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Can written options be exercised against you prior to expiry when they become “in-the-money”?
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Yes, if it's an American style option. American style options may be exercised at any time prior to expiration (even if they're not in-the-money). Generally, you are required to deliver or accept delivery of the underlying by the beginning of the next trading day. If you are short, you may be chosen by the clearinghouse to fulfill the exercise (a process called "assignment"). Because the clearinghouse is the counter-party to every options trade, you can be assigned even if the specific person who purchased the option you wrote didn't exercise, but someone else who holds a long position did. Similarly, you might not be assigned if that person did exercise. The clearinghouse randomly chooses a brokerage to fulfill an assignment, and the brokerage will randomly choose an individual account. If you're going to be writing options, especially using spreads, you need to have a plan ahead of time on what to do if one of your legs gets assigned. This is more likely to happen just before a dividend payment, if the payment is more than the remaining time value.
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Which graduate student loans are preferable?
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All new loans must be originated from the direct loan program. In most cases, the Stafford loan is better, as the rate is lower (6.8% vs. 7.9% for the PLUS loan). There aren't many viable alternatives for most people. Private student loans exist, but carry significantly higher rates and worse payment terms. The exceptions are programs that exist for professions like medicine and dentistry. Credit cards usually carry higher rates and limited credit lines, but you have the option of negotiating the balance down or declaring bankruptcy to discharge the debt if you are unable to repay.
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How to make use of EUR/USD fluctuations in my specific case?
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This is called currency speculation, and it's one of the more risky forms of investing. Unless you have a crystal ball that tells you the Euro will move up (or down) relative to the Dollar, it's purely speculation, even if it seems like it's on an upswing. You have to remember that the people who are speculating (professionally) on currency are the reason that the amount changed, and it's because something caused them to believe the correct value is the current one - not another value in one direction or the other. This is not to say people don't make money on currency speculation; but unless you're a professional investor, who has a very good understanding of why currencies move one way or the other, or know someone who is (and gives free advice!), it's not a particularly good idea to engage in it - while stock trading is typically win-win, currency speculation is always zero-sum. That said, you could hedge your funds at this point (or any other) by keeping some money in both accounts - that is often safer than having all in one or the other, as you will tend to break even when one falls against the other, and not suffer significant losses if one or the other has a major downturn.
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Is the Yale/Swenson Asset Allocation Too Conservative for a 20 Something?
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You can look the Vanguard funds up on their website and view a risk factor provided by Vanguard on a scale of 1 to 5. Short term bond funds tend to get their lowest risk factor, long term bond funds and blended investments go up to about 3, some stock mutual funds are 4 and some are 5. Note that in 2008 Swenson himself had slightly different target percentages out here that break out the international stocks into emerging versus developed markets. So the average risk of this portfolio is 3.65 out of 5. My guess would be that a typical twenty-something who expects to retire no earlier than 60 could take more risk, but I don't know your personal goals or circumstances. If you are looking to maximize return for a level of risk, look into Modern Portfolio Theory and the work of economist Harry Markowitz, who did extensive work on the topic of maximizing the return given a set risk tolerance. More info on my question here. This question provides some great book resources for learning as well. You can also check out a great comparison and contrast of different portfolio allocations here.
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Why does my car loan interest go up despite making payments on-time?
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The interest probably accrues daily, regardless of whether your payments are on time.
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Why do P/E ratios for a particular industry tend to cluster around particular values?
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This falls under value investing, and value investing has only recently picked up study by academia, say, at the turn of the millennium; therefore, there isn't much rigorous on value investing in academia, but it has started. However, we can describe valuations: In short, valuations are randomly distributed in a log-Variance Gamma fashion with some reason & nonsense mixed in. You can check for yourself on finviz. You can basically download the entire US market and then some, with many financial and technical characteristics all in one spreadsheet. Re Fisher: He was tied for the best monetary economist of the 20th century and created the best price index, but as for stocks, he said this famous quote 12 days before the 1929 crash: "Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months." - Irving Fisher, Ph.D. in economics, Oct. 17, 1929 EDIT Value investing has almost always been ignored by academia. Irving Fisher and other proponents of it before it was codified by Graham in the mid 20th century certainly didn't help with comments like the above. It was almost always believed that it was a sucker's game, "the bigger sucker" game to be more precise because value investors get destroyed during recession/collapses. So even though a recessionless economy would allow value investors and everyone never to suffer spontaneous collapses, value investors are looked down upon by academia because of the inevitable yet nearly always transitory collapse. This expresses that sentiment perfectly. It didn't help that Benjamin Graham didn't care about money so never reached the heights of Buffett who frequently alternates with Bill Gates as the richest person on the planet. Buffett has given much credibility, and academia finally caught on around in 2000 or so after he was proven right about a pending tech collapse that nearly no one believed would happen; at least, that's where I begin seeing papers being published delving into value concepts. If one looks harder, academia's even taken the torch and discovered some very useful tools. Yes, investment firms and fellow value investors kept up the information publishing, but they are not academics. The days of professors throwing darts at the stock listings and beating active managers despite most active managers losing to the market anyways really held back this side of academia until Buffett entered the fray and embarrassed them all with his club's performance, culminating in the Superinvestors article which is still relatively ignored. Before that, it was the obsession with beta, the ratio of a security's variance to its covariance to the market, a now abandoned theory because it has been utterly discredited; the popularizers of beta have humorously embraced the P/B, not giving the satisfaction to Buffet by spurning the P/E. Tiny technology firms receive ridiculous valuations because a long-surviving tiny tech firm usually doesn't stay small for long thus will grow at huge rates. This is why any solvent and many insolvent tech firms receive large valuations: risk-adjusted, they should pay out huge on average. Still, most fall by the wayside dead, and those 100 P/S valuations quickly crumble. Valuations are influenced by growth. One can see this expressed more easily with a growing perpetuity: Where P is price, i is income, r is the rate of return, and g is the growth rate of i. Rearranging, r looks like: Here, one can see that a higher P relative to i will dull the expected rate of return while a higher g will boost it. It's fun for us value investor/traders to say that the market is totally inefficient. That's a stretch. It's not perfectly inefficient, but it's efficient. Valuations are clustered very tightly around the median, but there are mistakes that even us little guys can exploit and teach the smart money a lesson or two. If one were to look at a distribution of rs, one'd see that they're even more tightly packed. So while it looks like P/Es are all over the place industry to industry, rs are much more well clustered. Tech, finance, and discretionaries frequently have higher growth rates so higher P/Es yet average rs. Utilities and non-discretionaries have lower growth rates so lower P/Es yet average rs.
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What's the best application, software or tool that can be used to track time?
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The best one I've found is TimeSnapper, I have the worst memory but this basically allows me to visually play back the day. It has a bunch of reporting functionality too.
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Does 83(b) cause a tax liability when exchanging startup stock for public stock?
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I was told by the lawyers there was no tax consequence because the two numbers were the same. That is correct. However, a tax professional tells me that since the start-up stock was "realized" there invokes a taxable event now. That is correct. I'm now led to believe I owe cap-gains tax on the entire 4 year vest this year That is incorrect. You owe capital gains tax on the sale of your startup stock. Which is accidentally the exact same amount you "paid" for the new unvested stocks. There's no taxable event with regards to the new stocks because the amount you paid for them was the amount you got for the old stocks. But you did sell the old stocks, and that is a taxable event.
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What are good games to play to teach young children about saving money?
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I know this question is closed now, but I just found this site that people might be interested in... http://www.practicalmoneyskills.com/games/
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Financed medical expenses and tax deductions
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You deduct expenses when you incur them (when you pay the hospital, for example). Medical expenses are deducted on Schedule A, subject to 7.5% AGI threshold. Financed or not - doesn't matter. The medical expense is deductible (if it is medically necessary), the loan interest is not.
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Tax consequences of changing state residency?
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I did the reverse several years ago, moving from NH to MA. You will need to file Form 1-NR/PY for 2017, reporting MA income as a part-year residence. I assume you will need to report the April capital gain on your MA tax return, as you incurred the gain while a MA resident. (I am not a lawyer or tax professional, so I don't want to state anything about this as a fact, but I would be very surprised if moving after you incurred the gain would have any affect on where you report it.)
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What evidence or research suggests that mid- or small-capitalization stocks should perform better than large caps?
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From Dimson, Elroy, Paul Marsh, and Mike Staunton. Triumph of the Optimists: 101 Years of Global Investment Returns. Princeton, N.J: Princeton University Press, 2002: Disappointingly, the small firm effect has not proved the road to great riches since soon after its discovery, the US size premium went into reverse. This was repeated in the United Kingdom and virtually all other markets around the world. Despite their disappointing performance in recent years, the very long-run record of small-caps remains one of outperformance in both the United States and the United Kingdom. Furthermore, mid- and small-size companies are still an important asset class. Their differential performance over long periods of history shows that there is useful scope for investors to reduce risk by diversifying across the “large” and the “small” capitalization sectors of the market. Furthermore, given the pervasiveness of the size effect across the entire size spectrum, it is important to all investors since the size tilt of any portfolio will strongly influence its short- and long-run performance. This holds true whether there is a size premium or a size discount. The size effect has certainly proved persistent and robust. What is at issue is whether we should continue to expect a size premium over the longer haul. And accompanying charts: And one chart from BlackRock:
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How can I legally and efficiently help my girlfriend build equity by helping with a mortgage?
