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Is Amazon's offer of a $50 gift card a scam? | It's not a scam. They just want you to be an Amazon customer for many years and you'll be advertising Amazon to anyone who sees your credit card. $50 is known as the cost of "customer acquisition" and it is a very good deal for someone who may become a Prime member and spend $1000s a year on Amazon. |
Ways to invest my saved money in Germany in a halal way? | What is not permitted in Islam is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. Originally, usury meant interest of any kind. A loan may be considered usurious because of excessive or abusive interest rates or other factors. But In case of financial markets, people borrow money to make money and both parties benefits, and no one is taking advantage of the other. I may be wrong in interpreting this way, God knows the best. |
Why don't forced buy-ins of short sold stock happen much more frequently? | Nobody is going to short sell stocks through a lender that forces people to buy in as soon as it is getting good for them. |
How to get 0% financing for a car, with no credit score? | Is it possible to get a 0% interest rate for car loan for used car in US? Possible? Yes. It's not illegal. Likely? Not really. $5K is not a very high amount, many banks won't even finance it at all, regardless of your credit score. I suggest you try local credit unions, especially those that your employer is sponsoring (if there are any). Otherwise, you will probably get horrible rates, but for 3 months - you can just take whatever, pay the 3 months interest and get rid of the loan as soon as you're able. |
Buying a home without a Real Estate Agent - Who should I get to do the paperwork? | Save yourself a lot of trouble you both agree on a Real Estate Attorney to prepare all the paperwork (ie. contract) and conduct the closing for or with the Title Company. Then you both split the normal costs of the transaction. (Real simple professionally handled and you both save the 6%) |
Best way to day trade with under $25,000 | One way a lot of people bypass the pattern trading equity requirement is to open multiple brokerage accounts. You have $10k, put $5k in one and $5k in another. Although I don't recommend it! |
How can I lookup the business associated with a FEIN? | If it is Texas company, you can try doing a taxable entity search on the Texas Comptroller website. |
Is there a bank account that allows ACH deposits but not ACH withdrawals? | Nowadays, all checks you write will not be send to your bank anymore, but instead the bank where they get deposited does an ACH from your bank. That implies that not allowing this to happen, your bank would not be able to honor any checks you wrote (without enforcing paper check delivery in the mail, but the Check21 bill does not allow such enforcing anymore). Basically, your bank would not be able to do business with anyone. The obvious conclusion is that no such bank exists. |
Are you preparing for a possible dollar (USD) collapse? (How?) | Depends what kind of expenses you intend to use this money for. If you plan to buy housing in the future (eg you're saving a deposit), then you need to ensure that the value doesn't deteriorate relative to the value of the housing you are likely to buy - so you could buy a Residential REIT, or buy some investment property. If you expect to use this money for food, then you should buy suitable assets (eg Wheat futures, etc). Link the current asset to the future expense, and you will be fine. If you buy Gold, then you are making a bet that Gold will retain its value compared to the thing you want to purchase in future. It doesn't matter what the price of Gold does in $US. |
Is there a free, online stock screener for UK stocks? | Most free stock screeners for UK stocks, even those mentioned above, are very poor and not worth the effort really, and searching for stock screeners on a search engine will only bring up stock screeners for USA stocks. The best free UK stock screener (registration is required although this is FREE) is without any doubt on www.digitallook.com who also provide many other features like five year fundamentals, charts, prospects, etc, which can easily be downloaded onto a spreadsheet. I really wouldn't look elsewhere to be honest unless you are prepared to pay. |
Does reading financial statements (quarterly or annual reports) really help investing? | Financial statements provide a large amount of specialized, complex, information about the company. If you know how to process the statements, and can place the info they provide in context with other significant information you have about the market, then you will likely be able to make better decisions about the company. If you don't know how to process them, you're much more likely to obtain incomplete or misleading information, and end up making worse decisions than you would have before you started reading. You might, for example, figure out that the company is gaining significant debt, but might be missing significant information about new regulations which caused a one time larger than normal tax payment for all companies in the industry you're investing in, matching the debt increase. Or you might see a large litigation related spending, without knowing that it's lower than usual for the industry. It's a chicken-and-egg problem - if you know how to process them, and how to use the information, then you already have the answer to your question. I'd say, the more important question to ask is: "Do I have the time and resources necessary to learn enough about how businesses run, and about the market I'm investing in, so that financial statements become useful to me?" If you do have the time, and resources, do it, it's worth the trouble. I'd advise in starting at the industry/business end of things, though, and only switching to obtaining information from the financial statements once you already have a good idea what you'll be using it for. |
Where should I park my money if I'm pessimistic about the economy and I think there will be high inflation? | Apart from some of the excellent things others say, you could borrow money in AUD and invest that in another currency (that's risky but interesting) if the AUD interest rate is low and the other countries interest rate is higher, you'll eventually win. Also, look at what John Paulson did in 2007, 2008... I wish I'd thought of that when I was in your position (predicting a housing crisis) |
Facebook buying WhatsApp for 19 Billion. How are existing shareholders affected? | The answer to your question has to do with the an explanation of "shares authorized, issued and outstanding." Companies, in their Articles of Incorporation, specify a maximum number of shares they are authorized to issue. For example purposes let's assume Facebook is authorized to issue 100 shares. Let's pretend they have actually issued 75 shares, but only 50 are outstanding (aka Float, i.e. freely trading stock in the market) and stock options total 25 shares. So if someone owns 1 share, what percentage of Facebook do they own? You might think 1/100, or 1%; you might think 1/75, or 1.3%; or you might think 1/50, or 2%. 2% is the answer, but only on a NON-diluted basis. So today someone who owns 1 share owns 2% of Facebook. Tomorrow Facebook announces they just issued 15 shares to Whatsapp to buy the company. Now there are 65 shares outstanding and 90 issued. Now someone who owns 1 share of Facebook own only 1/65, or 1.5% (down from 2%)! P.S. "Valuation" can be thought of as the price of the stock at the time of the purchase announcement. |
Does SIPC protect securities purchased in foreign exchanges? | I'll give it a shot, even though you don't seem to be responding to my comment. SIPC insures against fraud or abuse of its members. If you purchased a stock through a SIPC member broker and it was held in trust by a SIPC member, you're covered by its protection. Where you purchased the stock - doesn't matter. There are however things SIPC doesn't cover. That said, SIPC members are SEC-registred brokers, i.e.: brokers operating in the USA. If you're buying on the UK stock exchange - you need to check that you're still operating through a US SIPC member. As I mentioned in the comment - the specific company that you mentioned has different entities for the US operations and the UK operations. Buying through them on LSE is likely to bind you with their UK entity that is not SIPC member. You'll have to check that directly with them. |
Best way to buy Japanese yen for travel? | Have you tried calling a Forex broker and asking them if you can take delivery on currency? Their spreads are likely to be much lower than banks/ATMs. |
Will a credit card issuer cancel an account if it never incurs interest? | Remember, the card company gets a percentage at the time of purchase, as well as any interest you let them collect from you. Yes, they're still making a profit on our accounts, and they can always hope that at some point we'll run up a high enough bill to be willing to pay some interest. They may kill completely inactive cards, since they need a bit of income to pay for processing the account. But if you're actively using it, they aren't very likely to tell you to go away (though they may change which plan(s) they offer you). |
Why do gas stations charge different amounts in the same local area? | There are many factors. Most gas stations price their gas based on what it will cost them to replace it. So when their supplier raises the price that it charges the station the station typically raises its prices proportionality. The suppliers tend to have their own rates. The business needs to make a profit so the business sets the price where it feels it will make the most money. Some stations buy bargain gas. Many people say they find this gas to be just fine. Personally some stations gas seems to make my cars run much worse. I can say that my mileage can vary by as much as 4 miles to the gallon based on where I get my gas. So I pay more to go to those stations that consistently have provided me good gasoline. However higher prices do not necessarily mean better gas. We have a BP just down the street that seems to have bad gas while one about a half a mile away that I prefer because I have never had a bad tank of gas. Both are priced about the same. Also some localities have special tax zones. These are local taxes levied based on the location. We have 4 different zones here in Peoria IL (150k pop). That does not take into account the smaller cities around us. |
Are in-kind donations from my S-Corp tax-deductible in any way? | You should probably have a tax professional help you with that (generally advisable when doing corporation returns, even if its a small S corp with a single shareholder). Some of it may be deductible, depending on the tax-exemption status of the recipients. Some may be deductible as business expenses. To address Chris's comment: Generally you can deduct as a business on your 1120S anything that is necessary and ordinary for your business. Charitable deductions flow through to your personal 1040, so Colin's reference to pub 526 is the right place to look at (if it was a C-corp, it might be different). Advertisement costs is a necessary and ordinary expense for any business, but you need to look at the essence of the transaction. Did you expect the sponsorship to provide you any new clients? Did you anticipate additional exposure to the potential customers? Was the investment (80 hours of your work) similar to the costs of paid advertisement for the same audience? If so - it is probably a business expense. While you can't deduct the time on its own, you can deduct the salary you paid yourself for working on this, materials, attributed depreciation, etc. If you can't justify it as advertisement, then its a donation, and then you cannot deduct it (because you did receive something in return). It might not be allowed as a business expense, and you might be required to consider it as "personal use", i.e.: salary. |
