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How is options implied volatility for a stock determined? | There are a few different "kinds" of implied volatility. They are all based on the IVs obtained from the option pricing model you use. (1) Basically, given a few different values (current stock price, time until expiration, right of option, exercise style, strike of the option, interest rates, dividends, etc), you can ... |
Does bull/bear market actually make a difference? | The main difference between a bull market and a bear market is due the "the leverage effect". http://www.princeton.edu/~yacine/leverage.pdf The leverage effect refers to the observed tendency of an asset’s volatility to be negatively correlated with the asset’s returns. Typically, rising asset prices are accompanie... |
splitting a joint mortgage - one owner in home | Get a lawyer to put this in contract form, with everything spelled out explicitly. What is fair is what the two of you agree upon. My own suggestion: Divide the property into things which are yours, his, and shared, then have each of you be responsible for all your costs plus half the shared costs, but get all the bene... |
How credible is Stansberry's video “End of America”? | No. I glanced through the article you linked to. It's quite lengthy, but not compelling. I'd not lose any sleep over this. Others with far better credentials are making the opposite claim, that life is good and the Dow on its way to 20,000. Back to this guy - StansberryResearch.com Reviews – Legit or Scam? offers a... |
What emergencies could justify a highly liquid emergency fund? | Having a highly liquid emergency fund can lubricate the wheels for disaster recovery. For example, several years ago I returned from a vacation to discover that, during my absence, a plumbing fixture had broken and my house was flooded. Since we had sufficient liquidity to cover the cost of the repairs in our emergenc... |
What is the tax levied against stock portion cashed out of 401k? | You pay tax on the entire amount, not just the capital gains. When cashing out such a plan you would pay the top marginal tax rate on the full amount plus another 10% in penalties. It is very likely that the additional income, of the balance withdrawal, will increase your top marginal rate. It is impossible to com... |
Is there such a thing as a deposit-only bank account? | Do you write checks? You are giving your bank account and routing number to anybody you have ever given a check to. Your employer is paying taxes on your behalf, so they need your social security number so they can pay your social security taxes. Account and routing numbers are how deposits are made. If you are conc... |
My Boss owes money but I am named on letter from debt collection agency (UK) | You havent signed a contract, so you are only an authorised contact so you have nothing to worry about at all. Your credit reference can only be affected if you are a signed party on the contract. I would imagine that they wont remove your details as you may assist them by contacting your emplorer, and effectively ch... |
Could capital gains from a stock sale impact my IRA eligibility? | Yes, eligibility for contributing to a Roth IRA is determined by your Modified Adjusted Gross Income (MAGI) which is based on your Adjusted Gross Income (AGI). Now, AGI includes the net capital gains from your transactions and MAGI adds back in things that were subtracted off (e.g. tuition deductions, foreign earned in... |
How do I estimate my taxes when I have only 1099 income? | So there are a lot of people that get into trouble in your type of self employment situation. This is what I do, and I use google drive so there are no cost for tools. However, having an accounting system is better. Getting in trouble with the IRS really sucks bad. |
Is it possible for me to keep my credit card APR at 0% permanently? | Banks are in it to make money. But they're expected to provide a social good which powers our economy: secure money storage (bank accounts) and cashless transactions (credit/debit cards). And the government does not subsidize this. In fact, banks are being squeezed. Prudent customers dislike paying the proper cost of... |
Do people tend to spend less when using cash than credit cards? | One study found that, while people using gift certificates bought no more items than those who used cash, they tended to spend more per item. In "Study 3" the paper "Monopoly money: The effect of payment coupling and form on spending behavior", sets up a case where shoppers are given $50 in cash and $50 in gift certifi... |
Are tax deductions voluntary? | I did a little research and found this article from 2006 by a Villanova law professor, titled "No Thanks, Uncle Sam, You Can Keep Your Tax Break". The final paragraph of the article says: Under these circumstances, it is reasonable to conclude that a taxpayer is not required to claim a allowable deduction unless a sta... |
Do I even need credit cards? | The key part of your question is the "so far". So you didn't need a credit card today, or yesterday, or last month - great! But what about tomorrow? The time may come when you really need to spend a little more than you have, and a credit card will let you do that, at a very modest cost if you pay it off promptly (n... |
