can I find the dividend history for a stock? | I second @DumbCoder, every company seems to have its own way of displaying the next dividend date and the actual dividend. I keep track of this information and try my best to make it available for free through my little iphone web app here http://divies.nazabe.com |
Best return on investment for new home purchase | I encourage you to think of this home purchase decision as a chance to buy into a community that you want your children to grow up in. Try to find a place where you will be happy for the next 20 years, not just the next 2 or 7 years. In your situation, option 1 seems like a bad idea. It will create an obstacle to having children, instead of establishing a place for them to grow up in. Option 2 is close to "buying a house on a layaway plan". It offers the most financial flexibility. It also could result in the best long-term outcome, because you will buy in an established area, and you will know exactly what quality house you will have. But you and your fiancé need to ask yourselves some hard questions: Are you willing to put up with the mess and hassles of remodelling? Are you good at designing such projects? Can you afford to pay for the projects as they occur? Or if you need to finance them, can you get a HELOC to cover them? Especially if you and your fiancé do much of the work yourselves, break down the projects into small enough pieces that you can quickly finish off whatever you are working on at the time, and be happy living in the resulting space. You do not want to be nagging your husband about an unfinished project "forever" -- or silently resenting that a project never got wrapped up. I posted some suggestions for incrementally finishing a basement on the Home Improvement Stack Exchange. If you are up to the job of option 2, it is less risky than option 3. Option 3 has several risks: You don't know what sort of people will live in the neighborhood 5 - 20 years from now. Will the homes be owner-occupied? Or rentals? Will your neighbors care about raising children well? Or will lots of kids grow up in broken homes? Will the schools be good? Disappointing? Or dangerous? Whereas in an established neighborhood, you can see what the neighborhood is currently like, and how it has been changing. Unless you custom-build (or remodel), you don't control the quality of the construction. Some neighborhoods built by Pulte in the last 10 years were riddled with construction defects. You will be paying up-front for features you don't need yet. You might never need some of them. And some of them might interfere with what you realize later on might be better. In stable markets, new homes (especially ones with lots of "upgrades") often decline in value during the first few years. This is because part of the value is in the "newness" and being "up-to-date" with the latest fads. This part of the value wears off over time. Are the homes "at the edge of town" already within reasonable walking distance of parks, schools, church, grocery stores, et cetera? Might the commute from the "edge of town" to work get worse over the next 5 - 20 years? |
Net Cash Flows from Selling the Bond and Investing | Investopedia has a good explanation of the term shorting which is what this is. In the simplest of terms, someone is borrowing the bond and selling it with the intent to replace the security and any dividends or coupons in the end. The idea is that if a bond is overvalued, one may be able to buy it back later for a cheaper price and pocket the difference. There are various rules about this including margin requirements to maintain since there is the risk of the security going up in price enough that someone may be forced into a buy to cover in the form of a margin call. If one can sell the bond at $960 now and then buy it back later for $952.38 then one could pocket the difference. Part of what you aren't seeing is what are other bonds doing in terms of their prices over time here. The key point here is that brokers may lend out securities and accrue interest on loaned securities for another point here. |
Does an issue of bonus shares improve shareholder value? | This IS a stock split. http://en.wikipedia.org/wiki/Stock_split Ratios of 2-for-1, 3-for-1, and 3-for-2 splits are the most common, but any ratio is possible. Splits of 4-for-3, 5-for-2, and 5-for-4 are used, though less frequently. Investors will sometimes receive cash payments in lieu of fractional shares. |
Buying a home without a Real Estate Agent - Who should I get to do the paperwork? | Generally, the paperwork realtors use is pre-written and pre-approved by the relevant State and real-estate organizations. The offers, contracts, etc etc a pretty straightforward and standard. You can ask a realtor for a small fee to arrange the documents for you (smaller than the usual 5% sellers' fee they charge, I would say 0.5% or a couple of hundreds of dollars flat fee would be enough for the work). You can try and get these forms yourself, sometimes you can buy them in the neighborhood Staples, or from various law firms and legal plans that sell standard docs. You can get a lawyer to go over it with you for almost nothing: I used the LegalZoom plan for documentation review, and it cost me $30 (business plan, individual is cheaper) to go over several purchase contracts ($30 is a monthly subscription, but you don't have to pay it for more than one month). But these are standard, so you do it once and you know how to read them all. If you have a legal plan from work, this may cover document review and preparation. Preparing a contract that is not a standard template can otherwise cost you hundreds of dollars. Title company will not do any paperwork for you except for the deed itself. They can arrange the deed and the recording, escrow and title insurance, but they will not write a contract for the parties to use. You have to come with the contract already in place, and with escrow instructions already agreed upon. Some jurisdictions require using a lawyer in a real-estate transaction. If you're in a jurisdiction (usually on a county level) that requires the transaction to go through a lawyer - then the costs will be higher. |
Are companies in California obliged to provide invoices? | We run into this all the time with our EU clients. As far as I can tell, the only requirements when it comes to invoicing have to do with sales tax, which is determined at the state level, and only in the case that items are taxable. It seems that the service provided to you is not taxable and so there is no obligation under Californian law to provide you with the invoice you need. That said, it would be nice to provide this information to you as a courtesy. We don't provide the information typically required by EU tax authorities on our receipts either, but whenever one of our EU clients requests a more formal invoice we gladly send them one. |