What are the differences between gold/siver “coin” vs. “round”? | Coins are legal tender. They're authorized by governments and have a face value. Rounds are simply coined pieces of metal minted by private manufacturers. They do not have any face value and are not legal tender. Rounds are used to own metal, they have no value other than the value of the metal in them. Any premium you pay over the price of the metal is the mint's profit. Coins are also used as bulions (i.e.: to own metal and create profits for the government), but many times coins have limited issue and become valuable because of the rarity, specific issues with a specific coin (mistakes, impurities, exclusive designs), etc. So they also may have some numismatic value (depends on the specific coin). Coins also have the assurance of quality of the authorizing government (and fakes are dealt with by the law as forgery of coins is illegal and is a crime), rounds however do not enjoy such protection, and any one can mint them (only copyright/trademark protections apply, where the enforcement is by the owner and not the government). Re the advantages - coins (if you pick the right ones...) appreciate much more than the metal. However, this is mostly in hindsight, and most of the "bulion" coins do not appreciate significantly beyond the price of the metal unless there's something else significant about them (first year of issue, high quality certification, etc). Rounds on the other hand are cheaper (1 oz round will be significantly cheaper than 1 oz coin), and monitor more closely the price of the metal. It is unlikely for rounds to significantly deviate from the spot price (although this does happen occasionally, for specific designs or if a mint goes out of business). |
Friend was brainwashed by MLM-/ponzi investment scam. What can I do? | Even though this is really a psychology question, I'll try to give you an answer. You do nothing but stay away. What's going on is too small to matter. Bernie Madoff took investor's money and scammed them for $15B. That's B, billion, 9 zeros (Yes, I realize the UK Billion has 12, these are US Billion). Harry Markopolos was on to him, and presented his evidence to the government, but "No one would listen." In quotes because that's the title of the book he published on his experience. Even Barron's had an article suggesting that Madoff's returns were impossible. Eventually, it came to light. In my own experience, there was a mortgage acceleration product called "Money Merge Account." It claimed to help you pay off your mortgage in a fraction of the time "with no change to your budget." For two years or so, I was obsessed with exposing this scam, and wrote articles, nearly every week discussing every aspect of this product. Funny how even though mortgages are math that's pretty easy to explain, few sellers wanted to talk about the math. Using the same logic that you don't need to understand how a car works as long as you know how to drive. There were some people that would write to tell me I saved them the $3500 cost of that product, but mostly I argued with sellers who dismissed every word I wrote as if the math were incomprehensible to anyone but the software guys who wrote it. In the end, I had compiled a PDF with over 60 pages of my writing on the topic, and decided to call it quits. The product was recycled and now is sold as "Worth Unlimited," but the software is the same. This is all a tangent to your problem. It simply offers the fact that the big scam, Bernie, continued for a long time, and people who were otherwise intelligent, fell for his promises, and didn't want to believe otherwise. The mortgage software had many bloggers writing. Searching on the web found a lot of discussion, very easy to find. People will believe what they wish. Tell an Atheist that God exists, or a believer that He doesn't, and your words will fall on deaf ears. Unfortunately, this is no different. |
how much of foreign exchange (forex/fx) “deep liquidity” is really just unbacked leverage and what is the effect? | I'd think that liquidity and speed are prioritized (even over retail brokers and in come cases over PoP) for institutional traders who by default have large positions. When the going gets tough, these guys are out and the small guys - trading through average retail brokers - are the ones left holding the empty bag. |
Are there good investment options to pay off student loans? | Paying off your student loan is an investment, and a completely risk-free one. Every payment of your loan is a purchase of debt at the interest rate of the loan. It would be extremely unusual to be able to find a CD, bond or other low-risk play at a better rate. Any investment in a risky asset such as stocks is just leveraging up your personal balance sheet, which is strictly a personal decision based on your risk appetite, but would nearly universally be regarded as a mistake by a financial advisor. (The only exception I can think of here would be taking out a home mortgage, and even that would be debatable.) Unless your loan interest rate is in the range of corporate or government bonds -- and I'm sure it isn't -- don't think twice about paying them off with any free cash you have. |
I'm 20 and starting to build up for my mortgage downpayment, where should I put my money for optimal growth? | The big question is whether you will be flexible about when you'll get that house. The overall best investment (in terms of yielding a good risk/return ratio and requiring little effort) is a broad index fund (mutual or ETF), especially if you're contributing continuously and thereby take advantage of cost averaging. But the downside is that you have some volatility: during an economic downturn, your investment may be worth only half of what it's worth when the economy is booming. And of course it's very bad to have that happening just when you want to get your house. Then again, chances are that house prices will also go down in such times. If you want to avoid ever having to see the value of your investment go down, then you're pretty much stuck with things like your high-interest savings account (which sounds like a very good fit for your requirements. |
What's the point of a benchmark? | One reason it matters whether or not you're beating the S&P 500 (or the Wilshire 5000, or whatever benchmark you choose to use) is to determine whether or not you'd be better off investing in an index fund (or some other investment vehicle) instead of pursuing whatever your current investment strategy happens to be. Even if your investment strategy makes money, earning what the S&P 500 has averaged over multiple decades (around 10%) with an index fund means a lot more money than a 5% return with an actively managed portfolio (especially when you consider factors like compound interest and inflation). I use the S&P 500 as one of my criteria for judging how well (or poorly) my financial adviser is doing for me. If his recommendations (or trading activity on my behalf, if authorized) are inferior to the S&P 500, for too long, then I have a basis to discontinue the relationship. Check out this Wikipedia entry on stock market indices. There are legitimate criticisms, but on the whole I think they are useful. As an aside, the reason I point to index funds specifically is that they are the one of the lowest-cost, fire-and-forget investment strategies around. If you compare the return of the S&P 500 index over multiple decades with most actively managed mutual funds, the S&P 500 index comes out ahead. |
What is the easiest way to back-test index funds and ETFs? | yAnother potential tool for you would be a Monte Carlo Simulator. here's one http://financial-dictionary.thefreedictionary.com/Business+Fundamentals I know that past performance is no guarantee..... but I think it's in many cases not exactly a flawed tool, and especially with respect to money managers a good way to find good ones. If a manager has shown an ability over time to consistently beat the market, yes he might be due for a bad day, but you'd generally expect that they should be able to continue that trend. I'd apply the same logic to pundits. If their track record sucks, and they constantly seem to whipsaw you with their advice, why listen to them other than |
What typically happens to unvested stock during an acquisition? | I've been through two instances where I worked for a public company that was merged (for stock) into another company. In both cases the options I had were replaced with equivalent options in the merged company with the number of shares and strike price adjusted at the same rate as the actual stock was converted, and the vesting terms remained essentially the same. In other words, the options before and after were in essence equivalent. |
Is buying or selling goods for gold or silver considered taxable? | Of course. The rationale is exactly the same as always: profit is taxed. The fact that you use intermediate barter to make that profit is irrelevant. To clarify, as it seems that you think it makes a difference that no money "changed hands". Consider this situation: So far your cost is $10000. How will the tax authority address this? They will look at the fair market value of the barter. You got gold worth of $20000. So from their perspective, you got $20000, and immediately exchanged it into gold. What does it mean for you? That you're taxed on the $10000 gain you made on your product X (the $20000 worth of barter that you received minus the $10000 worth of work/material/expenses that you spend on producing the merchandise), and that you have $20000 basis in the gold that you now own. If in a year, when you plan to sell the gold, its price drops - you can deduct investment losses. If its price goes up - you'll have investment gain. But for the gain you're making on your product X you will pay taxes now, because that's when you realized it - sold the merchandize and received in return something else of a value. |
Is it legal if I'm managing my family's entire wealth? | Assuming you and your family always get along and everyone is happy with the situation... Should you become ill, die, or go on government benefits for some catastrophe, the government will look at all those funds as YOURS, and now your wonderful family is hurt by the estate tax and/or expectations of how much of the bill you handle before support kicks in. Additionally, should you ever reach a point where you are married and then facing divorce (even if no fault of your own), all that investment is now up for grabs in equitable distribution. So your family's entire investment fund is at risk. |
How does a stock operate when it is listed between two exchanges? | Say a stock is listed in Nasdaq, and the same company has a stock listed in Tsx. Does the Nasdaq price affect the Tsx price as trading commences? Not directly. Basically, an exchange is a market, and the price is defined only by supply and demand in that market. However, any substantial price differential for a commodity traded in multiple market creates an arbitrage opportunity, and there are many traders whose job it is exactly to find and use such opportunities. Their activity in turn has the effect of reducing the price differentials to the point where transaction costs make them unprofitable. With high-frequency traders around, the time for a price differential to disappear is nowadays measured in milliseconds. If a trader buys from one exchange, will it affect the price of the other? Only through the mechanism mentioned above. Are there any benefits to being listed in two exchanges? It increases the liquidity of a stock. |
Can you depreciate assets differently between Federal, State, and Local? | In general, you most definitely can. In some cases you must. However for each State you'll have to check whether you can choose how to depreciate. Many States require you to take the same depreciation as on the Federal schedule, including Sec. 179, others won't allow Sec. 179 at all. Specifically to PA, I haven't found any current guidance, but the rules from 2012 put PA in the bucket that requires you to take the same Sec. 179 on the State return as appears on your Federal return. If you elect to expense Section 179 Property for FIT purposes, you are required to expense the property for PIT purposes. However PA limit for Sec. 179 is $25K, so if your Federal deduction is larger - you can depreciate the rest. Check with a PA-licensed CPA or EA for a more reliable opinion, since I'm not a tax adviser. Just googled it. |
Is the contribution towards Employment Insurance (EI) wasted if I never get fired, or are my premiums refunded? | It is not wasted: it bought you peace of mind. Perhaps you would have had peace of mind without it, because of the particular industry you are in. But people from any industry can get sick or give birth, and not all industries are as evergreen as people think. A number of my onetime programmer colleagues now drive a truck or run a farm because new programming jobs weren't as easy to get as they once were. Like any insurance, it can't be affordable if it is bought only by those who think they will need it. The premiums you pay, in addition to giving you peace of mind, lower the premiums your neighbours pay. That contributes to social harmony. When your neighbours collect EI while looking for another job, they aren't tempted to turn to crime or legal-but-not-savoury ways to earn money. You probably like that, too. The fact they didn't get to choose whether or not to contribute means that they will be covered even if they aren't prudent and forward-looking people, which again is a benefit for you. And BTW, employers pay $1.40 in premiums for every dollar you pay. And we never collect. It's not for us. But we pay it. |