Are companies like EquityZen legitimate and useful? | Full disclosure: I’m an intern for EquityZen, so I’m familiar with this space but can speak with the most accuracy about EquityZen. Observations about other players in the space are my own. The employee liquidity landscape is evolving. EquityZen and Equidate help shareholders (employees, ex-employees, etc.) in private ... |
Are my parents ripping me off with this deal that doesn't allow me to build my equity in my home? | If I understand you situation correctly, then the accepted answer is extremely misleading and incorrect. Your arrangement with your parents is definitely unreasonable. It is definitely not "similar to an interest-only loan". In an interest-only loan, like you can get from a bank, you will loan a sum of money, which you... |
Why does Charles Schwab have a Mandatory Settlement Period after selling stocks? | TLDR: Why can't banks give me my money? We don't have your money. Who has my money? About half a dozen different people all over the world. And we need to coordinate with them and their banks to get you your money. I love how everyone seems to think that the securities industry has super powers. Believe me, even with... |
Mortgage vs. Cash for U.S. home buy now | I wondered about this problem too, so I looked into the maths and made this app :- http://demonstrations.wolfram.com/BuyOrRentInvestmentReturnCalculator/ (It uses the free Wolfram computable-document format (CDF) Player.) If you try it out you can see what conditions favour renting vs buying. My own conclusion was to ... |
Solo-401k interaction with employer sponsored 401k. Limits of contribution from Schedule C income | Alright, team! I found answers to part 1) and part 2) that I've quote below, but still need help with 3). The facts in the article below seem to point to the ability for the LLC to contribute profit sharing of up to 25% of the wages it paid SE tax on. What part of the SE tax is that? I assume the spirit of the law... |
Can I pay off my credit card balance to free up available credit? | Is it possible to pay off my balance more than once in a payment period in order to increase the amount I can spend in a payment period? Yes you can pay off the balance more than once even if its not due. This will get applied to outstanding and you will be able to spend again. If so, is there a reason not to do this? ... |
What is the correct pronunciation of CAGR? | Most readers probably know that an acronym is an invented word made up of the initial letters or syllables of other words, like NASA or NATO. Fewer probably know that an initialism is a type of acronym that cannot be pronounced as a word, but must be read letter-by-letter, like FBI or UCLA. A quote from Daily W... |
Bucketing investments to track individual growths | Some personal finance packages can track basis cost of individual purchase lots or fractions thereof. I believe Quicken does, for example. And the mutual funds I'm invested in tell me this when I redeem shares. I can't vouch for who/what would make this visible at times other than sale; I've never had that need. For th... |
Can paying down a mortgage be considered an “investment”? | It very much comes down to question of semantics and your particular situation. Some people do not view a house (and most upgrades) as an investment, but rather an expense. I certainly agree that this is probably the case if you pay someone else to make the repairs and upgrades. However, if you are a serious DIYer, t... |
What's the difference between stocks and shares? | For all practical purposes the words mean the same thing. Shares are just stock in a particular company whereas stock can refer to shares over many companies. Investopedia has a good explaination. If you are a financial journalist you might want to make sure you are using the right term at the right time, but otherwis... |
How did this day trader lose so much? | He didn't sell in the "normal" way that most people think of when they hear the term "sell." He engaged in a (perfectly legitimate) technique known as short selling, in which he borrows shares from his broker and sells them immediately. He's betting that the price of the stock will drop so he can buy them back at a low... |
Can I use stop limit orders on vanguard orders to prevent loss? | You've laid out a strategy for deciding that the top of the market has passed and then realizing some gains before the market drops too far. Regardless of whether this strategy is good at accomplishing its goal, it cannot by itself maximize your long-term profits unless you have a similar strategy for deciding that th... |
Are underlying assets supposed to be sold/bought immediately after being bought/sold in call/put option? | In the first case, if you wish to own the stock, you just exercise the option, and buy it for the strike price. Else, you can sell the option just before expiration, it will be priced very close to its in-the-money value. |
Opportunity to buy Illinois bonds that can never default? | If Illinois cannot go bankruptcy This is missing a few, very important words, "...under current law." The United States changed the law so as to allow Puerto Rico to go into a form of bankruptcy. So you cannot rely on a lack of legal support for bankruptcy to protect any bond investments you might make in Illinois. ... |