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I'm looking for something simple, legal, reasonably formal, easy to setup and tax efficient. You just described marriage. Get married.
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Pros/Cons of Buying Discounted Company Stock
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Some other answers mention the ability to sell at grant. This is very important. If you have that ability, think about your guaranteed return. In my case, I get a 15% discount on the lowest 6 month window price from the last two years. If you do the math, the worst case return can be calculated: 1) Money that from the beginning of the window, I make 15% for 6 months (30% annual return guaranteed) 2) Money at the end of the window (say the last month) is 15% for one month (180% annual return guaranteed) In the end, your average holding window for your money is about 3 months (you can calculate it exactly). At that rate, you have a guaranteed 60% annual return. You can't beat that anywhere, with a significant upside if your company stock is increasing. So, if your company has an instant sell at grant option, you have to be brain dead not to do it. If it takes time to get your shares, then you need to look at the volatility of the stock to see how big the chance of losing money is. To generalize to a formula (if that's what you want): WM = purchase window (in months); D = Discount Percentage; GR = Guaranteed Return GR = 12/(WM/2) * D = 6*D/WM One last thing, If you are going to participate in ESPP, make you that you understand how to do your taxes yourself. I haven't found a tax person yet who does ESPP correctly (including an ex IRS agent), so I always have to do my taxes myself to make sure they get done correctly.
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What is a good service that will allow me to practice options trading with a pretend-money account?
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Try ThinkOrSwim by TDAmeritrade. It allows you to paper trade with a powerful trading platform. There's also a mobile app so you can trade on the go. Good luck!
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Why is the stock market price for a share always higher than the earnings per share?
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Earnings per share are not directly correlated to share price. NV Energy, the company you cited as an example, is an electric utility. The growth patterns and characteristics of utilities are well-defined, so generally speaking the value of the stock is driven by the quality of the company's cash flow. A utility with a good history of dividend increases, a dividend that is appropriate given the company's fiscal condition, (ie. A dividend that is not more than 80% of earnings) and a good outlook will be priced competitively. For other types of companies cash flow or even profits do not matter -- the prospects of future earnings matter. If a growth stock (say Netflix as an example) misses its growth projections for a quarter, the stock value will be punished.
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Currently sole owner of a property. My girlfriend is looking to move in with me and is offering to pay 'rent'. Am I at risk here?
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Disclaimer: I am a law student, not a lawyer, and don't claim to have a legal opinion one way or another. My answer is intended to provide a few potentially relevant examples from case law in order to make the point that you should be cautious (and seek proper advice if you think that caution is warranted). Nor am I claiming that the facts in these cases are the same as yours; merely that they highlight the flexible approach that the courts take in such cases, and the fact that this area of law is complicated. I don't think it is sensible to just assume that there is no way that your girlfriend could acquire property rights as a rent paying tenant if arranged on an informal basis with no evidence of the intention of the arrangement. One of the answers mentions a bill which is intended to give non-married partners more rights than they have presently. But the existence of that bill doesn't prove the absence of any existing law, it merely suggests a possible legal position that might exist in the future. A worst-case assumption should also be made here, since you're considering the possibility of what can go wrong. So let's say for the sake of the argument that you have a horrible break up and your girlfriend is willing to be dishonest about what the intentions were regarding the flat (e.g. will claim that she understood the arrangement to be that she would acquire ownership rights in exchange for paying two thirds of the monthly mortgage repayment). Grant v Edwards [1986] Ch 638 - Defendant had property in the name of himself and his brother. Claimant paid nothing towards the purchase price or towards mortgage payments, but paid various outgoings and expenses. The court found a constructive trust in favor of the claimant, who received a 50% beneficial interest in the property. Abbot v Abbot [2007] UKPC 53, [2008] 1 FLR 1451 - Defendant's mother gifted land to a couple with the intention that it be used as a matrimonial home. However it was only put into the defendant's name. The mortgage was paid from a joint account. The claimant was awarded a 50% share. Thompson v Hurst [2012] EWCA Civ 1752, [2014] 1 FLR 238 - Defendant was a council tenant. Later, she formed a relationship with the claimant. They subsequently decided to buy the house from the council, but it was done in the defendant's name. The defendant had paid all the rent while a tenant, and all the mortgage payments while an owner, as well as all utility bills. The claimant sometimes contributed towards the council tax and varying amounts towards general household expenses (housekeeping, children, etc.). During some periods he paid nothing at all, and at other times he did work around the house. Claimant awarded 10% ownership. Aspden v Elvy [2012] EWHC 1387 (Ch), [2012] 2 FCR 435 - The defendant purchased a property in her sole name 10 years after the couple had separated. The claimant helped her convert the property into a house. He did much of the manual work himself, lent his machinery, and contributed financially to the costs. He was awarded a 25% share. Leeds Building Society v York [2015] EWCA Civ 72, [2015] HLR 26 (p 532) - Miss York and Mr York had a dysfunctional and abusive relationship and lived together from 1976 until his death in 2009. In 1983 Mr York bought a house with a mortgage. He paid the monthly mortgage repayments and other outgoings. At varous times Miss York contributed her earnings towards household expenses, but the judge held that this did "not amount to much" over the 33 year period, albeit it had helped Mr York being able to afford the purchase in the first place. She also cooked all the family meals and cared for the daughter. She was awarded a 25% share. Conclusion: Don't make assumptions, consider posting a question on https://law.stackexchange.com/ , consider legal advice, and consider having a formal contract in place which states the exact intentions of the parties. It is a general principle of these kinds of cases that the parties need to have intended for the person lacking legal title to acquire a beneficial interest, and proof to the contrary should make such a claim likely to fail. Alternatively, decide that the risk is low and that it's not worth worrying about. But make a considered decision either way.
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Why are some countries' currencies “weaker”?
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1:30 is not stronger than 1:79. These are just numbers. Trading 1:120 in 2008 and 1:79 now vs. trading 1:31 in 2008 vs 1:30 now is much better criteria to look at to evaluate the strength of the currency, and if you look at that you can see that the Japanese Yen is significantly stronger than the Bhat. While Yen gained 25% to its worth, Bhat gained nothing over the same period of time. You can also see that the Yen was very consistent, while Bhat was volatile over that period.
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Can I invest in gold through Vanguard (Or another instrument that should perform well in financial crisis)?
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In 2008, 10 year treasuries were up 20.1%, to gold's 4.96%. Respectfully, if I were certain if a market drop, I'd just short the market, easily done by shorting SPY or other index ETFs. If you wish to buy gold, the easiest and least expensive way is to buy an ETF, GLD to be specific. It trades like a stock, for what that's worth. There are those who would suggest this is not like buying gold, it's just 'paper'. I believe otherwise. It's a non leveraged, fully backed ETF. I try not to question other's political or religious beliefs or as it pertains to this ETF, their conspiracy theories.
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Looking to buy a house in 1-2 years. Does starting a Roth IRA now make sense?
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If you are going to be buying a house in 1-2 years, I would be putting my money into a short term holding area like a high interest (which isn't that high right now) or a CD (also low interest) because of your near-term need. I wouldn't use the Roth option for your down payment money. If you invest in something volatile (and stocks/mutual funds are very volatile in a 1-2 year term) I would consider it too risky for your need and time frame.
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The spread goes to the market maker, is the market maker the exchange?
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A "market maker" is someone that is contractually bound, by the exchange, to provide both bid and ask prices for a given volume (e.g. 5000 shares). A single market maker usually covers many stocks, and a single stock is usually covered by many market makers. The NYSE has "specialists" that are market makers that also performed a few other roles in the management of trading for a stock, and usually a single issue on the NYSE is covered by only one market maker. Market makers are often middlemen between brokers (ignoring stuff like dark pools, and the fact that brokers will often trade stocks internally among their own clients before going to the exchange). Historically, the market makers gave up buy/sell discretion in exchange for being the "go-to guys" for anyone wanting to trade in that stock. When you told your broker to buy a stock for you, he didn't hook you up with another retail investor; he went to the market maker. Market makers would also sometimes find investors willing to step in when more liquidity was needed for a security. They were like other floor traders; they hung out on the exchange floors and interacted with traders to buy and sell stocks. Traders came to them when they wanted to buy one of the specialist's issues. There was no public order book; just ticker tape and a quote. It was up to the market maker to maintain that order book. Since they are effectively forbidden from being one-sided traders in a security, their profit comes from the bid-ask spread. Being the counter-party to almost every trade, they'd make profit from always selling above where they were buying. (Except when the price moved quickly -- the downside to this arrangement.) "The spread goes to the market maker" is just stating that the profit implicit in the spread gets consumed by the market maker. With the switch to ECNs, the role of the market maker has changed. For example, ForEx trading firms tend to act as market makers to their customers. On ECNs, the invisible, anonymous guy at the other end of most trades is often a market maker, still performing his traditional role. Yet brokers can interact directly with each other now, rather than relying on the market maker's book. With modern online investing and public order books, retail investors might even be trading directly with each other. Market makers are still out there; in part, they perform a service sold by an Exchange to the companies that choose to be listed on that exchange. That service has changed to helping tamp volatility during normal high-volatility periods (such as at open and close).
