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what is this type of stock trade? | try to sell if today's google stock goes above 669$ This is Relative/Pegged-to-Primary Order with a Limit Price of $669 and an offset from National Best Offer of $0.00, but it is no different than an Market Order if the market price is $669 to begin with. do not sell if the stock keeps climbing beyond 669 unless there is a down tick of 20cents is seen This is a Trailing Stop Order with a Trailing Amount of $0.20. It sells if the market price dropped $0.20 from the peak. The two orders are contradictory. From your comments, I think the following is what you want: Submit Trailing Stop Order when market price is above $669. Cancel Trailing Stop Order before the end of the day and Submit Relative/Pegged-to-Primary Order to Sell. |
Calculating a simply complicated return? | Since you have the balance at equal periods and the cash flows at the period ends, the best return calculation in this case is the true time-weighted return. See http://en.wikipedia.org/wiki/Time-weighted_return#Formulae So, notwithstanding some ambiguity about your figures, here is a calculation using the first three periods from your second table. Giving a total return over the three periods of -23.88% If the periods are months, multiply by four to annualise. |
When to hire an investment professional? | Don't invest in regular mutual funds. They are a rip-off. And, most investment professionals will not do much to help your financial future. Here's the advice: |
Why would a bank take a lower all cash offer versus a higher offer via conventional lending? | Often the counter-party has obligations with respect to timelines as well -- if your buying a house, the seller probably is too, and may have a time-sensitive obligation to close on the deal. I'm that scenario, carrying the second mortgage may be enough to make that deal fall through or result in some other negative impact. Note that "pre-approval" means very little, banks can and do pass on deals, even if the buyer has a good payment history. That's especially true when the economy is not so hot -- bankers in 2011 are worried about not losing money... In 2006, they were worried about not making enough! |
Upcoming company merger with company I have stock in, help me interpret what is happening | The "par value" is a technicality that you can ignore in this case, and it has nothing directly to do with the merger. When a company issues stock, it puts a "par value" on the shares. If it later issues more shares, they cannot be issued at less than par value. The rest of the notice seems to be as you said: If you hold until the merger takes effect, they are going to give you $25/share and your shares will be gone. As always, you can try to sell on the open market before that time instead, although you can bet that not too many people are going to want to give you more than $25/share at this point. |
Why buy insurance? | There are several insurance products that I buy for legal reasons: Both of these protect me from lawsuits and fines. Many people buy similar products to protect their business operations. (e.g. medical malpractice insurance) There are some insurance products I buy for tax planning and financial planning purposes: I have a large amount of savings available, so I have several tricks to reduce my insurance costs, and I have several products that I avoid. Several of these reasons are mentioned in other answers, but I thought I would collect them into a single answer to demonstrate that there are reasons other than the rational calculation of what the payout will be for the insurance products vs. the premium paid. If I gain access to a tax advantaged Health savings account, that is a bigger benefit to me than avoiding the premium, especially when my employer is paying the majority of the premium. Perhaps it makes no sense to buy insurance given sufficient savings (like the products I listed that make no sense for me given my finances) but not everyone can self-insure; it does require a certain level of wealth. |
Working out if I should be registered as self-employed in the UK | As 'anonymous' already mentioned, I think the correct answer is to go see an accountant. That said, if you are already have to fill in a tax return anyway (ie, you're already a high rate taxpayer) then I don't see why it should be an issue if you just told HMRC of your additional profit via your tax return. I never was in the situation of being employed with a side business in the UK, only either/or, but my understanding is that registering as self employed is probably more suitable for someone who doesn't PAYE already. I might be wrong on this as I haven't lived in the UK for a couple of years but an accountant would know the answer. Of course in either case, make sure that you keep each an every scrap of paper to do with your side business. |
What happens when a non-U.S. citizen who's been making money from the U.S. moves to the U.S.? | Its not for US citizens - its for US residents. If the US considers you as a tax resident - you'll be treated the same as a US citizen, regardless of your immigration status. The question is very unclear, since it is not mentioned whether your US sourced income "from the Internet" is sales in the US, sales on-line, services you provide, investments, or what else. All these are treated differently. For some kinds of US-sourced income you should have paid taxes in the US already, regardless of where you physically reside. For others - not. In any case, if you become US tax resident, you'll be taxed on your worldwide income, not only the $10K deposited in the US bank account. ALL of your income, everywhere in the world, must be declared to the US government and will be taxed. You should seek professional advice, before you move to the US, in order to understand your responsibilities, liabilities and rights. I suggest looking for a EA/CPA licensed in California and experienced with taxation of foreigners (look for someone in the SF or LA metropolitan areas). Keep in mind that there may be a tax treaty between the US and your home country that may affect your Federal (but not California) taxes. |
H&R Block says form 1120 not finalized? IRS won't take it yet? | The forms get updated every year, and the software providers need to get approved by the IRS every year. "Form is not yet finalized" means that this year form hasn't been approved yet. IRS starts accepting returns on January 31st anyway, nothing to be worried about. Why are you nearing a deadline? The deadline for 1120 (corporate tax return) is 2 and 1/2 months after your corp year end, which if you're a calendar year corp is March 15th. If your year end is in November/December - you can use the prior year forms, those are finalized. |
Will I be turned down for a car loan? | Considering I'm putting 30% down and having my father cosign is there any chance I would be turned down for a loan on a $100k car? According to BankRate, the average credit score needed to buy a new car is 714, but they also show average interest rates at 6.39% for new-car loans to people with credit scores in the 601-660 range. High income certainly helps offset credit score to some extent. Not every bank/dealership does things the same way. Being self-employed you'd most likely be required to show 2 years of tax returns, and they'd use those as a basis for your income rather than whatever you have made recently. If using a co-signer, their income matters. Another key factor is debt to income ratio, if too much of someone's income is already spoken for by other debts a lender will shy away. So, yes, there's a chance, given all the information we don't know and the variability with lender policies, that you could be turned down for a car loan. How should I go about this? If you're set on pursuing the car loan, just go talk to some lenders. You'll want to shop around for a good rate anyway, so no need to speculate just go find out. Include the dealership as a potential financing option, they can have great rates. Personally, I'd get a much cheaper car. Your insurance premium on a 100k car will be quite high due to your age. You might be rightly confident in your earning potential, but nothing is guaranteed, situations can change wildly in short order. A new car is not a good investment or a value-retaining asset, so why bother going into debt for one if you don't have to? If you buy something in cash now, you could upgrade in a few years without financing if your earning prediction holds and would save quite a bit in car insurance and interest over the years between. |
How much should a new graduate with new job put towards a car? | So many answers here are missing the mark. I have a $100k mortgage--because that isn't paid off, I can't buy a car? That's really misguided logic. You have a reasonably large amount of college debt and didn't mention any other debt-- It's a really big deal what kind of debt this is. Is it unsecured debt through a private lender? Is it a federal loan from the Department of Education? Let's assume the worst possible (reasonable) situation. You lose your job and spend the next year plus looking for work. This is the boat numerous people out of college are in (far far far FAR more than the unemployment rates indicate). Federal loans have somewhat reasonable (indentured servitude, but I digress) repayment strategies; you can base the payment on your current income through income-based and income-continent repayment plans. If you're through a private lender, they still expect payment. In both cases--because the US hit students with ridiculous lending practices, your interest rates are likely 5-10% or even higher. Given your take-home income is quite large and I don't know exactly the cost of living where you live--you have to make some reasonable decisions. You can afford a car note for basically any car you want. What's the worst that happens if you can't afford the car? They take it back. If you can afford to feed yourself, house yourself, pay your other monthly bills...you make so much more than the median income in the US that I really don't see any issues. What you should do is write out all your monthly costs and figure out how much unallocated money you have, but I'd imagine you have enough money coming in to finance any reasonable new or used car. Keep in mind new will have much higher insurance and costs, but if you pick a good car your headaches besides that will be minimal. |
How to resolve imbalances and orphan transactions in Gnucash? | This started as a comment but then really go too long so I am posting an answer: @yarun, I am also using GnuCash just like you as a non-accountant. But I think it really pays off to get to know more about accounting via GnuCash; it is so useful and you learn a lot about this hundreds of years old double entry system that all accountants know. So start learning about 5 main accounts and debits and credits, imho. It is far easier than one can think. Now the answer: even without balancing amounts exactly program is very useful as you still can track your monthly outgoings very well. Just make/adjust some reports and save their configurations (so you can re-run quickly when new data comes in) after you have classified your transactions properly. If I still did not know what some transactions were (happens a lot at first import) - I just put them under Expenses:Unaccounted Expenses - thus you will be able to see how much money went who knows where. If later you learn what those transactions were - you still can move them to the right account and you will be pleased that your reports show less unaccounted money. How many transactions to import at first - for me half a year or a year is quite enough; once you start tracking regularly you accumulate more date and this becomes a non-issue. Reflecting that personal finance is more about behaviour than maths and that it is more for the future where your overview of money is useful. Gnucash wil learn from import to import what transactions go where - so you could import say 1 or 3 month intervals to start with instead of a while year. No matter what - I still glance at every transaction on import and still sometimes petrol expense lands in grocery (because of the same seller). But to spot things like that you use reports and if one month is abnormal you can drill down to transactions and learn/correct things. Note that reports are easy to modify and you can save the report configurations with names you can remember. They are saved on the machine you do the accounting - not within the gnucash file. So if you open the file (or mysql database) on another computer you will miss your custom reports. You can transfer them, but it is a bit fiddly. Hence it makes sense to use gnucash on your laptop as that you probably will have around most often. Once you start entering transactions into GnuCash on the day or the week you incur the expense, you are getting more control and it is perhaps then you would need the balance to match the bank's balance. Then you can adjust the Equity:Opening Balances to manipulate the starting sums so that current balances match those of your bank. This is easy. When you have entered transactions proactively (on the day or the week) and then later do an import from bank statement the transactions are matched automatically and then they are said to be reconciled (i.e. your manual entry gets matched by the entry from your statement.) So for beginning it is something like that. If any questions, feel free to ask. IMHO this is a process rather a one-off thing; I began once - got bored, but started again and now I find it immensely useful. |
Settling house with husband during divorce. Which of these two options makes the most sense? | How about a third approach: Figure the buyout as above. Figure what percentage of the value of the house the buyout constitutes. When the house sells the other party gets that percentage of the sales price. |