What can I replace Microsoft Money with, now that MS has abandoned it? | I used to use Quicken, but support for that has been suspended in the UK. I had started using Mvelopes, but support for that was suspended as well! What I use now is an IPhone app called IXpenseit to track my spending. |
Why can Robin Hood offer trading without commissions? | Robinhood does offer premium products that they charge for-I suspect we will see more of that in the future. They do not change the bid/ask spread as some have said because they have to give you the NBBO. |
Paid cash for a car, but dealer wants to change price | I have one additional recommendation: if the dealer continues to press the issue, tell them that they need to drop it, or you will write a Yelp review in excruciating detail about the entire experience. Used car dealers are very aware of their Yelp presence and don't like to see recent, negative reviews because it can ... |
Investing: P/E Ratio basic question | The idea here is to get an idea of how to value each business and thus normalize how highly prized is each dollar that a company makes. While some companies may make millions and others make billions, how does one put these in proper context? One way is to consider a dollar in earnings for the company. How does a do... |
Why is the stock market price for a share always higher than the earnings per share? | Think about the implications if the world worked as your question implies that it "should": A $15 share of stock would return you (at least) $15 after 3 months, plus another $15 after 6 months, plus another after 9 and 12 months. This would have returned to you $60 over the year that you owned it (plus you still own ... |
Need help with the psychology of investing: past failures and future fears | You're being too hard on yourself. You've managed to save quite a bit, which is more than most people ever do. You're in a wonderful position, actually -- you have savings and time! You don't mention how long you want/need to continue working, but I'll assume 20 years or so? You don't have to invest it all at once. Lik... |
Stock market vs. baseball card trading analogy | The Bobs tend to show up at the top of bubbles, then disappear soon after. For example, your next door neighbor who talks about Oracle in 1999, even though he doesn't know what Oracle does for a living. I don't think the Bobs' assets represent a large chunk of the market's value. A better analogy would be a spectrum o... |
Consolidate my debt? Higher APR, but what does that actually mean? | Your question indicates you really don't have a good grasp on personal finance. you might want to read a book or two. I'd recommend attending Financial Peace University, but my buddy Joe Taxpayer would throw an egg at me for that. Please take some sort of class. In the mean time, here is your plan: Pay this off do ... |
How can I find the historical stock price for a specific stock on a specific date? | A quick search showed me that UEP merged into Ameren on Dec 31, 1997, and Ameren still exists today. So I took a look at Ameren's Investor Relations website. Unfortunately, they don't provide historical stock prices prior to Ameren forming, so starting with 1998. However, I've had good luck in the past emailing a c... |
Are “hard money loans” meant only for real estate? | From Wikipedia: A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are almost never ... |
Where are the non floated Groupon shares | The original investors and founders own them. Think about it this way - When you hear that an IPO priced at $10 opened at $50, is that 'good or 'bad'? Of course, it depends who you are. If you are the guy that got them at $10, you're happy. If you are the founder of the company, you are thinking the banker you paid to ... |
What does it mean that stocks are “memoryless”? | With my current, limited knowledge (see end), I understand it the following way: Are share prices really described as "memoryless"? Yes. Is there a technical meaning of the term? What does it really mean? The meaning comes from Markov Models: Think of the behavior of the stock market over time as a Markov Chain, i.... |
I've tracked my spending and have created a budget, now what do I do with it? | Use the budget to drive down spending so you can save (for retirement, for college, for expenses) and so you can pay off your mortgage early. Some, (Dave Ramsey, for example) advocate for an "Envelope system"... If your budget says 100 a month for restaurants, then at the beginning of the month, you put 100 into that... |
What makes a Company's Stock prices go up or down? | There are many things that can make a company's share price go up or down. Generally, over the long term, the more consistently profitable a company is the more its share price will go up. However, there are times when a company may not be making any profits yet but its share price still goes up. This can be due to for... |
Credit Card Purchase - 'it is the bank's money no[t] yours' ? | Yes, they're referring to the credit card dispute (chargeback) process. In the case of dispute, credit card company will refund/freeze your charge so you don't have to pay until the dispute is resolved (or at all, if resolved in your favor). If the dispute is resolved in your favor, your credit card company will charge... |