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Can I get a discount on merchandise by paying with cash instead of credit?
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I bought a car a few years ago. The salesman had the order, I knew the car I wanted and we had a price agreed on. When I refused the payment plan/loan, his manager came over and did a hard sell. "99% of buyers take the financing" was the best he could do. I told him I was going to be part of the 1%. With rates so low, his 2 or 3% offer was higher than my own cost of money. He went so far as to say that I could just pay it off the first month. Last, instead of accepting a personal check and letting me pick up the car after it cleared, he insisted on a bank check to start the registration process. (This was an example of one dealer, illustrating the point.) In other cases, for a TV, a big box store (e.g. Best Buy) isn't going to deal for cash, but a small privately owned "mom and pop" shop might. The fees they are charged are pretty fixed, they don't pay a higher fee cause I get 2% cash back, vs your mastercard that might offer less.
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Why did gold dip in 2011
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The cause of the increase in 2006-2011 was the financial crisis, where, if you recall, the global banking system came close to collapse for reasons that are well documented. Rightly or wrongly, gold is seen as a safe haven asset in times of crisis. The price of gold began to decline in 2011 when the markets decided that the risk of a global banking system collapse had passed without further incident. In the period leading up to 2006, the price of gold was in a flat-to-down trend because there was little net buying interest in gold and large gold sales had been executed by various central banks around the world who felt that gold no longer had a place in central bank reserves. In modern economies gold is seen as a "fringe" asset. It has no role to play. The recent financial crisis may have dented that perception, but those dents are now being forgotten and the price of gold is returning to its long-term downward trend. When the next financial/banking crisis is upon us, the price of gold will again (probably) rally. The extent of the rally will depend on the extent of the crisis.
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Is it a good idea to teach children that work is linearly related to income?
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I think that is the wrong approach. You certainly need to teach the value of work, but you cannot tie it to income levels as a hard and fast rule. If you do, how do you then explain athletes making millions per year and only 'working' half a year, at most. And, then comparing that person to a person working hard in a factory, 40-50 hours per week, 50 weeks per year, bringing home $50K per year? I've always taught my kids to work hard and with integrity. And, most importantly, you better enjoy the work you do because no matter how much money you make, if you dread getting up in the morning to go to work, your money won't make you happy. I've never focused on the amount of money they should be making.
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How much money should I lock up in my savings account?
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No, don't bother. You need to decide what you are saving for, and how much risk you are prepared to take. It would make sense if you wanted the money only in x years, and couldn't afford to lose say 20% or more if the stock market crashed the day before you needed the cash. Typically if you are about to retire and buy an annuity, you want to protect your capital. This isn't you. At 28, you might be saving for a wedding, a deposit on a house, possibly for school fees, or for eventual retirement. It doesn't sound like you need to get back exactly 24k in July 2022. Keep the 6 months expenses in accounts that you can withdraw from at short notice. Some of this in a current account, some might be in a savings account that doesn't pay interest if you make withdrawals. After that, I'd stick most of the rest in stock market tracker funds, but you might go for actively managed funds instead (ask another question and take professional advice, there will presumably be local tax considerations too), and add in most of your monthly savings too. These should beat the 2.3% over the 5 years, and you can liquidate them easily if you want to buy a house. If there is a recession and a stock market dip, you presumably have the flexibility to hold on to them longer for the economy to recover. And if you are intending to buy a house, then a recession will probably also involve a fall in house prices, so the loss in your savings will be somewhat balanced by the drop in the purchase price of your house. Of course, the worst case scenario is a severe downturn where you lose your job, are unemployed for a considerable period of time, burn through your emergency fund, and need to sell shares at a considerable loss to meet your expenses. You might have family or dependents that you can borrow from or would need to support, which would change your tolerance for risk. Having money locked away for 5 years in this scenario is even worse. So if you don't want to put all your non-emergency savings into the stock market, you still want to choose something that is accessible at a slightly lower interest rate. But ultimately it sounds like you can afford to lose some of your savings, and the probability is that you will be rewarded with much better returns than 2.3% over 5 years.
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Why use ROI if I can use effective compount interest?
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Yes though I'd likely put a caveat on that. If you take short-term investments and extrapolate the results to get an annual result this can be misleading. For example, if a stock goes up 10% in a month, assuming this will continue for the next 11 months may not be a great idea. Thus, beware of how much data do you have in making these calculations. When looking at long-term investments, the compound annual growth rate can be quite useful for comparison.
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Gift card fraud: To whom to report? How to recover funds? Is the party which issued me the card liable?
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Have you checked to see if anything else went missing? Walmart says that because I was not the original purchaser of the gift card, they could not help me directly Just to build on what @littleadv already gave you, my personal experience on this is that none of the companies that you'll likely be dealing with in a situation like this will be falling over themselves to help you out. Unless it also helps them for some reason, or if they're compelled by consumer laws. If you think you should be protected from this sort of thing happening, feel free to reference the FCRA to see if you might get any consumer protections. But just from what you've said here, it doesn't sound like you do. So if anything else went missing (or even if not), it might have been someone working for Citi, who may have had access to more of your personal information than just your card. ID theft is unfortunately common, as a fairly easy crime to commit, a hard one to protect yourself against, and a very hard one to prosecute. When did you last check your credit report?
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I'm about to be offered equity by my employer. What should I expect?
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The main thing is the percentage of the company represented by the shares. Number of shares is meaningless without total shares. If you compute percentage and total company value you can estimate the value of the grant. Or perhaps more useful for a startup is to multiple the percentage by some plausible "exit" value, such as how much the company might sell for or IPO for. Many grants expire when or soon after you leave the company if you don't "cash out" vested shares when you leave, this is standard, but do remember it when you leave. The other major thing is vesting. In the tech industry, vesting 1/4 after a year and then the rest quarterly over 3 more years is most common.
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Should I have more than one brokerage account?
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I use two different brokerages, both well-known. I got a bit spooked during the financial crisis and didn't want to have all my eggs in one basket. The SIPC limits weren't so much a factor. At the time, I was more worried about the hassle of dealing with a Lehman-style meltdown. If one were to fail, the misery of waiting and filing and dealing with SIPC claims would be mitigated by having half of my money in another brokerage. In hindsight, I was perhaps a bit too paranoid. Dealing with two separate brokerages is not much of an inconvenience, though, and it's interesting to see how their web interfaces are slightly different and some things are easier to do with one vs the other. Overall, they're really similar and I can't say there's much advantage (other than my tin-foil hat tendencies) to splitting it up like that.
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Investment property refinance following a low appraisal?
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The new payment on $172,500 3.5% 15yr would be $1233/mo compared to $1614/mo now (26 bi-weekly payments, but 12 months.) Assuming the difference is nearly all interest, the savings is closer to $285/mo than 381. Note, actual savings are different, the actual savings is based on the difference in interest over the year. Since the term will be changing, I'm looking at cash flow, which is the larger concern, in my opinion. $17,000/285 is 60 months. This is your break even time to payoff the $17000, higher actually since the $17K will be accruing interest. I didn't see any mention of closing costs or other expenses. Obviously, that has to be factored in as well. I think the trade off isn't worth it. As the other answers suggest, the rental is too close to break-even now. The cost of repairs on two houses is an issue. In my opinion, it's less about the expenses being huge than being random. You don't get billed $35/mo to paint the house. You wake up, see too many spots showing wear, and get a $3000 bill. Same for all high cost items, Roof, HVAC, etc. You are permitted to borrow 50% of your 401(k) balance, so you have $64K in the account. I don't know your age, this might be great or a bit low. I'd keep saving, not putting any extra toward either mortgage until I had an emergency fund that was more than sufficient. The fund needs to handle the unexpected expenses as well as the months of unemployment. In general, 6-9 months of these expenses is recommended. To be clear, there are times a 401(k) loan can make sense. I just don't see that it does now. (Disclaimer - when analyzing refis there are two approaches. The first is to look at interest saved. After all, interest is the expense, principal payments go right to your balance sheet. The second is purely cash flow, in which case one might justify a higher rate, and going from 15 to 30 years, but freeing up cash that can be better deployed. Even though the rate goes up say 1/2%, the payment drops due to the term. Take that savings and deposit to a matched 401(k) and the numbers may work out very well. I offer this to explain why the math above may not be consistent with other answers of mine.)
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Are there any countries where citizens are free to use any currency?
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If I understand correctly, you're actually asking why there isn't a society whose members generally accept/use any currency for transactions, and just like, Google the exchange rate or something. The answer is because it's exceptionally inconvenient. Can you imagine having a wallet with 200 pouches for all the different currencies? Why would you want to deal with exchange rates all the time? What if the value of a currency changes? (A single currency at least has the illusion of being stable). Et cetera.
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Who Bought A Large Number Of Shares?