Did I get screwed in taxes on a mutual fund dividend payment? | No, not screwed. This is just an artifact of the tax code and year end dividends. You paid a tax, and in return, got a higher basis. When you sell, you will have less profit, therefore less tax to pay than the guy who bought right after the dividend. You can call the fund company if you want to buy later this year. Once you understand the process, it might not bother you at all. |
Debt collector has wrong person and is contacting my employer | Request verification in writing of the debt. They are required to provide this by law. Keep this for your records. Send them a notice by certified mail stating that this is not your debt and not to contact you again. Indicate that you will take legal action if they continue to try and collect. Keep a log of if/when they continue to call or harass you. Contact counsel about your rights under the fair debt collection laws, but if they keep harassing you after being provided proof of your identity, they are liable. You could win a judgement in court if you have proof of bad behavior. If your identity is stolen, you are not legally responsible for the charges. However it is a mess to clean up, so pull your credit reports and review your accounts to be sure. |
Pay off credit cards in one lump sum, or spread over a few months? | Should I allow the credit cards to be paid out of escrow in one lump sum? Or should I take the cash and pay the cards down over a few months. I have heard that it is better for your credit score to pay them down over time. Will it make much of a difference? Will the money you save by increasing your credit score (assuming this statement is true) be larger than by eliminating the interest payments for the credit card payments over "a few months" (13% APR at $24,000 is $3120 a year in interest; $260 a month, so if "a few months" is three, that would cost over $700 - note that as you pay more principal the overall amount of interest decreases, so the "a year" in interest could go down depending on the principal payments). Also, on a related note regarding credit score, it doesn't look good to have more than a third of a credit line available balance exceeded (see number 2 here: http://credit.about.com/od/buildingcredit/tp/building-good-credit.htm). |
New vending route business, not sure how to determine taxes | Actually, calculating taxes isn't that difficult. You will pay a percentage of your gross sales to state and local sales tax, and as a single-owner LLC your profits (after sales taxes) should pass through to your individual tax tax return (according to this IRS article. They are not cumulative since they have different bases (gross sales versus net profit). That said, when determining if your future business is profitable, you need to ask "what aspects of the business can I control"? Can you control how much each item sells for? Increasing your prices will increase your gross margins, which should be higher than your fixed and variable costs. If your margins do not exceed your costs, then you will note be profitable. Note that as a vendor you are at a slight disadvantage to a retailer, since tax has to be baked in to your prices. A retailer can advertise the pre-tax price, and pass-through sales tax at the point of sale. However, people expect to pay more at a vending machine, so the disadvantage is very small (you aren't directly competing with retailers anyways). |
What can my relatives do to minimize their out of pocket expenses on their fathers estate | Consider contracting with a property management company to lease and maintain the house until it can be sold. Rent on the property should cover the mortgage, property taxes, etc. The property management company can handle maintenance and the tenant would be responsible for utilities. |
Are large companies more profitable than small ones? | There is no general theory to support the notion that larger companies will be more profitable than smaller companies. Economies of scale are not always positive, one can have diseconomies of scale too. It is more common to talk about an optimal firm size, even going back to Stigler's (1958) "The Economies of Scale." Intuitively, if economies of scale extended indefinitely, then natural monopolies would dominate all industries in the long run. A profit ratio, unfortunately, wouldn't quite get at scale economies. Consider, for example, that the denominator of your metric would be profit+cost and that you are trying to get at the cost reduction that derives from scale. Then, you are measuring the size of a company by the exact metric that should be reduced if scale economies exist, so the calculation would be a bit confounded. It is my understanding that such assessments are usually conducted at the industry level by determining whether the industry is becoming increasingly concentrated among fewer firms over time. (Again see Stigler). If concentration is increasing, there is an implication that, at current firm sizes, there are economies of scale in the industry. |
Is CFD a viable option for long-term trading? | it is pretty much the same as a normal margin loan but cheaper because you don't own the underlying share.the if the margin is $1000 at 5% you could borrow $20000 in total so the actual amount would be $19000 in total that you would have to pay interest on so at the moment it is 5.1% which is $19000x5.1% /365 days =$2.66 a day and if the share price rises you don't pay extra in interest costs unless you have borrowed more.it still stays at 2.66 a day until you have sold the shares |
Paying estimated taxes in a quarter with losses | Yes, if you're caught up you can skip the quarter. |
What does “Yield Curve” mean? | Great question! A Yield Curve is a plot of the yields for different maturities of debt. This can be for any debt, but the most common used when discussing yield curves is the debt of the Federal Government. The yield curve is observed by its slope. A curve with a positive slope (up and to the right) or a steepening curve, i.e. one that's becoming more positively sloped or less negatively sloped, may indicate several different situations. The Kansas City Federal Reserve has a nice paper that summarizes various economic theories about the yield curve, and even though it's a bit dated, the theories are still valid. I'll summarize the major points here. A positively sloped yield curve can indicate expectations of inflation in the future. The longer a security has before it matures, the more opportunities it has to be affected by changes in inflation, so if investors expect inflation to occur in the future, they may demand higher yields on longer-term securities to compensate them for the additional inflationary risk. A steepening yield curve may indicate that investors are increasing their expectations of future inflation. A positively sloped yield curve may also reflect expectations of deprecation in the dollar. The publication linked before states that depreciation of the dollar may have increased the perceived risk of future exchange rate changes and discouraged purchases of long-term Treasury securities by Japanese and other foreign investors, forcing the yields on these securities higher. Supply shocks, e.g. decreases in oil prices that lead to decreased production, may cause the yield curve to steepen because they affect short-term inflation expectations significantly more than long-term inflation. For example, a decrease in oil prices may decrease short-term inflation expectations, so short-term nominal interest rates decline. Investors usually assume that long-term inflation is governed more by fundamental macroeconomic factors than short-term factors like commodity price swings, so this price shock may lead short-term yields to decrease but leave long-term relatively unaffected, thus steepening the yield curve. Even if inflation expectations remain unchanged, the yield curve can still change. The supply of and demand for money affects the "required real rate," i.e. the price of credit, loans, etc. The supply comes from private savings, money coming from abroad, and growth in the money supply, while demand comes from private investors and the government. The paper summarizes the effects on real rates by saying Lower private saving, declines in the real money supply, and reduced capital inflows decrease the supply of funds and raise the required real rate. A larger government deficit and stronger private investment raise the required real rate by increasing the demand for funds. The upward pressure on future real interest rates contributes to the yield curve's positive slope, and a steepening yield curve could indicate an increasing government deficit, declines in private savings, or reduced capital coming in from abroad (for example, because of a recession in Europe that reduces their demand for US imports). an easing of monetary policy when is economy is already producing near its capacity ... would initially expand the real money supply, lowering required short-term real interest rates. With long-term real interest rates unchanged, the yield curve would steepen. Lower interest rates in turn would stimulate domestic spending, putting upward pressure on prices. This upward price pressure would probably increase expected inflation, and as the first bullet point describes, this can cause long-term nominal interest rates to rise. The combination of the decline in short-term rates and the rise in long-term rates steepens the yield curve. Similarly, an inverted yield curve or a positively sloped yield curve that is becoming less steep may indicate the reverse of some or all of the above situations. For example, a rise in oil prices may increase expectations of short-term inflation, so investors demand higher interest rates on short-term debt. Because long-term inflation expectations are governed more by fundamental macroeconomic factors than short-term swings in commodity prices, long-term expectations may not rise nearly as much as short term expectations, which leads to a yield curve that is becoming less steep or even negatively sloped. Forecasting based on the curve slope is not an exact science, just one of many indicators used. Note - Yield Curve was not yet defined here and was key to my answer for What is the "Bernanke Twist" and "Operation Twist"? What exactly does it do? So I took the liberty of ask/answer. |
What one bit of financial advice do you wish you could've given yourself five years ago? | Compound interest. Next time you buy a 100$ toy realize that if you save it - in x years that 100$ you saved and invested could potentially be more than 100$ where as most likely whatever you're buying will be worth much less. |
Trouble sticking to a budget when using credit cards for day to day transactions? | As long as you can be trusted with a Credit Card i find that if you have a setup that uses three accounts: 1. your Credit Card, 2. 2. a high interest internet account (most of these accounts don’t have fees), 3. a savings account. The Method that works for me is: 1st i calculate my fixed monthly bills i.e Rent and utilities and then transfer it into my high interest account. for the month whenever i make a purchase i transfer the money into the high interest account ( this way I can keep a running balance of what money I have left to spend in the month. Then when the Credit Card bill comes I transfer the money out of the high interest account across to pay off the Credit Card ( this way you generate interest on the money which you would have spent throughout the month and still maintain $0 of interest from the Credit Card) over a year you can generate at least enough money in interest to go out for dinner on one of free flights! |
What is the purpose of property tax? | Property taxes, where they exist, are generally levied by cities, counties and other local-level administrative bodies like MUDs, and are the primary source of revenue at these levels of government. These taxes pay the lion's share of the expenses for basic services provided by a city or county: There are federal dollars, other revenue sources (State lottery revenues often go toward public schools for instance), and "usage fees" (vehicle registration, utility bills, toll roads) at play as well, but a lot of that money covers larger-scale infrastructure development (freeways/interstates) and specialized "earmarks" (political backscratching involving this bridge or that dam in a Congresscritter's home district, a few national initiatives from the President's budget like first-responder technology upgrades for improved disaster/terrorism readiness). Property taxes are the main funding for the day-to-day government operations at the most visible level to the average resident. The theory behind using a property tax instead of some other form of taxation (like income) is that the value of the property and the quality of services provided to the resident(s) of that property are interrelated; the property is valuable in part because the infrastructure is well-maintained and nearby schools/hospitals are good, and by the same token, affluent residents expect high-quality services. Property taxes are also easier to levy, because most of the work can be done by the tax assessor; monitor recent sale prices, do drive-bys through neighborhoods, come up with a number and send the resident the bill. That's opposed to sales taxes which businesses operating in the jurisdiction have to calculate, collect and turn over, or income taxes which require residents to fill out paperwork to calculate how much they owe. The justification is eminent domain. It's very simple; when you buy land in the U.S. and a State thereof, you are still a citizen and/or resident of that State and the U.S., and subject to their laws. You're not creating your own country when you buy a house. As such, the government charges you for the facilities and services they provide in your area and your State, which