Opening offshore account from UK | I think your best bet here would be HSBC. They will provide the required currencies, credit/debit cards, and very easy to use online banking transfers. This includes an online "Global Account View" which features all of your accounts on a single screen and allows you to "drag and drop" money between accounts. Regarding fees, I suspect you will need to be a "Premier Account" holder in order to avoid any fees imposed on transactions such as money transfers and exchanging money between currencies. In my experience HSBC offers extremely good exchange rates when exchanging "large" amounts of money ( greater than $10,000 / GBP 5,000 ). Exchanging small amounts will carry a larger spread but still much better than most banks offer. In my experience, exchanging GBP 5000 will have a spread of about 0.50-to-0.75 percent, while exchanging more than GBP10,000 will have a spread of as little as 0.10-to-0.20 percent. In order to qualify for a "Premier Account", if my memory of HSBC UK serves me correctly, you will need to have at least GBP 50,000 net across all of your HSBC managed accounts, including stockbroking and other investment accounts. In order to open a banking Swiss account, you will need to travel to Switzerland and apply in person. You cannot open a foreign bank account remotely. With a foreign investment account, I believe you can open accounts remotely. For example, I opened an account with Fidelity Switzerland using my Fidelity UK account directly from the UK, however obviously Fidelity does not provide banking services so this is not of interest to you. The simplest thing to do is to visit your local HSBC branch and discuss it with them in person. Other UK banks, such as Barclays, will also provide such services, but in my experience they are not as competitive on fees. |
When (if) I should consider cashing in (selling) shares to realize capital gains? | In a perfect world of random stock returns (with a drift) there is no reason to "take profit" by exiting a position because there is no reason to think price appreciation will be followed by decline. In our imperfect world, there are many rules of thumb that occasionally work but if any one of them works consistently over a long period of time, everyone starts to practice that rule and then it stops working. Therefore, there are no such rules of thumb that work reliably and consistently over long periods of time and are expected to continue doing so. Finding such a rule is and always has been a moving target. The rational, consistently sensible reasons to sell a stock are: These rules are very different from my interpretation of the "walk with your chips" behavior mentioned in your question. |
Why there's always a very huge volume of trades for AAPL every day before market close? | A huge amount of money in all financial markets is from institutional investors, such as mutual funds, government pension plans, sovereign wealth funds, etc. For various reasons these funds do all of their trading at the end of the day. They care primarily that their end-of-day balances are in line with their targets and are easy to audit and far less about "timing the market" for the best possible trades. So, if you're looking at a stock that is owned by many institutional investors -- such as a stock (like AAPL) that makes up a significant portion of an index that many funds track -- there will be a huge amount of activity at this time relative to stocks that are less popular among institutions. Even just in its introduction this paper (PDF) gives a fair overview of other reasons why there's a lot of trading at end-of-day in general. (In fact, because of all this closing activity and the reliance on end-of-day prices as signposts for financial calculations, the end-of-day has for decades been the single most fraud-ridden time of the trading day. Electronic trading has done away with a lot of the straight-up thievery that floor traders and brokers used to get away with at the expense of the public, but it still exists. See, for example, any explanation of the term banging the close, or the penalties against 6 banks just last month for manipulating the FX market at the close.) |
How does 1099 work with my own company | Can I work on 1099 from my own company instead of on W2? The reason is on W2 I can't deduct my commute, Health Insurance and some other expenses while on 1099 I think I can able do that. Since I am going to client place to work not at my own office, I am not sure whether I should able to do that or not. If you have LLC, unless you elected to tax it as a corporation, you need neither 1099 nor W2. For tax purposes the LLC is disregarded. So it is, from tax perspective, a sole proprietorship (or partnership, if multiple members). Being a W2 employee of your own LLC is a bad idea. For all these above expenses, which can I use company's debit/credit card or I need to use only my personal debit/credit card? It would be better to always use a business account for business purposes. Doesn't matter much for tax per se, but will make your life easier in case of an audit or a legal dispute (limited liability protection may depend on it). If I work on 1099, I guess I need to file some reasonable taxes on quarterly basis instead of filing at year end. If so, how do I pay my tax on quarterly basis to IRS? I mean which forms should I file and how to pay tax? Unless you're a W2 employee, you need to do quarterly estimate payments using form 1040-ES. If you are a W2 employee (even for a different job, and even if it is not you, but your spouse with whom you're filing jointly) - you can adjust your/spouse's withholding using form W4 to cover the additional tax liability. This is, IMHO, a better way than paying estimates. There are numerous questions on this, search the site or ask another one for details. |
When can you use existing real estate as collateral to buy more? | Generally, when you own something - you can give it as a collateral for a secured loan. That's how car loans work and that's how mortgages work. Your "equity" in the asset is the current fair value of the asset minus all your obligations secured by it. So if you own a property free and clear, you have 100% of its fair market value as your equity. When you mortgage your property, banks will usually use some percentage loan-to-value to ensure they're not giving you more than your equity now or in a foreseeable future. Depending on the type and length of the loan, the LTV percentage varies between 65% and 95%. Before the market crash in 2008 you could even get more than 100% LTV, but not anymore. For investment the LTV will typically be lower than for primary residence, and the rates higher. I don't want to confuse you with down-payments and deposits as it doesn't matter (unless you're in Australia, apparently). So, as an example, assume you have an apartment you rent out, which you own free and clear. Lets assume its current FMV is $100K. You go to a bank and mortgage the apartment for a loan (get a loan secured by that apartment) at 65% LTV (typical for condos for investment). You got yourself $65K to buy another unit free and clear. You now have 2 apartments with FMV $165K, your equity $100K and your liability $65K. Mortgaging the new unit at the same 65% LTV will yield you another $42K loan - you may buy a third unit with this money. Your equity remains constant when you take the loan and invest it in the new purchase, but the FMV of your assets grows, as does the liability secured by them. But while the mortgage has fixed interest rate (usually, not always), the assets appreciate at different rates. Now, lets be optimistic and assume, for the sake of simplicity of the example, that in 2 years, your $100K condo is worth $200K. Voila, you can take another $65K loan on it. The cycle goes on. That's how your grandfather did it. |
Foreign Earned Income Exclusion - Service vs. Product? | Even though you will meet the physical presence test, you cannot claim the FEIE because your tax home will remain the US. From the IRS: Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a "tax home" in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes. ... You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States. However, your abode is not necessarily in the United States while you are temporarily in the United States. Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United States, whether or not your spouse or dependents use the dwelling. ... The location of your tax home often depends on whether your assignment is temporary or indefinite. If you are temporarily absent from your tax home in the United States on business, you may be able to deduct your away from home expenses (for travel, meals, and lodging) but you would not qualify for the foreign earned income exclusion. If your new work assignment is for an indefinite period, your new place of employment becomes your tax home, and you would not be able to deduct any of the related expenses that you have in the general area of this new work assignment. If your new tax home is in a foreign country and you meet the other requirements, your earnings may qualify for the foreign earned income exclusion. If you expect your employment away from home in a single location to last, and it does last, for 1 year or less, it is temporary unless facts and circumstances indicate otherwise. If you expect it to last for more than 1 year, it is indefinite. If you expect your employment to last for 1 year or less, but at some later date you expect it to last longer than 1 year, it is temporary (in the absence of facts and circumstances indicating otherwise) until your expectation changes. For guidance on how to determine your tax home refer to Revenue Ruling 93-86. Your main place of business is in the US and this will not change, because your business isn't relocating. If you are intending to work remotely while you are abroad, you should get educated on the relevant laws on where you are going. Most countries don't take kindly to unauthorized work being performed by foreign visitors. And yes, even though you aren't generating income or involving anyone in their country, the authorities still well may disapprove of your working. My answer to a very similar question on Expatriates. |
Should I wait a few days to sell ESPP Stock? | Usually the amount of the ESPP stocks is very small compared to the overall volume of the trading, so it shouldn't matter. But check if for your company it not so (look at the stock history for the previous ESPP dates, and volumes). |
The Benefits/Disadvantages of using a credit card | One thing that has not been pointed out as a disadvantage of using Credit Cards: people tend to spend more. You can see This Study, and this one, plus about 500 others. On average people tend to spend about 17% more with credit cards then with cash. This amount dwarphs any perks one gets by having a credit card. The safest way to use one is to only use them for purchases where you cannot make a decision to spend more. One example would be for utility bills (that don't charge a fee) or at the gas pump. Using them at Amazon might have you upgrade your purchase or add some extra items. Using them at restaurants might encourage you to order an extra drink or two. Using them at the coffee shop might have you super size your coffee or add a pastry. Of course this extra spending could lead you into a debt cycle exacerbating the financial hit many struggle with. Please tread carefully if you decide to use them. |