Is an interest-only mortgage a bad idea? | It seems you understand the risks, it seems like a fine enough idea. Hopefully it works out for you. However, you may want to talk to a few local banks about getting a short term home equity loan. I know someone who was able to do this getting a very low rate for 7 years. At the time of the loan, the prevailing rate... |
Why index funds have different prices? | Price, whether related to a stock or ETF, has little to do with anything. The fund or company has a total value and the value is distributed among the number of units or shares. Vanguard's S&P ETF has a unit price of $196 and Schwab's S&P mutual fund has a unit price of $35, it's essentially just a matter of the fun... |
Put idle savings to use while keeping them liquid | Since you're coming out of college, you're probably a new investor and don't know too much about stocks, etc. I was in the same situation as well. I wanted to keep my cash 'liquid' and wanted to make low risk investments. What I ended up doing was investing the majority of my money in higher interest GICs (Guaranteed ... |
How risky are penny stocks? | Most penny stocks go to zero because most businesses fail. You stated in your original post that you were wondering specifically about companies with no assets. These are exactly the kind that fail and go to zero. There are many holes within the regulatory structure that allow for many accounting tricks in penny stoc... |
If the co-signer on my car loan dies, can the family take the car from me like they're threatening to? | My family members, particularly my aunt (his daughter), are telling me that when my grandpa dies they are taking my car. Bring this up with Grandpa. If this is what he wants to have happen, then help him make it happen before you finish paying $12,000 on a car worth only $6,000. Let the Aunt and other relatives deal ... |
Do any publically available documents from IR or SEC include all patents the company holds? | It appears as others have said that companies are not required to state this on as any sort of Asset. I remembered a friend of mine is a lawyer specializing in Intellectual Property Rights so asked him and confirmed that there's no document companies are required to file which states all patent holdings as assets. Ther... |
UK Contractor with Limited Company | I know a guy on a much higher rate than me, about £500 per day, and he claims to pay around 18% tax which has me bewildered He will be showing expenses, which are deductible. Check with your accountant about expenses, which can be legally claimed as expenses. This is the main benefit of operating through a limited comp... |
Credit and Debit | In view of business, we have to book the entries. Business view, owner and business are different. When capital is invested in business by owner, in future business has to repay it. That's why, capital always credit. When we come about bank (business prospective) - cash, bank, fd are like assets which can help in the... |
What's the best way to make money from a market correction? | Depends on how long you're willing to invest for. Broadly speaking, the best (by which I mean, more reliably repeatable) way to make money from market corrections is to accept them as a fact of life, and not sell in a panic when they happen, such that the money you already invested can ride back up again. Put another w... |
When's the best time to sell the stock of a company that is being acquired/sold? | What's your basis? If you have just made a 50% gain, maybe you should cash out a portion and hold the rest. Don't be greedy, but don't pass up an opportunity either. |
First job: Renting vs get my parents to buy me a house | Personally, I started renting out because I couldn't afford to buy a place but now I'm quite comfortably past that point. My three main issues are: These views aren't for everyone but I find it hard to seriously contemplate dealing with 2 while 1 and 3 are issues. To be honest, I found that I learned a lot sharing a... |
As a 22-year-old, how risky should I be with my 401(k) investments? | Whatever you do, don't take your retirement savings to Vegas. Second, you should also consider investment expenses. Your investments profit after the managers pay themselves. Get the lowest expense ratio mutual funds you can. Third, most active managers do not beat the market. Index funds are your friends. They also te... |
What's the best way to make money from a market correction? | As ChrisInEdmonton describes, shorting has an asymmetric risk/reward ratio. And put options have a time cost, if you think the market is overvalued and buy lots of puts, but they expire before the market finally corrects, you can lose your entire investment. Betting on market timing of any kind is extremely difficult ... |
What should I do with the change in my change-jar? | Every now and then I fill a pocket with a handful of coins and spend it on a very small shop on my way home, i.e. a loaf of bread (£1.50), a pint of milk (50p) by using the self-check out (Tesco/Sainsbury's) which has a coin slot or even better the little bowl where you put coins down. I find this pretty straightforwar... |
What will be the long term impact of the newly defined minimum exchange rate target from francs to euro? | The idea behind this move is to avoid or mitigate long-term deflationary pressure and to boost the competitiveness of Swiss exporters. This is primarily a Swiss-based initiative that does not appear likely to have a major impact on the broader Eurozone. However, some pressure will be felt by other currencies as investo... |