are then your privilege to use. Obviously roads aren't free; a one-mile stretch behind my house is costing the county $15 million to expand it from 2-lane to 4-lane. Here's the kicker; you've already been paying these taxes. You think your landlord's just going to take the property taxes for the whole apartment complex on the chin? He's out to make money, and doing that requires charging a sufficient amount to cover costs, including taxes he incurs. You just never see "allocated property taxes" as an item on your rent statement, just like you don't see "allocated landowner mortgage", "allocated facilities maintenance", "allocated gross margin" etc. You know you're getting shafted, paying someone else's financing with a little extra on the side to boot. That's why you want a house. Unfortunately, not being able to pay these taxes is a grim reality for some people, old and young, and government generally doesn't go easy on delinquent homeowners. After medical bills and mortgage delinquency, property tax delinquency is the number three reason for bankruptcy, and only a mortgage or property tax delinquency can cause your home to be seized and sold. Well that and using it for criminal enterprise, but unless you're running a meth lab in your half-million-dollar home or financing it with coke money I wouldn't worry about that score. Retirement planners figure property taxes into cost of living, and they do often advise a downgrade from the 2-story house you raised your children in to something smaller (for many reasons, including lower taxes). There really isn't a way to structure a completely "pay-as-you-go" metropolitan area, and you wouldn't want to live in it if there were. Imagine every strip of asphalt in the county being a toll road where your transponder (TollTag, EZ-Pass, etc) or license plate was scanned and you were billed at each intersection. In addition to being a huge invasion of privacy, the cost to maintain this network (and your cost to use it) would skyrocket. Imagine 911 asking for a credit card number before dispatching police, fire or EMS (Ambulance services already do bill on a per-event basis, but you'd be surprised how few people pay and how little power a county EMS has to enforce collection; without a property tax and Medicaid to cover the difference, EMS service could not be provided in most counties). |
What should I do with $4,000 cash and High Interest Debt? | Patti - I realize, of course, that you pose an either/or question. It seems the question closes the door on other potential solutions. |
How do you determine the dividend payout date for Mutual Funds? | Determine which fund company issues the fund. In this case, a search reveals the fund name to be Vanguard Dividend Growth Fund from Vanguard Funds. Locate information for the fund on the fund company's web site. Here is the overview page for VDIGX. In the fund information, look for information about distributions. In the case of VDIGX, the fourth tab to the right of "Overview" is "Distributions". See here. At the top: Distributions for this fund are scheduled Semi-Annually The actual distribution history should give you some clues as to when. Failing that, ask your broker or the fund company directly. On "distribution" vs. "dividend": When a mutual fund spins off periodic cash, it is generally not called a "dividend", but rather a "distribution". The terminology is different because a distribution can be made up of more than one kind of payout. Dividends are just one kind. Capital gains, interest, and return of capital are other kinds of cash that can be distributed. While cash is cash, the nature of each varies for tax purposes and so they are classified differently. |
When trading put options, is your total risk decreased if you are in a position to exercise the option? | In absolute terms the risk is about the same. If you own the stock and your put option goes in the money, then you have the option to get rid of your stock at yesterday's higher price. If you don't, you can sell the option for a higher price than you paid for it. But, as you calculated yourself, the net gain or loss (in absolute terms, not percentage terms) is the same either way. |
Should I start investing in property with $10,000 deposit and $35,000 annual wage | I want to caveat that I am not an active investor in Australia, you most likely should seek out other investors in your market and ask them for advice/mentorship, but since you came here I can give you some generalized advice. When investing in real estate there are a two main rules of thumb to quickly determine if the property will be a good investment. The 50% rule and the 2% (or 1%) rule. The 50% rules says that in general 50% if the income from the property will go to expenses not including debt service. If you are bringing in $1000 a month 500 of that will go to utilities, taxes, repair, capital expenditures, advertising, lawn care, etc. That leave you with 500 to pay the mortgage and if anything is left that can be cash flow. As this is your first property and it is in " a relatively bad neighbourhood" you might consider bumping that up to 60% just to make sure you have padding. The 1 or 2% rules says that the monthly rent should be 1(or 2) percent of the purchase price in this case the home is bought at 150,000. If the rent is 1,500 a month it might be a good investment but if it rents for 3,000 a month it probably is a good investment. There are other factors to consider if a home meets the 2% rule it might be in a rough neighborhood which increases turnover which in general is the biggest expense in an investment property. If a property meets one or both of these rules you should take a closer look at it and with proper due diligence determine that it is a deal. These rules are just hard and fast guidelines to property analysis, they may need to be adapted to you market. For example these rules will not hold in most (all?) big cities. |
Website for managing personal cash inflow and outflow, applicable to India? | There are sites in India that offer this, http://www.intuit.in/ is one such site. Apart from this some banks like ICICI offer this to limited extent. |
Getting over that financial unease? Budgeting advice | Budgeting is a tool for planning, not for execution. It sounds like you don't have a problem BUDGETING (planning what to spend on what things) but rather with the execution of your plan. That is - living frugally. This is primarily an issue of self control and personal psychology - not an issue with the mechanics of budgeting and finance, which explains why the most popular personal finance "gurus" (Dave Ramsey, Suze Ormond) deal as much with your relationship to money and spending as they do with financial knowledge. There is no easy answer here, but you can learn to spend less. One helpful thought is to realize that whatever your current income is, someone in your community is currently making less than that and surviving. What would you do differently if your real, actual income was $100 or $200 less than it is currently. If your food budget is a concern, learn to cook cheaply. (Often, this is more healthy.) You mentioned schooling, so I assume you are on or near a college campus. Many colleges have all sorts of free-food opportunities. (I used to eat free vegetarian meals weekly at a Hare Krsna temple. Price of admission: listening to the monk read from the Bhagavad Gita.) Fast food is, of course, a complete no-no on low-budget living. It probably goes without saying, but just in case you haven't: cancel cable, get a cheap phone plan (Ting is excellent if available in your area), and otherwise see how you can squeeze a few dollars out of your bills. On the subject of frugality, I have found no book more enlightening than: Money Secrets of the Amish: Finding True Abundance in Simplicity, Sharing, and Saving |
Stock grant, taxes, and the IRS | If you have a one-time event, you are allowed to make a single estimated payment for that quarter on Form 1040-ES. People seem to fear that if they make one such payment they will need to do it forevermore, and that is not true. The IRS instructions do kind of read that way, but that's because most people who make estimated payment do so because of some repeating circumstance like being self-employed. In addition, you may qualify for one or more waivers on a potential underpayment penalty when you file your Form 1040 even if you don't make an estimated payment, and you may reduce or eliminate any penalty by annualizing your income - which is to say breaking it down by quarter rather than the full year. Check on the instructions for Form 2210 for more detail, including Schedule AI for annualizing income. This is some work, but it might be worthwhile depending on your situation. https://www.irs.gov/instructions/i2210/ch02.html |
Why does it look like my 401k loan default was not paid by my 401k account balance? | When you leave an employer, 401(k) loans are immediately due (or within 30 days or 60 days). So maybe they are waiting to see if you will pay off your loan. If you wanted to transfer the loan as well, you need to talk to your new 401(k) plan administrator to find out if this even possible. If they say No and you don't pay off the loan, it will count as a premature distribution from your old 401(k) plan and possibly be subject to excise tax in addition to income tax. |
Payroll reimbursments | What they are doing is wrong. The IRS and the state might not be happy with what they are doing. One thing you can ask for them to do is to give you a credit card for business and travel expenses. You will still have to submit receipts for expenses, but it will also make it clear to the IRS that these checks are not income. Keep the pay stubs for the year, or the pdf files if they don't give you a physical stub. Pay attention to the YTD numbers on each stub to make sure they aren't sneaking in the expenses as income. If they continue to do this, ask about ownership of the items purchased, since you will be paying the tax shouldn't you own it? You can in the future tell them "I was going to buy X like the customer wanted, but I just bought a new washer at home and their wasn't enough room on the credit card. Maybe next month" |
Why would someone want to sell call options? | You appear to be thinking of option writers as if they were individuals with small, nondiversified, holdings and a particular view on what the underlying is going to do. This is not the best way to think about them. Option writers are typically large institutions with large portfolios and that provide services in all sorts of different areas. At the same time as they are writing calls on a particular stock, they are writing puts on it and options on other stocks. They are buying and selling the underlying and all kinds of different derivatives. They are not necessarily writing the option because they are expecting or hoping to benefit from a price move. It's just small part of their business. They write the option if the option price is good enough that they think they are selling it for very slightly more than it's worth. Asking why an option writer creates a call is like asking why a grocery store keeps buying groceries from their distributors. Don't they know the price of food may not always rise? Sure, but their business is selling the food for slightly more than they pay for it, not speculating on what will happen to its price. Most option writers are doing the same thing, except what they are buying and selling is sets of cash flows and risk. As a general rule, the business model of option writers is to profit from the few cents of spread or mispricing, not from aggregate changes in the price of the underlying. They should and often do maintain balanced portfolios so their option writing activities don't expose them to a lot of risk. Also note that there could be lots of reasons for writing options, even if you do have a particular view. For example, perhaps the option writer thinks volatility of the underlying will decrease. Writing a call could be part of an overall strategy that profits from this view. |
Making higher payments on primary residence mortgage or rental? | You're in the same situation I'm in (bought new house, didn't sell old house, now renting out old house). Assuming that everything is stable, right now I'd do something besides pay down your new mortgage. If you pay down the mortgage at your old house, that mortgage payment will go away faster than if you paid down the one on the new house. Then, things start to get fun. You then have a lot more free cash flow available to do whatever you like. I'd tend to do that before searching for other investments. Then, once you have the free cash flow, you can look for other investments (probably a wise risk) or retire the mortgage on your residence earlier. |
Can a Covered Call be called away before the expiration date? | They can sell a lower price call if they expect the stock to plummet in the near term but they are bullish on the longer term. What they are looking to do is collect the call premium and hope it expires worthless. And then again 'hope' that the stock will ultimately turn around. So yes, a lot of hoping. But can you explain what you mean by 'my brokerage gives premiums for prices lower than the current price'? Do you mean you pay less in commissions for ITM calls? |
New to investing — I have $20,000 cash saved, what should I do with it? | @mbhunter and @JoeTaxpayer have given good advice. Were I in your situation, the only thing I might do differently is put whatever amount of cash not needed for emergencies in a money market fund with check-writing privileges and/or a debit card. The rate on the account has at least some chance of preserving the value of your principal, and it will be easier to put your money into investments as soon as you're ready. This sort of account is offered by any number of brokerages and financial companies, so pick one you trust and start there. |