Doctor's office won't submit claim to insurance after 5 months | I'm a business law student, so medical stuff isn't really my specialty. I'll share with you what I know though. First, as to the legality, I'm not aware of anything making it illegal for them to consider their business with you concluded. Absent any contract between you and the doctor, it seems to me that you agreed to pay them in cash. If I was the business, I'd assume our business had been concluded as well. As for any contracts between the insurance company and the doctor's office, as far as I know, that's between them. That wouldn't give you standing to sue the doctor. I'm unfamiliar with a patient submitting insurance claims, but if that's something you are allowed to do with your insurance company and all you need is more information, submit a request for your medical records to the doctor. Under United States law, your medical records are yours. You have a right to receive a copy of them. Keep in mind though that the doctor's office may charge you a small copying fee to cover expenses they incur while making a copy for you. As far as complaining, I would suggest your local Better Business Bureau. Each state generally has a medical board which oversees doctors. You might lodge a complaint with them as well. I hope this helps. Keep in mind that I'm not an attorney. This is not legal advice. This is only what I personally would do if I were in your situation. You can and should consult an attorney who is licensed to practice law in your particular jurisdiction. |
Finance algebra | With the following variables the periodic (annual) repayment is given by The recurrence equation for the balance b at the end of month x is derived from b[x + 1] = b[x] (1 + r) - d where b[0] = s giving The interest portion of the final payment is b[n - 1] r and the total principal repaid at the end of period n - 1 is s - b[n - 1] Solving simultaneously n = 8.9998 and s = 7240 The principal repaid at the end of the first period is s - b[1] or d - r s = 479.74 |
What is the best source of funding to pay off debt? | Thirty thousand in credit card debt is a "big elephant to eat" so to speak. But you do it by taking a bite at a time. One positive is that you do not want to borrow from your 401K. Doing so is a horrible idea. The first question you have to ask yourself and understand, is how you accumulated 30K in credit card debt in the first place? Most people get there by running up a relatively small amount, say 5K, and playing the zero transfer game a few times. Then add in a late payment, and a negative event or two (like the car breaking down or a trip to the emergency room) and poof a large amount of credit card debt. Obviously, I have no idea if this is how you got there, and providing some insight might help. Also, your age, approximate income, and other debts might also help provide more insight. I assume you are still working and under age 59.5 as you are talking about borrowing from your 401K. Where I come from is that my wife (then girlfriend) found ourselves under stifling debt a few years ago. When we married, we became very intentional and focused on ridding ourselves of debt and now sit completely debt free (including the house). During our debt payoff time, we lived off of less than 25% of our salary. We both took extra jobs when we were able. Intensity was our key. If I were you, I would not refi the house. There are costs associated with this and why would you put more debt on your home? I might cash out the annuity provided that there are no negative tax consequences and depending on how much you can get for it. Numbers are the key here. However, I feel like doing so will not retire this debt. The first thing you need to do is get on a written budget. A game plan for spending and stick to it. If you are married, your spouse has to be part of this process. The budget has to be fresh each month, and each month you and your wife should meet. To deviate from the budget, you will also need to have a meeting. My wife and I still do this despite being debt free and enjoying very healthy incomes. Secondly, it is about cutting expenses. Cable: off. No eating out or vacations. Cut back on cell phone plans, only basic clothing. Gift giving is of the $5 variety and only for those very close to you. Forget lattes, etc. Depending on your income I would cut 401K contributions to zero or only up to the company match (if your household income is above 150K/year). Third, it is about earning more. Ebay, deliver pizzas, cut grass, overtime, whatever. All extra dollars go to credit card balance reduction. At a minimum, you should find an extra $1000/month; however, I would shoot for 2K. If you can find 2K, you will be done with this in 13 months. I know the math doesn't work out for that, but once you get momentum, you find more. How good will it feel to be out from under this oppression next March? I know you can do this without cashing in the annuity or refinancing. Do you believe it? |
What is a maximum amount that I can wire transfer out of US? | Chase has a limit of $500,000 per day. A banker should be able to help you determine any immediate tax liabilities that will arise as a direct result of the transaction. You may wish to consult with a tax professional about any indirect implications the transfer may have. This transaction will be reported to the government but assuming that you are not involved in any illegitimate activities the likelihood of the US government taking any action on the notice is incredibly low. I have heard of 7 and 14 day holds being placed on out of character transfers but if you are buying property you should work with your bank to help facilitate. Bankers understand the business and can help you avoid any appearances of impropriety that the government flags. Should your account be flagged, I would retain a lawyer immediately. If you feel you have a reason to be concerned, then I would contact a lawyer in the US and Thailand before initiating the transfer. As they say an ounce of prevention is worth a pound of cure. |
What is the best way to save money from inflation and currency devaluation? | Devaluation is a relative term, so if you want to protect yourself against devaluation of your currency against dollars - just buy dollars. Inflation is something you cannot protect yourself against because it is something that describes the purchasing power of the money. You will still need to purchase, and usually with money. A side effect of inflation is usually devaluation against other currencies. So one of the ways to deal with inflation is not to keep the money in your currency over time, and only convert from a more stable currency when you need to make purchases. Another way is to invest in something tangible that can easily be sold (for example, jewelery and precious metals, but it has other risks). Re whats legal and illegal in your country - we don't really know because you didn't tell what country that is to begin with, but the usual channels like travelers' checks or bank transfer should work. Carrying large amounts of cash are usually either illegal or strictly regulated. |
Please explain the relationship between dividend amount, stock price, and option value? | 1) What's the point of paying a dividend if the stock price automatically decreases? Don't the shareholders just break even? When the company earns cash beyond what is needed for expenses, the value of the firm increases. As a shareholder, you own a piece of that increased value as soon as the company earns it. When the dividend is paid, the value of the firm decreases, but you break even on the dividend transaction. The benefit to you in holding the company's shares is the continually increasing value, whether paid out to you, or retained. Be careful not to confuse the value of the firm with the stock price. The stock price is ever-changing, in the short-term driven mostly by investor emotion. Over the long term, by far the largest effect on stock price is earnings. Take an extreme, and simplistic example. The company never grows or shrinks, earnings are always the same, there is no inflation :) , and they pay everything out in dividends. By the reasoning above, the firm value never changes, so over the long-term the stock price will never change, but you still get your quarterly dividends. |
What is the difference between a scrip dividend and a stock split? | Most corporations have a limit on the number of shares that they can issue, which is written into their corporate charter. They usually sell a number that is fewer than the maximum authorized number so that they have a reserve for secondary offerings, employee incentives, etc. In a scrip dividend, the company is distributing authorized shares that were not previously issued. This reduces the number of shares that it has to sell in the future to raise capital, so it reduces the assets of the company. In a split, every share (including the authorized shares that haven't been distributed) are divided. This results in more total shares (which then trade at a price that's roughly proportional to the split), but it does not reduce the assets of the company. |
Mortgage interest income tax deduction during year with a principal residence change | Very simple. If it wasn't rented, it's deductible as a schedule A home mortgage interest. If it was rented, you go into Schedule E land, still a deduction along with any/every expense incurred. |
Why and why would/wouldn't a company split their stock? | A reason not to split your stock is that the value of the company might fall back again, and if its stock price falls below $1 it will be delisted from the NYSE. So if the value of your company grows tenfold so the shares go from $5 to $50, you do a ten-for-one split, and then its value shrinks back to where it started, you're off the stock exchange. |
How do I know when I am financially stable/ready to move out on my own? | One big deciding factor will be what standard of living you want to maintain once you move out. Your parents have had years to get raises, accumulate savings, and establish the standard of living you are used to. Regardless of how much you save up now, you'll still have to be living at or below your means once you move out, that means that all the expenses you currently have covered by your parents have to come out of something you are currently spending elsewhere. If they can come out of whatever extra money you have now, then great. If not, you'll have to re-align your budget to align with your income. In my experience, seeing my friends and I move out, this was the biggest issue. Those who settled into a new standard of living until their wages went up did fine (even the few who moved out at 18 with no savings). Those who couldn't drop the extra expenses, and wanted to continue living at their parent's standard of living either never left home, ended up moving back, or ended up massively in debt. We're only just hitting 30 now, so it didn't take long for things to settle out. |
What's the difference between TaxAct and TurboTax? | I typed my information into both last year, and while they were not exactly the same, they were within $10 of each other. For my simple 2009 taxes they were not different in any meaningful way. |
Would you withdraw your money from your bank if you thought it was going under? | I have two different thoughts on this subject. |
What to ask Warren Buffet at the Berkshire Hathaway shareholder meeting? | I would be curious how he balanced having two female life partners at once. Not sure I would ask that at the shareholder meeting though ;) |
Details on opening a small corporation in ontario | The Canada Revenue Agency does indeed put out just the guide you want. It's at http://www.cra-arc.gc.ca/E/pub/tg/rc4070/rc4070-e.html - you should always take a good look at URLs to make sure they're really from the government and not from some for-profit firm that will charge you to fill out forms for free services. It covers ways to structure your business (probably a sole proprietor in your case), collecting and submitting GST or HST, sending in payroll remittances (if you pay yourself a T4 salary), and income tax including what you can deduct. It's a great place to start and you can use it as a source of keywords if you want to search for more details. |
Ray Dalio - All Weather Portfolio | Making these difficult portfolio decisions for you is the point of Target-Date Retirement Funds. You pick a date at which you're going to start needing to withdraw the money, and the company managing the fund slowly turns down the aggressiveness of the fund as the target date approaches. Typically you would pick the target date to be around, say, your 65th birthday. Many mutual fund companies offer a variety of funds to suit your needs. Your desire to never "have to recover" indicates that you have not yet done quite enough reading on the subject of investing. (Or possibly that your sources have been misleading you.) A basic understanding of investing includes the knowledge that markets go up and down, and that no portfolio will always go up. Some "recovery" will always be necessary; having a less aggressive portfolio will never shield you completely from losing money, it just makes loss less likely. The important thing is to only invest money that you can afford to lose in the short-term (with the understanding that you'll make it back in the long term). Money that you'll need in the short-term should be kept in the absolute safest investment vehicles, such as a savings account, a money market account, short-term certificates of deposit, or short-term US government bonds. |