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SEC forms are required when declaring insider activity. An insider is defined by the SEC to be a person or entity which (i) beneficially owns 10% or more of the outstanding shares of the company, (ii) is an officer or director of the company, or (iii), in the case of insider trading, does so based on knowledge which is not otherwise publically available at the time. At any rate, the person or entity trading the stock is required to file certain forms. Form 3 is filed when a person first transitions into the status of an insider (by becoming an officer, director, or beneficial owner of a certain percentage of stock). Form 4 is filed when an existing insider trades stock under the company's symbol. Form 5 is filed when certain insider trades of small value are reported later than usual. *More information can be found at the SEC's website. Another possibility is that a large number of options or derivatives were exercised by an officer, director, or lending institution. In the cases of officers or directors, this would need to be declared with an SEC form 4. For an institution exercising warrants obtained as a result of a lending agreement, either form 3 or 4 would need to be filed. In addition to the above possibilities, username passing through pointed out a very likely scenario in his answer, as well.
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How does a defined contribution plan work
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The end result is basically the same, it's just a choice of whether you want to base the final amount you receive on your salary, or on the stock market. You pay in a set proportion of your salary, and receive a set proportion of your salary in return. The pension (both contributions and benefit) are based on your career earnings. You get x% of your salary every year from retirement until death. These are just a private investment, basically: you pay a set amount in, and whatever is there is what you get at the end. Normally you would buy an annuity with the final sum, which pays you a set amount per year from retirement until death, as with the above. The amount you receive depends on how much you pay in, and the performance of the investment. If the stock market does well, you'll get more. If it does badly, you could actually end up with less. In general (in as much as anything relating to the stock market and investment can be generalised), a Defined Benefit plan is usually considered better for "security" - or at least, public sector ones, and a majority of people in my experience would prefer one, but it entirely depends on your personal attitude to risk. I'm on a defined benefit plan and like the fact that I basically get a benefit based on a proportion of my salary and that the amount is guaranteed, no matter what happens to the stock market in the meantime. I pay in 9% of my salary get 2% of my salary as pension, for each year I pay into the pension: no questions, no if's or buts, no performance indicators. Others prefer a defined contribution scheme because they know that it is based on the amount they pay in, not the amount they earn (although to an extent it is still based on earnings, as that's what defines how much you pay in), and because it has the potential to grow significantly based on the stock market. Unfortunately, nobody can give you a "which is best" answer - if I knew how pension funds were going to perform over the next 10-50 years, I wouldn't be on StackExchange, I'd be out there making a (rather large) fortune on the stock market.
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The doctor didn't charge the health insurance in time, am I liable?
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This has a straightforward answer. It's likely that your doctor and the hospital have no responsibility to ensure that your insurance claim is filed in a timely manner. They bill you whether you or they get reimbursed by insurance, or not. The insurance company is more than happy not to pay you any way they can. Sorry if this is harsh, but it's up to you to follow through. See also here.
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Changing Mailing Adress
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If you call them, you can make sure they'll use the new address, but if you want to do it online, there is some risk that the update is delayed. Note also that an address change with an immediate request for a replacement debit card smells very fishy - this what a hacker / thief would do to get your money. Calling seems to be the better approach, as you can verify your identity further. Otherwise, you might well run into an automated block.
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Can a Roth IRA be used as a savings account?
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(To be clear, IRA accounts are just wrappers, and can contain a large variety of investments. I'm restricting myself to the usual setup of investment in the stock market.) So, let's say you have $5000 in savings, as an emergency fund. Of the top of my head, putting some of it into a Roth IRA could backfire in the following ways: The basic principle here is that the stock market is not a good place for storing your emergency cash, which needs to be secured against loss and immediately accessible. Once you're happy with your level of emergency cash, however, tax-advantaged investment accounts are a reasonable next step.
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How to do a direct cash flow statement given a stock ticker
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For US equities, Edgar Online is where companies post their government filings to the SEC. On Google Finance, you would look at the "SEC filings" link on the page, and then find their 10K and 10Q documents, where that information is listed and already calculated. Many companies also have these same documents posted on their Investor Relations web pages.
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How to convince someone they're too risk averse or conservative with investments?
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Remind him that, over the long-term, investing in safe-only assets may actually be more risky than investing in stocks. Over the long-term, stocks have always outperformed almost every other asset class, and they are a rather inflation-proof investment. Dollars are not "safe"; due to inflation, currency exchange, etc., they have some volatility just like everything else.
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Can I buy stocks directly from a public company?
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This is allowed somewhat infrequently. You can often purchase stocks through DRIPs which might have little or no commission. For example Duke Energy (DUK) runs their plan internally, so you are buying from them directly. There is no setup fee, or reinvestment fee. There is a fee to sell. Other companies might have someone else manage the DRIP but might subsidize some transaction costs giving you low cost to invest. Often DRIPs charge relatively large amounts to sell and they are not very nimble if trading is what you are after. You can also go to work for a company, and often they allow you to buy stock from them at a discount (around 15% discount is common). You can use a discount broker as well. TradeKing, which is not the lowest cost broker, allows buys and sells at 4.95 per trade. If trading 100 shares that is similar in cost to the DUK DRIP.
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Can I deduct my individual Health Insurance Premium in Tax
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Yes, you can. See the instructions for line 29 of form 1040. Self employed health insurance premiums are an "above the line" deduction.
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Questrade - What happens if I buy U.S. stock with Canadian money?
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The reason it's not automatic is that Questrade doesn't want to force you to convert in margin accounts at the time of buying the stock. What if you bought a US stock today and the exchange rate happened to be very unfavorable (due to whatever), wouldn't you rather wait a few days to exchange the funds rather than lose on conversion right away? In my opinion, Questrade is doing you a favor by letting you convert at your own convenience.
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How do you save money on clothes and shoes for your family?
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I look ahead for sizes. I was at the thrift store and saw a good condition, good brand winter coat that will likely fit my daughter next year, so I bought it. I also bought a snowsuit my baby can wear when he's 6 months (~5 months pregnant now). When it starts getting cold next fall, I'll be set, rather than wasting time and money running around town trying to find winter gear. This applies for any regular stores you visit (Costco, thrift stores, kids resale stores, etc): look for clearance/discounted kids clothes in the next few sizes up, even off-season. This works especially well for basics you need lots of (PJs, socks, etc) and more expensive things where you don't want to be desperate when shopping for them. You're always "buying low."
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If throwing good money after bad is generally a bad idea, is throwing more money after good Ok?
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The principle behind the advice to not throw good money after bad is better restated in economics terms: sunk costs are sunk and irrelevant to today's decisions. Money lost on a stock is sunk and should not affect our decisions today, one way or the other. Similarly, the stock going up should not affect our decisions today, one way or the other. Any advice other than this is assuming some kind of mispricing or predictability in the market. Mispricings in general cannot be reliably identified and stock returns are not normally predictable. The only valid (efficient markets) reason I know of to allow money you have lost or made on a stock to affect your decision today is the tax implications (you may want to lock in gains if your tax rate is temporarily low or vice versa).
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If NYSE has market makers, what is the role of NYSE ARCA which is an ECN
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Electronic trading is many orders of magnitude cheaper and more liquid than floor trading and is rapidly displacing it. Stil, electronic trading accounts for 79% of stock trading volume in the U.S. Polcari is losing the battle. Floor trading is still offered, but it's only used for bulk orders, so electronic trading is servicing small trades at minimum prices while floor trading is now the concierge service.
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How much power does a CEO have over a public company?
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This is a very good question and is at the core of corporate governance. The CEO is a very powerful figure indeed. But always remember that he heads the firm's management only. He is appointed by the board of directors and is accountable to them. The board on the other hand is accountable to the firm's shareholders and creditors. The CEO is required to disclose his ownership of the firm as well. Ideally, you (as a shareholder) would want the board of directors to be as independent of the management as it is possible. U.S. regulations require, among other things, the board of directors to disclose any material relationship they may have with the firm's employees, ex-employees, or their families. Such disclosures can be found in annual filings of a company. If the board of directors acts independently of the management then it acts to protect the shareholder's interests over the firm management's interest and take seemingly hard decisions (like dismissing a CEO) when they become necessary to protect the franchise and shareholder wealth.
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What is the “point” (purpose) of the S&P 500?
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I hate to point to Wikipedia as an answer, but it does describe exactly what you are looking for... The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock market exchanges; the New York Stock Exchange and the NASDAQ. The components of the S&P 500 are selected by committee... The committee selects the companies in the S&P 500 so they are representative of the industries in the United States economy. In addition, companies that do not trade publicly (such as those that are privately or mutually held) and stocks that do not have sufficient liquidity are not in the index. The S&P is a capitalization weighted index. If a stock price goes up, then it comprises more of the total index. If a stock goes down, it comprises less, and if it goes down too much, the committee will likely replace it. So to answer your question, if one stock were to suddenly skyrocket, nothing would happen beyond the fact that the index was now worth more and that particular stock would now make up a larger percentage of the S&P 500 index.
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Does VSMAX invest in smaller companies than FSEVX?