23 and on my own, what should I be doing? | I also had a student loan and glad you are taking a good look on interest rate as it really makes a huge difference. One of the strategies I followed was since my credit improved as I stepped out of school. I took advantage of a good 0 percent credit card. I applied for discover and got a decent credit limit. There are 2 particular things you are looking for in a credit card in this situation Usually the initial $0 transaction charge is only for a couple of months so ensure you take advantage of that. What is the benefit: Imagine being able to pay off that higher interest rate balance with 0% and not have to worry about it immediately. That way you save on the interest you would be paying and stress as well Watch out for: Although you have to ensure that you do payoff the money you paid through the 0 percent credit card ( which may have been put off for a year or even 15 months or so) other wise you may have to pay it all at once as the offer is expiring. Note: for credit cards ensure to note when the 0% is expiring as that is usually not mentioned on the statement and you may have to call the customer service. I was in a similar situation and was able to pay it all off fairly quickly. I am sure you will as well. |
What are the best software tools for personal finance? | KMyMoney Pros: Cons: |
What exactly is a “derivative”? | A derivative is a financial instrument of a special kind, the kind “whose price depends on, or is derived from, another asset”. This definition is from John Hull, Options, Futures and Other Derivatives – a book definitely worth to own if you are curious about this, you can easily find old copies for a few dollars. The first point is that a derivative is a financial instrument, like credits, or insurances, the second point is that its price depends closely from the price of something else, the mentioned asset. In most cases derivatives can be understood as financial insurances against some risk bound to the asset. In the sequel I give a small list of derivatives and highlight the assets and the risk they can be bound to. And first, let me point out that the definition is (marginally) wrong because some derivatives depend on things which are not assets, nor do they have a price, like temperature, sunlight, or even your own life in the case of mortgages. But before going in this list, let me go through the remaining points of your question. What is the basic idea and concept behind a derivative? As already noted, in most cases, a derivative can be understood as a financial insurance compensating from a risk of some sort. In a classical insurance contract, one party of the contract is an insurance company, but in the broader case of a derivative, that counterparty can be pretty anything: an insurance, a bank, a government, a large company, and most probably market makers. How is it really used, and how does this deviate from the first point? Briefly, how does is it affecting people, and how is it causing problems? An important point with derivatives is that it can be arbitrarily complicated to compute their prices. Actually what is hidden in the attempt of giving a definition for derivatives, is that they are products whose price Y is a measurable function of one or several random variables X_1, X_2, … X_n on which we can use the theory of arbitrage pricing to get hints on the actual price Y of the asset – this is what the depends on means in technical terms. In the most favorable case, we obtain an easy formula linking Y to the X_is which tells us what is the price of our financial instrument. But in practice, it can be very difficult, if at all possible, to determine a price for derivatives. This has two implications: Persons possessing sophisticated techniques to compute the price of derivatives have a strategic advantage on derivatives market, in comparison to less advanced actors on the market. Organisation owning assets they cannot price cannot compute their bilan anymore, so that they cannot know for sure their financial situation. They are somehow playing roulette. But wait, if derivatives are insurances they should help to mitigate some financial risk, which precisely means that they should help their owners to more accurately see their financial situation! How is this not a contradiction? Some persons with sophisticated techniques to compute the price of derivatives are actually selling complicated derivatives to less knowledgeable persons. For instance, many communes in France and Germany have contracted credits whose reimbursements have a fixed interest part, like in a classical credit, and a variable interest part whose rate is computed against a complicated formula involving the value of the Swiss frank at each quarter starting from the inception of the credit. (So, for a 25 years running credit of theis type, the price Y of the credit at its inception depends on 100 Xs, which are the uncertain prices for the Swiss frank each quarter of the 25 next years.) Some of these communes can be quite small, with 5.000 inhabitants, and needless to say, do not have the required expertise to analyse the risks bound to such instruments, which in that special case led the court call the credit a swindling and to cancel the credit. But what chain of events leads a 5.000 inhabitants city in France to own a credit whose reimbursements depends on the Swiss frank? After the credit crunch in 2007 and the fall of Lehman Brothers in 2008, it has begun to be very hard to organise funding, which basically means to conclude credits running long in time on large amounts of money. So, the municipality needs a 25 years credit of 10.000.000 EUROS and goes to its communal bank. The communal bank has hundreds or thousands of municipalities looking for credits and needs itself a financing. So the communal bank goes to one of the five largest financial institutions in the world, which insists on selling a huge credit whose reimbursements have a variable part depending on hundred of values the Swiss frank will have in the 25 next years. Since the the big bank has better computation techniques than the small bank it makes a big profit. Since the small bank has no idea, how to compute the correct price of the credit it bought, it cuts this in pieces and sell it in the same form to the various communes it works with. If we were to attribute this kind of intentions to the largest five banks, we could ask about the possibility that they designed the credit to take advantage of the primitive evaluation methods of the small bank. We could also ask if they organised a cartel to force communal banks to buy their bermudean snowballs. And we could also ask, if they are so influent that they eventually can manipulate the Swiss frank to secure an even higher profit. But I will not go into this. To the best of my understanding, the subprime crisis is a play along the same plot, with different actors, but I know this latter subject only by what I could read in French newspapers. So much for the “How is it causing problems?” part. What is some of the terminology in relation to derivatives (and there meanings of course)? Answering this question is basically the purpose of the 7 first chapters of the book by Hull, along with deriving some important mathematical principles. And I will not copy these seven chapters here! How would someone get started dealing in derivatives (I'm playing a realistic stock market simulation, so it doesn't matter if your answer to this costs me money)? If you ask the question, I understand that you are not a professional, so that your are actually trying to become the one that has money and zero knowledge in the play I outlined above. I would recommand not doing this. That said, if you have a good mathematical background and can program well, once you are confindent with the books of Hull and Joshi, you can have fun implementing various market models and implementing trading strategies. Once you are confident with this, you can also read the articles on quantitative finance on arXiv.org. And once you are done with this, you can decide for yourself if you want to play the same market as the guys writing these articles. (And yes, even for the simplest options, they have better models than you have and will systematically outperform you in the long run, even if some random successes will give you the feeling that you do well and could do better.) (indeed, I've made it a personal goal to somehow lose every last cent of my money) You know your weapons! :) Two parties agree today on a price for one to deliver a commodity to the other at some future instant. This is a classical future contract, it can be modified in every imaginable way, usually by embedding options. For instance one party could have the option to choose between different delivery points or delivery days. Two parties write today a contract allowing the one party to buy at some future time a commodity to the the second party. The price is written today, as part of the contract. (There is the corresponding option entitling the owner to sell something.) Unlike the future contract, only one party can be obliged to do something, the other jas a right but no obligation. If you buy and option, your are buying some sort of insurance against a change of price on some asset. This is the most familiar to anybody. Credits can come in many different flavours, especially the formula to compute interests, or also embed options. Common options are early settlement options or restructuration options. While this is not completely inutitive, the credit works like an insurance. This is most easily understood from the side of the organisation lending the money, that speculates that the ratio of creanciers going bankrupt will be low enough for her to make profit, just like a fire insurance company speculates that the ratio of fire accidents will be low enough for her to make a profit. This is like a mortgage on a financial institution. Two parties agree that one will recive an upfront today and give a compensation to the second one if some third party defaults. Here this is an explicit insurance against the unfortuante event, where a creancier goes bankrupt. One finds here more or less standard options on electricity. But electricity have delicious particularities as it can practically not be stored, and fallout is also (usually) avoided. As for classical options, these are insurances against price moves. A swap is like two complementary credits on the same amount of money, so that it ends up in the two parties not actually exchanging the credit nominal and only paying interest one to the other — which makes only sense if these interests are computed with different formulas. Typical example are fixed rate vs. EURIBOR on some given maturity, which we interpret as an insurance against fluctuations of the EURIBOR, or a fixed rate vs. the exchange ratio between two currencies, which we interpret as an insurance against the two currencies decorrelating. Swaps are the richest and the most generic category of financial derivatives. The off-the-counter market features very imaginative, very customised insurance products. The most basic form is the insurance against drought, but you can image different dangers, and once you have it you can put it in options, in a swap, etc. For instance, a restaurant with a terrasse could enter in a weather insurance, paying each year a fixed amount of money and becoming in return an amount of money based on the amount of rainy day in a year. Actually, this list is virtually without limits! |
I'm upside down on my car loan and need a different car, what can I do? | Before buying a new car, determine whether you really need one! If there's an automotive discussion, you should ask there FIRST to get opinions on how much all-wheel-drive helps. You may not want to change cars at all. Remember, most of us in the Northeast are NOT driving all-wheel-drive vehicles, and all cars have all-wheel brakes. All-wheel drive is better at getting you moving from a stop if one of the drive wheels would otherwise be slipping. It makes less difference during actual driving. Traction control braking is much more important -- and much more common, hence much cheaper. And probably already present in your Camry. And good tires make a huge difference. (Top-of-the-line all-season tires are adequate, but many folks do switch to snow tires during the winter and switch back again in summer.) Tires -- even if you get a second set of rims to put them on -- are a heck of a lot cheaper than changing cars. Beyond everything else, driving in winter conditions is a matter of careful practice. Most of the time, simply avoiding making sudden starts/stops/turns and not driving like you're in a video arcade ("gotta pass three more or I lose my game!") will do the job. You'll learn the feel of how the car responds. Some basic instruction in how to handle a skid will prepare you for the relatively rare times when that happens. (Some folks actively learn by practicing skids in a nice open parking lot if they can find one; I never have but it makes some sense.) If in doubt about the driving conditions, wait until the roads have been plowed and salted. Remember, teenagers learn to do this, and they're certifiably non compos mentis; if they can do it, you can do it. Before buying a new car, determine whether you really need one! |