Why are Rausch Coleman houses so cheap? Is it because they don't have gas? | I am a realtor and work for Rausch Coleman and can answer this question for you. We are a production builder. We build in communities with typically 5-9 Floorplan options per community and a select set of option and finishes that we offer. Because of the set options, we buy the materials in bulk and are able to receive cost savings on that from our suppliers which we can pass on to you. We use the same trades consistently through out our division which means they have our plans and process down to a science. They know the product, which means less likely to make mistakes and less likely to miss things. Our heart is affordability in that we understand that not everyone can afford granite, gas, hardwood floors, etc. so we allow you to be able to customize your monthly payment, and that you are not financing something you may not want or need or to allow you to get in to a home you may not be able to afford otherwise. We work a lot with the first time buyer and we want to provide the best quality for the best value. We start our homes at a base model and allow you to customize the way you want (adding granite, gas, hardwoods, fireplace, etc.) and in doing that we allow you to choose whether you want to pay $90 or $101 per square foot or whatever that may be. I can tell you in Northwest Arkansas we are the best value and the quality shows. I pull comps consistently and in fact have another builder in the same community as I sell in. Our homes in this community for single stories is about $88-$95 and two story homes are on average $78-$86. Two stories are more cost efficient in that the square footage goes up and not out so there is less concrete, which is one of the most expensive parts of the homebuilding process. This other builder consistently sells their homes for $101-$105 per square foot, and uses the exact same materials we do. The difference? Yes granite and hardwoods and gas and custom cabinets come standard, you have no choice in that. Would you rather have the option for a lower priced home if you didn't want granite? Or if you'd rather have carpet? We build in 5 different markets over 4 states and are in our 61st year of business. I'd love to meet with you and can walk you through a community and show you our homes (at all stages of construction) where you can see the product and quality in our homes. I am in our Dixieland Crossing community here in Northwest Arkansas. You can check out our website for other information at www.rauschcoleman.com |
Do stock option prices predicate the underlying stock's movement? | Options reflect expectations about the underlying asset, and options are commonly priced using the Black-Scholes model: N(d1) and N(d2) are probability functions, S is the spot (current) price of the asset, K is the strike price, r is the risk free rate, and T-t represents time to maturity. Without getting into the mathematics, it suffices to say that higher volatility or expectation of volatility increases the perceived riskiness of the asset, so call options are priced lower and put options are priced higher. Think about it intuitively. If the stock is more likely to go downwards, then there's an increased chance that the call option expires worthless, so call options must be priced lower to accommodate the relative change in expected value of the option. Puts are priced similarly, but they move inversely with respect to call option prices due to Put-Call parity. So if call option prices are falling, then put option prices are rising (Note, however, that call prices falling does not cause put prices to rise. The inverse relationship exists because of changes in the underlying factors and how pricing works.) So the option action signifies that the market believes the stock is headed lower (in the given time frame). That does not mean it will go lower, and option traders assume risk whenever they take a particular position. Bottom line: gotta do your own homework! Best of luck. |
Why do some symbols not have an Options chain for specific expiration dates? | The answer is actually very simple: the cost of data. Seriously. Call the CBOE tomorrow and ask yourself. They have two big programs: 1) the penny pilot program, where options trade at penny increments instead of 5 cent increments. This is only extended to a select few symbols because of the amount of data this can generate is too much for the data vendors. Data vendors store and sell historical data. The exchanges themselves often have a big data vending business too. 2) the weekly options program, where only select symbols get these chains because of the amount of data they will generate. Liquidity and demand are factors in determining if the CBOE will consider enabling those series on new issues. (although they have to give the list of which symbols are on these programs to the SEC) |
Who could afford a higher annual deductible who couldn't afford a higher monthly payment? | I edited in the total annual out of pocket for each level to help illustrate what's going on. Your question makes sense, of course, but it's less a matter of afford vs an attempt to save. The way these plans work is to allow some choice based on your past experience. I can afford any option, but knowing the number of visits we have had in the past, the lowest cost option has the highest premium. A young couple who hardly sees a doctor may choose the highest deductible, risking the potential $3434 extra they may pay in a bad year for the savings of $1016. Personally, I'd not be able to guess accurately enough to benefit from the middle choices, and can see the two extremes being picked most often. |
What do these numbers mean? (futures) | No, it means that is only the notional value of that underlying asset of that contract, generally. The contract specification itself is listed on the exchange's websites, and there are really no assumptions you can make about a particular contract. Where S&P futures have one set of specifications, such as what it actually represents, how many each contract holds, how to price profits and losses... a different contract, such as FTSE 100 stock futures have a completely different set of specifications. Anyway in this one example the s&p 500 futures contract has an "initial margin" of $19,250, meaning that is how much it would cost you to establish that contract. Futures generally require delivery of 1,000 units of the underlying asset. So you would take the underlying asset's price and multiple it by 1,000. (what price you use is also mentioned in the contract specification), The S&P 500 index is $1588 you mentioned, so on Jun2013 you would have to delivery $1588 x 1000, or $1,588,000. GREAT NEWS, you only have to put up 1.2% in principal to control a 1.5 million dollar asset! Although, if even that amount is too great, you can look at the E-Mini S&P futures, which require about 1/10th the capital and delivery. This answer required that a lot of different subjects be mentioned, so feel free to ask a new question about the more specific topics. |
Plan/education for someone desiring to achieve financial independence primarily through investing? | Stay in school, learn everything you can, and spend as little money as possible. And realize that the chances of you dropping out and becoming a millionaire are much lower than the chances of you staying in school and becoming a millionaire. You're unlikely to be a good investor if you make bets with negative expected payoffs. |
UK Ltd taxation on stocks/bonds income and real estate rent income | For stocks, bonds, ETF funds and so on - Taxed only on realised gain and losses are deductible from the gain and not from company's income. Corporate tax is calculated only after all expenses have been deducted. Not the other way around. Real estate expenses can be deducted because of repairs and maintenance. In general all expenses related to the operation of the business can be deducted. But you cannot use expenses as willy nilly, as you assume. You cannot deduct your subscription to Playboy as an expense. Doing it is illegal and if caught, the tours to church will increase exponentially. VAT is only paid if you claim VAT on your invoices. Your situation seems quite complicated. I would suggest, get an accountant pronto. There are nuances in your situation, which an accountant only can understand and help. |
Should I finance rental property or own outright? | To answer some parts of the question which are answerable as-is: Yes, mortgage interest is deductible. So is depreciation. See this question and others. It would be a good idea to put some money away for tax season, just as you should save some money to cover unexpected property expenses. But as @JoeTaxpayer says, this is a good problem to have, assuming you own the property, it's low-maintenance, your tenant is good, and your rent is at market levels. |
Is it wise to invest small amounts of money short-term? | Even straight index funds grow at about 6-7%. on average, or over long periods of time. In short time periods (quarters, years), they can fluctuate anywhere from -10% to +20%. Would you be happy if your bank account lost 10% of its value the week before you had to pay the bill for the repairs? Is it appropriate to invest small amounts for short periods of time? In general, no. Most investments are designed for long term appreciation. Even sophisticated financial companies can't do any better than 1 or 2% (annualized) on short-term cash reserves. Where you can make a huge difference is on the cost side. Bargain with suppliers, or wait for sales on retail items. Both will occasionally forego their margin on certain items in order to try to secure future business, which can make a difference of 20% or more in the cost of repairs. |
Is it possible to sell a stock at a higher value than the market price? | The core issue is to understand what 'selling a share' means. There is no special person or company that takes the share from you; you are selling on the open market. So your question is effectively 'can I find a guy on the street that buys a 10$-bill for 11$ ?' - Well, maybe someone is dumb enough, but chances are slim. |
How to protect myself against unauthorized recurring CC charges? | The bank SHOULD be able to issue you a new card without letting vendors roll over the recurring payments. In fact, I've never had a bank move recurring payments to a new card automatically, or even upon request; they've always told me to contact the vendor and give them my new card number. So go back to the bank, tell them specifically that you have a security issue and you want the new card issued WITHOUT carrying over any recurring charges, and see if they can do it properly. If not: 1) Issue a "charge back" every time a bogus charge comes in. This costs the vendor money, and should convince them to stop trying to access your card. It's a hassle because you have to keep contacting the bank about the bad charges, but it won't cost you more than time and a phone call or letter. (The bank can tell you what their preferred process is for this.) 2) Consider moving to a bank that isn't stupidly over-helpful. |
Can I place a stock limit order to buy above the current price? Can I place a stock limit order to sell below the current price? | You can place the orders like you suggested. This would be useful in a market that is moving quickly where you want to be reasonably sure of execution but don't want the full exposure of a market order. This won't jump your spot in the queue though in the sense that you won't get ahead of other orders that are "ready" for execution just because you have crossed the spread aggressively. |
Does bull/bear market actually make a difference? | To short: Of course, you may always buy some index correlated ETF that eliminates the above. They use stock futures on the index, and you simply buy the "shorting ETF" in your non-margin account. However, they are surprisingly high cost, and despite the intended correlation, have significant drag. It's a much safer way to short the market (you have great choice in which market ETF) and eliminates the single stock risk. |