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You are comparing apples and oranges: the charts show the capital appreciation excluding dividends. If you include dividends and calculate a total return over that period you see VSMAX up 132% vs. FSEVX up 129%, i.e. quite close. That residual difference is possibly due to a performance difference between the two benchmarks.
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Where do traders take their prices data from? How can it be different from their brokers'?
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To add a bit to Daniel Anderson's great answer, if you want to 'peek' at what a the set of bid and ask spreads looks like, the otc market page could be interesting (NOTE: I'm NOT recommending that you trade Over The Counter. Many of these stocks are amusingly scary): http://www.otcmarkets.com/stock/ACBFF/quote You can see market makers essentially offering to buy or sell blocks of stock at a variety of prices.
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How to evaluate stocks? e.g. Whether some stock is cheap or expensive?
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If you are looking for numerical metrics I think the following are popular: Price/Earnings (P/E) - You mentioned this very popular one in your question. There are different P/E ratios - forward (essentially an estimate of future earnings by management), trailing, etc.. I think of the P/E as a quick way to grade a company's income statement (i.e: How much does the stock cost verusus the amount of earnings being generated on a per share basis?). Some caution must be taken when looking at the P/E ratio. Earnings can be "massaged" by the company. Revenue can be moved between quarters, assets can be depreciated at different rates, residual value of assets can be adjusted, etc.. Knowing this, the P/E ratio alone doesn't help me determine whether or not a stock is cheap. In general, I think an affordable stock is one whose P/E is under 15. Price/Book - I look at the Price/Book as a quick way to grade a company's balance sheet. The book value of a company is the amount of cash that would be left if everything the company owned was sold and all debts paid (i.e. the company's net worth). The cash is then divided amoung the outstanding shares and the Price/Book can be computed. If a company had a price/book under 1.0 then theoretically you could purchase the stock, the company could be liquidated, and you would end up with more money then what you paid for the stock. This ratio attempts to answer: "How much does the stock cost based on the net worth of the company?" Again, this ratio can be "massaged" by the company. Asset values have to be estimated based on current market values (think about trying to determine how much a company's building is worth) unless, of course, mark-to-market is suspended. This involves some estimating. Again, I don't use this value alone in determing whether or not a stock is cheap. I consider a price/book value under 10 a good number. Cash - I look at growth in the cash balance of a company as a way to grade a company's cash flow statement. Is the cash account growing or not? As they say, "Cash is King". This is one measurement that can not be "massaged" which is why I like it. The P/E and Price/Book can be "tuned" but in the end the company cannot hide a shrinking cash balance. Return Ratios - Return on Equity is a measure of the amount of earnings being generated for a given amount of equity (ROE = earnings/(assets - liabilities)). This attempts to measure how effective the company is at generating earnings with a given amount of equity. There is also Return on Assets which measures earnings returns based on the company's assets. I tend to think an ROE over 15% is a good number. These measurements rely on a company accurately reporting its financial condition. Remember, in the US companies are allowed to falsify accounting reports if approved by the government so be careful. There are others who simply don't follow the rules and report whatever numbers they like without penalty. There are many others. These are just a few of the more popular ones. There are many other considerations to take into account as other posters have pointed out.
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Do I need to invest to become millionaire?
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If your take-home salary after taxes etc is 35K / year, and you say you will be able to save at most 40% of that, you will need to find something that pays 2.75% to reach one million in 40 years*. However, these numbers can chance dramatically depending on your specific circumstances. If you're just starting your career, 40 years of saving is not impossible. If you're in the middle or nearing the end, you will have dramatically less time to achieve your goals. *40% of 35000 is 14000 saved per year, at an interest of 2.75% compounded annually, you will reach 1000000 after roughly 40 years.
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Credit card statement dates follow pattern?
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Each bank is different. Usually in my experience for newer credit card accounts, there is a specific number of days in a billing cycle (something like 28) and then a 20-25 day grace period. Older accounts usually have 30+ day billing cycles. Back in the 90's, many cards also had 30-40 day grace periods. The language specific to your card is in the card agreement.
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How to calculate my real earnings from hourly temp-to-hire moving to salaried employee?
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Here's an alternative. There are hundreds, maybe thousands, of contract engineering firms ("job shops") in the United States, probably hundreds in California alone. They are in the business of doing what your "employer" wants you to do, they know how to do it, they have been doing it for decades, working with the biggest, most-established companies in the country. They have forgotten more about providing engineering services to clients, and paying the engineers, than you can learn in a lifetime. Call a few of them. Set up meetings. Budget a few hours for it. You want to talk with the most experienced recruiter in the office, the Old Guy Who Has Been There And Done That. Explain your situation, and tell them that, rather than go through all of the headaches yourself, you want to investigate the possibility of THEM handling all the headaches, for their usual markup of course. (You can probably word this better than I can, but you get the idea.) The shop may or may not be willing to talk about their markup. My personal opinion is that this is perfectly OK. What they make off of you, after your rate is paid, is THEIR business. Also, talk about what you do, and your recommended rate. It would not surprise me to learn that you are currently grossly underpaid. AND, mention that, if the client declines, you're going to be available immediately, and you'd certainly be open to working with them. (You will see this again.) In fact, if they have any current leads that you fit, you would certainly be interested in hearing about them. (They may already have a req from another client, for which you fit, for which the client is willing to pay much more than your current "employer".) If it were me, personally, I'd start with Yoh, Belcan, and maybe TAD Technical. These are three of the oldest and best. I'd also hit up CE Weekly, get a subscription, and find some other shops with offices in your area. Once you have a shop lined up, then ask your "employer" if, rather than you setting up a personal corporation, they'd be willing to work with an established Contract Engineering firm, who does this kind of thing for a living, who does this every day, who has been doing this for decades. Doing this is simpler for everyone, and, by going through an established firm, they avoid having to teach you how to do business with them. They also avoid the risk of having you reclassified by IRS as an employee, which exposes them to all kinds of legal and financial liability. If they say "No", WALK AWAY FROM THEM. Immediately. They've just thrown up a HUGE red flag. This is where the other discussions with the shop come into play.
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Is it legal to receive/send “gifts” of Non-Trivial Amounts to a “friend”?
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Am I right to say that no tax needs to be given for the annual ~$130k USD, since they are considered as annual gift tax exclusion? Not only that you're wrong, but it also looks like a tax fraud, not just mere avoidance. You'll have hard time proving to any judge or jury that the gifts are "in good faith". By the way, $5 a month is below minimum wage.
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Equity market inflow meaning
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If for every buyer, there's a seller, doesn't that also mean that there were $25B in outflows in the same time period? Yes for every buyer there is a seller. The inflows are not being talked in that respect. about there being $25B in inflows to US equity markets since the election...what does that mean? Lets say the index was at X. After a month the index is at X+100. So lets say there are only 10 companies listed. So if the Index has moved X to X+100, then share price S1 has moved to S1+d1. So if you sum all such shares/trades that have increased in value, you will get what in inflow. In the same period there could be some shares that have lost value. i.e. the price or another share was S2 and has moved to S2-d2. The sum of all such shares/trades that have decreased in value, you will get outflow. The terms are Gross outflow, Gross inflow. In Net terms for a period, it can only be Inflow or outflow; depending on the difference between inflow and outflow. The stats are done day to day and aggregated for the time period required. So generally if the index has increased, it means there is more inflow and less outflow. At times this analysis is also done on segments, FI's inflow is more compared to outflow or compared to inflow of NBFI or Institutional investors or Foreign participants etc.
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What would a stock be worth if dividends did not exist? [duplicate]
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As a thought experiment I suppose we can ask where dividends came from and what would be different if they never existed. The VOC or Dutch East India Companywas the first to IPO, sell shares and also have a dividend. There had been trade entrepot before the VOC, the bulk cog (type of sea-going ship) trade in the Hanseatic League, but the VOC innovation was to pool capital to build giant spice freighters - more expensive than a merchant partnership could likely finance (and stand to lose at sea) on their own but more efficient than the cogs and focused on a trade good with more value. The Dutch Republic became rich by this capital formed to pursue high value trade. Without dividends this wouldn't have been an innovation in seventeenth century Europe and enterprises would be only as large as say the contemporary merchant family networks of Venice could finance. So there could be large partnerships, family businesses and debt financed ventures but no corporations as such.
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Who can truly afford luxury cars?
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Each of us makes our own way in life, making choices based upon or own needs and desires. Some of us choose to live simple lives, others choose more complex lives where we earn and spend more. There are several points which one should examine and consider. Consider that the market for new cars is not the entire population, but only the fraction of the population that can afford to spend $20,000+ for a new car (at $400+/month payments). You quickly realize that most people making below median income cannot afford to purchase a new car. They buy used cars, from the pool of cars left after depreciation has reduced the price of the car by half (or more). One rule of thumb might be to spend < 10% of your income on transportation. Which might allow for a $400-500/month car payment for half of families. And when you keep a car for 10 years, that can mean two cars, one payment-free. Consider that a new Honda Accord or Toyota Camry is $20-30,000 which is 2/3 to 3/4 the price of a new luxury car. When I purchased my (used) Civic several years ago, the price was nearly 1/2 the price of a new luxury car. I recently purchased a (used) luxury car (7 year old, 70,000 miles) less than 1/3 the new price. The leather interior looks new, more amenities, better performance than my Civic, the car runs well, and with proper maintenance, I expect to drive it for 2-3 years and pass it along to one of my children.