Can I open a personal bank account with an EIN instead of SSN? | According to IRS Publication 1635, Understanding your EIN (PDF), under "What is an EIN?" on page 2: Caution: An EIN is for use in connection with your business activities only. Do not use your EIN in place of your social security number (SSN). As you say your EIN is for your business as a sole proprietor, I would also refer to Publication 334, Tax Guide for Small Business, under "Identification Numbers": Social security number (SSN). Generally, use your SSN as your taxpayer identification number. You must put this number on each of your individual income tax forms, such as Form 1040 and its schedules. Employer identification number (EIN). You must also have an EIN to use as a taxpayer identification number if you do either of the following. Pay wages to one or more employees. File pension or excise tax returns. If you must have an EIN, include it along with your SSN on your Schedule C or C-EZ as instructed. While I can't point to anything specifically about bank accounts, in general the guidance I see is that your SSN is used for your personal stuff, and you have an EIN for use in your business where needed. You may be able to open a bank account listing the EIN as the taxpayer identification number on the account. I don't believe there's a legal distinction between what makes something a "business" account or not, though a bank may have different account offerings for different purposes, and only offer some of them to entities rather than individuals. If you want to have a separate account for your business transactions, you may want them to open it in the name of your business and they may allow you to use your EIN on it. Whether you can do this for one of their "personal" account offerings would be up to the bank. I don't see any particular advantages to using your EIN on a bank account for an individual, though, and I could see it causing a bit of confusion with the bank if you're trying to do so in a way that isn't one of their "normal" account types for a business. As a sole proprietor, there really isn't any distinction between you and your business. Any interest income is taxable to you in the same way. But I don't think there's anything stopping you legally other than perhaps your particular bank's policy on such things. I would suggest contacting your bank (or trying several banks) to get more information on what account offerings they have available and what would best fit you and your business's needs. |
Where can I find a Third Party Administrator for a self-directed solo 401K? | Fidelity Investments offers Solo 401(k) plans without any management fees. The plan administrator is typically the employer itself (so, your business, or you as the principal manager). You (as the individual employee) are the participant. |
Do the nasdaq small cap stocks or penny stocks get promoted? | Promotion of any stock should be treated with extreme suspicion, since the purpose is generally to make money for the promoter, not to inform the public. |
How do I calculate the quarterly returns of a stock index? | So for quarters So, if Q1's value was 10 and Q2's value was 25 For closing or opening prices, I would use closing prices. For instance, some used Adjusted Close or Close on Yahoo Finance (see this example of AAPL). Added Note: In your example, for your example, you'll want to take the absolute value of the denominator (aka: divisor), so an Excel formula might look like the below example ... ... where the new and old are cells. |
What is an “Options Account”? | Options are a derivative product, and in this case, derive their value from an underlying security, a traded stock. An option gives you the right, but not the obligation, to buy a stock at a given price (the strike price) by a given time (the expiration date.) What I just described is a call option. The opposite instrument is a put, giving you the right, but not the obligation, to sell the stock at a given price. Volumes have been written on the subject, but I'd suggest that for a custodial Roth, I'd not activate the ability to trade options. How to get started with options investing? offers a nice introduction to trading options. In my response, I offer an example of a trade that's actually less risky due to the option component. |
Can paying down a mortgage be considered an “investment”? | Paying down your mortgage saves lots of interest. With a long term mortgage you end up paying twice us much to the bank than the sales price of the house. Even low mortgage interests are higher than short term bonds. The saving of those interest are as much an investment as the interest you get from a bond. However, before paying off a mortgage other higher interest loans should be paid off. Also it should be considered if the mortgage interest create a tax reduction in the comparison with any other options. |
Why is company provided health insurance tax free, but individual health insurance is not? | All questions regarding why is activity X taxed but activity Y taxed differently boils down to: The legislature wanted to promote or discourage the activity. By making employer provided healthcare tax free to the employee, the average worker like the plan. Not only is a significant portion not coming out of my paycheck, I also don't have to pay taxes on the benefit. Some organization pushed for this and the legislature agreed. |
How do I use investments to lower my taxes [US]? | Not exactly. There are a few ways to manage your taxes with investments. 1) For most investments you get taxed on any gain in value in the investment or dividends paid by that investment. Most investments (with some exceptions for mutual funds) you don't take the tax hit until you sell the investment and realize the gain. For bonds, cds, and other cash type investments you have to pay taxes in the year they pay out the interest or dividend. 2) You can put money (up to a certain limit) in a traditional IRA and can subtract that amount from your income for tax calculation for the year you invest it. However, you are going to pay taxes on it when you take the money out at retirement. It really just delays the taxes. 3) If you put the money in a Roth IRA, you don't get a tax break now, but you don't have to pay any taxes on the money or the gains when you take it out at retirement. 4) The gains from some mutual funds can be tax exempt, but that just saves you from paying tax on the increase in value. 5) Don't fall for scams that try to use insurance policies as investments to avoid taxes. The fees are ginormous, which usually makes them a ripoff. |
How to keep control of shared expenses inside marriage? | I'd say its time to merge finances! |
Are credit cards not viewed as credit until you miss one payment? | Not sure what you mean by "missing". Credit card debt can be paid back in full when you get the bill, or you can "take a loan" and "pay in installments". If you do the latter, and pay back at least the minimum required amount on time, you are not "missing" your payment. Technically, you are taking a small, but expensive loan, and if you pay that loan back according to the terms and conditions that apply to your credit card, this is reported to the credit bureau and improves your credit. If you are really "missing your payment", paying late (more than a few days), less than minimum or nothing at all, this won't help to improve your credit. A "first-time offender" won't always be reported to the credit bureau, but if he is, it won't be a positive report. |
Can LLC legally lend money to a friend? | One thing I would add to TTT's answer: One of the benefits of using an LLC for your business is right there in the name - "limited liability". It provides a level of protection for your personal assets should your business go bankrupt, get sued, and so forth. However, if someone can show that there's no real separation between your LLC's activities and your personal activities, then they can "pierce the corporate veil" and go after your personal assets. If this loan is really purely personal and not related to your business activities, you may create a paper trail that can later be used in this way. My advice would be to just avoid the whole thing and make the loan from personal funds. I don't see any upside to doing this out of the LLC funds. |
How to invest 100k | The best way to invest in college for your kid is to buy an investment property and rent it out. You might think I am really crazy to ask you to you to buy a real estate property when everyone is running from real estate. Go where others are running away from it. Look where others are not looking. Find out the need for a decent rental property in your city or county and start following the real estate market to understand the real activities including the rental market. I would say follow it for 6 months before jumping in with any investment. And manage your property with good tenants until your kid is ready to go to college. By the time your kid is ready for college, the property would have been paid off by the rents and you can sell the property to send your kid to college. |
ISA trading account options for US citizens living in the UK | This sounds like a FATCA issue. I will attempt to explain, but please confirm with your own research, as I am not a FATCA expert. If a foreign institution has made a policy decision not to accept US customers because of the Foreign Financial Institution (FFI) obligations under FATCA, then that will of course exclude you even if you are resident outside the US. The US government asserts the principle of universal tax jurisdiction over its citizens. The institution may have a publicly available FATCA policy statement or otherwise be covered in a new story, so you can confirm this is what has happened. Failing that, I would follow up and ask for clarification. You may be able to find an institution that accepts US citizens as investors. This requires some research, maybe some legwork. Renunciation of your citizenship is the most certain way to circumvent this issue, if you are prepared to take such a drastic step. Such a step would require thought and planning. Note that there would be an expatriation tax ("exit tax") that deems a disposition of all your assets (mark to market for all your assets) under IRC § 877. A less direct but far less extreme measure would be to use an intermediary, either one that has access or a foreign entity (i.e. non-US entity) that can gain access. A Non-Financial Foreign Entity (NFFE) is itself subject to withholding rules of FATCA, so it must withhold payments to you and any other US persons. But the investing institutions will not become FFIs by paying an NFFE; the obligation rests on the FFI. PWC Australia has a nice little writeup that explains some of the key terms and concepts of FATCA. Of course, the simplest solution is probably to use US institutions, where possible. Non-foreign entities do not have foreign obligations under FATCA. |
What's the best way to manage all the 401K accounts I've accumulated from my past jobs? | I'd roll them all into one account, just for your own convenience. It's a pain to keep track of lots of different accounts, esp. since you need logins/passwords, etc for all of them, and we all have plenty of those. :) Pick a place like Vanguard or Fidelity (for example), where you can find investment options with lower fees, and do the standard rollover. Once all the accounts are rolled into one, you can think about how to invest the stuff. (Some good investments require larger minimums, so if you have several old 401ks, putting them together will give you more options.) Rolling them over is not hard, if you have paperwork from each of the 401ks. You might be able to DIY online, but I found it helpful to call and talk to a person when I did this. You just need account numbers, etc. If you are moving brokerage accounts, you may need to provide paper documents/applications, which might require getting them notarized (I found a notary at my bank, even though the accounts I was moving from and to weren't at my bank), which means you'll need to provide IDs, etc. and get a special crimped seal after the notary witnesses your signature. |
Why is it possible to just take out a ton of credit cards, max them out and default in 7 years? | It may become difficult to rent a car or a hotel room. It may affect your ability to get a job. Some employers now check credit reports and disqualify candidates with a poor credit report. It may affect your ability to get a security clearance or professional bonding. It may affect your ability to find housing. Many landlords check credit reports. You may be harassed morning, noon, and night by collection agencies. This can be theoretically solved by declaring bankruptcy, but the bankruptcy court may force the sale of some of your assets to make payments towards your debt. |
Buying an option in the money, at the money, or out of the money | 1 reason is Leverage.... If you are buying out of the money options you get much more bang for your buck if the stock moves in your favor. The flipside is it is much more likely that you would lose all of your investment. |
Why don't banks give access to all your transaction activity? | Well, I know why the Rabobank in the Netherlands does it. I can go back around one year and a half with my internet banking. But I can only go further back (upto 7 years) after contacting the bank and paying €5,- per transcript (one transcript holds around a month of activities). I needed a year worth of transcripts for my taxes and had to cough up more than €50. EDIT It seems they recently changed their policy in a way that you can request as many transcripts as you like for a maximum cost of €25,- so the trend to easier access is visible. |