My employer is switching 401k plan providers. How might this work in practice? | A few years ago our company switched from Fidelity to a different 401k provider. During the blackout transition, nearly every employee lost a considerable amount of money. The "Trustee" advised us that during the blackout he had a right to invest the funds and that the investments lost money. |
To pay off a student loan, should I save up a lump sum payoff payment or pay extra each month? | As a new graduate, aside from the fact that you seem to have the extra $193/mo to pay more towards your loan, we don't know anything else. I wrote a lengthy article on this in response to a friend who had a loan, but was also pondering a home purchase in the future. Student Loans and Your First Mortgage discusses the math behind one's ability to put a downpayment on a house vs having that monthly cash to pay towards the mortgage. In your case, the question is whether, in 5 years, the $8500 would be best spent as a home down payment or to pay off the 6.8% loan. If you specifically had plans toward home ownership, the timing of that plan would affect my answer here, as I discuss in the article. The right answer to your question can only come by knowing far more of your personal situation. Meanwhile, the plan comes at a cost. Your plan will get rid of the loan in about 5 years, but if you simply double up the payments, advising the servicing company to apply the extra to principal, it would drop to just a couple month over over 4. As you read more about personal finance, you'll find a lot of different views. Some people are fixated on having zero debt, others will focus on liquidity. In the end, you need to understand each approach and decide what's right for you. |
If there's no volume discount, does buying in bulk still make sense? | Instead of buying in bulk, I invest the money in equity mutual funds, for an expected return of 12%, which is more than inflation. So, I make more returns. But at the cost of a slight risk, which I'm comfortable with. |
Market Close Order | During the day, market and limit orders are submitted at any time by market participants and there is a bid and an ask that move around over time. Trades occur whenever a market order is submitted or a limit order is submitted that at a price that matches or exceeds an existing limit order. If you submit a market order, it may consume all best-price limit orders and you can get multiple prices, changing the bid or ask at the same time. All that stuff happens during the trading day only. What happens at the end of the day is different. A bunch of orders that were submitted during the day but marked as "on close" are aggregated with any outstanding limit orders to create a single closing price according to the algorithm established by the exchange. Each exchange may handle the details of this closing event differently. For example, the Nasdaq's closing cross or the NYSE's closing auction. The close is the most liquid time of the day, so investors who are trading large amounts and not interested in intraday swings will often submit a market-on-close or limit-on-close order. This minimizes their chance of affecting the price or crossing a big spread. It's actually most relevant for smaller stocks, which may have too little volume during the day to make big trades, but have plenty at the close. In short, the volume you see is due to these on-close orders. The spike in volume most likely has no special information about what will happen overnight or the next day. It's probably just a normal part of the market for illiquid stocks. |
What is the purpose of property tax? | Property taxes, where they exist, are generally levied by cities, counties and other local-level administrative bodies like MUDs, and are the primary source of revenue at these levels of government. These taxes pay the lion's share of the expenses for basic services provided by a city or county: There are federal dollars, other revenue sources (State lottery revenues often go toward public schools for instance), and "usage fees" (vehicle registration, utility bills, toll roads) at play as well, but a lot of that money covers larger-scale infrastructure development (freeways/interstates) and specialized "earmarks" (political backscratching involving this bridge or that dam in a Congresscritter's home district, a few national initiatives from the President's budget like first-responder technology upgrades for improved disaster/terrorism readiness). Property taxes are the main funding for the day-to-day government operations at the most visible level to the average resident. The theory behind using a property tax instead of some other form of taxation (like income) is that the value of the property and the quality of services provided to the resident(s) of that property are interrelated; the property is valuable in part because the infrastructure is well-maintained and nearby schools/hospitals are good, and by the same token, affluent residents expect high-quality services. Property taxes are also easier to levy, because most of the work can be done by the tax assessor; monitor recent sale prices, do drive-bys through neighborhoods, come up with a number and send the resident the bill. That's opposed to sales taxes which businesses operating in the jurisdiction have to calculate, collect and turn over, or income taxes which require residents to fill out paperwork to calculate how much they owe. The justification is eminent domain. It's very simple; when you buy land in the U.S. and a State thereof, you are still a citizen and/or resident of that State and the U.S., and subject to their laws. You're not creating your own country when you buy a house. As such, the government charges you for the facilities and services they provide in your area and your State, which are then your privilege to use. Obviously roads aren't free; a one-mile stretch behind my house is costing the county $15 million to expand it from 2-lane to 4-lane. Here's the kicker; you've already been paying these taxes. You think your landlord's just going to take the property taxes for the whole apartment complex on the chin? He's out to make money, and doing that requires charging a sufficient amount to cover costs, including taxes he incurs. You just never see "allocated property taxes" as an item on your rent statement, just like you don't see "allocated landowner mortgage", "allocated facilities maintenance", "allocated gross margin" etc. You know you're getting shafted, paying someone else's financing with a little extra on the side to boot. That's why you want a house. Unfortunately, not being able to pay these taxes is a grim reality for some people, old and young, and government generally doesn't go easy on delinquent homeowners. After medical bills and mortgage delinquency, property tax delinquency is the number three reason for bankruptcy, and only a mortgage or property tax delinquency can cause your home to be seized and sold. Well that and using it for criminal enterprise, but unless you're running a meth lab in your half-million-dollar home or financing it with coke money I wouldn't worry about that score. Retirement planners figure property taxes into cost of living, and they do often advise a downgrade from the 2-story house you raised your children in to something smaller (for many reasons, including lower taxes). There really isn't a way to structure a completely "pay-as-you-go" metropolitan area, and you wouldn't want to live in it if there were. Imagine every strip of asphalt in the county being a toll road where your transponder (TollTag, EZ-Pass, etc) or license plate was scanned and you were billed at each intersection. In addition to being a huge invasion of privacy, the cost to maintain this network (and your cost to use it) would skyrocket. Imagine 911 asking for a credit card number before dispatching police, fire or EMS (Ambulance services already do bill on a per-event basis, but you'd be surprised how few people pay and how little power a county EMS has to enforce collection; without a property tax and Medicaid to cover the difference, EMS service could not be provided in most counties). |
Does the low CAD positively or negatively impact Canadian Investors? | If you buy US stocks when the CAD is high and sell them when the CAD is lower you will make a currency gain on top of any profit or loss from the stock investments. If you buy US stocks when the CAD is low and sell when the CAD is higher any profits from gains from the stock investment will be reduced and any losses will be increased. If you are just starting out you may be better off investing in your own country to avoid any currency risk adding to your stock market risk. |
Does the profit of a company directly affect its stock or indirectly by causing people to buy or sell? | people implicity agree to sell stocks when a company does bad But, remember, when you sell the stock of a company that, in your estimation, 'did bad', someone else had to buy; otherwise, there is no sale. The someone else who bought your shares evidently disagrees with your assessment. Did you sell because the company didn't earn a profit at all? Did it not earn a profit because it's in a dead-end business that is slowly but inevitably declining to zero? Something like Sears Holdings? Or did it not make a profit because it is in an emerging market that will possibly someday become hugely profitable? Something like Tesla, Inc.? Did you sell because the company made a profit, but it was lower than expected? Did they make a lower-than-expected profit because of lower sales? Why were the sales lower? Is the industry declining? Was the snow too heavy to send the construction crews out? Did the company make a big investment to build a new plant that will, in a few years, yield even higher sales and profits? What are the profits year-over-year? Increasing? Declining? Usually, investors are willing to pay a premium, that is more than expected, for a stock in a company with robust growth. As you can see, the mere fact that a company reported a profit is only one of many factors that determine the price of the shares in the market. |
What happens to an options contract during an all stock acquisition? | Depends on your contract, cash or shares delivered? If shares, then you get 5 BIG shares. Theres no longer any options. If you sell instantly, theoretically you will net the $10 difference + profit above strike. If cash, same thing just that you get cash $50 less strike. Applies to cash and stock deals Options are binary, never pro-rated. if converted, basically you end up with BIG shares. |
Strategies for putting away money for a child's future (college, etc.)? | Saving for school is [fundamentally] no different than saving for any other major purchase: in addition to some of the great answers already provided, here are a couple other thoughts: Just to have the [simplified] numbers handy: If you can increase that to $2000/yr, after 18 years: One final thought - I would personally avoid the 529 plans because if your child decides to not go to school (eg goes in the Coast Guard, decides to be a farmer, enters the Peace Corps, etc), you're penalized on withdrawal, whereas with any other savings/investment methodology, you won't have those penalties. |
Split buying a house 3 ways. How do I approach this? | I would second the advice to not do this. Real estate ownership is complex to begin with, involving a constant stream of maintenance, financing, and other decisions. It is difficult enough to do for a single individual or a family as a unit (a couple), but at least spouses are forced to compromise. Friends are not, and you can end up with long-running conflicts and impasses. Financial transactions of any kind impose tensions on relationships, and friendships are no exception. If you want your friendship to survivie, do not sacrifice it to the financial arrangement which seems like a good idea at the moment. My advice would be to steer clear, no matter how attractive on the surface the deal might look. Focus on your own individual finances and use discipline and patience to save the amount needed for acquiring a separate investment property. But it will be 100% yours, and will save tons of headache. Since you are still considering this deal, it's a great time to politely change your mind and walk away - believe me, a few minutes of inconvenience will save you years of frustration. Good luck! |
Is there any way to buy a new car directly from Toyota without going through a dealership? | I feel your pain. It probably depends on your state, but two things we've tried with some benefit: |