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Optimal way to use a credit card to build better credit?
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Most business credit cards do not report to the personal credit report unless the person pays the card late. Given that fact, any debt carried on these cards does not hurt the credit score if it is not reported. You can carry credit card debt on these cards without hurting your credit score. Just apply for business credit cards now to start building this segment of your credit.
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Identifying “Dividend Stocks”
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How to find good divided stocks? Research and read. Google, Yahoo, and most likely your broker offer some sort of stock screener tool where you can look for stocks with given P/E ratios, dividend payouts, pricing, and any of a number of other filters. When you've found some that appeal to you, read what others are saying on stock talk websites like Vantagewire and Stockhouse. Read what each company is putting out as news and look at their quarterly reports. In Canada you can find a company's reports for free on Sedar. I'm afraid I don't know the U.S. equivalent. Reuters will be of help. Finding a good dividend-paying stock is the same as finding a good growth or value stock; research the company and the sector as if you were buying it to take the company over.
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A-B-C Class Shares: What's the difference?
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In most cases, the other classes of shares are preferred stock (example, JPM-F). Preferred stock usually pays higher dividends and shareholders get preferential treatment in the event that the company goes under. (Preferred shareholders are behind bondholders in line, but ahead of common stock holders) In other cases, different classes of shares have different voting rights or pricing. Examples include Berkshire Hathaway B shares. In the case of Berkshire Hathaway B shares, the stock has 1/500th of the rights and 1/10,000th of the voting rights of an "A" share. You need to be cautious about investing in anything other than common stock -- make sure that you understand what you are getting into. This is not to say that other share classes are 'bad' -- just that many preferred stocks are thinly traded and are difficult to buy and sell.
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Is it true that the price of diamonds is based on a monopoly?
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Yes, the De Beers Group of Companies is a diamond cartel that had complete control of the diamond market for most of the 20th century. They still control a sizable portion of the market and their effort at marketing (particularly with the slogan "A Diamond is Forever") has done much to inflate the market for diamonds in our society. The intrinsic value of diamonds is much lower than the market prices currently reflect, but with the caveat that there is a rarity factor which does drive up the price of larger diamonds. The larger the diamond, the more likely it is to have flaws, so when it comes to diamonds that are 5 carats or greater, you are not as likely to see a new supply of diamonds disrupt the prices of those larger stones. Some other ways that high end jewelers and suppliers are differentiating themselves is by patenting a specific cut that they design. This is another barrier to entry that works to create some artificial price inflation. One common example is the Lucida cut sometimes referred to as the Tiffany cut. Diamonds can also be manufactured. The same carbon structure can be grown in a lab. These stones have the same carbon structure as natural diamonds but without the flaws and visible impurities. Most manufactured diamonds are used industrially, but processes have improved sufficiently to allow for gemstone quality synthetic diamonds. They sell at a decent discount, so that might be an option to consider if you want a substitute. In the years to come, you can expect prices for synthetic diamonds to continue to decrease which will probably put some further downward pressure on jewelers' prices.
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Is there a formula to use to analyse whether an investment property is a good investment?
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When you invest in a property, you pay money to purchase the property. You didn't have to spend the money on the property though - you could have invested it in the stock market instead, and expected to make a 4% annualized real rate of return or thereabouts. So if you want to know whether something's a "good investment", ask whether your annual net income will be more or less than 4% of the money you put into it, and whether it is more or less risky than the stock market, and try to judge accordingly. Predicting the net income, though, is a can of worms, doubly so when some of your expenses aren't dollar-denominated (e.g. the time you spend dealing with the property personally) and others need to be amortized over an unpredictable period of time (how long will that furnace repair really last?). Moreover your annualized capital gain and rental income is also unpredictable; rent increases in a given area cannot be expected to conform to a predetermined mathematical formula. Ultimately it is impossible to predict in the general case - if it were possible we probably would have skipped that last housing bubble, so no single simple formula exists.
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Does the profit of a company directly affect its stock or indirectly by causing people to buy or sell?
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Yes, the price of a stock is what investors think the value of a stock is, which is not tied to profits or dividends by any rigid formula. But to say that therefore the price could be high even though the company is doing very poorly is hypothetically true, but unlikely in practice. Consider any other product. There is no fixed formula for the value of a used car, either. If everyone agreed that a rusting, 20-year old car that doesn't run is worth $100,000, then that's what it would sell for. But that's a pretty big "if" at the beginning of that sentence. If the car had been used in some hit TV show 20 years ago, or if it was owned by a celebrity, or some such special case, maybe a rusting old car really would sell for $100,000. Likewise, a stock might have a price higher than what one would predict from its dividends if some rich person wanted to buy that company because the brand name brings back nostalgic memories from his youth and so he drives the price up, etc. But the normal case is that, in the long term, the price of a stock tends to settle on a value proportional to the dividends that it pays. Or rather, and this is a big caveat, the dividends that investors expect it to pay in the future. And then adjusted for all sorts of other factors and special situations, like the value of the company if it was to be liquidated, etc.
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Why would a company care about the price of its own shares in the stock market?
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Fiduciary They are obligated by the rules of the exchanges they are listed with. Furthermore, there is a strong chance that people running the company also have stock, so it personally benefits them to create higher prices. Finally, maybe they don't care about the prices directly, but by being a good company with a good product or service, they are desirable and that is expressed as a higher stock price. Not every action is because it will raise the stock price, but because it is good for business which happens to make the stock more valuable.
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Do I need to pay taxes in India?
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Do I need to pay taxes in India in this scenario? For India tax purposes, you would still qualify as "Resident Indian". As a resident Indian you have to pay taxes on Global income. It is not relevant whether you transfer the money back to India to keep in US. The income is generated and taxable. Depending on your contract, presumably you are working as a free lance; certain expenses are allowed to be deducted from your income, for example if you purchase equipment to help carry out the work, stay / entertainment costs, etc. Consult a professional CA who should be able to guide you on what is eligible and what is not. The balance along with your other income will be taxed as per tax brackets. There is exemption for certain category of workers, mostly in entertainment industry where such income is not taxable. This does not apply to your case.
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What is the standard deviation and mean return of oil?
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Oil as a commodity or investing in oil companies as a stock? As a commodity, I'd recommend none. The article Commodities – They Have (Almost) No Place in Your Portfolio and The Case Against Commodities explain why commodities are not good investments.
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Relocating and buying a house simultaneously - How to handle pre-approval on fluctuating yearly income?
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Assuming the numbers you gave are forecasted 2013 annual income, you should really use an average and give the lender 1 number, as long as you can provide documentation to back it up. Lenders aren't as sophisticated as considering your monthly income fluctuations into their underwriting algorithm. If you're not tied down to your existing lender, I highly recommend you to shop around. There isn't an "universal lending requirement". You'll be surprised at how flexible they are. Not as a recommendation to get around the rules, but just finding a lender that'll work with your situation. Try personal finance forums such as FatWallet or Slickdeal to find low-cost lenders: http://goo.gl/vIojT
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I can make a budget, but how can I get myself to consistently follow my budget?
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Try a tool like mint.com that will send you text messages regarding how you budget is going. If you use mint, set up your budget to send you reminders before you hit your budget. Example: if my budget for dining out is $100, I tell mint.com it is $50 and I get nagging text messages after $50 to remind me to keep a lid on my spending.
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Who owned my shares before me?
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A lot will depend on wether you have in your possession the physical share documents or just numbers in your brokerage portfolio. Electronic shares are not traceable as they do not exist as individual entities. ETrade certainly knows who bought how much, but no concept of which ones. Lets say ET buys 1000 shares of Acme, their database looks like this: Now they sell 400 shares to Bob: Bob sells 200, Alice buys 100: ( skipped one transaction for brevity ) Did Alice get 100 shares out of ET's original 1000, or did she get 100 shares that were previously owned by Bob? Or 27 from ET and 73 from ET? Another, less exact way to picture the process is one share is 1ml of liquid. If you return 50ml to the pot it becomes indistinguishable from the rest.
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I can make a budget, but how can I get myself to consistently follow my budget?
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It's simple, really: Practice. Fiscal responsibility is not a trick you can learn look up on Google, or a service you can buy from your accountant. Being responsible with your money is a skill that is learned over a lifetime. The only way to get better at it is to practice, and not get discouraged when you make mistakes.
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Filing Taxes for Two Separate Jobs Being Worked at the Same Time?
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You file taxes as usual. W2 is a form given to you, you don't need to fill it. Similarly, 1099. Both report moneys paid to you by your employers. W2 is for actual employer (the one where you're on the payroll), 1099 is for contractors (where you invoice the entity you provide services to and get paid per contract). You need to look at form 1040 and its instructions as to how exactly to fill it. That would be the annual tax return. It has various schedules (A, B, C, D, E, F, H, etc) which you should familiarize yourself with, and various additional forms that you attach to it. If you're self employed, you're expected to make quarterly estimate payments, but if you're a salaried employee you can instruct your employer to withhold the amounts you expect to owe for taxes from your salary, instead. If you're using a tax preparation software (like TurboTax or TaxAct), it will "interview" you to get all the needed information and provide you with the forms filled accordingly. Alternatively you can pay someone to prepare the tax return for you.