Ray Dalio - All Weather Portfolio | Here are the specific Vanguard index funds and ETF's I use to mimic Ray Dalio's all weather portfolio for my taxable investment savings. I invest into this with Vanguard personal investor and brokerage accounts. Here's a summary of the performance results from 2007 to today: 2007 is when the DBC commodity fund was created, so that's why my results are only tested back that far. I've tested the broader asset class as well and the results are similar, but I suggest doing that as well for yourself. I use portfoliovisualizer.com to backtest the results of my portfolio along with various asset classes, that's been tremendously useful. My opinionated advice would be to ignore the local investment advisor recommendations. Nobody will ever care more about your money than you, and their incentives are misaligned as Tony mentions in his book. Mutual funds were chosen over ETF's for the simplicity of auto-investment. Unfortunately I have to manually buy the ETF shares each month (DBC and GLD). I'm 29 and don't use this for retirement savings. My retirement is 100% VSMAX. I'll adjust this in 20 years or so to be more conservative. However, when I get close to age 45-50 I'm planning to shift into this allocation at a market high point. When I approach retirement, this is EXACTLY where I want to be. Let's say you had $2.7M in your retirement account on Oct 31, 2007 that was invested in 100% US Stocks. In Feb of 2009 your balance would be roughly $1.35M. If you wanted to retire in 2009 you most likely couldn't. If you had invested with this approach you're account would have dropped to $2.4M in Feb of 2009. Disclaimer: I'm not a financial planner or advisor, nor do I claim to be. I'm a software engineer and I've heavily researched this approach solely for my own benefit. I have absolutely no affiliation with any of the tools, organizations, or funds mentioned here and there's no possible way for me to profit or gain from this. I'm not recommending anyone use this, I'm merely providing an overview of how I choose to invest my own money. Take or leave it, that's up to you. The loss/gain incured from this is your responsibility, and I can't be held accountable. |
Why would you ever turn down a raise in salary? | I once turned down a raise because I didn't agree with the employee review that supposedly substantiated the raise. I felt the review to be superficial and incomplete. Then I refused to sign it, or take the accompanying raise, due to that fact. |
How can I deposit a check made out to my business into my personal account? | Depending on where you are, you may be able to get away with filing a "Doing Business As" document with your local government, and then having the bank call the county seat to verify this. There is generally a fee for processing/recording/filing the DBA form, of course. But it's useful for more purposes than just this one. (I still need to file a DBA for my hobby work-for-pay, for exactly this reason.) |
Best way to start investing, for a young person just starting their career? | Not 100% related, but the #1 thing you need to avoid is CREDIT CARD DEBT. Trust me on this one. I'm 31, and finally got out of credit card debt about eight months ago. For just about my entire 20s, I racked up credit card debt and saved zero. Invested zero. It pains me to realize that I basically wasted ten years of possible interest, and instead bought a lot of dumb things and paid 25% interest on it. So yes, put money into your 401k and an IRA. Max them out. |
At what age should I start or stop saving money? | While there is no age limit, bear in mind that saving money makes sense only if it doesn't delay your paying off expensive debt. If you have credit cards or expensive loans you would be best placed to focus on paying them down before saving a lot. If you save and keep debt, you'll effectively lose money as the interest on your debt will usually be higher than you can earn on savings. Having said that, it's worth saving a small amount anyway to have as an emergency fund. As you pay off your debt, start saving the money you no longer have to pay out and it will soon pay dividends. |
Taking out a loan to pay down a mortgage | You're not crazy, but the banks are. Here's the problem: You're taking 100% LTV on property A - you won't be able to get a second mortgage for more than 80% total (including the current mortgage) LTV. That's actually something I just recently learned from my own experience. If the market is bad, the banks might even lower the LTV limit further. So essentially, at least 20% of your equity in A will remain on the paper. Banks don't like seeing the down-payment coming from anywhere other than your savings. Putting the downpayment from loan proceeds, even if not secured by the property which you're refinancing, will probably scare banks off. How to solve this? Suggest to deal with it as a business, putting both properties under a company/LLC, if possible. It might be hard to change the titles while you have loans on your properties, but even without it - deal with it as if it is a business. Approach your bank for a business loan - either secured by A or unsecured, and another investment loan for B. Describe your strategy to the banker (preferably a small community bank in the area where the properties are), and how you're going to fund the properties. You won't get rates as low as you have on A (3.25% on investment loan? Not a chance, that one is a keeper), but you might be able to get rid of the balloon/variable APR problem. |
How can I make a one-time income tax-prepayment to the US Treasury? | You can make estimated tax payments on Form 1040-ES. Most people who make such payments need to do it quarterly because the typical reasons for making estimated payments is something like self-employment income that a person will get throughout the year. If you have a one-time event like a single, large sale of stock, however, there's nothing wrong with doing it just one quarter out of the year. When it comes time to file your taxes, part of the calculate is whether you were timely quarter-by-quarter not just for the entire year, so if you do have a big "one-time" event mid-year, don't wait until the end of the year to file an estimated payment. Of course, if the event is at the end of the year, then you can make it a 4th quarter estimated payment. |
How to model fees from trades on online platforms? | where A1 is the number of trades. you may have to change the number 100 to 99 depending on how the 100th trade is charged. The idea is to use the if statement to determine the price of the trades. Once you are over the threshold the price is 14*number over threshold. |
Is it advisable to go for an auto loan if I can make the full payment for a new car? | Full payment is always better than auto-loan if you are prudent with finances. I.E if you take a loan, you are factoring the EMI hence your savings will remain as is. However if you manage well, you can buy the car with cash and at the same time put aside the notional EMI as savings and investments. The other factor to consider is what return your cash is giving. If this more than auto-loan interest rate post taxes, you should opt for loan. For example if auto-loan is 10% and you are getting a return of 15% after taxes on investment then loan is better. Company Car lease depends on terms. More often you get break on taxes on the EMI component. But you have to buy at the end of lease period and re-register the car in your name, so there is additional cost. Some companies give lease at very favourable rates. Plus if you leave the job lease has to be broken and it becomes more expensive. |
Can my company buy my personal debt? | When your debt is forgiven, you have to consider the amount written off as an ordinary income item (with the exclusion of the debt originated from the purchase of primary home). If you're trying to write the debt off from your taxes - then it won't work. Even if you can expense the debt forgiveness, you will incur tax liability on your personal taxes side, and in addition you'll be out of cash in your business. So basically you'll end up paying it with after tax money, exactly the thing you're trying to avoid. In addition, you're dealing with related persons here, which means that the loss deduction might not be allowed (depends on the actual details of the transaction), so you might actually end up paying more taxes with this scheme that just paying off the loan directly (if your business pays taxes separately from your person). A loss on the sale or exchange of property between related persons is not deductible. This applies to both direct and indirect transactions, but not to distributions of property from a corporation in a complete liquidation. For the list of related persons, see Related persons next. |
Why are credit cards preferred in the US? | Credit card fraud protection (by law), credit card cash back programs (provided by most CC issuers), and debit card fees (commonly imposed by the merchant). The crux is that with CC transactions, a small percentage is remitted to the issuing bank. Since the banks are already making money hand over fist on CC's, they incentivize people to use them. CC security is also lax because the merchant is responsible for fraudulent charges instead of the bank. If the merchant fails to check a signature, they are held liable for all charges if the card holder reports a fraudulent transaction. |
Debit cards as bad as credit cards? | Debit cards are the dumbest development ever. I now have a piece of plastic that allows any yahoo to cause me to bounce my mortgage. Great. Throw away the debit card. Use a credit card and exercise some self control. Take out a sufficient amount of cash to cover your weekly incidental expenses under $50. If you want something that costs more than $50, wait a week and use the credit card. You'll find that using cash at places like the convenience store or gas station will cause you to not spend $3 for a slim jim, lotto ticket, donut or other dumb and unnecessary item. |
Isn't an Initial Coin Offering (ICO) a surefire way to make tons of money? | There is no sure thing in investing. Everything has a risk component. Sure, people talk about these cryptocurrencies like they have nowhere to go but up, but there are massive risks with these. For example, they could be declared illegal, the exchanges could go bankrupt (and some have), the backing companies off the ICOs could fail, the algorithms behind them could have a fatal flaw with unknown consequences, they can be stolen in unusual ways, everyone could suddenly realize that they have no real value... |
Why do stock prices of retailers not surge during the holidays? | If you look at S&P 500's closing price for the first trading day on December and January for the last 20 years, you will see that for 10 of these years, stocks did better overall and for 10 others they did worse. Thus you can see that the price of stocks do no necessarily increase. You can play around with the data here |
What is the point of the stock market? What is it for, and why might someone want to trade or invest? | In finance, form is function, and while a reason for a trade could be anything, but since the result of a trade is a change in value, it could be presumed that one seeks to receive a change in value. Stock company There may have been more esoteric examples, but currently, possession of a company (total ownership of its' assets actually) is delineated by percentage or a glorified "banknote" frequently called a "share". Percentage companies are usually sole proprietorship and partnerships, but partnerships can now trade in "units". Share companies are usually corporations. With shares, a company can be divided into almost totally indistinguishable units. This allows for more flexible ownership, so individuals can trade them without having to change the company contract. Considering the ease of trade, it could be assumed that common stock contract provisions were formulated to provide for such an ease. Motivation to trade This could be anything, but it seems those with the largest ownership of common stock have lots of wealth, so it could be assumed that people at least want to own stocks to own wealth. Shorting might be a little harder to reason, but I personally assume that the motivation to trade is still to increase wealth. Social benefit of the stock market Assuming that ownership in a company is socially valuable and that the total value of ownership is proportional to the social value provided, the social benefit of a stock market is that it provided the means to scale ownership through convenience, speed, and reliability. |
How long do credit cards keep working after you disappear? | how can I keep my website running for posterity after I die? If this is the real problem, incorporate a non-profit corporation or have a lawyer set up a foundation. Those will survive after your death and their bank accounts with them. You might even find someone willing to do this for you. It sounds like a neat business. Collect the ad revenue, charge a fee, pay the web hosting. Heck, this is a decent deal for a web host. Provide the web hosting; collect the ad revenue. |
Should I pay off my student loan before buying a house? | One extremely important aspect that must be taken into consideration is the state of the housing market. If prices are rising it will probably be a false economy to delay your house purchase. Say you pay off a £5,000 student loan, thus delaying your house purchase another year you could well end up forking out an extra £10,000 on the mortgage due to the rise in house prices. Of course, if the housing market is falling then, without a doubt, pay off the student debt. |
How to determine contractor hourly rate and employee salary equivalents? | Take $100,000 base salary, x 1.5 = $150,000 contractor salary, divide by 1,872 hours = $80/hr |