Debt collector has wrong person and is contacting my employer | I can ONLY WISH this would happen to me. Get every scrap of information that you can. DOCUMENT DOCUMENT DOCUMENT..and then get a nice sleazy lawyer to sue the collector AND your employer if they leaked anything... Plain and simple, it's illegal and there are very nice protections in place for such. |
What are the advantages of a Swiss bank account? | This doesn't answer your question, but as an aside, it's important to understand that your second and third bullet points are completely incorrect; while it used to be true that Swiss bank accounts often came with "guarantees" of neutrality and privacy, in recent years even the Swiss banks have been caving to political pressure from many sides (especially US/Obama), with regards to the most extreme cases of criminals. That is to say, if you're a terrorist or a child molester or in possession of Nazi warcrime assets, Swiss banks won't provide the protection you're interested in. You might say "But I'm not a terrorist or a pervert or profiteering of war crimes!" but if you're trying so hard to hide your personal assets, it's worth wondering how much longer until Swiss banks make further concessions to start providing information on PEOPLE_DOING_WHAT_YOU_ARE_DOING. Not to discourage you, this is just food for thought. The "bulletproof" protection these accounts used to provide has been compromised. I work with online advertising companies, and a number of people I know in the industry get sued on a regular basis for copyright or trademark infringement or spamming; most of these people still trust Swiss bank accounts, because it's still the best protection available for their assets, and because Swiss banks haven't given up details on someone for spamming... yet. |
How big of a mortgage can I realistically afford? | I bought a house 6 months ago for $240,000 on an $80k salary am getting by just fine and am able to save money (and I live on Long Island, an extremely expensive area to live). I would look at finding a few more interest rate quotes; for instance, Wells Fargo is offering 4.25% right now for FHA (first time home buyers) loan (which only require 3.5% down). A lower interest rate will lower your monthly payment. Make the banks compete with one another - this little bit of leg-work will save you thousands upon thousands of dollars in the long run). Also, try to negotiate to NOT paying a point down on the mortgage - most of the time they are bull, especially in this economy (banks are desperate for new loans). However, as others have said, do not assume or count on rent coming in to be able to afford your mortgage (unless you are married). What if your friend moves out and you cannot find another tenant? However, I strongly recommend you talk to a financial adviser and your bank mortgage loan officer to work out the numbers - you will be surprised what you can afford when you factor in your income tax and mortgage interest write-offs. |
Joint Account for Common Earnings | Short Answer: Go to the bank and ask them about your options for opening a business account. Talk to an attorney about the paperwork and company structure and taxes. Long Answer: You and your buddies jointly own an unincorporated business. This is called a partnership. Yes, there is paperwork involved in doing it properly and the fact that you guys are minors might complicate that paperwork a little bit. In terms of what type of account to open: A business account! Running a business through a personal account (joint or otherwise) is a sure way to get that account shut down. Your bank will want to know the structure of the business, and will require documentation to support that. For a partnership, they will probably want a copy of the partnership agreement. For an LLC, they'll probably want a copy of the filing with Ohio Secretary of State as well as the operating agreement etc. That said, pop into a local bank and ask a business banker directly what you should do. They deal with new businesses all the time, and would probably be best qualified to help you figure out the bank account aspect of it. Regarding business structure... this really impacts a lot more than just the type of bank account to open and how you file your taxes. It is something you guys should really discuss with an attorney. What happens if down the road one of you quits? What happens if you want to bring in a new partner later? What if there is a disagreement about something? These are all things that the attorney can help you address ahead of time - which is a heck of a lot easier (and cheaper) than trying to figure it out later. You're brining in enough that you should certainly be able to buy a couple hours of a lawyer's time. Getting the formation stuff right could save all of you a lot of money and heartache later. |
How do dividend reinvestment purchases work? | Many brokers administer their own dividend reinvestment plans. In this case, on dividend payment date, they automatically buy from the market on behalf of their reinvestment customers, and they administer all fractional shares across all customers. All of your shares are in the broker's street name anyway, the fractional share is simply in their account system. The process is well documented for several common online brokers; so any specific questions you may have about differences in policies or implementation should be directed to your broker: https://us.etrade.com/e/t/estation/help?id=1301060000 https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA208.pdf |
Is this the right formula to use implied volatility to gauge probability of a stock being within a certain range? | To get the probability of hitting a target price you need a little more math and an assumption about the expected return of your stock. First let's examine the parts of this expression. IV is the implied volatility of the option. That means it's the volatility of the underlying that is associated with the observed option price. As a practical matter, volatility is the standard deviation of returns, expressed in annualized terms. So if the monthly standard deviation is Y, then Y*SQRT(12) is the volatility. From the above you can see that IV*SQRT(DaysToExpire/356) de-annualizes the volatility to get back to a standard deviation. So you get an estimate of the expected standard deviation of the return between now and expiration. If you multiply this by the stock price, then you get what you have called X, which is the standard deviation of the dollars gained or lost between now and expiration. Denote the price change by A (so that the standard deviation of A is X). Note that we seek the expression for the probability of hitting a target level, Q, so mathematically we want 1 - Pr( A < Q - StockPrice) We do 1 minus the probability of being below this threshold because cumulative distribution functions always find the probability of being BELOW a threshold, not above. If you are using excel and assuming a mean of zero for returns, the probability of hitting or exceeding Q at expiration, then, is That's your answer for the probability of exceeding Q. Accuracy is in the eye of the beholder. You'd have to specify a criterion by which to judge it to know the answer. I'm sure more sophisticated methods exist that are more unbiased and have less error, but I think it's a fine first approximation. |
What is the median retirement savings in the United States today? | Social security and pensions make up a big part of it. You may want to look at the source of the data. If a person, has 5K at Vanguard, 5K at Fidelity and 100K at the bank; Fidelity will report on that person as having only 5K. Vanguard will do the same. The opening pitch of a life insurance salesman sometimes includes the "100 man story". Before retirement age: 26% of people will die, 54% will be broke, 5% will work, 4% will be secure, and 1% will be wealthy. Then they sell you life insurance which is a horrible product for retirement savings. If you further dig into this subject you will find a great disparity between the mean and median retirement savings. That is because many Americans have none, and those that do skew the average upward and have no where near mean or average. Its like this with other things in personal finance. For example those with actual credit card debt have much higher than the average. As those with none, or even no credit cards skew the average downward. In my opinion it is like this because of behavior. If one saved half of the average car payment over their working life in a growth stock mutual fund, they would make it to that 4% category. If they also had a good salary, kept debt to a minimum, and saved a healthy amount they would make it to that 1% category. It was a daily choice that was made many years prior to retirement. |
Is there an advantage to a traditional but non-deductable IRA over a taxable account? [duplicate] | This is ideal placement for your allocation to income investments or those with nonqualified dividends: bonds, REITS, MLPS, other partnerships, and so forth. These are all taxed at income rate, generally throw off more income than capital gains, so you get the deferment without losing the cap gains rate. |
Why do governments borrow money instead of printing it? | “Why do governments borrow money instead of printing it? (When printing money, one doesn't need to pay interest).” Good question. Numerous leading economists, including a couple of economics Nobel Laureates have asked the same question and concluded that borrowing can be dispensed with. First, Milton Freidman set out a monetary system in a paper in the American Economic Review which involved no government borrowing, and govt just printed money (in a responsible fashion of course) as and when needed. See: http://www.jstor.org/pss/1810624 A second Nobel Laureate with similar views was William Vickrey. A third economist with similar views (of Keynes’ era) was Abba Lerner. Keynes said of Lerner, “Lerner's argument is impeccable, but heaven help anyone who tries to put it across to the plain man at this stage of the evolution of our ideas”. |
How do I know if refinance is beneficial enough to me? | It would help if we had numbers to walk you through the analysis. Current balance, rate, remaining term, and the new mortgage details. To echo and elaborate on part of Ben's response, the most important thing is to not confuse cash flow with savings. If you have 15 years to go, and refinance to 30 years, at the rate rate, your payment drops by 1/3. Yet your rate is identical in this example. The correct method is to take the new rate, plug it into a mortgage calculator or spreadsheet using the remaining months on the current mortgage, and see the change in payment. This savings is what you should divide into closing costs to calculate the breakeven. It's up to you whether to adjust your payments to keep the term the same after you close. With respect to keshlam, rules of thumb often fail. There are mortgages that build the closing costs into the rate. Not the amount loaned, the rate. This means that as rates dropped, moving from 5.25% to 5% made sense even though with closing costs there were 4.5% mortgages out there. Because rates were still falling, and I finally moved to a 3.5% loan. At the time I was serial refinancing, the bank said I could return to them after a year if rates were still lower. In my opinion, we are at a bottom, and the biggest question you need to answer is whether you'll remain in the house past your own breakeven time. Last - with personal finance focusing on personal, the analysis shouldn't ignore the rest of your balance sheet. Say you are paying $1500/mo with 15 years to go. Your budget is tight enough that you've chosen not to deposit to your 401(k). (assuming you are in the US or country with pretax retirement account options) In this case, holding rates constant, a shift to 30 years frees up about $500/mo. In a matched 401(k), your $6000/yr is doubled to $12K/year. Of course, if the money would just go in the market unmatched, members here would correctly admonish me for suggesting a dangerous game, in effect borrowing via mortgage to invest in the market. The matched funds, however are tough to argue against. |
Is trading stocks easier than trading commodities? | One reason why you may have gotten this advice is that stocks have an expected real return over time, while commodities do not. Therefore, when gambling on individual stocks, odds are in your favor that they will ultimately go up over time. You may do better or worse than the market as a whole, but they will likely go up as the whole market, on average, rises over time. Commodities, on the other hand, have no expected real return. It is more zero-sum. In fact, after costs, a real loss should be expected on average, making gambling in here more risky. |