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What is a good 5-year plan for a college student with $15k in the bank?
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I disagree with the IRA suggestion. Why IRA? You're a student, so probably won't get much tax benefits, so why locking the money for 40 years? You can do the same investments through any broker account as in IRA, but be able to cash out in need. 5 years is long enough term to put in a mutual fund or ETF and expect reasonable (>1.25%) gains. You can use the online "analyst" tools that brokers like ETrade or Sharebuilder provide to decide on how to spread your portfolio, 15K is enough for diversifying over several areas. If you want to keep it as cash - check the on-line savings accounts (like Capitol One, for example, or Ally, ING Direct that will merge with Capitol One and others) for better rates, brick and mortar banks can not possible compete with what you can get online.
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Why is the fractional-reserve banking not a Ponzi scheme?
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No, fractional reserve banking isn't a scam. A simple exercise: replace dollars with time. You're trading some time now for time in the future, plus a bit of extra time. This is only a problem if you promise your entire life away, which we've helpfully outlawed. Once you realize that wealth is the result of human labor, and that money is simply a unit of account for it, it becomes far easier to see how simplistic models don't match reality.
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Is there data and proof that a diversified portfolio can generate higher returns than the S&P 500 Index?
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While it's definitely possible (and likely?) that a diversified portfolio generates higher returns than the S&P 500, that's not the main reason why you diversify. Diversification reduces risk. Modern portfolio theory suggests that you should maximize return while reducing risk, instead of blindly chasing the highest returns. Think about it this way--say the average return is 11% for large cap US stocks (the S&P 500), and it's 10% for a diversified portfolio (say, 6-8 asset classes). The large cap only portfolio has a 10% chance of losing 30% in a given year, while the diversified portfolio has a 1% chance of losing 30% in a year. For the vast majority of investors, it's worth the 1% annual gap in expected return to greatly reduce their risk exposure. Of course, I just made those numbers up. Read what finance professors have written for the "data and proof". But modern portfolio theory is believed by a lot of investors and other finance experts. There are a ton of studies (and therefore data) on MPT--including many that contradict it.
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What's the catch in investing in real estate for rent?
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Don't over analyze it - check with some local landlords that are willing to share some information and resources Then analyze the Worst Case Scenarios and the likelihood of them happening and if you could deal with it if it did happen Then Dive In - Real Estate is a long term investment so you have plenty of time to learn everything..... Most people fail.... because they fail to take the first leap of faith !!!
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FSA when a retirement agreement has been put into place
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While you have found a way to possibly gain $1275 in tax free income, you are also risking $1275 if you end up not using the money you contributed. You will have to find a way to have that much in medical expenses by your retirement date or you will leave some money in the Flexible Spending Account. There are risks you take with these accounts (use it or lose it) and risks the company takes (leave with a deficit in the account). Many times we get questions about how to spend all that the employee contributed before the last day of work, or the end of the plan year. You can play it more fair by selecting the maximum amount per check to be taken from your pay check, then waiting until the retirement date to decide how much you will withdraw from the FSA. Your last day of work is your last day to incur a medical expense but you are given a window to submit your claims that extends beyond your last day of work. I have not personally heard of an employer requiring a former employee to pay back the money when there is a deficit in their FSA. Remember people are fired, or laid off with little or no warning trapping their money in a FSA. The fact that you have the ability to plan for this event and considered your options, is a great position to be in.
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How do you translate a per year salary into a part-time per hour job?
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Rule of thumb: Double your hourly rate to get a yearly salary (in thousands). Halve your yearly salary to get your hourly rate. (assuming a 40hr/week job). eg: $50k/year = $25/hr.
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Asking price went through the roof
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As folks have explained in the comments:
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Weekly budgets based on (a variable) monthly budget
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Try reading about budgeting. Make a list of all income coming in and all expenses going out. Eliminate any unnecessary expenses and try to increase income, which could include a part-time second job. Try to always put a portion of the income away as savings - try 10%, but if this is too hard to start with try saving at least 5% of the income.
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Do dividend quotes for U.S. stocks include witheld taxes?
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No. As a rule, the dividends you see in the distribution table are what you'll receive before paying any taxes. Tax rates differ between qualified and unqualified/ordinary dividends, so the distribution can't include taxes because tax rates may differ between investors. In my case I hold it in an Israeli account but the tax treaty between our countries still specifies 25% withheld tax This is another example of why tax rates differ between investors. If I hold SPY too, my tax rate will be very different because I don't hold it in an account like yours, so the listed dividend couldn't include taxes.
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Should I pay cash or prefer a 0% interest loan for home furnishings?
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If a shop offers 0% interest for purchase, someone is paying for it. e.g., If you buy a $X item at 0% interest for 12 months, you should be able to negotiate a lower cash price for that purchase. If the store is paying 3% to the lender, then techincally, you should be able to bring the price down by at least 2% to 3% if you pay cash upfront. I'm not sure how it works in other countries or other purchases, but I negotiated my car purchase for the dealer's low interest rate deal, and then re-negotiated with my preapproved loan. Saved a good chunk on that final price!
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How can all these countries owe so much money? Why & where did they borrow it from?
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They borrowed it from the people, and typically to finance wars and military spending. For example, Wikipedia suggests that the Bank of England "was set up to supply money to the King. £1.2m was raised in 12 days; half of this was used to rebuild the Navy." It's a game that everyone has to play once started; if Napoleon buys an army on credit, you'll have to raise an equal amount or face quite a problem. As for why they've grown so large, it's because governments are quite skilled at owing large sums of money. Only a small portion of the debt comes due in full at a given moment, and they constantly reissue new debt via auction to keep it rolling. So as long as they can make coupon (interest) and the lump sum at maturity, it's not difficult to keep up. Imagine how much credit card debt you could rack up if you only ever had to pay interest. This game will continue for as long as people lend. And there are plenty of lenders. There's pensions, mutual funds and endowments, which find public debt typically safer than stocks. And money market funds, which target 1 dollar NAV and only invest in the "safest" AAA-rated bonds to protect it. There's central banks, which can buy and sell public debt to manipulate inflation and exchange rates. Absent some kind of UN resolution to ban lending, or perhaps a EU mandated balanced budget, these debts will likely continue to grow. You think they "collectively owe more money than can exist", but there's a lot of wealth in the world. Most nations owe less than a year's GDP. For example, the US's total wealth is in the neighborhood of 50 trillion.
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Would cross holding make market capitalization apparently more?
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Initially, Each company has 10k shares. Company B has $500k money and possibly other assets. Every company has stated purpose. It can't randomly buy shares in some other firm. Company A issued 5k new shares, which gives it $500k money. Listed companies can't make private placements without regulatory approvals. They have to put this in open market via Public issue or rights issue. Company B does the same thing, issuing 5k shares for $500k money. Company A bought those 5k shares using the $500k it just got There is no logical reason for shareholder of Company B to raise 5K from Company A for the said consideration. This would have to increase.
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Determining current value for real estate for inheritance purposes
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how is this new value determined? According to Publication 551: Inherited Property The basis of property inherited from a decedent is generally one of the following. The FMV of the property at the date of the individual's death. The FMV on the alternate valuation date if the personal representative for the estate chooses to use alternate valuation. For information on the alternate valuation date, see the Instructions for Form 706. The value under the special-use valuation method for real property used in farming or a closely held business if chosen for estate tax purposes. This method is discussed later. FMV is Fair Market Value - which is the price that a willing buyer would pay for the property with reasonable knowledge of all the facts of the property. The rest generally apply to farmland or other special-purpose land where the amount of income it generates is not properly reflected in the market value. One or more real estate professionals will run "comps" that show you recent sales in the same area for similar houses to get a rough estimate of fair market value. Does it go off of the tax appraised value? Tax assessment may or may not be accurate depending on tax laws (e.g. limits to tax increases) and consistency with the actual market. Should you, prior to your death, get an independent appraiser to appraise the value of the property and include that assessment of the properties value with the will or something? That should not be necessary - another appraisal will likely be done as part of the estate process after death. One reason you might do one is if you are distributing different assets to different heirs, and you want to make sure that the estate is divided equitably.
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Do rental car agencies sell their cars at a time when it is risky for the purchaser?
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I've been told by staff in my local car hire agency that they get such big discounts that they actually make money selling the cars, so they replace all their cars every six months (in the UK the number plate indicates when the car was registered, in six month periods). This suits the manufacturers, because it means they can offer a lower-cost product to price sensitive customers, while charging more to people who want something brand new. For example, you could buy a brand new Fiesta for £14,000 or a 6 month old version of the same car with a few thousand miles on the clock for £12,000. This means if you only have £12,000 then you can afford to buy a nearly new Fiesta, but if you can afford a bit more then Ford will happily take that off you for a brand new Fiesta. Ford sell an extra car, and if the car hire company only paid £11,000 then they make some profit too.