Should I continue to invest in an S&P 500 index fund? | 5-8 years is not quite long term. Until the naughts (the 2001-10 decade), advisors were known to say that the S&P was always positive given a 10 year holding period. Now, we're saying 15 years is always positive looking back. One can easily pull S&P return data which would let you run numbers showing the range of ret... |
how do I calculate rate of return on call options that are spread | Outside of software that can calculate the returns: You could calculate your possible returns on that leap spread as you ordinarily would, then place the return results of that and the return results for the covered call position side by side for any given price level of the stock you calculate, and net them out. (Net... |
What to sell when your financial needs change, stocks or bonds? | Don't set mental anchor points. I am saying this as a total hypocrite, mind you, it isn't easy to follow that advice. My suggestion would be to look at each investment and ask yourself, "Would I buy that at today's price?", because if you wouldn't you need to sell regardless of whether you are cashing out. Effectively ... |
A friend wants to use my account for a wire transfer. Is this a scam or is it legitimate? | In many countries it is a legal requirement or in some other way mandatory for the banks to ban the owner(s) of an account to allow a third party to use the account. In some countries if you willing give someone access in this way you get no compensation what so ever and you'll be lucky if they catch the crooks and eve... |
Pros and Cons of Interest Only Loans | Given the current low interest rates - let's assume 4% - this might be a viable option for a lot of people. Let's also assume that your actual interest rate after figuring in tax considerations ends up at around 3%. I think I am being pretty fair with the numbers. Now every dollar that you save each month based on th... |
Finance the land on a non-financeable house? | Some lenders will make loans for vacant land, others will not. You have to discuss with local bank what are your plan for the land: live in the old mobile home; install a new mobile home; build a new house; Sell it to a developer; use it for camping... Is the property part of a development with other mobile homes? If s... |
Why is it important to research a stock before buying it? | To a certain degree "the only sure thing I know is the price I paid for the stock is the fair price at the time I buy it" is absolutely right, by definition, and by the law of the free and efficient market and forces of supply and demand, freedom of public information about share price sensitive information, etc, etc, ... |
Should I get a auto loan to diversify my credit lines if I have the cash to pay upfront | You should not seek a kind of debt just for it's appearance on your credit report. If you don't need an auto loan don't get an auto loan. Getting a credit card for the purpose of building credit is a little bit of a different animal because you can use a credit card such that you never pay any interest or fees. With ... |
Should I deduct or capitalize the cost to replace a water heater in my rental property? (details Below) | You may be able to choose. As a small business, you can expense certain depreciable assets (section 179). But by choosing to depreciate the asset, you are also increasing the cost-basis of the property. Are you planning to sell the property in the next couple of years? Do you need a higher basis? Section 179 - Elec... |
How to calculate how far a shorted stock's price can rise before broker issues a margin call? | When margin is calculated as the equity percentage of an account, the point at which a broker will forcibly liquidate is typically called "maintenance margin". In the US, this is 25% for equities. To calculate the price at which this will occur, the initial and maintenance margin must be known. The formula for a long ... |
Is it possible to make money by getting a mortgage? | I think this is possible under very special conditions. The important part of the description here is probably retired and rich. The answers so far apply to people with "normal" incomes - both in the sense of "not rich" and in the sense of "earned income." If you sit at the top tax bracket and get most of your income... |
What resources can I use to try and find out the name of the manager for a given fund? | Yahoo Finance: http://finance.yahoo.com/q/pr?s=VFINX+Profile Under "Management Information" |
Where do online stock brokers get their real-time data from? | As another answer started, this information comes straight from an exchange and generally costs a fortune . . . However things change: IEX, a new exchange, recently opened and they are offering real time bid/ask data for free. Here's the API description: https://www.iextrading.com/developer/ This data should be good fo... |
Why is stock dilution legal? | Theoretically, when a company issues more shares, it does not affect the value of your shares. The reason is that when a company issues and sells more shares, the proceeds from the sale of those shares goes back into the company. Using your example, you have 10 out of 100 shares of the company, for a 10% stake. Let's... |