Is paying off your mortage a #1 personal finance priority? | You say A #1 priority, that implies multiple #1 priorities. Long term or medium term my goal is to pay off the mortgage. But short term paying off the mortgage isn't a concern. Some people are comfortable with a mortgage during retirement, others aren't. When I was younger the mortgage concern was not being overextended. I didn't want to be in a situation that dictated my financial decisions because I needed to make a big house payment. Being overextended is no longer a concern for me. Now I am looking in more detail about how my retirement will actually play out. How to handle my actual retirement income sources. For me, not having a mortgage simplifies my planning. |
What one bit of financial advice do you wish you could've given yourself five years ago? | Advice to myself: the benefits of being self-employed totally outweigh the risks! |
Margin when entered into a derivative contract | A derivative contract can be an option, and you can take a short (sell) position , much the same way you would in a stock. When BUYING options you risk only the money you put in. However when selling naked(you don't have the securities or cash to cover all potential losses) options, you are borrowing. Brokers force you to maintain a required amount of cash called, a maintenance requirement. When selling naked calls - theoretically you are able to lose an INFINITE amount of money, so in order to sell this type of options you have to maintain a certain level of cash in your account. If you fail to maintain this level you will enter into whats often referred to as a "margin-call". And yes they will call your phone and tell you :). Your broker has the right to liquidate your positions in order to meet requirements. PS: From experience my broker has never liquidated any of my holdings, but then again I've never been in a margin call for longer then a few days and never with a severe amount. The margin requirement for investors is regulated and brokers follow these regulations. |
Where can I open a Bank Account in Canadian dollars in the US? | Royal Bank in Canada can open an account for you in the US through RBC (the US affiliate to Royal Bank of Canada) I think it's called RBC Access USA. |
How are various types of income taxed differently in the USA? | Long-term capital gains, which is often the main element of investment income for investors who are not high-frequency day traders, are taxed at a single rate that is often substantially below the marginal rate they would otherwise be taxed at, particularly for wealthy individuals. There are a few rationales behind this treatment; the two most common are that the government wants to encourage long-term investments (as opposed to short-term speculation), and that capital gains are a kind of double taxation (from one point of view) as they are coming from income that has already been taxed once before (as wage or ordinary income). The latter in particular is highly controversial, but this is one of the more divisive political issues in the taxation front - one party would eliminate the tax entirely, the other would eliminate the difference. For most individuals, the majority of their long-term capital gains are taxed at 15% up to almost half of a million dollars total AGI, which is a fairly low rate - it's equivalent to the rate a taxpayer would pay on up to $37,000 in wage income (after deductions/exemptions/etc.). You can see from this table in Wikipedia that it is much preferred to pay long-term capital gains rates when possible - at every point it's at least 10% lower than the tax rate for ordinary income. Ordinary income includes wages and many other sources of income - basically, anything that is not long term capital gains. Wage income is taxed at this rate, and also subject to some non-income-tax taxes (FICA and Medicare in particular); other sources of ordinary income are not subject to those taxes (including IRA income). Short term capital gains are generally included in this bucket. Qualified Dividends are treated similarly to long-term capital gains (as they are of a similar nature), and taxed accordingly. The "Net Investment Tax" is basically applying the Medicare tax to investment income for higher-income taxpayers ($125k single, $250k joint). It's on top of capital gains rates for them. It came about through the Affordable Care Act, and is one of the first provisions likely to be repealed by the new Congress (as it can be repealed through the budgeting provision). It seems likely that 2017 taxes will not contain this provision. |
What is the most effective saving money method? | First pay yourself. When you get salary, send some parts of that (for example 10%) to your saving account. Step by step you'll save nice money ;) |
When should I walk away from my mortgage? | The value of debt is that it allows you to profit from the return of equity beyond the amount of actual net equity you own. Of course, this only works if the cost of borrowing is less than your return on equity. Market timing matters a great deal but isn't accounted for in this view. For my answer I would like to hand-wave away market timing considerations. One plausible justification is that you could default on your current home and then immediately go buy one of equal value. If you buy a new home of a lesser value (due to lack of funds) and then prices appreciate, then you missed some opportunity cost but probably not $100k worth of it. Moving on, here are some helpful assumptions I'll make. I'll ignore performance of your portfolio after retirement and only seek to optimize F, which will be your net worth upon retirement. In either case, your current net worth is earning the R2 rate. We can convert this for both your current net worth and future savings using conversion formulas. Present to future value F = P (1+R2)^x Annual to future value F = S ( (1+R2)^x - 1 ) / R2 Adding these together is sufficient to obtain F in the case that you have no borrowing power. The case where you do not default and maintain your credit score is different due to an initial $100k penalty and the amortized value of borrowing power. In a completely theoretical sense, you get an effective (R2-R1) yield on all borrowed money. The future value will be the following: F = A1 (1+R2-R1)^x One step is missing, however, which is to convert this value (the value of having a good credit score) into present value to compare to value of your defaulting. P of borrowing power = F / (1+R2)^x = A1 { (1+R2-R1)/(1+R2) }^x Now, let's put some specific values in. Say that you can borrow $300k with your good credit history and this applies for the next 25 years, after which you retire. The borrowing rate is 7% and the time-value of money to you is 10%. I would then calculate: P of borrowing power = $58 k < $100 k This indicates that it would be more economical to default. Of course, some people might point out that it will be removed from your record after 7 years. If you plug 7 years instead of 25 years into the equation, almost no assumptions about rates will lead to the option of keeping your house being preferable. So in a nutshell, the value of your credit is probably less than $100k in a purely mathematical sense. But there are other factors too. If you don't have that borrowing ability maybe you wouldn't be able to borrow money to start the business of your dreams. If you are a rock star entrepreneur, then time-value of money to you could be 1,000% yield, sure, then maybe you could make the above numbers work (to favor keeping the house). I've also neglected ethics. As other people point out, it would be like stealing from the bank. |
How to take advantage of record high household debt in Canada? | Some ideas: |
How did historical high tax rates work in practice? | I remember in the 19th and early 20th century was the problem of Trusts set up by the wealthy to avoid taxes (hence the term "Anti-Trust") That's not what antitrust means. The trusts in that case were monopolies that used their outsized influence to dominate customers and suppliers. They weren't for tax evasion purposes. Trusts were actually older than a permanent income tax. Antitrust law was passed around the same time as a permanent income tax becoming legal. Prior to that income taxes were temporary taxes imposed to pay for wars. The primary ways to evade taxes was to move expenses out of the personal and into businesses or charities. The business could pay for travel, hotels, meals, and expenses. Or a charity could pay for a trip as a promotion activity (the infamous safari to Africa scheme). Charities can pay salaries to employees, so someone could fund a charity (tax deductible) and then use that money to pay people rather than giving gifts. If you declare your house as a historical landmark, a charity could maintain it. Subscribe to magazines at the office and set them in the waiting room after you read them. Use loyalty program rewards from business expenses for personal things. Sign up for a benefit for all employees at a steep discount and pay everyone a little less as a result. Barter. You do something for someone else (e.g. give them a free car), and they return the favor. Call it marketing or promotion ("Trump is carried away from his eponymous Tower in a sparkling new Mercedes Benz limousine."). Another option is to move income and expenses to another tax jurisdiction that has even fewer laws about it. Where the United States increasingly cracked down on personal expenses masquerading as business expenses, many jurisdictions would be happy just to see the money flow through and sit in their banks briefly. Tax policy is different now than it was then. Many things that would have worked then wouldn't work now. The IRS is more aggressive about insisting that some payments be considered income even if the organization writes the check directly to someone else. It's unclear what would happen if United States tax rates went back to the level they had in the fifties or even the seventies. Would tax evasion become omnipresent again? Or would it stay closer to current levels. The rich actually pay a higher percentage of the overall income taxes now than they did in the forties and fifties. And the rich in the United States pay a higher percentage of the taxes paid than the rich in other countries with higher marginal rates. Some of this may be more rich people in the US than other countries, but tax policy is part of that too. High income taxes make it hard to become rich. |
501(3)(c) to donators for trophy party | The good news is that your parent organization is tax exempt and your local organization might be. The national organization even has guidelines and even more details. Regarding donations they have this to say: Please note: The law requires charities to furnish disclosure statements to donors for such quid pro quo donations in excess of $75.00. A quid pro quo contribution is a payment made partly as a contribution and partly for goods or services provided to the donor by the charity. An example of a quid pro quo contribution is when the donor gives a charity $100.00 in consideration for a concert ticket valued at $40.00. In this example, $60.00 would be deductible because the donor’s payment (quid pro quo contribution) exceeds $75.00. The disclosure statement must be furnished even though the deductible amount does not exceed $75.00. Regarding taxes: Leagues included under our group exemption number are responsible for their own tax filings with the I.R.S. Leagues must file Form 990 EZ with Schedule A if gross receipts are in excess of $50,000 but less than $200,000. Similar rules also apply to other youth organizations such as scouts, swim teams, or other youth sports. |
Should we prepay our private student loans, given our particular profile? | See my recent answer to a similar question on prepaying a mortgage versus investing in IRA. The issue here is similar: you want to compare the relative rates of funding your retirement account versus paying down your debt. If you can invest at a better rate than you are paying on your debt, with similar risk, then you should invest. Otherwise, pay down your debt. The big difference with your situation is that you have a variable rate loan, so there's a significant risk that the rate on it will go up. If I was in your shoes, I would do the following: But that's me. If you're more debt-averse, you may decide to prepay that fixed rate loan too. |
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