Does a US LLC owned by a non-resident alien have to pay US taxes if it operates exclusively online? | As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question "Does a US LLC owned by a non-resident alien have to pay US taxes" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice. |
Help required on estimating SSA benefit amounts | There has been an abundance of articles in recent years which make it fairly clear that many participants in the Social Security system-- especially those who have started contributing recently, and going forward from that-- will experience negative rates of return. In other words, they will put in more than they will get out. Some examples of such articles: Time Magazine: But it is now official: Social Security is a lousy investment for the average worker. People retiring today will be among the first generation of workers to pay more in Social Security taxes than they receive in benefits over the course of their lives, according to a new analysis by the Associated Press. That AP piece, referenced by Time: People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It's a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press. A piece which appeared in DailyFinance (includes a helpful graphic summary): 10 Myths About Social Security: Myth 4: Social Security Is a Good Deal for Today’s WorkersEven if there were no reduction in benefits or increase in taxes—an impossibility given Social Security’s looming financing shortfalls—Social Security is an extremely bad investment for most young workers. In fact, according to a study by the nonpartisan Tax Foundation, most young workers will actually receive a negative return on their Social Security taxes— they will get less in benefits than they paid in taxes. Some studies indicate that a 30- year-old two-earner couple with average income will lose as much as $173,500. That actual loss does not even consider the opportunity cost, what workers might have earned if they had been able to invest their taxes in real assets that yield a positive return. In fact, a study by financial analyst William Shipman demonstrates that, if a 25-year-old worker were able to privately invest the money he or she currently pays in Social Security taxes, the worker would receive retirement benefits three to six times higher than under Social Security. Has that answered your question? |
Is it irresponsible for me to lease a $300/month car for 18 months? | Presumably you need a car to get to work, so let's start with the assumption that you need to buy something to replace the car you just lost. The biggest difficulty to overcome in buying a car is the concept of the monthly payment. Dealers will play games with all of the numbers to massage a monthly payment that the buyer can swallow, but this usually doesn't end up giving the customer the best deal. The 18 month term is not normal for a lease, typically you'll see 24 or 36 months. You are focusing on another goal of paying your student loans by then which would free up much more money for other wants (like a car) but at what cost? The big difficulty of personal finance is the mental mind game of delaying gratification for greater long-term benefit. You are focusing on paying your student loans now so that you can be free of that debt and have more flexibility for the future. Good. You're tempted to spend another $5400 (assuming no down-payment or other surprise fees) to drive a car for 18 months. That doesn't sound any wiser than $5,000 for an unreliable used car that gave you more problems than you bargained for. Presumably you got some percentage of that money back from the insurance company when the car was totaled, but even if not, the real lesson should be finding a car that you can afford up-front, but also one that you can still use when the loan is paid off (like your education--that investment will keep giving even when the loans are a distant memory). My advice would be to look for a car that has about 30k miles on it and pay for it as quickly as possible, then drive it at least for 70-120k more miles before replacing it. You may wish for a newer car, especially in 3 or 4 more years when it starts to show its age, but you'll also thank yourself when you can buy a newer better car with cash and break out of the monthly payment game that dealers try to push on you. You might even enjoy negotiating with car salesmen when you see through their manipulations and simply work for the best cash price you can get. |
In the USA, why is the Free File software only available for people earning less than $62k? | Regardless of the source of the software (though certainly good to know), there are practical limits to the IRS 1040EZ form. This simplified tax form is not appropriate for use once you reach a certain level of income because it only allows for the "standard" deduction - no itemization. The first year I passed that level, I was panicked because I thought I suddenly owed thousands. Switching to 1040A (aka the short form) and using even the basic itemized deductions showed that the IRS owed me a refund instead. I don't know where that level is for tax year 2015 but as you approach $62k, the simplified form is less-and-less appropriate. It would make sense, given some of the great information in the other answers, that the free offering is only for 1040EZ. That's certainly been true for other "free" software in the past. |
What assets would be valuable in a post-apocalyptic scenario? | Assuming that the financial system broke down, not enough supply of essential commodities or food but there is political and administrative stability and no such chaos that threatens your life by physical attacks. The best investment would then be some paddy fields, land, some cows, chickens and enough clothing , a safe house to stay and a healthy life style that enables you to work for food and some virtue at heart and management skills to get people work for you on your resources so that they can survive with you (may be you earn some profit -that is up to your moral standards to decide, how much). It all begins to start again; a new Financial System has to be in place….! |
does interest payment on loan stay the same if I pay early | It depends on the type of loan. Fully amortized loans have a schedule of payments don't recalculate as you pay. If you want to make an additional payment you need to contact the lender to apply your payment toward principle and reamortize the loan. Otherwise all your additional payment will do is change the amount due on your next payment, or push out your next payment due date. Regarding interest calculation, you owe interest on the principle outstanding. Say you have a 10 year loan (120 Months), at 5% APR, and a $1,000 payment (this means you borrowed roughly $94,000) Each month the amount of interest owed reduces because there is less principle outstanding. The reason loans are amortized like this is so the borrower has a predictable, known, monthly amount due. |
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