What to do with an old building to get money | There are a few ways to get money from property, but I'm not sure any would work for you: 1) Firstly you could sell it. Selling the building might require enough repairs that the building is habitable; if the repair costs are too high, you might not be able to recover costs from selling. For a particularly old and unke... |
On what quantity the Dividend is given in India? | In India, the amount of dividend you get is based on the face value of the stock. If the stock's face value is Rs. 10 and the company announced a dividend of 20%, you will receive Rs.2 per share.To see whether you qualify to receive a dividend, see the ex-dividend date of the company. If you purchased shares before tha... |
Does freedom to provide services allow me contracting in Germany without paying taxes there (but in my home EU country)? | You're free to provide services, but if you stay in one country for more than half a year - you're generally considered to be its resident for tax purposes. Germany is no exception to the rule, in fact - this is true to almost any country in the world. If you provide the services from Poland, and never set foot in Germ... |
Pay online: credit card or debit card? | I use another solution: debit card with an account kept empty most of the time and another account in the same bank without any card. I keep the money on the second card-less account, and when I want to buy something, I instantly transfer the appropriate amount to the account with the card and pay. That way money is on... |
How should one structure a portfolio given the possibility that a Total Stock Market Index might decline and not recover for a long time? | Generally, you need something that goes up over time during periods of index decline, but otherwise holds some value. Historically, people tend to use gold for that purpose. But with gold also set up for possible declines, that raises questions. Silver has dropped a bit more than gold in terms of percentages. If yo... |
Facebook buying WhatsApp for 19 Billion. How are existing shareholders affected? | Of course it is a dilution of existing shareholders. When you buy milk in the supermarket - don't you feel your wallet diluted a little? You give some $$$ you get milk in return. You give some shares, you get Watsapp in return. That's why such purchases must go through certain process of approval - board of directors (... |
When does a pricing error become false advertising? | It's definitely annoying, but it's not necessarily false advertising. There is no rule or law that says they have to fix a pricing error at all, let alone within a certain period of time. Unfortunately they have no obligation to do business with you unless they take (and keep) your money. If they canceled the order and... |
How can a credit card company make any money off me? I have a no-fee card and pay my balance on time | Ever wonder why certain businesses won't accept certain credit cards? (The sign above the register saying "Sorry, we don't accept AmericanExpress"). It's because they don't want to pay that credit card company's transaction fees. One of the roles of the credit card company is to facilitate the transaction process betwe... |
Why does selling and then rebuying stock not lead to free money? | There are a few people that do this for a living. They are called "market makers" or "specialists" in a particular stock. First of all, this requires a lot of capital. You can get burned on a few trades, a process known as "gambler's ruin," but if you have enough capital to weather the storm, you can make money. Second... |
Do you avoid tax when taking a home equity loan? | Why would someone invest in other instruments (e.g. stocks) to pay for childrens' college education when the capital gains on those are taxed, unlike a home equity loan? Many tax advantageous vehicles exist for the purpose of saving for college education such as 529 plans, Roth IRAs, Series EE and I bonds. Tax and ... |
How can one identify institutional accumulation of a particular stock using price and volume data? | You can have a pretty good guess by looking at price pattern and order flow (size of the trades) a) price should be traded in a range b) relatively large size orders, speed. |
Good book-keeping software? | You should consider Turbocash. It's a mature open-source project, installed locally (thick client). |
Should we buy a house, or wait? | Advantages of buying: With every mortgage payment you build equity, while with rent, once you sign the check the money is gone. Eventually you will own the house and can live there for free. You can redecorate or remodel to your own liking, rather than being stuck with what the landlord decides is attractive, cost-effe... |
Why was S&P 500 PE Ratio so high on May 2009 | Asking why the p/e was so high is best answered "because reported earnings were so low". Recall that the S&P500 bottomed in early March 2009 when the panic of the financial crisis reached exhaustion. As noted on the page you have linked, the reported p/e ratios are computed using reported earnings from the trailing tw... |