I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment? | I am very surprised no one mentioned the Stock Repair Option Strategy which has real benefits and is one of the mainstream Option Strategies. Quote: Who Should Consider Using the Stock Repair Strategy? In a nutshell, you are buying call options with current strike price (at-the-money) and sell call options with higher strike price (out-of-the-money), all with the same expiry dates. The only reason to also sell call options here is to recover your premium paid for the other call options. If you are comfortable paying that premium, you just buy the call options without selling the others. In case your stock will rise moderately to a price between the two strike prices, your call option will rise together with your stock, so you will be faster to recover your money. This is the main reason it is called Repair. If you have sold any call options, as the price rises, you have to be careful when it reaches the strike price of the options sold, as from there on you will begin incurring losses. It is however exactly the lucky outcome you were hoping for, your stock is higher, and you can buy back those loss making options - then or shortly before. If you didn't sell any options and payed your premium, you don't need to worry at all at this stage. WARNING It should be noted that the Stock Repair Strategy offers no protection for your stock price further falling down. In that case all those options will expire worthless or you can sell back the ones your bought but likely not for much. In order to have the downside protection for your stock, there are other strategies, the simplest one being buying a Put Option at-the-money or slightly lower. That will effectively cut your possible losses to the Option Premium (which is the main use of that option). Again, if you hate to pay that premium, you can offset it by selling other options that you either hope won't be exercised or take steps to protect you against those. |
Snowball debt or pay off a large amount? | I agree with the Dave Ramsey method as well. If you don't have $1k in the bank already, do that. Total up the smaller debts and the best buy card. if they are $4k all together, then pay them off. Don't get caught up in keeping the smaller one around because they are at zero percent. If they exceed $4k, then payoff the interest bomb best buy card, then pay off the smaller ones, starting with the smaller balance. That is the only tweak I will make here. Dropping any amount into the Citi balance is pointless because it only reduces the amount, not the total number of hands reaching into your bank account. |
Using credit cards online: is it safe? | The answer: don't use your actual card number. Some banks offer virtual credit card numbers (services like Apple Pay are functionally the same). Bank of America's virtual cards work like this: The virtual card number is different from your actual card number, so the merchant never sees your real card number. In fact, the merchant cannot even tell that you are using a virtual card. You can set the maximum amount to be charged. You can set the expiration date from 2 to 12 months. Once the merchant has made a charge on that virtual card, only THAT MERCHANT can make any further charges on that same virtual card. It is not possible to discover the real card number from the virtual card number. So the result is that your risk is reduced to the merchant not delivering the order, or charging too much (but not over the limit you set). There is nothing to be stolen since your real info never goes over the internet, and once a merchant has used the virtual card once, no other merchant can use it. Other banks may have virtual cards which have fewer features. The only DISadvantage of this is that you have to go to the bank's website whenever you want to make a purchase from a new merchant. But you don't have to worry about them stealing your real credit card information. |
Why do I see multiple trades of very small quantities? | It looks more like someone is trying to pocket the spread. The trades are going off at the bid then the ask (from what I can tell without any L1 and L2 data, but the spread could be bigger than what the prices show, since the stock looks pretty volatile given the difference between current price and VWAP...). Looking through the JSE rule books I didn't find any special provisions on how they handle odd lots in their Central Order Book, but the usual practice in other markets is to display only round lot orders. So these 4 share orders would remain hidden from book participants and could be set there to trigger executions from those who are probing for limit orders. Or to make a market with very limited risk. |
Free service for automatic email stock alert when target price is met? | I've used BigCharts (now owned by MarketWatch.com) for a while and really like them. Their tools to annotate charts are great. |
How can people have such high credit card debts? | You must understand that not everyone has or can get credit cards. Consider that those who are in the the lowest 20-30% of income tend to have fewer credit cards (or none), and lower credit debt, although some have quite high credit card debt relative to their income. So you really aren't comparing the same demographics (the population of all income earners, used to calculate average income, and the population of all credit card debt holders, are not the same groups of people). Once you remove those folks from consideration, then credit card usage may still average higher, but accept that it is unusual for people making less than $20K-30K/year to have much credit card debt. You must understand that wealth and income are two very different (although related) concepts. One must note that there are millions of people in the U.S. who have wealth; they have net assets of over $1M (excluding their homes). Many of those folks have assets greatly exceeding $1M. And although it might seem foolish to carry a large balance on their credit cards, they may have quite low interest rates, and simply find it simpler and more convenient to use credit cards in lieu of personal loans. Suppose you have $2M in net assets, and want to buy a classic car or a diamond necklace. Charging $30K and carrying the balance until a dividend check arrives may make sense. Understand also that not everyone makes the same choices, or good choices. Carrying a credit card balance may appear like a poor choice, especially when you are not wealthy, or have lower income. But suppose you have a high credit limit across several cards, and you need to handle a short-term financial challenge (car repair, layoff, medical bills, etc). You might use the credit card to pay for that purchase, essentially financing an extraordinary event over a longer period of time. And although having a balance of more than 5-10% of your monthly income may seem foolish to some, it may make sense to others. And some people choose to carry balances of 50% to 100% of their credit limit. Others realize that keeping their credit utilization below 30%, 20%, or 10% of the credit limit is a better plan (both interest rate and risk wise). |
What is the formula for determining estimated stock price when I only have an earning per share number? | See this link...I was also looking an answer to the same questions. This site explains with an example http://www.independent-stock-investing.com/PE-Ratio.html |
What kinds of information do financial workers typically check on a daily basis? | Google Finance and Yahoo! Finance would be a couple of sites you could use to look at rather broad market information. This would include the major US stock markets like the Dow, Nasdaq, S & P 500 though also bond yields, gold and oil can also be useful as depending on which area one works the specifics of what are important could vary. If you were working at a well-known bond firm, I'd suspect that various bond benchmarks are likely to be known and watched rather than stock indices. Something else to consider here is what constitutes a "finance practitioner" as I'd imagine several accountants and actuaries may not watch the market yet there could be several software developers working at hedge funds that do so that it isn't just a case of what kind of work but also what does the company do. |
How do I calculate the actual dividend amount for a monthly dividend payout mutual fund? | So if someone would invest 14000 credits on 1st April 2016, he'd get monthly dividend = ((14000 ÷ 14) × 0.0451) × (1 - 1.42 ÷ 100) = 44.459 credits, right? One would get ((14000 ÷ 14) × 0.0451) = 45.1 is what you would get. The expenses are not to be factored. Generally if a scheme has less expense ratio, the yield is more. i.e. this has already got factored in 0.0451. If the expense ratio was less, this would have been 0.05 if expense ration would have been more it would have been 0.040. Can I then consider the bank deposit earning a higher income per month than the mutual fund scheme? As the MIP as classified as Hybrid funds as they invest around 30% in equities, there is no tax on the income. More so if there is a lock-in of 3 years. In Bank FD, there would be tax applicable as per tax brackets. |
Why would someone buy a way out-of-the-money call option that's expiring soon? | I suggest you look at many stocks' price history, especially around earnings announcements. It's certainly a gamble. But an 8 to 10% move on a surprise earning announcement isn't unheard of. If you look at the current price, the strike price, and the return that you'd get for just exceeding the strike by one dollar, you'll find in some cases a 20 to 1 return. A real gambler would research and find companies that have had many earnings surprises in the past and isolate the options that make the most sense that are due to expire just a few days after the earnings announcement. I don't recommend that anyone actually do this, just suggesting that I understand the strategy. Edit - Apple announced earnings. And, today, in pre-market trading, over an 8% move. The $550 calls closed before the announcement, trading under $2. |
Is it a good practice to keep salary account and savings account separate? | I pretty much only use my checking. What's the downside? Checking accounts don't pay as much interest as savings account. Oh, but wait, interest rates have been zero for nearly 10 years. So there is very little benefit to keeping money in my savings account. In fact, I had two savings accounts, and Well Fargo closed one of them because I hadn't used it in years. Downsides of savings accounts: You are limited to 5 transfers per month into or out of them. No such limit with checking. Upsides of savings accounts: Well, maybe you will be less likely to spend the money. Why don't you just have your pay go into your checking and then just transfer "extra money" out of it, rather than the reverse? If you want to put money "away" so that you save it, assuming you're in the U.S.A., open a traditional IRA. Max deposit of $5500/year, and it reduces your taxable income. It's not a bad idea to have a separate account that you don't touch except for in an emergency. But, for me, the direction of flow is from work, to checking, to savings. |
Strategies for saving and investing in multiple foreign currencies | Evaluating the value of currencies is always difficult because you are usually at the mercy of a central bank that can print new currency on a whim. I am trying to diversify my currency holdings but it is difficult to open foreign bank accounts without actually being in the foreign country. Any ideas here? You don't indicate which currencies you own but I would stick with your diversified portfolio of currencies and add some physical assets as a hedge against the fiat currencies. |
Why are options created? | The main reason is that you move from the linear payoff structure to a non-linear one. This is called convexity in finance. With options you can design a payoff structure in almost any way to want it to be. For example you can say that you only want the upside but not the downside, so you buy a call option. It is obvious that this comes at a price, the option premium. Or equivalently you buy the underlying and for risk management reasons buy a put option on top of it as an insurance. The price of the put could be seen as the insurance premium. You can of course combine options in more complicated ways so that you e.g. profit as long as the underlying moves strongly enough in either direction. This is called a straddle. |
Looking for good investment vehicle for seasonal work and savings | In the short-term, a savings account with an online bank can net you ~1% interest, while many banks/credit unions with local branches are 0.05%. Most of the online savings accounts allow 6 withdrawals per month (they'll let you do more, but charge a fee), if you pair it with a checking account, you can transfer your expected monthly need in one or two planned transfers to your checking account. Any other options that may result in a higher yield will either tie up your money for a set length of time, or expose you to risk of losing money. I wouldn't recommend gambling on short-term stock gains if you need the money during the off-season. |
Could someone explain this scenario about Google's involvement in the wireless spectrum auction? | If history is any guide, Page’s idealistic impulses could result in a vaster, more sprawling company. The following is an example of one of Page’s idealistic impulses (wanting people to share spectrum) which could result in a vaster, more sprawling company (if they hadn't been outbid, Google would have expanded by buying a business asset i.e. spectrum which they didn't need). I've no experience with bidding. I don't understand what's happening at all An 'auction' is a way to sell something. Instead of offering it for sale at a fixed price, you offer it 'to the highest bidder'. Someone (e.g. Google) says, "I'll offer you [some amount: e.g. a million dollars] for it." If no-one else exceeds that bid, then you say 'sold' and Google has bought it. Alternatively someone else comes along with a higher bid, "I'll offer you two million dollars for it," in which case they're the new high bidder, and you'll sell it to them unless the process repeats itself with anyone counter-offering an even higher bid. See also http://en.wikipedia.org/wiki/Auction and http://en.wikipedia.org/wiki/Spectrum_auction The "Disadvantages" section of this article alleges (currently without a citation) that: Despite the apparent success of spectrum auctions, an important disadvantage limiting both efficiency and revenues is demand reduction and collusive bidding. The information and flexibility in the process of auction can be used to reduce auction prices by tacit collusion. When bidder competition is weak and one bidder holds an apparent advantage to win the auction for specific licenses, other bidders will often choose not to the bid for higher prices, hence reducing the final revenue generated by the auction.[citation needed] In this case, the auction is best thought of as a negotiation among the bidders, who agree on who should win the auction for each discrete bit of spectrum. Google's bid made that impossible (or, at least, ensured that the winning bid would be at least as high as the minimum which was set by Google's bid). |