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Is technical analysis based on some underlying factors in the market or do they work simply because other people use them?
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Technical Analysis assumes that the only relevant number(s) regarding a security is (are) price (and price momentum, price patterns, price harmonics, price trends, price aberrations, etc.). Technical is all based on price. Technical is not based on any of the fundamentals. Technical Analysis is for traders (speculators) not for long term investors. A long term investor is more concerned with the dividend payment history and such similar data as he makes his money from the dividend payments not from the changes in price (because he buys and holds, not buy low sell high).
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Why do stores and manufacturers use mail in rebates? A scam, or is there a way to use them effectively?
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Some notable percentage of buyers won't even try to do the rebate, or will forget - so it's a [relatively] cheap incentive to the consumer than most will miss out on.
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Why is silver so volatile compared to the S&P 500?
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The S&P 500 represents a broadly diversified basket of stocks. Silver is a single metal. If all else is equal, more diversification means less volatility. A better comparison would be the S&P 500 vs. a commodities index, or silver vs. some individual stock.
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If I have all this stock just sitting there, how can I lend it out to people for short selling?
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Typically, as an individual, you can't just decide you want to lend out some securities. There is a lot of legalities that must take place in order to engage in such a transaction. It's a regulated industry and the contractual obligations that exist between borrower and seller are taken care of ahead of time by the broker with their client, prior to any actual transaction taking place. http://en.wikipedia.org/wiki/Securities_lending I say typically, becuase I'm guessing that if you are a large enough client and own a substantial block of shares (I really mean a lot) you may be in the unique position of being able to lend out. I'm not sure what the logistics of this would look like, but I think the brokerage house would approach you and negotiate a borrowing rate. In that situation, you may negotiate lending to the the brokerage house and not necessarily directly to the borrower.
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Depositing a check with a DBA on the title
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Assuming it's your business, endorse the check as yourself and your DBA name, payable to your personal account
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Oh, hail. Totaled car, confused about buy-back options
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It seems like there are a few different things going on here because there are multiple parties involved with different interests. The car loan almost surely has the car itself as collateral, so, if you stop paying, the bank can claim the car to cover their costs. Since your car is now totaled, however, that collateral is essentially gone and your loan is probably effectively dead already. The bank isn't going let you keep the money against a totaled car. I suspect this is what the adjuster meant when he said you cannot keep the car because of the loan. The insurance company sounds like they're going to pay the claim, but once they pay on a totaled car, they own it. They have some plan for how they recover partial costs from the wreck. That may or may not allow you (or anyone else) to buy it from them. For example, they might have some bulk sale deal with a salvage company that doesn't allow them to sell back to you, they may have liability issues with selling a wrecked car, etc. Whatever is going on here should be separate from your loan and related to the business model of your insurance company. If you do have an option to buy the car back, it will almost surely be viewed as a new purchase by the insurances company and your lender, as if you bought a different car in similar condition.
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How can I figure out when I'll be able to write call options of a stock?
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You can't know. It's not like every stock has options traded on it, so until you either see the options listed or a company announcement that option will trade on a certain date, there's no way to be sure.
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Is Amazon's offer of a $50 gift card a scam?
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Based on my personal experience with that particular offer, I can say that it's not really a scam. I signed up for an Amazon Credit Card to get $70 off a purchase, but then never used the card. In fact, I never even called to activate it! After a few months, I then called to cancel it. I did not see a significant hit to my credit. However if you do shop frequently at Amazon it may be in your best interest to use their card, because it has other discounts associated with it.
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Filing personal with 1099s versus business s-corp?
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Depends whom the 1099 was issued to. If it was issued to your corporation - then its your corporation's income, not yours. Why would it go to your tax return? Your corporation and you are two separate legal entities. You will have to file the 1120S, whether you have corporate income or not, it has to be filed each year. So why make a mess of your reporting and not just report the corporation income on its return and your personal income on your own return? If you no longer use the corporation and all the 1099's are issued to you personally, then just dissolve it so that you won't have to file an empty 1120S every year and pay additional fees for maintaining it.
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What happens when PayPal overdrafts a checking account (with an ample backup funding source available)?
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You should check directly with the seller. I suspect you will find they have not recieved any money. Paypal tend to hang on to money as long as possible in all transactions, and will do anything to avoid giving out cash before it has come in.
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Relation between inflation rates and interest rates
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When the inflation rate increases, this tends to push up interest rates because of supply and demand: If the interest rate is less than the inflation rate, then putting your money in the bank means that you are losing value every day that it is there. So there's an incentive to withdraw your money and spend it now. If, say, I'm planning to buy a car, and my savings are declining in real value, then if I buy a car today I can get a better car than if I wait until tomorrow. When interest rates are high compared to inflation, the reverse is true. My savings are increasing in value, so the longer I leave my money in the bank the more it's worth. If I wait until tomorrow to buy a car I can get a better car than I would be able to buy today. Also, people find alternative places to keep their savings. If a savings account will result in me losing value every day my money is there, then maybe I'll put the money in the stock market or buy gold or whatever. So for the banks to continue to get enough money to make loans, they have to increase the interest rates they pay to lure customers back to the bank. There is no reason per se for rising interest rates to consumers to directly cause an increase in the inflation rate. Inflation is caused by the money supply growing faster than the amount of goods and services produced. Interest rates are a cost. If interest rates go up, people will borrow less money and spend it on other things, but that has no direct effect on the total money supply. Except ... you may note I put a bunch of qualifiers in that paragraph. In the United States, the Federal Reserve loans money to banks. It creates this money out of thin air. So when the interest that the Federal Reserve charges to the banks is low, the banks will borrow more from the Feds. As this money is created on the spot, this adds to the money supply, and thus contributes to inflation. So if interest rates to consumers are low, this encourages people to borrow more money from the banks, which encourages the banks to borrow more from the Feds, which increases the money supply, which increases inflation. I don't know much about how it works in other countries, but I think it's similar in most nations.
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How to diversify IRA portfolio given fund minimum investments and IRA contribution limits?
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There are fund of funds,e.g. life cycle funds or target retirement funds, that could cover a lot of these with an initial investment that one could invest into for a few years and then after building up a balance large enough, then it may make sense to switch to having more control.
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In the event of a corporate spin-off, how can I calculate the correct cost basis for each company's shares?
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From my understanding: Original Holding: Siemens - 10,000 units at 80 Euros/unit Cost = 800,000 euros Spin-off: Every 10 Siemens get 1 OSRAM On July 5th, 2013: Siemens closing - 78 Euros On Monday, July 8th: Ex-date (opening) - 75 Euros Hence: Market value for:- 1. Siemens: 75 * 10,000 = 750,000 euros 2. OSRAM: (10,000 / 10) * (78 - 75) = 3,000 euros Total Market value = 780,000 + 3,000 = 753,000 euros Ratio for: 1. Siemens = 750,000 / 753,000 = 0.996015936 2. OSRAM = 3,000 / 753,000 = 0.003984063 Cost for: 1. Siemens = 800,000 * 0.996015936 = 796,812.75 2. OSRAM = 3,187.25
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How to pay myself as a single person corporation in Ontario? Should I get an accountant?
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Get an accountant. Now. There are many subtle things that you do not know especially if you are just starting with your own corporation. There is also an issue of corporate tax return that you will have to face pretty soon. You should be looking for accountant that does accounting for corporations, there are companies specializing in small business. I do not think you can "just" transfer money to your personal account. They have to be treated as dividends and treated as such for income tax purposes. Or, as you described, you may pay yourself a salary, but then you have to pay CPP and EI on top of that. When you pay yourself dividends your corporation will need to issue T5 slip for you (accountant will do that) that you will need to use when preparing personal tax return. If you pay yourself salary, corporation will need to give you T4 In terms of tax treatment, if we do not take RRSP contributions dividend tax treatment will leave little bit more money in your hands. I'd say if you have RRSP room and/or TFSA room, pay yourself dividends and then do contributions as you see fit, if you need RRSP room, pay yourself salary. TFSA room does not depend on the type of income, so if you have room there, consider filling it first.
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Double entry for mortgage
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For the purpose of personal finance, treating $500 as Interest Expense is sufficient. For business accounting, it involves making the $500 a contra-liability and amortizing it as interest expense over the course of life of the loan.
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What's the catch with biweekly mortgage payments?
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Another thing to consider is that paying extra principal (either via one of these services, or by including something extra with your normal mortgage payment and designating that it go to principal rather than be held to reduce next month's payment, or just sending an additional payment to the bank and designating it as reducing the principal) shortens the term of your loan. Is this good? Maybe. Consider that banks lend with a variety of terms. Usually the 15-year fixed rate mortgage has a lower interest rate than the 30-year fixed-rate mortgage, and the 5-year home-equity-loan has an even lower rate. When you prepay your loan, your interest rate stays the same, but the bank gets its money back sooner. This makes more profit for the bank as it can then invest the money in other things. That profit could have been yours if you had made that investment instead of prepaying your mortgage.
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