Effect of country default on house prices? | Some of the factors that will act on house prices are: There will likely be a recession in that country, which will lower incomes and probably lower housing prices. It will likely be harder to get credit in that country so that too will increase demand and depress demand for housing (cf the USA in 2010.) If Greece leav... |
Credit card grace period for pay, wait 1 day, charge? | If I understand you correctly, no you shouldn't be charged interest. Lets say you have a billing cycle of monthly (which usually isn't true). You charge $XX per day, ending up at $1000 at the end of January. So February 1st, your bill for your January billing cycle is $1000, due by Feb 15th (lets say). On February 1st,... |
Paying Off Principal of Home vs. Investing In Mutual Fund | Excellent answers so far, so I will just add one additional consideration: liquidity. Money invested in a mutual fund (exclusive of retirement accounts with early withdrawal penalties) has a relatively high liquidity. Whereas excess equity in your home from paying down early has very low liquidity. To put it simply: If... |
Are you preparing for a possible dollar (USD) collapse? (How?) | I think it's apt to remind that there's no shortcuts, if someone thinks about doing FX fx: - negative sum game (big spread or commissions) - chaos theory description is apt - hard to understand costs (options are insurance and for every trade there is equivalent option position - so unless you understand how those are... |
Why would I want a diversified portfolio, versus throwing my investments into an index fund? | Index funds are well-known to give the best long-term investment. Are they? Maybe not all the time! If you had invested in an index fund tracking the S&P500 at the start of 2000 you would still be behind in terms of capital appreciation when taking inflation into considerations. Your only returns in 13.5 years would ha... |
Should I pay off my credit card online immediately or wait for the bill? | If you carried a balance from the last month, then pay the card off as soon as possible. Otherwise I agree with @mbhunter that you should wait until close to time for the bill to become due. Then always pay the credit card off in full and you will borrowing Chase's money interest free for up to 30 days. |
Is there an advantage to keeping a liquid emergency fund if one also has an untapped line of credit? | Why can't you have both? If you do have both credit and an emergency fund, and an emergency occurs, you can draw from the line of credit first. Having debt + cash is a much more stable situation than having neither, because then you have the option to use the cash to pay off the debt, or use the cash to pay other expen... |
Why do 10 year-old luxury cars lose so much value? | +1 They are over priced to begin with - More specifically they are expensive to create exclusivity, which raises their value to people who value that kind of thing. Perhaps folks who buy those cars aren't buying them for value or quality or performance, but are buying them for the badge and the intangible factors. I f... |
Retirement planning 401(k), IRA, pension, student loans | None of your options seem mutually exclusive. Ordinarily nothing stops you from participating in your 401(k), opening an IRA, qualifying for your company's pension, and paying off your debts except your ability to pay for all this stuff. Moreover, you can open an IRA anywhere (scottrade, vanguard, etrade, etc.) and f... |
Is there an advantage to keeping a liquid emergency fund if one also has an untapped line of credit? | An emergency fund is your money, sitting in a bank, that you can use for emergency purposes. A line of credit is somebody else's money, that they've provisionally promised to let you borrow. But they can change their mind at any time. |
Do bond interest rate risk premiums only compensate for the amount investors might lose? | In answer to your last formulation, no. In a perfectly efficient market, different investors still have different risk tolerances (or utility functions). They're maximizing expected utility, not expected value. The portfolios that maximize expected utility for different risk preferences are different, and thus general... |
How much should a new graduate with new job put towards a car? | I have a slightly different take on this, compared to the other answers. In general, I think your emergency fund should always be at least 3K, especially if you own a used car that is out of warranty. Any number of unlucky auto repairs could easily cost over 2K. So, if you have 7K in savings, I would personally buy a c... |
When to sell a stock? | I am a believer in stocks for the long term, I sat on the S&P right though the last crash, and am 15% below the high before the crash. For individual stocks, you need to look more closely, and often ask yourself about its valuation. The trick is to buy right and not be afraid to sell when the stock appears to be too h... |
Interest charges on balance transfer when purchases are involved | Its called a "Grace Period" and you are not paying interest on the 0% BT, you are paying interest on the amount you spent in purchases If you do not pay your balance in full by the due date your grace period ends. This means that you have to pay interest on the purchased amount from the day it is made. This is why when... |
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