What should I do about proxy statements? | Whether or not you want to abstain or throw away the proxy, one reason it's important to at least read the circular is to find out if any of the proposals deal with increasing the company's common stock. When this happens, it can dilute your shares and have an effect on your ownership percentage in the company and shareholder voting control. |
How to calculate tax amounts withheld on mixed pre-tax and Roth 401(k) contributions, and match? | Your 401k IRA will now have three different sub-accounts, the one holding your Traditional (pre-tax) 401k contributions, the one holding your Roth 401k contributions, and the one holding the employer match contributions (which, as has been pointed out to you, cannot be considered to be Roth 401k contributions). That is, it is not true that So my next month's check shows $500+$500 going to the regular 401k, and $82+$82 going to the Roth 401k. Your next month's paystub will show $500 going into the regular 401k, $100 going into the Roth 401k, and if employer matching contributions are listed on the paystub, it will still show $600 going into the employer match. If you have chosen to invest your 401k in mutual funds (or stocks), shares are purchased when the 401k administrator receives the money and are also segregated in the three subaccounts. If you are paid monthly, then you will know on a month-by-month basis how many shares you hold in the three separate subaccounts, and there is no end-of-year modification of how many shares were purchased with Roth 401k contributions versus how many were purchased with pretax contributions or with employer matching funds as you seem to think. |
Why do car rental companies prefer/require credit over debit cards? | I am not sure if this is the actual reason or not, but all of the major credit cards (Visa, Mastercard, Amex, Discover) provide damage insurance coverage on car rentals. Debit cards do not usually provide this coverage. So, if you use a credit card, the car company knows it will be able to recover the cost of any damage to the car. Of course, this doesn't explain some of the odd debit card policies out there. For example, Alamo will not let you use a debit card unless you provide proof of round trip travel (like a plane or cruise ticket). But you can use a credit card without having a travel ticket. I'm not sure how having a travel ticket makes debit card users less of a risk, but apparently it does somehow. |
Professional investment planning for small net-worth individual in bearish market | There is no magic bullet here. If you want professional management, because you think they know more about entry and exit points for short positions, have more time to monitor a position, etc... (but they might not) try a mutual fund or exchange traded fund that specializes in shorts. Note: a lot of these may not have done so well, your mileage may vary |
Credit card closed. Effect on credit score (USA) | So My question is. Is my credit score going to be hit? Yes it will affect your credit. Not as much as missing payments on the debt, which remains even if the credit line is closed, and not as much as missing payments on other bills... If so what can I do about it? Not very much. Nothing worth the time it would take. Like you mentioned, reopening the account or opening another would likely require a credit check and the inquiry will add another negative factor. In this situation, consider the impact on your credit as fact and the best way to correct it is to move forward and pay all your bills on time. This is the number one key to improving credit score. So, right now, the key task is finding a new job. This will enable you to make all payments on time. If you pay on time and do not overspend, your credit score will be fine. Can I contact the creditors to appeal the decision and get them to not affect my score at the very least? I know they won't restore the account without another credit check). Is there anything that can be done directly with the credit score companies? Depending on how they characterize the closing of the account, it may be mostly a neutral event that has a negative impact than a negative event. By negative events, I'm referring to bankruptcy, charge offs, and collections. So the best way to recover is to keep credit utilization below 30% and pay all your bills and debt payments on time. (You seem to be asking how to replace this line of credit to help you through your unemployment.) As for the missing credit line and your current finances, you have to find a way forward. Opening new credit account while you're not employed is going to be very difficult, if not impossible. You might find yourself in a situation where you need to take whatever part time gig you can find in order to make ends meet until your job search is complete. Grocery store, fast food, wait staff, delivery driver, etc. And once you get past this period of unemployment, you'll need to catch up on all bills, then you'll want to build your emergency fund. You don't mention one, but eating, paying rent/mortgage, keeping current on bills, and paying debt payments are the reasons behind the emergency fund, and the reason you need it in a liquid account. Source: I'm a veteran of decades of bad choices when it comes to money, of being unemployed for periods of time, of overusing credit cards, and generally being irresponsible with my income and savings. I've done all those things and am now paying the price. In order to rebuild my credit, and provide for my retirement, I'm having to work very hard to save. My focus being financial health, not credit score, I've brought my bottom line from approximately 25k in the red up to about 5k in the red. The first step was getting my payments under control. I have also been watching my credit score. Two years of on time mortgage payments, gradual growth of score. Paid off student loans, uptick in score. Opened new credit card with 0% intro rate to consolidate a couple of store line of credit accounts. Transferred those balances. Big uptick. Next month when utilization on that card hits 90%, downtick that took back a year's worth of gains. However, financially, I'm not losing 50-100 a month to interest. TLDR; At certain times, you have to ignore the credit score and focus on the important things. This is one of those times for you. Find a job. Get back on your feet. Then look into living debt free, or working to achieve financial independence. |
Should an IRA be disclaimed to allow it to be distributed according to a will? | There are two different possible taxes based on various scenarios proposed by the OP or the lawyer who drew up the OP's father's will or the OP's mother. First, there is the estate tax which is paid by the estate of the deceased, and the heirs get what is left. Most estates in the US pay no estate tax whatsoever because most estates are smaller than $5.4M lifetime gift and estate tax exemption. But, for the record, even though IRAs pass from owner to beneficiary independent of whatever the will might say about the disposition of the IRAs, the value of the deceased's IRAs is part of the estate, and if the estate is large enough that estate tax is due and there is not enough money in the rest of the estate to pay the estate tax (e.g. most of the estate value is IRA money and there are no other investments, just a bank account with a small balance), then the executor of the will can petition the probate court to claw back some of the IRA money from the IRA beneficiaries to pay the estate tax due. Second, there is income tax that the estate must pay on income received from the estate's assets, e.g. mutual fund dividends paid between the date of death and the distribution of the assets to the beneficiaries, or income from cashing in IRAs that have the estate as the beneficiary. Now, most of OP's father's estate is in IRAs which have the OP's mother as the primary beneficiary and there are no named secondary beneficiaries. Thus, by default, the estate is the IRA beneficiary should the OP's mother disclaim the IRAs as the lawyer has suggested. As @JoeTaxpayer says in a comment, if the OP's mother disclaims the IRA, then the estate must distribute all the IRA assets to the three beneficiaries by December 31 of the year in which the fifth anniversary of the death occurs. If the estate decides to do this by itself, then the distribution from the IRA to the estate is taxable income to the estate (best avoided if possible because of the high tax rates on trusts). What is commonly done is that before December 31 of the year following the year in which the death occurred, the estate (as the beneficiary) informs the IRA Custodian that the estate's beneficiaries are the surviving spouse (50%), and the two children (25% each) and requests the IRA custodian to divide the IRA assets accordingly and let each beneficiary be responsible for meeting the requirements of the 5-year rule for his/her share. Any assets not distributed in timely fashion are subject to a 50% excise tax as penalty each year until such time as these monies are actually withdrawn explicitly from the IRA (that is, the excise tax is not deducted from the remaining IRA assets; the beneficiary has to pay the excise tax out of pocket). As far as the IRS is concerned, there are no yearly distribution requirements to be met but the IRA Custodial Agreement might have its own rules, and so Publication 590b recommends discussing the distribution requirements for the 5-year rule with the IRA Custodian. The money distributed from the IRA is taxable income to the recipients. In particular, the children cannot roll the money over into another IRA so as to avoid immediate taxation; the spouse might be able to roll over the money into another IRA, but I am not sure about this; Publication 590b is very confusing on this point. All this is assuming that the deceased passed away before well before his 70.5th birthday so that there are no issues with RMDs (the interactions of all the rules in this case is an even bigger can of worms that I will leave to someone else to explicate). On the other hand, if the OP's mother does not disclaim the IRAs, then she, as the surviving spouse, has the option of treating the inherited IRAs as her own IRAs, and she could then name her two children as the beneficiaries of the inherited IRAs when she passes away. Of course, by the same token, she could opt to make someone else the beneficiary (e.g, her children from a previous marriage) or change her mind at any later time and make someone else the beneficiary (e.g. if she remarries, or becomes very fond of the person taking care of her in a nursing home and decides to leave all her assets to this person instead of her children, etc). But even if such disinheritances are unlikely and the children are perfectly happy to wait to inherit till Mom passes away, as JoeTaxpayer points out, by not disclaiming the IRAs, the OP's mother can delay taking distributions from the IRAs till age 70.5, etc. which is also a good option to have. The worst scenario is for the OP's mother to not disclaim the IRAs, cash them in right away (huge income tax whack on her) or at least 50% of them, and gift the OP and his sibling half of what she withdrew (or possibly after taking into account what she had to pay in income tax on the distribution). Gift tax need not be paid by the OP's mother if she files Form 709 and reduces her lifetime combined gift and estate tax exemption, and the OP and his sibling don't owe any tax (income or otherwise) on the gift amount. But, all that money has changed from tax-deferred assets to ordinary assets, and any additional earnings on these assets in the future will be taxable income. So, unless the OP and his sibling need the cash right away (pay off credit card debt, make a downpayment on a house, etc), this is not a good idea at all. |
Is there a free, online stock screener for UK stocks? | Most free stock screeners for UK stocks, even those mentioned above, are very poor and not worth the effort really, and searching for stock screeners on a search engine will only bring up stock screeners for USA stocks. The best free UK stock screener (registration is required although this is FREE) is without any doubt on www.digitallook.com who also provide many other features like five year fundamentals, charts, prospects, etc, which can easily be downloaded onto a spreadsheet. I really wouldn't look elsewhere to be honest unless you are prepared to pay. |
Is this mortgage advice good, or is it hooey? | I think the idea here is that because of the way mortgages are amortized, you can drop additional principal payments in the early years of the mortgage and significantly lower the overall interest expense over the life of the loan. A HELOC accrues interest like a credit card, so if you make a large principal payment using a HELOC, you will be able to retire those "chunks" of debt quicker than if you made normal mortgage payments. I haven't worked out the numbers, but I suspect that you could achieve similar results by simply paying ahead -- making even one extra payment per year will take 7-9 years off of a 30 year loan. I think that the advantage of the HELOC approach is that if you borrow enough, you may be able to recalculate/lower the payment of the mortgage. |
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